icici prudential.pdf
TRANSCRIPT
PROJECT REPORT
ON
“INVESTMENT AVENUES AVAILABLE”
SUBMITTED BY
NISHA JANI MBA Sem-II
ACADEMIC YEAR 2005-2006
SUBMITTED TO AHMEDABAD EDUCATION SOCIETY
POST GRADUATE INSTITUTE OF BUSINESS MANAGEMENT (AES PGIBM) AHMEDABAD
AFFILIATED TO GUJARAT UNIVERSITY
AHMEDABAD
Insurance is one of the fastest growing sectors these days and bancassurance is
one of the major contributors to its success. ICICI Prudential is the leading
company amongst the private life insurers. This project highlights the features of
ULIP (Unit Linked Insurance Plans) of ICICI Prudential. These plans offer not just
insurance to the customers but also serve the investment purpose.
ICICI Prudential offers a range of products to meet every customer’s
requirement. From traditional plans to ULIP there is a choice for every need.
Since ULIP plans are market linked they offer greater returns.
The project deals with the bancassurance channel and the six ULIP plans offered
by ICICI Prudential. It highlights the various aspects of these plans as; entry
parameters, charges, surrender values and other features which make these
plans unique and most opted plans.
The success of ICICI Prudential company can be attributed to its unit managers,
agents (comprising the Tide channel) and to the employees and managers of
ICICI bank (comprising bancassurrance channel).
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I, Nisha Jani, am thankful to Mr. Rohit Mehrotra (Financial Services Manager at
ICICI Prudential) for being a support and a guide throughout my summer training.
I would also like to thank Mr. Pankaj Popat (branch manager at ICICI bank Jai
Hind branch, Rajkot) for his guidance and encouraging me at various stages of
my training. He had helped me to deal with the customers of ICICI bank.
I would like to thank Ms. Falguni Faldu for being a wonderful trainer and for
providing me with the resources during my training.
Lastly, I would take this opportunity to put a word of thanks for all the faculty
members for helping me at various stages of my summer training.
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CONTENTS
Sr. No
Particulars Page no
1 Executive Summary 5 2 Introduction 6 (a) Company Details 9 (b) Company Overview 12 (c) Industry Details 23 (d) Product Details 27 (e) Competitors Details 55 (f) Regulatory Environment 63 3 Limitations and Recommendations 67 4 Conclusions 68 5 Web sites 69
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I have taken training in ICICI Prudential Life Insurance Company. It is the leading
life insurance company in private sector. I had done my training on the subject
“Investment Avenues Available” with special emphasis on insurance plans.
ICICI Prudential is having financial background from the ICICI Bank. The bank
gives total support in Life Insurance to ICICI Prudential. Every financial
transaction is carried out effectively so that the company does not have to face
any problem related to finance. ICICI bank helps by providing business to ICICI
Prudential Co.
I have undertaken the training in ICICI Prudential’s bancassurance channel.
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Life Insurance
Life insurance is a contract of payment of sum of money assured to the person
assured (or falling him/her, to the person entitled to receive the same) on the
happening of the event, insured against.
Usually the insurance contract provides for the payment of an amount on the
date of maturity or at the specified dates at periodic intervals or at unfortunate
death if it occurs earlier. Obviously, there is a price to be paid for this benefit.
Among other things, the contract also provides for the payment of premiums by
the assured. Life Insurance is universally acknowledged as a tool to eliminate
risk, substitute certainty and ensure timely aid to the family in the unfortunate
event of the death of the breadwinner. In other words, it is civilized world’s partial
solution to the problems caused by the death.
In a nutshell, life insurance helps in two ways: premature death, which leaves
dependent families to fend for itself and old age without visible, means of
support.
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Benefits of Life Insurance: Superior To Any Other Saving Plan
Unlike any other saving plan, a life insurance policy affords full protection against
risk of death. In the event of death of a policy holder, the insurance company
makes available the full sum assured to the policy holders’ near and dear ones.
In comparison, any other saving plan would amount to the total savings
accumulated till date. If the death occurs prematurely, such savings
can be much less than the sum assured. Evidently, the potential financial loss to
the family of the non policyholder is sizable.
Encourages And Forces Thrift
A saving deposit can easily be withdrawn. The payment of life insurance
premiums however is considered sacrosanct and is viewed with the same
seriousness as the payment of interest on mortgage. Thus a life insurance policy
in effect brings about compulsory savings.
Easy Settlement and Protection Against Creditors
A life insurance policy is the only financial instrument the proceeds of which can
be protected against the claims of a creditor of the assured by effecting a valid
assignment of the policy.
Administering The Legacy for Beneficiaries
Speculative or unwise expenses can quickly cause the proceeds to be
squandered. Several policies have foreseen this possibility and provide for
payments over period of years or in a combination of installments and lumsum
amounts.
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Ready Marketability and Suitability for Quick Borrowing
A life insurance policy can, after a certain time period (generally three years), be
surrendered for a cash value.
Disability Benefits
Death is not only the hazard that is insured; many policies also include disability
benefits. Typically, these provide for waiver of future premiums and payments of
monthly installments spread over certain time period.
Accidental Death Benefits
Many policies can also provide for an extra sum to be paid to the beneficiaries
(typically equal to the sum assured) if death occurs as a result of an accident.
Tax Relief
Under the Indian Income Tax Act, tax relief is available under section 80C and
10(10D).
When these benefits are factored in, it is found that most policies offer returns
that are comparable/ or even better than other saving modes as PPF, NSC
(National Saving Certificate) etc. Moreover, the cost of insurance is not too much.
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COMPANY DETAILS
ICICI Prudential Life Insurance Company is a joint venture between ICICI a
premier financial power house and Prudential Plc a leading international financial
group headquartered in the United Kingdom, ICICI prudential was amongst the
first private sector insurance companies to begin operations in December 2000
after receiving approval from Insurance Regulatory Development Authority
(IRDA).
ICICI Prudential equity base at RS 11.85 billion with ICICI Bank and Prudential
Plc holding 74% and 26% stake respectively. In the financial year ended March
31, 2005, the company garnered Rs 1584 crore of new business premium for a
total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The
company has a network of about 56,000 advisors; as well as 7 bancassurance
and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has
retained its position as the No. 1 private life insurer in the country, with a wide
range of flexible products that meet the needs of the Indian customer at every
step in life.
ICICI Prudential is also the only private life insurer in India to receive a National
Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA rating
is the highest credit rating, and is a clear assurance of ICICI Prudential’s ability to
meet its obligations to customers at the time of maturity or claims.
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ICICI BANK
ICICI Bank is India's second-largest bank with total assets of about Rs. 2,513.89
bn (US$ 56.3 bn) at March 31, 2006 and profit after tax of Rs. 25.40 bn (US$ 569
mn) for the year ended March 31, 2006 (Rs. 20.05 bn (US$ 449 mn) for the year
ended March 31, 2005). ICICI Bank has a network of about 614 branches and
extension counters and over 2,200 ATMs. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail customers
through a variety of delivery channels and through its specialized subsidiaries
and affiliates in the areas of investment banking, life and non-life insurance,
venture capital and asset management. ICICI Bank set up its international
banking group in fiscal 2002 to cater to the cross border needs of clients and
leverage on its domestic banking strengths to offer products internationally. ICICI
Bank currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International
Finance Centre and representative offices in the United States, United Arab
Emirates, China, South Africa and Bangladesh. Our UK subsidiary has
established a branch in Belgium. ICICI Bank is the most valuable bank in India in
terms of market capitalization.
ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange
and the National Stock Exchange of India Limited and its American Depositary
Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
At June 5, 2006, ICICI Bank, with free float market capitalization of about Rs. 480.00 billion (US$ 10.8 billion) ranked third amongst all the companies listed on the Indian stock exchanges.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI
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Bank was reduced to 46% through a public offering of shares in India in fiscal
1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000,
ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation
in fiscal 2001, and secondary market sales by ICICI to institutional investors in
fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World
Bank, the Government of India and representatives of Indian industry. The
principal objective was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian
company and the first bank or financial institution from non-Japan Asia to be
listed on the NYSE.
PRUDENTIAL PLC
Established in London in 1848, Prudential plc, through its businesses in the UK
and Europe, the US and Asia, provides retail financial services products and
services to more than 16 million customers, policyholder and unit holders
worldwide. As of June 30, 2004, the company had over US$300 billion in funds
under management. Prudential has brought to market an integrated range of
financial services products that now includes life assurance, pensions, mutual
funds, banking, investment management and general insurance. In Asia,
Prudential is the leading European life insurance company with a vast network of
24 life and mutual fund operations in twelve countries - China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand
and Vietnam.
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Name of the company : - ICICI PRUDENTIAL LIFE INSURANCE CO. LTD
Registered Office : - ICICI PRUDENTIAL LIFE INSURANCE CO. LTD
1089 Appasaheb Marathe Marg,
Prabha Devi,
MUMBAI – 400025
The ICICI Prudential Life Insurance Co. Ltd board comprises reputed people
from the finance industry both from India and abroad.
Mr. K.V.Kamath, Chairman Mr. Mark Norbom
Mrs. Lalita D.Gupte Mrs. Kalpana Morparia
Mrs. Chanda Kocchar Mr. Keki Dadiseth
Mr. M.P.Modi Mr. R Narayanan
Ms. Sikha Sharma, Managing Director Mr. HT Phong
Mr. N.S. Kannan, Executive Director
Ms. Shikha Sharma, Managing Director & CEO
Ms. Anita Pai, Chief Operations and Underwriting
Mr. Sandeep Batra, Chief Financial Officer and Company Secretary
Mr. Shubhro J. Mitra, Chief Human Resource
Mr V Rajgopalan, Appointed Actuary
Mr. N.S. Kannan, Executive Director
Mr. V. Rajagopalan, Chief - Actuary
Mr. Puneet Nanda, Chief – Investments
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ICICI and Prudential came together in 1993 to form Prudential ICICI Asset
Management Company, which has today emerged as one of the leading mutual
funds in India. The two companies brought together two of the strongest financial
services brands in Asia, known for their professionalism, excellent quality of
service and long term commitment to people. Riding on the success of this
relationship the two companies joined hands once more in 2000 to form ICICI
Prudential Life Insurance with a commitment to provide leading edge Life
insurance solutions.
ICICI Bank has 74% stake in the company and Prudential plc has 26%.
ICICI Prudential Life Insurance Company, India’s leading private life insurer, has
increased its capital base by Rs 50 crore, taking its total paid up equity capital to
Rs 675 crore. This is the ninth equity hike since the company was incorporated in
December 2000. The two partners ICICI Bank and Prudential Plc, contributed
capital in their existing proportions, 74:26 respectively. The authorized capital of
the company stands at Rs 1200 crore.
The additional capital will be used to meet capital adequacy norms as stipulated
by the regulator, to fund the high up front expenses typical to a life insurance
business and expansion such as opening new branches.
In the life insurance business, a number of expenses are incurred up front but the
revenue in the form of premium flows over a 10-15 year time frame. Because of
this a life insurer must regularly infuse capital during the first 5-7 years in order to
support growth in the business. Typically, the more business a company writes,
the greater the capital requirements.
ICICI Prudential has grown exponentially over the past 3 years, making its mark
in a number of segments such as retirement solutions, child plans and market
linked plans. The success of the business has reaffirmed the commitment of both
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the partners- ICICI Bank and Prudential plc towards achieving the company’s
vision of being a leader in life insurance business in India said Ms Shikha
Sharma, Managing Director, ICICI Prudential Life Insurance Company.
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To make ICICI Prudential the dominant player on trust by world class services.
The company hopes to achieve:
Understanding the needs of customers and offering them superior products
and service.
Leveraging technology to service customers quickly, efficiently and
conveniently.
Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to policy holders.
Providing an enabling environment to foster growth and learning for
employees.
And above all, building transparency in all dealings.
The success of the company will be founded in its unflinching commitment to 5
core values i.e.
Integrity,
Customer first,
Boundary less,
Ownership
Passion
Each of the values describes what the company stands for, the qualities of our
people and the way they work.
The companies do believe that they are on the threshold of an exciting new
opportunity, where it plays a significant role in redefining and reshaping the
sector. Given the quality of the parentage and commitment of the team, there are
no limits to their growth.
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Introduction Bancassurance in its simplest form is the distribution of insurance products
through a bank’s distribution channels. In concrete terms bancassurance which is
also known as Allfinanz- describes a package of financial services that can fulfill
both banking and insurance needs at the same time. It takes various forms in
various countries depending upon the demography and economic and legislative
climate of that country. Demographic profile of the country decides the kind of
products bancassurance shall be dealing in with. Economic situation will
determine the trend of turn over, market share etc. whereas legislative climate
will decide the periphery within the bancassurance has to operate.
For bank it is a means of product diversification and a source of additional fee
income. Insurance companies see bancassurance as a tool for increasing their
market penetration and premium turnover. The customer looks bancassurance
as a bonanza in terms of reduced price, high quality product and delivery at door
steps. Actually everybody is a winner here.
Which distribution model to use is a tactical decision, secondary to more basic
strategic concerns? Bancassurance strategies should be driven by market and
channels encompass a broad range of tactics and practices and leverage the
competencies of the bank and the insurer. They should identify and build upon a
discrete set of value drivers; these factors of such fundamental importance; to
ignore anyone of them could be fatal to the success of the project.
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Brand equity: The strategy should leverage the bank’s brand equity with consumers.
Consumers throughout the world rate bankers higher than insurance agents in
terms of such criteria as credibility of advice and product knowledge. A
rationalized bancassurance strategy will build on the superior brand equity of
banks by integrating insurance into the bank’s product portfolio and distribution
infrastructure.
Distribution: The distribution model should accomplish the following objectives
1) It should cater to all segments of the bank’s customer.
2) It should work as a single shop for all financial requirements for the bank’s
customer.
3) It should effectively utilize the existing branch banking platform
4) It should take advantage of the multiple sales opportunities afforded by the
bank’s other distribution channels.
Technology Bancassurance should plan a technological infrastructure that will exploit
customer information, found in the bank’s database to uncover sales
opportunities and produce transactional simplicity for insurance customers.
Bancassurance should use technology to simplify the insurance purchase as
much as possible thereby making the purchase easier, more pleasant experience
and further differentiating themselves in the process.
Thus bancassurance can be enriched by using proper technology particularly in
insurance policy; the buying experience itself is a key part of the purchase.
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Culture: An effective Bancassurance strategy acknowledges the fundamental cultural
conflict between the bank and the insurance company by aligning the banks with
those of the insurance company.
In any given situation one of the four value drivers may greatly outweigh the
importance of the others. In some cases solving the cultural problem may loom
especially large, while in others building technology platforms may be paramount,
all four have to be taken in to consideration in case of successful banc assurance
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In their natural and traditional roles and with their current skills neither banks nor
insurance companies could effectively mount a bancassurance start up alone.
Collaboration is the key to making this new channel work.
Bank brings a variety of capabilities to table. Most obviously, they own
proprietary database that can be tapped for middle market warm leads. In
addition they can leverage their name recognition and reputation at both local
and regional levels. Strong players also excel at managing multiple distribution
channels, cross selling banking products and using direct mail. However most
bank lack experience in several areas critical to successful bancassurance in
particular developing insurance product selling through face to face push,
channels underwriting and managing long term insurance products
Where banks usually fall short strong insurers excel well, most have substantial
product and underwriting experience, strong push channel capabilities and
investment management expertise. On the other hand they tend to lack
experience or ability in the areas where banks prevail. They have little or no
background in managing low cost distribution channel they often lack local and
regional name recognition and reputation and they seldom possess access to or
experience with the middle market.
Why should banks enter insurance?
There are several reasons why banks should seriously consider bancassurance,
the most important of which is increased in return on assets. One of the best
ways to increase ROA, assuming a constant asset base, is through fee income.
Banks that build fee income can cover more of their operating expenses.
Sale of personal life insurance products through banks meets an important set of
consumer needs. Most large retail banks enjoy a great deal of trust in broad
segments of consumers, which they can leverage in selling them personal life
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insurance products. In addition, bank’s branch network allows the face to face
contact that is so important in the sale of personal insurance.
Another advantage banks have over traditional insurance distributors is the lower
cost per sales lead, which is possible by their sizable, loyal customer base.
Banks also enjoy significant brand awareness within their geographic regions
again providing for a lower per lead cost when advertising through print, radio
and or television. Bank that makes the most of these advantages are able to
penetrate their customers base and markets for above average market share.
Other, banks strengths are their marketing and processing capabilities. Banks
have extensive experience in marketing. They also have access to multiple
communications channels such as statements, direct mail, ATMS, telemarketing
etc. Banks proficiency in using technology has resulted in improvements in
transactions processing and customer service.
Benefits to insurer
Insurers have much to gain from marketing through banks. Personal lines
carriers have found it difficult to grow using traditional agency systems because
price competition has driven down margins and increased the compensation
demands of successful agents. Over the last decade life agents have sold fewer
and large policies to a more upscale client base. Middle income consumers who
comprise the bulk of bank customers’ get little attention from most life agents. By
capitalizing on bank relationships, insurers will recapture much of this
underserved market.
Most insurers that have tried to penetrate middle income markets through
alternative channels such as direct mail have not done well. Clearly a change in
approach is necessary. As with any initiative, success requires a clear
understanding of what must be done, how it will be done and by whom. The
place to begin is to segment the strengths that the bank and insurer brings to the
business opportunity.
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1) Most Trusted Private Life insurer: The Economic Times- A c Nielsen
Survey of Most trusted Brands- 2004
2) Prudence Customer Centricity Award: Prudential Corporation Asia
3) Best life insurer 2003: Outlook Money Awards 2003-04
4) IMM Awards for Excellence: Institute of Marketing and Management
5) Organization with Innovative HR Practices: India Group of
Institutes.
6) Super brand 2003-04
7) Organization with Innovative HR Practices; Asia Pacific H R Congress
Awards for HR Excellence.
8) Silver Effie for Effectiveness of the “Retire from Work not Life”
advertising campaign” Effies 2003
9) Most Trusted Private Life Insurer; The Economic Times AC Nielsen
survey of Most Trusted Brands -2003
10) Best New Insurer: Outlook Money Awards 2003
11) Rajkot branch has achieved 9th rank in its business and in the last
year. Rs100 lakh business in the year 2003-04
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HIERARCHY
TIED AGENCY
ALTERNATE DISTRIBUTION
COURNTRY HEAD VICE PRESIDENT
ASSI SALES MANGER
BANCASSURNCE
FINANCIAL SERVICE
CUSTOMER SERVICE REPRESENT
TRAINEES
RELATIONSHIP MANAGER
REGIONAL MANAGER
UNIT MANAGER
SALES MANAGER
BRANCH SALES MANAGER
SALES MANAGER
CORPORATE AGENCY
TEAM LEADER
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INDUSTRY DETAIL:
There is no end to the challenges that confront an insurer in this increasingly
uncertain world. A lot depends on how the prudent insurer looks at the
uncertainty as a threat or an opportunity? While some insurers and reinsures
have been consolidating their basic strengths, profitability and so on, others have
not been so fortunate. Some sporadic acts of terrorism here; a military conflict
there and an environment-related problem elsewhere have all tested the
resilience of the insurance industry. Thankfully, insurance has been the winner in
the end and rightly so, because the success of insurance is essential for the
overall success of the economies, across the globe.
Coming to the Indian scenario, the benefits of liberalization and a competitive
environment are at last hitting the market. While the leaders in the market are
leading by a wide margin, the boundaries are being redrawn. The style of
delivering services are taking new look and adopting a refreshing way to satisfy
the customer it gives more awareness to the people. There is also a serious
need to look at the need base selling and also the type of personnel needed to
do the job.
Besides, there is also a serious need to impart the right kind of training to the
personnel if the tempo is to be sustained. One particular aspect very hot now a
days is, government is giving due attention towards the industry which is also felt
by budget-related changes. With the FDI cap slated its pumping lots of money
into the industry as a whole.
The size of the industry is very big and due to increase in FDI limit there is
immense opportunity for the players in the market. The population of India is 2nd
largest in the world which clearly indicates that there is a lack of awareness
about the insurance among the people so, there is vast opportunity out there.
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There are about fourteen players in the industry of life and about ten players in
the non life segment.
GROWTH IN THE INDUSTRY: The Indian insurance industry is going full steam now, in its new, rejuvenated
form. There are several players in each of the classes competing with each other
to grab the best share and create a niche for themselves. While the going has
been good on the whole, there are some areas that need immediate attention of
the forces involved. In a competitive regime, some of these trends are, perhaps,
inevitable. The best thing that has happened is the overall freshness that is
perceptible as regards the insurance business as also the other things attached
to it, like the distribution channels, new styles of service delivery; the genesis of
new products on the horizon; and above all, a whole new set of opportunities for
employment in the insurance sector.
Last year as per the IRDA report there is an increase in the industry by 49%
annually. The industry growing rapidly after government opened door for the
private players and the permission of FDI up to the limit of 49%, which is very
welcome step by the government to support the industry as a whole.
There is immense opportunity for the players in the industry to capture the larger
market share as the awareness among the people is increases and the
importance of insurance concept is gaining favor. There is also an increase in
the number of policy sold and the premium income is growing like anything. The
market share of the public sector giant has been progressively showing a
declining trend due to the private player’s entry into the industry.
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CURRENT SCENARIO AND PROBLEMS:
The five years that we have had of a liberalized insurance domain, present
contrasting pictures of growth and consolidation on the other hand, and
insufficient understanding and lopsided priorities on the other. Unless the players
realign themselves positively, the real purpose for which the industry has been
opened up would be hard to realize. While the performance in some areas has
been exceptionally good, others need to be addressed by all the players to
ensure an overall growth. The market share of the public sector giant has been
progressively showing a declining trend and is likely to get stabilized at a certain
level, sooner or later.
One thing that is very conspicuous in the Indian industry is the strengths that the
public sector companies command. This puts the new players in that slightly
more disadvantageous position as they have to fight giants.
One class that has been making ripples in the industry is health insurance. it is
good to see that health insurance, which is just seventeen years old in the Indian
domain, has grabbed the third place as regards the total gross domestic premium
income. It has overtaken the age-old marine and engineering classes to post an
8% market share. It has grown a healthy 26% during the year 2003-04, while the
overall industry grew only by 13%. This should not however be taken as a great
leap forward as the class is itself beset with a lot of misgivings on the part of the
customer as well as the provider.
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PROBLEMS:
• Need identification of the customer took a back seat and this, in turn, is
largely responsible for the high lapsation ratio.
• The tendency not to Share information or data’s to other insurers in one
company as data plays major role in the insurance business.
• The lack of understanding of concept of insurance, the insurers would do
well to spread the message of insurance in its right earnest so that these
adventurous tendencies among the policyholders are arrested.
Insurance is a mechanism to provide protection against the uncertain
eventualities and not a means to make a profit out of. In this regard, there is a
great responsibility on the part of the insurers themselves; regulators; the
academicians; and all those involved either directly or indirectly with the
insurance industry; including the policy holders themselves. Unless this is
achieved, we cannot look forward to a healthy and vibrant insurance market.
Future Scenario
Considering past and present we can say that the insurance industry is in the
boom period.
Still there are 70% uncovered people who might be potentials for the insurance.
It has also provided good employment, as well as has boosted the economy as a
whole. Technology has also been updated keeping in pace due to insurance
industry. So we can say that the future of insurance industry is quite bright and
challenging also. Future of ICICI PRU LIFE INSURANCE CO Ltd is also bright
and is going to be appreciated more; it has already acquired the tag of no. 1
private insurance Co. from IRDA. Financially as well a managerially the company
is performing well. It has excellent vision and bright future.
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The following are the main products of ICICI PRUDENTIAL LIFE INSURNANCE
Insurance Solutions for Individuals:
ICICI Prudential Life Insurance offers a range of innovative, customer centric
products that meet the needs of customers at every life stage. Its products can
be enhanced with riders to create customized solution for each policy holder.
ICICI Pru Life offers flexible riders, which can be added to the basic policy at a
marginal cost, depending on the specific needs of the customer.
1) Accident & Disability Benefit : If death occurs as the result of an accident
during the term of the policy, the beneficiary receives an additional amount
equal to the sum assured under the policy. If the death occurs while
traveling in an authorized mass transport vehicle, the beneficiary will be
entitled to twice the sum assured as additional benefit.
2) Accident Benefit : This rider option pays the sum assured under the rider
on death due to accident.
3) Critical Illness Benefit : Protects the insured against financial loss in the
event of 9 specified critical illnesses. Benefits are payable to the insured
for medical expenses prior to death.
4) Major Surgical Assistance Benefit : Provides financial support in the event
of medical emergencies ensuring that benefits are payable to the life
assured for medical expenses incurred for surgical procedures.
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5) Income Benefit : This rider pays the 10% of the sum assured to the
nominee every year, till maturity in the event of the death of the life
assured. It is available on Smart kid, Secure Plus and Cash Plus.
6) Wavier of Premium : In case of total and permanent disability due to an
accident or death the premiums are waived till maturity. This rider is
available with Smart Kid Secure Plus and Cash Plus.
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PRODUCT PROFILE
(1) LIFE TIME SUPER (4) LIFE TIME PLUS
(2) SMART KID (5) PREMIER LIFE
(3) LIFE TIME PENSION (6) CASH PLUS
FEW COMMON FEATURES
Maturity Benefit
• Maturity Benefit – Fund Value
• Alternatively, Settlement options can be opted for.
Investment Options
• Choice of Investment Funds
o Maximiser (Equity Fund)
o Balancer (Balanced Fund)
o Protector (Debt Fund)
o Preserver (Money Market Fund)
* Pension Maximiser, Balancer, Protector & Preserver for Pension Plan
• Switches
• 4 switches in a policy year free
• Subsequent switches in that year are charged Rs. 100 per switch
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Automatic Transfer Plan (ATP)
• Customer can choose this option at any time during the policy.
• No additional charge for this option.
• Funds would be automatically transferred from *Protector II to *Maximiser
II (Only this option available currently)
• Customer can choose either amount or percentage of Fund to be
transferred every month.
• ATP would cease once funds are exhausted in Protector.
• Min switch amount – Rs. 2000
• Normal switches available apart from ATP option
* In Pension Plan Pension Protector II to Pension Maximiser II
Cover Continuance Option
• Available after 3 years premium payment
• Ensures that the life cover & rider cover continues, if policy holder stops
paying premiums
• Policyholder has to opt for the option, before end of reinstatement period
• Alternately, policyholder can choose the option at inception.
• If opted for, life cover is available throughout the policy term.
• If not opted for, life cover continues for a period of 2 yrs from the date
unpaid premium, post which will be foreclosed & surrender value paid.
• In both situations, if the Fund Value reaches 110% of one year’s premium,
the policy will be foreclosed and surrender value paid out.
30
Other Conditions
• Increase/Decrease in Term – NOT ALLOWED
• Increase/Decrease in Annual Premium - NOT ALLOWED
• Increase in Sum Assured –ALLOWED subject to underwriting *
• Decrease in Sum Assured – NOT ALLOWED
• Loans – NOT AVAILABLE
* Smart Kid & Pension Plan: Increase in Sum Assured Not Allowed
Settlement Period Options
• Available on maturity of the plan
• Settlement option can be exercised for a period of 1/2/3/4/5 years from
maturity
• Structured payout of units depending on the period & payment mode
selected
• Payment Modes available – Yearly, Half-yearly, Quarterly or Monthly
(through ECS - Electronic Clearing Service) allowed
• Customer can withdraw entire Fund Value at any time (Part-withdrawals
not allowed)
• Life Cover not available during Settlement Period
31
Surrender Values
Post payment of 3 years’ premiums
SV as a % of Fund Value No of completed years of policy
Life Time Super
Smart Kid
Life Time Pension
Life Time Plus
Premier Gold
3 years 98% 96% 96% 92% 96%
4 years 99% 98% 98% 94% 98%
5 years 100% 100% 100% 96% 100%
6 years - - - 98% -
7 years
and
above
- - - 100% -
Before 3 years’ premiums are paid
Premiums paid Surrender Value if not reinstated
<1 yr Nil
1yr to <2 yr 25%
2yrs to <3 yrs 40%
This surrender value will be paid out after completion of 3 policy years or end of
reinstatement period, whichever is later.
32
Partial Withdrawals
FEATURES LIFE TIME SUPER
SMART KID LIFE TIME PLUS
PREMIER GOLD
CASH PLUS
Allowed after completion of
3 policy
years
5 policy years
to provide for
expenses at
key
educational
milestones
3 policy years
3 policy years &
payment of 3 full
years’ premiums
5 policy years
& payment of 5
full years’
premiums
No. of withdrawals allowed
No
restrictions
on number
Max. One per
policy year
4th – 10th policy
year: Max. One
per year
4th – 10th year,
Max. One per
year
6th year
onwards, Max.
One per year
Amount of withdrawal allowed
No
restrictions
on amount
Max. of 25% of
Fund Value
per withdrawal
Max. of 20% of
Fund Value
Max. of 20% of
Fund Value
Max. of 10% of
Fund Value
11th year onwards
-
Total of 5
withdrawals
allowed during
policy term
No restrictions on
the
number/amount
of withdrawals
No restrictions on
the number/
amount of
withdrawals
Unused Partial
Withdrawal
cannot be
carried forward
Min age of Life Assured
18 years 18 years 18 years 18 years 18 years
Min amount Rs. 2,000 Rs.2,000 Rs.2,000 Rs.2,000 Rs. 2,000
Salient points
- -
First withdrawal –
Free.
Subsequent
withdrawals
charged Rs.100
per partial
withdrawal.
-
The partial
withdrawals will
reduce the
Guaranteed
Value of the
fund.
33
Add-0n Riders
LIFE TIME SUPER
SMART KID
LIFE TIME PENSION
LIFE TIME PLUS
PREMIER GOLD
CASH PLUS
Accidental Death & Disability Rider
√ √ √ √ √ √
Critical Illness Benefit Rider
√ - √ - √ √
Waiver of Premium Rider (Permanent Disability)
√ √ √ √ - √
Income Benefit Rider
- √ - - - -
Fund Management Charges for Smart Kid, Life Time Pension,
Life Time Plus, Premier Gold
Fund Asset Mix Potential
Risk-Reward
Fund Mgmt
Charge
Equity & Related Securities Max. 100% Pension Maximiser Debt, Money Market & Cash Max. 25%
High 1.5%
Equity & Related Securities Max. 40% Pension Balancer Debt, Money Market & Cash Min. 60%
Medium 1%
Max. 100% Pension Protector Debt Instruments, Money Market & Cash
Min. 100% Low 0.75%
Debt Instruments Max. 50% Pension Preserver Money & Cash Min. 50%
Very Low 0,75%
34
Entry Parameters * Age and Term in years.
LIFE TIME SUPER
SMART KID
LIFE TIME PENSION
LIFE TIME PLUS
PREMIER GOLD
CASH PLUS
Age at Entry 0 – 65 - 18 – 65 0 – 65 0-65 or 69 0-60
Age at Entry (PARENT)
- 20 – 60 - - - -
Age at Entry (CHILD)
- 0 – 15 - - - -
Age at Maturity (PARENT)
- 75 - - - -
Age at Maturity (CHILD) - 18 - 25 - - - -
Maximum Age at Policy Maturity
75 22-25
(child’s) 75 75 75 75
Minimum Term 10 10 10 10 6 or 10 10
Maximum Term 75 25 57 30 30 30
Min Premium (p.a.)
Rs.
18,000 Rs.10,000 Rs.10,000
Rs.
20,000
Rs. 60000
or 100000 Rs. 8400
Max Premium - - -
Rs.
3,00,000
p.a
- -
Minimum Policy Term
3 N.A. 10 3 3 10
Maximum Policy Term
75 22-25 57 75 75 30
35
SALIENT FEATURES
(1) LIFE TIME SUPER
Entry into the plan will be based on the Unit Value applicable on the date of
policy issue. The amount of premium towards death benefit decreases with the
increase in the value of the units.
Death Benefit
• Nominee receives Higher of Sum Assured (less partial withdrawals) or
Fund Value in case of death of the Life Assured.
Additional Allocation of Units
• Additional Allocation at the rate of 4 % of annual premium every 4 years
starting from the end of the 4th policy year
• Allocation would be made only if due premiums are paid upto the date of
allocation
Effect of Partial Withdrawals on Sum Assured
• Before or at the age of 60 years, Sum Assured payable on death is
reduced to the extent of partial withdrawals made in the preceding two
years
• After the age of 60 years, Sum Assured payable on death is reduced to
the extent of all partial withdrawals made from age 58 years onwards.
36
How Does The Policy Work?
• Choose the Premium amount, Term and Sum Assured
• Your Min Sum Assured = Annual Premium * (Term/2) subject to a minimum of Rs. 1 lakh.
• You can choose a higher Sum Assured subject to Sustainability Matrix.
• You can opt for add-on riders available.
• All applicable charges will be deducted from the units available in your
fund.
• In case of death, the Death Benefit will be paid out.
• In case of survival, the Fund value will be paid out to the policyholder at
maturity. Or you can opt for settlement options.
Charges
Premium Allocation Charge
Premium (Rs.) Year 1 Year 2 Year 3 onwards
18,000-49,999 20% 7.5% 4%
>=50,000 18% 7.5% 4%
Fund Management Charges
Fund Asset Mix Potential
Risk-Reward
Fund Mgmt
Charge
Equity & Related Securities Max. 100% Maximiser Debt, Money Market & Cash Max. 25%
High 2.25%
Equity & Related Securities Max. 40% Balancer Debt, Money Market & Cash Min. 60%
Medium 2.25%
Max. 100% Protector Debt Instruments, Money Market & CashMin. 100%
Low 1.50%
Debt Instruments Max. 50% Preserver Money & Cash Min. 50%
Very Low 0,75%
37
Sustainability Matrix
Maximum SA multiples for given annual premium
Age at Entry
Base Plan only
Base Plan + ADBR
Base Plan + CIBR
Base Plan + ADBR + CIBR
Upto 17 140 - - - 18-25 120 75 55 75 26-30 90 65 40 30 31-35 60 45 25 25 36-40 40 35 20 20 41-45 25 20 20 20 46-50 15 15 15 15 51-55 15 15 15 15 56-60 10 - - - 61-65 10 - - -
38
(2) ICICI SMART KID PLAN
Death Benefit
• Added Protection – Child (Beneficiary) receives Sum Assured in case
of death of parent (life assured) PLUS the policy benefits also
continue.
• In case of death of parent, Premiums waived off & Company pays
future premiums into the plan (Payer Waiver Benefit).
• If Income Benefit Rider is chosen, then 10% of Rider SA is paid to the
child till maturity of the policy, in case of death of the parent.
How does the policy work?
• Choose the premium amount and Sum Assured
• Choose maturity age of the child between 18 and 25 years of age. The
term of the policy = Maturity age less Current age of the child.
• Your Min Sum Assured = Annual Premium X (Term/2) subject to a
minimum of Rs.1 lakh.
• You can choose a higher Sum Assured subject to Sustainability Matrix.
• You can opt for add-on riders available.
• All applicable charges will be deducted from the units available in your
fund.
• In case of death of the parent (life assured), the Death Benefit will be
paid out.
• In case of survival, the Fund value will be paid out to the policyholder
at maturity. Or you can opt for settlement options.
39
Charges
Premium Allocation Charge
Premium (Rs.) Year 1 Year 2-5 6th-10th year 11th year onwards
10,000 -19,999 20% 5% 2% 1%
20,000 - 49,999 19% 5% 2% 1%
>= 50,000 18% 5% 2% 1%
Policy Administration Charges
Rs. 60 per month.
Additional Policy Administration Charges
Rs. 60 per month if premiums are not paid before grace period in the first 5 policy
yrs. (Additional Policy Admin Charge would stop after completion of 5 years)
Sustainability Matrix
Maximum SA multiples for given annual premium
Age Band (Parent) Base Case ADBR IBR ADBR+IBR
20-25 50 50 50 45
26-30 50 50 45 40
31-35 50 50 35 30
36-40 45 40 25 20
41-45 30 25 20 20
46-50 15 15 15 15
51-55 15 15 15 15
56-60 10 N.A. N.A. N.A.
40
What is Smart Kid?
As parents, the biggest concern is that of securing the future of child. In today's
world, with ever increasing competition, escalating cost of education and
uncertain financial markets, it is very important to plan for the child's future. It is a
plan that provides guaranteed benefits to the child along with life insurance
cover. Smart Kid is so designed that it provides money at all the critical
milestones in his/her life, whatever be the uncertainties.
STRUCTURE 1
Imagine that the age of parents is 32 years old and their child is 5 years old and they want the product to mature when he/she is 22 years old. They have option to choose between two structures of payout of benefits. Term : 22-5 = 17 yrs
At the End Of Child's Age % of Sum Assured
Needs Met
10th yr of policy
(Term-7)
15 years 20% of SA* Extra tuition, preparation
for professional courses,
change of school or
college.
12th yr of policy
(Term-5)
17 years 25% of SA* Join a professional
college or graduation
college.
14th yr of policy
(Term-3)
19 years 30% of SA* Higher studies or post
graduation
16th yr of policy (Term-1) 21 years 35% of SA* +
Guaranteed
Additions
Further education in
India and abroad.
17th yr of policy (Term) 22 years 40% of SA Further education in
India or abroad.
Alternatively, used for
marriage or career
establishment.
41
STRUCTURE 2
At the End Of Child's Age % of Sum Assured Needs Met
13th yr of policy
(Term-4)
18 years 20% of SA* Extra tuition, preparation for
professional courses,
change of school or college.
14th yr of policy
(Term-3)
19 years 25% of SA* Join a professional college
or graduation college.
15th yr of policy
(Term-2)
20 years 30% of SA* Graduation
16th yr of policy
(Term-1)
21 years 35% of SA* Graduation
17th yr of policy
(Term)
22 years 40% of SA*
+ Guaranteed Additions
Further education in India
and abroad. Alternatively,
used for marriage or career
establishment.
Why should one buy Smart Kid?
Because Smart Kid ensures that one has total peace of mind as far as their
child's future is concerned.
In the event of death of the Life Assured:
Sum Assured of the plan is paid immediately - assists the family in meeting the
unforeseen expenses incurred because of the unfortunate loss.
Waiver of Premium - no future premium are payable, thereby ensuring that your
family is not burdened financially.
Educational benefits, guaranteed - which means that the future of the child
remains secure.
Thus, there will be no financial obstacle in realizing the dream which the parent
or child had.
42
(3) LIFE TIME PENSION PLAN
The policy’s “Super” touch-
• Choice of flexible life cover
• Increased age at entry
• Maximum cover age increased
• Pension through Annuity card
• Attractive allocation charge
• Increased Commission Structure
• Cover continuance option after 3 years
Death benefit
• In case of death before vesting age:
• Higher of the sum assured or the Fund Value will be paid as the death
benefit to the nominee.
• However, if spouse is nominee, Fund Value or Sum Assured can be taken
as annuity.
How does the policy work?
• Choose an amt that you wish to invest annually subject to a minimum of Rs. 10,000.
• Choose a term between 10 & 57 yrs, subject to vesting (retirement age)
between 45(minimum vesting age) and 75 years(maximum vesting age).
• You have an option either to choose Zero sum assured or choose any
sum assured between 1 lakh and annual premium * policy term.
• You can opt for add-on riders available under the policy for a nominal extra amount.
• During the term of the policy, you pay regular premiums and accumulate
savings for your retirement.
43
Charges
Premium Allocation Charge
Premium (Rs.) Year 1 Year 2 3-10th year 11th year onwards
10,000-19,999 20% 9% 1% 0%
20,000-49,999 17% 9% 1% 0%
>=50,000 14% 9% 1% 0%
Plan Details
The Life Time Pension plan provides regular income for life from a date that can
be chosen by the insured. The amount one receives will depend upon the
premiums paid, the market value of the investment and the option of the annuity
chosen.
Annuity Benefit
On the date of vesting (retirement), the insured begins to receive a regular
income for life. This amount would depend upon the annuity option chosen and
the value of units as on the vesting date. The annuity would also depend upon
the annuity rates offered by the company as on that date and are not guaranteed.
Increase/Decrease Death Benefit:
There is an option of opting for a zero death benefit so as to make this a pure
accumulation product.
44
Annuity Options
Five different annuity options available are:
1. Life Annuity: Annuity for Life.
2. Life Annuity with Return of Purchase Price
3. Life Annuity for the annuitant with the return of the purchase price to the
beneficiary.
4. Life Annuity Guaranteed for 5, 10, 15 years: Guaranteed Annuity is paid
for the chosen term (5/10/15) and after that the annuity continues if at that
time annuitant is alive.
5. Joint Life, Last Survivor with Return of Purchase Price:
In this case the annuity is first paid to the annuitant, after the death of the
annuitant the spouse starts getting a pension which is equal in amount of
the annuity paid to the annuitant. After the death of the last survivor the
purchase price is returned back to the beneficiary.
Open Market Option
This option gives you the flexibility to buy a pension from any other insurer of
your choice, at the time of vesting. So you have the freedom to take the best
from the market.
The Unit Value is calculated bi-weekly on a forward
pricing basis.
Market/Fair value of the Plan's investments +Current
Assets-Current Liabilities Unit Value =
Number of Units outstanding under the relevant Plan
45
(3) LIFE TIME PLUS
Death Benefit
“PLUS” Protection – Nominee receives Sum Assured PLUS Fund Value in case
of death of the Life Assured.
Additional Allocation of Units
At the end of Allocation Rate (as a % of first
year premium)
8th policy year 5%
12th policy year 5%
16th policy year 5%
20th policy year 5%
24th policy year 5%
28th policy year 5%
How does the policy work?
Choose the Premium amount, Term and Sum Assured
Your Min Sum Assured = Annual Premium X (Term/2)
You can choose a higher Sum Assured subject to Sustainability Matrix.
You can opt for add-on riders available.
All applicable charges will be deducted from the units available in your fund.
In case of death of the life assured, the Death Benefit will be paid out.
In case of survival, the Fund value will be paid out to the policyholder at
maturity. Or you can opt for settlement options.
46
Charges
Premium Allocation Charge
Premium Amount (Rs)
Year 1 Year 2 Year 3 Year 4 Year 5
onwards
20,000 – 3,00,000 25% 25% 3% 3% 1%
Policy Administration Charges
Rs. 60 per month.
Additional Policy Administration Charges
Rs. 60 per month if premiums are not paid before grace period in the first 5 policy
yrs. (Additional Policy Admin Charge would stop after completion of 5 years)
Sustainability Matrix
Age at entry Base case Base + ADBR Base + CIBR Base + ADBR + CIBR
Upto 17 75 - - -
18-25 50 35 20 15
26-30 35 30 15 15
31-35 25 20 15 15
36-40 20 15 15 15
41-45 20 15 15 15
46-50 15 15 15 15
51-55 15 15 15 15
56-60 10 - - -
61-65 10 - - -
47
(5) PREMIER LIFE GOLD
Death Benefit
Nominee receives Higher of Sum Assured (less partial withdrawals) AND
Fund Value in case of death of the Life Assured.
Effect of Partial Withdrawals on Sum Assured
Before or at the age of 60 years, Sum Assured payable on death is
reduced to the extent of partial withdrawals made in the preceding
two years
After the age of 60 years, Sum Assured payable on death is
reduced to the extent of all partial withdrawals made from age 58
years onwards.
How does the policy work?
Select a Premium Payment Term (PPT) and the premium amount.
Select the Policy Term as per your requirement. Policy term once chosen
cannot be changed.
Select a Sum Assured according to your life stage and requirement.
Opt for add-on Riders available under the policy
After deducting premium allocation and other charges, the balance
amount will be invested in the investment fund(s) of your choice
On maturity you will receive the Fund Value, which you can withdraw
immediately or over a period of 5 years from maturity (through the
Settlement Option)
In the unfortunate event of death, the nominee receives the higher of Sum
Assured and Fund Value.
48
Charges
Premium Allocation Charge
Premium Payment Term Year 1 Year 2 & 3 Year 4 & 5
3 years 12% 4% -
5 years 12% 4% 2%
Entry Parameters
Minimum Entry Age 0 years
Maximum Age at Policy Maturity 75 years
Premium Payment Terms 3 years 5 years
Minimum Premium Rs. 100000 Rs. 60000
Minimum Coverage Term 6 years 10 years
Maximum Coverage Term 30 years 30 years
Maximum Entry Age 69 years 65 years
Minimum Sum Assured Higher of (5 * Annual Premium AND Policy
Term/2*Annual Premium)
49
Increase/ Decrease of Premiums
• Will be treated as Policy Alteration
• Customer needs to submit an addendum
Premium DECREASE
• Request can be given either at inception or later
• Customer has the option to keep the SA at the original level or
decrease it proportionately
Premium INCREASE
• Request can only be submitted on Policy Anniversary.
• Will lead to proportional increase of SA.
• Customer to bear the cost of medical tests (if any), required to increase
Maximum SA multiples for given annual premium
Age Base ADBR CI ADBR + CI
Upto 17 25 - - -
18-25 25 25 20 15
26-30 25 25 15 15
31-35 25 20 15 15
36-40 20 15 15 15
41-45 15 15 15 15
46-50 15 15 15 15
51-55 15 15 15 15
56-60 10 - - -
61-65 10 - - -
66-69 5 - - -
50
(6) CASH PLUS
Terms to know
• Regular Premium: Payment of Premium at fixed, regular intervals.
• Sum Assured: The guaranteed amount that is payable on death of the life
assured.
• Fund Value: This is the product of the total number of units under this
policy and the Net Asset Value (NAV) per unit as on that date
• Guaranteed Value: This is the sum of all allocated premiums (net of
mortality and policy administration charges and partial withdrawals) and
accrued bonus interest credits.
• Bonus Interest Credits: Interest that is declared on the Guaranteed Value
at the end of every financial year
• Partial Withdrawal: Any part of the fund that is withdrawn by the
policyholder during the policy term.
• Surrender: Surrender means terminating the contract once and for all. On
surrender, a surrender value is payable that is usually expressed as Fund
Value less the surrender charge.
How does Cash Plus provide you with protection?
• Cash Plus offers you three levels of cover (in the form of sum assured) for
the same annual contribution.
• You can choose from Basic, Standard and Enhanced levels of cover.
• The cover depends upon the term and premium chosen by you, as
follows:
51
Type of Cover Basic Standard Enhanced
Amount of Cover (Term-5) x Premium (Term) x Premium (Term+5) x
Premium
Increase in SA
There is availability of an opportunity to increase the cover by shifting from
• Basic to Standard / Enhanced level
Or
• Standard to Enhanced level of cover
For each level of sum assured, applicable mortality charges would be deducted
from the premium.
Death Benefit
• Nominee receives the Sum Assured ALONG WITH the higher of Fund
Value and Guaranteed Value
Investment Option
Indicative Portfolio Allocation:
• Debt, Money market & Cash Maximum 100%
Potential Risk- Return profile of the fund: Low
52
How does your policy value accumulate?
• At the end of every year, the company will declare bonus interest credits
on the Guaranteed Value at that point in time.
• This bonus interest will have a compounding effect on the value of your
policy.
• The differential between the bonus interest credited and the income
earned on investments would not be more than 1%.
How does the policy work?
• Select the Premium amount and the Type of cover.
• Select the Policy Term as per your requirement. Policy term once chosen
cannot be changed.
• After deducting premium allocation and other charges, the balance
amount will be invested in the investment fund(s) of your choice
• On maturity you will receive the higher of Fund Value and Guaranteed
Value
• In the unfortunate event of death, the nominee receives the Sum Assured
along with higher of Fund Value and Guaranteed Value.
Surrender Values
You can surrender your policy anytime after 3 policy years and after payments of
3 full years’ premiums.
Surrender values are available to you after deducting surrender charges and
would depend on the number of premiums paid and the policy term.
53
Charges
Policy Year Year 1 Year 2 Year 3 Year 4
onwards
Premium Allocation Charge (Percentage of
Premium)
57% 15% 15% 5%
Fund Management Charges
An FMC of 1.25% will be adjusted from the NAV on a daily basis.
54
At present there are total 14 players in Indian life insurance sector. There is only
one player in the government sector and it is the Life Insurance Corporation of
India. Rest of the players is in the private.
Players and their market share
No. Name of the Company Market Share in %
1 Life Insurance Corporation (PSU) 78.07
2 ICICI Prudential Life Insurance Company 6.35
3 Birla Sunlife Insurance Company 2.45
4 Bajaj Allianz Life Insurance Company 3.39
5 SBI Life Insurance Company 1.91
6 HDFC Standard Life Insurance Company 1.92
7 Tata AIG 1.18
8 Max New York Life Insurance Company 0.89
9 Aviva 0.76
10 Kotak Mahindra Life Insurance Company 1.48
11 ING Vysya 0.76
12 AMP Sanmar 0.36
13 Met Life Insurance Company 0.22
14 Guardian Life Insurance Co Ltd.
0.00
55
Graph No.2 MARKET SHARE OF PRIVATE LIFE INSURANCE COMPANIES
MARKET SHARE OF PRIVATE LIFE INSU. COM.
5%7%
11%
4%
5%
9%
1%15%
29%
9%3%
2% 0%
TATA AIG KOTAK MAHINDRA OLD MUTUAL
BIRLA SUNLIFE MAX NEW YORK
ING VYSYA HDFC STANDARD
MET LIFE BAJAJ ALLIANZ
ICICI PRUDENTIAL SBI
AVIVA AMP SANMAR
SAHARA LIFE
56
Insurers in India
Company Foreign shareholder
Major local shareholder
Business of local shareholder
Allianz Bajaj life Allianz Bajaj Auto Auto manufacturer
AMP Sanmar AMP Sanmar Diversified
conglomerate
Birla sun life Sun life of CanadaBirla global
finance
Diversified
conglomerate
Dabur CGU CGNU Dabur
Medical &
consumer
products
HDFC standard
life Standard life HDFC
Investment &
finance
ICICI Prudential
life Prudential(UK) ICICI
Investment &
finance
ING Vysya life ING Vysya bank Bank & other
investors
Max New York
Life New York Life Max India
Diversified
conglomerate
MetLife India MetLife
Jammu & Kashmir
bank: Pallonji
group
Bank & diversified
conglomerate
OM Kotak
Mahindra Old Mutual Kotak Mahindra
Investment &
finance
SBI Life Cardiff SBI Bank
TATA-AIG Life AIG TATA Diversified cong.
57
LIFE INSURANCE CORPORATION
The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance. Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six-lakh agency force.
LIC has hundred divisional offices and has established extensive training
facilities at all levels. At the apex, are the Management Development Institute,
seven Zonal Training Centers and 35 Sales Training Centers.
At the industry level, along with the Government and the GIC, it has helped
establish the National Insurance Academy. It presently transacts individual life
insurance businesses, group insurance businesses, social security schemes and
pensions, grants housing loans through its subsidiary; and markets savings and
investment products through its mutual fund. It pays off about Rs 6,000 crore
annually to 5.6 million policyholders.
BIRLA SUN LIFE INSURANCE Birla Sun Life Insurance Company Limited, a joint venture between Sun Life
Assurance Company of Canada and Aditya Birla Management Corporation
Limited, recently completed a successful first year of operations. The company
emerged as a strong private sector insurance player in the newly opened
insurance market in India with its pioneering efforts in the area of Unit Linked
insurance plans. The company sold over 20,000 policies covering more than
33,000 lives in its first year of operations. It achieved an annualized premium
income of Rs.350 million with a total sum assured of Rs.16,000 million.
The company has more than 2,700 insurance advisors who sell company
products across the country. The company offers an array of products in the
individual and group life segments. The company established a strong presence
in India with 22 branches and two development centers across 17 cities.
58
ICICI Prudential Life Insurance Company
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
a premier financial powerhouse and Prudential plc, a leading international
financial services group headquartered in the United Kingdom. ICICI Prudential
was amongst the first private sector insurance companies to begin operations in
December 2000 after receiving approval from Insurance Regulatory
Development Authority (IRDA).
ICICI Prudential equity base stands at Rs. 1185 crore with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. In the financial year
ended March 31, 2005, the company garnered Rs 1584 crore of new business
premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000
policies. The company has a network of about 56,000 advisors; as well as 7
bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI
Prudential has retained its position as the No. 1 private life insurer in the country,
with a wide range of flexible products that meet the needs of the Indian customer
at every step in life.
Bajaj Allianz Life Insurance Company Bajaj Allianz General Insurance a joint venture non-life company promoted jointly
by Bajaj Auto and the German insurer- Allianz. Indian auto major holds 74%
while Allainz holds 26% in the Joint Venture, and has an authorized and paid up
capital of Rs. 110 crores. Mr. Graham Norris is the CEO of the company. Bajaj
Allianz General Insurance will leverage the customer base and expertise of Bajaj
Auto Ltd and Allianz AG.
Incorporated in September 2000, Bajaj Allianz General Insurance received the
certificate of registration from Insurance Regulatory and Development Authority
in May 2001.
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SBI Life Insurance Company SBI Life Insurance Co. Ltd. is a registered Life Insurance Company which has
been licensed by Insurance Regulatory and Development Authority of India. It
belongs to State Bank of India (SBI) group.
State Bank of India has joined hands with Cardiff of France to form a Life
Insurance Company:
SBI - The Largest bank in India
Cardiff - A wholly owned subsidiary of BNP PARIBAS (one of the top 10 banks in
the world), is a leading Insurance Company in France operating in 27 countries
all over the world.
Tata AIG
Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance
Company Ltd. (collectively "Tata AIG") are joint venture companies, formed from
the Tata Group and American International Group, Inc. (AIG). Tata AIG combines
the strength and integrity of the Tata Group with AIG's international expertise and
financial strength. The Tata Group holds 74 per cent stake in the two insurance
ventures while AIG holds the balance 26 per cent stake
Tata AIG Life Insurance Company Ltd. provides insurance solutions to
individuals and corporate. Tata AIG Life Insurance Company was licensed to
operate in India on February 12, 2001 and started operations on April 1, 2001.
Tata AIG Life offers a broad array of life insurance coverage to both individuals
and groups, with various types of add-ons and options available on basic life
products to give consumers flexibility and choice.
The non-life insurance arm, Tata AIG General Insurance Company, which started
its operations in India on January 22, 2001 offers the complete range of
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insurance for automobile, home, personal accident, travel, energy, marine,
property and casualty, as well as several specialized financial lines.
ING Vysya ING Vysya (a group terminology) has 3 businesses in India, ING Vysya Life
Insurance, ING Vysya Bank and ING Vysya Mutual Fund. ING Vysya Bank is a
premier private sector bank with a 70-year heritage and 1.5 million satisfied
customers. ING Vysya Mutual Fund is a mid sized asset management company
with a retail investor focus.
Kotak Mahindra Life Insurance Company
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak
Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Life Insurance, aim to
help customers take important financial decisions at every stage in life by offering
them a wide range of innovative life insurance products, to make them financially
independent. Jeene Ki Azaadi...
AMP Sanmar A Joint venture combining AMP's life Insurance expertise and Sanmar's Indian
Business Expertise. The Life Insurance joint venture Company between AMP of
Australia and the Sanmar Group of Chennai will creates a better future by
helping build and manage wealth.
AMP Sanmar offers a comprehensive range of life insurance Products that will
enhance the savings and provide financial security to people who need the
support. AMP is a leading international financial services group with over 150
years with core business in Insurance, Asset Management and Financial
Planning.
The Sanmar Group is a leading industrial group in South India and one of the
top corporations in the country that helped pioneer industrialization in India for
over six decades. Both AMP and Sanmar are deeply committed to this Life
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Insurance joint venture and to create a long-term relationship with the customer.
Aviva Life Insurance Company India Pvt. Ltd.
In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest
Group of companies. A professionally managed company, Dabur is the country's
leading producer of traditional healthcare products. Aviva pioneered the concept
of Bancassurance in India, and has leveraged its global expertise in
Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-
ups with ABN Amro Bank, American Express Bank, Canara Bank, The Lakshmi
Vilas Bank Ltd. and Punjab & Sind Bank.
Aviva has 34 Branches (including rural branches) in India supporting its
distribution network. Through its Branches and its Bancassurance partner
locations, Aviva products are available in 165 towns and cities across India.
Aviva has also opened four rural branches in Faridkot, Udaipur, Nasik and
Nagpur.
Max New York Life Insurance
Max New York Life Insurance Company Limited is a joint venture between Max
India Limited, a multi-business corporation focusing on life insurance, health care
and information technology, and New York Life, a Fortune 100 company with
over 150 years of experience in the life insurance business. In 2000, Max New
York Life became the first Indo-American insurance joint venture registered and
granted a license to conduct business in India. Since that time, Max New York
Life has acquired a national presence, establishing a wide distribution network
with 35 offices located across 27 cities in India, which are staffed by over 1,500
employees and over 7,700 highly competent life insurance Agent Advisors. In
2003, Max New York Life became the first life insurance company in India to
receive the ISO 9001:9002 certification for its commitment to quality. All of Max
New York Life’s offices are supported by state-of-the-art technology designed to
enhance its goal of providing excellent service to customers. It has also set up a
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Centre for Operational Excellence at its head office in Gurgaon, Haryana, just
outside of New Delhi.
REGULATORY FRAMEWORK (INSURANCE ACT & IRDA) Insurance Act, 1938 The Insurance Act was enacted in 1938 with a view to control the insurance
market in India. The Insurance Act provides major guidelines to insurance
companies to do insurance business.
The Insurance Act prescribes rules for Assignment or transfer of policies and
nominations, commission and rebates and licensing for agents, amalgamation or
transfer of insurance business, setting up of the Tariff Advisory Committee,
solvency margins, insurance cooperative societies, reinsurance, registration etc.
The Insurance Act, 1938 allows for only Indian Insurance companies registered
under the Companies Act, to transact insurance business in India.
Amendment in 2001 For smooth functioning of the market, certain amendments were made in the Act.
The amendments contain entry of insurance co-operative societies, provisions
relating to payment of commission and fee for insurance intermediaries, allowing
flexibility in the eligibility qualifications for corporate agents, allowing a more
flexible mode of payment of premium through credit cards, smart cards, internet,
etc.
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Insurance Regulatory and Development Authority (IRDA) The Insurance Regulatory and Development Authority (IRDA) was constituted as
an autonomous body to regulate and develop the business of insurance and re-
insurance in India. The Authority was constituted on April 19, 2000; vide
Government of India’s notification No. 277.
The Insurance Regulatory and Development Authority Act, 1999, was enacted by
Parliament in the fiftieth year of the Republic of India to provide for the
establishment of an Authority to protect the interests of holders of insurance
policies, to regulate, promote and ensure orderly growth of the insurance industry
and for matters connected therewith or incidental thereto and further to amend
the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the
General Insurance Business Act, 1972. IRDA was constituted in terms of the
Insurance Regulatory and Development Authority Act, 1999, as the regulator of
the Indian Insurance industry.
IRDA was setup in 1996 but it was formally constituted as a regulator of the
insurance industry in April 2000. The regulator was initially known as the
Insurance Regulatory Authority but was subsequently rechristened as Insurance
Regulatory and Development Authority as it was provided that it had broader role
to perform in the Indian insurance market. It has not only to frame and issue
statutory and regulatory stipulations, guidelines, and clarification but it has also to
perform a developmental and promotional role. The developmental and
promotional role of the regulator include facilitating the growth of the market by
attracting large number of players, integrating of the insurance market with the
domestic financial services market, and synchronizing the Indian Insurance
market with that of global insurance market.
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Thus, the objectives of IRDA are two fold: policyholder protection and healthy
growth of the insurance market.
IRDA has till 2001 issued seventeen regulations in the areas of registration of
insurers, their conduct of business, solvency margins, conduct of reinsurance
business, licensing, and code of conduct intermediaries. It follows the practice of
prior consultation and discussion with various interest groups before issuing
regulations and guidelines.
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of
IRDA.
(1) Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure orderly
growth of the insurance business and re-insurance business.
(2) Without prejudice to the generality of the provisions contained in sub-section
THE POWERS AND FUNCTIONS THE AUTHORITY SHALL INCLUDE, -
A. Issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration;
B. Protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other terms
and conditions of contracts of insurance;
C. Specifying requisite qualifications, code of conduct and practical training
for intermediary or insurance intermediaries and agents;
D. Specifying the code of conduct for surveyors and loss assessors;
E. Promoting efficiency in the conduct of insurance business;
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F. Promoting and regulating professional organizations connected with the
insurance and re-insurance business;
G. Levying fees and other charges for carrying out the purposes of this Act;
Calling for information from, undertaking inspection of, conducting
enquiries and investigations including audit of the insurers, intermediaries,
insurance intermediaries and other organizations connected with the
insurance business;
H. Control and regulation of the rates, advantages, terms and conditions that
may be offered by insurers in respect of general insurance business not
so controlled and regulated by the Tariff Advisory Committee under
section 64U of the Insurance Act, 1938 (4 of 1938);
I. Specifying the form and manner in which books of account
shall be maintained and statement of accounts shall be
rendered by insurers and other insurance intermediaries;
J. Regulating investment of funds by insurance companies;
K. Regulating maintenance of margin of solvency;
L. Adjudication of disputes between insurers and intermediaries or insurance intermediaries;
M. Supervising the functioning of the Tariff Advisory Committee;
N. Specifying the percentage of premium income of the
insurer to finance schemes for promoting and regulating
professional organizations referred to in clause (f);
O. Specifying the percentage of life insurance business, general insurance
business to be undertaken by the insurer in the rural or social sector; and
P. Exercising such other powers as may be prescribed.
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Limitations of the study
• Customer interaction limited to ICICI bank’s Jai Hind branch Rajkot only.
• Detailed study of ICICI Prudential’s three main products possible.
Recommendations
• Improve bank employee’s knowledge of ICICI Prudential’s Life Insurance
products by providing required training.
• Use various marketing schemes and tools to attract attention of
customer’s visiting the bank.
• Use various forms of media to promote the products and highlight the
product USP in comparison to competitor’s product.
• Bank employees should also have the knowledge of the competitor’s
product to counter the customer’s arguments.
• Emphasis should be given to insurance factor while selling the product.
• Customers should be satisfied with the service provided.
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Life insurance policies are usually of a long term nature and therefore the
service aspect is very important. Proper service is likely to see that policies
do not lapse.
Bacassurance channel should be given more attention as it is a source of
potential business not just to ICICI bank but to its sister company ICICI
Prudential as well.
Since the bank has a pool of customer data it can be effectively used to
convert good customers of bank to that of ICICI Prudential.
This has been a learning experience for me. Interaction with different
customers has helped me improve my communication skills and to better
understand the customers. It has also improved my knowledge of insurance
and banking sector along with its products.
Throughout the training I have experienced and gained knowledge about
the corporate world which would be of immense help in my future
endeavors.
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• www.icicibank.com
• www.iciciprulife.com
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