Summer Project Report

On

On study of all managerial departments & financial analysis

of
ICICI Prudential Life Insurance

Prepared by:
Amit Kumar (BBA-IV)

Project Guide:
Mr. Navin Aggarwal

Submitted to:
Miss. Gurneet Kaur
Lovely professional university

1
 Preface
An Industrial, Business or service organization by taking up a project study is most
important part of our B.B.A course & is must as per the syllabus prescribed by Lovely
Professional University. Our BBA course is of administrative and managerial activity
of industrial, Business or service organization. The main objective of this project study
is to help the student to develop ability to practical technique to solve real life problem
related industrial, Business or Service organization.

According to the rules, I have taken my summer training in ICICI Prudential Life
Insurance. Our gardeners, professors and banks sum manager’s gives the knowledge
and guidance of this bank to us.

The summer training programmed for student of B.B.A Sam-IV training is for six
weeks in the time of summer vacation theoretically knowledge and class room
discussion is not sufficient for the student but training given them practical and day to
day working of company.

In this project report I had tried to analyze the needs of the customers and suggest
them the most suitable insurance solution. As well as I also analyzed the brand
awareness among the people.

2
 ACKNOWLEDGEMENT

To take training is a part of our BBA programming and is an important part. Training
quit valuable and important aspect to provide practical knowledge student of
management studies.

It was very useful and experience which I got during my training in “ICICI
Prudential Life Insurance”.

I was able to prepare this training report with the co-operation of various people.

First of all I am very much thankful to training in charge professor of our university.

Our project in charge, Mr. Navin Aggarwal, (area manager of ICICI prudential life
insurance, Jalandhar) who has given me an opportunity and Miss Pinki Gupta(Unit
Manager) & all consultant trainers of ICICI prudential life insurance Jalandhar, who
helped me very much in preparing the report by their guidance.

Thanking you

Amit Kumar

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 EXICUTIVE SUMMARY

The economy is highly influenced by the Financial System of the country. The Indian
Financial System has been broadly divided into two segments: the organized and the
unorganized. An investor has a wide array of investment avenues available. Economic well
being in the long run depends significantly on how wisely he invests.

For today’s complex financial scenario a Mutual Fund is the ideal investment option. Markets
for other investment avenues have become information driven. The Mutual Fund Industry in
India began with the setting up of the Unit Trust of India (UTI) in 1964 by the Government of
India. Ever since then this industry has witnessed numerous changes and growth. In 1987
public sector banks and insurance companies were permitted to set up mutual funds.
Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993,
which for the first time established a comprehensive regulatory framework for the mutual
fund industry. Since the private and joint sectors and the share of the private players have set
up then several mutual funds has risen rapidly.

When investors are confronted with an astounding range of products, from traditional bank
deposits to downright shady money-multiplier schemes, it has to be judged on the yardsticks
of return, liquidity, safety, convenience and tax efficiency.

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 Objective of the Study

Management as a profession can’t be taught merely in the four walls of classrooms.

Only theoretical knowledge is not sufficient to build competitive managers. Practical
knowledge of the business environment is equally important.

In today business world, insurance sector is running towards its booming stage. This
industry still has many things to come up to, so many changes and opportunities will
be given by insurance industry. So I choose insurance industry for my training
session in B.B.A.

I choose ICICI Prudential Life Insurance is one of those private insurance players
who entered the market before few years and made its own place among all its
competitors.

This report is shows insurance sector & how insurance is most important part of life.
And understand insurance definitions, different providers of life insurance and
comparisons. It also shows ICICI Prudential Life Insurance’s Products.
As a Trainee ICICI Prudential Life Insurance give me very practical knowledge
about life insurance and how to working in organization, How to manage work, how
to maintain relations with top level management as well as colleges and bottom level
management. So, this experience will helpful in future. I am pleased by taken
training at India’s one of the best insurance company.

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 NATURE & DEFINITION OF INSURANCE

Insurance is defined as a co-operative device to spread the loss

caused by a particular risk over a number of persons who are
exposed to it and who agree to ensure themselves against that risk.
Risk is uncertainty of a financial loss. It should not be confused
with the chance of loss, which is the probable number of losses out
of confused with peril, which is defined as the cause of loss or
with hazard, which is a condition, may increase the chance of loss.

Every risk involves the loss of one or other kind. The function of
insurance is to spread the loss over a large number of persons who
are agreed to co-operate each other at the time of loss. The risk
cannot be over rated but loss occurring due to a certain risk can be
distributed amongst the agreed persons. They are agreed to share
the loss because the chance of loss is there.

Everybody’s greatest asset during his/her working years is his/her

ability to earn an income. It is important to adequately safeguard
this asset to ensure his/her cash flow will continue in the event of
an unexpected disaster. His/her insurance policies will help to
protect him/her (if any) against any unforeseen odds.

There are two kinds of insurance available viz. Life Insurance and
General Insurance.

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Life Insurance

 Provides for dependents in case of death.

 Replaces earning power, if disabled.
 Protects his/her ability to meet accumulation / education /
marriage goals.

General Insurance
 Addresses health care concerns.
 Provides for auto, home and personal liability protection.
 Provides for potential long-term care costs.
 Plans for business continuation.

GENERAL DEFINITION

The general definitions are given by the social scientists & they
consider insurance as a device to protection against risks, or a
provision against inevitable contingencies or a co-operative device of
spreading risks. Some of such definitions are given below:
 In the words of John Magee , “Insurance is a plan by which large
number of people associate themselves & transfer to the shoulder
of all, risks that attach to individuals.”
 In the words of Sir William Bevridges , “The collective bearing
of risks is insurance.”
 In the words of Boone & Kurtz , “Insurance is a substitution for a
small known loss (the insurance premium) for a large unknown
loss, which may or may not occur.”
 In the words of Thomas , “Insurance is a provision, which a
prudent man makes against for the loss or inevitable
contingencies, loss or misfortune.”
 In the words of Allen Z. Mayerson , “Insurance is a device for the
transfer to an insurer of certain risks of economic loss that
would otherwise come by the insured.”
 In the words of Ghosh & Agarwal , “Insurance is a co-operative
form of distributing a certain risk over a group of persons who
are exposed to it.”

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 FUNDAMENTAL STATEMENT

These are based on economic or business oriented since it is a device

providing financial compensation against risk or misfortune.
 In the words of D. S. Harsell , “Insurance may be defined as a
social device providing financial compensation for the effects of
misfortune, the payments being made from the accumulated
contribution of all parties participating in the scheme.”
 In the words of Robert I. Mehr & Emerson Cammark , “Insurance
is purchased to offset the risk resulting from hazards, which
exposes a person to loss.”
 In the words of Riegel & Miller , “Insurance is a social device
whereby the uncertain risks of individuals may be combined in a
group & thus made more certain small periodic contributions, by
the individuals providing a fund, out of which, those who suffer
losses may be reimbursed.”
 Insurance follows important characteristics.

Sharing of Risks
Insurance is a co-operative device to share the burden of risk, which
may fall on happening of some unforeseen events, such as the death of
head of the family, or on happening of marine perils or loss of by fire.

Co-operative Device
Insurance is a co-operative form of distributing a certain risk over a
group of persons who are exposed to it (Ghosh & Agarwal). A large
number of persons share the losses arising from a particular risk.

Evaluation of Risk
For the purpose of ascertaining the insurance premium, the volume of
risk is evaluated, which forms the basis of insurance contract.

Payment of happening of specified event

On happening of specified event, the insurance company is bound to
make payment to the insured. Happening of the specified event is
certain in life insurance, but in the case of fire, marine or accidental
insurance, it is not necessary. In such cases, the insurer is not liable
for payment of indemnity.

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Amount of payment
The amount of payment in indemnity insurance depends on the nature of
losses occurred, subject to a maximum of the sum insured. In life
insurance, however, a fixed amount is paid on the happening of some
uncertain event or on the maturity of the policy.

Large number of insured persons

The success of insurance business depends on the large number of
persons insured against similar risk. This will enable the insurer to
spread the losses of risk among large number of persons, thus keeping
the premium rate at the minimum.

Insurance is not a gambling

Insurance is not a gambling. Gambling is illegal, which gives gain to
one party & loss to the other. Insurance is a valid contract to indemnity
against losses. Moreover, insurable interest is present in insurance
contracts & it has the element of investment also.

Insurance is not charity

Charity pays without consideration but in the case of insurance,
premium is paid by the insured to the insurer in consideration of future
payment.

Protection against risks

Insurance provides protection against risks involved in life, materials &
property. It is a device to avoid or reduce risks.

Spreading of risk
Insurance is a plan, which spread the risks & losses of few people
among a large number of people. John Magee writes, “Insurance is a
plan by which large number of people associates themselves & transfer
to the shoulders of all, risks attached to individuals.”

Transfer of risk
Insurance is a plan in which the insured transfers his risk on the
insurer. This may be the reason that Mayerson observes, that insurance
is a device to transfer some economic losses to the insurer, and
otherwise such losses would have been borne by the insured themselves.

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Ascertaining of losses
By taking a life insurance policy, one can ascertain his future losses in
terms of money. This is done by the insurer to determining the rate of
premium, which is calculated on the basis of maximum risks.

A contract
Insurance is a legal contract between the insurer & insured under which
the insurer promises to compensate the insured financially within the
scope of insurance policy, & the insured promises to pay a fixed rate of
premium to the insurer.

Based upon certain principle

Insurance is a contract based upon certain fundamental principles of
insurance, which includes utmost good faith, insurable interest,
contribution, indemnity, causa proxima, subrogation, etc., which are the
basis for successful operation of insurance plan.

Utmost Good Faith

Insurance is a contract based on good faith between the parties.
Therefore, both the parties are bound to disclose the important facts
affecting to the contract before each other. Utmost good faith is one of
the important principles of insurance.

To conclude, insurance is a device for the transfer of risks from the

insured to the insurers, who agree to it for a consideration (known as
premium), & promises that the specified extent of loss suffered by the
insured shall be compensated. It is a legal contract of a technical
nature.

To conclude, insurance is a device for the transfer of risks from the

insured to the insurers, who agree to it for a consideration (known as
premium), & promises that the specified extent of loss suffered by the
insured shall be compensated. It is a legal contract of a technical
nature.

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 INTRODUCTION TO INSURANCE COMPANY.

In order to go through the journey of LIC – Path of private sector

insurance companies to nationalize company to again private sector
insurance companies is given as below:

Path
Private Life Insurance Companies

Nationalization

Privatization of Life Insurance Sector

Life Insurance concept was accepted

1870 –
with almost 250 Private Life
1956
Insurance Companies
Merging of almost 250 Private
Sector Life Insurance Companies in
1956
one nationalized
Life Insurance Corporation of India
Proposal to privatize life insurance
1995
business
June
Registration process was notified
2000
August
Application was filed
2000
October 1 s t license was issued with
2000 introduction of IRDA
During the month of January, 11
2002 Life and Non-Life Private Insurance
license were issued

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In order to elaborate the above path lets go through the history of
Life Insurance Sector.

On 3 r d December 1670, seven earnest men of Bombay with just

seven rupees for initial expenses gave shape to a plan of offering
insurance to the public without the risk of ruin and the Bombay
Mutual Life Insurance Society came into existence.

Right up to the end of the 19 t h century, foreign insurance

companies had an upper hand in the matter of insurance business
and they enjoyed mere monopoly and the partiality were observed
in the form that Indian lives were insured with 10% extra premium
as a common practice, at that time Lala Harikishan Lal from
Lahore was called “The Napoleon of Indian Finance” as he was
then called to launch the Bharat Insurance Company at Lahore
(1896) in Punjab.

Prior to 1912, India had no legislation for regulating insurance.

The Life Insurance Companies Act 1912 and the Provident Fund
Act 1912 were passed.

The Insurance Act 1938 was the first comprehensive legislation

governing not only life but also non-life branches of insurance to
provide strict state control over insurance business.

But after the introduction of Insurance Act 1938, the demand for
nationalization of Life Insurance Industry was raised, there were so
many reasons in order to nationalize the insurance sector.
They are:

 Policyholders will be provided cent percent security.

 Expenses will be reduced due to Absence of duplication,
wasteful competition
 Better service due to absence of profit motive.
 The funds will be available for nation building activities.

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 Insurance is servicing sector and so that it should be in the
hands of government only.

Above are few but strong reasons, which have contributed towards
nationalization of insurance sector, and then after in the year 1956,
all insurance companies were merged in to one and Life Insurance
Corporation of India came into existence.

Till the year 1999, LIC of India was the only insurance sector in
economic market with ever-increasing growth rate and market
share with the capacity to earn high rate of profit and thus
profitability. In spite of all these merits of LIC, the overall status
of insurance sector was not so satisfactory.

Business figure before the introduction of IRDA

Population 1.00 Billion
Insurable Population 0.36 Billion
No. Of insured individuals 0.08 Billion
Potential uninsured 0.28 Billion
individuals
New Business premium 0.66 Billion

Above stated figures clearly shows that from 1 Billion population

of India, almost 0.28 Billion population was uninsured. Again the
existing government unit did not properly meet the emerging
segments like retirement, disability. Moreover, the government
wanted 25% p.a. growth rate in new business premium from
insurance sector. All these factors combine forced the government
to take the decision about the privatization of insurance sector.

In order to increase the business activities, the introduction of

IRDA was made by Government. Thus, IRDA (Insurance
Regulatory and Development Authority) witnessed the existence
power to co-ordinate regular and control the insurance business.

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 Private Insurers in Indian Insurance Market

Registration Date of Name of the Company

No. Registration

101 23.10.2000 HDFC Standard Life

104 15.11.2000 Max New York Life

105 24.11.2000 ICICI Prudential Life

107 10.01.2001 Om Kotak Mahindra Life

109 31.01.2001 Birla Sun Life Insurance

110 12.02.2001 TATA AIG Life Insurance

111 30.03.2001 SBI Life Insurance

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 SHARE OF PRIVATE INSURANCE PLAYERS

As per the figure available with IRDA reports for the period ended in August
2005, the 13 private players have grabbed nearly 26% market share from LIC
in terms of premium underwritten as against 17.70% in August 2004” The list
of insurer with premium underwritten, investment and their market share have
been presented in table.
Table shows that the life insurance market has collected Rs. 16,604cr as a fresh
premium. It grew about 2.8 times bigger than he 3 players put together in terms
of premium collection. It is still growing at the rate 26% per annum. It is
relevant to that the market share by them. Out of 13 pvt. Players, ICICI
prudential has leading pvt. Player in the Life insurance, invested Rs. 625 cr
which is the highest investments among the private players and captured first
position with 7.11% of the market share. Secondly, Max New York life has
invested Rs. 305 cr and had failed to capture the second position in terms of
market share and was satisfied with only 1.32% Followed by HDFC standard
Life had invested Rs. 255 cr and 2.96% of the market share was captured and
stood third position interims of investments and capturing market share.
Allianz Bajaj has invested Rs. 250 cr and stands fourth in terms of investment
but captured second position with 6.12% of the market share. This indicates
that there is no relation between investment and acquiring market share and
mere capital is not alone playing any significant role in terms of capturing
market share. There may be some other variables like: (a) innovative schemes,
(b) brand loyalty, (c) professional outlook, (d) transference in their
transactions, etc. It can be noticed that the capital is not playing any attaching,
kindly significant role in terms of premium collection and capturing market
share. It seems to be Bajaj Allianz would occupy the first position in near
future in terms of market share as well as annual growth rate.

Chart 1 shows that. Among private players, the ICICI prudential has captured
the 28% of the market share up to December 2005, followed by Allianz Bajaj
with 23% and HDFC Standard Life with 11% TATA Aig life and Birla Sunlife
with 7% each and remaining other players have captured less than 5% of
market share.

15
 2%2% LIC
6%
2% ICICI Pru. Life
4% 28% New York MaxLife
3% HDFC Standard Life
Alliance Bajaj
7% TATA AIG
OM Kotak Mahindra
AVIVA Life
7% 5% ING Vysya
SBI Life Insu.
AMP Sanmar
11%
Metlife
23%

Chart 2 shows that the annual growth rate of the private life insurance players
from November 2004-05. it is interesting to note that Allianz Bajaj has achived
264.09% annual growth rate in terms of premium collection and the fastest
growing insurance players, followed by HDFC Standard with 143.1% and
Metlife with 136.45%, and remaining other players have doubled their
premium in a span of one year, whereas Birla Sunlife and SBI life have failed
to collect the premium consistently and registered negative growth rates 7.93%
and 2.48% respectively. Surprisingly, ICICI Prudential Co. has not been
retrained in their leading position in 2005.
The market share of the LIC has been declining since 2000, after opening up of
the sector to private companies, LIC’s higher market share in the number of
policies sold compared with premium income, so it is to be inferred that the
private players are cornering a larger share of high premium policies. Further
all policymakers are expected that, insurance business will take wings under
bancassurance but despite the belief SBI Life was registered negative 2.48%
annual growth rate in corresponding period. It is need to be viewed serious by
the RBI and IRDA authorities.

16
 Annual Growth rate of Private Insu.
Players from Nove. 2004-05
Annual growth

300 264.09
200 164.31 136.48
rate

100 73.0290.41 66.23 93.9100.43 98.69 78.06

48.24
0 -2.48 -7.93
ICICI Pru.

Birlasunli
TATA
-100
Standard

SBI Life

Metlife
AVIVA
AIG
HDFC

Insu.
Life
Life

fe
Insurers

17
 INTRODUCTION TO ICICI GROUP

ICICI BANK

ICICI Bank is India’s second-largest bank with total assets of about Rs.112.024 crore
and a network of about 450 branches and offices and about 1750 ATMs. ICICI Bank
offers a wide range of banking products and financial services to corporate and retail
customer 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, asset management and information technology. ICICI
Bank’s equity shares are listed in India on stock exchanges at
Chennai. Delhi, Kolkata and Vadodara, 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).

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 Mathura 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 management 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

18
merged entity’s access to low-cost deposits, greater opportunities for earning fee-
based income and the ability to participate in the payment system and provide
transaction-banking 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 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 Jalandhar 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. ICICI Bank is the only Indian company
to be rated above the country rating by the international rating agency moody “s and
the only Indian company to be awarded an investment grade international credit
rating. The Bank enjoys the highest AAA (or equivalent) rating from all Leading
Indian rating agencies.

Prudential P.L.C.

Established in 1848, today prudential plc is a leading international financial

services company with some 16 million customers, policyholders and unit
holders and some 20,000 employees worldwide. 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 of 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 millions
policies and contracts in force.

19
Prudential has brought to market an integrated range of financial services
products that now includes life assurance, pensions, mutual funds, banking,
investment management and general insurance. In Asia, Prudential is UK”s

Largest life insurance company with a vast network of 22 life and mutual fund
operations in twelve countries – China, Hong Kong, India, Indonesia, Japan,
Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
Since 1923, Prudential has championed customer-centric products and services,
supported by over 60,000 staff and agents across the region.

Prudential plc’s strong mix of business around the world positions us well to
benefit form the growth in customer demand for asset accumulation and income
in retirement. Our international reach and diversity of earnings by geographic
region and product will continue to give us significant advantage.

Our commitment to the shareholders who own Prudential is to maximize the

value over time of their investment. We do this by investing for the long term to
develop and bring out the best in our people and our businesses to produce
superior products and services, our international peer group in terms of total
shareholder returns.

At Prudential our aim is lasting relationships with our customers and

policyholders, through products and services that offer value for money and
security. We also seek to enhance our Company’s reputation, built over 150
years, for integrity and for acting responsibly within society.

ICICI Prudential Life Insurance:

ICICI Prudential Life Insurance Company 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 Prudential’ s equity base stands at Rs.6.75 billion with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. In the year ended

20
March 31,2004 the company had issued over 430,000 policies, for a total sum
assured of over Rs 8,000 crore and premium income in excess of Rs.980 crore.
The company has a network of about 30,000 advisors; as well as 12 banc
assurance tie-ups. Today the company is the number one private life insurer in
the country.

Management

K. V. Kamath
Managing Director and Chief Executive Officer

Lalita Gupte Kalpana Morparia

Joint Managing Director Joint Managing Director

Chanda Kochhar Nachiket Mor

Deputy Managing Director Deputy Managing Director

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Board Committees

Board Governance &

Audit Committee
Remuneration Committee
Mr. Sridar Iyengar Mr. N. Vaghul
Mr. Narendra Mr. Anupam Puri
Murkumbi Mr. M. K. Sharma
Mr. M. K. Sharma Mr. P. M. Sinha
Prof. Marti G. Subrahmanyam
Customer Service
Credit Committee
Committee
N. Vaghul Mr. N. Vaghul
Narendra Murkumbi Mr. Narendra Murkumbi
M.K. Sharma Mr. M .K. Sharma
P.M. Sinha Mr. P. M. Sinha
K. V. Kamath Mr. K. V. Kamath
Fraud Monitoring
Risk Committee
Committee
Mr. M. K. Sharma Mr. N. Vaghul
Mr. Narendra Mr. Sridar Iyengar
Murkumbi Prof. Marti G. Subrahmanyam
Mr. K. V. Kamath Mr. V. Prem Watsa
Ms. Kalpana Mr. K. V. Kamath

22
Morparia
Ms. Chanda D.
Kochhar
Share Transfer &
Shareholders'/
Asset-Liability Management
Investors'
Committee
Grievance
Committee
Mr. M. K. Sharma Ms. Lalita D. Gupte
Mr. Narendra Ms. Kalpana Morparia
Murkumbi Ms. Chanda D. Kochhar
Ms. Kalpana Dr. Nachiket Mor
Morparia
Ms. Chanda D.
Kochhar
Committee of
Directors
Mr. K. V. Kamath
Ms. Lalita D. Gupte
Ms. Kalpana
Morparia
Ms. Chanda D.
Kochhar
Dr. Nachiket Mor

23
 ICICI PRUDENTIAL’S PRODUCTS.

Insurance solution for individuals…..

ICICI Prudential Life Insurance offers a range of innovative, customer-centric
products that meet the needs of customers at every life stage. Its 17 products cab is
enhanced with up to 6 riders, to create a customized solution for each policyholder.

Savings Solutions…..
Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of
protection. Cash Plus is a transparent, feature-packed savings plan that offers 3 levels
of protection as well as liquidity options. Save n Protect is a traditional endowment
savings plan that offers life protection along with adequate returns. Cash Back is an
anticipated endowment policy ideal for meeting milestone expenses like a child’s
marriage, expenses for a child’s higher education or purchase of an asset.

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Protection Solutions…….
LifeGuard is a protection plan, which offers life cover at very low cost. It is available
in 3 coupons – level term assurance, level term assurance with return or premium and
single premium.

Child Solutions…….
Smart kid child plans provide guaranteed educational benefits to a child along with
life insurance cover for the parent who purchases the policy. The policy is designed to
provide money at important milestones in the child’s life. SmartKid child planed are
also available with in unit-linked form – both single premium and regular premium.

Market-linked Solutions

LifeLink is a single premium Market Linked Insurance Plan, which combines life
insurance cover with the opportunity to stay, invested in the stock market. Life Time
offers customers the flexibility and control to customize the policy to meet the
changing needs at different life stages. It offers 3 investment options –Growth Plan,
Income plan and Balance plan.

Retirement Solutions……

Forever Life is a retirement products targeted at individual in there thirties. Secure

Plus Pension is a flexible pension plan that allows one to select between 3 levels of
cover.

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Market-linked retirement products

Life Time Pension is a regular premium market-linked pension plan. Life Link
Pension is a single premium market linked pension plan. ICICI Prudential also
launched “Salaam Zindagi”, a social sector group insurance policy targeted at the
economically underprivileged sections of the society.

Group Insurance Solutions……

ICICI Prudential also offers Group Insurance Solutions for companies seeking to
enhance benefits to their employees.

Group Gratuity Plan……

ICICI Pru”s group gratuity plan helps employers fund their statutory gratuity
obligation in a scientific manner. The plan can also customize to structure schemes
that can provide benefits beyond the statutory obligations.

Group Superannuation Plan

ICICI Bank offers flexible defined contribution superannuation scheme to provide a

retirement kitty for each member of the group. Employees have the option of choosing
from various annuity options or opting for partial commutation of the annuity at the
time of retirement.
Group Term Plan

Group Term Plan……

26
ICICI Pru”s flexible group term solution helps provides affordable cover to members
of group. The cover could be uniform or based on designation/rank or a multiple of
salary. The benefit under the policy is paid to the beneficiary nominated by the
member on his/her death.

Flexible Rider Options

ICICI Pru Life offers flexible riders, which can be added to the basic policy at
marginal cost, depending on the specific of the customer.

Accident & disability benefit: If death occurs as the result of an accident during the
term of the policy, the beneficiary receives an additional amount equal to the sum
assured under the policy. If the death occurs while traveling in an authorized mass
transport vehicle, the beneficiary will be entitled to twice the sum assured as
additional benefit.

Accident benefit: This rider option pays the sum assured the rider on death due to
accidents.

Critical Illness Benefit: protects the insured against financial loss in the event of 9
specified critical illnesses. Benefits are payable to the insured for medical prior to
death.

Major Surgical Assistance Benefits: provides financial support in the event of

medical emergencies, ensuring that benefits are payable to the life assured for medical
expenses Incurred for surgical procedures. Cove is offered against 43 different
surgical procedures.

Income Benefit: This rider pays the 10% of the sum assured to the nominee every
year, till maturity, in the event of the death of the life assured. It is available on
SmartKid, SecurePlus and Cashplus.

Waiver of Premium: In Case of total and permanent due to an accident, the

premiums are waived till maturity. This rider is available with SecurePlus and
CashPlus.

27
 INTRODUCTION TO FINANCE MANAGEMENT

Financial management, as an academic discipline, has undergone fundamental

changes in its scope and coverage. In the early years of its evolution it was treated
synonymously with the raising of funds. In the current literature pertaining to financial

Management, a broader scope so as to include, in addition to procurement of funds,

efficient use of resources is universally recognized. Similarly, the academic thinking
as regards the objective of financial management is also characterized by a change
over the years.

Financial management, as an integral part of overall management, is not a totally

independent area. It draws heavily on related disciplines and fields of study, such as
economics, accounting, marketing, production and quantitative methods. Although
these disciplines are interrelated, there are key differences among them. The
relationship between finance and accounting, conceptually speaking, has two
dimensions:
(1) They are closely related to the extent that accounting is an important input in
financial decision-making and
(2) There are key differences in viewpoints between them.
The viewpoint of accounting relating to the funds of the firm is different from that of
finance. The measurement of funds (income and expenses) in accounting is based on
the accrual principle/system.

Capitalization and Capital Structure:

Capital structure can affect the value of a company by affecting either its expected
earnings or the cost of capital, or both. While it is true that financing-mix cannot
affect the total operating earnings of a firm, as they are determined by the investment
decisions, it can affect the share of earnings belonging to the ordinary shareholders.
The capital structure decision can influence the value of the firm through the earnings
available to the shareholders. But the leverage can largely influence the value of the
28
firm through the cost of capital. In exploring the relationship between leverage and
value of a firm the relationship between leverage and cost of capital from the
standpoint of valuation.

The importance of an appropriate capital structure is, thus, obvious. There is a

viewpoint that strongly supports the close relationship between leverage and value of a
firm. There is an equally strong body of opinion, which believes that financing-mix or
the combination of debt and equity has no impact on the shareholders’ wealth and the
decision on financial structure is irrelevant. In other words, there is nothing such as
optimum capital structure.

Capital structure theories are based on certain assumptions, they are:

[1] There are only two sources of funds used by a firm: perpetual risk less debt
and ordinary shares.
[2] There are no corporate taxes. This assumption is removed later.
[3] The dividend-payout ratio is 100. That is, the total earnings are paid out as
dividend to the shareholders and there are no retained earnings.
[4] The total assets are given and do not change. The investment decisions are, in
other words, assumed to be constant.
[5] The total financing remains constant. The firm can change its degree of
leverage (capital structure) either by selling shares and use the proceeds to
retire debentures or by raising more debt and reduce the equity capital.
[6] The operating profits (EBIT) are not expected to grow.
[7] All investors are assumed to have the same subjective probability distribution
of the future expected EBIT for a given firm.
[8] Business risk is constant over time and is assumed to be independent of its
capital structure and financial risk.
[9] Perpetual life of the firm.

Leverage Analysis:

A firm can make use of different sources of financing whose costs are different. These
sources may be, for purposes of exposition, classified into those that carry a fixed rate
of return and those on which the returns vary. The fixed returns on some sources of
finance have implications for those who are entitled to a variable return. Thus, since
debt involves the payment of a stated rte of interest, the return to the ordinary
shareholders is affected by the magnitude of debt in the capital structure of a firm.

The employment of an asset or source of funds for which the firm has to pay a fixed
cost or fixed return may be termed as leverage. Consequently, the earnings available
to the shareholders as also the risk are affected. If earnings les the variable costs
exceed the fixed cost, or earnings before interest and taxes exceed the fixed return
29
requirement, the leverage is called favorable. When they do not, the result is
unfavorable leverage.

There are 2 types of leverage- ‘operating’ and ‘financial’. The leverage associated
with investment (asset acquisition) activities is referred to as operating leverage, while
leverage associated with financing activities is called financial leverage. While we are
basically concerned with financial leverage for purposes of the financing decision of a
firm, the discussion of operating leverage is to serve as a background to the
understanding of financial leverage because the two types of leverage are closely
related. Operating leverage is determined by the relationship between the firm’s sales
revenues and its earnings before interest and taxes (EBIT). The earnings before
interest and taxes are also generally called as operating profits. Financial leverage
represents the relationship between the firm’s earnings before interest and taxes
(operating profits) and the earnings available for ordinary shareholders. The operating
profits (EBIT) are thus, used as the pivotal point in defining operating and financial
leverage. In a way, operating and financial leverage represents two stages in the
process of determining the earnings available to the equity shareholders and, Apart
from the elaboration of the return-risk implications, their combined effect has also
been discussed.

Operating leverage results from the existence of fixed operating expenses in the firm’s
income stream. The operating leverage may be defined as the firm’s ability to use
fixed operating costs to magnify the effects of changes in sales on its earnings before
interest and taxes. Operating leverage occurs any time a firm has fixed costs that must
be met regardless of volume. We employ assets with fixed cost in the hope that
volume will produce revenues more than sufficient to cover all fixed and variable
costs. In other words, with fixed costs, the percentage change in profits accompanying
a change in volume is greater than the percentage change in volume. This occurrence
is known as operating leverage.

Financial leverage relates to the financing activities of a firm. The sources from
which funds can be raised by a firm, from the point of view of the cost/charges, can be
categorized into [1] those which carry a fixed financial charge, and [2] those which do
not involve any fixed charge. The sources of funds in the first category consist of
various types of long-term debt, including bonds, debentures, and preference shares.
Long-term debts carry a fixed rate of interest which is a contractual obligation for the
firm. Although the dividend on preference shares is not a contractual obligation, it is
fixed charge and must be paid before anything is paid to the ordinary shareholders.
The equity shareholders are entitled to the remainder of the operating profits of the
firm after all the prior obligations are met. Financial leverage results from the presence
of fixed financial charges in the firm’s income stream. These fixed charges do not
vary with the earnings before interest and taxes (EBIT) or operating profits.
30
Capital Budgeting:

Capital budgeting decision pertains to fixed/long-term assets which by definition refer

to assets which are in operation, and yield a return, over a period of time, usually,
exceeding one year. They therefore, involve a current outlay or series of outlays of
cash resources in return for an anticipated flow of future benefits. In other words, the
system of capital budgeting is employed to evaluate expenditure decisions which
involve current outlays but are likely to produce benefits over a period of time longer
than one year. These benefits may be either in the form of increased revenues or
reduced costs. Capital expenditure management, therefore, includes addition,
disposition, modification and replacement of fixed assets.

Capital budgeting decisions are of paramount importance in financial decision-

making. In the first place, such decisions affect the profitability of a firm. They also
have a bearing on the competitive position of the enterprise mainly because of the fact
that they relate to fixed assets. The fixed assets represent, in a sense, the true earning
assets of the firm. They enable the firm to generate finished goods that can ultimately
be sold for profit. The current assets are not generally earning assets. Rather, they
provide a buffer that allows the firms to make sales and extend credit. True, current
assets are important to operations, but without fixed assets to generate finished
products that can be converted into current assets, the firm would not be able to
operate. Further, they are ‘strategic’ investment decisions as against ‘tactical’- which
involve a relatively small amount of funds. Therefore, such capital investment
decisions may result in a major departure from what the company has been doing in
the past. Acceptance of a strategic investment will involve a significant change in the
company’s expected profits and in the risks to which these profits will be subject.
Working Capital Management:
Working capital management is concerned with the problems that arise in attempting
to manage the current assets, the current liabilities and the interrelationship that exists
between them. The term current assets refer to those assets which in the ordinary
course of business can be, or will be, converted into cash within one year without
undergoing a diminution in value and without disrupting the operations of the firm.
The major current assets are cash, marketable securities, accounts receivable and
inventory.
Current liabilities are those liabilities which are intended, at their inception, to be paid
in the ordinary course of business, within a year, out of the current assets or earnings
of the concern. The basic current liabilities are accounts payable, bills payable, bank
overdraft, and outstanding expenses. The goal of working capital management is to
manage the firm’s current assets and liabilities in such a way that a satisfactory level
of working capital, it is likely to become insolvent and may even be forced into
bankruptcy. The current assets should be large enough to cover its current liabilities in
31
order to ensure a reasonable margin of safety. Each of the current assets must be
managed efficiently in order to maintain the liquidity of the firm while not keeping too
high a level of any one of them. Each of the short-term sources of financing must be
continuously managed to ensure that they are obtained ad used in the best possible
way. The interaction between current assets and current liabilities is, therefore, the
main theme of the working capital management.
Receivables Management:
The receivables represent an important component of the current assets of a firm. The
receivables are defined as ‘debt owned to the firm by customers arising from sale of
goods or services and in the ordinary course of businesses. When a firm makes an
ordinary sale of goods or services and does not receive payment, the firm grants trade
credit and creates accounts receivable, which could be collected in the future.
Receivables management is also called trade credit management. Thus, accounts
receivables represent an extension of credit to customers, allowing them a reasonable
period of time in which to pay for the goods received.
The sale of goods on credit is an essential part of the modern competitive economic
systems. In fact, credit sales and, therefore, receivables are treated as a marketing tool
to aid the sale of goods. The credit sales are generally made on open account in the
sense that there are no formal acknowledgements of debt obligations through a
financial instrument. As a marketing tool, they are intended to promote sales and
thereby profits. However, extension of credit involves risk and cost. Management
should weigh the benefits as well as cost to determine the goal of receivables
management. The objective of receivables management is ‘to promote sales and
profits until point is reached where the return on investment in further funding
receivables is less than the cost of funds raised to finance that additional credit (i.e.
cost of capital)’. The specific costs and benefits, which are relevant to the
determination of the objectives of receivables management, are:
o Cost
o Collection cost
o Capital cost
o Delinquency cost
o Default cost

Dividend policy:
Dividend refers to that portion of a firm’s net earnings which are paid out to the
shareholders. Since dividends are distributed out of profits, the alternative to the
payment of dividends is the retention of earnings/profits. The retained earnings
constitute an easily accessible important source of financing the investment
requirements of firms. There is, thus, a type of inverse relationship between retained
earnings and cash dividends. Larger the retention, lesser dividends, and smaller
retentions, larger dividends. Thus, the alternative uses of the net earnings-dividends
and retained earnings-are competitive and conflicting.
32
A major decision of financial management is the dividend decision in the sense that
the firm has to choose between distributing the profits to the shareholders and
plugging them back into the business. The choice would obviously hinge on the effect
of the decision on the maximizing present values; the firm should be guided by the
consideration as to which alternative use is consistent with the goal of wealth
maximization. That is, the firm would be well advised to use the net profits for paying
dividends to the shareholders if the payment will lead to the maximization of wealth of
the owners. If not, the firm should rather retain them to finance investment programes.
The relationship between dividends and value of the firm should, therefore, be the
decision criterion.
There are however, conflicting opinions regarding the impact of dividends on the
valuation of a firm. According to one school of thought, dividends are irrelevant so
that the amount of dividends paid has no effect on the valuation of a firm. On the other
hand certain theories consider the dividend decision as relevant to the value of the
value of the firm measured in terms of the market price of the shares. The crux of the
argument supporting the irrelevance of dividends to valuation is that the dividend
policy of a firm is a part of its financing decision.
As a part of the financing decision, the dividend policy of the firm is a residual
decision and dividends are a passive residual. If the dividend policy is strictly a
financing decision, whether dividends are paid out of profits, or earnings are retained,
will depend upon the available investment opportunities. It implies that when a firm
has sufficient investment opportunities, it will retain the earnings to finance them.
Conversely, if acceptable investment opportunities are inadequate, the implication is
that the earnings would be distributed to the shareholders.
The test of adequate acceptable investment opportunities is the relationship between
the return on investments and the cost of capital. As long as investments exceed cost
of capital, a firm has acceptable investment opportunities. In other words, ifs firm can
earn a return higher tan its cost of capital; it will retain the earnings to finance
investment projects. If the retained earnings fall short of the total funds required, it
will raise external funds-both equity and debt-to make up the shortfall.

Annual Report of ICICI Prudential

33
 Assets Under Management (AUM) as at the end of Feb-2007 (Rs in Lakhs)
AUM Average AUM For The Month
Mutual Fund Name
Excluding Fund Of Excluding Fund Of
Fund Of Funds Fund Of Funds
Funds Funds
1. ABN AMRO Mutual Fund 527298.61 34793.7 520357.41 35962.1
2. AIG Global Investment Group Mutual Fund N/A N/A N/A N/A

3. Benchmark Mutual Fund 493459.19 0 565300.47 0

4. Birla Sun Life Mutual Fund 2107032.33 1901.45 2276874.74 2016.87
5. BOB Mutual Fund 13189.46 0 12710.58 0
6. Canbank Mutual Fund 220055.55 0 224400.85 0
7. DBS Chola Mutual Fund 267272.69 0 236941.15 0
8. Deutsche Mutual Fund 632738.66 0 643309.79 0
9. DSP Merrill Lynch Mutual Fund 1363796.81 0 1337579 0
10. Escorts Mutual Fund 11892.52 0 9857 0
11. Fidelity Mutual Fund 567052.22 7885.48 594872.17 8669.47
12. Franklin Templeton Mutual Fund 2210219.06 32939.41 2343907.4 33551.3

13. HDFC Mutual Fund 3107988.05 0 3222873.02 0

14. HSBC Mutual Fund 1196159.48 0 1219830.8 0
15. ING Vysya Mutual Fund 465070.34 91168.93 469516.87 97905.45
16. JM Financial Mutual Fund 382811.94 0 386731.37 0
17. JPMorgan Mutual Fund N/A N/A N/A N/A
18. Kotak Mahindra Mutual Fund 1340625.72 55835.13 1335816.27 59243.32
19. LIC Mutual Fund 1149722.96 0 1197068.82 0
20. Lotus India Mutual Fund 123858.99 0 84093.35 0
21. Morgan Stanley Mutual Fund 287119.9 0 310427.14 0
22. PRINCIPAL Mutual Fund 1060032.69 0 1094027.66 0
23. ICICI PRUDENTIAL Mutual Fund 4328067.51 3731.96 3907924.85 3982.85
24. Quantum Mutual Fund 5380.17 0 5818.48 0
25. Reliance Mutual Fund 4221591.34 0 4359281.53 0
26. Sahara Mutual Fund 17596.99 0 16987.98 0
27. SBI Mutual Fund 1847383.96 0 1874050.79 0
28. Standard Chartered Mutual Fund 1299706.71 2886.65 1381960.47 2861.86

29. Sundaram BNP Paribas Mutual Fund 780107.96 0 793897.25 0

30. Tata Mutual Fund 1419829.99 0 1448329.74 0
31. Taurus Mutual Fund 23543.31 0 25362.02 0
32. UTI Mutual Fund 3860299.44 0 3926014.55 0
Grand Total 35330904.55 231142.71 35826123.52 244193.22

Asset Under Management

34
 Mutual Fund Name AUM Equity & Debt & Equity Debt
Balance MIP % %
ABN AMRO Mutual Fund 1580.36 464.589. 1115.92 29.39 70.61
Alliance Capital Mutual Fund 1431.46 589.48 841.98 41.18 58.82
Birla Sun Life Mutual Fund 10049.66 1668.77 8380.89 16.61 83.39
Canbank Mutual Fund 1565.19 224.35 1340.84 14.33 85.67
Chola Mutual Fund 1004.62 232.63 771.99 23.16 76.84
Deutsche Mutual Fund 2366.72 96.57 2270.15 4.08 95.92
DSP Merrill Lynch Mutual Fund 6472.80 1462.33 5010.47 22.59 77.41
Fidelity Mutual Fund 1628.06 1628.06 0.00 100.00 0.00
Franklin Templeton Mutual Fund 16704.74 6965.36 9739.38 41.70 58.30
HDFC Mutual Fund 15707.82 6126.04 9581.78 39.00 61.00
HSBC Mutual Fund 7250.63 1987.93 5262.70 27.42 72.58
ING Vysya Mutual Fund 2072.86 337.25 1735.62 16.27 83.73
JM Financial Mutual Fund 3780.83 85.52 3694.51 2.26 97.74
Kotak Mahindra Mutual Fund 6501.52 1065.12 5436.41 16.38 83.62
LIC Mutual Fund 2959.15 277.46 2681.69 9.38 90.62
PRINCIPAL Mutual Fund 6264.96 1682.48 4582.48 26.86 73.14
Prudential ICICI Mutual Fund 17095.89 2169.46 14926.44 12.69 87.31
Reliance Mutual Fund 9907.89 4226.40 5681.49 42.66 57.34
Sahara Mutual Fund 565.50 25.74 539.76 455 95.45
SBI Mutual Fund 7189.35 2311.54 4877.81 32.15 67.85
Standard Charted Mutual Fund 7636.86 0.00 7636.86 0.00 100.00
Sundaram Mutual Fund 2035.21 997.91 1037.31 49.03 50.97
Tata Mutual Fund 8713.95 2629.09 6084.86 30.17 69.83
Taurus Mutual Fund 170.76 157.53 13.23 92.25 7.75
UTI Mutual Fund 21975.57 8791.81 13183.77 40.01 59.99

List of Assets Management Companies and their assets under management

As on June 2008 (In Crores.)

Particulars ICICI PRUDENTIAL
35
 Diversified 1593.8546
Tax Planning 47.9336
Index 2.0978
Sector 179.0116
Total Equity 2107.78
FMP 1551.236
MIP 823.2623
Debt ST 479.4336
Income 3778.4525
Total Debt 6932.384
Balanced 469.6412
Gilt LT 412.9397
Gilt ST 150.5677
Total Gilt 563.5074
Liquid 6961.6842
Total 17095..89

(Above Table showing Acquisition and Utilization of fund of ICICI PRUDENTIAL)

Fund Manager does utilization of fund, ICICI PRUDENTIAL AMC has variety of scheme and each
scheme has different Fund Manager who is responsible of investing money into market and also
responsible to give return to investors.

RATIO ANALYSIS
Growth Fund
Ratio Formula 2008 2007
Current ratio Current 2438.37/1818.15=1.34 1275.46/1066.90=1.19
asset/current
36
 liability
Total profit/unit
EPS 23311.45/7700.63=3.02 14126.20/9981.01=1.41
capital
Div payout
Div. paid/unit 941.81/7700.63=0.12(12%)Div. 621.86/9981.01=0.62(6.2%
to unit
capital paid/unit capital )
holders
Div. paid/net
Div. payout 941.81/23311.45=0.04(4%) 621.86/14126.20=0.04(4%)
profit
Div. to total Dividend/total 717.53/14882.68=0.48(4.8
428.45/18041.54=0.24(2.4%)
income income %)
Profit on
sales
Profit/sales 12074.52/14882.68=0.81(8
redemption 13834.17/18041.54=0.77(77%)
redemption 1%)
to total
income
(Above Table Showing - Ratio analysis of ICICI PRUDENTIAL AMC)

Marketing Yesterday and Today

Today the definition of marketing has been changed. The marketing activity of an
organization before the product is produced and continues even after the product is
sold. In the buyer market of recent times the sharpest weapon that a company can
develop is globalize marketing place in the value creation and delivery. The proud and

37
demanding customer of today brings before corporate a critical fact, when the
customer is jury. It is the value generation for the customer that will separate the victor
from vanquished. The value of customer service cascades all over the company. The
aim of customer focus is not just satisfaction but delight satisfaction.

Till the year 1999 the life insurance business was exclusively conducted by the Life
Insurance Corporation (LIC) while the general insurance business in India, was
exclusive by General Insurance Corporation and its four subsidiaries. The insurance
sector is opened for private participation since November, 2000.

Before 1999 there was no marketing done by LIC due to its monopoly but now after 5
years the picture has changed. Now there are private players in market. With the
effective marketing techniques the private players has changed the whole scenario of
the insurance sector. They are slowly and gradually driving the business out of the
hands of the LIC. Before 1999 customer had no option other then LIC, but now they
have got many options.

This is the significant change in insurance industry. Now the customer is back in the
center state. All the companies are trying to please the customer with the innovative
schemes and better service.

Relationship Marketing in Insurance

Introduction

It is five times more expensive to acquire a new customer than to retain an old one.
Relationship marketing is the practice of building long term satisfying relationship
with key parties customers and suppliers. They accomplish this by promoting and
delivering high quality, goods, services, and fair prices to other parties overview.
Relationship marketing results in strong economic, technical and social ties among the
parties.

Definition of Relation Marketing:

Relationship marketing can be defined as the “process to identify, establish, maintain
and other stakeholders at a profit so that the objective of all parties involved are net
and this is done by mutual exchange and fulfillment of promises.

38
The important objectives of relationship marketing to acquire new customers maintain
and enhance relationship with existing customers, re-activities of ex-customers and
handling of customer terminations. The key objective of relationship marketing is to
establish one to one relationship with all the customers. This may have sound like a
day dream few dream few years ago but thanks to the technological breakthrough and
technological solution providers, it is very much of a reality.

How to add value through relationship Marketing

Identify loyal customers

Recognize their special needs

Provide special reward for loyalty

Establish continuing relationship

Ensure increase in customer value

Relationship marketing is one of the hottest tread in the present marketing scenario.

Satisfied customers not only stay with a company but they are also walking talking
advertisement for the company’s product.

OPERATION DEPARTMENT
The Operation department oils the work processes between the customer and 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 under writers, and manages work processes.
39
The vision at customer service

Vision of the company is to deliver “World Class Service” at every opportunity.

Units such as the 9 to 9 contact centre, out bound call centre, customer care. And
query reduction unit are all committed across the country. ICICI Prudential has one of
the largest distribution networks amongst private life insurers in India, having
commenced operations in 58 cities and towns in India.

These are….. Agra, Jalandhar, Ajmer, Amritsar, Aurangabad, Bangalore, Bhopal,

Calicat, Chandigrah, Chennai, Coimbatur, Dehradun, Gurgaon, Hyderabad, Hubli,
Indore, Jaipur, Jalandhar, Jamnagar, Kanpur, karnal, Kochi, Kolkatta, Kota,
Kolhapur, Kottayan, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai,
Nagpur, Nashik, Noida, New Delhi, Patiala, Pune, Raipur, Rajkot, Ranchi, Surat,
Thane, Thrissur, Trichy, Trivendrum, Udaipur, Vadodara, Vashi, Vijayawada and
Vizag.

The Company has twelve banc assurance tie-ups having agreements with ICICI Bank,
Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, Punjab and
maharastra Co-Operative Bank, Goa State Co-operative Bank, Indoor Paraspar
Sahakari Bank, Manipal State Co-Operative and Jalgaon People’s Co-Operative
Bank, as well as some corporate agents. It has tie-up with organizations like Dhan for
Distribution of Salaam Zindgi, a Policy for the socially and economically
underprivileged sections of society.

ICICI Prudential has recruited and trained over 32000 insurance advisors to interface
with and advice customers. Further, it leverages is State-of the art IT infrastructure to
provide superior quality of service to customer.

The Operation Department of ICICI Prudential delivers the following services to the
customers such as:
 Out Bound Call Centre
 Customer Care
 Query Resolution Unit
 Policy Login Process
 9 to 9 Contact Centre

Role of Information Technology in Operation Department:

The Information Technology function at ICICI Prudential is committed to enables

business through the use of technology. It is segmented into 4 groups to enable

40
highest levels of delivery to the customers: Life Asia Solutions Group that provides
flexibility in designing better product offering to end-users, the Solutions Group-
Web that provides real-time information to customers and is responsible for customer
relationship management, IT Architecture and 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 organizations. 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 development of business
application.

With the help of Information Technology, an advisor and managers can login the
policy fro any of the offices of ICICI Prudential Ltd. And also with the help of IT any
employee or management can know any information, any thing about the policy,
advisor’s record, any branch’s sales, any new schemes, any manager’s record, and
other thins at any time any place.

41
 HUMAN RESOURCE MANAGEMENT DEPARTMENT

Introduction to HRM:-

Human resource management is a management function that helps managers’ recruit,

select, train and develops members for an organization. HRM is concerned with the
people’s dimension in organization. ‘Manpower’ or ‘human resource’ may be thought
of as ‘the total knowledge, shills, creative abilities, talents and aptitudes of an
organization’s work force, as well as the values, attitudes and benefits of an individual
involved. It is the sum total of inherent abilities, acquired knowledge and shills
represented by the talents and aptitudes of the employed persons.

Of all the ‘Ms’ in management (i.e. the management of materials, machines, methods,
money, motive power), the most important ‘m’ for men or human resources. It is the
most valuable asset of an organization, and not the money or physical equipment. It is
in fact an important economic resource, covering all human resources- organized or
unorganized, employed or capable of employment, working at all levels- supervisors,
executives, government employees, ‘blue’ and ‘white' collar workers, managerial,
scientific, engineering, technical, skilled or unskilled persons, who are employed in
creating, designing, developing, managing and operating productive and service
enterprises, and other economic activities.

Human resources are utilized to the maximum possible extent in order to achieve
individual and organizational goals. And organization’s performance and resulting
productivity are directly proportional to the quantity of its human resources

Organization Structure:-

‘Organization’ is a group of people working together cooperatively under ‘authority’

toward achieving goals and objectives that mutually benefit the participants and the
organization. A well-known author of HRM Allen says “the process of identifying and
grouping the work to be performed, defining and delegating responsibility and
authority, and establishing relationships for the purpose of enabling people to work
most effectively together in establishing of objectives”

The essence of this definition is that people who work together require a defined
system or structure through which they relate to each other and through which their
efforts can be coordinated. Every organization has goals or objectives for its existence.
In the case of Personnel Management, it is to optimize “the effectiveness of human
resources”. These goals can be achieved more suitably if the behavior of the workers
and the composition of the organization can be predicted and integrated cooperatively.
42
 The formal organization structure attempts to give order and unity to the actions and
efforts of those who work together.

An organization tries to establish an effective behavioral relationship among selected

employees and in selected work places in order that a group may work together
effectively. There are three kinds of work which must be performed whenever an
organization comes into being:
• Division of labor
• Combination of labour and
• Coordination

The organization structure at ICICI web trade is somewhat like this:

C.E.O. Mr. K.V. Kamath

Board of Directors

National Head (at Mumbai-branch)

Area manger/ In charge of

Project at Jalandhar
(Navin Aggarwal)

Assistant unit manager

(Miss Pinki Gupta)

Sales Sales Sales Sales

Executive Executive Executive Executive
In any organization there is what is termed a ‘hierarchy’, refers to various levels of
authority in an organization, ranging from the Board of Directors at the top to the sales
executives at the bottom.

Human Resource Planning:-

43
Human resource planning can be explained as “the process by which a management
determines how an organization should move from its current manpower position to
its desired manpower position. Through planning, a management strives to have the
right number and right kind of people at the right places, at the right time to do things
which result in both the organization and the individual receiving the maximum long-
range benefit”.

Coloman has defined human resource or manpower planning as “the process of

determining manpower requirements and the means for meeting those requirements in
order to carry out the integrated plan of the organization.”

Stainer defines HRM as “Strategy for the acquisition, utilization, improvement, and
preservation of an enterprise’s human resources. It relates to establishing job
specifications or the quantitative requirements of jobs determining the number of
personnel required and developing sources of manpower.”

Human resources planning are a double-edged weapon. If used properly, it leads to the
maximum utilization of human resources, reduces excessive labor turnover and high
absenteeism; improves productivity and aids in achieving the objectives of an
organization. Faultily used, it leads to disruption in the flow of work, lower
production, less job satisfaction, high cost of production and constant headaches for
the management personnel. Therefore, for the success of an enterprise, human
resource planning is a very important function, which can be neglected only at its own
peril. It is as necessary as planning for production, marketing, or own peril. It is as
necessary as planning for production marketing, or capital investment.

44
Recruitment Sources:-

Human resource planning helps to determine the number and type of people an
organization needs. Job analysis and job design specify the tasks and duties of jobs
and the qualifications expected from prospective jobholders. The next logical step is to
hire the right number of people of the right broad groups of activities. Recruitment
forms the first stage in the process which continues with selection and ceases with the
placement of the candidate. It is the next step in the procurement function, the first
being the manpower planning. Recruiting makes it possible to acquire the number and
types of people necessary to ensure the continued operation of the organization.

Recruiting is the discovering of potential applicants for actual or anticipated

organizational vacancies. In other words, it is ‘linking activity’ bringing together those
with jobs and those seeking jobs. As Dale Yoder and other point out: “Recruitment is
a process to discover the sources of manpower to meet the requirements of the staffing
schedule and to employ effective measures for attracting that manpower in adequate
numbers to facilitate effective selection of an efficient working force.” Accordingly,
the purpose of recruitment is to locate sources of manpower to meet job requirements
and job specifications.

Recruitment has been regarded as the most important function of personnel

administration, because unless the right types of people are hired, even the best plans,
organization charts and control systems would not do much good. Flippo views
recruitment both as ‘positive’ and ‘negative’ activity. He says “it is a process of
searching for prospective employees and stimulating and encouraging them to apply
for jobs in an organization. It is often termed positive in that it stimulates people to
apply for jobs to increase the ‘hiring ratio’ i.e. the number of applicants for a job.
Selection, on the other hand tends to be negative because it rejects a good member of
those who apply, leaving only the best to be hired.”

MANPOWER PLANNING AT ICICI PRUDENTIAL

Human Resource Planning is the process by which an organization ensures that it has the right
number and kind of people, at the right place, at the right time, capable of effectively and
efficiently competing those tasks that will help the organization achieve its overall objectives.
Human Resource Planning translates the organization’s objectives and plans into the number
of workers meet those objectives. Without a clear-cut planning, estimation of an
organization’s human resource need is reduced to mere guesswork.

ICICI PRUDENTIAL Asset Management Company considers several factor in HRP are
strategy of company, organization planning about new schemes, environment uncertainties,
time horizons, and nature of jobs being filled. By considering these entire factors it helps to
45
 ICICI PRUDENTIAL to coping with change, creates highly talented personnel, and helps to
determine futures needs.

Manpower planning is needed with respect to persons who can work as sub-broker for the
companies. Companies focused on Insurance Advisor and post office agent, Tax consultants
and CAs for making sub-broker. ICICI PRUDENTIAL AMC Forecast HR Demand – it
estimates the future quantity and quality of people required. It uses forecasting technique that
is Management Judgment that involves “bottom-up” or “top-down” approach. After
forecasting company forecast about HR supply that may be from Existing human resource,
internal sources or External sources.
RECRUITMENT

The upper level members like zonal managers, regional managers, branch managers and
senior executives are recruited. The regional manager has authority to select lower level
employee like peon, marketing executives, financial accountant etc. by approval of zonal
manager.

ICICI PRUDENTIAL AMC recruits through following sources:

• Internal Sources:
 Present Employees
 Employee Referrals
 Previous Applicants
• External Sources:
 Advertisement
 Campus interview
 Consultants
 Walk-ins

SELECTION

Selection is a process to select a fixed number of personnel from a large number of applicant
received by employees, seeking the job and selecting those who suitable for the given job
selection includes a number of steps. The purpose of selection is to pick up the right person
for every job.
A scientific procedures of selection, requires 2 things:
1. Knowledge regarding the qualities which a person should posses in order to do the given job
properly
2. The evaluation of qualities possessed by a candidate for the job.
Prudential ICICI has adopted the following steps for selection procedure:

46
PRELIMINARY INTERVIEW

The main purpose of preliminary interview is to screen out those who are unsuitable. Those
interviews are quite short. If candidates are found suitable then an application blank may be
given to him to fill up and return.

In ICICI PRUDENTIAL AMC regional manager first interviews candidates, and if selected
than he is interviewed by zonal manager & if he is found suitable than an application blank is
given to them.

APPLICATION BLANK

Here the applicants are asked to complete a blank that provides space for him to record data
relating to the name of candidates, experience etc. The application blank must not be too
lengthy. In Pru ICICI AMC this application blank is forwarded to Mumbai branch to hr
department.

INTERVIEW

After the application blank reaches to the HR Department Mumbai, a telephonic interview is
conducted by HR Manager to see that the regional manager & zonal manager has made the
right choice or not.

MEDICAL CHECK UP

If the candidates clears all the above stages, company checks his medical report the basic
purpose of medical check-up is to determine the job for which candidate is fit or not.

REFRENCES

Checking of references is an important part of selection process. The company prefers to

select the candidate within the group or if the candidate gives the name of reputed person as
his references.

FINAL SELECTION

If the candidate passes successfully from the above stages he is finally selected for the post.
The final selection lies with the regional manager.

47
PLACEMENT

The last stage in selection process is the placement of candidate. After the final selection is
done, the selected candidate is finally placed on the job.

TRAINING

THERE ARE TWO TYPES OF TRAINING PROGRAMS:

• ON THE JOB TRAINING
• OFF THE JOB TRAINING

Continuous training and upgrading technical, behavioral and managerial skills is a way of life
in ICICI PRUDENTIAL AMC. ICICI PRUDENTIAL AMC encourages agent or sub-broker
to hone their skills regularly to enable them to face the challenges of the changing
requirements of customers that fit market up and down.

Training needs analysis is done on a regular basis and systematic methodologies are ensured
that skills and capabilities of all agents are constantly upgraded to enable them to perform in
the challenging work. There is special training session at regular time period in local branch to
all financial consultant and agents about new scheme and to improve their effectiveness.

PERFORMANCE APPRAISAL

“It is the systematic evaluation of the individual with respect to his or her performance
on the job and his or her potential for development.”

Objective of Performance appraisal if for Developmental uses for agents and Financial
Consultants, for wages, transfer, promotion, for documentation and for organizational purpose
like Human Resource Planning, Job analysis and for training and development.

ICICI PRUDENTIAL first set the objective of performance appraisal then in establish job
expectation and then decide whose performance should be rated and who the raters are.
Basically raters are immediate supervisor, subordinates, peers, clients. For Performance
Appraisal modern method is used like MBO (Management by Objectives) and 360” appraisal.
But there is some limitation like Hello effect, Bias, Perception factor, Spill over etc

Selection Methods:
The selection procedure is concerned with securing relevant information about an
applicant. This information is secured in a number of steps or stages. The objective of

48
selection process is to determine whether an applicant meets the qualifications for a
specific job and to choose the applicant who is most likely to perform well in that job.

The hiring procedure is not a single act but it is essentially a series of methods or steps
or stages by which additional information is secured about the applicant. At each
stage, facts may come to light which may lead to the rejection of the applicant. A
procedure may be compared to a series of successive hurdles or barriers which an
applicant must cross. These are intended as screens, and they are designed to eliminate
an unqualified applicant at any point in the process. This technique is including all
these hurdles.

Placement & Induction:-

Placement at ICICI bank is done very critically. The human resources are considered
very critical and are said to be main power of the bank. The CEO Mr. K. V. Kamath
says, “Human capital is very important at ICICI. Training is a big thing; each
employee spends at least 69 hours during the year recharging himself”. Placement is
done on the qualification and merit basis. Generally for the retail banking and other in
house jobs placement is done on the basis of the interviews by branch and regional
heads. They select only those competent people who are ready to work round the
clock and have full dedication towards the bank.

Induction is a technique by which a new employee is rehabilitated into the changed

surroundings and introduced to the practices, policies and purposes of the
organization. In other words, it is a welcoming process-the idea is to welcome a new
comer, make him feel at home and generate in him a feeling that his own job, however
small, is meaningful and has significance as a part of the total organization.

When a new comer joins an organization, he is an utter stranger to the people, work
place and work environment. He may feel insecure, shy and nervous. The first few
days may be anxious and disturbing ones for him. He may have anxiety caused by not
following the usual practices prevalent in the organization, or the haphazard
procedures, and lack of information. These may develop discouragement,
disillusionment or defensive behavior. Induction leads to reduction of such anxieties;
dispels the irrational fears present employees and hold colleagues responsible for
assisting the new comer so that he may feel confident. ICICI says that, “newcomers
are to be a part of informal identification of talent apart, there is a formal process. It
starts form induction, where newcomers are subject to the OPQ (occupational
personality questionnaire). The tests have also been conducted right up to the general
manager and senior general manger.

49
Training and Development:-

ICICI is a kind of private sector bank where if you are confident and competent then
you can get your carrier advancement and development at a very high speed. CEO Mr.
K. V. Kamath says, “There are several young people in our organization who are on
the threshold of making it to the board”. He himself has this habit of dropping in
unannounced on people tow or three levels below him. It helps him to keep a tab on
things and also to find out who is knocking on top management doors. His
management by walking about also takes him to the basement, to see that everything
is spick and span. He does like to get to the bottom of things.

At ICICI executive development programme is more important. Because they believe

that if the executives are properly trained, properly motivated and fully focused then
they can guide any kind of work force. All those persons who have authority over
others and are responsible for their activities and for the operations of an enterprise are
managers. In a business organization, the co-ordination and direction of the efforts of
others is a major part of the management job. The manager has to deal not only with
the staff but also with others outside his own group, and has decided influence on the
organization.

Performance Appraisal Policy:-

Once the employee has been selected, trained and motivated, he is then appraised for
his performance. Performance appraisal is the step where the management finds out
how effective it has been at hiring and placing employees. If any problems are
identified, steps are taken to communicate with the employee and to remedy them. A
“performance appraisal” is a process of evaluation an employee’s performance of a
job in terms of its requirements.

50
RESEARCH DESIGN & METHODOLOGY

Objectives

• To Study the Brand awareness of the new product i.e. Unit Linked Insurance
Plans in Jalandhar City.
• To know what are the priorities of people of city for making investment in
Insurance.
• To know what are the perception of the consumer about ICICI Prudential Life
Insurance Co.
• To know the standing of the ICICI Prudential Life Insurance Co. in Jalandhar
City.

Data Source:
The data would be collected from both primary as well as secondary source.
Consumers would be asked to fill questionnaires to arrive at the information. Various
secondary sources of data as magazines, journal, Internet etc. would also be explored.

Sampling Area:
The sampling areas of this research are Jalandhar.

Sampling method:
The convenient sampling method was used for this research and the respondents were
those who have already taken life insurance policy.

Sample Size:
The size of this research is 50 respondents.

Research Instrument:
The research instruments, which was used, for collecting the data is questionnaire.

Method of contact:
The method of contact would be personal and direct as this would help to qualify the
customer’s issues while filling up the questionnaire and also helps them if they do not
have the knowledge about any insurance plan of the company.

Method of making an approach for Sales:

After analyzing the data form the questionnaires the needs of prospects were identified
and the best suitable insurance solution was suggested to them accordingly.

51
Data Collection and Analysis

Q.1. Do you have a Life Insurance Policy?

Criteria No. Of Respondents

Yes 50
No 0

As our sample is those people who have insurance so all the respondents are falling
under the “Yes” criteria.

Q.2. Which Company’s Insurance Policies do you have?

Company No. of Respondents

LIC 50
Birla Sunlife 2
SBI 3
ICICI Pru. Life 10
Kotak Mahindra 3
Post Office 15
HDFC 3

No. of Respondents

60
50
No. of 40
30
Respondents 20
10
0
LIC

SBI

HDFC
Mahindra
Kotak

52
 As from the above chart it is very clear the all of the respondents have an insurance of
the LIC while some of them have an insurance of the other companies like post Office,
ICICI Prudential Life insurance Co., HDFC Co. Etc.

The reason behind this is that the LIC competitor since more than four decades and the
Indian Govt. allowed the Introduction of private player in Insurance in the year 2000.

Q.3 What is amount of insurance premium you pay annually?

Criteria No. of Respondents

Below Rs. 10,000 11
10,000 to 20,000 18
20,000 to 30,000 6
30,000 to 40,000 5
Above 40,000 10

The analysis of the above available data is merely to find out the percentage of income
that one is willing to invest in insurance.

Q.4 What priorities would you consider most important, while purchasing a
policy?

Criteria/Rank 1 2 3 4 5 Total
Death Benefit 29 10 6 2 3 50
Children’s 7 13 21 3 0 44
Future
Retirement 5 5 6 20 7 43
Planning
Tax Planning 8 18 8 8 6 48
Financial 2 5 3 11 25 46
Planning

53
 Priorities of Respondents
No. of Respondents

60 Death Benefit
50
40 Children’s Future
30
20
Retirement
10
Planning
0
Tax Planning

l
ta
1

5
o
T
Financial
Rank
Planning

From the table and chart it can be say that most of the people rank death benefit first
for the decision to make investment in Insurance. Their second priority is tax planning
because the premium, which is paid by the people towards Insurance, is deductible up
to certain limit from the income and also the maturity amount is also tax free. The
third and fourth priorities are children’s future and retirement planning.

Q.5 Do you have any knowledge of the stock market?

Criteria No. of Respondents

Yes 32
No 18

Q.6 If “Yes” do you have any knowledge about unit linked insurance plans?

Criteria No. of Respondents

Yes 25
No 7

The question number 5 and 6 are designed to know the awareness of people who have
knowledge of share market or deals in shares also have the knowledge of the new
modern insurance product i.e. Unit Linked Insurance Plan. From the available data it
can be say that those who deal in shares are also aware of the ULIP.

Q.7 Is your current Insurance policy “Unit Linked” or “Traditional?

54
 Criteria No. of Respondents
Only Unit Linked 0
Only Traditional 39
Both 11

Respondents Having ULIP and

Traditional Insurance Products

22% 0%
Only Unit Linked
Only Traditional
Both
78%

From the Q. No. 7 we can say that even though the modern products available in the
market since more than two years and which are having the more flexibility and also
giving the higher return than traditional one most of the people do not have or may be
not aware of it which shows the lack of brand awareness and it requires an aggressive
promotional efforts on the part of company.
There is a lot of scope available for the company to attract more customers by giving
or introducing most suitable ULIP products and at the same time increase the customer
base.

Q.8 If given a choice, where would you like to invest your money?
(Please Rank Your Choice)

Choice/Rank 1 2 3 4 5 6 7 8 Total
Mutual Fund 0 1 5 1 25 12 5 1 50
Insurance 4 12 14 4 8 3 0 0 45
Gold 4 8 1 2 2 5 13 13 48
Equities 17 3 0 5 2 6 1 0 34
Post Office 22 12 12 2 2 0 0 0 50
Debenture 0 2 4 10 1 14 2 0 33
Bank Deposit 0 6 12 19 1 0 3 1 42
Other 10 5 0 2 1 0 0 2 20

55
 Investment Priorities
No. of Respondents

60
50 Mutual Fund
40 Insurance
30 Gold
20 Equities
10 Post Office
0
Debenture

Total
1
2
3
4
5
6
7
8
Bank Deposit
Other
Rank

This question is mainly designed to know the investment priorities of the people of
Jalandhar town. The objective behind this Q. is that after the Charotar Nagrik Co-
oprerative Bank and other Credit Societies, which are giving higher interest on
deposits, the whole scenario of city is changed. Most of the people prefer to invest in
post office saving schemes and where their money is safe even though the return is
very less. So there is a great need to divert the efforts of the company towards the
safety and security as ICICI Prulife is a private insurance Company.

Q.9 According to you what are the factors that would affect you decision while
purchasing an insurance policy?

Criteria/Rank 1 2 3 4 5 50
Premium 12 15 15 6 2 50
Return 21 17 8 2 2 50
Safety 20 14 15 1 0 50
Liquidity 1 1 9 18 21 50
Market 1 2 0 16 21 40
Condition

56
 Factors Affecting the Insurance
Decision
Respondents

60 Criteria/Rank
40
No. of

Premium
20 Return
0 Safety
1 2 3 4 5 6 Liquidity
Rank Market Condition

The question No. 9 is designed to know which the factors are affecting the
most to the prospect while making decision to invest in insurance. As far as investment
in insurance is concerned most of the people want that it should be safe and at the
same time giving the compatible returns because insurance is not only for death benefit
it is also a saving tool for future. So the mix response of respondents is welcomed.
Available data is such that there is a bit ambiguity. But we can say that the most
affecting factors to the prospect are return and safety. As per the finance theory risk
and return goes in hand in hand but as far as insurance is concerned it is all about the
compatible and safe returns over others.

Q. 10 Are you or ay of your family members are planning to buy an

insurance policy in near future?

Criteria No. of Respondents

Yes 13
No 37

This question is taken to collect the information of those respondents who are
going to plan to purchase insurance within near future that is used by the
company for making personal contact for sale.

57
Q. 11 Are your needs satisfied with your current investment in insurance?

Criteria No. of Respondents

Yes 10
No 30

Q. 11(a) If “No”, then give reasons?

Criteria No. of Respondents

High Premium 0
Low Return 1
Poor Services 7
Others 2

No. of Respondents

20% 0% 10%
High Premim
Low Return
Poor Services
Others
70%

The question No.11 and 12 are designed to know the percentage of people who
are not satisfied with the current investment in insurance and also to know the
reasons behind it. So that the company can focus on those areas where the
competitors fail. Because now a days the competition is very stiff in the
insurance industry. All companies are trying to attract more customers by
anyhow. So it will be useful for designing the promotional schemes of the
company.
From the above table and chart it can be seen that the respondents who
are dissatisfied give the main reason behind it are poor services. There are many
others reasons like more time taken by the company for claim settlement, non-
dispatchment of cheques and other important vouchers, etc. So the company can
improve upon these and increase its market share by offering quality service to
the customers.
Q. 12 Do you know anything ICICI Prudential Life Insurance?

58
 Criteria No. of Respondents
Yes 30
No 20

Q. 13 If “Yes”, from where did you come to know about the company?

Criteria No. of Respondents

Television 4
News Paper 3
Sales Representative 14
Others source 9

Toal No. of Advertisement

Television
13%
30% News Paper
10%

Sales
Representative
47% Others source

Q. 14 What do you feel about “ICICI Prudential Life Insurance?

(Open Ended)

The question No.13, 14 and 15 are designed to know the company

awareness the respondents of the city and also the source of awareness. But I
felt very much difficulty while filling up these questions because most of the
people know about the company but they know it as an ICICI Bank not as a
different identity. So there is a great need to design the advertisement campaign
in such a way that it will create the different image of the company. The main
reason behind this is that the image of ICICI Bank in city is such that most of
the people ask for charges first than the service that it provides.
QUESTIONNAIRE

59
Q.1. Do you have a Life Insurance Policy?
Yes  No 

Q.2. Which Company’s Insurance Policies do you have?

(Please specify the numbers)

LIC  SBI Life Insurance 

HDFC Standard Life  New York MaxLife 
Birla Sunlife  Alliance Bajaj 
Cholamandalam  ICICI Pru. Life Insurance 
TATA AIG Insurance  MetLife Insurance 
ING Vysya  OM Kotak Mahindra 
AVIVA Life  AMP Sanmar 

Q.3 what is amount of insurance premium you pay annually?

Amount

Q.4 What priorities would you consider most important, while purchasing a
policy? (Please Rank Your Choice)

Death Benefit 
Children’s Education 
Retirements Benefit 
Tax Planning 
Financial Planning 
All of above 

Q.5 have you any knowledge of the stock market?

Yes  No 

Q.6 If “Yes” do you have any knowledge about unit linked insurance plans?
Yes  No 

Q.7 Is your current Insurance policy “Unit Linked” or “Traditional?

Yes  No 

60
Q.8 If given a choice, where would you like to invest your money?
(Please Rank Your Choice)
Mutual Funds  Post Office Schemes 
Insurance Policies  Debentures 
Gold  Banks (FD’s etc.) 
Equities  If other (specify) ___________

Q.9 According to you what are the factors that would affect you decision while
purchasing an insurance policy?
(Please Rank Your Choice)
Premium 
Return 
Safety 
Liquidity 
Market Condition 

Q. 10 Are you or any of your family members are planning to buy an insurance
policy in near future?
Yes  No 

Q. 11 Are your needs satisfied with your current investment in insurance?

Yes  No 

Q. 11 (a) If “No”, then give reasons?

High Premium  Poor Services 
Low Return  Other Reasons__________
______________________

Q. 12 Do you know anything ICICI Prudential Life Insurance?

Yes  No 

Q. 13 If “Yes”, from where did you come to know about the company?
T.V.  Newspaper  Magazine 
Radio  Internet  Hoarding 

Others (Please Specify)_____________________________

Q. 14 What do you feel about “ICICI Prudential Life Insurance?

_______________________________________________________________
61
 _______________________________________________________________
_____________________
CONCLUSION

So according to the data available form the survey one can conclude that even though
the Unit Linked Insurance Plans are very much popular in Metro and semi cities, the
product awareness of ULIP is very low among the people of villages/rural areas and at
the same time there is a need to create the different image of the company among the
people by any means like advertisement, seminars or meetings.

62
 SWOT ANALYSIS

• Strengths
 Flexible Products
 Partners having experience in different markets of the
world.
 Synergy with existing operations
 Expertise in the field of insurance
 Professional management
 Good Customer service
 Create a brand name
• Weakness

 Low capital base

 Yet to build strong distribution network
 Cannot tap rural market

• Opportunities

 Untapped market
 Banks ready to tie up for as a readymade distribution network for a
small fee.

• Threats
 Large distribution network of LIC
 Decades of experience and brand name of LIC
 5% service tax on investments.

63
 BIBILIOGRAPHY

Website address

www.bimaonline.com
www.licindia.com
www.irdaindia.com
www.iciciprulife.com

Magazines
India Today
ICFAI Journal
Outlook Express

Materials
LIC literature and brochures
ICICI Prudential literature and brochures
IC-33 OF IRDA ACT

64