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ICICI PRUDENTIAL LIFE INSURANCE CO. LTD.,
VIDEOCON TOWER, NEW DELHI
There is always a sense of gratitude which one express to other for the helpful so needy services they render during all phases of life. I would like to express my gratitude towards all those who have been helpful to me in getting this mighty task of training to a successful end. First of all, I consider it a pleasant duty to express my heart felt appreciation, gratitude and indebtedness to my guide for his keen interest, invaluable pain taking & excellent guidance, patience, endurance, encouragement & thoughtful advice throughout the project work duration. I would also like to be thankful to Mr. Gitesh Mishra – Unit Manager (ICICI Prudential Life Insurance, Videocon Tower, New Delhi, who has given me the right way to prepare my project report. I would take this opportunity to thank all my family members for their helps & suggestions during the course of project work. I am also thankful to all my friends who gave me constant & continuous inspiration to complete this project.
SAURABH SAXENA MBA-III SEMESTER
1. SYNOPSIS 2. COMPANY PROFILE 3. INTRODUCTION 4. INSURANCE MARKETING 5. RESEARCH METHODOLOGY 6 OBJECTIVE OF THE STUDY 7. DATA ANALYSIS 8. INTERPRETATION 9. CONCLUSION 10. SUGGESTIONS 11. LIMITATIONS 12. QUESTIONNAIRE
13. BIBLIOGRAPHY 14. APPENDIXES
TITLE OF THE PROJECT: AGENCY DEVELOPMENT OF ICICI
PRUDENTIAL .LIFE INSURANCE COMPANY.
NAME OF THE COMPANY: ICICI PRUDENTIAL LIFE INSURANCE OBJECTIVE BEHIND THE STUDY:
To study and evaluate various strategies and tactics of ICICI Prudential for the agency development..
The project is Descriptive in nature and requires use of both primary and secondary data.
Primary data: Database obtained by market survey, Questionnaires
Secondary data: Database of existing customers with the company
Sample size: 100 Area Covered: Delhi and NCR
Using Questionnaire and Interviewing the Respondents obtain the data.
ICICI PRUDENTIAL LIFE INSURANCE LTD.
It is a joint venture between ICICI bank, a premier financial powerhouse and prudential Plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from insurance regulatory development authority (IRDA). ICICI and Prudential came together in 1993 to form prudential ICICI asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial service brands in Asia, known for their professionalism, excellent quality of service and long term commitment to you. Riding on the success of this relationship, the two companies joined hands once more in 2000, to form ICICI Prudential Life Insurance, with a commitment to provide leading-edge life insurance solutions. ICICI Prudential’s equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
Board of Directors : The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Ms. Chanda D. Kochhar, Chairperson Mr. N. S. Kannan, Director Mr. K. Ramkumar, Director Mr. Barry Stowe, Director Mr. Adrian O’Connor, Director Mr. Keki Dadiseth, Independent Director Prof. Marti G. Subrahmanyam, Independent Director Ms. Rama Bijapurkar, Independent Director Mr. Vinod Kumar Dhall, Independent Direct Mr. V. Vaidyanathan, Managing Director & CEO
Management Team : Mr.V.Vaidyanathan, Managing Director & CEO Ms. Anita Pai, Executive Vice President - Customer Service, Technology & Marketing Dr. Avijit Chatterjee, Appointed Actuary Mr. Puneet Nanda, Executive Vice President
A bank is an institution, which deals in money. It means that a bank receives money in the form of deposits from public and lends money to the development of trade and commerce. The Indian companies act defines the term Bank as “The accepting for the purpose of lending or investment of money from the public, repayable and demand or otherwise and withdraw able by cheque, draft, order or otherwise” Banks are classified into several types based on the functions they perform. 1. Commercial Bank. 2. Investment or industrial Banks. 3. Exchange Banks. 4. Co-operative Banks. 5. Land Development Banks. 6. Savings Banks. 7. Central Banks.
(1). Commercial Banks : Commercial banks perform all the business transaction of a typical bank. Commercial Banks accept three types of deposits, Like Savings Bank Deposit, Fixed Deposit and Current Deposit. They accept these deposit, which are payable on demand or in short notice. As such they lend or invest only for short duration. They funds for short-term needs of trade of commerce.
(2). Investment or Industrial Banks : Investment Banks are those banks, which provide funds on long term for industries. These Banks have specialized in providing long term loans to industries with a view to buy plant of machinery. The investment Banks obtain funds through share capital, Debentures and long term deposits from the public. They float bonds for the sake of mobilizing funds to provide funds for big industries corporations. These banks also under write or issue new shares of debentures of industrial concerns.
(3) Exchange Banks : Exchange Banks are known as foreign Banks or foreign exchange Banks. The foreign exchange banks provide exchange for imports trade. Their main function is to make international payment through purchased sake of exchange bills.
(4) Co-operative Banks : Co-operative Banks are promoted to meet the banking requirements of consumers. They are established not only in the urban areas but also in the rural areas. In the rural areas these banks supply finances to agriculture, while in the urban areas they provide finance to consumer goods.
(5) Land Mortgage Banks : Whenever agriculturist require investment loans, they have to approach land development Banks. Where loans are given on long-term basis. They provide loans on the security of the land.
(6) Savings Banks : Savings Banks are specialized financial institutions established to mobilize savings from the people. The primary object of the commercial Banks is to promote thrift among the low and middle-income groups. The Banks also offer interest on these deposits.
(7) Central Banks : Central Bank in an apex Bank in the country, which keeps the entire banking system unified, controlled and regulated. In fact, the central bank is the Bank, which formulates the monetary policy. It regulates the notice issue. In India, the Reserve Bank of India is the central Bank Of India.
ICICI Bank is India's second-largest bank with total assets of about Rs.1, 67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom and Canada, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank's equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). As required by the stock exchanges, ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. At April 4, 2005, ICICI Bank, with free float market capitalization* of about Rs. 308.00 billion (US$ 7.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market Sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transactionbanking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. Shareholders of ICICI and ICICI BANK approved the merger in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.
DIVERSIFICATION OF ICICI BANK LTD
HISTORY OF ICICI 1955: The Industrial Credit and Investment Corporation of India Limited (ICICI)
incorporated at the initiative of the World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI also among the first Indian companies to raise funds from International markets. 1956: ICICI declared its first Dividend at 3.5%. 1958: Mr.G.L.Mehta was appointed the 2nd Chairman of ICICI Ltd. 1960: ICICI building at 163, Back bay Reclamation was inaugurated1967: ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed. 1972: Second entity in India to set-up merchant banking services 1977: ICICI sponsors the formation of Housing Development Finance Corporation Managed its first equity public issue.I. 1982: Becomes the first ever-Indian borrower to raise European Currency Units. 1986: ICICI first Indian Institution to receive ADB Loans. First public issue by an Indian entity in the Swiss Capital Markets. ICICI along with UTI sets up Credit Rating Information Services of India Limited, (CRISIL) India’s first professional credit rating agency. ICICI promotes Shipping Credit and Investment Company of India Limited. (SCICI). 1987: ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth Development Corporation (CDC), the first loan by CDC for financing projects in India. 1993: ICICI sets-up ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan. 1994: ICICI sets up ICICI Bank. 1996: ICICI becomes the first company in the Indian financial sector to raise GDR. Mr.K.V.Kamath appointed the Managing Director and CEO of ICICI Ltd. 1997: ICICI was the first intermediary to move away from single prime rate to three-tier prime rates structure and introduced yield-curve based pricing. The name “The Industrial Credit and Investment Corporation of India Limited “ was changed to “ICICI Limited”. 1998: Introduced the new logo symbolizing a common corporate identity for the ICICI Group. 1999: ICICI launches retail finance - car loans, house loans and loans for consumer durables. ICICI becomes the first Indian Company to list on the NYSE through an issue of American Depositary Shares. 2000: ICICI Bank becomes the first commercial bank from India to list its stock on NYSE. ICICI Bank announces merger with Bank of Madura. 2001: The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank. 2002: Moodys’ assign higher than sovereign rating to ICICI
2003: ICICI has ties-up four Banks Goa State Co-operative Bank, Jalgaon People”s Cooperative Bank, Indoor Paraspar Sahakari Bank & Manipal State Co-operative Bank. 2004: Strategy tie-up with Shamrao Vithal Bank, Which is most prominent Urban Cooperative Bank. 2006: ICICI Prudential Life ties-up with 10 regional rural banks- Avadh Gramin Bank, Barabanki Gramin Bank, Farrukhabad Gramin Bank, Chandrapur Gadchiroli Gramin Bank, Bhandara Gramin Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur Gramin Bank, Baitarani Gramya Bank, Jharkhand Gramin Bank & Narmada Malwa Gramin Bank operate in the state of U.P, Maharashtra, Orisa, Jharkhand, & M.P. 2007: ICICI Prudential Life enters into strategic tie-up with Sherkhan. 2008: ICICI Prudential Life launches first Micro-Insurance product is “Sarv Jana Suraksha”.
THE SWOT ANANLYSIS OF ICICI BANK STRENGTHS: The ICICI bank is a strong brand among its competitors. Wide reach in the urban areas. With the help of the tie up with the Bank of Madura it has access to rural. WEAKNESS: Although it has a tie up with the Bank Of Madura it’s reach to the rural areas is not as much as expected. THREATS : It is facing stiff competition from the other private banks. OPPORTUNITIES : The present low interest rate is the opportunities to introduce more products and consequently increasing customer base.
Committee of Directors :
Ms. Chanda D. Kochhar, Chairperson Mr. N. S. Kannan, Director Mr. K. Ramkumar, Director Mr. Barry Stowe, Director Mr. Adrian O’Connor, Director Mr. Keki Dadiseth, Independent Director Prof. Marti G. Subrahmanyam, Independent Director Ms. Rama Bijapurkar, Independent Director Mr. Vinod Kumar Dhall, Independent Direct Mr. V. Vaidyanathan, Managing Director & CEO -
PRUDENTIAL PLC. : It is a leading international financial services company in the UK, with around us$250 billion funds under management, and more than 16 million customers worldwide. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. • Started operations in 1848 and is now one of the largest life insurance companies in the world. • Presence in UK, Europe, US and through out Asia. • Insurance and investment funds under management exceed rs.11, 00,000 crores. • Solid reputation built over 150 years. • Already established as one of the biggest private sector mutual fund companies in India (prudential ICICI AMC). India is one of three countries in Asia where prudential is the leading private insurer the other two being Vietnam and Indonesia. It is the second largest insurer in Malaysia and third largest in Singapore. It helps people to enhance and protect their own and their dependants’ financial well being by providing them with appropriate savings and protection products. It has strong positions in three of the largest and most attractive markets in the world, where rising global wealth and changing demographics are fuelling demand for long-term savings. Their strategy is to build sustainable, profitable businesses in each of these markets, and thereby maximize returns to our shareholders over time. In the UK Prudential is a leading life and pensions provider with around seven million customers. M&G was acquired by Prudential in 1999 and is the Group's UK and European fund manager, responsible for
managing over £111 billion of funds (as at December 2003). Launched by Prudential in 1998, Egg is an innovative financial services company, with over three million customers, with nearly six per cent of UK credit card balances. In Asia, Prudential is the leading European life insurer with 23 life and fund management operations in 12 countries serving some five million customers. In the US, Prudential owns Jackson National Life, a leading life insurance company, and has more than 1.5 million policies and contracts in force. Sir David Clementi – Chairman, Prudential Plc. DISTRIBUTION ICICI Prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in over 116 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Amritsar in the north to Trivandrum in the south. The company has 8 bancassurance tie-ups, having agreements with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Ernakulam Bank, Lord Krishna Bank and some co-operative banks, as well as about 290 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies and organisations like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained more than 65,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers VISION : To make ICICI Prudential the dominant life and pensions player built on trust by world-class people and service Hope to achieve by: • Understanding the needs of customers and offering them superior products and service. • Leveraging technology to service customers quickly, efficiently and conveniently. • Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders. • Providing an enabling environment to foster growth and learning for our employees. • And above all, building transparency in all our dealings. The success of the company will be founded in its unflinching commitment to 5 core values : – • Integrity. • Customer First.
• Boundary less. • Ownership. • Passion. ACHIEVEMENTS : The no.1 private life insurance company with : – • Maximum number of policies sold. • Largest premium income. • Largest agency force. • Biggest pension player.
Corporate Office : ICICI Prudential Life Insurance Company ICICI Prulife Towers, 1089, Appasaheb Marathe Marg Prabhadevi, Mumbai-400025
LIFE STAGE : Young Professional : Life Stage Needs Solution
Protect loved ones & protection against liabilities Saving / Investing for the future
LifeGuard Traditional Save 'n' Protect. CashBak. SecurePlus. CashPlus. Unit Linked Insurance Solutions LifeTime II. LifeLink II. Traditional Forever Life. SecurePlus Pension. Unit Linked Insurance Solutions LifeTime Pension II. LifeLink Pension II. All Life Insurance plans - Sec 88 All Retirement plans - Sec 80CCC(1)
Newly Married : Life Stage Needs Solution
Newly Married Protect loved ones & protection LifeGuard against liabilities Saving / Investing for the future Traditional Save 'n' Protect CashBak SecurePlus CashPlus Unit Linked Insurance Solutions LifeTime II LifeLink II Retirement planning Traditional Forever Life SecurePlus Pension Unit Linked Insurance Solutions LifeTime Pension II LifeLink Pension II Tax Planning All Life Insurance plans - Sec 88 All Retirement plans - Sec 80CCC(1) Health Concerns Major Surgical Assistance Rider Critical Illness Rider
Accident & Disability Benefit Rider Waiver of Premium Rider
Married with Kids : Life Stage Needs Solution
Married with Kids
Protect loved ones & protection against liabilities Saving / Investing for the future
Traditional Save 'n' Protect CashBak SecurePlus CashPlus Unit Linked Insurance Solutions LifeTime II LifeLink II
Traditional Forever Life SecurePlus Pension Unit Linked Insurance Solutions LifeTime Pension II LifeLink Pension II
All Life Insurance plans - Sec 88 All Retirement plans - Sec 80CCC(1)
Child's education Health Concerns
SmartKid Education Plans Major Surgical Assistance Rider Critical Illness Rider
Accident & Disability Benefit Rider Waiver of Premium Rider
LIFE STAGE : -
Nearing Retirement : Life Stage Needs Solution
Protection against liabilities Retirement planning
LifeGuard LifeLink Pension II LifeTime Pension II
All Life Insurance plans - Sec 88 All Retirement plans - Sec 80CCC(1)
The overall evaluation of a company’s Strengths, Weakness, Opportunities and Threats is called SWOT Analysis.
ICICI Prudential Life Insurance Ltd :
(1) STRENGTHS : The ICICI is a strong brand among its competitors. Wide reach in the urban areas and upgrowing in rural areas too. With the help of the tie up with the Prudential Plc it has accessed as major Insurance player in India. Smart Kid, Life Time & Retirement Solutions are the major policies captured by ICICI Pru in the market than any other Insurance Players. (2) WEAKNESS : Although it has a tie up with the Prudential Plc the perception of the consumer in terms of insurance is still remain a bit doubtful compared to the giant LIC and with growing competitors like HDFC Standard Life etc.
(3)THREATS : It is mainly facing stiff competition from the giant LIC and HDFC Standard Life and with other private insurance players like TATA AIG, BIRLA SUNLIFE, ING VYSYA etc. (4)OPPORTUNITIES : The present interest regarding the insurance and saving plans by customers in India is the biggest opportunity to capture more and more customers by consequently increasing customer base.
WORKING WITH ICICI PRUDENTIAL
ICICI Prudential is India's leading private life insurance company. You could be a part of the growing ICICI Prudential family.: • An advisor An employee
Be an advisor
Being an ICICI Prudential advisor can be an enriching and exciting career option. It’s an opportunity to associate with an industry leader, be in touch with the latest and finest insurance practices from around the globe, and grow both personally and
professionally. Here are some of the benefits of being an ICICI Prudential Life Insurance Advisor : Unlimited earning potential A clear career path All round support through exclusive advertising, your own in-house consultant, and world-class training • A comprehensive benefit package What does it take to be an ICICI Prudential advisor? At ICICI Prudential, we believe that our Advisors are our ambassadors to the customers. They are a key source of business for the organization, and are the continuing link with our clients. That is why, we take a lot of care in recruiting and developing our advisor force, so that we continue to set higher standards of quality in service and salesmanship. To cater to the needs of the knowledge-oriented marketplace, we look for graduates who are service-oriented, good communicators and enjoy meeting new people. Prior sales experience is an added benefit. Some of the qualities we seek are: • Self motivator • A master communicator • A go-getter • A graduate Training At ICICI Prudential, we understand the importance of training in a dynamic business environment. Our advisors go through both generic and specific, professional programs that help them remain well-informed and knowledgeable about the company’s products in the market. There is a further focus on soft skills such as communication, managing long-term relationships and selling skills, which are very relevant in a servicedriven industry like life insurance. State of the art infrastructure training facilities coupled with an excellent faculty, guarantee an exceptional learning environment. For advisors who might be occupied with their daily business/professional routines, ICICI Prudential also offers convenient training options such as online and self-learning are also provided by the organization. A 17-day training schedule covers the mandatory IRDA training requirements and ICICI Prudential product-training module. Revision session ensure that the candidates thoroughly understand the course contents and are well prepared for the licensing examination. Theoretical training is interspersed with practical appointment settings with potential customers, giving advisors a feel of how their business will work from the very first day. All through, the Unit Manager and the management provide continuous support to the advisors in achieving independence towards garnering business. Career At ICICI Prudential, career development is emphasized upon from the very day the advisor joins the system. Though individual meetings with his or her manager, the advisor can discuss various issues related to business development and career enhancement. Expectations from the organization in terms of chalking a career in the insurance industry are also discussed. Tiger Team: ICICI Prudential offers the “Tiger Team” programme for identified high potential advisors. Hand picked by the • • •
management, these advisors are placed on a fast-track career path and recognized as ‘Tiger trainers’. The advisors can participate in this programme, subject to certain criteria being fulfilled. Pinnacle Program: Absorption into the management is another career enhancement option provided at ICICI Prudential through the Pinnacle Program. This program helps advisors build a full time career as a unit manager in the organization, offering great potential for managing a team of advisors and personal development. ‘Fast track Pinnacle’ programme is also available to advisors who are able to meet the performance criteria within the stipulated time. Rewards and Recognition ICICI Prudential advisors are constantly recognized and rewarded for their performance. Numerous contests all year round promote healthy competition amongst advisors and recognition for their efforts. Depending on the level of business the advisor achieves in a year, he or she can become a member of various clubs such as the President’s club, ICICI Pru Star International and the ICICI Pru Star India club. Each of these clubs have specific performance criteria for qualification and members of these clubs are entitled to attend seminars held at exotic international and domestic locations each year. Advisors can also qualify for the renowned MDRT (Million Dollar Round Table), an exclusive international insurance advisors club. An Employee ICICI Pru offers exciting career oppurtunities for people from a variety of streams. You can apply for jobs at ICICI Prudential Life Insurance through our e-recruitment section. Distribution
Tied Agency is the largest distribution channel of ICICI Prudential, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable business model. Bancassurance and Alliances ICICI Prudential was a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the company's sales and distribution strategy, contributing to approximately one third of company's total business. The business philosophy at B&A is to leverage distribution synergies with our partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel.
Customer Service & Operations
The Operations department oils the work processes between the customer and the company to ensure consistent and quality service to the customer. To streamline the
operations, the Operations department interfaces between the clients and the agents, the branches and the underwriters, and manages work processes. The Vision at Customer Service is to deliver 'World Class Service' at every opportunity. Units such as the 9 to 9 contact centre, Outbound Call Centre, Customer Care and Query Resolution Unit are all committed to providing effective solutions to over lakhs of customers across the country
The Information Technology function at ICICI Prudential is committed to enable business through the use of technology. It is segmented into 4 groups to enable highest levels of delivery to the customers: Life Asia Solutions Group that provides flexibility in designing better product offerings to end-users, the Solutions Group- Web that provides real-time information to customers and is responsible for customer relationship management, IT Architecture & Corporate Solutions Group is in charge of developing and maintaining a blueprint for the IT architecture for the enterprise as a whole. This team works as an in house R&D Solution Group, exploring new technological initiatives and also caters to information needs of corporate functions in the organization. IT Infrastructure group is responsible for providing hardware, software, network services to the whole organization. This group runs the 'Digital Nervous System' of the Enterprise at the highest levels of efficiency and provide robust, scalable and highly available platform for deployment of business application.
The Marketing function at ICICI Pru covers an array of activities - brand and media management, channel support, direct marketing and corporate communications. The Brand and Communications team is in charge of advertising, consumer research, media planning & buying and Public Relations; that helps develop and nurture ICICI Prudential's corporate identity while effectively communicating its varied product offerings to the customer. Channel marketing provides support to the sales force by streamlining the design and development of collaterals and sales tools across distribution channels. The Direct marketing team was set up to generate high quality leads for profitable business. The team achieves this through target database acquisition and communicating customised product information through e-mailers, telemarketing and innovative direct mailers.
Finance function in ICICI Prudential is committed to create an infrastructure that is aligned to shareholder expectations. Finance basically comprises of four functions. . Corporate Planning and MIS provide feedback on business strategies. This includes driving the budgeting process, providing strategic inputs for decision-making and management reporting and analysis. The Accounts function includes preparation and maintenance of financial records, funds management, and expense processing and treasury operations. Compliance ensures that every action is within the regulatory framework. This includes reviewing compliance requirements and supporting the ethical framework of ICICI Pru life. Internal audit provides assurance to the management over the organizations' control framework and includes process risk management, information security assessment and business continuity assessment.
The people strategy of ICICI Prudential is "To build a committed team with a culture of innovation, learning and growth. The Human Resource Function at ICICI Prudential drives the people strategy of the business. With its initial focus on operational excellence to deliver benefits and services to staff members, HR is now committed to building capability through state of the art processes. A robust performance management system, compensation system and a segmented training architecture enable it to deliver value to the organization.
Excellence The Business Excellence function is committed to building a quality mindset across the organization. ICICI Prudential is the first organization in the Insurance Industry that has adopted the Six Sigma Methodology for process efficiency and measurement. The team is also driving the Malcolm Baldrige framework across the organization, an intervention that examines management of key inputs for Business Excellence.
Introduction of Insurance And Insurance Marketing
Introduction OF Insurance: Insurance may be described as a social device to ensure protection of economic value of life and other assets. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term "risk" is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss. Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an individual are distributed over a group of individuals. It is used with reference to financial protection against a possibility, such as fire, accidental damage, theft, or medical expenses: motor insurance, house hold insurance, travel insurance, health insurance. • • • • It ensures protection of economic value of asset. It is a joint venture It is a social security tool It is a risk transfer mechanism.
The insurance institute of India was established in 1955 fro the purpose of imparting insurance education to persons engaged or interested in insurance. The institute conducts written examinations at various levels and arranges tuition services, both oral and postal
In the words of John Magee, “Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals.”
In the words of D.S. Hansell, “Insurance accumulated contributions of all parties participating in the scheme.”
In the words of justice Tindall, “Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency.”
Characteristics of insurance
♦ Sharing of risks ♦ Cooperative device ♦ Evaluation of risk ♦ Payment on happening of a special event ♦ The amount of payment depends on the nature of losses incurred. ♦ The success of insurance business depends on the large number of people insured against similar risk. ♦ Insurance is a plan, which spreads the risk and losses of few people among a large number of people. ♦ The insurance is a plan in which the insured transfers his risk on the insurer. ♦ Insurance is a legal contract, which is based upon certain principles of insurance which includes utmost good faith, insurable interest, contribution, indemnity, causes proximal, subrogation, etc. ♦ The scope of insurance is much wider and extensiv
IRDA (The Insurance Regulatory And Development Authority): A critical element, of financial sector reforms is the development of a pool of human resources having right skill and expertise in each segment of the industry to provide quality intermediation to market participants. Quality intermediation requires personnel working in the industry need to – (1) Follow a certain code of conduct. (2) Have an understanding of business and skills to service different constituents in the market. In order to ensure this, the IRDA (hereinafter referred to as the “regulations”). Regulation 6 of the regulations requires that a person desiring to obtain or renew a license to act as an insurance agent or a composite insurance agent shall pass the pre-recruitment examination in life or general insurance business, or both, as the case may be, conducted by the insurance institute of India, Mumbai or any other examination body “duly recognized by the authority” Accordingly, the institute has developed pre-recruitment examinations in both life and general insurance business. These examinations are administrated all over the country manually by the institute and electronically by the national stock exchange of India ltd., mumbai (hereinafter referred to as the “NSE”). The national stock exchange of India ltd. A company registered under the companies act, 1956,provides a testing and certification mechanism called NSE’s certification in financial markets (NCFM) to test practical knowledge and skills that are required for operations in financial markets in a
secure and unbiased manner. NCFM is designed to administer tests in a modular fashion. It offers a comprehensive range of modules that cover many different areas of finance. It is an on-line nation –wide testing and certification system where the entire process from generation of question paper to certifying is fully automated. Insurance industry is at a threshold of a major change. With the deregulation of the insurance sector, doors of the Indian market have opened up to private sector and foreign companies. Around 30 companies have shown interest for stating the business. Many foreign companies have also entered into alliance with Indian companies. Most of these companies have many years of experience in the financial and insurance sector. The entry of such private companies is regulated by IRDA.IRDA has put rules and guidelines to govern private participation (Indian or with a tie-up with a foreign company) in the sector. IRDA has granted license for life insurance to the following companies: ICICI prudential life insurance company ltd. • HDFC standard life insurance company ltd • Om kotak Mahindra life insurance company LTD • Max New York life insurance company ltd • Birla Sun life insurance company ltd • Tata Aig life insurance company ltd • SBI life insurance company ltd • Ing Vysya life insurance company ltd • Aviva life insurance company ltd • Etc.
Mechanism:The basic mechanism of insurance works with the principle where people exposed to the risks come together and pool funds to protect each and individual against risk. Therefore, risk is spread out .The insurance companies collect money in advance and creates a fund from which losses are paid. Risk is defined as the possibility of adverse results flowing from any occurrence. Insurance reduces the impact of risk on the owner and those who depend on the asset .It must however be noted that, only economic or financial losses can be compensated. For example, the emotional support that the breadwinner provides can neither be evaluated nor compensated. However, the financial support can be evaluated and compensated.
Role of insurance in economic development : Insurance premium collected by insurance companies are invested in various development projects. They provide the much – needed cash for economic development and growth. LIC (Life Insurance Corporation Of India) used this money to invest in infrastructure development e.g. housing loans, sewage systems and electricity.
Role of insurance in nation building : Insurance benefits society by :• Providing relief to the insured from any mishap.
Reducing the burden of the government in providing relief to old citizens. Placing large sums of money at the disposal of the government for development of the economy.
Insurance company operations : The process of creating a product, making it available to consumers, ensuring customer satisfaction is integral to an insurance company.
Creating the product : The functional areas that are involved in the creation of a product are: 1. Actuarial. 2. Accounting. 3. Marketing. 4. Agents, brokers & sales representatives. 5. Information systems. 6. Investment. 7. Legal. 8. Underwriting. 9. Policy owner services. 10. Claim administration. The creation of a product involves the following stages : 1. Idea generation. 2. Comprehensive business analysis. 3. Technical designing. 4. Implementation. 5. Product introduction. 6. Sales monitoring and review. Basically the various elements, which can upset human plans, are : • Burglary. • Death. • Accidental permanent disability. • Sickness. • Critical illness. Events that must occur at some time, such as death, are provided for by assurance.
There are two different branches of insurance : • Life insurance. • Non-life or General insurance.
Life Insurance : It insures the life of a person. Human life is an income-generating asset. This asset can be lost through unexpected death or made non-functional through sickness or disability caused by an accident. There is no certainty that an accident will happen. On the other hand there is a certainty that death will happen, but its timing is uncertain.
Life insurance is a branch of insurance in which compensation is made available to designated survivors of a deceased person, or to a person on their own survival after a fixed term of years, in return for payments, or premiums. Life assurance is based on the mathematics of probability, which determines the level of premium to be paid, and on compound interest, which determines the growth over time, through investment, of the fund constituted by the intake of premiums. The two together ensure an adequate fund to provide the compensation required. Life insurance protects against loss of income of an individual. Life Insurance : • Does not protect the asset. • Does not prevent its loss. • It is not a contract of indemnity. • It cover depends on the paying capacity of an individual. Insurance reduces the impact of risk on the owner and those who depend on the asset. It must however be noted that, only economic or financial losses can be compensated not emotional support. Life insurance products provide for: • Risk cover. • Investment. • Health cover. Four main types of insurance policies: Term assurance (Only in the term). Whole-life assurance (Whole-life). Pure endowment (Only on the survival of the selected term). • Annuity. (A form of pension in which an insurance company makes a series of periodic payments to a person (annuitant) (or) his (or) her dependents over a no. Of years. (Term) in the return for the money paid to the insurance company either in a lump sum (or) in installments. Non-Life (Or) General Insurance: It insures everything except life. i.e. vehicle, electronic, furniture, medical, home (or) building, industry etc.
• • •
Functions of insurance: Primary functions:
1. Provide protection:- Insurance cannot check the happening of the risk, but can provide for the losses of risk. 2. Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others. 3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. 4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.
1. Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions. 2. Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty. 3. Contributes towards development of larger industries.
Means of savings and investment: Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their costs, which include payments to cover the losses of policyholders, as well as sales and administrative expenses, taxes and dividends. Insurance companies have two sources of income for covering these costs: premiums and investment income. The premiums are collected on a regular basis and invested in Government Bonds, Gilt, stocks, mutual funds, real estates and other conservative avenues. However, investment income depends on market conditions, interest rates, economy etc. and varies from year to year. Because of the uncertainty associated with the investment income, insurance companies must generate enough income from premiums to cover the bulk of their expenses. The risk becomes insurable if the following requirements are complied with: ♦ The insured must suffer financial loss if the risk operates. ♦ The loss must be measurable in money, ♦ The object of the insurance contract must be legal. ♦ The insurer should have sufficient knowledge about the risks he accepts.
Fundamentals of Insurance The fundamental Principles of the Insurance are as follows:
♦ Insurable Interest: Insurable interest means the legal right to insure. Insurable Interest is a must and only then the insurance contract is enforceable at law. This principle differentiates a Contract of insurance from wager. Lack of insurable interest renders the contract null and void. For Insurable Interest to exist there must be Property, Rights, Interest, Life or Liability; this must be insured and the Insured should have a legally recognizable relationship thereto. The Insured should be benefited by the safety of the property or is prejudiced by its loss. Insurable Interest may arise in the following manner: 1. Ownership: Absolute ownership entitles the owner to insure the property. This is the commonest method whereby Insurable Interest arises. 2. Partial Interest is also insurable e.g. a mortgagee. A creditor can also insure the life of his debtor but only to the extent of his loan. 3. Administrators and executors i.e. officials appointed by a court of law to take care of a property may also insure the property. 4. Relationship does not automatically constitute insurable interest. The only relationship recognized by law for this purpose is the one between a husband and wife. 5. An employer can insure his employee under a Personal Accident Policy as he has insurable interest in them. ♦ Proximate cause: Generally, the claims are payable under insurance policies if they arise out of events which are proximately caused by the insured perils. In other words, the proximate cause of the event has to be peril covered by the policy, so as to constitute a valid claim. ♦ Contribution: An insured may have several insurance on the same subject matter. If he recovers his loss under all these insurance, he will obviously make a profit out of loss. This will be an infringement of the principle of indemnity. Common Law has, therefore, evolved the doctrine of contribution whereby the insured is prevented from recovering more than his loss, despite his having several insurance on the subject matter. ♦ Subrogation: The principle of indemnity seeks to prevent the insured from making profit out of loss. However, it may so happen that that the insured may recover his loss under his policy and he may also have rights against third parties. If, after the insurance claim is settled, the insured is allowed to enforce his rights against third parties and to retain whatever damages he receives from them, he will certainly make a profit and the principle of indemnity will be infringed. Common Law has therefore, evolved the doctrine of subrogation as corollary to the principle of indemnity. Subrogation may be defined as the transfer of rights and remedies of the insured to the insurers who have indemnified the insured in respect of the loss. The Common Law right of subrogation is implied an all contracts on indemnity, as it arises only after payment of loss.
♦ Utmost Good Faith: In all General Insurance contracts we know that a property or interest or liability or life is offered for insurance and the insured has to take decisions on the acceptance of the proposal. If he decides to accept the proposal a premium commensurate with the risk has to be charged. To enable him to take necessary decision in this regard, the insurer must have certain facts about the risk offered. These facts influence the judgment of the insurer in deciding about the acceptance or otherwise of the risk and the rate of premium to be charged, if accepted. Such facts are known as material facts.
NATURE OF INSURANCE CONTRACTS:
When the insured pays the premium and the insurers accept the risks, the contract of insurance is concluded. The policy issued by the insurers is the evidence of the contract. The contract of insurance, like any other contract, for example a contract for the sale of goods, is subject to the general law of contract as embodied in the Indian Contract Act, 1872. According to this Act, a contract must have certain essential features in order to make it legally valid and enforceable. The following are the essential elements: a) Offer and acceptance: Usually, the offer is made by the propose, and acceptance made by the insurer. b) Consideration: This means that the contract must involve some mutual benefit to the parties. The premium is the consideration from the insured and the promise to indemnity is the consideration from the insurers. c) Agreement between the parties: Both the parties should agree to the same thing in the same sense. d) Capacity of the parties: Both the parties to the contract must legally competent to enter into the contract. For example, minors cannot enter into insurance contracts. e) Legality: The object of the contract must be legal and the contract should not violate any legal requirements. E.g. no insurance can be had for smuggled goods. RISK Reasonable or not, risks are inescapable in business. Every business venture is something of a gamble, because the possibility of loss is as real as the prospects for profits. And even though managers do everything possible to ensure that their business succeeds, they cannot guard against every conceivable form of risk. Pure Risk versus Speculative Risk: ♦ Pure Risk: Events representing the kind of risk that no business can predict or escape, known as Pure Risk, it is the threat of a loss without the possibility of gain. In other words, a disaster such as avalanche or fire is costly for the business it strikes, but the fact that no disaster occurs contributes nothing to a firm's profit.
♦ Speculative Risk: It is the type of risk that offers the prospect of making profit - and prompts people to go into business in the first place. Every business accepts the possibility of losing money in order to make money. Approaches to Risk Management Risk Management is the process of reducing the threat of loss due to uncontrollable events. Steps in selecting a risk management approach: · ♦ To identify all the things those can possibly go wrong. · ♦ To consider the probability that an event will occur. Techniques of Risk Management are: 1. Avoiding the Risk: When a company avoids risk, it eliminates the possibility that a particular event will occur. To avoid the possibility of a suit, for example, not to produce any products -which would, of course, eliminate both the threats of a lawsuit and the opportunity to profit. With rare exceptions, avoiding risk entirely is extremely difficult. 2. Reducing Risk: A more practical approach is to reduce the risk by taking precautions. Risk reduction is an important element in most companies' approach to risk management. Typical precautions include putting safety locks on doors to prevent robberies, installing overhead sprinklers to minimize fire damage, and periodic checking motor vehicles to prevent accidents. 3. Assuming risk: Many companies draw on current revenues or set aside a "Contingency Fund" to cover unexpected losses. Setting aside money on regular basis could be cheaper than purchasing insurance. Moreover, the company can earn interest on the reserved cash. Such assumption of risk is also called self-insurance or risk retention. 4. Transferring the risk: Most companies still rely on outside insurance firms for financial protection against catastrophic losses. In buying insurance, companies transfer the risk of loss to an insurance firm, which agrees to pay for certain types of losses. In exchange, the insurance firm collects a fee known as a premium.
INSURANCE MARKETING :
A marketing mix is a combining of these four variables in a way that will meet or exceed organizational objectives. A separate marketing mix is usually crafted for each product offering. When constructing the mix, marketers must always be thinking of who their target market are. Mix coherency refers to how well the components of the mix blend together. A strategy of selling expensive luxury products in discount stores has poor coherency between distribution and product offering. In the long term, all four of the mix variables can be changed, but in the short term it is difficult to modify the product or the distribution channel. Therefore in the short term, marketers are limited to working with only half their tool kit. This limitation underscores the importance of long term strategic planning. Some commentators have increased the number of p's in the mix to 5, 6 or even 8. "People" is sometimes added, recognizing the importance of the human element in all aspects of marketing. Others include "Partners" as a mix variable because of the growing importance of collaborative channel relationships.
7 – P’s of ICICI Prudential
Marketing Mix Of ICICI Pru
Premium Target Market
Physical Evidence (i.e; Returns on Investment)
A target market is the market segment, which a particular product is marketed to. Age, gender and/or socio-economic grouping often define it. Targeting strategy is the selection of the customers you wish to service. The decisions involved in targeting strategy include:
How many segments to target? Which segments to target? How many products to offer? Which products to offer in which segments?
There are three steps to targeting:
Market segmentation. Target choice. Product positioning.
Targeting strategy decisions are influenced by:
Market maturity. Diversity of buyer’s needs and preferences. The company's size. Strength of the competition. The volume of sales required for profitability.
5 – Patterns Of Target Market Selection Single - Segment Concentration. - Through concentrated marketing, the firm gains a strong knowledge of the segment’s needs and achieves a strong market presence. Selective Specialization. - The firm selects a number of segments, each objectively attractive and appropriate. Product Specialization. - The firm makes a certain product that it sells to several segments. Market Specialization. - The firm concentrates on serving many needs of a particular customer group. Full Market Coverage. - The firm attempts to serve all customer groups with all the products they might need.
Single - Segment Concentration
P = Product
M = Market
P = Product
M = Market
M1 M2 M3
P = Product
M = Market
ICICI : After segmenting, ICICI has targeted Product Specialization in patterns of target market selection to promote their banking products. ICICI made certain banking products like SBA, CA, JA, FDA, Credit & Debit Cards, ATM’s etc. that it sells to several segments.
M1 M2 M3
P = Product
M = Market
ICICI : After segmenting, ICICI has even targeted Market Specialization in patterns of target market selection to promote their financial products in various markets. ICICI had concentrated on serving many needs of a particular customer group with various types of financial products they need like - Banking, Mutual Funds, Insurance etc.
Full Market Coverage
M1 M2 M3
P = Product
M = Market
ICICI Prudential Life Insurance ltd : After segmenting, ICICI Pru has targeted Full Market Coverage in patterns of target market selection to promote their Insurance services. The firm attempts to serve all customer groups with various types of Insurance services they need.
Major Segmentation Variable For
ICICI Prudential Life Insurance Pvt. Ltd. Geographic Segmentation : Region : Eastern, Western, Northern, Southern Parts of India. Density : Urban, Suburban, Rural. City Or Metro Size. Demographic Segmentation : Age : For All Ages. Family Size : 1-2, 3-4, 5 + Family Life Cycle : Young, Single, Married, Married with children, Older. Gender : Male & Female. Income : Low, Medium, High. Occupation : Any. Education : Any. Religion : Any. Generation : Present & Future. Nationality : Indian. Social Class : Upper Lowers, Working Class, Middle Class, Upper Middles, Lower Uppers, Upper Uppers. Psychographic Segmentation : Life Style : Any
Personality : Any Behavioral Segmentation : Benefits : Quality Service. Loyalty Status : None, Medium, Strong. Readiness Stage : Unaware, Aware, Informed, Interested, Desirous. Attitude Toward Product: Positive, Indifferent, Negative, and Enthusiastic. POSITIONING OF ICICI PRUDENTIAL LIFE INSURANCE PVT LTD. Attribute Positioning. - Positioned as 5 years of existence in India as started their operations in 2000. Benefit Positioning. Positioned as the leader in Life Time, Retirement Solutions & Smart Kid.
Use or Application Positioning. - Positioned as best for Insurance Services. User Positioning. - Positioned as best for all age groups according to their requirements. Competitor Positioning. - Positioned as to be 2nd and 3rd in couple of years in terms of quality insurance services than LIC & HDFC. Product Category Positioning. - Positioned as the leader in a certain services like Smart Kid, Life Time & Retirement solutions category. Quality or Price Positioning.
Positioned as offering the best value for their services.
ROLE OF AN ADVISOR: 1. Identify future clients/prospect 2. Making appointment. 2. Conduct financial review meeting with prospect. 4. Close sale. 5. Get referral 6. Provide service to clients/prospect. 7. Follow internal sales and reporting system. After analyzing the quality (which the company is looking for), back office service (which the company is giving to that person). functions to be performed. role to be played . I used to describe the benefits which the advisor can get out of his/her joining as an advisor in ICICI Prudential Life Insurance Company.
OPPORTUNITIES: 1. No start up capital is required to becoming an advisor. 2. Flexible working environment. 3. Be his/her own boss. 4. Unlimited earning potential. 5. To be part of world class team.
Besides these ICICI Pru has given the following benefits to the individual those who are willing to join as an advisor in our company.
PROCESS OF INSURANCE ADVISOR
: First of all a questionnaire was made. Cold calling and find which person have been interested became an advisor was done and the questionnaire was made to be filled by the respondents there. Data are also collected through personal references, websites, tata yellow pages, newspapers, phone directories, etc. After this I fixed the meeting and explain the process of the plan and after that his queries were answered. If he gets satisfied with the plan then certain questions were asked from him in order to satisfy the criteria of Q- SCORE SHEET .Q – SCORE SHEET consist of 5 criteria. Out of the five criteria out of the five criteria if minimum three are satisfied then only the respondent can became a advisor. Now if it is found that this person is a right according to the Q – SCORE SHEET then he filled his information. After this he submitted the foam with the important documents. . These documents include: 1. 10TH MARKSHEET 2. MARKSHEET OF THE GRADUATION 3. PHOTOGRAPHS
4. A DEMAND DRAFT OF RS 1500 IN FAVOUR OF ICICI PRUDENTIAL LIFE INSURANCE. The companies provide a 100 hours training with the help of IRDA. This training is finished in 15-20 days. After this the company gives the date of examination.
A center was told to them where the examination took place. In the exam the minimum pass marks were 45 out of 100. If they clear the examination then the company issued a certificate to them declaring that they had now become a legal advisor of the company. But if any person were not able to clear the exam then he give the reexamination by submitted the fees.
After this they become a advisor then the company give an agent code. With the help of this code an advisor open the zero balance in the ICICI BANK. This was the whole study during the summer training.
Instructions • Please answer the below question in yes/no. • In case of Q score is less than 3, approval from either 1) 2) Territory manager or above. Sales manager-channel development. Q SCORE SHEET Application No. Age above 25? Married? Are you a graduate? Living in same city for more than 5 years? Household income above 2 lakhs? Total score Yes / No Yes / No Yes / No Yes / No Yes / No (Out of 5)
Research Methodology And Objective of the study
Research design depends on type of research studies that we are going to make. My research study is descriptive type. Research methodology is all of the techniques, methods and procedures adopted in terminology work to carry out terminology research. It is a way to systematically solve the research problem. DESCRIPTIVE RESEARCH STUDY:. In this type of research study the researcher must able to define clearly, what he wants to measure and must find adequate methods measuring it along with the clear cut definition of population he wants to study. Since the aim of study is to obtain complete and accurate information, who must be interested in insurance company. The design in such studies must be rigid and rigid. For the study I have taken a sample of about 100 customers, etc from each and every market in Delhi, Noida and Ghaziabad. In planning and designing a specific research project it is necessary to anticipate all the steps that must be under taken if the project is to be successful in collecting valid & reliable information. If it were broken down into very small parts or activities, the marketing research process would consist of a great no of steps --- Selecting a sample type. Specifying research objectives. Preparing a list of the needed information. Designing the data collection project. Determining a sample size.
Organizing and carrying out the fieldwork. Analyzing the collected data and reporting the findings. 1. FORMULATION OF OBJECTIVE: Research Objective must be clearly defined (what the study is about and why it is being done) then only, it can be achieved in a best way. With the aim to make comparative analysis between the Insurance companies we analyse the data of different companies in various prospectives:---
Purpose of study:
To study and evaluate various strategies of ICICI PRUDENTIALfor various section of society.
2. DATA SOURCES
The second stage is the collection of data is the data sources Primary Data Sources and Secondary Data Sources. Primary Data Sources are collected specifically for the purpose of research study, which is to be done, and secondary data source are already collected data, with some other objective.
Primary Data Source: Questionnaire: A formal list of Questions is formulated and asking the questions from
the people who are having the related information. Here the Questionnaire is Structured. Close end Questionnaire with Dichotomous and Multiple Choice Questions. Main aim is
to compare the Customer Attitude and Loyalty towards SMART KIDS PLAN product of different companies.
Secondary Data Source: Internal sources:
On-Line Information, Report of IRDA( INSURANCE
REGULATORY &DEVELOPMENT AUTHORITY ),
External data : Magazines like Business Standard, Books on insurence and journals . 3.SAMPLING PLAN Sampling Unit (Who Is Being Surveyed)
All prospectives who are intresting in investment cum insurance.
Sampling Size (How Many People Should Be Surveyed)
100 customers in DELHI & NCR
Contact Method (How The Subject Should Be Contacted)
Cold calling, Personal Contract, Through Internet After using contact method those person interested I meet them individual.
My objective is to maximize the recruitment number of good quality advisor by minimizing the relevant cost and comparative study of ICICI Prudential product with other insurance companies .There are more objectives regarding the research methodology and these are stated below: 1. To increase the equity base of ICICI Prudential by increasing the number of good quality advisor who sell the more policy. 2. To hold the market share and also to increase the competitive edge over other. Then only ICICI Prudential will be able to the position as first rank. Again this is possible only when the company recruiting good quality advisors those who are having much more contact with high or medium profile people those who are the potential customer for the company. With the aim to make comparative analysis among the various insurance companies with respect to their smart kids product is done considering following factor: • • • • • Entry Age & Maturity date Premium value & Term Death Benefit Surrender Benefit Withdrawal
AREA-WISE DISTRIBUTION OF SAMPLE
14% 33% east delhi ghaziabad noida
AGE GROUPWISE BREAK-UP OF THE SAMPLE
15-25 25-35 35-45
CONVERSION RATE OF POTENTIAL RESPONDENTS
converted not converted
30 25 20 15 10 5 0 No. of Respondent >10000 10000-20000 20000-30000 30000-40000 <40000
45 40 35 30 25 20 15 10 5 0
Business Pvt.Service Govt.Searvice Others
No. of Respondent
100 90 80 70 60 50 40 30 20 10 0
LIC Pvt. Players
20 20 20 20 20 05- 04- 03- 02- 0106 05 04 03 02
30 25 20 15 10 5 0 MARKET SHARE (%)
ICICIPru Bajaj Allianz HDFC SBI life Birla SunLife Tata AIG Max New York Aviva Kotak Mahindra Others
3000 2500 2000 1500 1000 500 0 ICICIPru Bajaj Allianz HDFC Birla SunLife Tata AIG Max New York Aviva Kotak Mahindra PREMIUM COLLECTED 2005-06 (in crores)
ICICIPR UDENTI AL BAJAJ ALLIANZ HDFC STANDA RD LIFE SBI LIFE
70 60 50 40 30 20
MAX NEW YORK LIFE TATA AIG AVIVA
MARKET SHARE(Fig in%)
OM KOTAK MAHIND RA
After analyzing the data the interpretation of the data can be done as follows. No of clients visited are 100 in the region of Delhi , Noida and Ghaziabad. (1) The above pie-chart gives the split of the sample area-wise. The sample constituted 53% of the respondents from Ghaziabad, 33% from East-Delhi and 14% from Noida. (2)The above pie chart gives the age-group wise split of the sample. According to it there were 37% respondents belonging to group 15-25 years. 24% were of group 25-35 years. 22% were of group 35-45 years and finally 22%belonged to 45-55 years. (3)Out of the total appointments called for is 100,15 of them were finally converted. Hence the conversion rate turns out to be 15. %. (4)The above pie chart gives the income group wise split of the sample. According to this every person earn the different income. The income of the mostly people is >10000. (5) I found that those people who are between 30-35% are more serious for this.
Because every people want to earn more money for their family . So that they are more interested in this area. (6) And if we analyze according to income then I found that those people who
are having income less than 2 lakh is more serious about this. Because they have required of the money
And if we consider according to occupation then I found that those people
who are either businessmen or in private job they are more interested in this area. Because they want to secure their future. (8) Many People want to work as an advisor but they want to do it as a part time,
not full time. (9) ICICI PRUDENTIAL LIFE INSURANCE and BAJAJ ALLIANZ is tough competitor to each other. In this year the market share of BAJAJ ALLIANZ is more than ICICI PRUDENTIAL LIFE INSURANCE. The market ICICI PRUDENTIAL LIFE INSURANCE is than .8% to BAJAJ ALLIANZ (10) In this year BAJAJ ALLIANZ is collected the more premium than ICICI PRUDENTIAL LIFE INSURANCE.
(11) The parameters which effect the customer while going for the insurance policy the parameter rated most is Retirement Benefit that is 35% the next parameter is Tax Rebate with a share of 28% the other parameters are Saving & Investment and Tenure with 11% and 26% respectively.
Change is very important and one who goes with the changing environment always succeed, that is what I have learned from the study. The competition has grown too much in the insurance sector with the opening of the sector. This is for the LIC to change their strategy on the basis of the competition. For many years it was only LIC for life and GIC for general insurance companies available. In 1991 when the liberalization started, foreign investors become attracted towards the country. In 1993 government appointed Mr. R.N. Malhotra committee to suggest reforms measures. In 1998 the New IRDA Bill was passed and became a law which paved the way for foreign insurance companies. Multinational insurance companies aligned with the Indian companies to step into this sector. LIC has the largest network of operation with 2148 offices, 124,000 employee and 750000 agents. ICICI Prudential is the largest private player in the insurance industry in India. It is my great experience and pleasure working in a company like ICICI Prudential. It was a great learning experience about recruitment strategy of an advisor, about the business, about the fulfillment of the business and so on. After going through the whole project for two months I have got different issues like motivation, encouragement from the
senior. Career path and so on.It has sold over one lakh fifty thousand policies till date.
So, It is my great experience and pleasure working in a company like ICICI Prudential. It was a great learning experience about recruitment strategy of an advisor, about the business, about the fulfillment of the business and so on. After going through the whole project for two months I have got different issues like motivation, encouragement from the senior. It was also a great experience of meeting various kinds of people like CA, FD, LAWYER Service, persons etc. It was a great learning experience of how, to approach different kind of people. After this I find that mostly people believe in LIC. Because it is a government company.
Thus it can say that these have been a great two months of learning and growth.
Suggestions And Limitations
Suggestions and Recommendation
The company is charging Rs. 1500 from person who wants to join the company as an advisor but the fees is too high for the freshers. They have to arrange the money for it and if they fail to do so they are left in vain. The fees should be reduced to a considerable amount so that any person who wants to join the company can easily arrange it and be part of the prestigious group. Further it has been seen that the no. of the advisors joining the company is far more in the month of May as compared to the other part of the year, when the fees is totally whipped by the company. So if the fee is reduced the no. of advisors joining the company will increase and this will help in capital gain to the company.
The minimum age criteria set by the company for the person joining as an advisor is 25 yrs. This age limitation should be reduced to 21 yrs. This is an ideal time for the fresh graduates to join the company as an advisor and achieve the positions they deserve. An advisor can easily reach to higher posts in the company with the span of time and showing their capabilities to do the work assigned to them at different levels. The company should try to hit this segment. Since the advisors can also became an employee of the prudential, starting from unit manager, through the pinnacle program, and can go to more higher posts also, the students finds it’s a great opportunity for themselves. The
zeal to show good performance is also much high in them as compared to other segments people.
The company should take proper care of the advertisements of the new schemes launched by it so that more and more people are attracted towards it and become a member of it. The advertisements give a way to the people about the benefits of the scheme and to overcome the increasing competition with the other big names of the market.
The company should gives an attractive gifts and packages to the advisors as per their work so that they can have faith in the company and works in more enthusiastic manner to earn more and more benefits.
The company should provide an intensive training to the fresh advisors so that they can cope up with the increasing competition in the market and overcome the difficulties they faces during their work in a more effective manner.
The commission provide to the advisors should be enhanced so that the existing employees and the interested candidates to join the company are attracted towards it. In addition to it a minimum monthly package should also be given to them and the existing method of giving only the commission should be replaced. When there is a monthly salary in addition to the commission the advisors will stick to their jobs and will give the company more profit with the increasing experiences.
It has been seen that most of the branches of prudential are situated in the metropolitans and the urban areas. But the life of India lives in the villages and the semiurbans. The company should try to hit these areas so as to increase the opportunities. This will help in boosting the profit of the company and new schemes should be launched to attract this segment of population.
The company’s more sellable life time policy has a minimum premium of Rs. 18000/- where as this premium is as low as to Rs. 10000/- of their competitors in the market. If this premium is reduced by the company to a competitive amount than more people can be attracted towards the life term policies offered by the company and the loss can be adjusted by increasing the no. of customers. The low income group can also be attracted towards it by launching new schemes and policies with a low premium.
PROMOTIONAL STRATEGIES Press publicity: Paper inserts Advertisements in newspaper (local and national). Interest cards distribution Mailers/personal invitations to selective section of the society Leaflets
Outdoor publicity: Banners in commercial areas and prime sites.
Air balloons at shopping complex. Bus stands shelters. Advertisements on Dividers and Railings.
Media: Local channel advertisement (cable TV scrolls) Advertisements in news channels and business channels
Face to face: Personal interaction of marketing executives through Meetings Detailing about schemes and updating them from time to time Event sponsoring in local clubs and social gathering Road shows Contacting senior citizens in parks in morning and evening. Contacting office goers in the morning and evening at stop lights by
distribution of interest cards.
These are measured in terms of, Interest – Time – Cost – Human error. Interest : Most of people had a bad perception on insurance sector. As most of the people are satisfied in their works they have very less interest to do a side-by-side business and especially in insurance sector. Time : Professionals, Business Men, Employees etc don’t have time to do an extra business and even though they are interested they don’t have time to attend the training for advisor ship due to their hectic schedule in their perspective works. As they don’t attend the training they might not be able to know about the process of insurance sector and its product information. So time takes a major role in this sector. Cost : As concerned regarding cost, company is spending an approximate of 10,000 / - per head on training. They are spending this money by means of seminars, lectures, stationary, food etc. so company is charging 1500/ - per head earlier itself for the sake of insurance
exam and for other formalities so that company have faith on the candidate that he/she may not escape from company after taking training. Company had kept a motivation factor too, i.e.; actually by rule that 1500 / - is non-refundable. But if the candidate can give 7 policies in first 3 months it will be paid from the pockets of ICICI Pru.
Human Error : Insurance is a type of industry that is fully 100% based on human feelings and their actions. Mainly every advisor should have patience in large amounts, shouldn’t have ego problems, have motivation skills, have enough confidence to go through in the market, have very good relationship skills and ability to maintain good society
Respondent’s Profile NAME: AGE: CONTACT NUMBER: OCCUPATION: ADDRESS: 1. DO YOU THINK LIFE INSURANCE COVER IS IMPORTANT FOR YOU? a) YES b) NO RESIDENCE:
2. HAVE YOU TAKEN ANY LIFE INSURANCE POLICY? a) YES b) NO
IF YES THEN WHAT AMOUNT? 3. DO YOU THINK THE POLICY YOU HAVE TAKEN IS ENOUGH TO COVER YOUR LIFE? a) YES b) NO
4. DO YOU HAVE VEHICAL (TWO WHEELER OR FOUR WHEELER) IS IT INSURED? a) YES b) NO
5.WHAT ARE YOUR FUTURE GOALS? a) MONEY b) GOING ABROAD e) CAR c) CHILD EDUCATION d) HOUSE
SOME IMPORTANT INFORMATION ABOUT FOR AGENT 6. HAVE YOU HEARD ABOUT ICICI PRUDENTIAL COMPANY? a) YES b) NO
7. WHICH INSURANCE INDUSTRY IS BEST IN INDIA? a) ICICI PRULIFE b) LIC c) HDFC STANDARD d) BIRLA SUN LIFE
8.DO YOU HAVEB ANY FINANCIAL PRODUCT? a) BANK A/C b) HOME LOAN c) INSURANCE d) CREDIT CARD
9.WHAT IT IS YOUR ANNUAL HOUSE HOLD INCOME? a) 150000 b) 100000 c) 175000 d) MORE THAN 200000
10.HAVE YOU ANY EXPERIENCE IN INSURANCE INDUSTRY? a) YES b) NO
11.WHAT IT IS YOUR MARITAL STATUS? a) MARRIED b) UNMARRIED
12.ARE YOU GRADUATE? a) YES b) NO
13.ARE YOU LIVING IN SAME CITY FOR MORE THAN 5 YEARS? a) YES b) NO
14.AGE ABOVE 25? a) YES b) NO
15.TELL ME ABOUT YOUR OCCUPATION: a) STUDENT b) SELF EMPLOYED c) GOVT.SERVICE d) OTHER
BIBLIOGRAPHY BOOKS REFERRED:
Marketing Management- Philip Kotler
RESEARCH METHODOLOGY- (C.R.KOTHARI)
BUSINESS WORLD INDIA TODAY
www.iciciPrudentiallife.com www.asianinsurancereview.com www.bimaonline.com www.businessline.com
Discussion with various employees of ICICI Prudential Life Insurance Company
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