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INDEX
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TOPIC
LIFE INSURANCE MARKET ICICI BANK WHAT IS LIFE INSURANCE?

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3 4 NATIONALIZATION OF LIFE INSURANCE REASONS FOR NATIONALIZATION OF LIFE INSURANCE REASONS FOR PRIVATIZATION OF LIFE INSURANCE ADVANTAGES OF PRIVATIZATION OF LIFE INSURANCE ILL EFFECTS OF PRIVATISATION OF LIFE INSURANCE IS NATIONALIZATION MORE CONDUCTIVE TO A GROWING ECONOMY OR PRIVATIZATION? 5-6

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CONCLUSION ACKNOWLEDGEMENT & BIBLIOGRAPHY DONE BY

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Innovative products. who have always seen life insurance as a tax saving device. are now suddenly turning to the private sector and snapping up the new innovative products on offer. with regard to state owned LIC's new premium business has fallen. With the entry of the private insurers the rules of the game have changed. Indians. 2 . The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument.insured with no flexibility or transparency in the products. not as a product giving protection. The new business premium of the 12 private players has tripled to Rs 1000 crore in 2002. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected.LIFE INSURANCE MARKET The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. smart marketing and aggressive distribution.03 over last year. Most customers were under. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. Meanwhile.

with over 90 percent of the customers. the private insurers have already wrested over 33 percent of the market. the average size of a life insurance policy before privatization was around Rs 50. Buoyed by their quicker than expected success. 3 . The state owned companies still dominate segments like endowments and money back policies. But the private insurers are ahead in this game and the average size of their policies is around Rs 1. For instance. But in the annuity or pension products business. But a rejuvenated LIC is also trying to fight back to woo new customers.way bigger than the industry average. No doubt the aggressive stance of private insurers is already paying rich dividends.000. nearly all private insurers are fastforwarding the second phase of their expansion plans. The private insurers also seem to be scoring big in other ways.The growing popularity of the private insurers is evidenced in other ways.1 lakh to Rs 1.2 lakh. They are coining money in new niches that they have introduced. That has risen to about Rs 80.000.they are persuading people to take out bigger policies. And in the popular unit-linked insurance schemes they have a virtual monopoly.

848 companies and 16. the Government of India and the Indian Industry. ICICI Prudential has a market share of 23 per cent of the total market. ICICI had disbursed a total of Rs.. 2003. established ICICI LTD. . ICICI has thus far financed all the major sectors of the economy.700 crore and a premium income in excess of Rs 640 crore. 2000. Since inception.070 crores. 1.ICICI Prudential has become the first private insurance company to cross the Rs 500 crore capitals. It highlights howan industry where "sell" and "push" were often used words and consumer was nothing more than a file number. Alternative distribution channels. such as bank assurance. to promote industrial development of India by providing project and corporate finance to Indian industry.ICICI BANK The World Bank.851 projects. ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. the company has issued around four lakh policies with a sum assured of Rs 9. As on June 30. The private sector insurance company is a joint venture between ICICI Bank and Prudential of UK. Unit-linked life pension products contributed 52 per cent of the premium in the last fiscal. direct marketing contributed Rs 100 crore to the new business in the financial year 2003. has changed to one where "consumer preference" and "consumer pull" rules the roost. 13. Promoters of ICICI Prudential Life Insurance Company Ltd have increased the capital by Rs 100 crore to Rs 525 crore. In the retirement segment. in 1955. since inception. about 30 per cent of the total business. ICICI Prudential is a case study in the role of marketing in reshaping an industry. 4 . As of March 31. covering 6. corporate agents.

THE JOINT VENTURE ICICI Prudential Life Insurance Company Limited was incorporated on July 20. by the Insurance Regulatory and Development Authority on November 24. 2000. a leading international financial services group. way back in 1923 to establish Life and General Branch agencies. 2000. 1999. ICICI Prudential Life Insurance was granted Certification of Registration for carrying out life insurance business by the Insurance Regulatory & Development Authority of India. pensions. and caters to the financial needs of over 10 million customers. joint venture between ICICI and Prudential plc of U. The Company was granted Certificate of Registration for carrying out Life Insurance business.K.PRUDENTIAL Prudential was founded in 1848. Incorporated on July 20. with a wide range of flexible products that meet the needs of the Indian customer at every step in life. ICICI Prudential has emerged as the No. It is a joint venture between ICICI Bank. In November 2000. Asia has always been an important region for Prudential and it has had a presence in Asia for over 75 years. 39.2300 Million. 1900 Million. unit trusts and personal banking. The paid up capital is Rs. 1998). becoming one of the first few private sector players to enter the liberalized arena. 2000. a premier financial powerhouse & Prudential Plc. 5 . In fact Prudential's first overseas operation was in India. The Company issued its first policy on December 12. Today. ICICI Prudential was amongst the First private sector insurance company to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The Company is a joint venture of ICICI (74%) and prudential plc UK (26%). It has a presence in over 15 countries. It manages assets of over US$ 259 billion (Rupees 11. 2000 it is a 74:26.600 crores approx. annuities. 1 private life insurer in the country. The authorized capital of the company is Rs. 2000. It commenced commercial operations on December 19.) as of December 31. Prudential is the largest life insurance company in the United Kingdom (Source: S&P's UK LifeFinancial Digest. Since then it has grown to become one of the largest providers of a wide range of savings products for the individual including life insurance.

 Leveraging technology to service customers quickly. 6 . MISSION  Understanding the needs of customers and offering them superior products and service. building transparency in all our dealings. This we hope to achieve by:  Understanding the needs of customers and offering them superior products and service.  And above all.VISION To make ICICI Prudential the dominant Life and Pensions player built on trust by worldclass people and service.  Providing an enabling environment to foster growth and learning for our employees. efficiently and conveniently.  Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders.  Building long lasting relationships with their partners.  Providing an enabling environment to foster growth and learning for their employees.

RURAL PLANS ICICI Prudential covers more than 6. Plans to ensure financial security for your family in the unfortunate event of your death. savings and Security. GROUP PLANS Group Insurance Plans from ICICI Prudential enable you to effortlessly provide your employees with both.000 lives across as many as 17 states in India. CHILD PLANS Realize your child¶s dream by giving him the best possible education. HEALTH PLANS Designed to ensure that you and your family get the best medical treatment whenever you need it. Pension plans to enjoy a regular monthly pension post retirement. WEALTH PLANS Get the dual benefit of protection along with potentially higher returns of market linked instruments.50.INSURANCE PLANS TERM PLANS Protect your family from the uncertainties of life. RETIREMENT PLANS Live your life to the fullest even after you retire. 7 . ALL ULIPS A unit linked life insurance policy which Provides a combination of risk cover and investment both together.

MARKETING AND SELLING OF LIFE INSURANCE PLANS With relation to life insurance in simple terms it can be said that«. and your products. They have to make strategies to over-ride all the above difficulties and be innovative in Marketing Communication and devise their branding. Marketing is the process of attracting people to you. 8 . Selling is getting someone to say µyes¶. advertising. a marketing manager of a life insurance company has to sit with the head of distribution and the advertisement agency to resolve these issues. ³Life Insurance is often sold and not bought´ and life insurance marketing at the macro-level deals with concept selling rather than selling a plan of insurance. structure of the plan. Therefore. but the same will not hold good for a life insurance plan.  This is because a common man finds it hard to understand a financial product in this case a life insurance plan.  Marketing and subsequent selling of a life insurance plan is harder than a physical product.  The utility factor for a life insurance plan is different from other physical products. Taking into mind the above comments the following understanding can be made:  Life insurance plans are not like FMCG products which has a physical presence. For others the utility benefit is immediate on consumption. benefit illustration etc. Prospecting is generating a flow of names for you to contact. He often fails to understand his need for the plan. your services. segmenting and distribution strategies to gain maximum customer attention.

Life insurers in India always followed a ³sell´ and ³push´ strategy. The above challenges were faced effectively by the company.  Lack of customer centric approach in servicing. the scenario has changed dramatically. When ICICI Prudential started its business in India it faced the following problems:  Attitudinal barriers of consumers in buying life insurance plans.  Perception of life insurance as a tax-saving instrument. has now changed the way insurance plans are being marketed in India.But with the entry of ICICI Prudential. With its marketing campaigns concentrating on ³consumer preference´ and ³consumer pull´ approach it is now the undisputed leader in the private insurance space for the past 8 years. They tackled the problems like consumer¶s perception.PROMOTIONAL STRATEGY OF ICICI PRUDENTIAL LIFE INSURANCE The promotional strategies adopted by ICICI Prudential.  Lack of variety of product offering (or plans). by giving the policy holders an improvement in terms of:  Product quality  Cost effective pricing  Innovative distribution channels  Successful promotional campaigns  Well defined process 9 . lack of product offering etc with a well thought out Marketing Mix.  It also had a huge market before it which it had to tap and that too at a faster pace. Each problem was given individual attention and they went with a concrete marketing plan to counter all these problems.

10 For Aggressive Investors Life cover. Investment and Risk Appetite is Moderate Invest Shield Life New: It is a ULIP Premium Guarantee Plan where the company undertakes to pay the policy holder a certain sum whatever the market condition is. The premium is invested in government securities. The variants under the Smart Kid plan are to make it customized for the various categories of investors. Premium paid is not returned on survival so the sum assured is high The investor enjoys a huge cost advantage. 2400 p. Smart Kid New Unit-linked Single Premium and Smart Kid Regular Premium. benefits go the child Smart Kid: Smart Kid offers a choice of 3 education insurance plans: Smart Kid New Unit-linked Regular Premium. Save n Protect: This is same as Pure Protect except that the premium paid is returnable on survival. and Risk Appetite is High . Life Stage Assure: Aims at wealth creation for the policy holder coupled with giving a life cover. The premium is very low starting from Rs. PRODUCT QUALITY INVESTOR TYPE DESCRIPTION PRODUCT Pure Protect: It offers only life cover. Risk Appetite is Low For Moderate Investors Life cover. Educational Plans Father is the life assured. For Conservative Investors Only life cover.I. Wealth Creation.a.

The policy holder can opt for periodic pension payout or a lump sum pay out. 11 Retirement Plans Secure your life after earning period Health Plans To get medical benefits . This is a pure traditional plan with no risks attached. Life Time Gold: This is also a wealth creation plan which gives life cover also. A risky fund is chosen at a young age and a stable fund is chosen at the retirement age. in accordance with the age of the policy holder.This is a life stage plan which varies the allocation of premium among various funds. Forever Life: This is insurance cum pension plan that performs two crucial roles: it acts as a protective cover while the plan also earns for the policy holders retirement. This is a unit linked plan which invests various funds. Life Time Super Pension: Designed to help the policy holder save for his retirement systematically. Health Saver: This plan provide you complete health coverage through a hospitalization cover while at the same time also creating a health fund to cover any other healthcare expenses. This is a regular premium unitlinked policy that offers potentially higher returns through the Multiplier Fund that invests in the top 50 large cap companies.

stroke. and kidney failure among others. organ transplants.Hospital Care and MediAssure: The hospitalization coverage may be reimbursement based plans or fixed benefit plans. Crisis Cover: These health insurance plans provide you coverage against critical illnesses such as heart attack. 12 . These plans aim to cover the more frequent medical expenses. Diabetes Care and Cancer Care: These plans are designed specifically to offer health insurance against certain complications due to diabetes or cancer. They may also include features such as disease management programs which are specific to the condition covered.

COVER CONTINUANCE OPTION: this option ensures that the life insurance cover continues in case the policy holder is unable to pay premiums. depending on the market conditions. FUNDS: The Company offers choice of 7 investment funds. Switches can be done online. PARTIAL WITHDRAWAL BENEFIT: Under this feature in certain ULIP plans partial withdrawals are allowed after completion of 3 policy years. any time after payment of first three year¶s premium. Flexi Growth. AVAILABLE RIDERS: Accident and disability benefit rider. SWITCHING OPTION: Under this option the policy holder can switch the investment made between funds at any time.CUSTOMIZED PRODUCT FEATURES OFFERED BY ICICI PRUDENTIAL 1. Critical illness benefit rider and Waiver of premium rider is available under most plans. Flexi Balanced. Balancer. All applicable charges will be deducted from the units available in the fund. These funds vary according to their asset mix and potential risk and reward ratio. 2. The policy holder can choose to invest fully in any one fund or allocate premiums into various funds in a proportion that suits their investment needs. 5. 6. EXTENDED DEATH BENEFIT: Certain plans offer death benefit even after the completion of the term of the policy. The funds are Rich. 3. Normally the extended years vary from 3 to 5 years. 7. INCREASED SUM ASSURED: Policy holder may choose to increase the sum assured at any time during the policy term. 4. Protector and Preserver. This is done without any fresh medical examination. Multiplier. 13 .

The company should transform the potential policy holders into actual policy holders. It should be priced in such a manner that the company is able to book profits and also gives value to the policy holders. Mortality rate is typically expressed in units of deaths per 1000 individuals per year. commission to agents. marketing involves doing life-stage segmentation so that opportunities to up-sell products can be tapped. ICICI Prudential has one of the lowest premium structures in the industry. 2. Life insurance industry is characterized by long break-even period. reinsurance companies as well as registration is all incorporated into cost of installments and premium sum. COST EFFECTIVE PRICING Pricing of life insurance plans are very important. As the child turns into an adolescent. At ICICI Pru. For ICICI Pru. 3. scaled to the size of that population. The pricing in insurance is in the form of premium rates. MORTALITY RATE: Mortality rate is a measure of the number of deaths in some population. ICICI Prudential with its aggressive strategy and vast geographical presence has to price its products suitably to break-even at the earliest. In a developing country like India where the disposable income in the hands of prospects is low. 2. the now middle-aged customer may want to reduce risk cover and instead buy a retirement plan. The three main factors used for determining premium rates are: 1. EXPENSES: The cost of processing. it is possible to sell him a product at every stage of his life. Consider a situation where a 20 yr takes a Rs 5 lakh cover. 14 . INTEREST RATE: This is one of the major factors which determines people¶s willingness to invest in a particular company¶s plan.LIFE STAGE SEGMENTATION The idea behind product flexibility is to cover as many customers as possible. and on becoming a parent takes a child cover as well. the pricing decision is difficult to take. per unit time.

It has a strong presence across India with around 1.PREMIUM HOLIDAYS Crucial to the customer-insurer relationship is servicing. TIED AGENCY Agent channel is the traditional channel in life insurance distribution. This channel is active in ICICI Prudential and is slowly being adopted by other players.400 branches and an advisor base of over 1. The company has bancassurance partners having tie-ups with ICICI Bank and Proddatur Co-Op Town Bank Ltd the Company has a network of over 72.000 advisors. 70. 3.It has over 1360 branches of Bank of India across the country.has strategic distribution tie-up with Sharekhan. Life insurance being a financial product is best sold by talking to the prospect on a one to one basis. ICICI Pru. This channel contributes more than 60% to the company¶s business. As customers become more discerning. CORPORATE BROKERS BANCASSURANCE ICICI Prudential Life Insurance Company Limited (ICICI Prudential Life). offers premium holiday to policy holders in case of contingencies or sudden expenses in the family.000 (as on March 31. listening to their concerns and translating that into an intelligent product solution. as well as 9 bancassurance partners and over 200 corporate agent and broker tie-ups. retirement solution and health insurance products to their customers across the country. wealth creation. 15 . MORTGAGE REDUCING TERM ASSURANCE Mortgage Reducing Term Assurance is an exclusive channel under bancassurance with distributes life policies to persons who are taking loans. 2011). the insurers have to become more sensitive to their needs. The partnership has been established under the corporate agency model and will enable Sharekhan to distribute ICICI Prudential Life's protection. one of India's leading retail brokerage houses. If the borrower dies before loan payment the insurance company pays the loan on behalf of the borrower and also gives the borrower life cover. INNOVATIVE DISTRIBUTION CHANNELS ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India.

ICICI Prudential plans nationwide tie-up with postal dept. send in the premium online:       Pay premium online Manage your policy online: check policy details. The policy can be done bought completely online as no physical documentation is required. The arrangement will help the company penetrate into the rural areas as 90 per cent of the post offices are located in rural areas. It allows the channel partners to manage their whole business on the web through premium alerts.a completely online term insurance plan that is extremely affordable. 16 . the nominee will receive the entire sum assured. but delivers quotations online. The customer can access policy and payment details. Policy holders in the State can also make their premium payments at any of the 529 e-payment enabled post offices across the State. The entry age for a customer is a minimum of 20 years and a maximum of 65 years with a minimum policy term of 10 years and a maximum of 30 years. IProtect provides financial security to the family of the policy holder in the event of his untimely death. An individual can apply online for iProtect and the payment can be made either through his/her internet banking account or credit card. life cover can be bought immediately without the need for any medical tests. the entire transaction can be finished online but the cover will start post a medical test. and premium calculator.ANYTIME INSURANCE Doing the talking to consumers is still the agent. but information technology has helped arm both the agent and the consumer with instant information. client diary. anywhere. ICICI Prudential Life which entered into a tie-up with India Post's Andhra circle is planning to go for a nationwide partnership with Postal Department to push its insurance products in rural markets. switch funds and do much more! Get certificate that can be reproduced as an investment proof to taxation authority Keep track of how your investments are doing Make claims online Get benefits like health assessment. The life cover commences as soon as the premium is paid. They had already tied up with Gujarat. In case of such an eventuality. diet advice & special offers with Health Active ICICI Prudential Life Insurance Company Ltd (ICICI Prudential Life) today announced the launch of iProtect . Above this limit also. Upto a certain limit. anytime. The maximum age at policy expiry is 75 years. ICICI Pru''s website offers not just product information. Uttar Pradesh and Karnataka Postal circles.

 Advertisements of ICICI Prudential Life are effective. This gives their brand a high recall rate. Their television advertisements are so designed to capture the attention of the target audience and also remain in their mind of the customer. Amitabh Bachhan. 17 . Shopped at any of the Westside stores recently or stopped by at Bharat Petroleum to tank up? If yes. expect a call from one of the direct marketers selling ICICI Prudential Life Insurance pension policy or child solutions. 4. It is now running its ³Jeetey Raho´ advertisement campaign which gives the positive aspects of life and now ads featuring Mr. It was the first insurer to think of a plan where it was able to connect to the prospect emotionally while advertising a boring subject like insurance. ICICI Prudential portrayed life insurance buying as good thing to do for a person with a family.ALLIANCE MARKETING Using what it calls 'alliance marketing' ICICI Pru mines databases of retail chains and credit card companies to identify potential customers. SUCCESSFUL PROMOTIONAL CAMPAIGNS  ICICI Prudential gave a new dimension to life insurance advertising. ICICI Prudential Life has made its presence felt in television by innovate and emotional advertisements. has now become household name. µChintamani¶ the cartoon which often comes on ICICI Prudential¶s advertisements as the mascot of the middle class.

This is followed by internet. of respondents 80 60 40 20 0 Yes No 13 87 Inference: The above chart indicates most respondents have seen the advertisement of ICICI Prudential Life. 18 . magazines at rank 2 and 3 respectively. PEOPLE WHO HAVE SEEN ICICI PRUDENTIAL LIFE INSURANCE ADVERTISEMENTS 100 No. newspapers etc 1 16 5 47 23 13 1 22 Radio 9 24 26 40 Internet Mobile 5 Rank 3 1 Rank 4 Television Inference: 78 respondents have indicated that they are connected to television for purpose of advertisement viewing and ranked it as 1. Mobile and radio has got the least rank.REGULARLY CONNECTED TO MEDIA 100 90 80 70 60 50 40 30 24 20 10 0 Rank 1 Rank 2 13 29 38 4 3 Rank 5 78 7 19 52 Magazines. This indicates good coverage of promotional campaigns of the company among various sections of population.

SAY ABOUT ITS CANCER CARE. of respondents 80 60 40 20 3 0 Yes No 97 Inference: Very low number of respondents have seen advertisements of ICICI Prudential Life¶s Health Plans. HAVE YOU SEEN ADVERTISEMENTS OF HEALTH PLANS OF ICICI PRUDENTIAL LIFE INSURANCE. of respondents 40 30 20 10 0 Television Print Media Radio Internet Mobile 15 11 3 23 48 Inference: Most respondents have viewed advertisements of the company in television followed by internet.THE MEDIA IN WHICH ADS ARE MOST VIEWED 60 50 No. Therefore the awareness level of availability of health plans is completely absent. ICICI Prudential Life has made its presence felt in television by innovate and emotional advertisements. DIABETES CARE PLANS ETC. 19 . print media and radio.? 100 No.

will these advertisements translate into sales is a big question. But.HOW WELL HAVE BEEN ABLE TO UNDERSTAND THE ADVERTISEMENTS OF ICICI PRUDENTIAL? 80 71 70 59 60 No. I would consider purchasing a plan from ICICI Pru Life Inference: Most respondents strongly agreed that they were able to understand and connect with the advertisements of ICICI Prudential Life. they are well designed and are able to appeal the respondents. 20 . of respondents 50 40 30 20 20 10 0 Strongly Agree Agree Neutral Disagree Strongly Disagree 16 6 17 14 11 6 3 0 6 1 0 0 20 15 20 19 14 13 15 48 53 53 I was able to understand the message of the advertisement The advertisement message was relevant to me The advertisement was believable The monetary benefits described in the advertisements can be attained After viewing the advertisement. Therefore as far as the content of the advertisements. since only a few respondents were ready to buy a policy after seeing the advertisements.

It is also the only life insurer in India to be assigned AAA credit rating from Fitch Ratings. ICICI Prudential has retained its position as the No. Customer Responsiveness Awards.Economic Times. AGC Networks .AWARDS India's Most Customer Responsive Insurance Company. For the past five years. 1 private life insurer in the country. 2010. 21 .

 The company should concentrate on enhancing its brand value and giving quality plans in terms of design and flexibility since these are the main factors deciding buying behavior. Crisis Cover etc have not been promoted on television. Health plans have a huge potential because India does not have a good social health care system.  The content of the advertisement must be made believable. For the sake of connecting with customers the ads should not promise situations which cannot happen.OUR RECOMMENDATIONS  The company should give more trust to child and health plans. mutual funds etc.  The company should give discount on premium and other costs if a customer buys policy directly from the company bypassing intermediaries like an agent. This policy benefits both the company and the customer.  The structure of a plan must be made simple.  Constant innovations in products and service needed to stay ahead of competition stiff competition.  Insurance advertisements should not be entertaining rather they should say the reality. as the persons having these plans are very low.  Health Plans like Diabetic Care. Therefore promotion should be done to launch a life product as an investment tool just as other savings options like shares.  Being in the private space the company should concentrate on building trust among its policy holders and also the general public. They should be widely promoted widely.  Most people take life insurance only for life cover and tax benefit. 22 . Cancer Care. fixed deposits. Trust plays an important role in Life Insurance business. Complex plans must be made simple for the common man to understand its benefits and use it.

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