Ankit

INTRODUCTION TO INSURANCE
WHAT IS INSURANCE?
The business of insurance is related to the protection of the economic

values of the assets. Every asset has a value. The asset would have been created
through the efforts of the owner. The asset is valuable to the owner, because he
expects to get some benefits from it. The benefit may be an income or some
thing else. It is a benefit because it meets some of his needs. In the case of a
factory or a cow, the product generated by is sold and income generated. In the
case of a motor car, it provides comfort and convenience in transportation.
There is no direct income.
Every asset is expected to last for a certain period of time during which
it will perform. After that, the benefit may not be available. There is a life-time
for a machine in a factory or a cow or a motor car. None of them will last
forever. The owner is aware of this and he can so manage his affairs that by the
end of that period or life-time, a substitute is made available. Thus, he makes
sure that the value or income is not lost. However, the asset may get lost earlier.
An accident or some other unfortunate event may destroy it or make it non-
functional. In that case, the owner and those deriving benefits there from, would
not have been ready. There is an adverse or pleasant situation. Insurance is a
mechanism that helps to reduce the effect of such adverse situations.
HISTORY OF INSURANCE
The business of insurance started with marine business. Traders, who

used to gather in the Lloyd’s coffee house in London, agreed to share the losses
to their goods while being carried by ships. The losses used to occur because of
pirates who robbed on the high se4as or because of bad weather spoiling the
Neville Wadia Institute of Management Studies & Research

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goods or sinking the ship. The first insurance policy was issued in 1583 in
England. In India, insurance began in 1870 with life insurance being transacted
by an English company, the European and the Albert. The first Indian insurance
company aw the Bombay Mutual Assurance Society Ltd, formed in 1870. This
was followed by the Oriental Life Assurance Co. in 1874, the Bharat in 1896
and the Empire of India in 1897.
Later, the Hindustan Co-operative was formed in Calcutta, the United

India in Madras, the Bombay Life in Bombay, the National in Calcutta, the New
India in Bombay, and the Jupiter in Bombay and the Lakshmi in New Delhi.
These were all Indian companies, started as a result of the Swadeshi movement
in the early 1900’s by the year 1956, when the life insurance business was
nationalized and the Life Insurance Corporation of India (LIC) was formed on
1st September 1956, there were 170 companies and 75 provident fund societies
transacting life insurance business in India. After the amendments to the
relevant laws in1999, the L.I.C. did not have the exclusive privilege of doing
life insurance business in India. By 31/03/2002, eleven new insurers had been
registered and had begun to transact life insurance business in India.
PURPOSE & NEED OF INSURANCE
Assets are insured, because they are likely to be destroyed, through

accidental occurrences. Such possible occurrences are called perils. Fire, flood,
breakdowns, lightning, earthquakes, etc, are perils. If such perils can cause
damage to the asset, we say that the asset is exposed to that risk. Perils are the
events. Risks are the consequential loses or damages. The risk to an owner of a
building, because of the peril of an earthquake, may be a few lakhs or a few
crores of rupees, depending on the cost of the building and the contents in it.
The risk only means that there is a possibility of loss or damage. The damage
may or may not happen. Insurance is done against the contingency that it may
happen. There has to be an uncertainty about the risk. Insurance is relevant only
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if there are uncertainties. If there is no uncertainty about the occurrence of an
event, it cannot be insured against. In the case of a human being, death is
certain, but the time of death is uncertain. In the case of a person who is
terminally ill, the time of death is not uncertain, through not exactly known. He
cannot be insured.
Insurance does not protect the asset. It does prevent its loss due to the
peril. The peril cannot be avoided through insurance. The peril can sometimes
be avoided, through better safety and damage control management. Insurance
only tries to reduce the impact of the risk on the owner of the asset and those
who depend on that asset. It only compensates the losses- and that too, not fully.
Only economic consequences can be insured. If the loss is not financial,

insurance may not be possible. Examples of non-economic losses are love
affection of parents, leadership of managers, sentimental attachments to family
heirlooms, innovative and creative abilities, etc.
HOW INSURANCE WORKS
The mechanism of insurance is very simple. People who are exposed to

the same risks come together and agree that, if anyone of them suffers a loss,
the others will share the loss and make good to the person who lost. All people
who send goods by ship are exposed to the same risks, which are related to
water damage, ship sinking, piracy, etc. those owning factories are not exposed
to these risks, but they are exposed to different kinds of risks like, fire,
hailstorms, earthquakes, lightning, burglary, etc. like this, different kinds of
risks can be identified and separate groups made, including those exposed to
such risks. By this method, the heavy loss that anyone of them may suffer (all of
them may not suffer such losses at the same time) is divided into bearable small
losses by all. In other words, the risk is spread among the community and the
likely big impact on one is reduced to smaller manageable impacts on all.

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If a Jumbo Jet with more that 350 passengers crashes, the loss would run
into several crores of rupees. No airline would be able to bear such loss. It is
unlikely that many Jumbo Jets will crash at the same time. If 100 airline
companies flying Jumbo Jets, come together into an insurance pool, whenever
one of the Jumbo Jets in the pool crashes, the loss to be borne by each airlines
would come down to a few lakhs of rupees. Thus, insurance is a business of
‘sharing’.
There are certain principles, which make it possible for insurance to
remain a fair arrangement. The first is that it is difficult for any one individual
to bear the consequences of the risks that he is exposed to. It will become
bearable when the community shares the burden. The second is that the peril
should occur in an accidental manner. Nobody should be in a position to make
the risk happen. In pother words, none in the group should set fire to his assets
and ask others to share the costs of the damage. This would be taking unfair
advantage of an arrangement put into place to protect people from the risks they
are exposed to. The occurrence has to be random, accidental, and not the
deliberate creation of the insured person.
The manner in which the loss is to be shared can be determined before-

hand. It may be proportional to the risk that each person is exposed to. This
would be indicative of the benefits he would receive if the peril befell him. The
share could be collected from the members after the loss has occurred or the
likely shares may be collected in advance, at the time of admission to the group.
Insurance companies collect in advance and create a fund from which the losses
are paid.
The collection to be made from each person in advance is determined on

assumptions. While it may not be possible to tell beforehand, which person will
suffer, it may be possible to tell, on the basis of past experiences, how many
persons, on an average, may suffer losses. The following two examples explain
the above concept of insurance.

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Example-1
In a village, there are 400 houses, each valued at Rs. 20,000. Every year,
on the average, 4 houses get burnt, resulting into a total loss of Rs.
80,000. If all the 400 owners come together and contribute Rs. 200 each,
the common fund would be Rs. 80,000. This would be enough to pay
Rs. 20,000 to each of the 4 owners whose houses got burnt. Thus, the
risk of 4 owners is spread over 400 house-owners in the village.
Example-2
There are 1000 persons who are all aged 50 and are healthy. It is
expected that of these, 10 persons may die during the year. If the
economic value of the loss suffered by the family of each dying person
is taken to be Rs. 20,000, the total loss would work out to Rs. 2,00,000.
If each person in the group contributed Rs. 200 a year, the common fund
would be Rs. 2,00,000. This would be enough to pay Rs. 20,000 to the
family of each of the ten persons who die. Thus the risks in the case of
10 persons are shared by 1000 persons.
 THE HUMAN ASSET
A human being is an income generating asset. One’s manual labour,

professional skills and business acumen are the assets. This asset also can be
lost through unexpectedly early death or through sickness and disabilities
caused by accidents. Accidents may or may not happen. Death will happen,
but the timing is uncertain.
If it happens around the time of one’s retirement, when it could be

expected that the income will normally cease, the person concerned could
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have made some other arrangements to meet the continuing needs. But if it
happens much earlier when the alternate arrangements are not in place, there
can be losses to the person and dependents. Insurance is necessary to help
those dependent on the income.
A person, who may have made arrangements for his needs after his
retirement, also would need insurance. This is because the arrangements
would have been made on the basis of some expectations like, likely to live
for another 15 years, or that children will look after him. If any of these
expectations do not become true, the original arrangement would become
inadequate and there could be difficulties. Living too long can be as much a
problem as dying too young. Both are risks, which need to be safeguarded
against. Insurance takes care.
 INSURANCE OF INTANGIBLES
The concept of insurance has been extended beyond the coverage of

tangible assets. Exporters run the risk of losses if the importers in the other
country default in payments or in collecting the goods. They will also suffer
heavily due to sudden changes in currency exchange rates, economic policies
or political disturbances in the other country. These risks are insured. Doctors
run the risk of being charged with negligence and subsequent liability for
damages. The amounts in question can be fairly large, beyond the capacity of
individuals to bear. These are insured. Thus, insurance is extended to
intangibles. In some countries, the voice of a singer or the legs of a dancer
may be insured.
THE BUSINESS OF INSURANCE
Insurance companies are called insurer. The business of insurance is to

(a) bring together persons with common insurance interests (sharing the same

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risks), (b) collect the share or contribution (called premium) from all of them,
and (c) pay out compensations (called claims) to those who suffer. The
premium is determined on the same lines as indicated in the examples above,
but with some further refinements.
In India, insurance business is classified primarily as life and non-life or

general. Life insurance includes all risks related to the lives of human beings
and general insurance covers the rest. General insurance has three
classifications viz., Fire (dealing with all fire related risks), Marine (dealing
with all transport related risks and ships) and Miscellaneous (dealing with all
others like liability, fidelity, motor, crop, personal accident, etc). Personal
accident and sickness insurance, which are related to human beings, is classified
as non-life in India, but is classified as ‘life’, in many other countries. What is
‘Non-Life’ in India is termed ‘Property and Casualty’ in some other countries.
The premium is based on expectations of the losses. These expectations

are based on studies of occurrences in the past and the use of statistical
principles. There is, in statistics, a “law of large numbers”. When you toss a
coin, the chance of a head or tail coming up is half. If the coin is tossed 10
times, one cannot be sure that the head will come up 5 times. If the coin is
tossed 1 million times, the number of heads will be closer to half a million
proportionately than in the case of 10. The variation will be less as a percentage.
So also, the larger the numbers (of risks) included in the pool, the better the
chances that the assumptions regarding the probability of the risk occurring,
which is the basis of premium calculation, will be realized in practice. In order
to be amenable to statistical predications, insures have to insure large numbers
of risks. The larger the spread of the business, the better is the experience in
relation to expectations.
The business of insurance is nothing but one of sharing. It spreads losses

of an individual over the group of individuals who are exposed to similar risks.

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People who suffer loss get relief because their loss is made good. People who
do not suffer loss are relieved because they were spared the loss.
The insurer is in the position of a trustee as it is managing the common

funds, for and on behalf of the community of policyholders. It has to ensure that
nobody is allowed to take undue advantage of the arrangement. That means that
the management of the insurance business requires care to prevent entry (into
the group) of people whose risks are not of the same kind as well as paying
claims on losses that are not accidental. The decision to allow entry is the
process of underwriting of risk. Underwriting includes assessing the risk, which
means, making an evaluations of how much is the exposure to risk. The
premium to be charged depends on this assessment of the risk. Both
underwriting and claim settlement have to be done with great care.
INSURANCE AS A SOCIAL SECURITY TOOL
The United Nations Declaration of Human Rights 1948 provides that

“Everyone has a right to a standard of living adequate for the health and
wellbeing of himself and his family, including food, clothing, housing and
medical care and necessary social services and the right to security in the event
of unemployment, sickness, disability, widowhood or other lack of livelihood in
circumstances beyond his control”.
When the bread winner dies, to that extent, the family’s income dies.
The economic condition of the family is affected, unless other arrangements
come into being to restore the situation. Life insurance provides such an
alternate arrangement.
If this did not happen, another family would be pushed into the lower
strata of society. The lower strata create a cost on society. Poor people cost the
nation by way of subsidies and doles and so on. Poor people also cost by way of

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larger growth in population, poor education and vagaries in behavior of
children.
Life insurance tends to reduce such costs. In this sense, the life
insurance business is complimentary to the State’s efforts in social
management.
Under a socialistic system the responsibility of full security would be

placed upon the State to find resources for providing social security. In the
capitalistic society, provisions of security are largely left to the individuals. The
society provides instruments, which can be used in securing this aim. Insurance
is one of them.
In a capitalistic society too, there is a tendency to provide some social

security by the State3 under some schemes, where members are required to
contribute e.g. Social Security Scheme in U.K.
In India, social security finds a place in our Constitution. Article 41

requires the State, within the limits of its economic capacity and development,
to education and to provide public assistance incase of unemployment, old age,
sickness and disablement and in other cases of undeserved want. Part of the
State’s obligations to the poorer sections met through the mechanism of life
insurance.
As per the law and the directions of the regulatory authorities, insurance
companies in India are obliged to extend insurance benefits to economically
weaker sections of the society in the unorganized sector. Details of these
schemes are given in subsequent chapters.
ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT

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As per the law and the directions of the regulatory authorities, insurance
companies in India are obliged to extend insurance benefits to economically
weaker sections of the society in the unorganized sector. For economic
development, investments are necessary, which are made out of savings. A life
insurance company is a major instrument for the mobilization of savings of
people, particularly from the middle and lower income groups. These savings
are channeled into investments for economic growth. All good life insurance
companies have huge funds, accumulated through the payments of small
amounts pf premium of individuals. These funds are invested in ways that
contribute substantially for the economic development of the countries in which
they do business. All life insurance companies get huge amount of funds in the
form of premium from the investors. Every premium represents a risk that is
covered by that premium. In effect, therefore these vast amounts represent
pooling of risks. The funds are collected and held in trust for the benefit of the
policyholders. Apart from investments, business and trade benefits through
insurance. Without insurance, trade and commerce will find it difficult to face
the impact of major banks, would collapse if the factory, financed by it, is
reduced to ashes by a terrible fire. Insurers cover also the loss to financiers, if
their debtors default.
ADVANTAGES OF LIFE INSURANCE

Many people perceive about life insurance as an investment or a means
of saving, which is not entirely correct. When a person saves, the amount of
funds at any time is equal to the amount set aside in the past, plus interest. This
happens in a fixed deposit of a bank, in national savings certificates, in mutual
funds, etc. even if there no loss, the available fund at any time is the amount
invested plus appreciation. In life insurance, however the funds available is not
the total of the savings already made i.e. the premium paid, but the amount one
wishes to have at the end of the savings period say 20 or 30 years. Thus, one is
paying from his savings, for the later, only as long as he/she lives or for a lesser
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period if so chosen. Thus there is no substitute to life insurance which provides
this kind of benefits.
Following are few more of the benefits which no other saving

instrument can provide the investor with:
• In the event of death, the settlement is easy. The heirs can collect the
moneys quicker, because of the facility of nomination and assignment.
The facility of nomination is now available for some bank accounts.
• There is a certain amount of compulsion to go through the plan of
savings. In other forms, if one changes the original plan of savings, there
is no loss. In insurance, there is a loss.
• Creditors cannot claim the life insurance moneys. They can be
protected against attachments by courts.
• There are tax benefits, both in income tax and in capital gains.
• Marketability and liquidity are better. A life insurance policy is
property and can be transferred or mortgaged. Loans can be raised
against the policy.
The following tenets help agents to believe in the benefits of life

insurance: Such faith will enhance their determination to sell and their
perseverance.
• Life insurance is not only the best possible way for family protection.
There is no other way.
• Insurance is the only way to safeguard against the unpredictable risks of
the future. It is unavoidable.
• The terms of life are hard. The terms of insurance are easy.
• The value of human life is far greater than the value of property. Only
insurance can preserve it.
• Life insurance is not surpassed by many other savings or investment
instrument, in terms of security, marketability, stability of value or
liquidity.
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• Insurance, including life insurance, is essential for the conservation of
many businesses, just as it is in the preservation of homes.
• Life insurance enhances the existing standards of living.
• Life insurance helps people live financially solvent lives.
• Life insurance perpetuates life, liberty and pursuit of happiness.
• Life insurance is a way of life.
COMPANY PROFILE
The company assigned to me is ICICI Prudential Life Insurance

Company. It is in to selling life insurance products. 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). At present it is growing at a tremendous pace. Now we can say there is
no close competitor to ICICI Prudential.
ICICI Prudential’s equity base stands at Rs. 9.25 billion with ICICI
Bank and Prudential PLC holding 74% and 26% stake respectively. In the
financial year ended March 31, 2005, the company garnered Rs. 1,584 crores of
new business premium for a total sum assured of Rs. 13,780 crores and wrote
nearly 6,15,000 policies. The company has a network of about 56,000 advisors
as well as 7-bank assurance and 150 corporate agent tie-ups.
For the past five years, ICICI Prudential has retained its position as No.
1 private life insurance in the country, with a wide range of flexible products
that meet the needs of Indian customer at every step in life.

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The company mainly depends on advisors. The advisors are considered
as the brand ambassadors of the company or the working partner who doesn’t
have to invest to get returns but just work with the company to make money.
Advisors main job is to sell policy and in return the advisors get huge return like
high commission, rewards, recognition etc. He is, for all purposes, an
authorized salesman for insurance.
Advisors can become the Unit Manager of the company if they pass the
pinnacle program. ICICI Prudential has recruited and trained about 56,000
insurance advisors to interface with and advise customers. Further, it leverages
its state-of-the-art IT infrastructure to provide superior quality of service to
customers.
Manager will get a fixed salary and the commission on the policies sold
by his advisor and the commission of the policies which he has already sold.
Tiger team manager is one who gets to sell the policy and get commission, train
the advisors about the product and he is also a paid up employee of the
company.
COMPANY’S VISION
To make ICICI Prudential the dominant Life and Pension player built on
trust by world-class people and service.
This is hoped to be achieved by:

1. Recruitment of quality advisors.
2. Innovative financial solution.
3. Provide intensive product training and selling skills to the
advisors.
4. Understanding the needs of the customers and offering them
superior products and service.

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5. Leveraging technology to service customer quickly, efficiently and
conveniently.
6. Developing and implementing risk management and investment
strategies to offer sustainable and stable returns to the
policyholders.
7. Providing enabling environment to foster growth and learning for
the employees.
8. And above all, building transparency in all dealings.
The success of the company will be found in its unflinching

commitment to 5 core values:
1. Integrity
2. Customer first
3. Boundary less earnings
4. Ownership and
5. Passion
Each of these values describes what the company stands for, the quality
of the people and the way they work.
The Company believes that it is the threshold of an existing new

opportunity, where they can play a significant role in redefining and reshaping
the sector.
ICICI GROUP

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ICICI BANK
ICICI ICICI GROUP ICICI

PRUDENTIAL VENTURES
ICICI
LOMBARD
ICICI BANK
AN OVERVIEW
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ICICI Bank is India's second-largest bank with total assets of about Rs.
2,513.89 bn as on March 31, 2006 and profit after tax of Rs. 25.40 bn for the
year ended March 31, 2006. ICICI Bank has a network of about 614 branches
and extension counters and over 2,200 ATMs.
ICICI Bank offers a wide range of banking products and financial

services to corporate and retail customers through a variety of delivery channels
and through its specialized subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management.
ICICI Bank set up its international banking group in fiscal 2002 to cater
to the cross border needs of clients and leverage on its domestic banking
strengths to offer products internationally.
ICICI Bank currently has subsidiaries in the United Kingdom, Russia

and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai
International Finance Centre and representative offices in the United States,
United Arab Emirates, China, South Africa and Bangladesh.
Its UK subsidiary has established a branch in Belgium. ICICI Bank is

the most valuable bank in India in terms of market capitalization.
ICICI Bank's equity shares are listed in India on the Bombay Stock
Exchange and the National Stock Exchange of India Limited and its American
Depositary Receipts (ADRs) are listed on the New York Stock Exchange
(NYSE).
At June 5, 2006, ICICI Bank, with free float market capitalization* of

about Rs. 480.00 billion (US$ 10.8 billion) ranked third amongst all the
companies listed on the Indian stock exchanges.

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PRUDENTIAL PLC
THE COMPANY
Prudential PLC is an international retail financial services group that
aims to help people secure and enhance their own and their dependants’
financial well-being by providing savings, protection and other products and
services suited to their needs.
The company has strong franchises in three of the largest and most
attractive markets in the world, where rising wealth and changing demographics
are fuelling demand for life insurance and other long-term savings and
protection products.
The company’s strategy is to build successful and increasingly profitable

businesses in each of these markets, and thereby maximize returns to our
shareholders over time.
ABOUT THE COMPANY
Established as the Prudential Mutual Assurance and Loan Association in

1848, today the company is an international financial services company with a
product range which extends from personal banking insurance, pensions and
retail investments, to institutional fund management and property investments.
Their portfolio of well-known and respected brands, including

Prudential, M&G Investments, Jackson National Life, Prudential Corporation
Asia and Egg, has attracted more than 19 million customers (and policy holders
and unit holders) worldwide. Across the Group they have £234 billion of funds
under management (at 31 December 2005).
The company has significant operations in the UK, the US and Asia,
contributing to a diversity of earnings. Worldwide they employ more than

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20,000 people and their shareholders number 60,942 (at 31 December
2005). They are listed on the London and New York Stock Exchanges.
BUSINESS HISTORIES
ORIGINS
Prudential was founded 1848 to provide professional people with
loans secured by life assurance. This market broadened during the second
half of the nineteenth century when insurance policies – penny premiums
collected by agents – were sold to the working classes. Industrial insurance
was an insurance innovation: Prudential combined actuarial methods (until
then solely applied to the middle and upper classes) with the traditional
friendly society and burial club method of direct selling through agents.
Prudential grew extremely quickly following the introduction of its

Industrial Branch and by the 1900s the company insured one third of the UK
population.
ACHIEVEMENTS
Beginning operations in December 2000, ICICI Prudential’s success
has been meteoric, becoming the number one private life insurer within
months of launch. Today, it has one of the largest distribution networks
amongst private life insurers in India, with branches in 54 cities. The total
number of policies issued stands at more than 14, 00,000 with a total sum
assured in excess of Rs. 160 billion.
ICICI Prudential closed the financial year ended March 31, 2004 with
a total received premium income of Rs. 9.9 billion, up 135% from last years
total premium income of Rs. 4.20 billion. New business premium income
shows a 106% growth at Rs. 7.5 billion, driven mainly by the company’s

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range of unique unit-linked policies and pension plans. The company’s retail
market share amongst private companies stood at 36%, making it a clear
leader in the segment.
To add to its achievements, in the year 2003/04 it was adjudged Most

Trusted Private Life Insurer (Economic Times ‘Most Trusted Brand
Survey’ by ACNielsen ORG-MARG). It was also conferred the ‘Outlook
Money – Best Life Insurer’ award for the second year running. The company
is also proud to have won Silver at EFFIES 2003 for its ‘Retire from work, not
life’ campaign. Notably, ICICI Prudential was also short-listed to the final
round for its ‘Sindoor’ campaign in EFFIES 2002.
ICICI Prudential’s success is rooted in its philosophy to always

offer the customer a choice.
This has been the driving force behind its multi-channel distribution
strategy, which includes advisors, banks, direct marketing and corporate
agents. In fact, ICICI Prudential was the first life insurer to invest in multiple
channels and offer the customer choice and access; thus reducing dependency
on any one channel.
ICICI Prudential also made great strides in the retirement solutions

and pensions market. The company's penetration of the retirement market was
driven by the focused approach towards creating awareness through a sustained
campaign: ‘Retire from work, not life’. Within six months, the campaign
rewarded ICICI Prudential with an increased share of 23% of the total
pensions market and 78% amongst private players.
EXPANSION
New policies for single women, family and home protection were
introduced following the First World War and a further range of products was
initiated in 1929 with the establishment of group pensions.

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During the 1950s and 1960s, Prudential focused on life cover, long term
savings products and retirement annuities.
By the 1970s, Prudential had established a wide range of assurance,

investment and savings products.
COMPANY’S BUSINESS STRATEGY
Company’s aim is to be a leading international retail financial

services company, building businesses in those markets around the world
where the best opportunities lie for sustainable, profitable growth. At present,
the company sees these as Asia, the UK and the US.
In each of their markets, they strive to deliver superior value for our
customers as they believe that, only if they do this, will they achieve superior
returns for their shareholders, over time.
Looking to the future, company sees many opportunities for profitable

growth in each of their core markets.
In particular, as governments and individuals seek to address the

combined challenge of rising life expectancy and inadequate retirement
funding, and they believe they will look increasingly to the private sector to
fulfill their needs; their aim is to be a major player in the pre- and post-
retirement sector in each of their three regions.
The company also sees significant advantage in the combined strength

of its companies across the globe.

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By sharing knowledge between them we can make more effective use of
their capital, and adapt and export products across borders, meeting emerging
needs often more quickly and efficiently than competitors.
Our operational plans, in areas such as product design and IT

processing, are also increasingly developed on an international, rather than a
local basis.
MANAGEMENT
BOARD OF DIRECTORS
The ICICI Prudential Life Insurance Company Limited Board comprises

reputed people from the finance industry both from India and abroad.
Mr. K.V. Kamath, Chairman

Mr. Mark Norbom
Mrs. Lalita D. Gupte
Mrs. Kalpana Morparia
Mrs. Chanda Kochhar
Mr. H.T. Phong
Mr. M.P. Modi
Mr. R. Narayanan
Mr. Keki Dadiseth
Ms. Shikha Sharma, Managing Director
Mr. N.S. Kannan, Executive Director
MANAGEMENT TEAM

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Ms. Shikha Sharma, Managing Director & CEO
Mr. N.S. Kannan, Executive Director
Mr. V. Rajagopalan, Chief - Actuary
Mr. Sandeep Batra, Chief Financial Officer & Company Secretary
Ms. Anita Pai, Chief - Customer Service and Technology
Mr. Puneet Nanda, Chief – Investments
BANK ASSURANCE PARTNERS
ICICI Bank, Federal Bank, Bank of India, South Indian Bank, Lord
Krishna Bank, Goa State Co-operative Bank, Indore Paraspar Sahakari
Bank, Manipal State Co-operative Bank, Jalgaon People's Co-operative
Bank, Shamrao Vithal Co-operative Bank, Punjab & Maharashtra Co-
operative Bank.
DISTRIBUTION
ICICI Prudential has one of the largest distribution networks amongst

private life insurers in India, having commenced operations in over 116 cities
and towns in India, stretching from Bhuj in the West to Guwahati in the East,
and Amritsar in the North to Trivandrum in the South.
The company has 8 bank assurance tie-ups, having agreements with

ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Ernakulam Bank,
Lord Krishna Bank and some co-operative banks, as well as about 290
corporate agents and brokers.
It has also tied up with NGOs, MFIs and corporates for the distribution
of rural policies and organizations like Dhan for distribution of “Salaam
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Zindagi”, a policy for the socially and economically underprivileged sections
of society.
ICICI Prudential has recruited and trained more than 65,000 insurance
advisors to interface with and advise customers.
Further, it leverages its state-of-the-art IT infrastructure to provide

superior quality of service to customers.
PRODUCTS
A) Insurance Solutions 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
products can be enhanced with up to 5 riders, to create a customized solution for
each policyholder.
1. Savings Solutions:
a) Secure Plus is a transparent and feature-packed savings plan that offers 3

levels of protection.
b) Cash Plus is a transparent, feature-packed savings plan that offers 3

levels of protection as well as liquidity options.

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c) Save ’n’ Protect is a traditional endowment savings plan that offers life
protection along with adequate returns.
d) 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.
e) LifeTime & LifeTime II offer customers the flexibility and control to

customize the policy to meet the changing needs at different life stages.
Each offer 4 fund options? Preserver, Protector, Balancer and Maximiser.
f) Life Link II is a single premium Market Linked Insurance Plan which

combines life insurance cover with the opportunity to stay invested in the
stock market.
g) Premier Life is a limited premium paying plan that offers customers life
insurance cover till the age of 75.
h) Invest Shield Life is a Market Linked plan that provides capital

guarantee on the invested premiums and declared bonus interest.
i) Invest Shield Cash is a Market Linked plan that provides capital

guarantee on the invested premiums and declared bonus interest along with
flexible liquidity options.
j) Invest Shield Gold is a Market Linked plan that provides capital

guarantee on the invested premiums and declared bonus interest along with
limited premium payment terms.
2. Protection Solutions:
a) Life Guard is a protection plan, which offers life cover at very low cost.
It is available in 3 options - Level term assurance, level term assurance with
return of premium and single premium.

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b) Home Assure is a mortgage reducing term assurance plan designed
specifically to help customers cover their home loans in a simple and cost-
effective manner.
3. Child Plans:
a) SmartKid education 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 plans are also available in unit-linked form, i.e.,
both single premium and regular premium.
4. Retirement Solutions:
a) Forever Life is a retirement product targeted at individuals in their

thirties.
b) Secure Plus Pension is a flexible pension plan that allows one to select
between 3 levels of cover.
5. Market-linked retirement products:
a) Life Time Pension II is a regular premium market-linked pension plan
b) Life Link Pension II is a single premium market-linked pension plan.
c) Invest Shield Pension is a regular premium pension plan with a capital

guarantee on the investible premium and declared bonuses.
d) Golden Years is a limited premium paying retirement solution that offers

tax benefits up to Rs. 100,000 u/s 80C, with flexibility in both the
accumulation and payout stages.

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ICICI Prudential also launched “Salaam Zindagi”, a social sector group
insurance policy targeted at the economically underprivileged sections of the
society.
6. Health Solution:
a) Health Assure is a regular premium plan which provides long term cover
against 6 critical illnesses by providing policyholder with financial
assistance, irrespective of the actual medical expenses.
b) Health Assure Plus is a regular premium plan which provides long term
cover against 6 critical illnesses by providing financial assistance,
irrespective of actual medical expenses, as well as an equivalent life
insurance cover.
B) Group Insurance Solutions
ICICI Prudential also offers Group Insurance Solutions for companies

seeking to enhance benefits to their employees.
a) ICICI Pru Group Gratuity Plan: ICICI Pru’s group gratuity plan helps
employers fund their statutory gratuity obligation in a scientific manner. The
plan can also be customized to structure schemes that can provide benefits
beyond the statutory obligations.
b) ICICI Pru Group Superannuation Plan: ICICI Pru offers a 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 a partial commutation of the annuity at
the time of retirement.
c) ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution
helps provide affordable cover to members of a group. The cover could be
uniform or based on designation/rank or a multiple of salary. The benefit
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under the policy is paid to the beneficiary nominated by the member on
his/her death.
C) Flexible Rider Options
ICICI Pru Life offers flexible riders, which can be added to the basic
policy at a marginal cost, depending on the specific needs of the customer.
a) 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 rider 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.
b) Accident Benefit: This rider option pays the sum assured under the rider
on death due to accident.
c) 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 expenses prior to death.
d) 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 Smart Kid, Secure Plus and Cash Plus
e) Waiver of Premium: In case of total and permanent disability due to an

accident, the premiums are waived till maturity. This rider is available with
Secure Plus and Cash Plus.
CONCEPT OF MUTUAL FUND: A SUMMARY

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A Mutual fund is a common pool of money into which investors place
their contributions that are to be invested in accordance with a stated objective.
The ownership of the fund is thus joint or “mutual”; the fund belongs to all
investors. A single investor’s ownership of the fund is in the same proportion as
the amount of the contribution made by him or her bears to the amount of the
fund.
A mutual fund uses the money collected from investors to buy those
assets which are specifically permitted by its stated investment objective. Thus,
an equity fund would buy mainly equity assets-ordinary shares, preference
shares, warrants etc. A bond fund would mainly buy debt instruments such as
debentures, bonds, or government securities. It is these assets which are owned
by the investors in the same proportion as their contribution bears to the total
contributions of all investors put together. Since each owners a part owner of a
mutual fund, it is necessary to establish the value of his part. In other words,
each share or unit that an investor holds needs to be assigned a value. Since the
units held by an investor evidence the ownership of the fund’s assets, the value
of the total assets of the fund when divided by the total number of units issued
by the mutual fund gives us the value of one unit. This is generally called the
Net Asset Value (NAV) of one unit or one share. The value of an investor’s part
ownership is thus determined by the NAV of the number of units held.
Let us see an example. If the value of a fund’s assets stands at Rs.1000

and it has 10 investors who have bought 10 units each, the total number of units
issued is 100, and the value of one unit is Rs.10.00 (1000/100). If a single
investor in fact owns 3 units, the value of his ownership of the fund will be
Rs.30.00 (1000/100*3units). Note that the value of the fund’s investments will
keep fluctuating with market-price movements, causing the Net Asset Value
also to fluctuate. For example, if the value of our fund’s assets increased from
Rs.1000 to 1200, the value of our investor’s holding of 3 units will now be

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(1200/100*3) Rs. 36. The investment value can go up or down, depending on
the market value of the fund’s assets.
ADVANTAGES OF MUTUAL FUNDS
If mutual funds are emerging as the favorite investment vehicle, it is

because of the many advantages they have over other forms and avenues of
investing, particularly for the investor who has limited resources available in
terms of capital and ability to carry out detailed research and market
monitoring. The following are the major advantages offered by mutual funds
to all investors:
• Portfolio Diversification: Mutual Funds normally invest in a well-

diversified portfolio or securities. Each investor in a fund is a part owner of
all of the fund’s assets. This enables him to hold a diversified investment
portfolio even with a small amount of investment that would otherwise
require big capital.
• Professional Management: Even if an investor has a big amount of capital

available to him, he benefits from the professional management skills
brought in by the fund in the management of the investor’s portfolio. The
investment management skills, along with the needed research into available
investment options, ensure a much better return than what an investor can
manage on his own. Few investors have the skills and resources of their own
to succeed in today’s fast-moving, global and sophisticated markets.
• Reduction/Diversification of Risk: An investor in a mutual fund acquires a

diversified portfolio, no matter how small his investment. Diversification
reduces the risk of loss, as compared to investing directly in one or more
shares or debentures or other instruments. When an investor invest directly,
all the risk of potential loss is own. A fund investor also reduces his risk in
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another way. While investing in the pool of funds with other investors, any
loss on one or two securities is also shared with other investors. This risk
reduction is one of the most important benefits of a collective investment
vehicle like mutual fund.
• Reduction of Transaction Costs: What is true is also true of the

transaction costs. A direct investor bears all costs of investing such as
brokerage or custody of securities. When going through a fund, he has the
benefit of economies of scale; the funds pay lesser costs because of larger
volumes, a benefit passed on to its investors.
• Liquidity: Often, investors hold shares or bonds they cannot directly, easily
and quickly sell. Investment in a mutual fund, on the other hand, is more
liquid. An investor can liquidate the investment, by selling the units to the
fund if open-end, or selling them in the market if the fund is closed-end, and
collect funds at the end of a period by the mutual fund or the stock market.
• Convenience &Flexibility: Mutual fund management companies offer

many investor services that a direct market investor cannot get. Investors
can easily transfer their one holding from one scheme to the other, get
updated market information, & so on.
DISADVANTAGES OF MUTUAL FUNDS
• No Control over Costs: An investor in a mutual fund has any control over
the overall cost of investing. He pays investment management fees as long
as he remains with the fund, albeit in return for the professional
management and research. Fees are usually payable as a percentage of the
value of his investments, whether the fund value is rising or declining. A
mutual fund investor also pays fund distribution costs, which he would not
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incur in direct investing. However, this shortcoming only means that there is
a cost to obtain the benefits of mutual fund services. However, this cost is
often less than the cost of direct investing by the investors.
• No Tailor-made Portfolios: Investors who invest on their own can build

their own portfolios of shares, bonds and other securities. Investing through
funds means he delegates this decision to the fund managers. The very high-
net-worth individuals or large corporate investors may find this to be a
constraint in achieving their objectives. However, most mutual funds help
investors overcome this constraint by offering families of schemes - a large
number of different schemes - within the same fund. An investor can choose
from different investment plans and construct a portfolio of his choice.
• Managing a Portfolio of Funds: Availability of a large number of funds

can actually mean too much choice for the investor. He may again need
advice on how to select a fund to achieve his objectives, quite similar to this
situation when he has to select individual shares or bonds to invest in.
IRDA
(INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY)
INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY ACT, 1999
It is an act to provide for the establishment of an authority to protect the

interests of holder of insurance policies, to regulate, promote and ensure orderly
growth of the insurance industry and for matters connected therewith or
incidental thereto and further to amend the Insurance Act, 1938; the Life
Insurance Corporation Act, 1956; and the General Insurance Business Act,
1972.

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• The Authority replaces the Controller under Insurance Act, 1938. It
states that, if “Authority” is superseded by the Central Government, the
“Controller of Insurance” may be appointed till such time as “Authority”
is reconstituted.
• Section 2(f) defines an intermediary to include insurance brokers, re-

insurance brokers, insurance consultants, surveyors and loss assessors.
• The authority has the power and function to satisfy qualifications, code
of conduct and practical training for intermediaries and agents.
DUTIES, POWERS AND FUNCTIONS OF IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and
functions of IRDA...
1. Subject to the provisions of this Act and any other law for the time being
in force, the Authority shall have the duty to regulate, promote and
ensure orderly growth of the insurance business and re-insurance
business.
2. Without prejudice to the generality of the provisions contained in Sub

section-1, the powers and functions of the Authority shall include, -
(a) Issue to the applicant a certificate of registration, renew, modify,
withdraw, suspend or cancel such registration;
(b) Protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other
terms and conditions of contracts of insurance;
(c) Specifying requisite qualifications, code of conduct and practical
training for intermediary or insurance intermediaries and agents;
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(d) Specifying the code of conduct for surveyors and loss assessors;
(e) Promoting efficiency in the conduct of insurance business;
(f) Promoting and regulating professional organisations connected with
the insurance and re-insurance business;
(g) Levying fees and other charges for carrying out the purposes of this
Act;
(h) Calling for information from, undertaking inspection of, conducting
enquiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organisations
connected with the insurance business;
(i) Control and regulation of the rates, advantages, terms and conditions
that may be offered by insurers in respect of general insurance
business not so controlled and regulated by the Tariff Advisory
Committee under section 64U of the Insurance Act, 1938 (4 of
1938);
(j) Specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers
and other insurance intermediaries;
(k) Regulating investment of funds by insurance companies;
(l) Regulating maintenance of margin of solvency;
(m) Adjudication of disputes between insurers and intermediaries or
insurance intermediaries;
(n) Supervising the functioning of the Tariff Advisory Committee;
(o) Specifying the percentage of premium income of the insurer to
finance schemes for promoting and regulating professional
organizations referred to in clause (f);
(p) Specifying the percentage of life insurance business and general
insurance business to be undertaken by the insurer in the rural or
social sector; and
(q) Exercising such other powers as may be prescribed.

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COMPOSITION OF AUTHORITY UNDER IRDA ACT, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and

Development Authority (IRDA, which was constituted by an Act of Parliament)
specify the composition of Authority.
The Authority is a ten member team consisting of:
(a) A Chairman,
(b) Five whole-time members;
(c) Four part-time members,
(All appointed by the Government of India)
COMPETITOR’S ANALYSIS

34
MARKET SHARE
Retail Business
FTM YTD % Growth
Apr-06 May-06 Apr-06 May-06 M-O-M Y-O-Y
LIC 52% 60% 52% 57% 123% 46%
ICICI - Pru (total
basis) 11% 12% 11% 12%
ICICI – Pru 23% 30% 23% 27% 108% 96%

HDFC Standard 10% 8% 10% 9% 27% 82%
Birla Sun Life 5% 6% 5% 5% 85% 40%
Tata AIG 8% 5% 8% 6% 12% 39%
Allianz Bajaj 17% 16% 17% 17% 52% 255%
SBI Life 4% 8% 4% 6% 170% 397%
Others 33% 28% 33% 30% 38% 211%
Private Total 4,391 7,101 4,391 11,492 62% 136%
Total Industry 9,208 17,821 9,208 27,030 94% 75%
Group Business
For the Month

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• ICICI Pru’s share in total market increased from 6% to 13.5%. In private
market it stands 41.3%% via-a-vis 33.5% in the last month.
• SBI Life stands at 32.5% as against 12% in the previous month.
Year to Date
• SBI Life gained market share in Group Business and is now at

25.2% vis-à-vis 12% in January.
• ICICI Pru is at 9.8% (YTD Apr 6.0%) of the total market & 38.5%
(YTD Apr 33.5%) amongst private players.
• Birla Sun Life has gained market share and stands at 10.4% as
against 7.7% in the previous month.
PremiumwiseworldsInsurance
market
42% Life
58% NonLife
MARKET SHARE
Total Market Share
22%
LIC
ICICI Prudentail
8%
Others
70%

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ORGANISATION STRUCTURE
CHIEF MANAGING DIRECTOR (CMD)
CHIEF AREA OFFICER CHIEF AREA

OFFICER
(PENINSULAR)
(HIMALAYAN)
Sales Head
ZONAL MANA GER ZONAL MANA GER ZONAL MANA GER ZONAL MANA GER ZONAL MANA GER
ZONAL MANA GER ZONAL MANA GER
AREA SALES MANA GER

37
Unit Manager / Area Manager/ Senior Agency Manager
FINANCIAL ADVISORS AND THEIR ROLE
A Financial Advisor according to the Insurance Act is one who is

licensed under Section 42 of that Act and is paid by way of commission or
otherwise, in consideration of his soliciting or procuring insurance business
relating to the continuance, renewal or revival of policies of insurance.
Financial Advisor’s main function is to solicit and procure life insurance

business for the insurer, which has appointed him for that purpose.
At the same time, he is trusted by the prospect to advise him suitably

keeping his circumstances and needs in mind.
He is thus, in a unique role of a person trusted by both parties to the

transaction.
Financial advisor is bound by the terms of appointment of the insurer

and is expected to procure business for the insurer.
PRE SALES ROLE

• Telecalling for Suspecting of prospects.
• Fixing of appointments with prospects.
• Need analysis of the client.
• Re-fixing appointment for presenting solutions.
• Closing sales with cheque and other document collection.

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• Taking 3-4 references from the client.
• Submission of applications at the branch front desk.
POST SALES ROLE

• Track logins to achieve issuals of policy.
• Setting up medical appointment and accompany the client to medicals
(wherever required).
• Complete any other documentation or medical formalities as required.
• Reminders to customers for next payment due to avoid lapsation.
BENEFITS
• Commission on issuals of every policy (commission varies from 8% to
35%; an average of 15% commission can be expected per policy).
• Commission directly credited to your bank account every 15 days.
• Various sales linked contest and foreign trips.
• Availability of office infrastructure for telecalling, quotations, benefits
illustrations, etc.
• Intranet homepage to access illustrations, sales done, and contest
updates, etc.
• Personal e-mail ID.
• Regular training modules.
• Quick Start Sprint Race- QSSR
1. QS - Quick Start- 1 policy within 30 days- Certificate by Territory
Manager.
2. S - Sprint- 3 policies within 45 days- Certificate+ Trophy or 50
points= Rs. 500.

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3. R - Race- 5 policies within 90 days- Certificate+ Trophy or 100
points= Rs. 1000.
• PRESIDENT’S CLUB and ICICI PRU STAR CLUB- Top advisors
qualify for expense paid sales conventions at exotic locations throughout
India and overseas.
COMPARATIVE ANALYSIS
(Different areas where services of Insurance is better than Mutual
Funds)
Sr No. Particulars Insurance Mutual funds
1. Insurance Cover Yes No

2. Tax Benefits Yes No
(Sec80C&sec10(10D)
3. Returns High High
4. Transparency Yes No
5. Financial security Yes Yes
6. Security of capital Yes No
7. Financial security Yes No
8. Medical Benefits Yes No
9. Switching Free Yes No
10. Top-up Yes Yes
11. Sovereign Yes No
12. Compulsory savings Yes No
13. Loan Yes No
So, the different benefits which the insurance have up on the mutual funds
are as follows:

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• Life cover: Insurance provides life cover along with high returns. This can
be considered as a major advantage of insurance over mutual funds.
• Tax Benefits: The government provides some tax incentives to all those
who invest in insurance products by the way of premiums. Tax relief in income
tax and wealth tax can be availed on the premium paid for life insurance. This
is another area where this sector has an upper hand over mutual funds. Sec 80C
and sec10 (10D) are related to premium payments and withdrawal.
• Returns: Insurance sector provides high return as well as capital guarantee.

For example- investment shield life, guarantees all your investment premiums,
along with the accrued bonus interest.
• Transparency: Private players in insurance are mainly concentrating on

Unit Linked products because it provides both life cover and also serves the
investment purpose and also it provides the transparency for the customers, that
is, customers can know exactly where their money is invested and how much
he/she is going to get.
• Flexibility: We can increase or decrease our annual contribution. The

maximum decrease in the contribution can be up to 20 % of the initial
contribution chosen at the time of inception of the policy. There is no limit in
increasing the contribution. Increase the death benefit or decrease the sum
assured, if necessary.
• Security of capital: Investment shield life, invest shield cash, invest shield
gold is a market linked plan that provides capital guarantee on the investment
premiums and declared bonus interest.

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• Financial security: If a policy holder looses his life, who is the sole
breadwinner of the family, the insurance company guarantees the financial
protection of that family by providing the family the sum assured.
• Medical benefits: Protects the insured against financial loss in the event of
9 specified critical illnesses. Benefits are payable to the insured for medical
expenses prior to death. Provide financial support in the event of medical
emergency, ensuring benefits are payable to the life assured for medical
expenses incurred for surgical procedures. Cover is offered against 43 surgical
procedures.
• Switching Free: If at a later stage if our financial priorities changes, we

can switch between the various investment option at any time. There is a
provision of 4 free switches every policy year.
• Top-up: Whenever we have surplus amount we can top-up our fund and
utilize the opportunity.
• Sovereign: The government is giving the guarantee that if the company

fails then they will print the currency and provide to the insured the amount
paid by them.
• Compulsory Savings: Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the unnecessary
expenses by the insured. For the purpose of availing income-tax exemptions
also, people invest in insurance. Life insurance encourages long term saving.
By paying a small premium in easy installment for a long period a handsome
saving can be achieved.
• Loan provided: Loan can be obtained against a policy assured whenever

required. After the policy has acquired a surrender value, we can avail of a loan
42
under the policy. An interest will be charged on the loan, as per the prevailing
rate at that time.
These are some of the benefits of insurance; the list goes on and on.
From the above table it is very clear that “Services of Insurance are better
than the Mutual Funds”.
MARKET RESEARCH AND RECRUITMENT OF

FINANCIAL ADVISORS
ON THE JOB TRAINING
Working with ICICI Prudential can be considered as an excellent career

path for any SIP <SUMMER INTERNSHIP> student because we are getting an
opportunity to work in a company which is presently the leader in the insurance
industry. It is an opportunity for us to start our career in a better way. This can
be achieved if we perform according to the company’s standard and do
something which is beneficial for the company in the near future.
Some of the benefits of working with ICICI Prudential as a

Management Trainee are:
1. Learning Experience.
2. A clear career path.
3. All round support from the company, our company guide and world
class training.

43
4. A comprehensive benefit package in the long run, this is because we
have a chance to get a job as soon as we complete our studies. At ICICI
Prudential the type of On the job training given is job instruction
training.
OBJECTIVES
At ICICI Prudential, the company understands the importance of

training in a dynamic business environment. We go through both generic and
specific, professional programs that help us remain well informed and
knowledgeable about the company’s products in the market. There is a further
focus on soft skills such as communication, managing long term relationships
and selling skills, which are very relevant in a service-driven industry like life
insurance.
State of the art infrastructure training facilities coupled with an excellent
faculty, guarantee an exceptional learning environment. For us who are totally
new in the corporate world, ICICI Prudential offers us convenient training
which will be very helpful while entering into the field for recruitment of
advisors.
Theoretical training is given with practical appointment settings with

potential customers, gives us a feeling of how the business will work from the
very first day, although, the unit manager and the management provide
continuous support to us in achieving independence towards getting advisors
and the policies.
Our On the job training is to recruit financial advisors and to increase

their distribution network and market share.

44
By the on the job training we are getting to know about the procedures,
the people to target and how to convince the prospects to become the financial
advisor for the company and also how to make sales out of them.
TARGET
The main target of On the job training is to recruit prospective advisors

for the company with in the specified period provided to us.
The basic dimensions for an advisor is that he should be at least 12th

pass, but the company is mainly targeting on CA`s, Tax Consultants, Teachers,
Sales executives, share brokers, House wives, Graduates, retired and VRS
people.
RESEARCH METHODOLOGY
1. Data base collection:

 Collect data from various sources as much as possible.
 Segment the data and concentrate on one or two segments.
2. Telecalling:
 Call the customers from the data base and fix the appointment so
that we could explain about the offer provided by the company to the
prospective customer in detail.
3. Mass BOP (Business Opportunity Presentation):

We have decided to organize mass BOP every Friday in the company by
inviting as many prospective customers as possible and explain why should they
join ICICI Prudential and what are the benefits they are going to receive.

45
4. Activities:
We conducted various activities at different places in and around
Andheri. When conducting these activities we randomly selected people present
at the location and got the questionnaire filled from them. If we found the
person filling up the questionnaire suitable enough to become a Financial
Advisor with the company, then we told them about the business opportunity
with the company.
We conducted these activities at various places; few of them are Malls,

Parks, Societies, etc.
Few of the places where we got good responses were as follows:
• Infinity Mall
• Inorbit Mall
• City Mall
• Lallubhai Park
• Anand Dham Co-Operative Housing Society
• Tarun Bharat Society
• Khandwala Co-Operative Housing Society
EVENT
In order to do our project on an extensive scale, we conducted an event.

This event was named “LOKHANDWALA COVERED”, because this event
was conducted at the parks in Lokhandwala.
The schedule for this event was as follows:

46
Day 1: 7th June, 2006
Time: 4:00 p.m. to 7:30 p.m.
Location: Lokhandwala Park No. - 2
Day 2: 8th June, 2006

Time: 6:00 a.m. to 9:30 a.m.
Location: Lokhandwala Park No. - 1 & 2
When conducting this event we had put up a kiosk at the above said
locations. Then we selected people randomly and got the questionnaires filled.
Later we invited these people to attend the seminar at the company’s branch
office (J.P. Road, Andheri (West)).
The seminar was held on 8th and 9th June, 2006 at 6:00 p.m. The duration
of the seminar was approximately 45 minutes, which was conducted by a
qualified trainer of the company (Mr. Khorehmand Khurshed Katrak). In this
seminar the trainer gave a presentation to these people regarding the Insurance
Industry and ICICI Prudential.
Later these people were given an offer of becoming a Financial Advisor

with the company. The cases of people found interested were closed as soon as
possible. The rest were pitched for the sale of any of the company’s products as
per his/her requirement. In order to motivate the people for attending the
seminar a lucky draw was organized for those who attended it.
LIMITATIONS
Our main aim is to generate maximum business for the company so that
our company can retain its position as No. 1. But there are certain limitations,
because of which we are not able to reach up to the standard, they are:-

47
1) The main problem which I found was the training program for the
Advisors. The training is provided for 20 days in a row. As we are mainly
concentrating on business people who are normally very busy in their own job
are not able to attend these classes.
2) Apart from this the company also offers on-line training, but the
expense for on-line training is to be beard by the client. It is also not possible
for all to grasp all ideas from it.
3) The company is collecting a Demand Draft of Rs.1,500 which is an

additional expense, competitors are collecting lesser amount.
4) Our Unit Manager is not able to accompany us because of his busy

schedule.
5) We are able to attend only one or two appointments in a day because

the place is all together new to us.
These are some of the reason why we are not able to recruit advisors,
according to the pace in which the company want us to so.
So, if IRDA make some changes in the training program then it would
be better for the companies as well as those who are interested to be an advisor,
with out affecting his/her current job.
MIDCOURSE CORRECTION

48
Initially, I was targeting students and people from central location which
was not acceptable by my company guide. Then from that time onwards I
ignored this segment.
PROCEDURE FOR BECOMING AN ADVISOR
1. The insurance Act, 1938 lays down that an insurance agent must possess a
license under sections 42 of the Act. The license is to be issued by the
IDRA. A license issued by the IDRA will be valid for three years.
2. The qualifications necessary :

a. Be at least 18 years old.
b. Have passed at least the 12th standard or equivalent examination.
3. Have to underground at least 100 hours practical training in life or General

Insurance business.
4. Have to pass the pre- recruitment examination conducted by the Institute of

India or any other examination body recognized by the IDRA.
At ICICI Prudential, advisors are believed as ambassadors to the

customers. They are a key source of business for the organization, and are
continuing link with the clients.
This is why the company takes a lot of care in recruiting and developing
the advisors force, so that they continue to set higher standards of quality in
service and salesmanship. To cater to the needs of the knowledge oriented
market place, company look for graduate’s people. Prior sales experience is an
added benefit.

49
Some of the qualities the company seeks are:
1. Self Motivation
2. A master Communicator
3. A go-getter
4. A Graduate
DOCUMENTS NECESSARY TO BE AN ADVISOR
1. Educational proof
2. Address proof
3. Age proof
4. Six Passport size Photos
5. A demand draft of Rs.1,500
TRAINING
ICICI Prudential understands the importance of training in this business

environment. Company’s advisors go through both generic and specific training
programs that help them remain well-informed and knowledgeable about
company’s product in the market. There is a further focus on soft skill as
communicator, managing long term relationship and selling skills as
communication, managing long term relationships and selling skills, which are
very relevant in a service-driven industry like life insurance.
State of the art infrastructure training facilities coupled with an excellent

faculty, guarantee an exceptional learning environment. For advisors who might
be occupied with their daily business / professional routines, ICICI Prudential

50
also offers convenient training options such as online and self-learning are also
provided by the organization.
A 17-day training schedule covers the mandatory IRDA Training
requirements and ICICI Prudential product-training module. Revision session
ensure that the candidate thoroughly understand the course contents and are
well prepared for the licensing examination. Theoretical training is interspersed
with practical appointment settings with potential customers, giving advisors a
feel how their business will work from the very first day. All through, the unit
manger and the management provide continuous support to the advisors in
achieving independence towards garnering business.
CAREER
At ICICI Prudential, career development is emphasized upon from the

very first day the advisor joins the system. Through individual meetings with
his\her manager, the advisor can discuss various issues related to business
development and career enhancement. Expectations from the organization in
terms of making a career in the insurance are also discussed.
Being an ICICI Prudential advisor can be an enriching and exciting

career option. It’s an opportunity to associate with an industry leader, be in
touch with latest and finest insurance practices from around the globe, and grow
both personally and professionally.
Here are some of the benefits of being an ICICI Prudential Life

Insurance Advisor:
1. Unlimited earning potential

2. A clear Career path

51
3. All round support through exclusive advertisement, your
own in-house consultant, and world-class training
4. A Comprehensive benefit package.
TIGER TEAM
ICICI Prudential offers the “Tiger Team” program for identified higher
potential advisors.
Hand picked by the management, these advisors are placed on a fast-

track career path and recognized as “Tiger Trainers”.
The advisors can participate in this program, subject to certain criteria

being fulfilled.
PINNACLE PROGRAM
Absorption in the management is another career enhancement option

provided at ICICI Prudential through the pinnacle program.
This program helps advisors build a full time career as a “Unit

Manager” in the organization, offering greater potential for managing a team of
advisors and personal development.
“Fast track pinnacle” program is also available to advisors who are able
to meet the performance criteria within the stipulated time.
REWARDS AND RECOGNITION

52
ICICI Prudential advisors are constantly recognized and rewarded for
their performance.
Numerous contests all year round promote healthy competition amongst

advisors and recognition for their efforts.
Depending on the business the advisor achieves in the year, he/she can
become a member of various clubs such as:
1. President’s Club
2. ICICI Pru Star International and
3. ICICI Pru Star India Club
Each of these clubs have specific performance criteria for qualification

and members of these clubs are entitled to attend seminars held at exotic
international and domestic locations each year.
Advisors can also qualify for the renowned MDRT (Million Dollar
Round Table), an exclusive international insurance advisors club.
CONCLUSION
In the present situation insurance business is in the booming stage. So, it

can be considered as a career opportunity for those who are searching for a job.
This job is also very flexible because you are your own boss, there will
be no one to force you to work.
A person who has good contact and communication skill can exploit it
and generate business out of that. There is no upper limit of earning in this
53
business, it depends on our work. This business is mainly running on
commission basis.
To enter in to this business there is no capital investment. Any one who

has completed his 12th can do this business.
QUESTIONNAIRE
1. Name
2. Phone No.
3. Where do you money? (Please tick the Option)
a. Savings A/C
b. Share market
c. Real estate
d. Mutual Funds
e. Government bonds.
f. Insurance
g. Fixed Deposit
4. What are the reasons for investing in the given option above?
5. What features do you look at while investing your money?
6. According to you which is the better option to invest & why?
a. Mutual Fund

54
b. Insurance
7. What are the features that make Insurance products different from
Mutual Funds? Please jot down more than five points?
8. What type of service do you expect from your Financial Advisor?
9. What type of service do you expect from your Mutual Fund Broker?
10.Which one is better? Service by Advisor or by Broker, please
elaborate?
11.What type of advisory service you expect from a Financial Advisor?
12.According to you, is Customer Relationship important? If yes, why?
DATA ANALYSIS
In order to analyze the data, we followed Likert Rating Scale Method.

In this method we have given scores to different questions [Q.2, Q.3, Q.5, Q.6,
Q.8, Q.9, Q.10, Q.12] as per their importance, and analyzed the data on
individual as well as segment basis. Any person can get maximum score of 27
and minimum of 17. Any person getting a score in between 21 to 27 is
considered to be a suitable prospect for becoming a Financial Advisor for the
company. Also the average score of each segment is calculated and the segment
which has got the maximum average score is considered to be the segment
which has to be focused upon and tapped on an extensive scale.
OPERATION OF THE PROJECT
• For the First 20 Days, I approached the people and asked

them to fill up the Questionnaire and explained them the Opportunity
with ICICI PRU.

55
• For the Remaining Days, I phoned the people living in
Borivali Area and explained the Opportunity while talking on the phone.
• I Called the Interested Respondents to the Office Place and
explained them the whole detail.
• I also went to Prospects House and explained the detail of
Opportunity.
• Among all whom I met, Converted 5 Prospects into Financial
Advisors.
During the Survey, 100 People were Contacted, which comprises of:
• Housewives = 10%
• CA / Finance = 5%
• Businessmen = 43%
• Professionals = 18%
• Service Class = 24%
The Number of People, who has taken that Opportunity:
• Housewives = 1
• CA / Finance = 1
• Businessmen = 0
• Professionals = 1
• Service Class = 2
OVERALL LEARNING FROM THE PROJECT
• Achieving the target within a Specified time.
• Convincing the People for our Product and Opportunities.

56
• Interacting with the People of different background.
• Knowledge about the Products of ICICI PRU.
Respondents from various segments are ready to get associated with a

company based on the following factors:
Reason for a housewife to associate

2.86% 0.00%
11.43% 5.71% Better benefits
Govt
Better money
8.57% 25.71%
No.1
Easy selling
Trust/Reliable
Already a customer
Well established
5.71% Brand name
0.00%
34.29% Good s upport
Reason for a CA/Finance to associate

0.00%
11.11% 11.11% Better benefits
Govt
Better money
0.00% 0.00%
No.1
Easyselling
Trust/Reliable
11.11% Already a customer
Well established
Brand name
22.22% Good support

57
Reason for a businessman to associate
4.57% 4.06%
Better benefits
12.18%
Govt
Better money
No.1
35.03% Easy selling
13.71%
Trust/Reliable
Already a customer
0.51% 1.02% Well established
Brand name
0.51% Good support
19.80% 1.52%
Reason for Professionals to associate

0.00% 4.29%
Better benefits
18.57%
Govt
Better money
24.29%
No.1
Easy selling
Trust/Reliable
1.43%
Already a customer
18.57% 1.43% Well established
0.00% Brand name
Good support
1.43% 18.57%

58
Reason for a service people to associate
3.73% 8.21%
9.70% Better benefits
Govt
Better money
9.70% No.1
23.88% Easy selling
Trust/Reliable
5.22% Already a customer
2.99% Well established
0.00% Brand name
18.66% 5.22% Good support
• The major reason for people to associate with a company is that it

should be a government body.
• It should have a good brand name which would lead to easy selling of
the products.
• The company should be trust worthy and reliable.
• Respondents would not join the company only because there is good
money or better benefits, they would look at the above mentioned
factors focusing on the money factor.

59
FEEDBACK OF PEOPLE TOWARDS ICICI
PRUDENTIAL DURING THE SURVEY
POSITIVE FEEDBACK
• Company which provides good returns on investment.
• No. 1 player in private sector so more reliable than any other
private player.
• Wide network and constant growing portrays stability.
• Fast and good service to customers.
• Innovative products.
• Offers flexibility in products.
• Was the first to enter insurance business among the private
players.
• More reliable because of its promoter ICICI BANK.
• Good support provided to financial advisors.
• Good recognition given to business partners.
NEGATIVE FEEDBACK
• Not a government organization.
• No special schemes for women.
• Risky to invest money in private entity.

60
• ICICI PRU is newly established, LIC is 75 years Old.
• Bad experience with ICICI BANK so scared investing in
ICICI PRU.
• Few products as compared to LIC.
BIBLIOGRAPHY
PRIMARY SOURCE OF INFORMATION
• Personal interaction with concerned {Advisors, brokers, sales dept,

marketers customers)
• Unstructured interaction with the unit managers
• Observation in the market.
REFERENCE BOOKS
• Marketing Management - Philip Kotler

• Marketing Management - Rajan Saxena
• Reference books & Journals of ICICI Prudential and LIC
WEBSITES
www.iciciprulife.com
www.google.com
www.managementparadise.com
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INTRODUCTION TO INSURANCE

The business of insurance is related to the protection of the economic

The business of insurance started with marine business. Traders, who

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Later, the Hindustan Co-operative was formed in Calcutta, the United

PURPOSE & NEED OF INSURANCE

Assets are insured, because they are likely to be destroyed, through

Only economic consequences can be insured. If the loss is not financial,

HOW INSURANCE WORKS

The mechanism of insurance is very simple. People who are exposed to

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The manner in which the loss is to be shared can be determined before-

The collection to be made from each person in advance is determined on

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 THE HUMAN ASSET

A human being is an income generating asset. One’s manual labour,

If it happens around the time of one’s retirement, when it could be

The concept of insurance has been extended beyond the coverage of

THE BUSINESS OF INSURANCE

Insurance companies are called insurer. The business of insurance is to

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In India, insurance business is classified primarily as life and non-life or

The premium is based on expectations of the losses. These expectations

The business of insurance is nothing but one of sharing. It spreads losses

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The insurer is in the position of a trustee as it is managing the common

INSURANCE AS A SOCIAL SECURITY TOOL

The United Nations Declaration of Human Rights 1948 provides that

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Under a socialistic system the responsibility of full security would be

In a capitalistic society too, there is a tendency to provide some social

In India, social security finds a place in our Constitution. Article 41

ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT

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ADVANTAGES OF LIFE INSURANCE

Following are few more of the benefits which no other saving

The following tenets help agents to believe in the benefits of life

The company assigned to me is ICICI Prudential Life Insurance

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This is hoped to be achieved by:

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The success of the company will be found in its unflinching

The Company believes that it is the threshold of an existing new

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ICICI ICICI GROUP ICICI

ICICI Bank offers a wide range of banking products and financial

ICICI Bank currently has subsidiaries in the United Kingdom, Russia

Its UK subsidiary has established a branch in Belgium. ICICI Bank is

At June 5, 2006, ICICI Bank, with free float market capitalization* of

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The company’s strategy is to build successful and increasingly profitable

ABOUT THE COMPANY

Established as the Prudential Mutual Assurance and Loan Association in

Their portfolio of well-known and respected brands, including

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Prudential grew extremely quickly following the introduction of its

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To add to its achievements, in the year 2003/04 it was adjudged Most

ICICI Prudential’s success is rooted in its philosophy to always

ICICI Prudential also made great strides in the retirement solutions

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By the 1970s, Prudential had established a wide range of assurance,