A PROJECT REPORT ON INSURANCE SERVICE UNDER THE GUIDANCE OF

Mr. Ajayraj Vyas Mr.Ankur Amin

SUBMITTED BY:

PATEL YOGESH (56) PATEL SUKETU (50) PATEL ARPAN (04) IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION IN INDUSTRY AWARENESS AND EXPOSURE - III

 EVOLUTION OF SERVICE At the dawn of modern human history, widely dispersed groups of tightly knit kin, whom we today refer to collectively as huntergatherers, relied almost exclusively on clan relatedness as their only bulwark against the ever- present risk of death, debilitating injury, and starvation. For these early ancestors, the concept of risk can be thought of almost exclusively in terms of the physical persons of individuals, mitigated by the guarantee of personal and kin relationships, rather than objects and possessions. The later development of agrarian/pastoral societies necessitated almost everywhere the development of the notion of private property as the agricultural revolution made possible the storage of food and hence more complex societies. The efficiency gains accruing to these new social structures enabled specialization of labor into various trades, such as merchants, warriors, and blacksmiths, each requiring tools - of trade assets.1 The price of this progress was that individual self - interest was no longer so closely aligned with that of the collective. Ever since, individuals have recognized their need to mitigate risks that have the potential for ruin, either as a result of the assets they hold or simply by the fact of their existence in this world. In other words, a means was required for individuals to achieve at least a primitive form of financial diversification. Because risk is nonfungible at the individual level but the outcome of loss is transferable in aggregate, individuals exposed to losses through common risks naturally formed themselves into groups to aggregate those risks, price the risk, and eventually even sell it to investors. Perceptions of risk and the institutional arrangements that have developed in response closely mirror philosophical advances in society s stance on the sanctity of the persons of individuals. Risk is commonly understood to exist and require management at the level of the individual rather than the group. The market economy

is the ultimate expression of this freedom to transact, preservation of which requires the existence of regulations such as Solvency II to protect individuals rights. While it is apparent that Solvency II and similar regulations are implemented by national regulators acting as agents on behalf of an international body and bestowed on organizations across an industry, the ultimate goal of such regulations is to promote a socially optimal balance between the profit motive of organizations and individuals rights. Article 27 of the Solvency II Directive states: The main objective of (re)insurance regulation and supervision is adequate policyholder protection. Other objectives such as financial stability and fair and stable markets should also be taken into account but should not undermine that main objective.

A BRIEF HISTORY OF THE INSURANCE SECTOR

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1 st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

INSURANCE INDUSTRY: CLASSIFICATION

INSURANCE

LIFE INSURANCE

GENERAL INSURANCE

Fire Insurance Motor Vehicle

Marine Insurance

Mediclaim

MAJOR PLAYERS MAJOR INDIAN PLAYERS IN INSURANCE SECTOR: Life Insurance General Insurance

Life Insurance Corporation of General Insurance Corporation of India. India. 1. 2. 3. 4. New Entrants ICICI Prudential Life Insurance Bajaj Allianz General Insurance Ltd. Company Ltd. Tata AIG Life Corporation Ltd. ING Vysya Life Corporation Ltd. Insurance Reliance General Company Ltd. Insurance Tata AIG General Company Ltd. Insurance Oriental Insurance Company Ltd. New India Assurance Company Ltd. National Insurance Company Ltd. United India Insurance Company Ltd.

Insurance

Om Kotak Mahindra Insurance Corporation Ltd.

Life Royal Sundaram Alliance Insurance Company Ltd.

MAJOR GLOBAL PLAYERS IN INSURANCE SECTOR:

Global position Position (all industries) 1 2 3 4 5 6 7 8 9 10 9 14 18 20 62 65 70 73 91 101

Company

Country

Market Sales Profits Assets value (USD (USD (USD (USD bil.) bil.) bil.) bil.)

ING Netherlands 197.93 12.65 1932.15 75.78 Group Allianz AIG Group AXA Group Generali Group Germany 139.12 10.9 1547.48 80.3 USA France Italy 110.06 151.7 6.2 1060.51 118.2

7.75 1064.67 70.33 486.43 60.79 387.67 45.76 306.03 37.34 558.56 41.32 178.58 59.18 633.91 31.9

102.16 3.17 5.63 5.63 4.32 4.01 2.65

Zurich Financial Switzerland 55.05 Services Munich Re MetLife Manulife Financial Aviva Germany USA Canada United Kingdom 67.57 53.01 33.08 81.83

THREE MAJOR PLAYERS OF INSURANCE SECTOR IN INDIA 1) LIC 2) TATA AIG 3) ICICI PRUDENTIAL LIFE INSURANCE

LIC

COMPANY PROFILE
The Life Insurance Corporation of India (LIC) is the largest stateowned life insurance company in India, and also the country's largest investor. It is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It has assets estimated of 13.25 trillion (US$295.48 billion). It was founded in 1956 with the merger of 243 insurance companies and provident societies. Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from the public. The slogan of LIC is "Zindagikesaathbhi,Zindagikebaadbhi" The Oriental Life Insurance Company, the first corporate entity in India offering life insurance coverage, was established in Calcutta in 1818 by Bipin Bernard Dasgupta and others. Europeans in India were its primary target market, and it charged Indians heftier premiums. The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the preindependence era included

Bharat Insurance Company (1896) United India (1906) National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's First War of Independence, adverse effects of the World War I and World War II on the economy of India, and in between them the period of world wide economic crises triggered by the Great depression. The first half of the 20th century also saw a heightened struggle for India's independence. The aggregate effect of these events led to a high rate of bankruptcies and liquidation of life insurance companies in India. This had adversely affected the faith of the general public in the utility of obtaining life cover. The Life Insurance Act and the Provident Fund Act were passed in 1912, providing the first regulatory mechanisms in the Life Insurance industry. The Indian Insurance Companies Act of 1928 authorized the government to obtain statistical information from companies operating in both life and non-life insurance areas. The subsequent Insurance Act of 1938 brought stricter state control over an industry that had seen several financially unsound ventures fail. A bill was also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry.

TYPES OF PRODUCTS LIC OFFERS

1) LIFE INSURANCE 2) PENSIONS 3) MUTUAL FUND

Products Offered by LIC

Children's Policy KomalJeevan - Plan No. 159 Children Deferred - Plan no.41 Jeevan Kishore - Plan no.102 JeevanChhaya - Plan no.103 Marriage Endowment/Educational Annuity - Plan No. 90 JeevanAnurag - Plan no.168 Endowment Policy Endowment with Profits - Plan no.14

Limited Payment Endowment with Profits - Plan no.48 JeevanMitra - Plan no.88 New JanaRaksha Policy - Plan no.91 JeevanAnand Plan no. 149 JeevanMitra Triple Cover - Plan no.133 Group Insurance Policy JanashreeBimaYojana Group Insurance Scheme in lieu of EDLI Group (Term) Insurance Scheme Group Savings Linked Insurance Scheme Group Superannuation Scheme Group Mortgage Redemption Assurance Scheme ShikshaSahayogYojana Joint Life Policy JeevanSaathi - Plan no.89 Money Back Policy Money Back with Profit - Plan no.75 New Money Back - Plan no.93 JeevanSurabhi 15 yrs - Plan no.106 JeevanSurabhi 20 yrs - Plan no.107 JeevanSurabhi 25 yrs - Plan no.108 JeevanBharati Plan No 160 JeevanSamriddhi Plan No 154, 155, 156 157 BimaBachat- Plan no.175 Pension Plans or Annuities New JeevanDhara - Plan no.148 New JeevanSuraksha Plan no. 147 JeevanAkshay II Plan no. 163 JeevanNidhi Plan no. 169 JeevanAkshay V Plan no. 183 Special Plans

Term Assurance - Plan no.43 Mortgage Redemption - Plan no.52 JeevanAadhar - Plan no.114 Market Plus - Plan No 181 JeevanVishwas Plan No. 136 JeevanSaral Plan No. 165 JeevanPramukh Plan No. 167 BimaNivesh 2005 Plan No 171 Money Plus-Plan No 180 Term Policy Convertible Term Assurance - Plan no.58 New BimaKiran Term Assurance AnmolJeevan I Plan No- 164 AmulyaJeevan-Plan No-177 Whole Life Policy Whole Life with Profits - Plan no.2 Limited Payment Whole Life with Profits - Plan no.5 Single Premium Whole Life - Plan no.8 JeevanTarang- Plan no.178

PRODUCT DEVELOPMENT
In a competitive market, there is a greater need to provide insurance products that meet the needs of our customers. LIC therefore offers a wide variety of products which fulfills the needs of different segments of the society. As at the end of the financial year 2009-10, the Corporation had 54 plans available for sale. During the year Corporation introduced 5 new plans viz. JeevanSathi Plus, JeevanMangal,Health Protection Plus, JeevanNischay& Wealth Plus Plan, out of which JeevanNischay& Wealth Plus were close ended plans.

 MAJOR CUSTOMERS
The first thing is to target the right audience by focusing on selected groups of customers, but don't worry, appealing to more than one group of customers will attract more buyers interested in your unique product. Customer diversity is the reason to appeal to different groups of customers, because a broader market expands knowledge of the product. This is why it is necessary to know about customer lifestyles. Compiling a list of customers who buy small appliances is one type of buying habit attributed to certain customers. They are usually individuals who work outside the home. Other target audiences are customers who work at home, those with children,singles, and retired customers. Whatever their needs may be, they all seek to make improvements in their lifestyle. Gender is also another consideration in customer-focused marketing. Women are important customers who not only work but take care of families. They make a great many purchases not only for themselves but for others. Singles usually rent and want affordable furnishings; whereas, married customers own their own homes and want new furnishings. This may not be true for every single or married person, but historically, it is a trend. It is important to know that marital status is one consideration, but all customers seek affordable and useful products. Age groups are important and over the years, studies have shown that succeeding generations spend money differently. According to Lets Talk Business, Issue 73, September 2002, customers born between 1977 and 1994, with an average age of twenty-one, spend most of their money on education and personal appearance. Older adults, or older boomers, whose average age is around fifty, spend money on upgrading their homes and taking vacations. The emptynesters or seniors, spend more money on insurance, cars, and furniture. The chart illustrates other groups and also includes generation X, or the thirty something group, who spends money on food for their families.

 MARKET COVERAGE :
Insurance giant LIC had a healthy market share of 74.18 per cent in the last financial year with a premium collection of Rs 55,934.6 crore while nearly a dozen private insurers accounted for the rest 25.82 per cent. However, in terms of number of new policies, the state- owned company enjoyed a much better market share of 82.83 per cent with 3.82 crore new policies, LIC Chairman T S Vijayan said in his presentation of the financial performance in 2006-07. "In total LIC planned to invest around Rs 117 lakh crore this financial year of which Rs 52,000 crore had been already invested," T S Vijayan said. LIC's investment in the capital market as on March 31, 2007 stood at Rs 1,24,643 crore and it intended to invest between Rs 10,000 to 12,000 crore in equities and preference shares in the current fiscal. Till March 31, 2007 LIC's total investment was of Rs 6,13,266.58 crore of which 2,72,497.82 crore was invested in Central Government securities, Rs 64,284.80 crore in State Government and other approved securities, Rs 73,746 crore in infrastructure and social investments and Rs 44,217 crore in bond and debentures. The popular unit-linked insurance plans (ULIP) contributed 80 per cent in LIC's new business premium of Rs 39,541 crore as compared to the traditional business products.

PRICING POLICY:
PREMIUMS of some of the policies of Life Insurance Corporation (LIC) are set to go up. The southward march of interest rates has made LIC rethink its investment strategies and pricing of policies. The institution is considering re-pricing some of its insurance plans. Top LIC sources told Business Line that even though most of the policies would not be affected, the premiums of some of the plans would be

increased. While refusing to divulge which policies would be re-priced, they, however, said the increase would be o nly on new policies. According to the sources, LIC's rate of returns in terms of interest on investments, which is a major factor in pricing policies, has come down. Over the past year, the interest rates have eased considerably. Twentyyear Government stock is now going at 10.25 per cent, and at the shortend, three-year gilts fetch under 8.5 per cent. This is in comparison with YTMs of 11.60 per cent for 20-year debt and 10 per cent at the shorter end a year ago. LIC's investments in the current year would be of the order of Rs 55,000 crore. The squeeze on returns has forced the institution to rework its conservative investment strategy. LIC, which was only a buyer of securities and equities, is now becoming more dynamic. The corporation is getting aggressive in the secondary markets, both capital and debt. The sources said, ``We are actively playing the markets. Now our effort is to maximise returns, so we have also started booking profits, something we hardly did earlier. We have the team, strategy, and more important, the money to make sustained profits. '' The aim is to increase returns from the secondary markets to ``subsidise'' premiums. There are two major factors that go into the pricing of a policy -- returns from investments and mortality rate. The sources said even if there was a slight change in mortality rate, especially in places where the volumes are less, it created an aberration. MARKETING POLICY DIRECT MARKETING In the financial year 2009-10 Corporation took a new initiative of Direct Marketing. This vertical was started with an objective of "CREATING NEW SYSTEMS FOR BUSINESS GENERATION, SALES PROCESS MONITORING AND BUSINESS PROCESSING WITH A VIEW TO REACH

OUT TO UNTAPPED MARKETS AND PROVIDE IMPROVED BUYING EXPERIENCE TO CUSTOMERS". In a short span of 8 months, the channel has expanded and has presence at 21 centers with 542 professionally trained Direct Sales Executives (DSEs) to provide financial advice to prospective customers. During the year 2009-10, main focus of the channel was setting up systems and processes. A state of art Lead Management System has been established to provide easy access to prospective customers to reach out to LIC to buy a policy. Such leads captured through our website www.licindia.in are passed on to well-trained DSEs on real time basis who can contact the customer instantly. This channel procured a New Business of 25.55 crore under 8887 polocies giving average FP per policy as 28,759. AGENTS a) Agency Strength The total number of agents on our roll is 14,02,807as at 31.03.2010 as against 13,44,856 as on 31.03.2009. The number of active agents is 13,40,067as at 31.03.2010 as compared to 12,75,611 as on 31.03.2009. b) Agents' Club Membership In order to motivate and recognize high performers amongst agents a premium club called the Corporate Club was formed w.e.f the membership year 2004-2005. The other 5 clubs which were formed to recognize agents who perform consistently year after year, viz. Chairman, Zonal Manager, Divisional Manager, Branch Manager and Distinguished Agents have shown good growth. INFORMATION TECHNOLOGY The year 2009-10 saw the consolidation of the major technology initiatives such as the Corporate Active Data Warehouse (CADW), Enterprise Document Management System (EDMS) and the Portal resulting in tremendous value addition for our customers. This year also saw the initiation of the modernization of our Core Insurance system, the Front End Applications Package (FEAP).

a) New channels for premium Payment:It has been our endeavor to bring more and more services to the doorsteps of the customer. As part of these initiatives more channels were added this year to facilitate payment of renewal premium by our customers. A major addition was the Premium Point where policy holders could pay premium 24 x 7 and get a final receipt from the offices of Empowered LIC Agents across the country. Nearly 12000 Empowered Agents and 700 Senior Business Associates (SBAs) were collecting premium from the policy holders by the end of the year. We also introduced SMS based enquiry services using which our customers can now get information on the date of the next installment of premium. Nomination, bonus, loan and revival details by sending a simple sms: asklic policy no premium/ nom/bonus /loan /revival to 56677. b) Corporate Active Data Warehouse (CADW):LICs CADW is one of the largest life insurance customer databases in the world with records of more than 400 million policies being stored in it. The Warehouse has enabled LIC to launch many customer focused campaigns like the customer contact programs and Gold Club customer campaigns launched all over the country in 2009-10. Another major achievement has been to send a single notice for premium falling due in the same month for various polices of an individual customer. The project was also successfully used for generating marketing leads and running a host of targeted marketing campaigns. c) Enterprise Document Management System (EDMS):LIC has implemented Enterprise Document Management System (EDMS) in its offices to digitize the customer records and to offer Anytime Anywhere service to its customers. After all the policy records are scanned it will be possible to offer various services like loan disbursement and claims payment from any branch in the country irrespective of the branch where the policy is serviced. average of 16 documents in each docket) and enabled for online access from any office. This has helped us to improve the quality of customer service quite substantially. In addition, the use of the work-flow

automation feature has helped to greatly speed up inter office communication and decision making processes. As a socially committed organization, we have also made use of the electronic archival feature of EDMS to do away with office copies and thereby, reduce the usage of paper to a large extent. d) Network - achievement during 2009-10 1. New network architecture has been finalized and network hardware has been installed and commissioned in approx 3000 SOs and BOs .The leased lines connecting branches to divisional offices are being up graded to 2Mbps; this will ensure fast data transfer between the connected offices. The new concept of ISDN connectivity has been introduced as back up link for branch offices. 2. Network Implementation and Support Plan, which contains all the details like IP addressing, physical connectivity of routers/ servers and so on for uniformity and ease in troubleshooting was prepared. Online Leased link requisition module has been developed for better management of the leased link portfolio in the centralised billing with BSNL. At presentthere are more than 3000 links which are being managed at CO level. FINANCIAL INFORMATION

TATA AIG COMPANY PROFILE ABOUT TATA-AIG Tata AIG Insurance Solutions is one of the leading insurance companies that provide both life insurance as well as general insurance. This pioneer company is a joint collaboration between the American International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of 26:74. It is a leading financial institution that has carved a niche for itself all over the world. Tata AIG Insurance provides facilities to both corporate and individuals. Starting its operations on April 1, 2001, it seeks to serve different categories of people. It acquired its license for carrying out operations in India on February 12, 2001. Tata AIG Insurance Solutions is one of the most prestigious organizations in the business world. It employs thousands of employees and offers various opportunities to people to build a prospective career. As a leading name in the financial world, it identifies the potential and experience of the individual. This insurance company identifies the clients needs and works accordingly. It stresses on innovative aspect and opening of new markets. It believes in new economy and latest Internet technology. Tata AIG Insurance offers a number of products for the General Insurance holders. General insurance products include: Individual insurance Small business insurance Corporate insurance Tata AIG Insurance offers flexible life insurance to the individuals, business organization and other association. For the corporate, there are various insurance products like group pensions, employee benefits, work place solutions and credit life. For the individuals, Tata AIG Insurance offers various products for adults, children and for retirement planning.

 MAJOR PRODUCTS PRODUCTS FOR ADULTS The company has a slew of life insurance of plans for adults as follows. 1. Life Assure Lifeline Plans: High coverage at an affordable cost 2. Life Assure Growth Plans: It is an Endowment policy which keeps your money safe and has it grow 3. Life Assure 21 years Money Saver: Cash payments at the end of every 3 years. Life insurance coverage plus the flexibility of periodic payments. 4. Life Assure Golden Years Plan: It is an Endowment policy which gives Safety as well as returns. 5. Life Easy Retire: It is an Annuity plan with Return of Purchase Price Single premium payment. 6. Life Invest Assure Health: It is a Unit linked investment plan and helps to achieve financial goals along with a comprehensive health policy. 7. Life HospiCashBack: It gives multiple claims against unforeseen hospitalization expenses. 8. Life Health Investor: Benefit on diagnosis of 12 critical illnesses. It provides cover in case of unfortunate death.100% return of premium in case of no claims. 9. Life Invest Assure II: Life cover plus high returns. 10. Life Invest Assure Apex: Unit-linked life insurance plan. Guaranteed Maturity Unit Price. 11. Life Invest Assure Care: Non-participating unit linked insurance plan Inbuilt Critical Illness benefit . 12. Life Invest Assure Flexi: Unit linked endowment plan. Helps one achieve financial goals 13. Life Invest Assure Gold: There is a flexibility to invest more money. It takes care of emergency cash requirements 14. Life Life Plus: If you outlive the term get premium back. In case of death by natural causes get sum assured. 15. Life MahaLife Gold: Good for retirement planning. Provides for steady income and insurance coverage. 16. Life Raksha: Large cover at a small premium.

17. Life Shubh Life: Life insurance protection and high returns. 18. Life Health First: Covers health contingencies. 19. Life Health Protector: Covers cost of major surgery or treatment. CHILDREN FUTURE PLANNING To ensure your children lead happy and successful lives, its important to plan now so that they will have the financial support they need in the future. Tata AIG has a range of flexible insurance products to help you secure your childrens financial future. Tata AIG provides products for childrens which include the following: Tata AIG Life Invest Assure Superstar Tata AIG Life Invest Assure Superstar is a non- participating unit linked endowment plan that allows you to secure a financial future for your child. Tata AIG Life United UjjwalBhawishya Plus This is a unit linked endowment plan which provides you the assurance to realize yourchilds dreams. Tata AIG Life Assure Career Builder This money-back policy provides financial assistance at key stages of your childs life, from education to their first steps into a new career. Tata AIG Life Assure Educare at 18 & Tata AIG Life Assure Educare at 21 This first of its kind juvenile endowment policy is geared toward funding your childs education. You can choose between Assure Educare 18 and Assure Educare 21, depending on your childs needs. Tata AIG Life Assure 21 years Money Saver This savings plan provides you with cash payments in the form of survival benefits at regular intervals to fund your childs needs at critical milestones or support your financial obligations. You get the dual benefits of life insurance coverage plus the flexibility of periodic payments. Tata AIG Life MahaLife Gold This unique policy ensures that your child will have a steady income and insurance coverage for life! Premiums are payable only for the first 15 years. Tata AIG Life Starkid

An exceptional endowment policy that ensures you can afford to give your child the very best for his career & marriage. Get more details like Key features, Tax Benefits, Riders and Age Eligibility about any of above mention products for children. MICRO INSURANCE PLANS Micro Insurance is the process of delivering and servicing relevant and affordable life insurance products to the low-income socio economic strata. The focus of Tata AIG Lifes Micro insurance program is rural India, where traditionally the farflung, lower and lower middle-income segments have had limited access to life insurance services. How do Tata operate there? It operates in 11 states with a specific relationship management team for each state. A dedicated & trained sales and marketing team manages the front end of the Micro insurance program. Its micro insurance distribution model collaborates with NGOs (Non-governmental organizations) and Rural organizations with community level SHG (Self Help Group) women advisors who provide insurance advisory services to the rural customers at their doorstep. The grassroots level agents explain the product details in the local language of the customer, thereby enabling the customer to make a decision. The training programs, brochures, contract documents, and application forms are available in 8 different languages other than English and Hindi.

Cost of Micro Insurance plans: Tata AIG Life Micro insurance plans are available with or without survival benefits and with death benefits ranging from Rs.5,000 to Rs.50,000. With premiums as low as Rs.5** per month, there is now an affordable life insurance product for nearly every rural household in India. Term Plans / 25

Years Lifeline Plans, and Term to age 60 known as Assure Lifeline to Age 60 Money back Plans Pension Plans

Health Plans G Life Health First - 5 Year Guaranteed Renewal Accident and Health Plan Endowment Plans Plans

Wholelife Plans Annuity Plans

Children Plans sure Educare at 21 Unit Linked Plans

Tata AIG Life Invest Assure SwarnaJeevan Plus PRODUCT DEVELOPMENT Designing micro-insurance policies requires intensive work and not just reduced prices of existing insurance policies. It requires among

other things different marketing, distribution, and servicing channels. Life micro-insurance is the easiest and widely offered cover. An insurer would need to create a very attractive policy if they want to stay with life micro-insurance. It is worth exploring other types of microinsurance as a means of attracting good partners. Crop insurance has by and large proved unsuccessful. Health insurance is difficult because of the lack of private hospitals in poor rural areas. Weather indexing is proving a possible insurance option. MAJOR CUSTOMERS The first thing is to target the right audience by focusing on selected groups of customers, but don't worry, appealing to more than one group of customers will attract more buyers interested in your unique product. Customer diversity is the reason to appeal to different groups of customers, because a broader market expands knowledge of the product. This is why it is necessary to know about customer lifestyles. Compiling a list of customers who buy small appliances is one type of buying habit attributed to certain customers. They are usually individuals who work outside the home. Other target audiences are customers who work at home, those with children,singles, and retired customers. Whatever their needs may be, they all seek to make improvements in their lifestyle. Gender is also another consideration in customer-focused marketing. Women are important customers who not only work but take care of families. They make a great many purchases not only for themselves but for others. Singles usually rent and want affordable furnishings; whereas, married customers own their own homes and want new furnishings. This may not be true for every single or married person, but historically, it is a trend. It is important to know that marital status is one consideration, but all customers seek affordable and useful products. Age groups are important and over the years, studies have shown that succeeding generations spend money differently. According to Lets Talk Business, Issue 73, September 2002, customers born between 1977 and 1994, with an average age of twenty-one, spend most of their money on education and personal appearance. Older adults, or older boomers, whose average age is around fifty, spend money on upgrading their homes and taking vacations. The empty-nesters or seniors, spend more money on insurance, cars, and furniture. The chart illustrates other

groups and also includes generation X, or the thirty something group, who spends money on food for their families

MARKET COVERAGE :
Making the market successfully work for the low-income families would require a completely different distribution channel and a new approach to marketing and contracting because a micro-insurance policy is not merely a low-premium policy, as is usually perceived in India. This is because the poor are more susceptible to risks, cannot afford the same defences asthe urban clients, are illiterate and unaware of the concept of insurance, have minimal exposure to the formal financial institutions, and have high policyholder transaction costs. A reduction in the prices of the present insurance policies is not sufficient. Intensive work and innovation, much beyond the existing concepts, is required to design a micro-insurance policy. To reach the poor is still a difficult task for the private players alone due to infrastructure and cost considerations. The partnership model uses a synergistic approach that involves collaboration of the public sector banks, Microfinance Institutions (MFIs) and the community, including the self-help groups (SHGs). They help promote marketing of the product, premium collection, and claims, and hence, providethe required infrastructure.

 MARKETING POLICY
1) Doctors 2) Call Center + Insurance Gallery 3) SMS campaigns 4) Help lines 5) E- Commerce 6) Network Marketing 7) E- Insurance Port folio (Individuals) Insurance Department B.P.O. (Companies). 8) Wealth Port folio Finance aggregation 9) Portal Services 10) Crystal claims services (Unsettled claims +consumer court services)

FINANCIAL INFORMATION

 USE OF INFORMATION TECHNOLOGY

There is a evolutionary change in the technology that has revolutionized the entire insurance sector. Insurance industry is a data-rich industry, and thus, there is a need to use the data for trend analysis and personalization. With increased competition among insurers, service has become a key issue. Moreover, customers are getting increasingly sophisticated and tech-savvy. People today dont want to accept the current value propositions, they want personalized interactions and they look for more and more features and add ones and better service

The insurance companies today must meet the need of the hour for more and more personalized approach for handling the customer. Today managing the customer intelligently is very critical for the insurer especially in the very competitive environment. Companies need to apply different set of rules and treatment strategies to different customer segments. However, to personalize interactions, insurers are required to capture customer information in an integrated system. With the explosion of Website and greater access to direct product or policy information, there is a need to developing better techniques to give customers a truly personalized experience. Personalization helps organizations to reach their customers with more impact and to generate new revenue through cross selling and up selling activities. To ensure that the customers are receiving personalized information, many organizations are incorporating knowledge database-repositories of content that typically include a search engine and lets the customers locate the all document and information related to their queries of request for services. Customers can hereby use the knowledge database to mange their products or the company information and invoices, claim records, and histories of the service inquiry. These products also may be able to learn from the customers previous knowledge database and to use their information when determining the relevance to the customers search request.

CHALLENGES
The awareness regarding insurance is strong among people, but there are problems. The peculiarity of this market is that people tend to buy policies to save tax, which is why the three months prior to the end of financial year are when most of our business is conducted; this is followed by nothing periods. But insurance also offers protection against death and disability, besides being a savings instrument. The challenge for us is to change the mindsets of people through education about the need-based sale of life insurance. We have to convince people to park their hard-earned money in long-term insurance and savings. This will take us time. We are using our

trained agents and advisors to bring about this change in perception. Also, consumers were accustomed to having a single, dominant player for too long. With privatisation, plenty of companies have entered the fray and they are offering too much choice. This has resulted in the consumer getting confused and either making wrong decisions or making none at all. Hence our focus on insurance education.

ICICI PRUDENTIAL LIFE INSURANCE LTD. INTRODUCTION

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, one of the foremost financial services companies of India and Prudential plc, one of the leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector life insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 4,780 crores (as of September 30, 2010) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 1, 2010 to September 30, 2010, the company garnered Rs 7,267 crores of total premiums and has underwritten over 10 million policies since inception. The company has a network of over 1,500 offices and over 1,60,000 advisors, as on September 30, 2010. The company has assets held over Rs. 65,000 crores as on September 30, 2010. For the past nine years, ICICI Prudential Life has maintained a wide range of Life Insurance products that meet the needs of the Indian customer at every step in life. ICICI Prudential Life recently completed 10 years on the Indian Insurance scape on 12th December 2010

MAJOR PRODUCTS

SAVINGS PLAN

ICICI Pru SmartKid - a superior way to guarantee childs future no matter what the uncertainty. ICICI Pru LifeTime - a complete market-linked insurance plan that adapts itself to changing protection and investment needs, throughout a lifetime. ICICI Pru Save'n' Protect - a traditional endowment savings plan that offers both high returns and protection. ICICI Pru CashBak - an endowment savings plan that allows one to get back substantial survival benefits without having to wait till the maturity date.

PROTECTION PLAN

ICICI Pru LifeGuard - a low cost-high protection plan that offers protection over a specified period.

RETIREMENT PLAN ICICI Pru ForeverLife - a deferred annuity plan that helps one save for retirement while providing life insurance protection.

ICICI Pru LifeLink Pension - a single premium plan that allows one to park a lump sum amount for a secure future. ICICI Pru LifeTime Pension - a plan that gives one the twin benefit of marketlinked annuity and life insurance cover. ICICI Pru ReAssure - a plan that helps to invest money prudently and safely and offers the benefit of a regular income while providing life insurance protection.

INVESTMENT PLAN

ICICI Pru LifeLink - an investment plan that gives the flexibility of choosing your investment options while keeping you insured for life. ICICI Pru AssureInvest - a single premium endowment plan that gives potentially high returns coupled with insurance protection.

Each of these policies cater to different segments of the consumers who take the policy to satisfy the needs, wants and desires that are different from each other.

PRODUCT DEVELOPMENT
Designing micro-insurance policies requires intensive work and not just reduced prices of existing insurance policies. It requires among other things different marketing, distribution, and servicing channels. Life micro-insurance is the easiest and widely offered cover. An insurer would need to create a very attractive policy if they want to stay with life microinsurance. It is worth exploring other types of micro-insurance as a means of attracting good partners. Crop insurance has by and large proved

unsuccessful. Health insurance is difficult because of the lack of private hospitals in poor rural areas. Weather indexing is proving a possible insurance option.

MAJOR CUSTOMERS
The first thing is to target the right audience by focusing on selected groups of customers, but don't worry, appealing to more than one group of customers will attract more buyers interested in your unique product. Customer diversity is the reason to appeal to different groups of customers, because a broader market expands knowledge of the product. This is why it is necessary to know about customer lifestyles. Compiling a list of customers who buy small appliances is one type of buying habit attributed to certain customers. They are usually individuals who work outside the home. Other target audiences are customers who work at home, those with children,singles, and retired customers. Whatever their needs may be, they all seek to make improvements in their lifestyle. Gender is also another consideration in customer-focused marketing. Women are important customers who not only work but take care of families. They make a great many purchases not only for themselves but for others. Singles usually rent and want affordable furnishings; whereas, married customers own their own homes and want new furnishings. This may not be true for every single or married person, but historically, it is a trend. It is important to know that marital status is one consideration, but all customers seek affordable and useful products. Age groups are important and over the years, studies have shown that succeeding generations spend money differently. According to Lets Talk Business, Issue 73, September 2002, customers born between 1977 and 1994, with an average age of twenty-one, spend most of their money on education and personal appearance. Older adults, or older boomers, whose average age is around fifty, spend money on upgrading their homes and taking vacations. The empty-nesters or seniors, spend more money on insurance, cars, and furniture. The chart illustrates other groups and also includes generation X, or the thirty something group, who spends money on food for their families

 FINANCIAL INFORMATION

MARKET COVERAGE
ICICI Prudential Life Insurance hiked its market share to 42.72 per cent in the October-November period last year, up from 37.92 per cent in first quarter and 38.85 per cent in the second quarter of the current fiscal. Its total share of the Rs 439.2-crore premium collected by private players during the April-November period stood at 39.66 per cent. Its aggregate estimated premium income amounted to Rs 174.2 crore as at the end of November. According to ICICI officials, while the premium mop-up by private companies in April-June 2002 was about Rs 117 crore, the corresponding figures for the July-

September and October-November periods were Rs 201.3 crore and Rs 120.8 crore. Out of this, ICICIs premium income stood at Rs 44.4 crore, Rs 78.2 crore and Rs 51.6 crore, respectively. They cited Irda statistics saying the total premium income of the life sector was Rs 1,191 crore in April-June, 2002, and Rs. 3,512.8 crore uptil September.

CHALLENGES Facing challenges in managing their leads for health insuran- ce, the company developed a customized software to fulfill their needs. ICICI Prudential Life Insurance offers wide-ranging financial solutions to meet the varied needs of customers. The company intends to improve customer segmentation and also enable their sales force with lead management frameworks that are based on customer segmentation. The company's health insurance products from the extensive portfolio were one of the major focus of business

segments and was a fast growing one also. For this segment, the company sold their health insurance policies via distribution channels like doc channel and retail pharmacy. The doc channel has more than 31000 doctors listed while there are 23000 chemists under retailer channel across 65 towns that are used as referral partners to sell health insurance, apart from 2300 Feet on Street Consultants (FSCs). The company faced challenges in managing this highly segmented channel. There wasn't an effective lead management system. The monitoring and reporting framework was also not as reliable. Issues like, as a referral partner, a doctor is giving desired results to the FSCs or not, couldn't be tracked and monitored. The company felt the need to have a customized software application that could address the differential needs of health insurance segment.

USE OF INFORMATION TECHNOLOGY The Information Technology function at ICICI Prudential is committed to enable business through the use of technology. It is segmented into 4 groups to enable highest levels of delivery to the customers: Life Asia Solutions Group that provides flexibility in designing better product offerings to end-users, the Solutions Group- Web that provides real-time information to customers and is responsible for customer relationship management, IT Architecture & Corporate Solutions Group is in charge of developing and maintaining a blueprint for the IT architecture for the enterprise as a whole. This team works as an in house R&D Solution Group, exploring new technological initiatives and also caters to information needs of corporate functions in the organization. IT Infrastructure group is responsible for providing hardware, software, network services to the whole organization. This group runs the 'Digital Nervous System' of the Enterprise at the highest levels of efficiency and provide

robust, scalable and highly available platform for deployment of business application. MARKETING POLICIES The Marketing function at ICICI Prudential covers an array of activities - brand and media management, channel support, direct marketing and corporate communications. The Brand and Communications team is in charge of advertising, consumer research, media planning & buying and Public Relations; that helps develop and nurture ICICI Prudential's corporate identity while effectively communicating its varied product offerings to the customer. Channel marketing provides support to the sales force by streamlining the design and development of collaterals and sales tools across distribution channels. The Direct marketing team was set up to generate high quality leads for profitable business. The team achieves this through target database acquisition and communicating customized product information through e-mailers, telemarketing and innovative direct mailers.

PRICING POLICY

FUTURE TRENDS

There is presently building in India an upsurge in consumer awareness, putting immense and unavoidable pressure on the insurance industry. A lifting of the bar on composite insurance, where companies are allowed to do only life or non-life business today, can also be expected. Instead of categorizing insurance by class, the focus may shift more to the period for which the cover was offered and the risk underwritten. Already there is demand for permitting the industry to underwrite pure risk and leaving investment decisions to policyholders. With the entry of competition, the rules of the game are set to change. The market is already beginning to witness a wide array of products from players whose number is set to grow. In such a scenario, the differentiators among the different players are the products, pricing, and service. Meanwhile, the profile of the Indian consumer is also evolving. Consumers are increasingly more aware and are actively managing their financial affairs. Today, while boundaries between various financial products are blurring, people are increasingly looking not just at products, but also at integrated financial solutions that can offer stability of returns along with total protection. To satisfy these myriad needs of customers, insurance products will need to be customized. Insurance today has emerged as an attractive and stable investment alternative that offers total protection Life, Health and Wealth. In terms of returns, insurance products today offer competitive returns ranging between 7% and 9%. Besides returns, what really increases the appeal of insurance is the benefit of life protection from insurance products along with health cover benefits.