A

SUMMER TRAINING REPORT

ON

ICICI PRUDENCIAL LIFE INSURANCE (MARKETING)

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENTS FOR THE AWARD OF

THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

SESSION: 2018-2020

SUBMITTED TO: SUBMITTED BY:

MR SUMIT CHAUDHARY ABHISHEK GUPTA

ASSISTANT PROFESSOR ROLL NO -

SCHOOL OF ENGINEERING AND TECHNOLOGY

A UNIT OF GANGA TECHNICAL CAMPUS, SOLDHA,

MAHARISHI DAYANAND UNIVERSITY ROHTAK

1
 ACKNOWLEDGEMENT

With immense please I am presenting my summer internship project report on “ICICI PRU-
DENTIAL LIFE INSURANCE (MARKETING)” as a part of the curriculum of our college. We wish to
thank all the people who gave us unending support.

I express my profound thanks to Mr. Sumit Chaudhary project guide and all those who have indi-
rectly guided and helped us in preparation of this project.

I express my profound thanks to Mr. Parveen Dalal who was my head in ICICI PRUDENTIAL
under whose guidance I gave my exam of becoming an insurance agent in ICICI Prudential and I came
to know about the policies and marketing strategies in ICICI and completed my internship successfully.

I would also like to extend my gratitude to all staff and our colleagues of College of Management,
who provided moral support, a conductive work environment and the much-needed inspiration to con-
clude the project in time and a special thanks to my parents who are integral part of the project.

2
 DECLARATION

I Abhishek Gupta of MBA IInd year of School of Engineering and Technology a unit of Ganga Technical
Campus, Soldha, Bahadurgarh hereby declares that the project entitled Summer Internship Report on
“ICICI PRUDENCIAL LIFE INSURANCE (Marketing)” is an original work and the same has not been
submitted to any other institute for the award of any other degree. The interim report was present to the
Supervisor on the feasible suggestions have been duly incorporated in consultation with the supervisor.

Signature of the Candidate

3
EXECUTIVE SUMMARY

ICICI Prudential is one of the largest insurance networks in the country and 2nd largest life insurance
company in India. The ICICI group has been in existence since 1955 when ICICI group was created.
ICICI Prudential started in 2002 as subsidiary of ICICI Limited. Today ICICI Life Insurance has a cus-
tomer base of 4 million and total assets exceeding Rs 1, 00,000 Cr. making it in the 2nd largest life insur-
ance company in India next only to LIC.

The insurance sector after opening up provides greater opportunities. The global players have emerged
and the market has changed significantly. In the changed scenario the expectation is that the low insur-
ance premium as a percentage of GDP prevailing in India will improve and will offer better opportuni-
ties to the insurance players.

Life Insurance sector is one of the key areas where enormous business potential exists. In India currently
the life insurance premium as a percentage of GDP is 1.3 percent against 5.2 percent in the US, but in
the liberized scenario the life insurance premium was projected to grow around 18% to 20% from Rs
215 billion in 1998-99 to Rs 592 billion in 2004-2005 and to Rs 1450 billion in 2009-10. Corporate non
life premium was projected to grow from Rs 84 billion in 19998-99 to Rs 386 billion in year 2009-10.

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 TABLE OF CONTENT

INTRODUCTION .............................................................................................................. 7
What is Insurance? .................................................................................................................................................7
Understanding How Insurance Works ....................................................................................................................7
Insurance Policy Components ................................................................................................................................7
Special Considerations .......................................................................................................................................8
Key Takeaways ..................................................................................................................................................8

NEED FOR INSURANCE .............................................................................................. 10

TYPES OF INSURANCE ............................................................................................... 11
LIFE INSURANCE ............................................................................................................................................. 11
WHAT IS GENERAL INSURANCE? ............................................................................................................... 12
What are the types of General Insurance available? / What all can be insured? ............................................. 14
HEALTH INSURANCE ................................................................................................................................. 14
MOTOR INSURANCE ....................................................................................................................................... 15
1. Car Insurance ............................................................................................................................................... 15
2. Two-wheeler Insurance ............................................................................................................................... 16

Types of Motor Insurance: .............................................................................................. 16

TRAVEL INSURANCE ..................................................................................................................................... 17
Home Insurance ................................................................................................................................................... 17
FIRE INSURANCE............................................................................................................................................. 18
Types of fire insurance .................................................................................................................................... 18

HOW TO BUY INSURANCE? ...................................................................................... 19

WHAT DOES INSURANCE NOT COVER? .................................................................................................... 20
HOW MUCH DOES INSURANCE COST? ...................................................................................................... 21
Life Insurance .................................................................................................................................................. 21
Motor/Auto Insurance: .................................................................................................................................... 22
Travel Insurance .............................................................................................................................................. 22
Health Insurance .............................................................................................................................................. 22
Home Insurance ............................................................................................................................................... 22
HOW TO USE THE INSURANCE MONEY? ................................................................................................... 22

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INSURANCE IN INDIA .................................................................................................. 23
HISTORICAL PERSPECTIVE ABOUT LIFE INSURANCE IN INDIA ................ 24
IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS IN INDIA
............................................................................................................................................ 27
LEGAL STRUCTURE .................................................................................................... 28
INSURANCE SECTOR REFORMS ............................................................................. 29
Health Insurance Regulations, 2013 .................................................................................................................... 31
The role of TPA includes: ................................................................................................................................... 32

Phases of Regulatory Reforms ........................................................................................ 33

INSURANCE MARKET IN INDIA............................................................................... 34
ORGANISATION PROFILE: ICICI PRUDENTIAL ................................................. 37
ICICI PRUDENTIAL EDGE ......................................................................................... 39
VISION AND VALUES................................................................................................... 40
PROMOTERS .................................................................................................................. 41
ABOUT ICICI BANK ..................................................................................................................................... 41
ABOUT PRUDENTIAL CORPORATION HOLDINGS LIMITED ............................................................. 41

MANAGEMENT PROFILE........................................................................................... 42
BOARD OF DIRECTORS: ................................................................................................................................. 42

MANAGEMENT TEAM Mr. N. S. Kannan ................................................................ 43

PRODUCTS OF ICICI PRUDENTIALLIFE INSURANCE ...................................... 44
AWARDS AND RECOGNITIONS................................................................................ 45
MY EXPERIENCE IN ICICI PRUDENTIAL ............................................................. 47
CONCLUSION ................................................................................................................. 48
BIBLIOGRAPHY: ........................................................................................................... 49

6
 INTRODUCTION

What is Insurance?
Insurance is a means of protection from financial loss. It is a form of risk management, primarily used
to hedge against the risk of a contingent or uncertain loss.
An entity which provides insurance is known as an insurer, insurance company, insurance carrier
or underwriter. A person or entity who buys insurance is known as an insured or as a policyholder. The
insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the
form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the
event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms,
and usually involves something in which the insured has an insurable interest established by ownership,
possession, or pre-existing relationship.
The insured receives a contract, called the insurance policy, which details the conditions and circum-
stances under which the insurer will compensate the insured. The amount of money charged by the in-
surer to the policyholder for the coverage set forth in the insurance policy is called the premium. If the
insured experiences a loss which is potentially covered by the insurance policy, the insured submits a
claim to the insurer for processing by a claims adjuster. The insurer may hedge its own risk by taking
out reinsurance, whereby another insurance company agrees to carry some of the risk, especially if the
primary insurer deems the risk too large for it to carry.

Understanding How Insurance Works

There is a multitude of different types of insurance policies available, and virtually any individual or
business can find an insurance company willing to insure them—for a price. The most common types of
personal insurance policies are auto, health, homeowners, and life. Most individuals in the United States
have at least one of these types of insurance, and car insurance is required by law.

Businesses require special types of insurance policies that insure against specific types of risks faced by
a particular business. For example, a fast food restaurant needs a policy that covers damage or injury
that occurs as a result of cooking with a deep fryer. An auto dealer is not subject to this type of risk but
does require coverage for damage or injury that could occur during test drives.

There are also insurance policies available for very specific needs, such as kidnap and ransom (K&R),
medical malpractice, and professional liability insurance, also known as errors and omissions insurance.

Insurance Policy Components

A firm understanding of these concepts goes a long way in helping you choose the policy that best suits
your needs.

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Premium
A policy's premium is its price, typically expressed as a monthly cost. The premium is determined by the
insurer based on your or your business's risk profile, which may include creditworthiness. For example,
if you own several expensive automobiles and have a history of reckless driving, you will likely pay
more for an auto policy than someone with a single mid-range sedan and a perfect driving record. How-
ever, different insurers may charge different premiums for similar policies. So finding the price that is
right for you requires some legwork.

Policy Limit
The policy limit is the maximum amount an insurer will pay under a policy for a covered
loss. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life of
the policy, also known as the lifetime maximum.

Typically, higher limits carry higher premiums. For a general life insurance policy, the maximum
amount the insurer will pay is referred to as the face value, which is the amount paid to a beneficiary
upon the death of the insured.

Deductible
The deductible is a specific amount the policy-holder must pay out-of-pocket before the insurer pays a
claim. Deductibles serve as deterrents to large volumes of small and insignificant claims. Deductibles
can apply per-policy or per-claim depending on the insurer and the type of policy. Policies with very
high deductibles are typically less expensive because the high out-of-pocket expense generally results in
fewer small claims.

Special Considerations
With regard to health insurance, people who have chronic health issues or need regular medical attention
should look for policies with lower deductibles. Though the annual premium is higher than a comparable
policy with a higher deductible, less expensive access to medical care throughout the year may be worth
the trade-off.

Key Takeaways

 Insurance is a contract (policy) in which an insurer indemnifies another against losses from spe-
cific contingencies and/or perils.
 There many types of insurance policies. Life, health, homeowners, and auto are the most com-
mon forms of insurance.
 The components that make up most insurance policies are the deductible, policy limit, and pre-
mium.

Combined Physical Damage Coverage

Combined physical damage coverage is auto insurance designed to provide coverage for collision and
non-collision damages.

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Understanding Insurance Claims

An insurance claim is a formal request by a policyholder to an insurance company for coverage or com-
pensation for a covered loss or policy event. The insurance company validates the claim and, once ap-
proved, issues payment to the insured.

Understanding Liability Insurance

Liability insurance provides the insured party with protection against claims resulting from injuries and
damage to people and/or property.

Health Insurance Premium

A health insurance premium is an upfront payment made on behalf of an individual or family in order to
keep their health insurance policy active.

Inside Indemnity

Indemnity is compensation for damages or loss. Indemnity, in the legal sense, may also refer to an ex-
emption from liability for damages.

Understanding Indemnity Insurance

Indemnity insurance is an agreement wherein one party guarantees compensation for losses or damages
incurred by another.

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 NEED FOR INSURANCE

NEED FOR LIFE INSURANCE:

Life brings with it many surprises, some pleasant and some not so and a Life Insurance Plan ensures that
you are better prepared to face uncertainties. In a number of ways:

A) Protection:
You need life insurance to be there and protect the people you love, making sure that your family has a
means to look after itself after you are gone. It is a thoughtful business concept designed to protect the
economic value of a human life for the benefit of those financially dependent on him. That is a good rea-
son. Supposing you are suffered by an injury that keeps you away from earning? Would you like to be a
financial burden on your family, already losing out on your salary? With a life insurance policy, you are
protected. Your family is protected.

B) Retirement:
Life insurance makes sure that have regular income after retire and also helps to maintain standard of
living. It can ensure that your post-retirement years will be spent in peace and comfort.

C) Savings and Investments:

Insurance is a means to Save and Invest. The periodic premiums are like Savings and you are assured of
a lump sum amount on maturity. A policy can come in really handy at the time of your child’s education
or marriage! Besides, it can be used as supplemental retirement income.

D) Tax Benefits:
Life insurance is one of the best tax saving options today. Tax can be saved twice on a life insurance
policy-once when you pay your premiums and once when you receive maturity benefits. Money saved is
money earned.

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 TYPES OF INSURANCE

LIFE INSURANCE

Life insurance is a contract that offers financial compensation in case of death or disability. Some life
insurance policies even offer financial compensation after retirement or a certain period of time. Life
insurance, thus, helps you secure your family’s financial security even in your absence. You either make
a lump-sum payment while purchasing a life insurance policy or make periodic payments to the insurer.
These are known as premiums. In exchange, your insurer promises to pay an assured sum to your family
in the event of death, disability or at a set time.

Life insurance can help you support your family even after retirement. Depending on what it covers,
Life insurance can be classified into various types:

- It is the most basic type of insurance.

- It covers you for a specific period.
- Your family gets a lump-sum amount in the case of your
Term Insurance
death.
- If, however, you survive the term, no money will be paid
to you or your family.

- It covers you for a lifetime.

- Your family receives a certain sum of money after your
Whole Life Insur-
death.
ance
- They will also be entitled to a bonus that often accrues on
such amount.

- Like a term policy, it is also valid for a certain period.

- A lump-sum amount will be paid to your family in the
Endowment Policy event of your death.
- Unlike a term plan, you get the maturity proceeds after the
term period.

- A certain percentage of the sum assured will be paid to

you periodically throughout the term as survival benefit.
Money-back Policy - After the expiry of the term, you get the balance amount
as maturity proceeds.
- Your family gets the entire sum assured in case of death
during the policy period. This is regardless of the survival

11
 benefit payments made.

- Such products double up as investment tools.

- A part of your premium goes towards your insurance cov-
Unit-linked Insur- er.
ance Plans (ULIPs) - The remaining amount is invested in Debt and Equity.
- A lump-sum amount will be paid to your family in the
event of your death.

- This ensures your child’s financial security.

- In the event of your death, your child gets a lump-sum
amount.
Child Plan
- The insurer pays the premium amounts after your death.
- Your child will continue to get a certain sum of money at
specific intervals.

- This helps build your retirement fund.

- You can get a regular pension amount after retirement.
Pension Plans
- In the case of your death, your family can claim the sum
assured.

Tax Benefits

 Life insurance not only ensures the well-being of your family, it also brings tax benefits.
 The amount you pay as premium can be deducted from your total taxable income.
 However, this is subject to a maximum of Rs 1.5 laky, under Section 80C of the Income Tax Act.
 The premium amount used for tax deduction should not exceed 10% of the sum assured.

WHAT IS GENERAL INSURANCE?

A general insurance is a contract that offers financial compensation on any loss other than death. It in-
sures everything apart from life. A general insurance compensates you for financial loss due to liabilities
related to your house, car, bike, health, travel, etc. The insurance company promises to pay you a sum
assured to cover damages to your vehicle, medical treatments to cure health problems, losses due to theft
or fire, or even financial problems during travel.

Simply put, a general insurance offers financial protection for all your assets against loss, damage, theft,
and other liabilities. It is different from life insurance.

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Let us help you understand better:

Situation 1 Situation 2 Situation 3

You cannot stop cele-

You plan to propose to
brating your new car.
your girlfriend on the
You hit the roads with Your daughter wants to be-
Eiffel Tower.
your latest possession. come a pilot.
You already finalised the
Everything goes well You save all your disposable
deal with a jeweller in
until a car suddenly income to fund her dreams.
Paris.
tries to overtake you. Unfortunately, you fall severe-
But, things don’t go as
It leaves huge dents ly ill.
planned and you meet
and dislocates your
with an accident there.
left mirror.

Your new baby on the

Your treatment requires You need Rs. 2 lakh for your
block needs repairs
Rs. 50,000. But, still treatment immediately. Yet,
worth Rs. 30,000.
paid for that dainty piece you also easily pay your
Yet, you have a smile
of jewellery. daughter’s course fees.
on your face.

HOW?

Your Travel insurance The dent in your car

made you ready for didn’t cause a dent in
You didn’t face a dilemma of
emergencies. your pocket.
choosing one over the other
It paid for the expenses Your motor insur-
and compromise your daugh-
related to your accident. ance’ own damage
ter’s future. Your health insur-
You could, thus, go cover paid for your
ance took care of your treat-
ahead and surprise your car’s damages caused
ment costs. Your savings,
partner with a diamond by the accident. In
thus, remained unaffected by
ring without worrying fact, the insurer set-
your sudden illness.
about the treatment tled the bill directly at
costs. the garage.

13
As you can see, General Insurance can be the answer to life’s various problems. But, for that, you need
to select the right insurances from the myriad ones available.

What are the types of General Insurance available? / What all can be insured?

You can get almost anything and everything insured. But there are five key types available:

1. Health Insurance
2. Motor Insurance
3. Travel Insurance
4. Home Insurance
5. Fire Insurance

HEALTH INSURANCE

This type of general insurance covers the cost of medical care. It pays for or reimburses the amount you
pay towards the treatment of any injury or illness.

It usually covers:

 Hospitalisation
 The treatment of critical illnesses
 Medical bills prior to or post hospitalization
 Day care procedures like Cataract operations

You can also opt for add-on benefits like:

 Maternity cover: Your health insurance covers you for the costs related to childbirth. This in-
cludes pre-delivery check-ups, hospitalization during delivery, and post-natal care.
 Pre-existing diseases cover: Your health insurance takes care of the treatment of diseases you
may have before buying the health insurance policy.
 Accident cover: Your health insurance can pay for the medical treatment of injuries caused due
to accidents and mishaps.

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Your health insurance can also help you save tax. Your premium payment can reduce your taxable in-
come.

Tax deduction on the premium

For Total
amount

Rs. 25,000 (Rs. 30,000 if you are a Rs. 25,000 (or Rs.
Self
senior citizen) 30,000)

Parents, who are sen- Rs. 55,000 (or Rs.

Rs. 30,000
ior citizens 60,000)

Senior citizen = Individual aged 60 or over

MOTOR INSURANCE

Motor insurance is for your car or bike what health insurance is for your health.

It is a general insurance cover that offers financial protection to your vehicles from loss due to accidents,
damage, theft, fire or natural calamities

You can also get motor insurance for your commercial vehicles.

In India, you cannot drive or ride without motor insurance.

Let’s look at the two key types:

1. Car Insurance

It’s precious—your car. You paid laths of rupees to buy that beauty. Even a single scratch can be pain-
ful, forget about bigger damages.

Car insurance can reduce this pain for a few thousand rupees.

15
How it works:

What the insurer will pay for depends on the type of car insurance plan you purchase

2. Two-wheeler Insurance

This is your bike’s guardian angel. It’s similar to Car insurance.

You cannot ride a bike or scooter in India without insurance.

How it works:

As with car insurance, what the insurer will pay depends on the type of insurance and what it covers.

Types of Motor Insurance:

Third Party Insurance Comprehensive Car Insurance

Compensates for the damages Covers all kinds of damages and liabilities
caused to another individual, caused to you or a third party. It includes dam-
their vehicle or a third-party ages caused by accidents, sabotage, theft, fire,
property. natural calamities, etc.

You can increase your insurance protection with these Add-on covers for your car and bike insurance:

For more details about Motor Insurance, click here.

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TRAVEL INSURANCE

A travel insurance compensates you or pays for any financial liabilities arising out of medical and non-
medical emergencies during your travel abroad or within the country.

There are two types of Travel Insurance.

Single Trip Policy Annual Multi Trip

It covers you during a trip that lasts un- It covers you for several trips you take
der 180 days. within a year.

What all does travel insurance usually covers?

 Loss of baggage
 Emergency medical expenses
 Loss of passport
 Hijacking
 Delayed flights
 Accidental death

Home Insurance

Home insurance is a cover that pays or compensates you for damage to your home due to natural calami-
ties, man-made disasters or other threats.

It covers liabilities due to fire, burglary, theft, flood, earthquakes, and sabotage. It not only offers finan-
cial protection to your home, but also takes care of the valuables inside the property.

Some of the common types of home insurance are:

This covers your home against fire outbreaks and special

perils.
Standard fire and spe- The dangers covered are:
cial perils policy - Natural calamities like lightening, flood, storm, earth-
quake, etc.
- Damage caused due to overflowing or bursting of water
tanks, pipes, etc.

17
 - Damage caused due to man-made activities such as riots,
strikes, etc.

This protects the structure of your home from any kinds

Home structure insur- of risks and damages.
ance The cover is also extended to the permanent fixtures with-
in the house such as kitchen and bathroom fittings.

Public liability cover- The damage caused to another person or their property
age inside the insured home can also be compensated.

This covers the content inside the insured home.

Content Insurance What’s commonly covered: Television, refrigerator, port-
able equipment, etc.

FIRE INSURANCE

Fire insurance pays or compensates for the damages caused to your property or goods due to fire.

It covers the replacement, reconstruction or repair expenses of the insured property as well as the sur-
rounding structures.

It also covers the damages caused to a third-party property due to fire.

In addition to these, it takes care of the expenses of those whose livelihood has been affected due to fire.

Types of fire insurance

Some of the common types are:

The insurer firsts value the property and then undertakes to

Valued policy pay compensation up to that value in the case of loss or dam-
age.

Floating policy It covers the damages to properties lying at different places.

18
 This is known as an all-in-one policy.
Comprehensive
It has a wide coverage and includes damages due to fire, theft,
policy
burglary, etc.

This covers you for a specific amount which is less than the
Specific policy
real value of the property.

HOW TO BUY INSURANCE?

You can buy in 4 simple steps:

Step 1:

KNOW WHAT YOU NEED

 Understand the covers you need based on personal requirements.

 Get all the important details. For example, in the case of motor insurance get details such as the
manufacturing date of the vehicle, engine specifications, etc. For health insurance, check whether
you need insurance for self or the entire family.
 This initial assessment will help you get an idea about the coverage that you need.

Step 2:

CHECK OPTIONS AVAILABLE

 Compare the benefits offered.

 Check the add-ons offered
 Don’t forget to read the exclusions
 What’s the sum assured?
 Are there any extra services offered

Step 3:

PICK THE RIGHT PLAN

 Select the plan that best suits your requirements.

 Reach out to the company offering the plan.

19
Step 4:

PAY PREMIUM

 Fill in the application and pay the premium.

 You can do it online on the insurer’s website.
 You can also buy from a broker or the dealership.

WHAT DOES INSURANCE NOT COVER?

Your policy may not cover liabilities in certain situations. These are known as exclusions.

Let’s have a look at a few of them.

If death occurs due to:

- Alcohol or drug abuse
Life - War or terrorism
- Suicide or self-inflicted injuries
- Gross negligence or carelessness

- Damage caused when the policy is not active

- Loss of personal belongings kept in the car
- Damage to a car that is not insured
Car
- Damage caused when driving without a license
- Damage caused when driving under the influence of alcohol or drugs
- Damage due to wars, mutiny or nuclear risks

- Damage due to war, mutiny or nuclear risk

- Normal wear and tear and general ageing
- Tire or tube punctures. (If, however, your two-wheeler is damaged at the
Bike same time, you will be compensated for 50% of the cost of repair or re-
placement
- Mechanical or Electrical breakdown
- Any loss or damage caused outside India

- Hospitalization due to war or related activities

Health - Medical condition due to abuse of intoxicants or hallucinogenic sub-
stances
- Any medical condition existing before buying the policy during the wait-

20
 ing period
- Non-allopathic therapies such as acupuncture, yoga, naturotherapy, etc.
- Diagnostic charges if the reports do not confirm the existence of the cov-
ered disease
- Self-inflicted injuries

- Travelling against the advice of the physician

- Baggage delay for less than 24 hours
Travel - Psychological illness or self-inflicted injuries during your trip
- War or civil unrest in international locations
- Participation in hazardous sports like bungee jumping, parachuting, etc.

- Wilful destruction of the property

- Damages caused due to wear and tear
Home - Damages caused due to war
- Loss of money kept inside the property
- Loss to a property that has remain unoccupied for a certain period

Loss or damage caused to the property due to:

- Nuclear perils
Fire - War or related activities
- Pollution or contamination
- Mechanical or electrical breakdowns

HOW MUCH DOES INSURANCE COST?

Your insurance costs depend on your premium amount. This premium amount depends on several fac-
tors that differ from insurance to insurance. Here’s a look:

Life Insurance

 Age
 Health (past and current)
 Your occupation
 The type of coverage/plan
 Your smoking and drinking habits
 The sum assured

21
Motor/Auto Insurance:

 Make-Model of the vehicle

 The type of coverage/plan
 The value, age of your vehicle
 Your claim history

Travel Insurance

 The sum assured

 The type of coverage/plan
 Age
 Your health
 The location of travel

Health Insurance

 Your family health history

 The sum assured
 The type of coverage/plan
 Your age and gender
 Your health history

Home Insurance

 The size of your home

 The type of coverage/plan
 The age of your home and the systems installed therein
 The location of your home
 The sum assured

You can also use online calculators to check the premium amount.

HOW TO USE THE INSURANCE MONEY?

 You have to make a claim against your insurance policy.

 Give details about the loss you suffered. This differs from insurance to insurance.
 Submit the bills/proof of damage, loss, hospitalization, etc.
 The insurance company would verify your claim.
 It will then pay the bill or reimburse you for your loss.

22
 INSURANCE IN INDIA

Insurance in India refers to the market for insurance in India which covers both the public and private
sector organizations. It is listed in the Constitution of India in the Seventh Schedule as a Union
List subject, meaning it can only be legislated by the Central Government only.

The insurance sector has gone through a number of phases by allowing private companies to solicit in-
surance and also allowing foreign direct investment. India allowed private companies in insurance sector
in 2000, setting a limit on FDI to 26%, which was increased to 49% in 2014. Since the privatization in
2001, the largest life-insurance company in India, Life Insurance Corporation of India has seen its mar-
ket share slowly slipping to private giants like HDFC Life, Exide Life Insurance, ICICI Prudential Life
Insurance and Company. The insurance sector in India has come a full circle from being an open com-
petitive 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.

With largest number of life insurance policies in force in the world, Insurance happens to be a mega op-
portunity in India. It is a business growing at the rate of 1520 percent annually and presently is of the
order of Rs 450 Billion. Together with banking services, it adds about 7 per cent to the country’s GDP.
Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are
8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and
non-life insurance continues to be below international standards. In addition, this part of the population
is subject to weak social security and pension systems with hardly any old age income security. This is
an indicator that growth potential for the insurance sector is immense.

A well-developed and evolved insurance sector is necessary for economic development as it provides
long-term funds for infrastructure development and at the same time strengthens the risk taking ability.
It has estimated that, over the next ten years India would require investments of the order of one trillion
US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to
sustain economic growth of the country.

Insurance is a federal subject in India. Two legislations govern the sector- The Insurance Act- 1938 and
the IRDA Act- 1999. The insurance sector in India has come a full circle from being an open competi-
tive 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.

23
HISTORICAL PERSPECTIVE ABOUT LIFE INSURANCE IN INDIA

Insurance in this current form has its history dating back to 1818, when Oriental Life Insurance Compa-
ny was started by Anita Bhavsar in Kolkata to cater to the needs of European community. It was consid-
ered as a means to provide for English Widows. Interestingly in those days, a higher premium was
charged for Indian lives than the non-Indian lives, as Indian lives were considered more risky for cover-
age. The pre-independence era in India saw discrimination between the lives of foreigners (English) and
Indians with higher premiums being charged for the latter in 1870, Bombay Mutual Life Assurance So-
ciety became the first Indian insurer.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to
charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company estab-
lished in 1880. The General insurance business in India, on the other hand, can trace its roots to the Tri-
ton (Tital) Insurance Company Limited, the first general insurance company established in the year 1850
in Calcutta by the British. Until the end of nineteenth century, insurance business was almost entirely in
the hands of overseas companies.

At the dawn of the twentieth century, many insurance companies were founded. In the year 1912, the
Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance busi-
ness. The Life Insurance Companies Act, 1912 made it necessary that the premium-rate tables and peri-
odical valuations of companies should be certified by an actuary. However, the disparity still existed as
discrimination between Indian and foreign companies. The oldest existing insurance company in India is
the National Insurance Company, which was founded in 1906, and is still in business.

Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of
1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business
in India. By 1938, there were 176 insurance companies. The first comprehensive legislation was intro-
duced with the Insurance Act of 1938 that provided strict State Control over insurance business. The in-
surance business grew at a faster pace after independence. Indian companies strengthened their hold on
this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

The Government of India issued an Ordinance on 19 January 1956 nationalizing the Life Insurance sec-
tor and Life Insurance Corporation came into existence in the same year. The Life Insurance Corpora-
tion (LIC) absorbed 154 Indian, 16 non-Indian insurers and also 75 provident societies—245 Indian and
foreign insurers in all. In 1972 with the General Insurance Business (Nationalization) Act was passed by
the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1
January 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insur-
ance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and
the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated
as a company in 1971 and it commenced business on 1 January 1973.

24
The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector.
Before that, the industry consisted of only two state insurers: Life Insurers (Life Insurance Corporation
of India, LIC) and General Insurers (General Insurance Corporation of India, GIC). GIC had four sub-
sidiary companies. With effect from December 2000, these subsidiaries have been de-linked from the
parent company and were set up as independent insurance companies: Oriental Insurance Company
Limited, New India Assurance Company Limited, National Insurance Company Limited and United In-
dia Insurance Company.

The Government of India in 1956, brought together over 240 private life insurers and provident societies
under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. National-
ization was justified because it would create much-needed funds for rapid industrialization. This was in
conformity with the Government's chosen path of State lead planning and development.

The (non-life) insurance business continued to thrive with the private sector until 1972. Their operations
were restricted to organized trade and industry in large cities. The general insurance industry was na-
tionalized in 1972. India Assurance Company, Oriental Insurance Company and United India Insurance
Company are subsidiaries of the General Insurance Company (GIC).

By 2012 Indian Insurance is a US$72 billion industry. However, only two million people (0.2% of the
total population of 1 billion) are covered under Mediclaim. With more and more private companies in
the sector, this situation is expected to change. ECGC, ESIC and AIC provide insurance services for
niche markets. So, their scope is limited by legislation but enjoy some special powers. The majority of
Western Countries have state run medical systems so have less need for medical insurance. In the UK,
for example, the corporate cover of employees, when added to the individual purchase of coverage gives
approximately 11–12% of the population on cover due largely to usage of the state financed National
Health Service (NHS), whereas in developed nations with a more limited state system, like USA, about
75% of the total population are covered under some insurance scheme.

The history and development of insurance in India can broadly divided into four periods like early peri-
ods, Pre-Nationalization period, Post-Nationalization period and Post-Liberalization period. The argu-
ment behind opening up of the sector was consumer-centric, which claimed that opening up insurance
would give better products and services to consumers; the opponents of privatization argued that in poor
country like India insurance needs to have social objectives and newcomers will not have that commit-
ment although the insurance sector was opened to completion again in 1999-2000, it still has some way
to go before we can gauge its true performance. Following the recommendations of the Malhotra com-
mittee report, in 1999, the insurance regulatory and development authority (IRDA) was constituted as an
autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statu-
tory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to en-

25
hance customer satisfaction through increased consumer choice and lower premiums, while insuring the
financial security of the insurance market. The IRDA opened of the market in August 2000 with the in-
vitation for application for registration. Foreign companies were allowed ownership of up to 26 percent.
The authority has the power to frame regulations under section 114A of the insurance act, 1938 and has
from 2000 onwards frame various regulations ranging from registration of companies for caring on in-
surance business to protection of policy holders‟ interest. Presently 24 insurance companies including
LIC of India Chapter 5: Reforms and Regulations in Insurance Sector in India Page | 123 are operating
their business in Indian insurance market

The economic liberalization in India refers to the ongoing economic liberalization, initiated in 1991, of
the country's economic policies, with the goal of making the economy more market-oriented and ex-
panding the role of private and foreign investment. Specific changes include a reduction in import tar-
iffs, deregulation of markets, reduction of taxes, and greater foreign investment. By 1991, India still had
a fixed exchange rate system, where the rupee was pegged to the value of a basket of currencies of major
trading partners

The first sign of government concern about the state of the insurance industry was revealed in the early
nineties, when an expert committee was set up under the chairmanship of late R.N. Malhotra. The Mal-
hotra Insurance sector reform has become one of the most contentious issues in India‘s economic reform
process. Unlike in the banking sector, the insurance sector continues to defy and stall the course of fi-
nancial reforms in India Committee, which submitted its report in January 1994, made some far reaching
recommendations which, if implemented, could change the structure of the insurance industry. The
Committee urged the insurance companies to abstain from indiscriminate recruitment of agents, and
stressed on the desirability of better training facilities, and a closer link between the emolument of the
agents and the management and the quantity and quality of business growth. It also emphasized the need
for a more dynamic management of the portfolios of these companies, and proposed that a greater frac-
tion of the funds available with the insurance companies be invested in non-government securities.

26
IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS IN INDIA

YEAR MILESTONES OF INSURANCE INDUSTRY

First piece of insurance regulation promulgated—Indian Life Insurance Company
1912 Act, 1912.

1928 Promulgation of the Indian Insurance Companies Act.

Insurance Act 1938 introduced the first comprehensive legislation to regulate insur-
1938 ance business in India.

1956 Nationalization of life insurance business in India

1972 Nationalization of general insurance business in India.

1993 Setting up of the Malhotra Committee

1994 Recommendations of Malhotra Committee released

1996 Setting up of an (interim) Insurance Regulatory Authority (IRA).

The government gives greater autonomy to LIC, General Insurance Corporation of
India (GIC) and its subsidiaries with regard to the restructuring of boards and flexi-
1997 bility in investment norms aimed at channeling funds to the infrastructure sector
The Standing Committee headed by Murali Deora decides that foreign equity in pri-
vate insurance should be limited to 26%. The IRA Act was renamed the Insurance
1999 Regulatory and Development Authority (IRDAI) Act

1999 Cabinet clears IRDAI Act.

2000 President gives assent to the IRDAI Act

2015 FDI have been hiked to 49 percent in Insurance Sector

27
 LEGAL STRUCTURE

The insurance sector went through a full circle of phases from being unregulated to completely regulate
and then currently being partly deregulated. It is governed by a number of acts.
The Insurance Act of 1938 was the first legislation governing all forms of insurance to provide strict
state control over insurance business. Life insurance in India was completely nationalized on 19 January
1956, through the Life Insurance Corporation Act. All 245 insurance companies operating then in the
country were merged into one entity, the Life Insurance Corporation of India.
The General Insurance Business Act of 1972 was enacted to nationalize about 107 general insurance
companies then and subsequently merging them into four companies. All the companies were amalga-
mated into National Insurance, New India Assurance, Oriental Insurance and United India Insurance,
which were headquartered in each of the four metropolitan cities. Until 1999, there were no private in-
surance companies in India. The government then introduced the Insurance Regulatory and Develop-
ment Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies.
Furthermore, foreign investment was also allowed and capped at 26% holding in the Indian insurance
companies.
In 2006, the Actuaries Act was passed by parliament to give the profession statutory status on par with
Chartered Accountants, Notaries, Cost & Works Accountants, Advocates, Architects and Company Sec-
retaries. A minimum capital of US$80 million (Rs. 4 billion) is required by legislation to set up an insur-
ance business.

AUTHORITIES

The primary regulator for insurance in India is the Insurance Regulatory and Development Authority of
India (IRDAI) which was established in 1999 under the government legislation called the Insurance
Regulatory and Development Authority Act, 1999.
The industry recognizes examinations conducted by the IAI (for 280 actuaries), III (for 2.2 million retail
agents, 361 brokers, 175 banc assurers, 125 corporate agents and 29 third-party administrators) and
IIISLA (for 8,200 surveyors and loss assessors). There are 9 licensed web aggregators. TAC is the sole
data repository for the non-life industry. IBAI gives voice to brokers while GI Council and LI Council
are platforms for insurers. AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU and
NFIFWI cater to the employees of the insurers. In addition, there are a dozen Ombudsman offices to ad-
dress client grievances.

28
 INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N. Malhotra-
formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra
committee was setup with the objective of complementing the reforms initiated in the financial sector.

The reforms was aimed at creating a more efficient and competitive financial system suitable for the re-
quirements of the economy keeping in mind the structural changes currently underway and recognizing
that insurance is an important part of the overall financial system where it was necessary to address the
need for similar reforms. In 1994, the committee submitted the report and some of the key recommenda-
tions included:

a) Structure:
Government stake in the insurance Companies must bring down to 50%. Government should take over
the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.
All the insurance companies must have greater freedom to operate.

b) Competition:
Private Companies with a minimum paid up capital of Rs.1bn should allow entering the sector. No
Company should deal in both Life and General Insurance through a single entity. Foreign companies
were allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance
was allowed to operate the rural market. Only one State Level Life Insurance Company should be al-
lowed to operate in each state. 7

c) Regulatory Body:
The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of
Insurance- a part of the Finance Ministry- should be made independent.

d) Investments:
Mandatory Investments of LIC Life Fund in government securities to was reduced from 75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be
brought down to this level over a period of time)

e) Customer Service:
LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encour-
aged to set up unit linked pension plans. Computerization of operations and updating of technology to be
carried out in the insurance industry. The committee emphasized that in order to improve the customer
services and increase the coverage of insurance policies, industry should be opened up to competition.
But at the same time, the committee felt the need to exercise caution as any failure on the part of new
players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a

29
limited way by stipulating the minimum capital requirement of Rs.100 Crores.

The committee felt the need to provide greater autonomy to insurance companies in order to improve
their performance and enable them to act as independent companies with economic motives. For this
purpose, it had proposed setting up an independent regulatory body- The Insurance Regulatory and De-
velopment Authority.

A reform in the Insurance sector was initiated with the passage of the IRDA Bill in Parliament in De-
cember 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck
to its schedule of 8 framing regulations and registering the private sector insurance companies. Since
being set up as an independent statutory body the IRDA has put in a framework of globally compatible
regulations. The other decision taken simultaneously to provide the supporting systems to the insurance
sector and in particular the life insurance companies was the launch of the IRDA online service for issue
and renewal of licenses to agents. The approval of institutions for imparting training to agents has also
ensured that the insurance companies would have a trained workforce of insurance agents in place to sell
their products.

The Government of India liberalized the insurance sector in March 2000 with the passage of the Insur-
ance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players
and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the
current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There
is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and
this may also include restructuring and revitalizing of the public sector companies. In the private sector
12 life insurance and 8 general insurance companies have been registered. A host of private Insurance
companies operating in both life and non-life segments have started selling their insurance policies since
2001.

30
 THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)

Recognizing the global trend of market driven and competitive industry and the recommendations of the
Malhotra Committee, the insurance sector of India was opened up in August 2000. The Insurance Regu-
latory and Development Authority (IRDA) were constituted in April, 2000 under the IRDA Act 1999
and it is vested with the power to carry out the reforms in this sector, regulate and develop the insurance
and reinsurance business. This Act curbed the monopoly of Government Insurance Companies and al-
lowed the private insurance companies to play in the Indian Insurance market. The IRDA has its Head
Quarters at Hyderabad. The twin objectives of IRDAI are to regulate insurance market in India and pro-
tect the interest of consumers along with efficacy of grievance redressal mechanisms. Currently, Indian
insurance sector is governed by two legislations, namely, the Insurance Act 1938 and IRDAI Act 1999.
Since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing
regulations and registering The other decision taken simultaneously to provide the supporting systems to
the insurance sector and insurance companies was the launch of the IRDA’s online service for issue and
renewal of licenses to agents. The approval of institutions for imparting training to agents has also en-
sured on at later stage. Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. In the private sector 24 life insurance and 29 general in-
surance companies have been register. The Authority has notified 27 Regulations on various issues
which include Registration of Insurers, Regulations on Insurance Agents, Surveyors, Brokers, TPAs,
Reinsurance, Obligations of Insurers to Rural and Social sector, Investment and Accounting Procedures,
File and use guidelines, Protection of policy holders interest etc. Some of the important regulations of
IRDA are explained below: Regulations on Protection of Policy Holders:

On 16.10.2002, the IRDA has issued regulations to protect the Policy holders interest vides Insurance
Regulatory and Development Authority (protection of policy holder’s interest) Regulations 2002. Salient
Features of these regulations are given below:

 This Regulation is application to all insurers, insurer agents and insurance intermediaries.
 This Regulation is addition to any other regulations made by the Authority.
 Point of sale – the insurer / his agents to clearly spell out the scope of benefit terms and condi-
tions at the time of selling the policy.
 Proposal is must for insurance. Insurers have to give a copy of the proposal within the 30 days of
acceptance of the same. The proposal should be in any one of approved Indian language.
 Extending the nomination facility
 Claims procedures – claims should be settled within stipulated time
 Policy holders service – Time bound service

Health Insurance Regulations, 2013

Health insurance is a single largest portfolio on non-life insurers after motor insurance. Health consti-
tute around 25-30 percent total premium of insurance companies. IRDA also granted five companies to
do the business of health insurance exclusively.
31
Salient features of Regulations include:

 Grace period for Renewal of policy – 30 days.

 Senior Citizen – who has completed 60 yrs or more on the date of commencement / renewal.
 Group Mediclaim – 1 year contract only.
 File and Grace period for Renewal of policy – 30 days.
 Renewal can be denied – Mis-representation, fraud, non-disclosure & Moral Hazards
 Free look in period at inception
 Cost of Medical expenses should be included in the premium in general.
 If the terms is one year or less not less than 50% expenses shared by Insurance Companies.
 Insurer to provide list of Institutions where such Medical examinations conducted Portability –
as per rules Permitted non-allopathic treatment at Govt. Hospitals & Govt. approved Institutions.
Settlement including rejections within 30 days from last documents.
 No piecemeal – collection of documents.
 All data including underwriting, claims & report be captured in electronic format and main-
tained.
 The insurer and TPA are responsible for prompt service to policyholders
 Change in TPA – 30 days notice before effecting the changes.
 Details of TPA should be provided to Insured.

The Introduction of TPAs was made by Insurance Regulatory and Development Authority (IRDA) with
advent of TPAs (Third Party Administrators – Health Services) Regulation in order to infuse a new
management system and to regulate the healthcare services and costs. In other words, the prologue of
TPAs was made on the expectation to ensure to better services to insurers as well as to insured. There
are 26 TPA – Health services on the approved list of IRDA on 30th December, 2014.

The role of TPA includes:

 Collect all the records of medical insurance from the insurers
 Issue Identity cards to the policy holder In case of claims, policy holders to inform TPA on 24
hrs helpline
 TPA will direct the policy holders to hospital where TPA has arrangements Where there is no
TPA agreement with hospitals, TPA will process the claims on reimbursement basis and Issue
authorization letter to hospitals
 To follow the patients / hospital and collect the bills and records and settle the claims
 Insurer will pay service charges @ 5.5 percent to the TPA on the premium amount

32
 Phases of Regulatory Reforms

The recent regulatory reforms in the insurance industry can be divided into two phases- In Phase I of the
reforms the IRDA Bill was presented before the Parliament in 1999 for its approval. In the Phase II of
the reforms, there was an introduction of Insurance Laws (Amendment) Act, 2008 in the Parliament.
This proposal focused on the FDI cap hike in the insurance sector but was rejected by the then Govern-
ment in May, 2012. Again in the winter session of the Parliament in October, 2013, the Bill was present-
ed but failed to push up the reform process. However, Modi led NDA Govt. came into power on 16
May, 2014 and the Finance Minister, Mr. Arun Jaitley, announced in his first Union Budget speech on
10 July, 2014, to increase the FDI limit up to 49 percent from 26 percent , with full Indian management
and control through Foreign Investment Promotion Board (FIPB). And finally on 26 December, 2014,
the Government passed the Insurance Laws (Amendment) Act, 2015. The Insurance (Laws) Amendment
Act (2015) is a game changer for the insurance industry. It is a major step towards the deepening of eco-
nomic reform process in insurance sector. With the FDI limit hike from 26 percent to 49 percent it will
possibly speed up the ongoing reform process in Indian economy and can take the Indian economy into
new heights. One of the notable features of this amended Act of 2015 was that the subscribers of Em-
ployee’s Provident Fund (EPF) will now have choice to opt for New Pension Scheme (NPS) of the Gov-
ernment of India and also the workers covered under the Employee’s State Insurance will have the op-
tion to choose Health Insurance products organized by the IRDA.

Social Security Schemes introduced by our Prime Minister Shri Narendra Modi

The social security schemes of the Government of India including the state government and the insur-
ance schemes issued by the IRDAI come together through a Prime Minister Shri Narendra Modi,
through skilled labor force and establishing India as a focus of business both- national and international
level. Some questions have also been raised that the insurance sector will not reap benefits from the FDI
increase. There are leaders in the industry who all already well-established and they do not require addi-
tional capital. But at the same time there are also companies such that they do not have enough capital to
diversify and therefore are not doing well. These are the ones that are going to benefit by the FDI re-
forms introduced in the sector. In addition to this, the Finance Minister also had announced many
schemes in his Union Budget speech 2015-16, which would lead to increase the insurance penetration in
the country and especially in the health insurance segments. Some of them include Pradhan Mantri Su-
raksha Bima Yojana (PMSBY) in line with Pradhan Mantri Jan Dhan Yojana (PMJDY), was also an-
nounced that would cover accidental death risk of Rs.2 lakh for a premium of only Rs.12 per year, i.e. 1
per month. Pradhan Mantri Jeevan Bima Yojana (PMJBY), a social security scheme was also announced
that would cover both – natural and accidental death risk of Rs. 2 lakh. The premium would be Rs.330
per year or less than a rupee per day, for the age group of 18-50 years. Government has proposed to in-
crease the health insurance deduction limit under Section 80D to Rs.25000 from Rs.15000.

33
 INSURANCE MARKET IN INDIA

The India Insurance market despite having a highly elaborate history spanning almost two centuries, has
come of age only in last 50 years after the formation of the Life Insurance Corporation (LIC) of India in
1956 and the entry of private companies into the market in 2000.

Traditionally the Indian Insurance Market had centered on the life insurance until recently, a host of oth-
er insurance policies covering a diverse range of issues and objects like Medical Insurance, Accident
Insurance, Fire Insurance, Automobile Insurance and other policies which fall under the category of
general insurance are being provided by various private insurance companies.

The insurance industry of India consists of 57 insurance companies of which 24 are in life insurance
business and 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the
sole public sector company. Apart from that, among the non-life insurers there are six public sector in-
surers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporation of
India (GIC Re). Other stakeholders in Indian Insurance market include agents (individual and corpo-
rate), brokers, surveyors and third party administrators servicing health insurance claims.

Market Size

Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country
and proliferation of insurance schemes.
Gross premiums written in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs 4.58 tril-
lion (US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$ 23.38 billion) from non-life insur-
ance. Overall insurance penetration (premiums as % of GDP) in India reached 3.69 per cent in 2017
from 2.71 per cent in 2001.
In FY19 (up to October 2018), premium from new life insurance business increased 3.66 per cent year-
on-year to Rs 1.09 trillion (US$ 15.46 billion). In FY19 (up to October 2018), gross direct premiums of
non-life insurers reached Rs 962.05 billion (US$ 13.71 billion), showing a year-on-year growth rate of
12.40 per cent.

Investments and Recent Developments

The following are some of the major investments and developments in the Indian insurance sector.

 As of November 2018, HDFC Ergo is in advanced talks to acquire Apollo Munich Health Insurance
at a valuation of around Rs 2,600 crores (US$ 370.05 million).
 In October 2018, Indian e-commerce major Flipkart entered the insurance space in partnership with
Bajaj Allianz to offer mobile insurance.
 In August 2018, a consortium of West Bridge Capital, billionaire investor Mr Rakesh Jhunjunwala
announced that it would acquire India’s largest health insurer Star Health and Allied Insurance in a
deal estimated at around US$ 1 billion.
 In September 2018, HDFC Ergo launched ‘E@Secure’ a cyber insurance policy for individuals.

34
 Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion) through public
issues in 2017.
 In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$ 903 mil-
lion.
 India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with Ebix Inc to
build a robust insurance distribution network in the country through a new distribution exchange
platform.

Government Initiatives

The Government of India has taken a number of initiatives to boost the insurance industry. Some of
them are as follows:

 In September 2018, National Health Protection Scheme was launched under Ayushman Bharat to
provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million vulnerable families.
The scheme is expected to increase penetration of health insurance in India from 34 per cent to
50 per cent.
 Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana (PMFBY) in
2017-18.
 The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue rede-
signed initial public offering (IPO) guidelines for insurance companies in India, which are to
looking to divest equity through the IPO route.
 IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds that are
issued by banks to augment their tier 1 capital, in order to expand the pool of eligible investors
for the banks.

Road Ahead

The future looks promising for the life insurance industry with several changes in regulatory framework
which will lead to further change in the way the industry conducts its business and engages with its cus-
tomers.
The overall insurance industry is expected to reach US$ 280 billion by 2020. Life insurance industry in
the country is expected grow by 12-15 per cent annually for the next three to five years.
Demographic factors such as growing middle class, young insurable population and growing awareness
of the need for protection and retirement planning will support the growth of Indian life insurance.

35
 Performance Report of the Indian Insurance Market

The following points will provide you an insight into the insurance market in India and its fast expand-
ing prospects. The report is well supported by data based on detailed analysis that would help investors,
financial service providers and global banking players to venture into the Indian insurance market.

Taking into account the changing socioeconomic demographics rate of GDP growth, behavior of con-
sumers, and occurrences of natural calamities at regular 10 intervals the market of Life Insurance in In-
dia is expected grow to the value around US $ 41.44 billion by the year 2009. The Market is expected to
grow at a compounded annual growth rate (CAGR) of more than 200% year over year (YOY) from year
2006 onwards.

65% of the general insurance market is controlled by private house that already exists in the market.

However in automobile insurance, public sector covers a substantial 68% of the total market value.

Among individual companies that are worthy of mentioning, ICICI Lombard enjoys a whopping 53%
market share in Accident Insurance while the remaining 47% is shared by New India Assurance and
United India Insurance both belonging to the public sector

The other key players of the market include:

A) In Public Sector:
Life insurance Corporation(LIC) of India, National Insurance Company Limited, Oriental Insurance
Limited, New India Assurance Company Limited and United India insurance Company Limited.

B) In Private Sector:
ICICI prudential Life Insurance, Bajaj Allianz, SBI Life, HDFC Standard, Birla Sunlife, Aviva Life In-
surance, Kotak Mahindra old mutual, Max New York Life and Met life, Tata AIG Life, ING Vysya.
Thus, the ever increasing population of the country will ensure constant boom in the India Insurance
market in the distant future.

36
 ORGANISATION PROFILE: ICICI PRUDENTIAL

ICICI Prudential Life Insurance Company Limited (ICICI Prudential Life) is promoted by ICICI Bank
Limited and Prudential Corporation Holdings Limited.
ICICI Prudential Life began its operations in fiscal year 2001 and has consistently been amongst the top
players* in the Indian life insurance sector. Our Assets under Management (AUM) as on 31st March
2019 was `1,604.10 billion.
At ICICI Prudential Life, we operate on the core philosophy of customer centricity. We offer long term
savings and protection products to meet different life stage requirements of our customers. We have de-
veloped and implemented various initiatives to provide cost-effective products, superior quality services,
consistent fund performance and a hassle-free claim settlement experience to our customers.
In FY2015 ICICI Prudential Life became the first private life insurer to attain assets under management
of `1 trillion. ICICI Prudential Life is also the first insurance company in India to be listed on NSE and
BSE.

Fiscal Particulars

2001 Our Company started operations

2002 Crossed the mark of 100,000 policies

2005 Crossed the mark of 1 million policies

Crossed the mark of 5 million policies

2008 Crossed receipt of `100 billion of total premium
Crossed `250 billion of assets under management

Established Subsidiary for the purposes of undertak-

ing pension funds related business
2010 Our Company turned profitable - registered profit
of `2.58 billion
Crossed `500 billion of assets under management

2012 Started paying dividends

37
2015 Crossed `1 trillion of assets under management

First insurance company in India to list on NSE and

2017
BSE

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 ICICI PRUDENTIAL EDGE

The ICICI Prudential edge comes from our commitment to our customer, in all that we do-be it product
development, distribution, the sales process or servicing.

1. The products have been developed after a clear and through understanding of customer’s need. It is
this research that helps us develop Education plans that offer the ideal way to truly guarantee the child’s
education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after
you retire, or Health insurance that arms you with the fund you might need to recover from dreaded dis-
ease.

2. Having the right product is the first step, but it’s equally important to ensure that, the customer can
access them easily and quickly. To this end, ICICI prudential has an advisor base across the length and
breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute
the products

3. Robust risk management and underwriting practices form the core business. With clear guidelines in
place, we ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claim process.

4. Entrusted with helping our customer meet their long-term goals, they adopt an investment philosophy
that aims to achieve risk adjusted returns over the long-term.

5. Last but definitely not the least, our 32000 plus strong team is given the opportunity to learn and
grow, every day in multitude of ways. We believe this keeps them engaged and enthusiastic, so that they
can deliver on our promise to cover you, at every step in life.

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 VISION AND VALUES

OUR VISION:

To build an enduring institution that serves the protection and long-term saving needs of customers with
sensitivity.

To be the dominant life, Health and Pension player build on trust by world class people and service.

Understanding the need of customers and offering them superior products and service

This we hope to achieve by Leveraging conveniently technology to service customer quickly efficiently
and developing and implementing superior risk management and investment strategies to offer sustaina-
ble and stable return to the policyholders.

The success of the company will be founded in its unflinching commitment to 5 core values – Integrity,
Customer First, Boundary less, Ownership and passion.
Each of the values describes what the company stands for, the qualities of our people and the way we
work.

OUR VALUES

The success of the company will be founded in its unflinching commitment to 5 core values - Integrity,
Customer First, Boundary less, Humility and Passion. Each of the values describes what the company
stands for, the qualities of our people and the way we work. Every member of the ICICI Prudential team
is committed to the 5 core values and these values shine forth in all that we do.

 Customer First: Keep customers at the center of everything we do

 Humility: Openness to learn and change
 Passion: Demonstrate infectious energy to win and excel
 Integrity: Do the right thing
 Boundary less: Treat organization agenda as paramount

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PROMOTERS

ICICI Prudential Life Insurance Company Limited (ICICI Prudential Life) is promoted by ICICI Bank
Limited and Prudential Corporation Holdings Limited.

ABOUT ICICI BANK

ICICI Bank is a leading private sector bank in India. The Bank’s total consolidated assets stood at ₹
12,387.94 billion (US$ 179.1 billion) at March 31, 2019 and profit after tax of ₹ 33.63 billion (US$ 486
million) for the year ended March 31, 2019. ICICI Bank currently has a network of 4,874 Branches and
14,987 ATMs across India.

ABOUT PRUDENTIAL CORPORATION HOLDINGS LIMITED

Prudential Corporation Holdings Limited is an indirect wholly-owned subsidiary of Prudential plc. Pru-
dential plc and its affiliated companies constitute one of the world's leading financial services groups,
serving around 26 million customers and it has £657 billion of assets under management (as at 31 De-
cember 2018). Prudential plc is incorporated in England and Wales and is listed on the stock exchanges
in London, Hong Kong, Singapore and New York. Prudential plc is not affiliated in any manner with
Prudential Financial, Inc., a company whose principal place of business is in the United States of Amer-
ica.

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 MANAGEMENT PROFILE

BOARD OF DIRECTORS:
The ICICI Prudential life Insurance Company Limited Board comprises reputed people from the finance
industry both from India and abroad.

Mr. M. S. Ramachandran
Chairman, Independent Director

Mr. Anup Bagchi

Director

Mr. Sandeep Batra

Director

Mr. Raghunath Hariharan

Director

Mr. V. Sridar
Independent Director

Mr. Dilip Karnik

Independent Director

Mr. R. K. Nair
Independent Director

Mr. Dileep Choksi

Independent Director

Ms. Vibha Paul Rishi

Independent Director

Mr. N. S. Kannan
Managing Director & CEO

Mr. Puneet Nanda

Deputy Managing Director

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 MANAGEMENT TEAM

Mr. N. S. Kannan
Managing Director & Chief Executive Officer

Mr. Puneet Nanda

Deputy Managing Director
Mr. Judhajit Das
Chief - Human Resources
Mr. Manish Kumar
Chief Investment Officer
Mr. Satyan Jambunathan
Chief Financial Officer
Mr. Deepak Kinger
Chief Risk & Compliance Officer
Mr. Manish Dubey
Chief Marketing Officer
Ms. Asha Murali
Appointed Actuary
Ms. Vyoma Manek
Company Secretary

DISTRIBUTION

ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India.
It has strong presence across India with over 2000 branches ( including 1,100 micro- offices) and an ad-
visor base of over 2,58,000 (as on November 30,2008).

The company has 24 banc assurance partners having tie-ups with ICICI Bank, Bank of India, South In-
dian bank, Sharma Vitthal Co-Op bank, Jalgaon peoples Co-Op bank, Ernakulum district Co-Op bank,
Iuka District Co-Op Bank, Ratnagiri 17

Sindhudurg Gramin Bank, Jharkhand Gramin Bank, Solapur Gramin Bank, Narmada Malwa Gramin
bank, Wainganga Kshetriya Gramin Bank, Ratnagiri District Central Co-Op Bank, Seva Vikas Co-Op
bank, Sangli Urban Co- Operative bank, The Haryana State Co- Operative Bank, Renuka Nagrik Saha-
kari Bank, Amanath CoOperative Bank, Arvind Sahakari Bank, Bhandara Urban Co Operative Bank.

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 PRODUCTS OF ICICI PRUDENTIALLIFE INSURANCE

INSURANCE SOLUTION FOR INDIVIDUALS:

ICICI Prudential Life Insurance offers a range of innovative, customer-centric product that meets the
needs of customers at every stage.

a) SAVINGS & WEALTH CREATION PLANS: Save ‘n’ Protect Cash back. Life Time Gold Life
Stage RP Life Link Super Premier life Gold. Invest Shield Cash Back.

b) PROTECTION SOLUTION:
Pure protect Life Guard Home Assure Life Stage Assure

c) CHILD PLANS:
Smart Kid New ULRP

d) RETIREMENT SOLUTION:
Forever Life Time Super Pension Life Stage Pension Life Link Super Pension Immediate Annuity

e) HEALTH SOLUTION:
Health Assure Plus Cancer Hospital Care Crisis Cover Diabetes Care Active Medi Assure Health saver

f) GROUP INSURANCE SOLUTION:

ICICI Prudential also offers group insurance solution for companies seeking to enhance benefit to their
employees.

Group Gratuity Plan Group Superannuation Plan Group Immediate Annuities Group Term plan

g) FLEXIBLE RIDER OPTIONS:

ICICI Prudential Life Insurance offers flexible riders, which can be added to the basic policy at a mar-
ginal cost, depending on the specific needs of the customer such as

 Income Benefit Rider

 Wavier of premium
 Critical Illness Benefit
 Disability Benefit

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 AWARDS AND RECOGNITIONS

AWARDS

"Life Insurance Company of the Year" at the 4th Annual Insurance India Summit & Awards
2019.

Adjudged "Best Innovation and Diversification introduced by the Company in a Year" by

Emerging Asia Awards 2019.

Adjudged "Best Risk Management Strategy of the Year - Life Insurance" by Emerging Asia
Awards 2019.

ICICI Pru iProtect Smart voted "Product of the Year 2019" in the life insurance category by Prod-
uct of the Year (India) Private Limited.

Adjudged as the “Life Insurance Provider of the Year” and felicitated with the “Gold Award” by
Outlook Money Awards 2018.

ICICI Pru iProtect Smart, awarded the "Best Term Insurance Provider of the Year" by Money
Today Financial Awards 2017-18.

ICICI Pru Heart/Cancer Protect voted "Product of the Year 2018" in the life insurance category by
Product of the Year (India) Private Limited.

Adjudged as the “Best Life Insurance Company of the Year” by Emerging Asia Insurance
Awards 2018.

Awarded in the “Best Growth in Life Insurance” category by Emerging Asia Awards 2018.

“Best Insurance Firm of the Year 2018 – Life Insurance” for having one of the highest Persisten-
cy and Claim Settlement Ratio in the life insurance industry at the Money controls Wealth Creator
Awards.

Due to its robust and diversified distribution network, ICICI Prudential Life Insurance has been ad-
judged as the “Sales Champion” in the Life Insurance – Large category at the 5th Economic Times
Insurance Summit Awards 2018.

Adjudged as the “Life Insurance Company of the Year” by Insurance India Summit & Awards
2018.

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Awarded the "Certificate of Merit" for the FY2017-18 Annual Report in the Insurance Sector cat-
egory by the South Asian Federation of Accountants (SAFA).

ICICI Prudential Life Insurance has received the “ISO 22301:2012 Certificate" for the business
continuity preparedness, to deliver and support insurance products and customer service.

Our brand campaign 'Achche Bandeh', was awarded the ‘Silver Effie’ in the financial services cate-
gory.

RECOGNITIONS

A) ICICI Prudential Life was recognized as the most trusted brand amongst private life insurers in
the Economic Times-Most Trusted Brand survey 2008.

B) IMM Award for Excellence. Institute of Marketing & Management.

C) Organization with Innovative HR Practices. Indira Group of Institutes.

D) Organization with Innovative HR Practices. Asia-Pacific H R Congress Awards for HR Excel-

lence.

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 MY EXPERIENCE IN ICICI PRUDENTIAL

My summer internship started in ICICI Prudential Life Insurance Punjabi Bagh Branch Delhi under the
guidance of Mr Parveen Dalal who gave an excellent presentation about their organization and about
Life insurance market in India. My summer internship structure for 1 ½ months was developed by Mr
Parveen Dalal as per his plan, he wanted to give us practical exposure of Life Insurance Industry. I went
to the office regularly. There I was given classes for the exam which was to be conducted for member-
ship of ICICI Prudential Life Insurance Agent. After clearing the exam I was given classes on types of
Insurance policies.

In the beginning days, I felt difficult in explain the policies but later on, I managed to explain about the
policies. I also visited to client’s house to explain about the policies with Mr Parveen Dalal. Many of
the customers asked me “Is it an insurance firm?” as soon as I said that “I am calling from ICICI PRU-
DENTIAL” I cannot tell them anything rather than “yes sir” as soon as tell yes they said that “I am not
interested”. Some people will hear the whole story and will say that “I am little busy with my work and
call me later or tomorrow”. “Many people were asking why I should take life policies”. I answered that
“to overcome risk sir” their next question was “what risk?” I cannot tell them that “if u die it will be fi-
nancial support to your family sir”.

STEPS FOLLOWED IN TELEMARKETING OF POLICIES:

Firstly, I would make a call to the customer.

I request the customer to share a few minutes with me to know about the insurance plans available.

Depending on the age of the customer I inform him about the various plans that would suit him.

If he has any children I also explain him about the child plans available.

I clearly explain him about the Tax benefits which he will receive.

I also explain about the short term and the long term plans.

If he is interested I tell him that I would like to have an appointment with him at any convenient place to
give more detailed information about the plans.

This is my personal experience in ICICI prudential life insurance which was very nice & helped me to
be an outward person.

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 CONCLUSION

There is no equivalent way to learn things than learning it practically. Everyone learns from his mis-
takes, on experience. The practical experience is an entirely different aspect when considered about what
we learnt in classroom. This summer training report would reveal the various learning process. I have
learned some of the key things like how to behave in the organization? , How to talk with customers? ,
how to communicate with senior officials?

I would like to convey my regards and sincere thanks to Mr.Parveen Dalal head of ICICI Prudential Life
Insurance, Punjabi Bagh Delhi for his continued support and guidance throughout my internship period
and also for helping me to complete my internship training successfully.

I would like Conclude that ICICI Prudential Life Insurance provided me with a very good friendly learn-
ing environment; they are equipped with high quality infrastructure, pantry Facilities combined with
neat and clean environment

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 BIBLIOGRAPHY:

http://www.iciciprulife.com 2) http://www.google.com 3) http://www.wikipedia.com 4)

http://business.mapsofindia.com

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