Summer Project Report On

On study of all managerial departments & financial analysis of

ICICI Prudential Life Insurance

Prepared by: Pranav Bansal(MBA-III) Project Guide: Mr. Ashutosh Gupta Submitted to: Miss. Monika Hanspal GNA-IMT

Preface
An Industrial, Business or service organization by taking up a project study is most important part of our MBA course & is must as per the syllabus prescribed by GNAIMT. Our MBA 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 managers gives the knowledge and guidance of this bank to us. The summer training programmed for student of MBA 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.

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

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 todays 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.

Objective of the Study

Management as a profession cant 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 Insurances 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 Indias one of the best insurance company.

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. Everybodys 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.

Life Insurance
Provides Replaces Protects marriage for dependents in case of death. earning power, if disabled. his/her ability to meet accumulation / education / 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.

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. 8

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.

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

1956

1995 June 2000 August 2000 October 2000 2002

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

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 No. Date of Registration Name of the Company

101 104 105 107 109 110 111

23.10.2000 15.11.2000 24.11.2000 10.01.2001 31.01.2001 12.02.2001 30.03.2001

HDFC Standard Life Max New York Life ICICI Prudential Life Om Kotak Mahindra Life Birla Sun Life Insurance TATA AIG Life Insurance 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.

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2% 4% 3% 7%

6%

2% 2% 28%

LIC ICICI Pru. Life New York MaxLife HDFC Standard Life Alliance Bajaj TATA AIG OM Kotak Mahindra AVIVA Life

7%

5% 11% 23%

ING Vysya SBI Life Insu. AMP Sanmar Metlife

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, LICs 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.

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

Annual growth rate 300 200 100 0 -100 264.09 164.31 136.48 93.9 9 73.02 0.41 66.23 8.24 100.43 98.69 78.06 4 -2.48 -7.93 HDFC Standard Birlasunli fe TATA AIG SBI Life Insu. AVIVA Life Metlife

ICICI Pru. Life

Insurers

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INTRODUCTION TO ICICI GROUP

ICICI BANK
ICICI Bank is Indias 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 Banks 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. ICICIs 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 Banks 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 nonJapan 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 groups universal banking strategy. The merger would enhance value for ICICI shareholders through the 18

merged entitys access to low-cost deposits, greater opportunities for earning feebased 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 ICICIs strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, Particularly feebased 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 groups 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 Groups 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.

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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 UKs 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 plcs 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 Companys 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
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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 Joint Managing Director

Kalpana Morparia Joint Managing Director

Chanda Kochhar Deputy Managing Director

Nachiket Mor Deputy Managing Director

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Board Committees Audit Committee Mr. Sridar Iyengar Mr. Narendra Murkumbi Mr. M. K. Sharma Customer Service Committee N. Vaghul Narendra Murkumbi M.K. Sharma P.M. Sinha K. V. Kamath Fraud Monitoring Committee Mr. M. K. Sharma Mr. Narendra Murkumbi Mr. K. V. Kamath Ms. Kalpana Board Governance & Remuneration Committee Mr. N. Vaghul Mr. Anupam Puri Mr. M. K. Sharma Mr. P. M. Sinha Prof. Marti G. Subrahmanyam Credit Committee Mr. N. Vaghul Mr. Narendra Murkumbi Mr. M .K. Sharma Mr. P. M. Sinha Mr. K. V. Kamath Risk Committee Mr. N. Vaghul Mr. Sridar Iyengar Prof. Marti G. Subrahmanyam Mr. V. Prem Watsa Mr. K. V. Kamath
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Morparia Ms. Chanda D. Kochhar Share Transfer & Shareholders'/ Investors' Grievance Committee Mr. M. K. Sharma Mr. Narendra Murkumbi Ms. Kalpana 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

Asset-Liability Management Committee

Ms. Lalita D. Gupte Ms. Kalpana Morparia Ms. Chanda D. Kochhar Dr. Nachiket Mor

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ICICI PRUDENTIALS 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 childs marriage, expenses for a childs 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 childs 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 Prus 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

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ICICI Prus 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.

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Introduction to Working Capital

In a perfect world, there would be no necessity for current assets and liabilities because there would be no uncertainty, no transaction costs, information search costs, or production and technology constraints. The unit cost of production would not vary with the quantity produced. Borrowing and lending rates shall be same. Capital, labour, and product market shall be perfectly competitive and would reflect all available information, thus in such an environment, there would be no advantage for investing in short term assets. However the world we live is not perfect. It is characterized by considerable amount of uncertainty regarding the demand, Market price, quality and availability of own products and those of suppliers. There are transaction costs for purchasing or selling goods or securities. Information is costly to obtain and is not equally distributed. There are spreads between the borrowings and lending rates for investments and financings of equal risks. Similarly each organization is faced with its own limits on the production
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capacity and technologies it can employ there are fixed as well as variable costs associated with production goods. In other words, the markets in which real firm operated are not perfectly competitive. These real world circumstance introduce problem`s which require the necessity of maintaining working capital. For example, an organization may be faced with an uncertainty regarding availability of sufficient quantity of crucial imputes in future at reasonable price. This may necessitate the holding of inventory, current assets. Similarly an organization may be faced with an uncertainty regarding the level of its future cash flows and insufficient amount of cash may incur substantial costs. This may necessitate the holding of reserve of short term marketable securities, again a short term capital assets. In corporate financial management, the term working capital management (net) represents the excess of current assets over current liabilities.

WORKING CAPITAL

In simple words working capital is the excess of current Assets over current Liabilities. Working capital has ordinarily been defined as the excess of current assets over current liabilities. Working capital is heart of the business If
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it is weak business cannot proper and survives. It is therefore said the fate of large scale investment in fixed assets is often determined by a relatively small amount of current assets. As the working capital is important to lifeline of company. If this lifeline deteriorates so that the companys ability to fund operation, re-invest do meet capital requirements and payment. Understanding company`s cash flow health is essential to making investment decision. A good way to judge a company`s cash flow prospects is to look at its working capital management. The company must have adequate working capital as much as needed by the company. It should neither be excessive or nor inadequate. Excessive working capital cuisses for idle funds lying with the firm without earning any profit, where as inadequate working capital shows the company doesnt have sufficient funds for financing its daily needs working capital management involves study of the relationship between firm`s current assets and current liabilities. The goal of working capital management is to ensure that a short term debt and upcoming operational expenses. The better a company managers its working capital, the less the company needs to borrow. Even companies with cash surpluses need to manage working capital to ensure those surpluses are invested in ways that will generate suitable returns for investors. The primary objective of working capital management is to ensure that sufficient cash is available to Meet day to day cash flow needs. Pay wages and salaries when they fall due. Pay creditors to ensure continued supplies of goods and services. Pay government taxation and provider of capital-dividends and
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 Ensure the long term survival of the business entity

Working Capital Management

Working capital refers to a firms investment in short term assetscash, short term securities, accounts receivable and inventories. - Weston & Brigham Working capital can be classified either on the basis of its concept or on the basis of periodicity of its requirement. (I) On the basis of concepts there are two concepts of working capital: 1. Gross Working Capital 2. Net Working Capital

Gross Working Capital

Gross working capital refers to the firms investment in current assets. Current assets are assets that can be converted into cash within an accounting year. Current assets include cash and bank balance, Short-term securities, debtors, bills receivables and inventory. The Gross Working Capital concept focuses attention on two aspects of current assets management. (a) Optimum investment in current assets (b) Financing of current assets.

NET WORKING CAPITAL

Net working capital refers to the difference between current assets and current liabilities. Current liabilities are those claims of outsiders, which are expected to mature for payment within an accounting year and include bills
31

payable and outstanding expenses. Net working capacity indicates the liquidity position of the firm. Generally net working capacity is referred to as working capital. (II) On the basis of requirement According to Gestenberg, the working capital can be classified into permanent or regular working capital and variable working capital.

Operating Cycle

It is clear that working capital is required because of the time gap between the sales and their actual realization in cash. This time gap is technically termed as operating cycle of the business. Funds required investing in inventories; debtors and other current assets keep on changing shape and volume. Like a company has some cash in the beginning. This cash may be to the suppliers of raw material, to meet labour costs and other overheads. These three combined would generate WIP, which will be converted into finished goods on completion of production process. On sale these finished goods gets converted into debtors and debtors pay, the firm will again have cash. This cash will again used for financing raw materials, WIP, etc. Thus, there is a complete cycle when cash gets converted into raw material, WIP finished goods, debtors and finally again cash. In case of a manufacturing company, the operating cycle is the length of time necessary to complete the following cycle of events: (i) Conversion of cash into raw material. (ii) Conversion of raw material into work-in-progress. (iii) Conversion of work-in-progress into finished goods. (iv) Conversion of finished goods into accounts receivables, and (v) Conversion of accounts receivables into cash.
32

OBJECTIVES OF WORKING CAPITAL MANAGEMENT

The basic objective of working capital is to provide adequate support for the smooth functioning of normal business operations of a company. The term adequate working capital is subjective depending on managements attitude
33

towards uncertainty/risk. I. Maintenance of working capital. II. Availability of ample funds at the time of need.

Working Capital Cycle

The working capital cycle can be defined as The period of time which elapses between the point at which cash begins to be expended on the production of a product and the collection of cash from a customer
ACCOUNTS RECERECEIVABLES CASH RAW MATERIALS WORK IN PROGRESS FINISHED GOODS SALES

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Need of Working Capital Management

The need for working capital gross or current assets cannot be over emphasized. As already observed, the objective of financial decision making is to maximize the shareholders wealth. To achieve this, it is necessary to generate sufficient profits can be earned will naturally depend upon the magnitude of the sales among other things but sales can not convert into cash. There is a need for working capital in the form of current assets to deal with the problem arising out of lack of immediate realization of cash against goods sold. Therefore sufficient working capital is necessary to sustain sales activity. Technically this 10 is refers to operating or cash cycle. If the company has certain amount of cash, it will be required for purchasing the raw material may be available on credit basis. Then the company has to spend some amount for labour and factory overhead to convert the raw material in work in progress, and ultimately finished goods. These finished goods convert in to sales on credit basis in the form of sundry debtors. Sundry debtors are converting into cash after expiry of credit period. Thus some amount of cash is blocked in raw materials, WIP, finished goods, and sundry debtors and day to day cash requirements. However some part of current assets may be financed by the current liabilities also. The amount required to be invested in this current assets is always higher than the funds available from current liabilities. This is the precise reason why the needs for working capital arise
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Types of Working Capital

The operating cycle creates the need for current assets (working capital). However the need does not come to an end after the cycle is completed to explain this continuing need of current assets a destination should be drawn between permanent and temporary working capital.

1) Permanent working capital

The need for current assets arises, as already observed, because of the cash cycle. To carry on business certain minimum level of working capital is necessary on continues and uninterrupted basis. For all practical purpose, this requirement will have to be met permanent as with other fixed assets. This requirement refers to as permanent or fixed working capital

2) Temporary working capital

Any amount over and above the permanent level of working capital is temporary, fluctuating or variable, working capital. This portion of the required working capital is needed to meet fluctuation in demand consequent upon changes in production and sales as result of seasonal changes Graph shows that the permanent level is fairly castanet; while temporary working capital is fluctuating in the case of an expanding firm the permanent working capital line may not be horizontal. This may be because of changes in demand for permanent current assets might be increasing to support a rising level of activity.

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Determinants of Working Capital

The amount of working capital is depends upon a following factors

1. Nature of business
Some businesses are such, due to their very nature, that their requirement of fixed capital is more rather than working capital. These businesses sell services and not the commodities and that too on cash basis. As such, no founds are blocked in piling inventories and also no funds are blocked in receivables. E.g. public utility services like railways, infrastructure oriented project etc. there requirement of working capital is less. On the other hand, there are some businesses like trading activity, where requirement of fixed capital is less but more money is blocked in inventories and debtors.

2. Length of production cycle

In some business like machine tools industry, the time gap between the acquisition of raw material till the end of final production of finished products itself is quite high. As such amount may be blocked either in raw material or work in progress or finished goods or even in debtors. Naturally there need of working capital is high.
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3. Size and growth of business

In very small company the working capital requirement is quit high due to high overhead, higher buying and selling cost etc. as such medium size business positively has edge over the small companies. But if the business start growing after certain limit, the working capital requirements may adversely affect by

4. Business/ Trade cycle

If the company is the operating in the time of boom, the working capital requirement may be more as the company may like to buy more raw material, may increase the production and sales to take the benefit of favorable market, due to increase in the sales, there may more and more amount of funds blocked in stock and debtors etc. similarly in the case of depressions also, working capital may be high as the sales terms of value and quantity may be
38

reducing, there may be unnecessary piling up of stack without getting sold, the receivable may not be recovered in time etc.

5. Terms of purchase and sales

Some time due to competition or custom, it may be necessary for the company to extend more and more credit to customers, as result which more and more amount is locked up in debtors or bills receivables which increase the working capital requirement. On the other hand, in the case of purchase, if the credit is offered by suppliers of goods and services, a part of working capital requirement may be financed by them, but it is necessary to purchase on cash basis, the working capital requirement will be higher.

6. Profitability
The profitability of the business may be vary in each and every individual case, which is in turn its depend on numerous factors, but high profitability will positively reduce the strain on working capital requirement of the company, because the profits to the extent that they earned in cash may be used to meet the working capital requirement of the company.

7. Operating efficiency
If the business is carried on more efficiently, it can operate in profits which may reduce the strain on working capital; it may ensure proper utilization of existing resources by eliminating the waste and improved coordination etc.

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How to analyze Working Capital

The process of analysis of working capital is a three step process. This process is included the followings:1. Step v The first step of analyzing of working capital begins by determining current assets. v Current assets are comprised of cash, marketable securities, accounts receivable and current inventory. v The sum of the total value of each of the above is called the current assets 2. Step2 v The second step is determining of current liabilities. v Current liabilities include accounts payable, accrued expenses, notes payable and the portion of long-term debt that is classified as current. v The sum of all of these above mention accounts are called current liabilities figure. 3. Step3 v Take the total of the current assets and subtract them from the current assets. v The result will be the working capital. v In other words, current asset minus current liabilities equals to working capital.

40

Example:-

v The company has $100,000 in cash, $50,000 in securities, $10,000 in account receivable, and $30,000 in inventory. v On the current liabilities side, the company has $60,000 in accounts payable, $10,000 in accrued expenses, and $20,000 in current debt. v The current assets of the company are :$100, 000 + $50,000 + $10,000 + $30,000 = $190,000. v The current liabilities are:$60,000 + $10,000 + $20,000 = $90,000. v Now take the current assets of $190,000 and subtract the current liabilities of $90,000 to arrive at the working capital of $100,000. v $190,000 - $90,000 = $100,000.

Current Assets

Current Asset is a balance sheet item which equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that could be converted to cash in less than one year. A company's creditors will often be interested in how much that company has in current assets, since these assets can be easily liquidated in case the company goes bankrupt. In addition, current assets are important to most companies as a source of funds for day-today operations. In accounting, a current asset is an asset on the balance sheet which is expected to be sold or otherwise used up in the near future, usually within one year, or one operating cycle whichever is longer. Typical current assets include cash, cash equivalents, accounts receivable, inventory, the portion of prepaid accounts which will be used within a year, and short-term investments.

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Current Liabilities

In accounting, current liabilities are considered liabilities of the business that are to be settled in cash within the fiscal year or the operating cycle, whichever period is longer.

For example,
Accounts payable for goods, services or supplies that were purchased for use in the operation of the business and payable within a normal period of time would be current liabilities. Bonds, mortgages and loans that are payable over a term exceeding one year would be fixed liabilities or long-term liabilities. However, the payments due on the long-term loans in the current fiscal year could be considered current liabilities if the amounts were material.

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Annual Report of ICICI Prudential

Assets Under Management (AUM) as at the end of Feb-2007 (Rs in Lakhs)

AUM Mutual Fund Name 1. ABN AMRO Mutual Fund 2. AIG Global Investment Group Mutual Fund 3. Benchmark Mutual Fund 4. Birla Sun Life Mutual Fund 5. BOB Mutual Fund 6. Canbank Mutual Fund 7. DBS Chola Mutual Fund 8. Deutsche Mutual Fund 9. DSP Merrill Lynch Mutual Fund 10. Escorts Mutual Fund 11. Fidelity Mutual Fund 12. Franklin Templeton Mutual Fund 13. 14. 15. 16. 17. 18. 19. 20. HDFC Mutual Fund HSBC Mutual Fund ING Vysya Mutual Fund JM Financial Mutual Fund JPMorgan Mutual Fund Kotak Mahindra Mutual Fund LIC Mutual Fund Lotus India Mutual Fund Average AUM For The Month Fund Of Funds 35962.1 N/A 0 2016.87 0 0 0 0 0 0 8669.47 33551.3 0 0 97905.45 0 N/A 59243.32 0 0

Excluding Fund Of Excluding Fund Of Fund Of Funds Funds Funds 527298.61 34793.7 520357.41 N/A 493459.19 2107032.33 13189.46 220055.55 267272.69 632738.66 1363796.81 11892.52 567052.22 2210219.06 3107988.05 1196159.48 465070.34 382811.94 N/A 1340625.72 1149722.96 123858.99 N/A 0 1901.45 0 0 0 0 0 0 7885.48 32939.41 0 0 91168.93 0 N/A 55835.13 0 0 N/A 565300.47 2276874.74 12710.58 224400.85 236941.15 643309.79 1337579 9857 594872.17 2343907.4 3222873.02 1219830.8 469516.87 386731.37 N/A 1335816.27 1197068.82 84093.35

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21. 22. 23. 24. 25. 26. 27.

Morgan Stanley Mutual Fund PRINCIPAL Mutual Fund ICICI PRUDENTIAL Mutual Fund Quantum Mutual Fund Reliance Mutual Fund Sahara Mutual Fund SBI Mutual Fund

287119.9 1060032.69 4328067.51 5380.17 4221591.34 17596.99 1847383.96 1299706.71 780107.96 1419829.99 23543.31 3860299.44 35330904.55

0 0 3731.96 0 0 0 0 2886.65 0 0 0 0 231142.71

310427.14 1094027.66 3907924.85 5818.48 4359281.53 16987.98 1874050.79 1381960.47 793897.25 1448329.74 25362.02 3926014.55 35826123.52

0 0 3982.85 0 0 0 0 2861.86 0 0 0 0 244193.22

28. Standard Chartered Mutual Fund 29. Sundaram BNP Paribas Mutual Fund 30. Tata Mutual Fund 31. Taurus Mutual Fund 32. UTI Mutual Fund Grand Total

Asset Under Management

Mutual Fund Name ABN AMRO Mutual Fund Alliance Capital Mutual Fund Birla Sun Life Mutual Fund Canbank Mutual Fund Chola Mutual Fund Deutsche Mutual Fund DSP Merrill Lynch Mutual Fund Fidelity Mutual Fund Franklin Templeton Mutual Fund HDFC Mutual Fund HSBC Mutual Fund ING Vysya Mutual Fund JM Financial Mutual Fund Kotak Mahindra Mutual Fund LIC Mutual Fund PRINCIPAL Mutual Fund Prudential ICICI Mutual Fund

AUM 1580.36 1431.46 10049.66 1565.19 1004.62 2366.72 6472.80 1628.06 16704.74 15707.82 7250.63 2072.86 3780.83 6501.52 2959.15 6264.96 17095.89

Equity & Balance 464.589. 589.48 1668.77 224.35 232.63 96.57 1462.33 1628.06 6965.36 6126.04 1987.93 337.25 85.52 1065.12 277.46 1682.48 2169.46

Debt & MIP 1115.92 841.98 8380.89 1340.84 771.99 2270.15 5010.47 0.00 9739.38 9581.78 5262.70 1735.62 3694.51 5436.41 2681.69 4582.48 14926.44

Equity % 29.39 41.18 16.61 14.33 23.16 4.08 22.59 100.00 41.70 39.00 27.42 16.27 2.26 16.38 9.38 26.86 12.69

Debt % 70.61 58.82 83.39 85.67 76.84 95.92 77.41 0.00 58.30 61.00 72.58 83.73 97.74 83.62 90.62 73.14 87.31 44

Reliance Mutual Fund Sahara Mutual Fund SBI Mutual Fund Standard Charted Mutual Fund Sundaram Mutual Fund Tata Mutual Fund Taurus Mutual Fund UTI Mutual Fund

9907.89 565.50 7189.35 7636.86 2035.21 8713.95 170.76 21975.57

4226.40 25.74 2311.54 0.00 997.91 2629.09 157.53 8791.81

5681.49 539.76 4877.81 7636.86 1037.31 6084.86 13.23 13183.77

42.66 455 32.15 0.00 49.03 30.17 92.25 40.01

57.34 95.45 67.85 100.00 50.97 69.83 7.75 59.99

List of Assets Management Companies and their assets under management As on June 2008 (In Crores.) ICICI PRUDENTIAL 1593.8546 47.9336 2.0978 179.0116 2107.78 1551.236 823.2623 479.4336 3778.4525 6932.384 469.6412 412.9397 150.5677 563.5074 6961.6842 17095..89

Particulars Diversified Tax Planning Index Sector Total Equity FMP MIP Debt ST Income Total Debt Balanced Gilt LT Gilt ST Total Gilt Liquid Total

(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.

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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 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.

46

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. 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 47

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 companys 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. 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.

48

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 Peoples 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 highest levels of delivery to the customers: Life Asia Solutions Group that provides flexibility in designing better product offering to end-users, the Solutions GroupWeb 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,

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advisors record, any branchs sales, any new schemes, any managers record, and other thins at any time any place.

50

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 peoples dimension in organization. Manpower or human resource may be thought of as the total knowledge, shills, creative abilities, talents and aptitudes of an organizations 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 organizations 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. 51

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 Executive Sales Executive Sales Executive Sales 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.

RESEARCH DESIGN & METHODOLOGY 52

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 customers 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.

Data Collection and Analysis 53

Q.1.

Do you have a Life Insurance Policy? Criteria Yes No No. Of Respondents 50 0

As our sample is those people who have insurance so all the respondents are falling under the Yes criteria. Q.2. Which Companys Insurance Policies do you have?

Company LIC Birla Sunlife SBI ICICI Pru. Life Kotak Mahindra Post Office HDFC

No. of Respondents 50 2 3 10 3 15 3

No. of Respondents 60 50 40 30 20 10 0 LIC SBI Kotak Mahindra HDFC

No. of Respondents

54

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 Below Rs. 10,000 10,000 to 20,000 20,000 to 30,000 30,000 to 40,000 Above 40,000 No. of Respondents 11 18 6 5 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? 1 29 7 5 8 2 2 10 13 5 18 5 3 6 21 6 8 3 4 2 3 20 8 11 5 3 0 7 6 25 Total 50 44 43 48 46

Criteria/Rank Death Benefit Childrens Future Retirement Planning Tax Planning Financial Planning

55

No. of Respondents

Priorities of Respondents
60 50 40 30 20 10 0
T o ta l 1 2 3 4 5

Death Benefit Childrens Future Retirement Planning Tax Planning Financial Planning

Rank

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 childrens future and retirement planning.

Q.5

Do you have any knowledge of the stock market? Criteria Yes No No. of Respondents 32 18

Q.6

If Yes do you have any knowledge about unit linked insurance plans? Criteria Yes No No. of Respondents 25 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? 56

Criteria Only Unit Linked Only Traditional Both

No. of Respondents 0 39 11

Respondents Having ULIP and Traditional Insurance Products

22%

0% Only Unit Linked Only Traditional 78% Both

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) 1 0 4 4 17 22 0 0 10 2 1 12 8 3 12 2 6 5 3 5 14 1 0 12 4 12 0 4 1 4 2 5 2 10 19 2 5 25 8 2 2 2 1 1 1 6 12 3 5 6 0 14 0 0 7 5 0 13 1 0 2 3 0 8 1 0 13 0 0 0 1 2 Total 50 45 48 34 50 33 42 20

Choice/Rank Mutual Fund Insurance Gold Equities Post Office Debenture Bank Deposit Other

57

Investment Priorities
No. of Respondents 60 50 40 30 20 10 0 Total 1 2 3 4 5 6 7 8 Mutual Fund Insurance Gold Equities Post Office Debenture 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 Cooprerative 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? 1 12 21 20 1 1 2 15 17 14 1 2 3 15 8 15 9 0 4 6 2 1 18 16 5 2 2 0 21 21 50 50 50 50 50 40

Criteria/Rank Premium Return Safety Liquidity Market Condition

58

Factors Affecting the Insurance Decision

No. of Respondents 60 40 20 0 1 2 3 4 5 6 Rank Criteria/Rank Premium Return Safety Liquidity 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 Yes No No. of Respondents 13 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.

59

Q. 11 Are your needs satisfied with your current investment in insurance? Criteria Yes No Q. 11(a) No. of Respondents 10 30

If No, then give reasons? No. of Respondents 0 1 7 2

No. of Respondents

Criteria High Premium Low Return Poor Services Others

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, nondispatchment 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?
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Criteria Yes No

No. of Respondents 30 20

Q. 13 If Yes, from where did you come to know about the company? Criteria Television News Paper Sales Representative Others source No. of Respondents 4 3 14 9

Toal No. of Advertisement

Television 30% 13% 10% News Paper 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
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Q.1.

Do you have a Life Insurance Policy? Yes No Which Companys Insurance Policies do you have? (Please specify the numbers) LIC HDFC Standard Life Birla Sunlife Cholamandalam TATA AIG Insurance ING Vysya AVIVA Life SBI Life Insurance New York MaxLife Alliance Bajaj ICICI Pru. Life Insurance MetLife Insurance OM Kotak Mahindra AMP Sanmar

Q.2.

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 Childrens 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 62

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 (FDs etc.) Equities If other (specify) ___________ 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.9

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? _______________________________________________________________ 63

_______________________________________________________________ _____________________

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.

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SWOT ANALYSIS
world. Strengths Flexible Products Partners having experience in different markets of the 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.

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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

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