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“TO STUDY THE BEHAVIORAL PATTERN OF THE INVESTORS FOR LIFE INSURANCE”
FOR ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. PATAN Submitetd to
Dr. Ashwin Modi
( Faculty member ) S.K School of Business Management Hemchandracharya North Gujarat University, Patan. (In Partial fulfillment of the Requirement for the subject of 'Entrepreneurship Development And Project Mgt as a part of Semester-II in Post Graduate Diploma In Financial Services Management'.) SUBMITTED BY :Tejas Soni (36) Ashwin Chaudhary (15) Nima Patel (22) Sunita Prajapati (27)
On this occasion, I would also like to thank to all those people who have helped me directly or indirectly during my project work. I would like to thank Our H.O.D. Mr. Nishit Bhatt who has given me such opportunity which will help me in my future. I am also very thankful to my
project guide Mr. Ashwin Modi for providing the full guidance during my project work and motivated me through out the fulfillment of my project. I am very thankful to ICICI Prudential Life Insurance Company Limited for giving me the opportunity to undergo training in their esteemed organization. I would like to thank to Mr. Sunil Patel the channel development manager of ICICI Prudential Life Insurance Company Limited -Patan and Mr. Mehul Parmar the Unit manager of ICICI Prudential Life Insurance Company Limited -Patan for giving me training in my project. And at last but not the least I also express my sincere thanks to all my respondents, without their cooperation and help; I could not be able to complete my study.
Tejas Soni Ashwin Chaudhary Nima Patel Sunita Prajapati
The project topic assigned to me was “To study the behaviour pattern of Investors for Life insurance” at ICICI Prudential Life Insurance Company Ltd, Surat. The sample size was 50. The data was collected through contacting personal Interview. The approach to interview was questionnaire. Analysis includes the behavior pattern of the investors. At the time of investment actually what they keep in mind to invest money. How they approach to life insurance. This report talks about the behavioral pattern of the investors in life insurance policies. While building up the report there are various things, which we have found out like there are many people who are interested in investing in life insurance policies for reasons like education for children, tax benefits, increasing wealth and many more. This study will also throw light on how their profile affect the behavior pattern of the investors.
TABLE OF CONTENTS
No. 1 2 3 Contents Industry Profile Company Profile Research Methodology • Research objective • Research design • Sources of data • Research approach • Research instrument • Sampling plan • Limitations 4 5 6 7 Data Analysis Conclusion Annexure Bibliography Page No.
BRIEF HISTORY OF INSURANCE
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. Some of the important milestones in the life insurance business in India: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
The Indian insurance industry is segmented into two distinct markets: the life insurance market and the non-life, or general, insurance market. The history of life insurance in India can be traced from 1818.
THE KEY FEATURES OF LIFE INSURANCE INDUSTRY Nomination: -When one makes a nomination, as the policyholder you continue to be the owner of the policy and the nominee does not have any right under the policy so long as you are alive. The nominee has only the right to receive the policy monies in case of your death within the term of the policy. Assignment :-If your intention is that your policy monies should go only to a particular person, you need to assign the policy in favor of that person Death Benefit: -The primary feature of a life insurance policy is the death benefit it provides. Permanent policies provide a death benefit that is guaranteed for the life of the insured, provided the premiums have been paid and the policy has not been surrendered. Cash Value: -The cash value of a permanent life insurance policy is accumulated throughout the life of the policy. It equals the amount a policy owner would receive, after any applicable surrender charges, if the policy were surrendered before the insured's death. Dividends: -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the company's divisible surplus. Paid-Up Additions: -Dividends paid to a policy owner of a participating policy can be used in numerous ways, one of which is toward the purchase of additional coverage, called paid-up additions. Policy Loans: -Some life insurance policies allow a policy owner to apply for a loan against the value of their policy. Either a fixed or variable rate of interest is charged. This feature allows the policy owner an easily accessible loan in times of need or opportunity. Conversion from Term to Permanent: -When in need of temporary protection, individuals often purchase term life insurance. If one owns a term policy, sometimes a provision is available that will allow her to convert her policy to a permanent one without providing additional proof of nsurability.
Disability Waiver of Premium Waiver of Premium is an option or benefit that can be attached to a life insurance policy at an additional cost. It guarantees that coverage will stay in force and continue to grow. THE BENEFITS OF LIFE INSURANCE Risk cover: -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future. Tax Deduction: - Under section 80C of the Income Tax Act of 1961 one can get tax deduction on premiums up to one lakh rupees. Life Insurance policies thus decrease the total taxable income of an individual. Loans: - An individual can easily access loans from different financial institutions by pledging his insurance policies. Retirement Planning: - What had provided protection against the financial consequences of premature death may now be used to help them enjoy their retirement years. Moreover the cash value can be used as an additional income in the old age. Educational Needs: - Similar to retirement planning the cash values that flow from ones life insurance schemes can be utilized for educational needs of the insurer or his children. ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY The Life Insurance Industry has an enviable track record among public sector units. It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources. Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nation's development. The industry is recognized as one of the largest financial Institutions in the country. The ventures initiated by the industry in the areas of Mutual Fund, Housing Finance has done exceedingly well in recent years. To protect the country's foreign exchange reserves, the
reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders. INDIA AGAINST THE GLOBAL MARKETS India is an under-insured market India’s insurance market is still at an early stage of development. This is reflected in low penetration rates and low premiums per capita. Insurable population – only 10% of India’s population have life insurance According to ING only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured Global perspective – India ranks 19th on the global stage India represents only around 0.66% market share (ranked 19th) of global insurance premiums. As of 2004 the largest markets in size are the US (50x bigger than India), Japan and the UK. Out of the Asian countries (ex Japan), South Korea is the largest insurance market, Comprising 2.12% of global premiums, followed by China with 1.61%. While insurance continues to reach out to the masses, India’s insurance penetration (premiums as a percentage of GDP) still remains very low at 3.2%. This can be split between life penetration of 2.6% and non-life of 0.6%. On the world stage, penetration rates are significantly below developed markets such as the US (9.4%), UK (12.6%) and Australia (8%). Compared with Asian markets, India still falls well short of its nearest peers with countries such as Japan, South Korea and Taiwan having some of the highest penetration rates in the world (between 9% and 14%). Nevertheless, despite current low spend on insurance, the trends in India remain positive. Since the opening up of the market to foreign players in 2000, penetration has more than doubled from 1.5%. With foreigners gaining momentum and building the insurance, coupled with India’s favorable macro overlay, we expect penetration rates to continue to expand.
FUTURE OF LIFE INAURANCE SCHEMES The Indian Life insurance sector will register a high growth rate in the future years to come says the report prepared by Fitch Ratings. This will be due to the innovative products, better distribution network, better services coupled with other never-before changes that have taken place in the insurance sector. In Nov 2005 the Indian Life insurance industry saw a growth of 46 %. This rally is expected to continue as people realize the importance of risk management. The private sector players are expected to grow with their innovative and profitable life insurance schemes. INSURANCE REGULATORY AUTHORITY On the recommendation of Malhotra Committee, an Insurance Regulatory Development Act (IRDA) passed by Indian Parliament in 1993. Its main aim was to activate an insurance regulatory apparatus essential for proper monitoring and control of the Insurance industry. Due to this Act several Indian private companies have entered into the insurance market, and some companies have joined with foreign partners. In economic reform process, the Insurance Companies has given boost to the socio-economic development process. The huge amount of funds that are at the disposal of Insurance Companies are directed as desired avenues like housing, safe drinking water, electricity, primary education and infrastructure. Above all the policyholders gets better pricing of products from competitive insurance companies. Liberalization The opening up of Insurance sector was a part of the ongoing liberalization in the financial sector of India. The domain of State-run insurance companies was thrown open to private enterprise on December 7, 1999, with the introduction of the Insurance Regulatory and Development Authority (IRDA) Bill. The opening up of the sector gave
way to the world known names in the industry to enter the Indian market through tie-ups with the eminent business houses. What was once a quiet business is becoming one of the hottest businesses today. Post liberalization The changing face of financial sector and the entry of several companies in the field of Life Insurance segment are one of the key results of these liberalization efforts. Insurance business by way of generating premium income adds significantly to the GDP. Despite the fact that the market is vast in India for the Insurance business, the coverage is far less compared with the international standards. Estimates show that a meager 35-40 million, out of a population of 950 million, have come so far under the umbrella of the insurance industry. The potential market is so huge that it can grow by 15 to 17 per cent per annum. With the entry of private players, the Indian Insurance Market may finally be able to make deeper penetration in to newer segments and expand the market size manifold. The quality of service will also improve and there will be wide The Life insurance market in India is likely to be risky in the initial stages, but this will improve in the next three to five years Therefore, it may be advantageous to be a second-round entrant. In the Life insurance market the need risk assessment systems and data that are the key to success in the Life insurance market are significantly underdeveloped in India even today. MAJOR MARKET PLAYERS Presently there are 15 Life insurance companies in the country. There is only one public sector company LIC and the rest 14 are private sector. Although LIC has been dominating the Life Insurance business since past few years the private players have now started to take the momentum.
Major market players Life Insurance Corporation of India (LIC) Life Insurance Corporation of India is a 100% government held Public Sector Company. Being the first to be established LIC is the forerunner in the Life Insurance sector. The market share for the first eight months of FY 2005-06 is 73.91%. ICICI Prudential Life Insurance ICICI Prudential Life is a 74:26 joint venture between ICICI and Prudential. It is a private sector company. The company was registered on 24/11/2000. The market share for the first eight months of FY 2005-06 is 7.11%. Birla Sun Life Insurance Company Birla Sun Life Insurance Company is a 74:26 joint venture between Birla group and Sun Life Financial. It is a private sector company. The company was registered on 31/1/2001. The market share for first the eight months of FY 2005-06 is 1.84%. HDFC – Standard HDFC standard is a 74:26 joint venture between HDFC and Standard Life. It is a private sector company. The company was registered on 23/10/2000. The market share for the first eight months of FY 2005-06 is 2.96%. OM Kotak Mahindra old Mutual OM Kotak Mahindra is a 74:26 joint venture between Kotak Mahindra bank and Old Mutual. It is a private sector company. The company was registered on 10/1/2001. The market share for the first eight months of FY 2005-06 is 0.71%.
Royal Sundaram Royal Sundaram marks the coming together of Sundaram Finance, one of India’s most respected and trusted finance companies, and Royal and Sun Alliance, one of the largest insurance groups in the world. Max New York Life Max New York Life is a 74:26 joint venture between J & Bank, Pallonji & Co and MetLife. It is a private sector company. The company was registered on 6/8/2001. The market share for the first eight months of FY 2005-06 is 1.32%. AMP SANMAR Amp Sanmar was purchased by Reliance group in 3Q2005. It was registered as a private sector insurance company on 3/1/2002.The market share for the first eight months of FY 2005-06 is 0.54%. Aviva Life Insurance India Aviva Life insurance is a 74:26 joint venture between Aviva and Dabur. It is a private sector company. The company was registered on 14/5/2002. The market share for the first eight months of FY 2005-06 is 1.12%. ING Vysya Life insurance ING Vysya Life Insurance is joint venture between Exide (50%), Gujarat Cements (14.87%), Enam (9.13%) and ING (26 %). It is a private sector company. The company was registered on 2/8/2001. The market share for the first eight months of FY 2005-06 is 0.63%.
Met Life India Met Life India is a 74:26 joint venture between 74:26 JV between J & Bank, Pallonji & Co and MetLife. It is a private sector company. The company was registered on 6/8/2001. The market share for the first eight months of FY 2005-06 is 0.40%. Allianz Bajaj Life Insurance Co. Allianz Bajaj Life Insurance Company is a 74: 26 Joint venture between Bajaj Auto limited and Allianz AIG. The company was registered on 3/8/2001. The market share for the first eight months of FY 2005-06 is 6.12%. SBI Life Insurance Company Ltd: SBI Life Insurance Company is a 74: 26 Joint venture between SBI and Cardiff S.A. The company was registered on 31/3/2001.It is a private sector company. The market share for the first eight months of FY 2005-06 is 1.52%. The TATA AIG Group TATA AIG group is a 74:26 JV between Tata Group and AIG. It belongs to the private sector. The company was registered on 12/2/2001. The market share for the first eight months of FY 2005-06 is 1.78%. Sahara India Life Insurance Company Ltd. First Wholly Indian Owned Private Life Insurance Company. The Company commenced operations from 30th October 2004. Shriram life insurance company Ltd Shriram Life is a recent entrant into the life insurance sector It is a 74:26 joint venture between the Shriram group through its Shriram Financial Holdings and Sanlam Life Insurance Limited, South Africa. The company expects to start operations soon.
Life insurance is all about making sure your family has adequate financial resources to make those plans and dreams come true. It provides financial protection to help your family or business to manage after your death. Whole life policies - Cover the insured for entire life. The insured does not receive money while he is alive; the nominee receives the sum assured plus bonus upon death of the insured. Endowment policies - Cover the insured for a specific period. The insured receives money on survival of the term and is not covered thereafter. Money back policies - The nominee receives money immediately on death of the insured. On survival the insured receives money at regular intervals during the term. These policies cost more than endowment with profit policies.
Children's policies - The nominee receives a guaranteed amount of money at a predetermined time and not immediately on death of the insured. On survival the insured receives money at the same pre-determined time. These policies are best suited for planning children's future education and marriage costs. Annuities/Pension schemes - are policies that provide benefits to the insured only upon retirement. If the insured dies during the term of the policy, his nominee would receive the benefits either as a lump sum or as a pension every month. Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies covering all the needs.
THE MAJOR DISTRIBUTION CHANNELS Retail Banks While a lot of bank relationships with insurance companies have been established, life insurance sales have been slower than one would expect he primary bank insurance activities have been the distribution of annuities, credit life, and direct marketing insurance. Banks are failing to incorporate successful sales tactics used to sell other financial services like investments. Full-Service Brokers Brokerage firms have gained much of the institutional and personal trust business lost by the banks. These firms have steadily captured assets, primarily at the expense of the banks. The number of non-bank trust companies has increased in recent years as independent trust companies have emerged and more broker/dealers are integrated services. Insurance companies view full-service brokers as a potentially new distribution channel as well. Discount Brokers and Online Financial Services Direct sales of life insurance are growing rapidly, but many of the traditional full-serve players seem to be letting it go. Across all financial services, consumers are expressing a willingness to deal with a variety of providers on the web. Web sites are starting to pop up offering consumer insurance products especially designed for distribution over the web. Independent Advisors To gain a better understanding of the demand amongst independent advisors for trust services and to gain a better feel for how independent advisors handle trust services, a research was performed with independent advisors across several broker/dealers and custodians. The interviews revealed that demand is greatest for living trusts among independent advisors, followed by demand for corporate trustee services.
Life Insurance Agents, CPAs, & Lawyers Independent insurance agents represent a number of companies and can research these companies’ products to find the right combination for their clients. Independent agents & insurance producer groups are growing in prevalence. Although producer groups are in their infancy, their emergence may potentially be realignment in the distribution of financial services. Independent shops realized that by pooling production and funding a central support office, they had increased buying power.
PERFORMANCE A robust 36 per cent increase in business by country's largest insurer LIC and strong performance by most of the private players pushed the overall life insurance growth to 46 per cent in April-November 2005. With competition intensifying, the 14 life-insurers collected Rs 16,604 crores in new premium in the first eight months of 2005-06 compared to Rs 11,337 crores in the year ago period, according to data compiled by regulator IRDA. State-owned Life Insurance Corporation gave a tough fight to private players, who were fast increasing their market share, to collect Rs 12,271 crores in new premium by selling over 1.3 crores policies. The 13 private players led by ICICI Prudential and Bajaj Allianz are leaving no stones unturned to expand business by netting more policyholders to increase their market share. Among private players, ICICI Prudential ranked at the top by collecting about Rs 1,180 crores after logging 73 per cent growth, followed by Bajaj Allianz, which increased business by 264 per cent to collect Rs 1,016 crores in premium. ICICI Prudential had a market share of 7.11 per cent while Bajaj Allianz increased its market pie to 6.12 per cent.
HDFC Standard Life had a market share of 2.96 per cent, followed by Birla Sunlife (1.84 per cent), Tata AIG (1.78 per cent), SBI Life (1.52 per cent), Max New York Life (1.32 per cent) and Aviva (1.12 per cent). Other players -- Kotak Mahindra Old Mutual, ING Vysya, AMP Sanmar, Met Life and Sahara Life -- each had less than one per cent of the market. HDFC Standard collected Rs 491 crores in premium income till November, followed Birla Sunlife (Rs 305 crores), Tata AIG (Rs 296 crores), SBI Life (Rs 252 crores), Max New York Life (Rs 219 crores) and Aviva (Rs 186 crores). In group insurance, LIC continued to dominate with a market share of about 81.32 per cent by covering 8.638 million lives till November this fiscal. Among the private insurers, SBI Life was at the top with a market share of 5.27 per cent, followed by Tata AIG (4.16 per cent), ICICI Prudential (2.34 per cent), Met Life (1.9 per cent), Aviva (1.16 per cent) and Bajaj Allianz (1.14 per cent). First Year Premium Underwritten By Life Insurers For The Period Ended November 2005 l.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Insurer LIC Bajaj Allianz ING Vysya AMP Sanmar SBI Life Tata AIG HDFC Standard ICICI Prudential Birla SunLife Aviva Kotak Mahnidra Old Mutual Max New York Met Life Sahara Life Market Sahre(%) 73.91 6.12 0.63 0.54 1.52 1.78 2.96 7.11 1.84 1.12 0.71 1.32 0.40 0.06
India's Number One private life insurer, ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank-one of India's foremost financial services companies-and Prudential plc- a leading international financial services group headquartered in the United Kingdom. Total capital stands at Rs. 18.15 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). Today, the PruICICI having nation-wide team comprises, about 450 branches, over 150,000 insurance advisors and 18 bancassurance partners. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings.
To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. IT WILL BE ACHIEVED THROUGH: Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently
Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees building transparency in all their dealings.
VALUES: Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion.
ICICI Bank is India's second largest bank and largest private sector bank with assets of Rs. 2823.72 billion as on September 30, 2006. ICICI Bank provides a broad spectrum of financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards, corporate and agricultural finance. The Bank services a growing customer base through a multichannel access network which includes over 635 branches and extension counters, 2325 ATMs, call centers and Internet banking.
Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 21 million customers, policyholder and unit holders worldwide. As of June 30, 2006, the company had over £234 billion in funds under management. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia, Prudential is the leading European life insurance company with a vast network of 23 life
and mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
For the past six years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
ICICI Prudential has one of the largest distribution networks amongst private life insurers in India. As of December 31, 2006 it had commenced operations in over 360 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Jammu in the north to Trivandrum in the south, and had over 175,000 advisors.
The company has 18 bancassurance partners, having tie-ups with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Lord Krishna Bank, all regional rural banks sponsored by Bank of India, as well as some co-operative banks. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies.
ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder.
Savings & Wealth Creation Solutions CashPlus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options. Save'n'Protect is a traditional endowment savings plan that offers life protection along with adequate returns.
CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years. LifeTime Super & LifeTime Plus are unit-linked plans that offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options - Preserver, Protector, Balancer and Maximiser. LifeLink Super is a single premium unit linked insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. Protection Solutions LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium. HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.
Education insurance under the SmartKid brand provides guaranteed educational benefits to a child along withlife insurance cover for the parent who purchases the policy. The policy is designed to provide money at important
milestones in the child's life. SmartKid plans are also available in unit-linked form - both single premium and regular premium.
ForeverLife is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. LifeTime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers an annuity option (guaranteed income for life) at the time of retirement. LifeLink Super Pension is a single premium unit linked pension plan. Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options.
Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover. Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Diabetes Care: Diabetes Care is the first ever critical illness product specially for individuals with Type 2 diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover. Group Insurance Solutions
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. Group Gratuity Plan: ICICI Pru's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. Group Superannuation Plan: ICICI Pru offers both defined contribution (DC) and defined benefit (DB) superannuation schemes to optimise returns for the members of the trust and rationalise the cost. Members have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. Group Immediate Annuities: In addition to the annuities offered to existing superannuation customers, we offer immediate annuities to superannuation funds not managed by us. Group Term Plan: ICICI Pru's flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.
Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. 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. Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available on SmarKid and CashPlus.
Waiver of Premium: In case of total and permanent disability due to an accident, the future premiums continue to be paid by the company till the time of maturity. This rider is available with LifeTime Super, LifeTime Super Pension and CashPlus
To study the behavioral pattern of the investors for life insurance. OBJECTIVES OF THE STUDY Research Objectives: 1. To study the consumer preference for life insurance in general.
2. To better know how the consumers’ profile affects their investment decision in insurance. 3. To understand the positioning of life insurance products.
RESEARCH DESIGN Marketing research can be classified in one of three categories: • • • Exploratory research Descriptive research Causal research
Descriptive research is more rigid then exploratory research and seeks to describe users of a product, determine the proportion of the population that uses the product, or predict the future demand for a product. As opposed to exploratory research, descriptive research
should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words the, who, what, where, when, why and how aspects of the research should be defined. Such preparation allows the opportunity to make any required changes before the costly process of data collection has begun. There are two basic types of descriptive research: longitudinal studies and cross sectional studies. Longitudinal studies are time series analyses that make repeated measurements of the same individuals, thus allowing one to monitor behavior such as brand switching. However, longitudinal studies are not necessarily representative since many people may refuse to participate because of the commitment required. Cross sectional studies sample of the population to make measurements at a specific point of time. A special type of cross sectional analysis is a cohort analysis, which tracks an aggregate of individuals who experience the same event within the same time interval overtime. Cohort analyses are useful for long term forecasting of product demand.
This research is Descriptive Research as this research is based on secondary data collected
DATA COLLECTION Researcher has two options in order to collect the data. He can gather secondary data, primary data, or both.
PRIMARY DATA Primary data are data that freshly gathered for a specific purpose or for a specific research project.
The primary data is collected through the systematic market research survey. This survey conducted through questionnaire, which have predefined specific objective questions. The 150 respondents are contacted within the Surat city. Again the informal interview is also taken for more in-depth to topic to the same respondents.
SECONDARY DATA Before going through the time and expenses of colleting primary data, one should check for secondary data that previously may have been collected for other purposes but that can be used in the immediate study. Secondary data may be internal to the firm, such as sales invoices and warranty cards, or may be external to the firm such as published data or commercial available data. The government census is a valuable source of secondary data.
SECONDARY DATA SOURCES The secondary data are data that were collected for another purpose and already exist somewhere. The secondary I used in my research are from the following Books and sites: The data collected from the following websites, www.iciciprulife.com www.irdaindia.org Other sources of secondary data, Various Brochers of ICICI Prudential Life Insurance. LIMITATIONS 1. As this study is based on sample survey, therefore there might be chances of some little variation from census survey.
2. Some of data are highly sensitive, therefore some of respondents might give wrong information about their personal detail viz. Income 3. This survey is conducted within Patan city; therefore it might not be generalized for other cities.
ANALYSIS AND INTERPRETATION
(1) How much amount of money do you invest annually? 10000-20000 30000-50000 20000-30000 more than 50000
Amount Investing 10000-20000 20000-30000 30000-50000 Above 500000 Total
Respondent Percentage (%) 24 13 09 04 50 48 26 18 08 100
Annualy Investment 8% 18% 48%
10000-20000 20000-30000 30000-50000 Above 500000
Interpretation: From the Above Graph we can say that 26% of the respondents invest between 20000-30000, where 48% respondents invest between 10000-20000. 18% respondents between 30000-50000 and only 8% respondents invest above 50000.
(2) For what purpose do you invest? For child education and marriage For increase wealth For financial securities Planning for retirement Long-term returns Tax saving Any other, please specify
Purpose Child education Increase in wealth For financial securities Retirement Long term return Tax saving Total Respondents
Respondent 04 14 06 02 15 09 50
Percentage 08% 28% 12% 04% 30% 18% 100
Investm ent Purpose 8%
Child education Increase in wealth For financial securities Retirement Long term return Tax sav ing
28% 30% 4% 12%
Interpretation: From the Above Graph we can say that the purpose of most of respondents was to invest for increasing wealth and long term return. The percentages were 28% and 30 % respectively. 28% respondents invest for increase in wealth. 04%, 30% and 12% respondents were investing for planning for retirement, long term return and for financial securities respectively. (3) Where do you invest your money? Bank FD Post office deposit Shares Mutual fund Insurance Any other, please specify
Age group Bank FD Mutual fund Post office deposite Insurance Shares Total
Respondent 13 08 07 12 10 50
Percentage 26% 16% 14% 24% 20% 100
W here to Invest 20% 26%
Bank FD Mutual fund Post office deposite
from the above graph we can say that out of 50 respondents 13 respondents invest in F.D. 07 invests in post office deposit. 12 in insurance and 08 in mutual fund. and 10 invest in Shares.
(4) Name the insurance company that you are aware of? LIC ICICI Prudential Bajaj- Alliance TATA-AIG Reliance life Birla sun life HDFC standard life Company Bajaj Allianz Life Insurance ICICI Prudential life Insurance TATA- AIG Reliance Life Insurance LIC Respondent 38 42 34 26 50
Bajaj Allianz Life Insurance ICICI Prudential life Insurance TATA- AIG Reliance Life Insurance LIC
Percentage 76.00% 84.00% 68.67% 52.00% 100.00%
From the above graph we can say that LIC is the having the 100% awareness where 42 respondents were aware of ICICpru. 38 respondents were aware of Baja-alliance and 34 were aware of TATA- AIG, where 26 were aware of reliance life.
(5) Have you invested in any life insurance policy? Yes Policy holder Yes No Total No Respondent 35 15 50 Percentage (%) 70 30 100
Invest in insurance
Interpretation: From the above graph we can say that 70% from the respondents were having the insurance policy where 30% respondents had not insurance policy.
If No Go to Q. no. 08 Otherwise continue with next question. 06) Which policy do you hold? Investment Only Insurance Only Both Gender Investment only Insurance only Both Total Respondent Percentage (%) 11 13 11 35 31 38 31 100
Investment only Insurance only Both
From the above graph we can say that 31 % of them having Policy for both purpose where 38% of the respondents were used to invest for insurance cover only and 31% were used to invest for investment purpose.
(7) In you family, who all posses an insurance cover? My self Spouse Children Parents Grand children Gender My self Spouse Children Parents Grand Children Respondent 32 30 17 28 04
who posses insurance
4% 25% 29%
My self Spouse Children Parents Grand Children
Interpretation: From the above graph we can say that 35 respondents have the policy for their selves as well as their children, spouse, parents and grandchildren.
(08) At present are you interested in investing into life insurance policy? Yes Gender Yes No Total No Respondent Percentage (%) 41 09 50 82 18 100
Interested in Investing in Life Insurance
Interpretation: From the above graph we can say that 82% right who wants to invest in Life insurance. And 18% were not ready to invest right now.
(09) Choose the insurance policy in which you would like to invest? Investment only Insurance only Both Gender Investment only Insurance only Both Total Respondent Percentage (%) 09 11 29 50 18 23 59 100
18% Investment only Insurance Only 59% 23% Both
Interpretation: From the above graph we can say that those who wants to invest most of them 59% wants invest for both the purpose Investment as well as insurance. Where 23% wants to invest for insurance purpose only and 18% wants to invest for Investment purpose only.
Personal Information :(1) Gender: Male Female
Gender Male Female Total
Respondent Percentage (%) 45 05 50 10 90 100
Gender of respondent
10% Male Female 90%
Interpretation: Form the above graph we can say respondents are Female. that 90 % respondents are Male and 10%
(2) Age Group: Below 25 25-35 35-45 45-55 Above 55
Age group Below 25 25-35 35-45 45-55 Above 55 Total
Age group of Respondent
8% 20% 2%2%
Respondent Percentage (%) 01 35 10 04 01 50 02 68 20 08 02 100
Below 25 25-35 35-45 68% 45-55 Above 55
Interpretation: Form the above graph we can say that 68 % respondents are between the age of 25-35 and 20% respondents are between 35-45. There were 02% respondents below 25, 08% between 45-55 and only 2% respondents were above 55 in my survey.
(3) Marital Status:
Marital Status Married Unmarried Total
Respondent Percentage (%) 38 12 50 76 24 100
Gender of Respondent 24%
Interpretation: Form the above graph we can see that 76 % respondents are married and 24 % respondents are unmarried.
In the survey it is found that among the private player ICICI prudential is doing well in the insurance sector. People are Interested in investing in ICICIpru than other private insurance company. Most of the respondents having the income between 60000150000 and they usually investing in the different policy. 89 of the respondents have already invested indifferent plan of insurance. 123 of the respondents are really interested in investing in Insurance. People Who have invested in Insurance most of them are having the plan which includes the purpose of Investment as well as Insurance cover Most of the respondents have the policy for their selves as well as their family members. The purpose of investment of most of the respondent was for the Child education and the Tax benefit. Although there are some respondents who invest for increase in wealth and financial security ad retirement solution. Most of the respondents have their investment in the Bank FD, and post office deposit. Some of the them also investing in mutual funds and insurance also. In the survey it is found that most of the respondents were having the services as their occupation.
People still doubt the private companies whether they provide return or not and their money will safe or not. Company should improve the quality f the adviser so that they can provide full information to the customers. People still investing in the bank FD and post. To capture that market company should come with the product, which is more safe and having good return capacity. Company should also give more focus on professionals and the businessman who can be the more profitable for the company.
After survey its known that people want to invest in the ULIPs than other policy. the reason is that it gives reasonable return with lore safety than other plan of Private insurance players. People should be given more knowledge about the benefit of the insurance. As the trust on private player is less the company should work on the getting the full trust of all the people. Because of insecurity in private companies people invest in the bank FD and Post office deposit.
Business Research Methodology
Author : Donald Cooper & Pamela Schindler
Publisher : TATA - Mcgraw hill Year of Publication : 2003 Marketing Management Author : Philip kotler Publisher : prentice hall Year of Publication : 2006
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