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An Introduction to insurance
A system under which the insurer, for a consideration usually agreed upon in advance, promises to reimburse the insured or to render services to the insured in the event that certain accidental occurrences result in losses during a given period. It thus is a method of coping with risk. Its primary function is to substitute certainty for uncertainty as regards the economic cost of loss-producing events.
Insurance relies heavily on the “law of large numbers.” In large homogeneous populations it is possible to estimate the normal frequency of common events such as deaths and accidents. Losses can be predicted with reasonable accuracy, and this accuracy increases as the size of the group expands. From a theoretical standpoint, it is possible to eliminate all pure risk if an infinitely large group is selected. From the standpoint of the insurer, an insurable risk must meet the following requirements:
1. The objects to be insured must be numerous enough and homogeneous enough to allow a reasonably close calculation of the probable frequency and severity of losses.
2. The insured objects must not be subject to simultaneous destruction. For example, if all the buildings insured by one insurer are in an area subject to flood, and a flood occurs, the loss to the insurance underwriter may be catastrophic.
Project on Life Insurance
3. The possible loss must be accidental in nature, and beyond the control of the insured. If the insured could cause the loss, the element of randomness and predictability would be destroyed.
4. There must be some way to determine whether a loss has occurred and how great that loss is. This is why insurance contracts specify very definitely what events must take place, what constitutes loss, and how it is to be measured.
From the viewpoint of the insured person, an insurable risk is one for which the probability of loss is not so high as to require excessive premiums. What is “excessive” depends on individual circumstances, including the insured's attitude toward risk. At the same time, the potential loss must be severe enough to cause financial hardship if it is not insured against. Insurable risks include losses to property resulting from fire, explosion, windstorm, etc.; losses of life or health; and the legal liability arising out of use of automobiles, occupancy of buildings, employment, or manufacture. Uninsurable risks include losses resulting from price changes and competitive conditions in the market. Political risks such as war or currency debasement are usually not insurable by private parties but may be insurable by governmental institutions. Very often contracts can be drawn in such a way that an “uninsurable risk” can be turned into an “insurable” one through restrictions on losses, redefinitions of perils, or other methods.
Project on Life Insurance
Life insurance industry
Life insurance may be defined as a plan under which large groups of individuals can equalize the burden of loss from death by distributing funds to the beneficiaries of those who die. From the individual standpoint life insurance is a means by which an estate may be created immediately for one's heirs and dependents. It has achieved its greatest acceptance in Canada, the United States, Belgium, South Korea, Australia, Ireland, New Zealand, The Netherlands, and Japan, countries in which the face value of life insurance policies in force generally exceeds the national income.
In the United States in 1990 nearly $9.4 trillion of life insurance was in force. The assets of the more than 2,200 U.S. life insurance companies totaled nearly $1.4 trillion, making life insurance one of the largest savings institutions in the United States. Much the same is true of other wealthy countries, in which life insurance has become a major channel of saving and investment, with important consequences for the national economy.
Life insurance is relatively little used in poor countries, although its acceptance has been increasing.
Types of contracts The major types of life insurance contracts are term, whole life, and universal life, but innumerable combinations of these basic types are sold. Term insurance contracts, issued for specified periods of years, are the simplest. Protection under these contracts
Project on Life Insurance
expires at the end of the stated period, with no cash value remaining. Whole life contracts, on the other hand, run for the whole of the insured's life and gradually accumulate a cash value. The cash value, which is less than the face value of the policy, is paid to the policyholder when the contract matures or is surrendered. Universal life contracts, a relatively new form of coverage introduced in the United States in 1979, have become a major class of life insurance. They allow the owner to decide the timing and size of the premium and amount of death benefits of the policy. In this contract, the insurer makes a charge each month for general expenses and mortality costs and credits the amount of interest earned to the policyholder. There are two general types of universal life contracts, type A and type B. In type-A policies the death benefit is a set amount, while in type-B policies the death benefit is a set amount plus whatever cash value has been built up in the policy.
Life insurance may also be classified, according to type of customer, as ordinary, group, industrial, and credit. The ordinary insurance market includes customers of whole life, term, and universal life contracts and is made up primarily of individual purchasers of annual-premium insurance. The group insurance market consists mainly of employers who arrange group contracts to cover their employees. The industrial insurance market consists of individual contracts sold in small amounts with premiums collected weekly or monthly at the policyholder's home. Credit life insurance is sold to individuals, usually as part of an installment purchase contract; under these contracts, if the insured dies before the installment payments are completed, the seller is protected for the balance of the unpaid debt.
have a claim on all the earnings that accrue to the insurance company from investing the funds of its policyholders. The insured is not overpaying for protection. The insured does not. Practically all ordinary life insurance policies are issued on a level-premium basis. reflecting the fact that mortality rates increase with age. which makes it necessary to charge more than the true cost of the insurance in the earlier years of the contract in order to make up for much higher costs in the later years. the so-called overcharges in the earlier years are not really overcharges but are a necessary part of the total insurance plan.Project on Life Insurance Insurance may be issued with a premium that remains the same throughout the premium-paying period. however. ICICI PRUDENTIAL . the policyholder may borrow on this value or may recapture it completely by lapsing the policy. because of the claim on the cash values that accumulate in the early years. or it may be issued with a premium that increases periodically according to the age of the insured.
• 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. ICICI PRUDENTIAL . A brief history of the Insurance sector The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: • 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.Project on Life Insurance INSURANCE SECTOR IN INDIA The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again. • 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.
• 107 insurers amalgamated and grouped into four companies viz. 5 crore from the Government of India. LIC formed by an Act of Parliament. the New India Assurance ICICI PRUDENTIAL . LIC Act.Project on Life Insurance • 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised. • 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. the first company to transact all classes of general insurance business. set up. 1956. with a capital contribution of Rs. The General insurance business in India. the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: • 1907: The Indian Mercantile Insurance Ltd.. 1972 nationalised the general insurance business in India with effect from 1st January 1973.. • 1957: General Insurance Council. on the other hand. viz. frames a code of conduct for ensuring fair conduct and sound business practices. a wing of the Insurance Association of India. can trace its roots to the Triton Insurance Company Ltd. • 1972: The General Insurance Business (Nationalisation) Act. the National Insurance Company Ltd.
. and the United India Insurance Company Ltd. Insurance sector reforms: In 1993. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction.N. the committee submitted the report and some of the key recommendations included: ICICI PRUDENTIAL .Project on Life Insurance Company Ltd. the Oriental Insurance Company Ltd. Malhotra Committee headed by former Finance Secretary and RBI Governor R. The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements 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 Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. GIC incorporated as a company.
Project on Life Insurance 1) Structure Government stake in the insurance Companies to be brought 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 should be given greater freedom to operate 2) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry No Company should deal in both Life and General Insurance through a single entity Foreign companies may be allowed to enter the industry in collaboration with the domestic companies Postal Life Insurance should be allowed to operate in the rural market Only One State Level Life Insurance Company should be allowed to operate in each state ICICI PRUDENTIAL .
ICICI PRUDENTIAL .Project on Life Insurance 3) Regulatory Body The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finance Ministry) should be made independent 4) Investments Mandatory Investments of LIC Life Fund in government securities to be 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) 5) Customer Service LIC should pay interest on delays in payments beyond 30 days Insurance companies must be encouraged to set up unit linked pension plans Computerisation 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 the insurance industry should be opened up to competition.
nationalised the industry in two phases in 1956 (life) and in 1972 (non-life). The objective was to improve the penetration of insurance as a percentage of GDP. the Government of India. ICICI PRUDENTIAL . concerned by the unethical standards adopted by some players against the consumers. which was started in India in 1818 at Kolkata1.Project on Life Insurance LIFE INSURANCE SECTOR IN INDIA Many may not be aware that the life insurance industry of India is as old as it is in any other part of the world. The Committee recommended throwing open the sector to private players to usher in competition and bring more choice to the consumer. the Government set up a Committee on Reforms (popularly called the Malhotra Committee) in April 1993 to suggest reforms in the insurance sector. However. The first Indian life insurance company was the Oriental Life Insurance Company. The insurance business of the country was then brought under two public sector companies. which remains low in India even compared to some developing countries in Asia. In line with the economic reforms that were ushered in India in early nineties. Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). A number of players (over 250 in life and about 100 in non-life) mainly with regional focus flourished all across the country.
So far in the private sector. INSURANCE MARKET IN INDIA By any yardstick. which has put in place regulations in line with global norms.Project on Life Insurance Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in 1999. ICICI PRUDENTIAL . presents a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. with about 200 million middle class households. 12 life insurance companies and 9 general insurance companies have been registered. IRDA was set up as an independent regulatory authority. Table 1 reflects the low percentage and per capita penetration of insurance in India compared to other developed and developing countries2. India.
Some of the key names are AIG. Prudential. WINDS OF CHANGE Reforms have marked the entry of many of the global insurance majors into the Indian market in the form of joint ventures with Indian companies. ICICI PRUDENTIAL .5%)3.1003 billion by 2008 (a compounded annual growth of 16. which has responded to the competition in an admirable fashion by launching new products and improving service standards. the demand for insurance is expected to grow at an attractive rate in India.218 billion in 1998 to Rs. Allianz.Project on Life Insurance With the per capita income in India expected to grow at over 6% for the next 10 years and with improvement in awareness levels. Standard Life. The Monitor Group has estimated that the life insurance market will grow from Rs. Sun Life Canada and Old Mutual. An independent consulting company. New York Life. The following are the key winds of change brought about by privatisation. The entry of new players has rejuvenated the erstwhile monopoly player LIC.
However. The scope for expansion is still unlimited as virtually all the players are concentrating on large cities and towns . which is not considered very appropriate for long-term protection and savings. ICICI PRUDENTIAL .g. Customers are offered unbundled products with a variety of benefits as riders from which they can choose.Project on Life Insurance Market Expansion: There has been an overall expansion in the market. Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. More customers are buying products and services based on their true needs and not just traditional money-back policies. New Product Offerings: There has been a plethora of new and innovative products offered by the new players. mainly from the stable of their international partners. health products.e. This has been possible due to improved awareness levels thanks to the large number of advertising campaigns launched by all the players.except by LIC to an extent there was no significant attempt to tap the rural markets. there are still some key new products yet to be introduced .
Some of them are bancassurance. Channels of Distribution: Till two years back. Though it is too early to predict. There is an attempt to bring in international best practices in service and operational efficiency through use of latest technologies. the only mode of distribution of life insurance products was through Agents. Advice and need based selling is emerging through much better trained sales force and advisors. However. this was one area that witnessed the most significant change with the entry of new players. While agents continue to be the predominant distribution channel. final maturity payment. premium notice. the wide spread of bank branch network in India could lead to bancassurance emerging as a significant distribution ICICI PRUDENTIAL . there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels. policy document. the internet and direct marketing. settlement of claims etc. There is improvement in response and turnaround times in specific areas such as delivery of first policy receipt.Project on Life Insurance Customer Service: Not unexpectedly. brokers. today a number of innovative alternative channels are being offered to consumers.
ICICI PRUDENTIAL .Project on Life Insurance Table 2 below gives a snapshot of the performance for 2003-04 (up to October) of the 13 life insurance payers in India based on the first year premium figure 4. to the infrastructure sector which can look forward to long term funding being available. newer channels of distribution will have to be utilized to intensify the reach of insurance both in urban and rural markets. to the economy which will see increased savings. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies. from the individual who will now have wider choices. In an under-insured economy. It is also a sector which will lead to benefits across the full spectrum. Insurance is in a manner of speaking the last frontier in the financial sector to open.
ICICI PRUDENTIAL . Delivering service. the life insurance and pension sector is set for rapid changes and growth in the years ahead. For instance. building trust and being innovative are key areas in which any company will have to excel in order to do well in the long road ahead.Project on Life Insurance SUMMARY Overall. provided they have an account with ICICI Bank. Technology can play a crucial role in delivering the highest standards set by the company and it will be imperative for any serious player to excel in all these. Different companies will take different approaches and it would be myriad of solutions that will be found to delight the Indian customer.000. investors in Prudential-ICICI Liquid Plan can withdraw any amount over and above Rs 15.
Objectives of the Project Primary objectives- • Study will be conducted on Brand Image of ICICI Prudential Life Insurance. • An attempt will also be made to study the viewpoint of policyholders and further to suggest the modalities to improve the efficiency of ICICI PRUDENTIAL. ICICI PRUDENTIAL . Secondary objectives To find out the advantages of the policies offered by ICICI PRUDENTIAL over various companies.Project on Life Insurance PROBLEMS AND OBJECTIVES THE PROBLEM There are too many companies/players in the market who are offering a number of policies to the customers. An attempt will also be made to study the differentiating strategies adopted by ICICI PRUDENTIAL to win the customers. As a result individual is confused about the brand and the policy he/she should take and from which insurer for fulfillment of his/her life needs.
newspapers. 980 crore. Different tools like ratio analysis. Today the company is the #1 private life insurer in the country. As a primary source a survey of policyholders & company officials has been conducted. magazines. the company had issued over 430. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2006 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential's equity base stands at Rs.000 crore and premium income in excess of Rs. 2008. The company has a network of about 30. . ICICI PRUDENTIAL LIFE INSURANCE COMPANY ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank. Articles.000 advisors. 6. a leading international financial services group headquartered in the United Kingdom. correlation and regression have been used to analyse the collected data.Project on Life Insurance Research Methodology Data is collected from both primary & secondary sources.75 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. ICICI PRUDENTIAL . for a total sum assured of over Rs 8.000 policies. a premier financial powerhouse and prudential plc. referral books and Internet services have been used as secondary source of data. as well as 12 bancassurance tie-ups. In the year ended March 31.
98) 1900.60 4424.71 11.Project on Life Insurance Particulars for the period ended March 31. 2008 2008 2007 1163.63 (1471.00 220.07 (1050.00 120.00 ICICI PRUDENTIAL .71 1193.00 8.82) 4250.00 Premium Income Other Income Total Income Expenditure Net Profit/(Loss) Share Capital 4176.
Project on Life Insurance Partners ICICI and Prudential came together in 1993 to form Prudential ICICI Asset Management Company. ICICI Bank posted a net profit of Rs.1.icicibank. The Bank enjoys the highest AAA (or equivalent) rating from all leading Indian rating agencies. This includes mortgages. credit and debit cards. known for their professionalism. 1675 ATMs. 106812 crore. corporate and agricultural finance. which has today emerged as one of the leading mutual funds in India. ICICI Bank has 74% stake in the company. car and personal loans. 2003. The Bank services a growing customer base of more than 7 million customer accounts and 5 million bondholders accounts through a multi-channel access network. excellent quality of service and long term commitment to YOU. ICICI Bank is the only Indian company to be rated above the country rating by the international rating agency Moody''s and the only Indian company to be awarded an investment grade international credit rating. with a commitment to provide leading-edge life insurance solutions. Riding on the success of this relationship. This includes about 450 branches and extension counters. ICICI PRUDENTIAL . ICICI Bank provides a broad spectrum of financial services to individuals and companies. to form ICICI Prudential Life Insurance. call centres and Internet banking (www. and Prudential plc has 26%.com). the two companies joined hands once more in 2000. The two companies bring together two of the strongest financial service brands in Asia.206 crore for the year ended March 31. ICICI Bank ICICI Bank (NYSE:IBN) is India''s second largest bank with an asset base of Rs.
mutual funds. Thailand and Vietnam. India. the primary obligation to its policyholders. whose money it holds in trust. Malaysia. In Asia. Korea. without losing sight of the interest of the community as a whole. and more than 16 million customers worldwide.000 staff and agents across the region. with around US$250 billion funds under management. Taiwan. Prudential is UK''s largest life insurance company with a vast network of 22 life and mutual fund operations in twelve countries . Indonesia.China. the Philippines. Prudential has brought to market an integrated range of financial services products that now includes life assurance. Japan. Life Insurance Corporation Of India Their aim is to spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. supported by over 60. Singapore. pensions. investment management and general insurance. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. banking. Since 1923. Prudential has championed customer-centric products and services. in the investment of funds. the funds to be deployed to the best advantage of the investors as well as the ICICI PRUDENTIAL . Prudential plc is a leading international financial services company in the UK. Bear in mind.Project on Life Insurance PRUDENTIAL PLC Established in 1848. Hong Kong.
" ICICI PRUDENTIAL . and by rendering resources for economic development. Act as trustees of the insured public in their individual and collective capacities. Promote amongst all agents and employees of the Corporation a sense of participation.Project on Life Insurance community as a whole. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective VISION "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India" MISSION "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns. keeping in view national priorities and obligations of attractive return.
6. providing insurance benefits to their employees through Group Insurance Schemes.48 lakh.071 schemes with a premium income of Rs. 7.68 lakh. Despite a slow-down due to the Iraq war.45%. The number of new lives covered was 18. “Komal Jeevan”. Under the Social Security Schemes – “Janashree Bima Yojana” and “Krishi Shramik Samajik Suraksha Yojana”.89 crore.1. The new business premium of Rs. “Anmol Jeevan”.54% during the year. “Bima Nivesh” and “Jeevan Suraksha”. Value addition was also made in some of the existing plans. PENSION AND GROUP SCHEMES BUSINESS Despite competition from new insurance companies.Project on Life Insurance INDIVIDUAL ASSURANCES The Corporation sold 2. during the year 2002-03. ICICI PRUDENTIAL .46 lakh lives have been covered under 6.76.088 crore with a First Premium Income of Rs. thanks to the Corporate customers.837. “Jeevan Rekha” and “Jeevan Bharati” were introduced to bring vitality and innovativeness to its product range. showing a growth of 26. The growth on both these counts has been the highest in the decade.351.1. reduced sale of single premium and short term premium paying policies as a result of adverse market sentiments and withdrawal of some high yield guaranteed return plans like “Jeevan Shree”.645. the Corporation was still able to increase its total sales by 9.75 crore has been brought in registering a steep growth of 65.39 crore policies for a Sum Assured of Rs.49% over the last year. “Jeevan Samriddhi”. the Corporation did excellent business in the area of Pension and Group Schemes. During the year five new unique plans viz.
Project on Life Insurance GROWTH IN AGENCY ORGANISATION The growth in the number of Agents from 7.60 lakh as at the end of the current year coupled with appointment of over 110 Corporate Agencies has contributed to the growth in the number of policies. In the year 2001-02. ICICI PRUDENTIAL . the same has touched the lowest ebb at 0. LIC has shown best results in this area by settling 94.92 lakh to over 9. the outstanding claims ratio was 0. The claims performance has been improving year after year.55 lakh claims in 2002-2003.66% in terms of number of claims.23% during 2002-03 and this matches with the performance of any such insurance company in the world. BEST EVER CLAIM PERFORMANCE The settlement of claims is the best yardstick to judge the performance of any insurance company.
Unit Record Machines introduced in late 1950’s were phased out in 1980’s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. FRONT END OPERATIONS With a view to enhancing customer responsiveness and services . in July 1995. Quicker completion of proposals and ICICI PRUDENTIAL . Incorporating change of address can be done on line. LIC started a drive of On Line Service to Policyholders and Agents through Computer.Project on Life Insurance LIC’S USE OF INFORMATION TECHNOLOGY: A SOURCE OF COMPETITIVE ADVANTAGE LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crore policies is being held on computers in LIC 1964 saw the introduction of computers in LIC. prompt acceptance of their premium and get Revival Quotation. Loan Quotation on demand. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies. Standardization of Hardware and Software commenced in 1990’s. This on line service enabled policyholders to receive immediate policy status report .
Such Networks have been implemented in other cities also.Project on Life Insurance dispatch of policy documents have become a reality. Loan Quotation etc. New payment related Modules pertaining to both ordinary & SSS policies have been added to the Front End Package catering to Loan. As at ICICI PRUDENTIAL . 1997. All these modules help to reduce timelag and ensure accuracy. METRO AREA NETWORK A Metropolitan Area Network. This will enable a customer to view his policy data and pay premium from any branch of any MAN city. Claims and Development Officers’ Appraisal. connecting 74 branches in Mumbai was commissioned in November. from ANY Branch in the city. All 100 divisional offices have achieved the distinction of 100% branch computerisation.000 transactions are carried out over this Network on any given working day. The System has been working successfully. Surrender Value Quotation. enabling policyholders in Mumbai to pay their Premium or get their Status Report. WIDE AREA NETWORK All 7 Zonal Offices and all the MAN centres are connected through a Wide Area Network (WAN). More than 10.
g. This would enable customers to ring up LIC and receive information (e. This information could also be faxed on demand to the customer. Maturity payment due. Efforts are on to upgrade the web site to make it dynamic and interactive. Management Development Center.C. LIC has 91 centers in India with more than 1320 branches networked under WAN. INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS) IVRS has already been made functional in 59 centers all over the country. . next premium due. Loan Amount. Divisional Offices and also all Branch Offices with a view to speed up the communication process.The addresses/e-mail Ids of Zonal Offices. LIC ON THE INTERNET LICs Internet site is an information. Zonal Training Centers.LIC(Nepal)Ltd.Project on Life Insurance May 2002. LIC Mutual Fund. Status.) about their policies on the telephone. ICICI PRUDENTIAL . It displays information about LIC & its subsidiaries-LIC (International) E. Accumulated Bonus etc. Overseas Branches. LIC Housing Finance and their products.
INFORMATION KIOSKS LIC has set up 150 Interactive Touch screen based Multimedia KIOSKS in prime locations in metros and some major cities for dissemination information to general public on our products and services. Branch addresses and other organizational information. manned by skilled employees to provide you with information about our Products.Project on Life Insurance PAYMENT INTERNET OF PREMIUM AND POLICY STATUS ON LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and also view their policy details on Internet premium payments.There are 11 service providers with whom L I C has signed the agreement to provide this service. Policy Services. INFO CENTRES LIC has also set up 8 call centres. These KIOSKS are enable to provide policy details and accept premium payments. ICICI PRUDENTIAL .
a noted writer on leadership. all-intrusive and forward-thinking. It is the image that a business must have of its goals before it sets out to reach them." ICICI PRUDENTIAL . succinct statement of what the organization intends to become and to achieve at some point in the future. without specifying the means that will be used to achieve those desired ends.Project on Life Insurance Vision Vision is a short. which we call a vision. Vision refers to the category of intentions that are broad. Warren Bennis. often stated in competitive terms. may be as vague as a dream or as precise as a goal or a mission statement. says: "To choose a direction. an executive must have developed a mental image of the possible and desirable future state of the organization. It describes aspirations for the future. This image.
It makes concrete the leader's view of the direction and purpose of the organization. In turn.Project on Life Insurance Mission Statement A mission statement is an organization's vision translated into written form. A mission statement should be a short and concise statement of goals and priorities. The primary goal of any business is to increase stakeholder value. goals are specific objectives that relate to specific time periods and are stated in terms of facts. For many corporate leaders it is a vital element in any attempt to motivate employees and to give them a sense of priorities. ICICI PRUDENTIAL .
Providing an enabling environment to foster growth and learning for our employees . Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to the policyholders . the company hopes to achieve by: Understanding the needs of customers and offering them superior products and service. building transparency in all dealings.” This. Leveraging technology to service customers quickly. efficiently and conveniently .Project on Life Insurance MISSION “To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. The success of the company will be founded in its unflinching commitment to 5 core values – • • • • • Integrity Customer First Boundaryless Ownership Passion ICICI PRUDENTIAL . And above all.
you need ambitious visions. which are normally dealt with by company visions and missions. And it does not matter that vision cannot be laid out in details. but rather on tomorrow's opportunities." ICICI PRUDENTIAL . discovery and opportunity that can conveyed as worthwhile to all employees. It should not focus so much on today's problems. It is the direction that counts. a sense of direction. "To achieve great things.Project on Life Insurance Strategic Intent A strategic intent is a company's vision of what it wants to achieve in the long term. It must convey a significant stretch for your company.
DIFFERENTIATION STRATEGIES OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY. opportunity and purpose. Linking creation and implementation supports the overall process. It describes future customer's needs and the success factors required for meeting these needs. often lack discovery. Separating strategy creation from strategy implementation by using corporate planners or consultants for the former activity is thus a hindrance to the evolution of a successful strategy.Project on Life Insurance Strategic Intent versus Traditional Missions and Visions • Traditional company visions and missions. ICICI PRUDENTIAL . developed in one-day strategy session. the critical elements of strategic intent • Strategic intent cannot be planned all in advance. • Discovery and detection of opportunity serve as platforms for developing strategic intent. It must evolve on the basis of experience during its implementation. A strategic intent creates a picture of the customer daily life and describes discontinuities and anticipated changes from the world of today. and thus a strategy emerges and evolves. It is based on a vision of how the future will look in 10-15 years.
Project on Life Insurance If one analyses the history of growth of the insurance industry since reforms. It means deliberately choosing a different set of activities to deliver a unique mix of ICICI PRUDENTIAL . it is marked by all-round growth of all players. Still. Every player would like the customers to believe that its service standards are the best or that its agents are the most informed and ethical. in a market where it is difficult to distinguish oneself sufficiently on service or any other parameter to be able to charge a premium. improved customer service standards and revamped/expanded their distribution networks. More or less all players (including the market leader LIC) have aggressively recruited and trained advisors. each company is trying to be ‘everything to everybody’. launched new products. but is debatable whether there are any significant differences. appointed agents. Some players justify the above strategy on the basis that the Indian market is huge and it can accommodate everybody. The argument is that the strategy of being everything to everybody is risky. In other words. Strategy of ICICI Prudential The essence of strategy is choosing to perform activities differently than rivals do. If at all there was any major difference between players it was only in time lag in launching of services. it will lead to unmitigated price competition to the detriment of all players.
There is a hint of Second-order fit as well. It consists of moves made to establish business positions in different industries & approaches used to manage company’s group of business. 1. Nearing retirement Clearly the company has a First-order fit among its activities. retirement solutions or Lifetime.Project on Life Insurance values. Corporate strategy is the overall managerial game plan for a diversified company’s business. such as for ICICI Pru Smart Kid. It’s policies are targeted towards 4 types of life stages. At ICICI Pru the positioning is done based on Need-based positioning.first of all insurance and secondly from ICICI Prudential Life. Communication strategy To give the consumer a rational and tangible reason to buy . because some activities are reinforcing one another. Young professionals 2. Married with kids 4. Newly married 3. because they are aligned with its overall strategy. was achieved through product-specific advertising. ICICI PRUDENTIAL .
Allahabad Bank.CashBak.Project on Life Insurance Distribution strategy It uses a multi-channel distribution strategy .ReAssure and AssureInvest. Policyholders investing its market-linked products can select from three fund options . South Indian Bank.each with a varying degree of risk and return. Market-linked products such as LifeTime. Some of their bancassurance partners are ICICI Bank. It follows a proactive strategy of reviewing these on a regular basis in order to provide sustainable. after which bonuses are declared on a yearly basis. There are two products with guaranteed returns .leveraging bancassurance. It believes that there is a place for assured return products in its product portfolio. consistent returns in the long term ICICI PRUDENTIAL . Investment strategy ICICI Prudential Life invests policyholder’s funds in order to earn sustainable. LifeLink.in addition to advisors and financial service consultants. Bonus strategy For their endowment products .there are guaranteed additions for four years. Citibank. Bank of India and Punjab & Maharashtra Cooperative Bank. consistent returns over the long term. Save ’n’ Protect and SmartKid . LifeTime Pension and LifeLink Pension are valued on a NAV [net asset value] basis. All channels sell all the products. The policies are structured to be as transparent as possible and policyholders can check the NAV of the policy on a biweekly basis in leading newspapers. corporate agents and direct marketing . Federal Bank.
ICICI Prudential Life Insurance (ICICI PruLife) has gone live with PeopleSoft Human Capital Management (HCM) Solution. collaborative and efficient management of its human capital. More than two thousand employees of ICICI Prudential will be empowered by this online. personalized tool that works in real-time. easily accessible. ICICI PRUDENTIAL . enhances convenience as well as drives cost efficiency. and in line with this. a leader in enterprise management solutions.Project on Life Insurance Its promoters have infused Rs 100 crore into the company taking its capital base to Rs625 crore — the highest in the industry. Its focus was to expand reach. from 24 as of March 31. the company has nearly doubled the number of locations in which it operates. The capital infusion is a clear indication that the promoters are willing and able to commit the necessary resources upfront to ensure the success of the venture. The solution has enabled the company to achieve real time. ‘03 to 46 today.
• Competitive activity. is still low and the different types of policies available and the specific benefits of each often confuse them. improved customer service standards and revamped/expanded their distribution networks. final maturity payment. policy document. settlement of claims etc. ICICI PRUDENTIAL .Project on Life Insurance SWOT ANALYSIS OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY STRENGTHS • • Efficiently trained sales force and advisors. though increasing. • Consumer awareness. evolution of the distribution channels. launched new products. WEAKNESSES More or less all players (including the market leader LIC) have aggressively recruited and trained advisors. premium notice. thus it's the job of insurance companies to educate them about these. There is improvement in response and turnaround times in specific areas such as delivery of first policy receipt. appointed agents. If at all there was any major difference between players it was only in time lag in launching of services.
According to a UN survey. ICICI PRUDENTIAL . 22 per cent are under-insured. only 4 to 6 per cent of India's population is insured. This alliance expands ICICI Prulife's reach to around 2 lakh customers across 30 bank branches in Kerala and 30 in other cities including a large number of NRI customers. Of this. ICICI PruLife financial service consultants (FSC's) could now approach Federal Bank customers. based on referrals from the Bank. So the market presents opportunities for the enterprising.8 per cent of the GDP. What’s more.Project on Life Insurance Opportunities There are 17 insurance companies in the market today. Only 22 per cent of the insurable population possesses life insurance. life insurance premia forms only 1. More companies like Reliance and Sahara will soon enter the fray. in a country of over one billion people. indicating the extent of underinsurance ICICI Prudential Life Insurance Company has entered into a strategic tie-up with the Federal Bank for the distribution of life insurance products.
only two people amongst the senior management team has any experience in insurance — the head of sales and the chief actuary. 'Salaam zindagi'. a social sector policy will cover larger groups amongst the economically weaker sections of society. Says Shubhro Mitra. willingness to learn and be able to bring fresh ideas and perspectives to the business. ICICI Pru Forever Life. It has accepted five proposals sponsored by Madras Cements Ltd and Lucas TVS favouring underprivileged children. banking. The policies currently on offer are ICICI Pru Single Premium Bond. In fact. Most importantly. It hopes to break even in four to six years and for now has no plans to introduce any new products. The company targets to cross the one lakh policy mark by the end of the next fiscal and has already sold 1. energy. Human Resources. ICICI Pru CashBak and ICICI Pru LifeGuard ICICI PRUDENTIAL . etc. ICICI Prudential Life. for its middle and senior management teams. the fourth office of the company. telecom. the individuals must have a winning attitude. however not necessarily in the field of insurance. "The candidates must have the requisite qualifications in their functions and relevant experience. Chief. ICICI Pru Save'n Protect. such as FMCG." ICICI Prudential Life Insurance has flagged off operations in Chennai.Project on Life Insurance ICICI Prudential Life Insurance Company has recruited talent at a lateral level from various industries.500 policies till date.
smart advertising. These channels have only just emerged. but are already making their mark. ensuring the customer is protected and creating an environment for thriving private sector participation and a level playing field. so an insurance product through that channel is also regarded with less suspicion. omnipresence and quick expansion. Bancassurance and corporate agents are the two emerging channels that give companies an opportunity to reach out to a much larger number of individuals who might be interested in insurance.'at.on.Project on Life Insurance ICICI Prulife has very quickly gone on to become India’s largest private life insurance company. the contribution of such channels is bound to drive penet. Again the success lay in aggressive marketing. ICICI also has a strong presence in the general insurance sector with ICICI Lombard General Insurance Company Limited A large part of the success of the new entrants ran be attributed to the governmentappointed Insurance Regulatory and Development Agency (IRDA). With time and the appropriate regulations. The regulations governingthe life and non-life insurers are pragmatic and forward-looking. ICICI PRUDENTIAL . Moreover. which developed the regulatory framework.of the category. people inherently trust their local bank with which they have transacted for many years.
Project on Life Insurance THREATS ICICI Prudential Life Insurance Company Pvt. Expanding at a rapid pace ICICI PruLife is opening branches across multiple cities and towns in India. With multiple branches across the country a need was identified by the head office to service their internal employees in the same way as they would service an external customer. It is the leading private life insurance company India. (ICICI PruLife) is a joint venture company in the life insurance segment in India. ICICI PRUDENTIAL . The user base was growing with people being added every day. Ltd.
the need existed to be able to centrally provide a pool of experts as it was not possible to have experts for every function at every branch level. This in turn had an overall enterprise efficiency impact. This was not feasible.Project on Life Insurance The Problem: • ICICI PruLife wanted to service its employees across different functions in the same way as they would service an external customer while t. ICICI PRUDENTIAL . There was no visibility or count of the issues being faced in the organization. • Data flow throughout the organization was via emails – thus all data was stored in silos – an individual’s mailbox. • With multiple branches all across the country. • Data was hence not centrally available to gather information and convert the same into knowledge base. • Employees often spent considerable time in finding out from whom to seek information. as it was not possible to educate all the users of the different experts and with possible transfer of experts the problem was greater than it seemed. • This in turn would mean that a user would have to know the expert. location of the expert and his availability and correspond with him over email or long distance phone calls.
o Easy to Use – without any training. Objective Some insurers. is still low and the different types of policies available and the specific benefits of each often confuse them.Project on Life Insurance The Challenge: • Need of a solution that would be. introducing select products that they believe hold potential and fill market gaps. have fulfilled their mission to be a scale player in the mass market by intro-ducing a range of 13 products to meet the needs of each customer. Drive usage through out the enterprise... ICICI PRUDENTIAL . Low on band width consumption as it had to be on the WAN Consumer awareness. And it's the job of insurance companies to educate them about these. o Centralized administration of the system. though increasing. as it was not possible to train an employee force of 1500+ spread across 40+ locations. Updating of user information on a daily basis – because of addition of employees almost on a daily basis o • • • Ensuring the solution becomes the only conduit for employee service. Others have taken a more focused approach. such as ICICI PruLife.
but is debatable whether there are any significant differences. Our argument is that the strategy of being everything to everybody is risky. If at all there was any major difference between players it was only in time lag in launching of services. Every player would like the customers to believe that its service standards are the best or that its agents are the most informed and ethical. More or less all players (including the market leader LIC) have aggressively recruited and trained advisors. it will lead to unmitigated price competition to the detriment of all players. improved customer service standards and revamped/expanded their distribution networks. Some players justify the above strategy on the basis that the Indian market is huge and it can accommodate everybody. in a market where it is difficult to distinguish oneself sufficiently on service or any other parameter to be able to charge a premium. launched new products. In other words.Project on Life Insurance STRATEGIC ALTERNATIVES If one analyses the history of growth of the insurance industry since reforms. Still. One may achieve sales ICICI PRUDENTIAL . it is marked by all-round growth of all players. appointed agents. each company is trying to be ‘everything to everybody’.
It involves the very way a company organises itself to do business. the below-mentioned generic positioning alternatives5 appear worth considering. it is profitable for other players to focus on different segments to survive and thrive in a multi-firm open environment. The set of activities cover all upstream and downstream activities. ICICI PRUDENTIAL . promoted. In the insurance industry where large amounts of capital are required. While each company has to choose its own unique positioning based on its unique strengths. the way the products are priced. the way customers are serviced and so on. While there is room for a few scale players with a finger in every pie. the type of distribution mechanism used. Needless to say the positioning choices discussed here are not mutually exclusive and can be overlapping.Project on Life Insurance turnover. It is the configuration of the entire value chain of the company through a different set of activities to deliver unique value to consumers. but margins and profitability will suffer severely. CHOOSING THE RIGHT STRATEGY The right strategic choice is not a matter of positioning choice alone. this is risky. from the selection of the product mix.
ICICI PRUDENTIAL . they have used gramsevaks in different villages across the country to promote life insurance and act as their sales arm.Project on Life Insurance Some life insurance companies focusing on rural markets have adopted innovative means of distribution. Instead of appointing agents as is done typically.
Insurance penetration was at an abysmal 22% of the insurable population. ICICI PRUDENTIAL . Besides the above the private players were faced with: Attitudinal Barriers. Ratio of premium to GDP was low: 1.3% of GDP was invested in insurance.. the private players had to contend with a few issues.Project on Life Insurance MARKETING STRATEGY OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY ICICI Prudential is a case study in the role of marketing in reshaping an industry. Background: When the insurance sector was liberalized in 2000. Perception of insurance as a tax saving tool and lack of a consumer centric approach in service and product offerings. It highlights how an industry where “sell” and “push” were oft used words and consumer was nothing more than a file no. Here’s a look at how ICICI Pru changed the rules of the game and emerged a leader in the process. has changed to one where “consumer preference” and “consumer pull” rules the roost.
salaried and self employed. The Target Audience: Representing an ideal mix of medium to high net worth individuals: The consumers most disposed towards buying life insurance. household income: Rs. C) Achieve leadership status in saliency. To this effect the core brand insight highlighted was "As head of the family it's my responsibility to take care of my loved ones and protect them from the uncertainties of life". primarily male.45 years. image & product parameters. B) In the process. create differentiation for the ICICI Pru brand as a provider of social security and family protection. Middle-aged professionals.Project on Life Insurance Differentiation Strategy A) Reposition the category in the consumer's mind. age group: 28 . D) Build credibility and trust. summed up in the advertising idea: ICICI PRUDENTIAL . 000 and above. Creative Strategy: The essence of the creative strategy: To get the consumer to re look at Insurance as a means to lead a worry free life and not as a necessary evil.20. Influence the consumer to view it as a protection instrument and not a tax saving product alone.
affordability. satisfaction of knowing that one’s loved ones are protected. insurance not being good investment option and the myth that insurance was good only for tax saving. as interpreted in Hindi ). ICICI PRUDENTIAL . The creative execution heightened the emotional connect with the ICICI Pru brand .Indian. Symbolic representation of the protector of the family through situations showcasing various life stages and creating endearing imagery of protection and familial bonding. The product specific advertising focused on changing the prevalent perception about insurance and breaking a few myths: non. ICICI Pru was positioned as an enabler of protection relevant to the needs of the life stage that you are in. Press: Gave the consumer a rational and tangible reason to buy insurance first and secondly from ICICI Prudential. At the core of the communications strategy was appropriating the generic category benefit (protection) through its greatest metaphor – Sindoor. The Creative execution: TVC: Building image and creating a differential in the most creative and compelling manner.Project on Life Insurance ‘We cover you at every step in life (Suraksha… Zindagi ke har kadam par.
The role for each medium was envisaged. Strategic use of 15 sec. Radio FM. they used multiple touch points to reach the consumer. In a unique move. PR of communications campaign in press & TV. Its these same audiences who closely follow and aspire to be like the characters that they see in films and on TV everyday.Building an emotional connect with the audiences is their constant endeavour and one of the biggest challenges. one of TV's most popular personas. For e. In print. Cinema. Media Strategy: In a market likely to be cluttered. and database generation through Bancassurance channels. Internet were used to create a media multiplier effect.Project on Life Insurance Other Communications: Other programs included direct mail. will be buying a life insurance policy from none other than ICICI Pru! So check out Jassi Jaisi Koi Nahi. edits facilitated high frequency levels. Jassi. website marketing.g. to see how this biz-whiz protects her family! ICICI PRUDENTIAL . cost per response rather than cost per thousand as responses were measured in form of callins. The TV medium was used to enhance the emotional link with the brand.
the premiums are very low compared to other products.: 1 Private Life Insurance Company with almost 50% market share of the private players. 2002. new companies such as HDFC Standard Life. pure risk protection products have been introduced by some of the new life insurance companies in the market. Investment products provide long term investment growth and insurance cover. The last ICICI PRUDENTIAL . In case of the retail business for individuals. savings and pension. Among the retail products for individuals.Over 100000 policies on Mar 31. As these products have no savings component to it. ICICI Prudential and more will seek to be present across all the segments of the market. TATA AIG. Savings products like Endowments and Money-Backs provide a combination of protection and investment benefits.individuals and corporates. investment. Has sold highest no.Project on Life Insurance Sum up: In just over a year ICICI Pru has emerged as India’s no. Major Milestone . the 4 sub-segments are . This segment is growing rapidly. Apart from the existing leader LIC. MARKET SEGMENTS The life insurance and pension business has two distinct customers segments . of policies both in volume and value.protection.
Group insurance can be taken to provide low cost life insurance cover as part of employee benefit packages to motivate employees or to cover the housing or vehicle loan given by employer to employee.protection. which will enable a company to benefit from the actuarial. investment and operational expertise of a specialist company to manage its superannuation funds. Source: CII Insurance Committee Report 1999 ICICI PRUDENTIAL . In case of the group business. It can also be used as a substitute for the statutory EDLI subject to approval by the Regional Provident Fund Commissioner. there are three sub-segments . The statutory savings segment essentially comprises of the gratuity products for companies. statutory savings and pension. The pension segment will include products like group superannuation.Project on Life Insurance segment of pension includes products that are aimed at offering customers an income during their retirement years. Group insurance products are taken to provide low cost life insurance cover to a group of people.
not standardised insurance products. which has led to customisation of products for individual needs. companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in. Distribution: Different companies may however choose different channels and different geographies to focus on. Many companies like HDFC Standard Life are focussing on all channels whereas companies like Max New York Life are focussing on the tied agency force only. However. However. there are certain common characteristics that one can cull out from the possible strategies that companies can adopt. The channel options are tied agency force. corporate agents and brokers and this is an area where different companies will make different choices. The key to success is in providing insurance solutions. Product: The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans. The concept of riders/optional benefits has already been a huge innovation brought about by the new players.Project on Life Insurance MARKETING MIX POLICIES Different companies can choose to position themselves differently and hence the marketing mix would be different. Customer interface will be a key challenge for life insurance companies ICICI PRUDENTIAL .
In case of savings oriented products. claim processing and so on. service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. long term returns generated will be more relevant than just the price of the product. such as sales.Project on Life Insurance and includes every that interaction that the customer has with the company. premium payments. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these. ICICI PRUDENTIAL . Here too. Price: Price is a relevant differentiator only in two segments . new business underwriting. policy servicing.pure term insurance and in pure annuities. A focus on generating good investment performance and keeping a tight control on costs will help in generating good long-term maturity value for customers.
The market needs to be developed. Various communication tools including advertising. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people.Project on Life Insurance Advertising and promotion: The level of demand is latent and will have to be activated considerably. ICICI PRUDENTIAL . direct marketing and road shows will contribute to all this and different companies will take different approaches on these.
The effect would be to reduce the strain on the tax payer and assist in efficient allocation of societal resources • Facilitates trade. a sector with potential for business as is the case with Indian insurance provides incentive to develop it all the more faster ICICI PRUDENTIAL . Besides government provides for social security programs. business and commerce by flexible adaptation to changing risk needs particularly of the burgeoning Services sector. Insurance substantially steps in to provide these services. NGOs and public institutions assist with fund raising and relief assistance. There is considerable impact upon government in these respects. • Like any other financial institution insurance companies generate savings from the insurance sector within the economy and make available the same in well directed areas of the economy deserving investments .Project on Life Insurance ROLE OF INSURANCE IN INDIA’S FUTURE • Insurance would assist businesses to operate with less volatility and risk of failure and provide for greater financial and societal stability from the growth pangs of an estimated growth rate over 8 % in GDP • Government has arranged for disaster management and for funds.
ING Savings Trust and Zurich are active in asset management and are being keenly followed by retail investors. IDBI and UTI. ICICI PRUDENTIAL . Of late AIG is visible in the media and its investment announcements are being followed keenly by institutional investors in India.Project on Life Insurance • It enables risk to be managed more efficiently through risk pricing and risk transfers and this is an area which provides unlimited opportunities in the Indian context for consulting. In India visibility of LIC and GIC have been dwarfed by governments actions and other high profile institutions like ICICI. Its expertise in understanding losses assists it to share the experience across the economy thus enabling better loss control and preservation of national assets • In its risk pricing and investment decisions the insurance industry sets the tone for investment by others in the economy. Informed assessment by the insurance companies thus signals allocation of resources by others contributing to efficiency in allocation. broking and education in the post-privatization phase with newer employment opportunities • The insurance industry of its own accord is interested in loss minimization.
ICICI PRUDENTIAL . The analysis has been done differently for each question. The reasons may be lack of awareness among people or people don’t want to invest their money in insurance policies. The analysis of the questions has been done with the help of pie charts. It helps is presenting a clear picture of the responses of the people. It is as follows: 1. Do you own a life insurance policy? Yes No 38% Yes No 62% Analysis: Only 62 % people own a life insurance policy and rest of the people don’t own a policy.Project on Life Insurance ANALYSIS Policy Holders A sample size of 50 people has undertaken.
Where as ICICI Prudential has come into the market only 3-4 years back. The reason behind is that LIC is the oldest insurance player in the market since 1954 and had been enjoying monopoly for the last 40 years. ICICI PRUDENTIAL . LIC? Are you aware of various policies offered by ICICI Prudential and Yes No LIC 4% Yes No 96% 46% ICICI Prudential Yes 54% No Analysis: 96% people are aware of LIC whereas only 54% of people are aware of ICICI Prudential.Project on Life Insurance 2.
Whereas 10 people consider life insurance policy as an investment option and only 5 people want all the features in their policies.Project on Life Insurance 3. ICICI PRUDENTIAL . Only 3 people are considering risk factor as the major reason for taking a life insurance policy. What factors do you consider before purchasing a life insurance policy? Risk coverage Saving/Investment Tax saving All of the above 14 12 10 8 6 4 2 0 Risk coverage TaxSaving Saving/ Investment All of the Above Factors Analysis: 13 out of 31 people want life insurance as a tax saving option rather than a risk coverage instrument. which is not an acceptable norm.
Project on Life Insurance 4.Do you think that services have improved after allowing private players in insurance sector? Yes No 20% Yes No 80% Analysis: A large number of people are of the view that privatization is the appreciatable step of Indian government which is directly contributing in the way of growth of insurance sector in India. ICICI PRUDENTIAL .
ICICI PRUDENTIAL .Project on Life Insurance ICICI Prudential & LIC An interview with the officials of both the companies was conducted and the answers of the following questions were asked. What do you think are the major problems of Insurance sector in India? LIC Untapped rural sector Marketing is Timid Illiteracy of people ICICI Prudential Lack of awareness Huge untapped market 2. Can you mention some measures. 1. which are required to remove the difficulties faced by insurance sector in India? LIC E-Panchayats Education among people Improving marketing strategy ICICI Prudential Marketing strategy should be improved Recruitment of educated and talented sales force.
Why people are not very concerned regarding insurance in India? ICICI PRUDENTIAL . Do you think that financial position of people in India becomes a problem in the way of taking insurance policy? Yes No LIC ICICI Prudential No.Project on Life Insurance 3. What are the market prospects for life insurance in India? Poor Excellent Fair Satisfactory Good LIC Good ICICI Prudential Excellent 4. because we offer policies with policies with low premium which can be flexible and affordable premium as per affordable by poor people as well. because we are offering a range of No. the requirement of people No 5. Is health insurance popular in India? Yes LIC No ICICI Prudential No 6.
9. What type of products and services provided by your organization that is better than LIC/ICICI Prudential? ICICI PRUDENTIAL . Do you think that after privatization of Insurance industry in India growth is better than earlier? Yes No According to LIC this major step is helping the insurance sector to increase their market size. 7. What steps do you take to tap this market? LIC Advertising for the awareness among people Recruitment of agents Educating people ICICI Prudential Wide spread of our distribution network Recruitment advisors More advertisements of insurance 8.Project on Life Insurance LIC ICICI Prudential Because people are unaware of the People are more oriented towards benefits what an insurance policy can investment and tax saving rather than provide. risk coverage. India has huge untapped market for insurance.
quick settlement of claims.Project on Life Insurance LIC Premiums are lower More awareness of our policies as Compare to other players Huge distribution network ICICI Prudential Pension plans are better Market returns are better as compare to LIC and others Online services. flexibility ICICI PRUDENTIAL .
BIRLA SUNLIFE CLASSIC LIFE ICICI PRUDENTIAL . LIC BIMA PLUS. The analysis of the questions has been done and following advantages of ICICI PRUDENTIAL products came into picture under the following categories: • • • UNIT-LINKED PLANS PENSION PLANS CHILD PLANS UNIT LINKED PLANS ICICI PRUDENTIAL LIFETIME VS TATA AIG INVEST ASSURE.Project on Life Insurance ICICI PRUDENTIAL POLICYHOLDERS A sample size of 50 people has undertaken.MAX NEW YORK LIFE MAKER .
To reward the customers for the persistency in premium payment. Plus. Also the minimum top-up allowed in LifeTime is much lower and so are the charges. your need for protection will also increase. LifeTime does not have any restriction on the number of top-ups in a particular year. This is purely available as an additional benefit. ICICI PRUDENTIAL .Project on Life Insurance LifeTime does not have any entry age restrictions based on the term chosen. in case of any eventuality. In case of any unforseen eventuality. by using the premium allocation benefit wherein the premium can be invested in each fund based on your requirement. LifeTime offers partial withdrawals from the 1st year itself in case one needs to withdraw funds due to any eventuality. LifeTime gives you the added flexibility to increase / decrease your protection cover to suit your lifestage requirements. LifeTime also gives you the flexibility to choose your premium paying term and still continue the policy as long as you wish to. LifeTime gives you the flexibility to completely withdraw the units from the 3rd year onwards. With increasing responsibilities. LifeTime offers bonus units at regular intervals based on the premium amount paid. in case of an increase in the premium paying capacity of the individual. Customisation of the funds is possible even in case of LifeTime. Lifetime gives you the flexibility to increase the premiums. LifeTime gives you the option to reduce the premium amount without any change in the policy benefits. LifeTime gives you the option to choose your own term based on your requirements. LifeTime does not levy a charge on the premium holiday facility. LifeTime levies the charges based on the premium invested and not on the term chosen or the age of the individual.
LifeTime Pension also offers a Zero Life Cover option. In addition to giving the option of choosing a Sum Assured. LTP II allows you to choose a fund or a combination of funds as per your risk profile and investment priorities. it also allows you to decrease your contribution levels in case of any emergencies.BIRLA FLEXI SECURELIFE RETIREMENT.HDFC LINKED PENSION.TATA AIG NIRVANA PLUS LifeTime Pension II allows you to accmulate till you reach the ripe old age of 75 years giving you the option to maximise your retirement kitty even if you have begun late. thereby serving as a pure accumulation vehicle for your retirement. Lifetime Pension II gives you the flexibility to increase the savings for your retirement in case of an increase in savings potential.Project on Life Insurance PENSION PLANS ICICI PRUDENTIAL LIFETIME PENSION 2 VS LIC JEEVAN NIDHI. On the contrary. It also ICICI PRUDENTIAL .
LifeTime Pension II offers you a choice of 4 free switches in a policy year. The customer knows at every point in time how much he is actually accumulating. Lifetime Pension II maximises the value for the client in case he wishes to use some other vehicle for accumulation of his retirement kitty. net of the charges in the case of Lifetime Pension II whereas he does not know the same in case of other companies policies and has to wait for the declaration of bonuses at the end of each year ICICI PRUDENTIAL . This helps the client to maximise his returns as per his risk appetite.Project on Life Insurance allows you to switch between funds at any time. Jeevan Nidhi does not give such choices. To suit your ever-changing lifestage requirements and risk appetite. In Lifetime Pension II the client has the option to make an added payment in the same retirement kitty if he has a windfall gain.
Project on Life Insurance
ICICI PRUDENTIAL SMART KID CHILD PLAN VS LIC JEEVAN ANURAG CHILD PLAN, HDFC CHILD PLAN,BIRLA SUNLIFE CHILD PLAN
SmartKid gives you the flexibility to choose any one of the structures based on your needs, whether you require the money at periodic milestones or in the last few years of the policy. All the future premiums are not waived in case of Jeevan Anurag. In this case even in the case of the parent's death, the premiums will have to be paid to continue the policy…which is an extra burden on the family. Option to avail of an Income Benefit Rider - which will take care of your child's upbringing and all
- round development.
Project on Life Insurance
After analyzing the whole survey I come to know that market prospects of insurance is at a growing pace. Privatization is playing an important role in the way of growth of insurance sector in India. Most of the people are aware of the brand LIC as compare to ICICI Prudential, the reason being that LIC is enjoying monopoly for the last 40 years and ICICI Prudential is the new player in the market and trying to give a stiff competition to LIC. People expect some flexibility from LIC and lower premium from ICICI Prudential. In India policies are sold for tax saving purposes rather than risk coverage instrument. As per experts views insurance sector is facing a number of problems like lack of brand image, awareness of insurance needs, timid marketing, and illiteracy etc. Some measures were suggested by the experts like improved marketing strategies, huge distribution network, penetrating the rural sector etc. All the players for a better market prospect should follow these measures.
Project on Life Insurance
For the last few years I have seen the development in the insurance sector after privatization. This step of government of India has resulted in form of competition in the market & prospects to cover up the huge untapped market. Before privatization LIC had 100 % market share but after privatization it has come down to 90 % and 10 % for private players. Insurance sector is developing at a faster pace as compare to earlier one but still it has more scope to grow at the fastest pace it ever grows. Private players are giving a stiff competition to LIC. Though LIC offers a wide range of products as compare to other private players like ICICI
Prudential , but still they are performing better with features like online services, transparency, flexibility, quick settlement of claims etc. ICICI Prudential has become the # 1private player in the market due to its performance as I can measure by its 3 % holding of market share out of 10 % holding of all the private players in the market.
However, still now there is a huge untapped market for insurance in India. In a survey it was found that still there is 250million strong middle class population of India, which is still untapped. On the other hand rural areas and small towns offer a huge potential to the Insurance companies. This potential was largely untapped due to inadequate distribution It shows that there is a great scope of insurance business in India. In India health insurance is also not so popular. The reason behind is that people ICICI PRUDENTIAL
Project on Life Insurance
are not aware of their insurance needs. In India insurance is sold only as a tax saving and investment option rather than a risk-cover instrument. In my survey I found a number of reasons for the inadequate performance of insurance sector in India. Reasons like brand image, lack of awareness for insurance needs, lack of educated & talented sales force with insurance companies, Lack of penetration due to inadequate marketing/delivery system are main problems. Therefore, steps should be taken by ICICI PRUDENTIAL to overcome these hassles and try to become a leader in the insurance sector. The following are some recommendations given by me as I analyzed after getting the placement from IIPM in ICICI PRUDENTIAL and working there from last 11 months as a UNIT MANAGER.
They should follow proper advertising strategies as they just started by endorsing Jassi Jaisi Koi Nahin and Launching ICICI Prudential Zone in Mobile Phones (STEP 1 AND STEP 2. Village Panchayats and Post Offices. better packaging and improved customer service. can be unleashed by repositioning Life Insurance as a risk cover instrument.e brand image has to be created. ICICI Prudential will have to explore new distribution and marketing channels to reach the customers. Where the Cooperative societies and village Panchayats can act as ‘Corporate Agents’ to create the brand image of ICICI PRUDENTIAL in the rural market. STEP 5).Project on Life Insurance RECOMMENDATIONS Opening up the sector certainly means more awareness amongst customers and higher expectations. which can be satisfied by brand awareness i. Potential buyers for most of this Insurance lie in the middle class. ICICI PRUDENTIAL . STEP 3 AND STEP 4. The vast potential of the 250million strong middle class population of India. new products. The key to tap the rural market can be through Co-operative societies.
Project on Life Insurance ANNEXURE Questionnaire 1 (ICICI Prudential) 1 What do you think are the major problems of Insurance sector in India? 2 Can you mention some measures. What steps do you take to tap this market? 8 What type of products and services provided by your organization that is better than LIC? ICICI PRUDENTIAL . which are required to remove the difficulties faced by insurance sector in India? 3 What are the market prospects for life insurance in India? Poor _ Fair _ Satisfactory _ Good _ Excellent _ 4 Do you think that financial position of people in India becomes a problem in the way of taking insurance policy? Yes _ No _ 5 Is health insurance popular in India? Yes _ No _ 6 Why people are not very concerned regarding insurance in India? 7 India has huge untapped market for insurance.
What steps do you take to tap this market? 9 What type of products and services provided by your organization that is better than ICICI Prudential? ICICI PRUDENTIAL . which are required to remove the difficulties 3 faced by insurance sector in India? Do you think that after privatization of Insurance industry in India growth is better than earlier? Yes _ No _ 4 What are the market prospects for life insurance in India? Poor _ Excellent _ Fair _ Satisfactory _ Good _ 5 Do you think that financial position of people in India becomes a problem in the way of taking insurance policy? Yes _ No _ 6 Is health insurance popular in India? Yes _ No _ 7 8 Why people are not very concerned regarding insurance in India? India has huge untapped market for insurance.Project on Life Insurance Questionnaire 2 (LIC) 1 2 What do you think are the major problems of Insurance sector in India? Can you mention some measures.
specify No _ 4 What factors do you consider before purchasing a life insurance policy? _ Risk coverage _ Saving/Investment _ Tax saving _ All of the above 5 Do you want to comment on the products & services offered by ICICI Prudential & LIC? 6 Do you think that services have improved after allowing private players in insurance sector? Yes _ No _ ICICI PRUDENTIAL .Project on Life Insurance Questionnaire 3 (Policy Holders) 1 ` Do you own a life insurance policy? Yes _ No _ 2 Are you aware of various policies offered by ICICI Prudential and LIC? Yes _ No _ 3 Do you want any addition current policy? Yes _ If yes.
Project on Life Insurance Questionnaire 4 (ICICI PRUDENTIAL Policy Holders) 1 ` Do you own a life insurance policy? Yes _ No _ 2 Are you aware of various policies offered by ICICI Prudential and LIC? Yes _ No _ 3 Do you want any addition in your current policy? Yes _ If yes. Please comment on the advantages you think ICICI Prudential products have over the other companies products? 7. Which plan you are right now under and why did you bought that? 6. Do you think that services of ICICI PRUDENTIAL is much better than others? Yes _ No _ ICICI PRUDENTIAL . specify No _ 4 What factors do you consider before purchasing a life insurance policy? _ Risk coverage _ Saving/Investment _ Tax saving _ All of the above 5.
1993. Annual Report Product List L. Report/Acts • • Malhotra Committee Report on Reforms in the Insurance Sector.Project on Life Insurance BIBLIOGRAPHY 1.C. 1999.C. Palande. Lunawat (Response books) Brochures / Information Booklets • • • ICICI Prudential L. S.I. Shah & M. Insurance Management – Anand Ganguly (New Age International) Insurance in India – P. The Insurance Regulatory and Development Authority Bill. Newspapers / Magazines • • • Insurance Post The Economic Times The Insurance Times ICICI PRUDENTIAL . L. 3.I.
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