icici pru report prabhakarc
DESCRIPTION
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Summer Internship Report
On
For
ICICI PRUDENTIAL LIFE INSURANCE CO LTD
Submitted By:
ACKNOWLEDGEMENT
We are thankful to management of ICICI Prudential Life Insurance
Company Ltd for granting the opportunity, corporation and valuable
information for completion of this project.
No words are enough to thank Mr.Vipin Anand (Channel Development
Manager), who not only inspired us to work on this project but also accepted
to guide us a lot. In spite of heavy responsibilities and busy schedules, they
always managed time to provide proper guidance.
We are also thankful to our college professors for their constant suggestion
which resulted in successful completion of the project. Last but not the least;
we would like to thank our parents and friends for giving us their constant
support and encouragement in completion of our project.
Prabhakar Joshi
3
PREFACE
The competition in the insurance sector is highly volatile in nature. Over the
decade only government undertaking company was operating in India but
with the opening up of the economy several new players like private sector
& multinational insurance entered in Indian horizon.
In the given project we made a comparative analysis of mutual fund & life
insurance among MNC. Comparing their features & services one hand &
also done a research on the interest of investor regarding mutual fund & life
insurance in ICICI prudential company limited.
Research design method used was descriptive research. The
sampling method used was simple random sampling. We have taken a size
of 60 respondents. I first formed a structure questionnaire to collect data &
the questionnaire is filled by the person, who have one charted insurance
company & or more with any other MNC insurance company.
On the basis of filled questionnaire, coding sheet is formulated & the
conclusions are drawn with the help of graphs pie charts.
4
TABLE OF CONTENTS
AKNOWLEGEMENT
PREFACE
CONTENTS OF TABLE
EXECUTITIVE SUMMARY OF THE PROJECT
COMPANY PROFILE
PRODUCT POLICIES
PRODUCT PORTFOLIO
INTRODUCTION TO CHANNEL DEVELOPMENT
AND RECRUITMENT
METHODOLOGY USED TO RECRUIT ADVISOR
SWOT ANALYSIS
FUTURE GROWTH PROSPECTS OF COMPANY
COMPETITIVE ANALYSIS WITH HDFC
STANDARD LIFE
RECOMMENDATONS
LEARNINGS
BIBLIOGRAPHY
5
EXECUTIVE SUMMARY
Identifying different profiles of the people and giving them Career &
Business Opportunity to join ICICI Prudential as an advisor.
A market survey was done on life insurance companies. Different questions
regarding the companies training programs for advisor, top 5 usp's, training
centers etc were asked. The areas covered up in this survey were Noida and
Ghaziabad. The report contains details of different life insurance companies,
which are in healthy competition with ICICI Prudential life insurance.
Insurance industry is growing rapidly day-by-day. India itself has a
population of 1.12billion out of which roughly 33.2% people are insured.
This clearly shows that most of the people are not insured just because they
don’t know much about insurance. Most people have some common queries
about life insurance:
What is Life Insurance ?
A policy that will pay a specified sum to beneficiaries upon happening of an
unexpected event to the insured.
An agreement that guarantees the payment of a stated amount of
Monetary benefits upon death of the insured.
6
Why Insurance ?
Insurance is the protection of life and assets against unpredictable
circumstance. Whether it is a general accident policy, a Mediclaim policy or
a pension policy, an insurance policy helps you to scope with uncertainty
and insecurity.
Ever thought about why you should take an insurance policy. For one, it
helps you to hedge risks against unforeseen circumstances and save more. If
that's not all, it is:
Superior to an ordinary savings plan as it provides full protection
against risk of death.
Encourages and forces compulsory savings unlike other saving
instruments, wherein the saved money can be easily withdrawn.
Provides loan to tie over a temporary difficult phase and is also
acceptable as security for a commercial loan.
Offers tax relief to policyholders.
Hedges risk against uncertainty.
For a policy taken under the MWP Act 1874, (Married Women's
Property Act), a trust is created for wife and children as beneficiaries.
Based on the concept of sharing of losses, the society will benefit as
catastrophic losses are spread globally.
7
Who can buy a life insurance policy ?
Any person above 18 years of age, who is eligible to enter into a valid
contract, can go for an insurance policy. Subject to certain conditions, a
policy can be taken on the life of a spouse or children.
How is a life insurance policy useful ?
Planning for the financial consequences of a premature death is an essential
part of every financial plan. Generally, the consequences are simply too
large to ignore and cannot be totally covered with your own resources. Life
insurance is nothing but a contract with an insurance company under which
the insured (purchaser) pays a premium in exchange for coverage of
specified losses. Life insurance protects your family against the risk of the
premature death of you (or your spouse). Life insurance planning should
consider your family's short-term needs (for example, medical expenses) and
long-term needs (for example, replacing your income).
In the course of our life we are accosted by risk-that of failing health,
financial losses, accidents and so on. Insurance is a means by which life's
uncertainties are addressed in financial terms. It offers a monetary
compensation against those losses. Insurance is considered more as a
hedging mechanism rather than a true investment avenue. Life insurance, in
particular is essentially acknowledged as a mechanism that eliminates risk-
substituting certainty for uncertainty primarily by transferring risk from the
insured to the insurer.
8
Is life insurance a saving instrument ?
Life insurance is mainly considered as a saving instrument rather than an
investment avenue as it promotes compulsory savings besides reducing tax
burden on the policyholder and protects the family of the policyholder in the
event of unforeseen happening. It is the only saving instrument, which
covers the life risk besides giving tax concession both at entry (premium
paid) and at exit points. The section 10 (D) of the income tax act totally
exempts payment of tax on any amount received as bonus against life
insurance policies
9
COMPANY PROFILE
ICICI Prudential Life Insurance Company is joint venture between two heavy weights, ICICI Bank, India and Prudential Plc., UK. The name, ICICI Bank is not a new name in the Indian finance sector. It is India’s second largest bank and largest private sector bank with over 50 years of financial experience. It offers a wide range of banking products and financial services to corporate and retail customers in the areas of investment banking, life and non-life insurance, venture capital and asset management. It is a leading player in the retail banking market and has over 13 million retail customer accounts. The Bank has a network of over 570 branches and extension counters, and 2,000 ATMs.
Prudential Plc. is a London based finance company. It was established in the year 1848. The name Prudential might not be familiar among us but we have an emotional attachment with this name and specially our previous generation. The reason Many of us were infants when Kapil Dev Nikhanj lifted the Cricket World Cup at Lords in the year 1983. That World Cup was sponsored by none other than Prudential Plc.
Another famous example. In the year 1998, a movie named Titanic took away almost all the Academy Awards of that year. The incident of Titanic was a true one. The accident took place in the year 1913. It was Prudential Plc., which provided the ship the insurance coverage. The business of Prudential Plc. spans across the globe. By its products and services, it has brought a revolution of sort in the finance sector. It provides retail financial services products and services to more than 16 million customers, policyholder and unit holders worldwide. The credit goes to the company to bring to the market an integrated range of financial services and products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. Since its inception, it has been doing its business with its flag always flying high.
10
ICICI Prudential began its operations in India in December 2000. It is
among the first private sector insurance companies to get the approval from
Insurance Regulatory Development Authority (IRDA). ICICI Prudential’s
equity base stands at Rs. 1185 crore with ICICI Bank and Prudential plc
holding 74% and 26% stake respectively. Until Sep 30, 2005, the company
wrote 283,818 policies. Inn the process, it has garnered Rs 820 crore of new
Business premiums for a total sum assured of Rs 7,131 crore. For the past
four years, ICICI Prudential has been donning the No. 1 position in the
private life insurance sector in the country. It has a wide range of flexible
products that meet the needs of the Indian customer at every step.
Although for the last 50 years LIC has been the only company to cater the
consumer needs in the insurance sector but in the past 5 years 21 insurance
companies have emerged in this scenario
ICICI Prudential Life
Birla Sun Life
Bajaj Allianz
Max New York Life
Met Life
ING Vysa
Om Kotak Mahindra
Tata AIG
Aviva
HDFC Standard Life
11
SBI Life
IFFCO-TOKIO
Reliance life
Bharti
PNB Life
New players need to recognize the limitations of their rival and decide upon
the right mix of distribution channels in their business.
12
PRODUCTS PORTFOLIO
ICICI Prudential has a wide array of insurance plans that have been designed with the philosophy that different individuals are bound to have differing insurance needs.
The ideal insurance plan is one that addresses the exact insurance needs of the individual that will depend on the age and life stage of the individual apart from a host of other factors.
Life Insurance Plans:
Under Life insurance plans, ICICI Prudential offers plans under the
following major
categories:
Education Insurance Plans
Wealth Creation Plans
Premium Guarantee plans
Protection Plans
Retirement Solutions:
The primary objective of a retirement plan is to help you provide for your
financial needs in your post retirement years.
ForeverLife
Lifetime Super Pension
Life Link Super Pension
13
Health Product Suite:
Under Health Product Suite, ICICI Prudential offers plans under the
following major categories:
Health Assure
Health Assure Plus
Hospital Care
Cancer Care
Cancer Care Plus
Diabetes Care
Diabetes Care Plus
14
PRODUCT PORTFOLIO
PREMIER LIFE
How do I start?
Open an account with a minimum contribution of:
Rs. 60,000/ annum for annual premium payment
Rs. 30,000/ half year for half-yearly payment
Rs. 5,000/month for monthly premium
BENEFITS
a. Death benefits
The death benefit will be higher of the Sum Assured (decreased by the amount of withdrawals mode) or value of units.
b. Liquidity
Partial withdrawals would be allowed after 3rd year policy year & after payment of 3 year premium. Partial withdrawals would be subject to surrender value. Each partial withdrawal during the 4 th and 5th year would
15
be limited to 20% of the value of the investment at the time of withdrawal. The minimum partial withdrawals amount as to be Rs . 10,000.
c. Additional allocation of units
There would be additional survival units payable to the
policy holder at various point of time during the coverage
term.
Premium paying
term Bonus Units Received
Premium paying
term =3 Nil Nil 0.50% at the end of 6th year
Premium paying
term =5 0.25% at the end of 5 year 0.50 % at the end of 8 year 1.00% at the end of 10 year
Premium paying
term =7 1.00% at the end of 7 year 2.00% at the end of 12 year 2.50%at the end of 15 year
Premium paying
term =10 2.00% at the end of 10 year 3.00%at the end of 15 year 3.50% at the end of 20 year
16
OPTION
CHOICE of premium paying term
You can choice between the following premiums paying term option:
3 year term
5 year term
7 year term
10 year term
17
INVEST SHIELD GOLD
HOW DOES INVEST SHIELD GOLD WORK FOR ME?
Invest shield gold provide you with an option to select a specific level of
protection as per your need, based on a multiple of your annual premium. A
part of the premium paid is adjusted toward mortality charges & fixed
charges & the rest is invested in your Unit Fund will be based on the Net
Asset Value at that time. The total value of your policy is based on the
number of units allotted to you & the Net Asset Value.
Asset allocation % of unit FUND
Debt Minimum 70%
Equity Maximum 30%
18
What are the limits or conditions?
Minimum age at entry: 0 year
Maximum age at entry: 60 year
Maximum age at maturity: 75 year
Minimum sum assured: Rs.1, 00,000
How do I start?
You can start with a minimum premium of:
Rs. 25,000per annum premium payment
Rs. 12500 per half-year for half- yearly premium payment
Rs. 2084 per month for monthly premium
BENEFITS
In unfortunate event of the death of the life assured the nominee
received the Sum Assured along with the higher of the value of your
Unit Fund
Or the guaranteed value of your Unit Fund, provided due till date is
paid in full.
At the end of the police term, either the value of your Unit Fund or the
guaranteed value of your Unit FUND, whichever is higher will be paid as
maturity benefits.
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Choice of Premium payment term
Premium Payment term Maturity Term
5 Year 10 Year
7 Year 15 Year
10 Year 20 Year
SOME CHARGES:
Fixed charges
Fund-related charges
Mortality charges
Top-up charges
EDUCATION GURANTEED
Smart Kid Education plan have 4 products offer:
Unit-linked Regular premium
Unit-linked Regular Premium II
Unit-linked Single Premium II
Regular Premium
The uniqueness of this plan is that even if anything happens to the parent,
the benefits to the child are not compromised. The benefits under this police:
Death benefits The death benefit is equal to the Sum Assured chosen at the
Time parent applies & will be payable immediately on the police holder.
20
In case of unfortunate death, here is how the police work:
Sum Assured chosen is paid immediately
The police benefits continue so that the unit can be withdrawn for
your child as & when required for education or developmental needs.
21
INVEST SHIELD LIFE
How does Invest Shield Life work for me?
You can choose a specific level of protection as per your needs, based on a
multiple of your annual premium. Part of the premium paid by you is
adjusted towards mortality charges, allocation charges & fixed charges &
the rest is invested in your Unit Fund. Entry into the Unit Fund will be
based on the NAV at that time. The total value of your police is based on
the number of unit allocated to you & the NAV.
HOW DO I START?
Choose your term from 10 to 30 years & a minimum premium of:
Rs. 8000 per annum for annual premium payment
Rs. 4000 per half-year for half-yearly premium payment
Rs. 667 per month for monthly premium payment
22
What are the limits or conditions applicable?
Minimum age at entry: 0 year
Maximum age at entry: 55 year
Maximum age at maturity: 65 year
Maximum cover ceasing age: 75 year
Minimum term: 10 year
Maximum term: 30 year
Minimum Sum Assured: Rs. 1, 00,000
Now, ICICI prudential Life Insurance presents a comprehensive range of
unit-linked product that take care of your wealth creation by providing you
flexibilities in saving & investment & option for your production needs. We
present life time II comprehensive portfolio of products that provide you
complete flexibility to choose a solution, based on your specific needs.
23
LIFE TIMEHow do I start?
Open an account with a minimum premium of …
Rs. 18000/-p.a. for annual mode
Rs. 9000/-per half year for half-yearly mode
Rs. 1500/- per month for monthly mode
Benefits
Death benefit: In unfortunate event of death, your closes once are spared an
uncertain future. Our guaranteed death benefit ensures that the nominee will
receive the higher of either the death benefit chosen or the value of units.
Liquidity option: There is no maturity date. Anytime after 3year of
commencement you can make partial or complete withdrawals, at no
penalty, to meet your immediate requirements.
Option
a. Choice of Investment Plan
You have the option to choose how you want your investments to
grow based on the objectives of each of the plan.
24
Maximiser:
If high growth in your priority, this is the plan for you. You can enjoy long
term appreciation from a portfolio that is invested primarily in equity &
equity-related securities.
Protector:
If on the other hand your priority is steady return, you can opt for the
protector plan. Here you can accumulated a steady income, at low risk
across a medium to long term period from a portfolio, which is primarily
invested in fixed income securities.
Balancer:
If you prefer a balance of growth & steady returns, choose our balancer plan.
This would ensure that your portfolio is invested in equity & equity-link
securities as well as in fixed income securities.
b. Choice of Switch between Investment options
If at later stage your financial priorities change, you can switch
between the various investment options at any time . there is provision
of 4 free switch every policy year , subject to the condition that the
minimum switch amount is Rs. 10000. Any switch beyond this limit
will be charged at Rs.100/switch.
c. Choice of Top-up
Top-up your investment any time you have surplus funds. The Top-
ups will not have any effect on the Sum Assured of the product. The
minimum amount of top-up is Rs.5000.
25
INTODUCTION TO CHANNEL DEVELOPMENT AND RECRUITMENT
Who is an insurance advisor?
An agent is the representative of an insurance company who sells different
policies or product to its clients.
Another term used for insurance agents is advisors; ICICI Prudential life
insurance company Ltd introduced this term.
Today in life insurance companies’ advisors are known to be the backbone
of the whole system. Advisors/agents do not work on monthly payroll basis;
they receive a certain commission on the policies they sell to the clients.
The eligibility required to become an advisor/agent is that he/she should be
12th pass to operate in urban area and 10th pass for rural areas. Before a
person becomes an advisor/agent he/she has to undergo 100hrs training
according to IRDA norms, which is compulsory.
A person who wants to be an advisor has first to fill a recruitment form and
has to pay a fee of Rs. 1500/- in favor of ICICI Prudential. Then, he has to
pass a test, which is compiled by IRDA. After he gets through that test he is
awarded a license and then his training starts in the company regarding the
insurance business. ICICI Pru provides this training in 3 modes as per the
suitability of the advisors viz: -
1) Classroom training: - it is a Full Time Training with a period of 17
days regular between 9 am to 5pm at the training centers allotted to
the advisor.
26
2) Online training: - it is another mode of training where the company
provides CD’S and books to the advisor for his own study.
3) Classroom training: - it is a Part Time Training with a period of 36
days.
Advisor Role :
To provide ongoing financial advice for his/her clients:
Identify future clients
Making appointments
Conduct financial review meetings with prospects/clients.
Close sales
Get referrals
Provide service to clients.
Follows internal sales and reporting system.
Working Environment of an advisor/agent.
To be a part of world-class sales team.
Work from your own office or residence.
Work full time or part time (an advisor can work part time by
undergoing only 50hrs of training and 100hrs training is for full
time advisors.)
Earn Commission, Bonus & Incentives.
No upper limits on earnings.
Flexible career.
27
Opportunities for an Advisor/agent.
No startup capital required.
Flexible working environment.
Be your own boss.
Unlimited earning potential.
To be a part of a world-class team.
Commission Structure.
Different products will have different commission structures.
For example: Single Premium products will have a commission of 2%.
Renewal Commission is paid at the following rates:
2nd yr: 7.5% 3rd yr: 7.5% 4th yr: 5% 5th yr: 5% onwards
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Payments & benefits-commission Structure for
advisors/agents.
Year 1 Year 2 Year 3
Number of Policies Sold 50 75 100
Average Premium Rs. 10000 10000 10000
Total Premium Earned Rs. 500000 750000 1000000
Commission @ 25% 125000 187500 250000
Bonus @ 40% of Commission 50000 75000 100000
Earnings from New Business Rs. 175000 262500 350000
Commission on Renewal [email protected]% 37500 56250
For year 2, 3, and 5% after that 37500
Earnings from renewal business Rs. 37500 93750
Total Earnings Rs. 175000 300000 443750
29
Most preferred profiles to recruit as Advisors/agents.
Housewives
Income Tax Consultant
Chartered Accountant
Sales Personnel’s working in
Automobile Dealership
Credit Card Co.
Telecom
Mutual Fund
DSA’s
M R’s
Doctors
Teachers
VRS Holders
Advisors of other insurance companies
Post Office Agents
Business Men
Accountants OI in an organization
30
How does an advisor/agent work.
Firstly an advisor/agent has to make a list of 100 people that he/she
knows.
Then the Advisor/agent makes a call to these clients and tries to fix an
appointment.
When an appointment is fixed the advisor/agent meets the customer &
tries to sell the product.
After that the advisor/agent asks for the reference of maximum
number of people from the client.
The reference is asked in context to make future calls and the whole
procedure is repeated again.
31
INSURANCE ADVISOR SURVEY
GENDER OF THE RESPONDENTTable 1
Frequency PercentValid
PercentCumulative
PercentValid Female 15 23.1 23.1 23.1 Male 50 76.9 76.9 100.0 Total 65 100.0 100.0
23.1
76.9
female
male
gender of the respondent
32
INFERENCE
As we can see from the figure itself that there is a sex ratio difference
between males and females, which is 3:1 in the insurance industry. It is
mainly because advisor’s job is demanding in terms of rigorous fieldwork
and hence women finds difficult to cope up with it.
MARITAL STATUS OF THE RESPONDENT
T able 2
Frequency PercentValid
PercentCumulative
PercentValid Married 49 75.4 75.4 75.4 Unmarried 16 24.6 24.6 100.0 Total 65 100.0 100.0
75.4
24.6
married
unmarried
marital status of the respondent
33
INFERENCEMore married people work, as advisors and company prefer to employ them in comparison to unmarried ones because being family people they tend to take their work more seriously. Because generally a laid back attitude has been observed in the unmarried people.
34
EDUCATIONAL QUALIFICATION OF THE RESPONDENT
Table 3
Frequency PercentValid
PercentCumulative
PercentValid Inter 5 7.7 7.7 7.7 Graduate 40 61.5 61.5 69.2 Professional 20 30.8 30.8 100.0 Total 65 100.0 100.0
7.7
61.5
30.8
inter
graduate
professional
educational qualification of the respondent
INFERENCEAmong insurance advisors, it has been observed that 61.5% of them are graduates in comparison to professionals like CA’s or MBA’s who are just 30.8%. While intermediate pass people just make 7.7% of the whole lot.
35
CLUB MEMBERSHIP OF THE RESPONDENT
Table 4
Frequency PercentValid
PercentCumulative
PercentValid Yes 17 26.2 26.2 26.2 No 48 73.8 73.8 100.0 Total 65 100.0 100.0
26.2
73.8
yes
no
club membership of the respondent
INFERENCEThe insurance advisors who do remarkable work in terms of fetching business for the company are given club memberships like DM club, MDRT club, Zonal Club etc.
36
MODE OF TRAINING BY IRDA UNDERGONE BY RESPONDENT
Table 6
64.6
18.5
16.9
classroom
online
none
mode of training by IRDA undergone by respondent
INFERENCE Insurance companies provide training in three modes –classroom training, online training and part time training. We find out that 64.6% of the respondents had preferred to take classroom training as according to them it gives a better hang of the insurance business operations since you are one on
Frequency %Valid
PercentCumulative
PercentValid Classroom 42 64.6 64.6 64.6 Online 12 18.5 18.5 83.1 None 11 16.9 16.9 100.0 Total 65 100.0 100.0
37
one with the training manager and hence you can ask any queries then and there only.
EXPERIENCE IN THE FIELD OF THE RESPONDENT
Table 7
Frequency PercentValid
PercentCumulative
PercentValid 0 to 6
months2 3.1 3.1 3.1
6 to 12 months
7 10.8 10.8 13.8
More than 1 year
56 86.2 86.2 100.0
Total 65 100.0 100.0
0 to 6 months 6 to 12 months more than 1 year
0
20
40
60
80
100
Y A
xis
experience in the field of the respondent
INFERENCE86.2% of the total respondents were found to be well established in this field since they have been working for over one year and majority for the last 10 –15 yrs.
38
CUSTOMER SIZE PER MONTH OF THE RESPONDENT
Table 8
Frequenc
yPerce
ntValid
PercentCumulative Percent
Valid 1 to 5 11 16.9 16.9 16.9 5 to 10 6 9.2 9.2 26.2 More
than 10
48 73.8 73.8 100.0
Total 65 100.0 100.0
1 to 5 5 to 10 more than 10
0
10
20
30
40
50
Fre
qu
en
cy
customer size per month of the respondent
INFERENCEOn an average an insurance advisor deals with more than 100 customers in a month and out of them he converts 80% of the calls i.e. he sells policies to them. 73.8% of the respondents had a customer base of more than 10 which was the minimum figured option included in our questionnaire. And these were the advisors who had been in this field for the last 5 to 8 years or more than that.
39
CONTACTING THE CUSTOMER BY THE RESPONDENT
Table 9
Frequency PercentValid
PercentCumulative
PercentValid Personal
meeting & telephone
11 13.8 13.8 13.8
Telephone & references
10 15.4 15.4 29.2
All 46 70.8 70.8 100.0 Total 65 100.0 100.0
9
10
46
personal meeting & telephone
telephone & references
all
contacting the customer by the respondent
INFERENCE
When respondents were asked that what are the ways they use for contacting the clientele base they are having then 70.8% of them named telephone calls, personal meetings and references as the major means of keeping in touch with their customers while only 15.4% named telephone calls and references as their sources.
40
FREQUENCY OF VISITING THE CUSTOMER BY THE RESPONDENT
Table 10
Frequency PercentValid
PercentCumulative
PercentValid Once a month 10 15.4 15.4 15.4 Twice a month 49 75.4 75.4 90.8 More than that 6 9.2 9.2 100.0 Total 65 100.0 100.0
once a month twice a month more than that
0
10
20
30
40
50
Fre
qu
en
cy
frequency of visiting the customer by the respondent
INFERENCE
75.4% of the advisors were find to visit their customers almost twice a month for various purposes like updating the customers for new policies and products company is introducing etc. and only 15.4% visited their clients once a month.
42
ANNNUAL PRODUCTIVITY OF THE RESPONDENT
Table 11
Frequency PercentValid
PercentCumulative
PercentValid Below Rs.
50,0004 6.2 6.2 6.2
Rs. 50,000 -- 1,00,000
15 23.1 23.1 29.2
Above Rs. 1,00,000
46 70.8 70.8 100.0
Total 65 100.0 100.0
below Rs. 50,000 Rs. 50,000 -- 1,00,000 above Rs. 1,00,000
0
10
20
30
40
50
Fre
qu
en
cy
annnual productivity of the respondent
INFERENCE
The commission earned by the advisors on the policy they sell to their customers is called the premium or the productivity. 70.8% of them had an annual productivity of more than 1 lac due to the large amount of business they gained via insurance only while 23.1% were earning between 50,000 to 1,00,000 because either they were new to this business or they were not able to devote much time to this field.
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SOURCE OF INFORMATION OF THE CUSTOMER
Table 12
Frequency PercentValid
PercentCumulative
PercentValid Newspapers 15 23.1 23.1 23.1 Television and
radio14 21.5 21.5 44.6
Relatives/friends
24 36.9 36.9 81.5
Other sources 12 18.5 18.5 100.0 Total 65 100.0 100.0
newspapers television and radio relatives/friends other sources
0
5
10
15
20
25
Fre
qu
en
cy
source of information of the customer
INFERENCEAs per the point of view of the 36.9%advisors, the customers usually get to know about the policies and products of any insurance company via their relatives or friends while 23.1% advisors gave the credit to the advertising in the newspapers as the source of information to the people. TV and Radio had 21.5% of the advisors favoring them.
44
PARAMETERS DEMANDED IN INSURANCE POLICIES
Table 13
Frequency PercentValid
PercentCumulative
PercentValid Service 14 21.5 21.5 21.5 Quality 18 27.7 27.7 49.2 Product
features11 16.9 16.9 66.2
Brand 22 33.8 33.8 100.0 Total 65 100.0 100.0
21.54
27.69
16.92
33.85
service
quality
product features
brand
parameters demanded in insurance policies
INFERENCE
33.8% advisors feel that while buying a policy what customer looks is the brand name associated with it. Like for selling a LIC, which is a generic brand you don’t need to do that much hard work because customer knows it.
45
27.7% favored quality of the product they are selling as the top priority of the customer.16.9% advisors gave their consent to the product features as one of the enticing factor for the customers in buying into a policy.
PURPOSE OF GETTING INSURANCE
Table 14
Frequency PercentValid
PercentCumulative
PercentValid Protection 9 13.8 13.8 13.8 Savings 10 15.4 15.4 29.2 Child
future9 13.8 13.8 43.1
Retirement 13 20.0 20.0 63.1 Investment 11 16.9 16.9 80.0 Tax saving 13 20.0 20.0 100.0 Total 65 100.0 100.0
13.85
15.38
13.85
20
16.92
20
protection
savings
child future
retirement
investment
tax saving
purpose of getting an insurance
46
INFERENCE
20% of the advisors felt that retirement and tax saving are the main purpose of the people for getting an insurance done. While 13.8% felt that child future and protection were the causes for the people to get an insurance done.16.9% favored investment as the reason and 15.4% voted for savings as one of the cause for getting an insurance.
47
NEAREST COMPETITOR OF THE COMPANY WITH WHICH RESPONDENT
IS ASSOCIATED
Table 15
Frequenc
y PercentValid
PercentCumulative
PercentValid LIC 46 70.8 70.8 70.8 ICICI
PRU LIFE
13 20.0 20.0 90.8
OTHERS 6 9.2 9.2 100.0 Total 65 100.0 100.0
LIC ICICI PRU LIFE OTHERS
0
20
40
60
80
Pe
rc
en
t
nearest competitor of the company with which respondent is associated
INFERENCE
LIC is one generic brand, which no one can beat, and hence the biggest competitor of any insurance company.70.8% of the respondents had this viewpoint while only 20% felt that ICICI Prudential is the next big emerging competitor after LIC of course.
48
ANY OTHER AGENT IN THE FAMILY OF RESPONDENT
Table 16
Frequency PercentValid
PercentCumulative
PercentValid Yes 13 20.0 20.0 20.0 No 52 80.0 80.0 100.0 Total 65 100.0 100.0
20
80
yes
no
any other agent in the family of respondent
INFERENCE
Only 20% of the total advisors surveyed had some other family member also as an agent along with them and 80% of the advisors were the only one in their family who were into the insurance business.
49
GENERAL MASS SURVEY
GENDER OF THE RESPONDENT
Table 1
Frequency PercentValid
PercentCumulative
PercentValid
Male42 62.7 62.7 62.7
Female 25 37.3 37.3 100.0 Total 67 100.0 100.0
62.7
37.3
male
female
Gender Of The Respondent
INFERENCE
As the figures speak for themselves, total respondents whom we surveyed 62.7% were males while rest were females (37.3%).
50
MARITAL STATUS OF THE RESPONDENT
Table 2
Frequency PercentValid
PercentCumulative
PercentValid Married 32 47.8 47.8 47.8 Unmarried 35 52.2 52.2 100.0 Total 67 100.0 100.0
47.7652.24
married
unmarried
Marital Status Of The Respondent
INFERENCE
As the figure shows that 52.24% were married while 47.76% were unmarried. In a way, it helped us because while prospecting the people for making them the advisors we prefer those who are married.
52
EDUCATIONAL QUALIFICATION OF THE RESPONDENT
Table 3
Frequency PercentValid
PercentCumulative Percent
Valid Any Professional Degree
7 10.4 10.4 10.4
Post Graduate 42 62.7 62.7 73.1 Graduate 9 13.4 13.4 86.6 Undergraduate/ XII
Pass9 13.4 13.4 100.0
Total 67 100.0 100.0
10.4
62.7
13.4
13.4
any peofessional degree
post graduate
graduate
undergraduate/ XII pass
Educational Qualification Of The Respondent
53
INFERENCE
62.7% of the respondents were found to be post graduates and next came under graduates and graduates with 13.4%. Only 10.4% were found to be professionals like CA’s or MBA’s.
54
OCCUPATIONAL BACKGROUND OF THE RESPONDENT
Table 4
Frequency PercentValid
PercentCumulative Percent
Valid Govt/ State Services
21 31.3 31.3 31.3
Private Job 33 49.3 49.3 80.6 Professional 8 11.9 11.9 92.5 Others 5 7.5 7.5 100.0 Total 67 100.0 100.0
31.3
49.3
11.9
7.5
Govt/ State Services
Private Job
Professional
others
Occupatonal Background Of The Respondent
INFERENCE
Most of the respondents belonged to the private sector like they were working in some bank or in any private enterprise so they were easily convertible into agents because they can take agencies on their name while
55
government people can’t do that. Only 31.3% belonged to the government sector.
ANNUAL HOUSEHOLD INCOME
Table 5
Frequency PercentValid
PercentCumulative
PercentValid 5 to 8 lacs 34 50.7 50.7 50.7 3 to 5 lacs 19 28.4 28.4 79.1 1 to 3 lacs 14 20.9 20.9 100.0 Total 67 100.0 100.0
50.7
28.4
20.9
5 to 8 lacs
3 to 5 lacs
1 to 3 lacs
Annual Household Income
INFERENCE
Almost 50.7% were found to earn between 5 to 8 lacs. Those people who are earning up to one lac are avoidable profile for tapping the insurance advisors. We were supposed to look for people who fell in an average income group of earnings between3 to 5 lacs. Even people who had income
56
of 8 lacs were to be ignored because it was difficult to entice them into the insurance business.
57
INTEREST OF THE RESPONDENT IN MAKING EXTRA INCOME
Table 6
76.1
23.9
yes
no
Interest Of The Respondent In Making Extra Income
INFERENCE
When the respondents were asked the question that whether they will be interested in earning a surplus income then 76.1% of them were enthusiastic about it especially when they were told that this business well cost NIL investment from their side. Only 23.9% said they were not inclined to earn extra since they were satisfied with their present business.
Frequency PercentValid
PercentCumulative
PercentValid Yes 51 76.1 76.1 76.1
No 16 23.9 23.9 100.0Total 67 100.0 100.0
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OPTION CHOSEN BY THE RESPONDENT TO MAKE EXTRA INCOME
Table 7
Frequency PercentValid
PercentCumulative
PercentValid MLM 8 11.9 11.9 11.9 MUTUAL FUND
AGENT/ INSURANCE AGENT
23 34.3 34.3 46.3
TRADING OF STOCK
23 34.3 34.3 80.6
INVESTMENT IN PROPERTY
13 19.4 19.4 100.0
Total 67 100.0 100.0
11.9
34.3
34.3
19.4
MLM
MUTUAL FUND AGENT/ INSURANCE AGENT
TRADING OF STOCK
INVESTMENT IN PROPERTY
Option Chosen By The Respondent To Make Extra Income
INFERENCE34.3% of the respondents wanted to earn that extra income by means of the trading of the stock or being an insurance advisor while 19.4% preferred investing in the property.
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BEST INSURANCE COMPANY AS RATED BY THE RESPONDENT
Table 8
Frequency PercentValid
PercentCumulative
PercentValid LIC 46 68.7 68.7 68.7 ICICI 15 22.4 22.4 91.0 OTHER 6 9.0 9.0 100.0 Total 67 100.0 100.0
68.7
22.4
9
LIC
ICICI
OTHER
Best Insurance Company As Rated By The Respondent
INFERENCE
When the respondents were asked to give a name of insurance company, which they found best then one could easily see the impact of the LIC in life
60
of a common man since 68.7% instantly took the name of LIC only. ICICI Pru stood second with 22.4% people recalling its brand name.
INTEREST OF THE RESPONDENT IN JOINING ICICI PRU
Table 9
Frequency PercentValid
PercentCumulative Percent
Valid CERTAINLY 29 43.3 43.3 43.3 PROBABLY 26 38.8 38.8 82.1 DEFINITEL
Y NOT12 17.9 17.9 100.0
Total 67 100.0 100.0
43.3
38.8
17.9
CERTAINLY
PROBABLY
DEFINITELY NOT
Interest Of The Respondent In Joining ICICI PRU
INFERENCE
If given a choice to join ICICI Prudential as its advisor, almost 43.3% of the respondents said that they would certainly be interested while only 38.8%
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said that they would think over it because as per them their decision depended on the money they will be getting from prudential in comparison to other insurance companies.
Interest Of The Respondent In Getting High Returns
Table 10
Frequency PercentValid
PercentCumulative
PercentValid Yes 58 86.6 86.6 86.6 No 9 13.4 13.4 100.0 Total 67 100.0 100.0
86.6
13.4
yes
no
Interest Of The Respondent In Getting High Returns
INFERENCE
86.6% of the total respondents said that they would definitely like to join a business where they will be rewarded with high returns without actually
62
spending a single penny from their pocket. While 13.4% said they are not interested since as per them there is no such business where you don’t have to invest any thing.
63
METHODOLOGY USED TO
RECRUIT ADVISOR The basic aim of the company in providing us with this assignment was to
find out the people’s perception of their brand in the market and via this
increasing their advisor base by encashing on their brand name.
1) Hence, our sales pitch in recruiting the good profile advisor was based
on:
Money:
For those who are needy, greedy and speedy
Excellent back end support, attractive payments and benefits and
Extensive training for that edge over competition
Reward and Recognition
For those who want to be recognized and honored
Several programs including foreign trips, seminars etc.
Selected club memberships like president’s club, ICICI Pru Star
Club, MDRT club etc.
Achievements rewarded with trophies and certificates as well
with Point rewards to give you a flying start.
Career Prospects
For people who want to climb the success ladder fast.
A program like PINNACLE, AGENCY
CHAMPION and TIGER TEAM has been devised.
64
This whole strategy was based on the MASLOW‘s THEORY OF NEEDS.
2) Then, instead of going personally and meeting these already well-
established
Advisors, we tried the concept of holding BOP (Business Opportunity
Presentation).
For this we drafted an invitation, which was a gimmick so as to entice
these advisors into coming to our own office, and it was based on the
pretext of ONE MILION POLICY CELEBRATIONS, the target that
ICICI PRU has just achieved.
And result was good in the sense that we were able to convert 5 to 10
advisors for our company then and there only.
3) Then, we targeted high profile people like CA’s or MBA’s or govt.
people.
For that, we drafted a letter in which we just gave them a hang of what our
proposal was for them (for recruiting them as our advisors) and asked them
to contact us themselves if they are interested.
We got at least 10-15 calls of people who were interested and wanted to
become our advisors. Meetings were held with them and they were
converted.
The BOP letter and then invitation for the BOP i.e. Business Opportunity
Presentation has been attached at the end in the annexure.
65
SWOT ANALYSISStrengths:
Vast untapped market
In a country of 1 billion people there is a huge potential market for life insurance products. In India the penetration of the insurance sector in the rural and semi-urban areas is low. There is a market of 900 million for life insurance and 200 million for householder’s insurance policy. In addition to this the affluent section can be tapped for Overseas Mediclaim and Travel Insurance policies.
Huge pool of skilled professionals
Whether it is banks or insurance companies there is no dearth of skilled professionals in India to carry out a successful bancassurance venture.
Weakness:
Lack of networking among bank branches
In spite of growing emphasis on total branch mechanization (TBM) and full computerization of bank branches, the rural and semi-urban banks have still to see information technology as an enabler. Complete integration of branch network involves huge investments for creating IT and communication infrastructure.
Low savings rate
Though we have a huge market for insurance policies, the middle class who constitutes the bulk of this market is today burdened under inflationary pressures. The secret lies in inculcating savings habit but considering the amount of surplus funds available with the middle class for investing in future security, the ability to save is very nominal
66
Opportunities:
Data mining
Banks have a huge customer database which has to be properly leveraged. Target segments should be identified and tapped.
Wide distribution networks of banks provides a great opportunity to sell insurance products through banks
Another potential area of growth of bancassurance is exploiting the corporate customers and tying up for insurance of the employees of corporate clients
Threats:
Human Resource Challenges
Success in banc assurance venture requires a change in mindset. Though we have a large talent pool, the inability to sell complex insurance products on the part of bank professionals and their reluctance to learn can be severe setback. There has to be a change in the thinking, approach and work culture.
Non-response from the target groups can also pose a challenge as it happened in the USA in 1980s
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FUTURE GROWTH PROSPECTS OFCOMPANY :
IN the total market share, LIC has reduced its share from 91% to 70%. This
means that private insurance players have got more margins in their hands
which have increased from 9% to 30% in last 2years only.
In the private market share, ICICI PRU leads with 39% of the market share
in its hand followed by Bajaj Allianz with 18% shares and then comes Birla
Sun Life with 15% market shares.
ICICI PRU has been maintaining its NO 1 position since last 5 years
because of its prolific product range and commanding brand equity. It has a
highest capital base of Rs. 925 crores and a team of more than 56,300 well-
trained advisors. It enjoys a brand recall rate of 92% and gives credit of its
success to the 5 core values-
Integrity
Customer
Boundary Less
Ownership
Passion
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MARKET SHARE IN PRIVATE
SECTOR
69
Total Market SharePrivate
Players
30%
LI C
70%
LIC
Private Players
LATEST UNIT VALUES OF SCHEME
Unit Values of different Plan options as on 08-06-2007
PlanUnit Value (Rs./unit)
Protector (Income) Plan* 15.2064
Balancer (Balanced) Plan* 24.14
Maximiser (Growth) Plan* 47.04
Pension Maximiser (Growth) Plan # 47.35
Pension Balancer (Balanced) Plan # 22.8
Pension Protector (Income) Plan # 13.654
Group Balanced Fund 15.86
Group Debt Fund 12.5022
Group Short Term debt fund 12.4647
Group Growth Fund 20.54
Group Capital Guarantee Short Term Debt Fund 11.8656
Maximiser (Growth) Fund II ^ 25.41
Preserver (Short Term) Fund * ^ 12.0221
Balancer (Balanced) Fund II ^ 15.6
Protector (Income) Fund II ^ 11.3331
Pension Preserver (Short Term) Fund # ~ 11.9604
Pension Maximiser (Growth) Fund II ~ 26.59
Pension Protector (Income) Fund II ~ 11.3368
Pension Balancer (Balanced) Fund II ~ 16.09
Invest Shield Cash *** 11.3759
70
Invest Shield Life ** 13.67
Invest Shield Pension 13.74
ICICI Prudential Life Maximiser III ^^ 11.92
ICICI Prudential Life Balancer III ^^ 11.21
ICICI Prudential Life Protector III ^^ 10.7264
ICICI Prudential Life Preserver III ^^ 10.8909
*Group Capital Guarantee Debt Fund 11.0156
*Group Capital Guarantee Balanced Fund 11.72
InvestShield Life New Fund ## 11.39
Group Capital Guarantee Growth Fund 10.69
Cash Plus Fund 11.9019
Secure Plus Fund 11.8
Secure Plus Pension Fund 11.5337
Flexi Growth * 10.86
Flexi Growth II ^ 10.9
Flexi Growth III ^^ 10.84
Pension Flexi Growth # 10.96
Pension Flexi Growth II ~ 10.88
Flexi Balanced * 10.55
Flexi Balanced II ^ 10.61
Flexi Balanced III ^^ 10.5
Pension Flexi Balanced # 10.73
Pension Flexi Balanced II ~ 10.62
Group Capital Guarantee Short Term Debt Fund II 10.2319
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Group Capital Guarantee Debt Fund II 10.2166
Group Capital Guarantee Balanced Fund II 10.4
UNIT VALUE CONDITION BEFORE 30-04-07
SchemePerformanc
e(1 year)
Annualized
Returns (Since
Inception)
InceptionDate
Preserver * 7.59% 6.11% 17-May-04
Protector @ 5.42% 7.78% 16-Nov-01
Balancer # 6.18% 17.09% 16-Nov-01
Maximiser $ 6.69% 32.27% 16-Nov-01
Pension Preserver * 7.44% 5.91% 17-May-04
Pension Protector @ 5.47% 6.31% 31-May-02
Pension Balancer # 7.31% 17.81% 31-May-02
Pension Maximiser $ 7.38% 36.40% 31-May-02
InvestShield Cash @ 6.42% 5.30% 04-Jan-05
InvestShield Life ^ 10.63% 13.42% 04-Jan-05
InvestShield Pension ^ 9.96% 13.60% 04-Jan-05
So, in future it might be possible that the unit value of scheme and market
share of ICICI prudential life insurance will be increase.
72
COPETITIVE ANALYSIS WITH HDFC - STANDARD LIFE:
HDFC Standard Life Insurance Company is a joint venture
between India's largest housing finance provider, HDFC and
Europe's largest mutual life assurance company The Standard Life
Assurance Company (U. K).
Standard Life, UK , founded in 1825, has been at the forefront of
the UK insurance industry for 175 years by combining sound
financial judgment with integrity and reliability.
It is the Largest Mutual Life company in Europe and has total
assets of Rs. 5, 50,000 crore.
Training activities for agents/advisors.
As per IRDA guidelines, 100hrs training is compulsory.
Both online & classroom training are available.
Training is compulsory with both part-time & full time
Options.
An objective based exam is conducted by IRDA, the
minimum qualification required is-
12th pass for urban areas
10th pass for rural areas.
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Commission Structure.
Depends on the product, like on savings
20-40% Ist year premium.
On investment 2%
On pension 7.5%
Modes & ways through which the company recruits agents. Direct contacts.
Newspaper adds.
Consultants.
Member of the company can introduce a new member.
Current agent force500-600 in NOIDA.
Top 5 USP’s (Unique Selling Proposition) Of HDFC Std.Life
Best insurer according to Outlook.
Well supported by foreign Ist private sector life insurance
Company to be granted a license.
Declared bonus every year from the day of incorporation
(only company.)
Provides fast service to the customers in terms of claim
74
During the exposure of 2 months I had in the insurance industry via
ICICI Prudential, it helped me to develop the basic understanding of how
this industry works and the work experience & knowledge gained has
also helped me to give the recommendations as stated below:
An insurance policy is a product, which needs a lot of convincing
before it can be sold because what I analyzed in this internship that
there are very few people who have a basic knowledge about life
insurance especially the lower middle class society. So, it is essential
for the advisor to know what the customer actually needs and then
letting the customer know what benefits he will get out of it.
The limitation here is how to win the trust of people when so many
companies are offering the same product range. Here, icici pru needs
to encash its brand name because after the survey I conducted what I
concluded is that after LIC if people know any other insurance
company is then it is ICICI Prudential.
During the calls where I went along with the Unit manager, I observed
that people in general have the perception that insurance is all about
getting discount in tax. People should be made realize that it is a great
way of saving for the future too.
Besides doing market research, my other job was also to increase the
advisor base of the company. And company preferred the profiles of
76
the already established insurance advisors of the other company
especially the LIC ones. What I suggest is that before approaching
these prominent agents we need to do a SWOT analysis of the co. they
are into. Like LIC Agents usually complain of LOW returns and
hence icici pru can tap them on this loophole of LIC.
Instead of approaching these good profile agents personally, the
company can hold Seminars Or Club Meetings because every one
comes for free lunches. Once they come, they can be given Business
Opportunity presentations about the incentives, commission structure
etc ICICI Pru is offering to its advisors.
Since the commission structure has been fixed by the IRDA only so
no insurance company can give more commission on products but
every company has a different mode of distributing commission, since
ICICI pru has all kind of products and policies with it (including the
products which LIC have and even those which LIC do not have) thus
every agent can earn as much (NO UPPER LIMIT ON EARNINGS)
as he wants because he has more choice to offer to the customer. This
can be one of the sales pitch for the ICICI Pru.
77
LEARNINGS The basic aim of the company in providing us with this assignment was to
find out the people’s perception of their brand in the market and via this
increasing their advisor base by encasing on their brand name.
I learned how to recruit insurance advisor and convinced
them for job profile.
When I was doing this project I met several people & collected their
responses, some of them give positive response, some gave negative
response & some can’t say any thing, they don’t believe in private sector. I
also personally met 20 to 25 people in a day. I also did Tele-calling & had
appointment. It is very helpful in the collection of the customer databases.
Under this project:
No. of customer met; more than 250
No. of customer called (phone); 300
No. of forms filled; more than 100
No. of customer converted; 25
ICICI Prudential Life Insurance Company is the number one private life
insurance company in India with a market share of 42.2%. Birla sun life
stands second in private life insurance companies with a market share of
18.5%. Looking in private sector ICICI Prudential has been the dominant
player because the amount of gap between the market shares is huge.
78
But if we analyze in all sectors of life insurance then LIC has been the
most dominant player since 1956. The impact of LIC has been so
much in both rural and urban areas that people use the term LIC
instead of life insurance.
ICICI prudential faces a big challenge in front of them to stay in the
race with Life insurance Corporation (LIC) because with the entrance
of other companies like Max New York, HDFC Standard Life & Birla
Sun Life the competition has become tougher.
But insurance is also growing day by day, India has a population of
1.2 billion and only 33.3% population is insured. This means
insurance is an upcoming industry but ICICI prudential has to work a
lot on their strategies to overcome LIC.
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BIBLOGRAPHY
Monthly Fact Sheet MAY 2006
Mutual fund Review MAY 2006
Study Material for AMFI exam
Investment update report of other AMC’S
Various Business Newspaper
Magazines
WWW. AMFINDIA. COM
WWW. ICICIPRULIFE.COM
WWW.INVESTMSRTINDIA.COM
WWW.PERSONALFN.COM
WWW.ECONOMICTIMES.COM
WWW.STOCKINDIA.COM
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