Stragey and Tactics for the Developmentof the Agency by Icici

8/14/2019 Stragey and Tactics for the Developmentof the Agency by Icici

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STRAGEY AND TACTICS FOR THEDEVELOPMENTOF THE AGENCY BY ICICI

COMPARISION TO OTHER LEADINGINSURANCE COMPANY

Submitted By:

Name: ANKUR JAINRoll no: 05014

INSTITUTE OF MANAGEMENT EDUCATION

G.T. ROAD, SAHIABABAD, GHAZIABAD.


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ACKNOWLEDGEMENT

There is always a sense of gratitude which one express to other for the helpful so needy

services they render during all phases of life. I would like to express my gratitude

towards all those who have been helpful to me in getting this mighty task of training to

a successful end.

First of all, I consider it a pleasant duty to express my heart felt appreciation, gratitude

and indebtedness to my guide for his keen interest, invaluable pain taking & excellent

guidance, patience, endurance, encouragement & thoughtful advice throughout the

project work duration.

I would also like to be thankful to Mr. VISHAL SHARMA Unit Manager (ICICI

Prudential Life Insurance, New Delhi), who has given me the right way to prepare

my project report.

I would like to thank COL. ASHOK PANDIT whose guidance inspride me to complete

this project easily

I would take this opportunity to thank all my family members for their helps &

suggestions during the course of project work. I am also thankful to all my friends who

gave me constant & continuous inspiration to complete this project.


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CONTENTS

CHAPTER 1:EXECUTIVE SUMMARY

CHAPTER 2:

INSURANCE AN INTRODUCTION

CHAPTER 3:

INDUSTRY PROFILE

3.1:ORIGIN OF INSURANCE

3.2: INSURANCE SECTOR REFORMS3.3:POTENTIALITY OF INSURANCE IN INDIAN MARKET

CHAPTER 4:

INSURANCE MARKETING

4.1: EFFECTIVE PRODUCT PLANNING

4.2: PRODUCT AND PROMOTION MIX

4.3: PRICING DECISIONS

4.4: PERSONAL PROMOTION STRATEGIES

4.5: FAQs

CHAPTER 5:

LIFE INSURANCE PRODUCTS

5.1: WHOLE LIFE POLICY

5.2: ENDOWMENT POLICY

5.3: MONEY BACK POLICY

5.4: TERM POLICY

5.5: ANNUITY

5.6: JOINT LIFE POLICY

5.7: GROUP INSURANCE

CHAPTER 6:

IRDA ACT 1999

6.1: DUTIES, POWERS, FUNCTIONS

CHAPTER 7:


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PLAYERS IN INDIAN INSURANCE INDUSTRY

7.1: LIFE INSURERS

7.2: GENERAL INSURERS

7.3: INSURANCE BUSINESS

CHAPTER 8:

COMPANY PROFILE

9.1: ABOUT ICICI PRUDENTIAL

9.2: PRODUCTS

9.3: RIDERS

9.4: INSURANCE PLANS

9.5 PREMIUM PAY

CHAPTER 9:

COMPARATIVE ANALYSIS

ICICI PRUDENTIAL LIFE INSURANCE

VS

1 HDFC STANDARD LIFE INSURANCE

2 BIRLA SUN LIFE INSURANCE

3 AVIVA LIFE INSURANCE

CHAPTER 10:

CONCLUSION

CHAPTER 11:

RECOMMENDATION

CHAPTER 12:

BIBLIOGRAPHY


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EXECUTIVESUMMARY


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EXECUTIVE SUMMARY

The Indian Insurance Industry is broadly segmented into

public and private insurance companies. Before year 2000,

only public sector insurance companies were allowed to do

business in India. But after year 2000, insurance sector was

thrown open for private insurance companies as well.

But as of now there now around12 private life insurance

companies and around 9 private non-life insurance

companies doing business in India.

This report is prepared with an aim to provide the

development of present Indian Insurance Industry. Also with

LIC, heading the public life insurance companies and ICICI

Prudential heading the private life insurance players, this

report also provides a comparative analysis of HDFC

Standard life insurance, Aviva life insurance, Birla sunlife

insurance Vs. ICICIs Forever Life policies.

Based on this report , the prospecting insurance customers

would get help in choosing the right insurance products for

themselves.


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INSURANCE AN

INTRODUCTION


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Insurance An Introduction

Insurance may be described as a social device to ensure

protection of economic value of life and other assets. Under

the plan of insurance, a large number of people associate

themselves by sharing risks attached to individuals. The

risks, which can be insured against, include fire, the perils of

sea, death and accidents and burglary. Any risk contingentupon these, may be insured against at a premium

commensurate with the risk involved. Thus collective bearing

of risk is insurance.

Insurance is a contract whereby, in return for the payment of

premium by the insured, the insurers pay the financial

losses suffered by the insured as a result of the occurrence of

unforeseen events. The term "risk" is used to describe the

possibility of adverse results flowing from any occurrence or

the accidental happenings, which produce a monetary loss.

Insurance is a pool in which a large number of people

exposed to a similar risk make contributions to a common

fund out of which the losses suffered by the unfortunate few,

due to accidental events, are made good. The sharing of risk

among large groups of people is the basis of insurance. The

losses of an individual are distributed over a group of

individuals.


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Definitions:

General definition:

In the words of John Magee, Insurance is a plan by

themselves which large number of people associate and

transfer to the shoulders of all, risks that attach to

individuals.

Fundamental definition:

In the words of D.S. Hansell, Insurance accumulated

contributions of all parties participating in the scheme.

Contractual definition: In the words of justice Tindall,

Insurance is a contract in which a sum of money is paid to

the assured as consideration of insurers incurring the risk of

paying a large sum upon a given contingency.


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Characteristics of insurance

Sharing of risks

Cooperative device

Evaluation of risk

Payment on happening of a special event

The amount of payment depends on the nature of losses

incurred.

The success of insurance business depends on the large

number of people insured against similar risk.

Insurance is a plan, which spreads the risk and losses of

few people among a large number of people.

The insurance is a plan in which the insured transfers his

risk on the insurer.

Insurance is a legal contract which is based upon certain

principles of insurance which includes, utmost good faith,insurable interest, contribution, indemnity, causas

proxima, subrogation, etc.

The scope of insurance is much wider and extensive.


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Functions of insurance:

Primary functions:

1. Provide protection:- Insurance cannot check the

happening of the risk, but can provide for the losses of

risk.

2. Collective bearing of risk: - Insurance is a device to share

the financial losses of few among many others.

3. Assessment of risk: - Insurance determines the probable

volume of risk by evaluating various factors that give rise

to risk.

4. Provide certainty: - Insurance is a device, which helps to

change from uncertainty to certainty.

Secondary functions:

1. Prevention of losses: - Insurance cautions businessman

and individuals to adopt suitable device to prevent

unfortunate consequences of risk by observing safety

instructions.

2. Small capital to cover large risks: - Insurance relives the

businessman from security investment, by paying small

amount of insurance against larger risks and uncertainty.

3. Contributes towards development of larger industries.


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Other Function:

Means of savings and investment:

Insurance companies are business houses. The product they

sell is financial protection. To succeed and survive, they

must cover their costs, which include payments to cover the

losses of policyholders, as well as sales and administrative

expenses, taxes and dividends.

Insurance companies have two sources of income for

covering these costs: premiums and investment income.

The premiums are collected on a regular basis and invested

in Government Bonds, Gilt, stocks, mutual funds, real

estates and other conservative avenues. However, investment

income depends on market conditions, interest rates,

economy etc. and varies from year to year. Because of the

uncertainty associated with the investment income,

insurance companies must generate enough income from

premiums to cover the bulk of their expenses.

The risk becomes insurable if the following requirements

are complied with:

The insured must suffer financial loss if the risk operates.

The loss must be measurable in money,

The object of the insurance contract must be legal.


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The insurer should have sufficient knowledge about the

risks he accepts.

Fundamentals of Insurance

The fundamental Principles of the Insurance are as follows:

Insurable Interest: Insurable interest means the legalright to insure. Insurable Interest is a must and only then

the insurance contract is enforceable at law. This principle

differentiates a Contract of insurance from wager. Lack of

insurable interest renders the contract null and void. For

Insurable Interest to exist there must be Property, Rights,

Interest, Life or Liability; this must be insured and theInsured should have a legally recognizable relationship

thereto. The Insured should be benefited by the safety of

the property or is prejudiced by its loss. Insurable Interest

may arise in the following manner:

1. Ownership: Absolute ownership entitles the owner to

insure the property. This is the commonest method

whereby Insurable Interest arises.

2. Partial Interest is also insurable e.g. a mortgagee. A

creditor can also insure the life of his debtor but only to

the extent of his loan.


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3. Administrators and executors i.e. officials appointed by a

court of law to take care of a property may also insure theproperty.

4. Relationship does not automatically constitute insurable

interest. The only relationship recognized by law for this

purpose is the one between a husband and wife.

5. An employer can insure his employee under a Personal

Accident Policy as he has insurable interest in them.

Proximate cause: Generally, the claims are payable under

insurance policies if they arise out of events which are

proximately caused by the insured perils. In other words,

the proximate cause of the event has to be peril covered by

the policy, so as to constitute a valid claim.

Contribution: An insured may have several insurance on

the same subject matter. If he recovers his loss under all

these insurance, he will obviously make a profit out of

loss. This will be an infringement of the principle of

indemnity. Common Law has, therefore, evolved the

doctrine of contribution whereby the insured is prevented

from recovering more than his loss, despite his having

several insurance on the subject matter.

Subrogation: The principle of indemnity seeks to prevent

the insured from making profit out of loss. However, it

may so happen that that the insured may recover his loss


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under his policy and he may also have rights against third

parties. If, after the insurance claim is settled, the insuredis allowed to enforce his rights against third parties and to

retain whatever damages he receives from them, he will

certainly make a profit and the principle of indemnity will

be infringed.

Common Law has therefore, evolved the doctrine of

subrogation as corollary to the principle of indemnity.

Subrogation may be defined as the transfer of rights and

remedies of the insured to the insurers who have

indemnified the insured in respect of the loss. The

Common Law right of subrogation is implied an all

contracts on indemnity, as it arises only after payment of

loss.

Utmost Good Faith: In all General Insurance contracts

we know that a property or interest or liability or life is

offered for insurance and the insured has to take decisions

on the acceptance of the proposal. If he decides to accept

the proposal a premium commensurate with the risk has

to be charged. To enable him to take necessary decision in

this regard, the insurer must have certain facts about the

risk offered. These facts influence the judgment of the

insurer in deciding about the acceptance or otherwise of

the risk and the rate of premium to be charged, if

accepted. Such facts are known as material facts.


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INDUSTRY

PROFILE


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NATURE OF INSURANCE CONTRACTS:

When the insured pays the premium and the insurers accept

the risks, the contract of insurance is concluded. The policy

issued by the insurers is the evidence of the contract. The

contract of insurance, like any other contract, for example a

contract for the sale of goods, is subject to the general law of

contract as embodied in the Indian ContractAct,1872.

According to this Act, a contract must have certain essential

features in order to make it legally valid and enforceable. The

following are the essential elements:

a) Offer and acceptance: Usually, the offer is made by the

proposer, and acceptance made by the insurer.

b) Consideration: This means that the contract must involve

some mutual benefit to the parties. The premium is the

consideration from the insured and the promise to indemnity

is the consideration from the insurers.

c) Agreement between the parties: Both the parties should

agree to the same thing in the same sense.

d) Capacity of the parties: Both the parties to the contract

must legally competent to enter into the contract. For

example, minors cannot enter into insurance contracts.


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e) Legality: The object of the contract must be legal and the

contract should not violate any legal requirements. E.g. noinsurance can be had for smuggled goods.

RISK

Reasonable or not, risks are inescapable in business. Every

business venture is something of a gamble, because the

possibility of loss is as real as the prospects for profits. And

even though managers do everything possible to ensure that

their business succeed, they cannot guard against every

conceivable form of risk.

Pure Risk versus Speculative Risk:

Pure Risk: Events representing the kind of risk that no

business can predict or escape, known as Pure Risk, it is

the threat of a loss without the possibility of gain. In other

words, a disaster such as avalanche or fire is costly for the

business it strikes, but the fact that no disaster occurs

contributes nothing to a firm's profit.

Speculative Risk: It is the type of risk that offers the

prospect of making profit - and prompts people to go into

business in the first place. Every business accepts the

possibility of losing money in order to make money.


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Approaches to Risk Management

Risk Management is the process of reducing the threat of

loss due to uncontrollable events. Steps in selecting a risk

management approach:

To identify all the things those can possibly go wrong.

To consider the probability that an event will occur.

Techniques of Risk Management are:

1. Avoiding the Risk: When a company avoids risk, it

eliminates the possibility that a particular event will occur.

To avoid the possibility of a suit, for example, not to produceany products -which would, of course, eliminate both the

threats of a lawsuit and the opportunity to profit. With rare

exceptions, avoiding risk entirely is extremely difficult.

2. Reducing Risk: A more practical approach is to reduce

the risk by taking precautions. Risk reduction is an

important element in most companies' approach to risk

management. Typical precautions include putting safety

locks on doors to prevent robberies, installing overhead

sprinklers to minimize fire damage, and periodic checking

motor vehicles to prevent accidents.


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3. Assuming risk: Many companies draw on current

revenues or set aside a "Contingency Fund" to coverunexpected losses. Setting aside money on regular basis

could be cheaper than purchasing insurance. Moreover, the

company can earn interest on the reserved cash. Such

assumption of risk is also called self-insurance or risk

retention.

4. Transferring the risk: Most companies still rely on

outside insurance firms for financial protection against

catastrophic losses. In buying insurance, companies transfer

the risk of loss to an insurance firm, which agrees to pay for

certain types of losses. In exchange, the insurance firm

collects a fee known as a premium.

Insurable and uninsurable risks:

Insurable risks: An insurable risk - one that an insurable

company will cover - Generally meets the following

requirements. The peril insured against must not be under

the control of the Insured. This means, of course that insurer

do not pay for losses that are intentionally caused by an

insured, caused at the Insured's direction, or caused with the

insured's collusion. For example, a fire insurance policy

excludes loss caused by the Insureds own arson. It does,

however, include loss caused by an employee's arson. Losses

must be calculable, and the cost of insuring must be


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economically feasible. To operate profitably, insurance

companies must have data on the frequency of losses caused

by a given peril. If this information covers a long period of

time and is based on a large number of cases, Insurance

companies can usually predict quite accurately how many

losses will occur in the future. For example, the insurance

companies to fix up the rate of premium of Personal Accident

Insurance may use the information of the number of people

who will die each year in India in accidents. The peril must

be unlikely to affect all insured simultaneously. Unless an

insurance company spreads its coverage over large

geographic areas or a broad population base or different

classes of Insurance, a single disaster might force it to pay

out all its policies at once. The possible loss must be

financially serious to the Insured. An Insurance company

could not afford the paperwork involved in handling

numerous small claims of a few Rupees each. As a result,

many policies have a clause specifying that the insurance

company will pay only that part of a loss greater than an

amount - the deductible or excess - stated in the policy. The

excess represents small losses that the Insured has to

absorb.


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ORIGIN OF LIFE INSURANCE

Life Assurance was born in England when the first

policy providing temporary cover for a period of 12

months was issued as easy as 1583 A.D. The Amicable

Society started granting fluctuating sum on death since

1705 and a fix sum since 1757, With the development of

mortality tables, the life Assurance acquired a scientific

character. The Equitable Society founded in 1762 was

the first Society established on scientific basis.

ORIGIN OF LIFE ASSURANCE IN INDIA

In India, after failure of two British companies, the

European and the Albert in 1870, which attempted

writing business on Indian lives, first Indian Life

Assurance Society was formed in the same year called

Bombay Mutual Assurance Society Ltd. It was followed

by the Oriental Life Assurance Company Limited in

1874, Bharat in 1896 and Empire of India in 1897. The

Idea of insurance was born out of a desire of the people

to share loss of an individual by many. Originally it

restricted to forms other than life assurance. It started

with Marine Insurance, where the losses on account of

perils of sea were shared by all who were engaged in

trade. Reference to some forms of insurance, is found in

the codes of Hammurabi, Manu (Manav Dharma


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Shastra). The word `Yogakshema is used in the Rig

Veda suggesting that some form of community insurancewas practiced by the Aryans in India over 3000 years

ago. In India during Buddhist period burial societies

existed which were mutual in their character and used

to help a family by building a house, protecting the

widow, marrying the girls.

The Swadeshi Movement of 1905 provided impetus to

the formation of several companies such as the

`Hindustan Cooperative, the `United India, the

`Bombay Life, the `National. Further in the wake of

freedom movement number of companies such as the

`New India, the `Jupiter the `Lakshmi emerged.

The Government began to exercise a certain measure of

control on Insurance business by passing the

`Insurance Act in 1912. For controlling investment of

funds, expenditure and management, a comprehensive

Act was passed known as `The Insurance Act 1938. For

controlling the affairs, the office of Controller of

Insurance was established. The act was extensively

amended in 1950.

In the year 1955, approximately 170 Insurance Offices

and 80 Provident Fund Societies had been registered for

transacting Life Assurance business in India. There

were, however, no full guarantees to the policyholders.


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The concept of trusteeship was lacking. Many insurance

companies went into liquidation. There weremalpractices in insurance business. For achieving the

following purposes it was felt necessary to nationalize

the insurance business in India. To provide security to

the policyholders

(i) To utilize the funds for nation-building activities.

(ii) To avoid cut throat competition

(iii) To abolish mal-practices

(iv) To spread the insurance message to the rural

areas.

The first step in this direction was taken by the

Government of India by issuing the Life Insurance (the

Emergency provisions) Ordinance, 1956 on 19th

January, 1956. The then Finance Minister, Shri C. D.

Deshmukh mentioned the purpose of nationalisation as

reaching the goal of socialistic pattern of society,

rendering genuine service to the people in the rural

area. The Life Insurance Corporation Act (Act XXXI

of1956) was passed by the Parliament in June 1956

which came in force on 1st July 1956. The Life

Insurance Corporation of India came into existence on

1st September 1956.


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Insurance Sector Reforms

Having looked at the insurance sector, let us look at the

efforts made by the government to make the industry more

dynamic and customer friendly. To begin with, the Malhotra

committee was set up with the objective of suggesting

changes that would achieve the much required dynamism.

The Malhotra Committee Report

In 1993, Malhotra Committee, headed by former Finance

Secretary and RBI Governor R. N. Malhotra, was formed to

evaluate the Indian insurance industry and recommend its

future direction. In 1994, the committee submitted the report

and gave the following recommendations:

Structure

Government stake in the insurance Companies to be

brought down to 50%

Government should take over the holdings of GIC and its

subsidiaries so that these subsidiaries can act asindependent-corporations

All the insurance companies should be given greater

freedom to operate


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Market Regulations :

Private Companies with a minimum paid up capital of

Rs.1bn should be allowed to enter the industry

No Company should deal in both Life and General

Insurance through a single entity

Foreign companies may be allowed to enter the industry in

collaboration with the domestic companies

Postal Life Insurance should be allowed to operate in the

rural market

Only one State Level Life Insurance Company should be

allowed to operate in each state

Regulatory Body

The Insurance Act should be changed

An Insurance Regulatory body should be set up

Controller of Insurance (Currently a part from the FinanceMinistry) should be made independent

Investments

Mandatory Investments of LIC Life Fund in government

securities to be reduced from 75% to 50%


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GIC and its subsidiaries are not to hold more than 5% in

any company (There current holdings to be brought downto this level over a period of time)

Customer Service

LIC should pay interest on delays in payments beyond 30

days

Insurance companies must be encouraged to set up unit

linked pension plans

Computerization of operations and updating of technology

to be carried out in the insurance industry

Overall, the committee strongly felt that in order to improve

the customer services and increase the coverage of the

insurance industry should be opened up to competition.

But at the same time, the committee felt the need to exercise

caution as any failure on the part of new players could ruin

the public confidence in the industry.

Hence, it was decided to allow competition in a limited way

by stipulating the minimum capital requirement of Rs.1 bn.

This amount is not very high for foreign firms, as it

translates to only about US$25 million. Further, to date it is

unclear


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whether equity should be payable in one go or should be

brought in as installments. Also, the foreign equityparticipation was to be restricted to only 40%.

The committee felt the need to provide greater autonomy to

insurance companies in order to improve their performance

and enable them to act as independent companies with

economic motives. For this purpose, it had proposed setting

up an independent regulatory body.

The industry and analysts find that there is lack of clarity in

the following areas:-

Though coverage of rural areas was to be made

compulsory, it raises the question as to who would

subsidies the rural policies as they would be difficult to

service and hence costs will go up.

There is some confusion with respect to investments.

Where should the funds be invested? Currently 70% of the

funds with LIC & GIC are invested in Government

securities. Would new entrants be allowed to invest in GOIsecurities?

The report also does not enumerate exit options available

to the new entrants. In the event of failure, there should

be an arrangement made whereby the other

Companies pool in to bail the customers, who in allprobability would be middle class individuals.


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Potentiality of Insurance in Indian market

Marketing inefficiency of general insurers has kept

society in dark even when so many personal as well as

commercial lines of insurance covers are available for

them. Insurers have failed to identify the need of the

individual risk factors and thereafter selecting proper

market segments and developing demand of these needs

by adopting proper marketing mix. There is great scope

of commercial line of insurance as we are developing at

a very fast rate but the potentiality and scope of

personal lines of insurance is vast as this areas is still

under-tapped. Product designing and pricing is also

simple and growth of this portfolio is guaranteed in this

country which has a base of over 100 crore population,

where there are about 25 crore dwellings, 20 crore

schools, colleges and educational institutions and about

5 crore small and big shops. But despite this the Indian

insurers share in personal line of business is very low or

negligible.

There are enormous growth opportunities to Indian as

well as foreign insurers because of such a huge base of

population there is ample scope to introduce the new

line of covers as per the changing needs and to increase

the per capita share of the insurance by encouraging

risk transfer by investing small portion of the savings ofthe individuals.


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INSURANCE

MARKETING


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INSURANCE MARKETING :

Marketing was accepted as a organizational imperative.

It was felt that alignment of marketing in the insurance

business would identify the most profitable markets now

and in future; would be helpful in assessing the present

and future needs of the users; would be instrumental in

setting business development goals; would be successful

in making time honored plans to translate them into

realities and would manage various customer services,

in addition to their promotion in the socio-economic

parlance. All these outstanding properties of marketing

practices make it clear that insurance business can't

flourish unless overall marketing decisions are

innovated, more so when the industrially advanced

countries of the world have been found successful in

drawing the positive results by including marketing

principles.

The term insurance marketing refers to the marketing of

insurance services with the motto of customerorientation which makes possible a * blending of

customer satisfaction and profit generation. It is meant

growing the market; it is meant needs oriented

development of product; it is meant formulation of

product mix; it is meant making of suitable pricing


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decisions; it is meant designing of sensitive promotional

strategies and further it is also meant scientificapproach to the management of events so that

qualitative or quantitative improvements are made

possible.

No doubt a few insurance companies have effective

marketing operations, however there are a few typical

insurance companies where the marketing functions

diffused throughout the organization with no one

executive responsible for overall marketing activities,

such as advertising at the expense of others, such as

providing adequate customer service at teller windows.

On the other hand, it is also found that some of the

insurance companies have recently recognized the

significance of marketing concern where executives are

responsible for overall marketing performance.

Insurance companies tend toward a strong sales

orientation, sin the services they sell, although certainly

necessary ones, rarely sell themselves. Potential

policyholders are reluctant to think about disaster a

death. So they postpone planning for these possibilities

until they are contacted and influenced by insurance

agents. Thus the insurance company's natural

orientation is toward sales, not marketing. But in the

modern business world, the marketing concept insists


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on fixing of account ability for overall marketing

performance.

The selection of risks (Product planning), policy writing

(customer service), rating or actuarial (pricing) and

agency management (distraction) - all marketing

activities make up an integrated market strategy.

Effective Product Planning

Insurance Product:

The insurance business is concerned with the

guaranteeing compensation in the event of loss, damage

to property, or death. The present day insurance or the

protection as provided by the Life Insurance Corporationor other companies pertaining to life has its basis

concept that the individual or groups seeking protection

must earn a surplus over the cost of maintaining and

then pay a premium out of the income. For this purpose

the insurance business is based on a mutual and basic

desire to protect the loss of one's property and loss dueto death of an individual.

In the insurance business, the Insurance companies are

found engaged in selling services. And so, services are

their products. Thus a product is also called a bundle of

utilities consisting of various product features and

accompanying services. When a man or a company buys


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a policy from the insurance companies, not only the

policies a bought but the agent's assistance and advice,the prestige of the insurance companies, the facilities of

claims and compensations are also bought.

In the Indian context, the Life Insurance Corporation of

India (LIC) and the General Insurance Corporation of

India (GICI) are the two leading Corporations engaged in

offering insurance services to the concern users. The

LIC's main products are policies, annuities, cre facilities

to individual and companies and consultancy service


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that policy makers consider the needs and requirements

of almost all the segments.

The policy makers have to frame such strategies, which

help corporations in accomplishing the objectives. The

product decisions become significant to make the

marketing decisions sensitive. This automatically throws

a sense of responsibility on the shoulders of Date

Processing Department to manage the information in

such a way that provides authentic or reliable

information regarding the needs - hierarchy and taste -

preferences of the potential policyholders. The feed back

received from the factual policyholders would influence

the elimination process. If they are not responding

positively, either the produce should be eliminated or in

place or opting for a new policy; some amendments in

the provisions of old policies or annuities may also serve

our purpose.


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LIFE

INSURANCE

PRODUCTS


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LIFE INSURANCE PRODUCTS:

Whole life policy: These are low-cost insurance

plans where the sum assured is payable on the death of

the insured

A typical whole life policy runs as long as the policyholder is

alive. In other words, the risk is covered for the entire life of

the policyholder, which is why it is known as whole life

policies.

The policy money and the bonus are payable only to the

nominee of the beneficiary upon the death of the

policyholder. The policyholder is not entitled to any money

during his or her own lifetime, i.e. there is no survival

benefit.

Whole life policies are fairly rigid and inflexible and are

suitable only in a few, very specific cases.

Whole Life Policy can be a good initial policy to buy since its

cost is very low. That is an important consideration when one

is just starting a care

Endowment policy: Under these plans, the sum assured is

pay-able on the maturity of the policy or in case of death of

the insured individual before maturity of the policy.

Endowment policies cover the risk for a specified period at

the end of which the sum assured is paid back to the


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policyholder along with the entire bonus accumulated during

the term of the policy. It is this feature - the payment of theendowment to the policyholder upon the completion of the

policys term -, which rightly accounts for the popularity of

endowment policies. The original sum assured and the

accumulated bonus - received back comes handy from the

endowment can either be used for buying an annuity policy

to generate a monthly pension for the whole life, or put it in

any other suitable investment of his choice. As compared to

whole life policies, the premium rates for endowment policies

are higher and the bonus rates are lower. On the plus side,

these polices offer an endowment - representing a return on

his premium payments payable to him in his own lifetime

when the policy comes to an end.

Money back policy:

Unlike ordinary endowment insurance plans where the

survival benefits are payable only at the end of the

endowment period, money back policies provide for periodic

payments of partial survival benefits during the term of thepolicy, of course so long as the policy holder is alive.

An important feature of this type of policies is that in the

event of death at any time within the policy term, the death

claim comprises full sum assured without deducting any of

the survival benefit amounts, which may have already been


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paid as money-back components. Similarly, the bonus is also

calculated on the full sum assured

Under money back policies premiums can be paid as per the

insurance companys policy. These could be quarterly, half

yearly or annually. The premiums for these policies are

payable for the selected term of years, or till death if it occurs

earlier.

By buying such policies one can receive income at regular

intervals other than the risk cover it provides. Also a good

amount of bonus on the full sum assured is quite a good

bargain

Term policy:

Under these plans, the sum assured is payable only on the

death of the insured individual before expiry of the policy.

Term policies; cover only the risk during the selected term

period. If the policyholder survives the term, the risk cover

comes to an end.

A Term plan is designed to meet the needs of people who are

initially unable to pay the larger premium required for a

whole life or an endowment assurance policy, but they hope

to be able to pay for such a policy in the near future.

No surrender, loan or paid-up values are granted under

these policies because reserves are not accumulated. If the


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premium is not paid with the days of grace, the policy will

lapse without acquiring a paid-up value.

However, a lapsed policy may be revived during the lifetime of

the life assured but before the expiry of the period of two

years from the due date of the first unpaid premium on the

usual terms. Accident and / or Disability benefits are not

granted on policies under the Term plan.

Annuity (Pension Plan):

These plans provide for either immediate or deferred pension

for life. The pension payments are made till the death of the

annuitant (per-son who has a pension plan) unless the policy

has provision of guaranteed period.

An annuity is an investment that one make, either in

a single lump sum or through installments paid over

a certain number of years, in return for which one

receive back a specific sum every year, every half-

year or every month, either for l ife or for a f ixed

number ofyears.

After the death of the annuitant or after the f ixed

annuity period expires for annuity payments, the

invested annuity fund is refunded, perhaps along

with a small addition, calculated at that time.

Annuit ies di ffer from all the other forms of life


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insurance discussed so far in one fundamental way -

an annuity does not provide any life insurance croverbut, instead, offers a guaranteed income either for

life or a certain period.

Typically annuities are bought to generate income

during ones retired life, which is why they are also

called pension plans. Annuity premiums and

payments are fixed with reference to the duration of

human life. Joint life policy:

Joint life policies are similar to endowment policies in as

much as these policies also offer maturity benefits to thepolicyholders, apart form covering the risks as all life

insurance policies.

But these are categorized separately as these cover two lives

together thus offering a unique advantage in some cases;

notable, for a married couple or for partners in a business

firm

Under a joint life policy the sum assured is payable on the

first death and again on the death of the survivor during the

term of the policy. Vested bonuses would also be paid

besides the sum assured after the death of the survivor. If

one or both the lives survive to the maturity date, the sum


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assured as well as the vested bonuses are payable on the

maturity date.

The premiums payable cease on the first death or on the

expiry of the selected term, whichever is earlier.

Accident benefits equivalent to the sum assured are available

under this plan on the first death. However, if both lives are

covered under Double Accident Benefit (DAB), the surviving

life is covered under DAB until the end of the policy year, in

which the first life dies under the cover of the policy.

These benefits are available with respect to both lives if

Both lives perish simultaneously owing to an accident. To

avoid such an eventuality, nomination is allowed under

the policy OR

Both die within the specified period as a result of the same

accident OR

The second life also dies in the same policy year as result of

another accident. To avoid such an eventuality, nomination

is allowed under the policy.

Particularly for couples - Joint life policies provide dual-

purpose income and risk protection for both belonging to

every income group and class of society.

Under a joint life plan though the premium payment stops

after the first life's death, bonuses continue to accrue on the


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basic Sum Assured till Maturity Date or till the death of the

second life, if earlier.

Group insurance:

Group Insurance offers life insurance protection under group

policies to various groups such as employer-employee,

professionals, co-operatives, weaker sections of society etc. It

also provides insurance coverage to people under certainapproved occupations at the lowest possible premium cost.

Besides providing insurance coverage, it also offers group

schemes to employers, which provide funding of gratuity and

pension liabilities of the employers Group insurance plans

have low premiums. Such plans are particularly beneficial to

those for whom other regular policies are a costlierproposition. Group insurance plans extend cover to large

segments of the population including those who cannot

afford individual insurance. As such the premia one need to

pay is comparatively lower and at the same time one can

avail of insurance benefits.

The main features of the schemes are low premium and

simple insurability conditions. Premiums are based upon age

combination of members, occupation and working conditions

of the group.

A number of group insurance schemes have been designed

for various groups. These include employer-employee groups,associations of professionals (such as doctors, lawyers,


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chartered accountants etc.), and members of cooperative

banks, welfare funds, credit societies and weaker sections ofsociety. Creditor-Debtor groups are also offered group

insurance schemes.

Group insurance schemes providing uniform cover can be

granted to outstanding loans. These groups are Members of

primary housing societies where housing loans are granted

by State Apex housing societies, borrowers granted loans by

Institutional agencies in Public/Joint Sectors for housing

purposes and borrower members of cooperative

societies/banks formed by employees of the same employers

Special plan:

Special plans are insurance policy plans available from the

national insurance providers to serve the needs of citizens

that cannot be commonly classified or segregated. These

special plans are designed to satisfy needs ranging from

debt-clearance in event of the death of the insured to

financial aid in the event of a medical mishap.

Special plans also provide financial assistance for

handicapped dependants as well as emergency surgery

required if and when a medical condition arises. Since

special plans are designed for people with diverse and

specific needs, the average citizen may not necessarily need

or use them. Yet, in the normal course of life, situations may


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arise when one may need to provide for unplanned or

unexpected contingencies and mishaps.

Pricing Decisions

In the insurance business, the pricing decisions are

concerned with the premium charged against the

policies, interest charged for defaulting the payment of

premium and credit facilities, commission charged forunderwriting and consultancy activities etc. The

formulation of pricing strategies becomes significant

with the viewpoint of influencing the target market or

the prospects. Particularly in the developing countries

where the disposable income in the hands of prospects

is low, the pricing decisions also govern thetransformation of potential policyholders into actual

policyholders. Hence, this component of marketing mix

occupies an outstanding place in the making of

marketing decisions. The strategies may be in both the

forms - high pricing strategy and the low pricing

strategy, keeping in view the level or standard ofcustomers or the policyholders. Particularly when the

Corporations have been fixing premium on the policies

meant for the weaker sections of the society, it is very

natural that the pricing strategies are low but the same

strategy can't be followed for the affluent sections of the

society. Even in insurance services, the Corporations fixpremium on the basis of costs, thus the cost of


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insurance is found here a determining factor. The

important bases for determining the cost are rate ofdeath, rate of interest and the expenses incurred on the

insurance business. The mortality table helps

determination of death rate. It is such data which record

the past mortality and is put in such a form that can be

used in estimating the course of future data. It is to

predict future mortality. A large number of persons are

selected and observed for death and survival rates. The

best method of construction of mortality table is to

select a large number of persons at attained age, which

is meant age nearer to birth rate. The second important

element to be considered is the interest rate. On the

basis of mortality rate, it is estimated that when and

how much amount would be received as premium and

would be paid as claims but on the basis of interest

rate, it is estimated that how much interest can be

earned by investing the insurance funds. Interest table

is prepared for computing the rate of interest. The last

element is expanses. There are certain expenses which

are incurred in the inception of the policy, certain

expenses are recurring which incur every year on the

policy, certain expenses incur only at the time of the

end of the policy. This necessitates determination of the

nature of expenses according to occurrence and equal

distribution of the expenses every year for equable

distribution of loading.


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In view of the above, it emerges that in the making of

pricing decisions, the calculation of premium rate isinfluenced by a number of factors. The growing

management expenses or the growing costs of

administration make the insurance policy costly.

Besides, the investment decisions also govern the cost

as unproductive investments are proved to be a burden.

Contrary to it, if the insurance funds are invested in

private companies, the rate of profitability can multiply.

The expenses to be incurred on a policy also aggravate

the costs of insurance. All these facts necessitate cost

effectiveness.

The pricing decisions make it essential that insures

keep in mind the nature of policy and the category of

prospects. An important task before the policy makers is

to minimize the cost. Important positive developments in

the socio-economic environment, growing health care

facilities, rising standard of living, growing disposable

income, increasing literacy are some of the important

factors governing the rate of premium. The investment

decisions of Insurance Corporations have also been

instrumental in affecting the costs. If the Corporations

prefer investments in government securities, no doubt

the security would be of high magnitude but the rate of

return of investments would be woefully low. This would

prove to be a barrier, especially while minimizing the


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costs, Contrary to it when the Insurance Corporations

favour investments in the private sector, the rate ofreturn on investments would be handsome which would

be helpful in minimizing the costs. Particularly in the

Indian setting, the Corporations have been liberal to the

public investments. This trend needs a departure, or at

least a contraction in public investments.

In the yester-decades, there has been a phenomenal

growth in the standard of living of the masses. The

medical facilities have also been increased to a

considerable extent. The level of income shows a positive

trend. All these positive developments have made

possible a sharp reduction in the death rate.

Particularly in the Life Insurance business, the rate of

premium is directly linked with the death rate. "Higher

the death rate, higher the premium" - "lower the death

rate, it is judicious that the rate of premium is brought

down. This would induce the potential policyholders and

the insurance business would gain a rapid momentum.

Thus, the thrust areas are:-

Making Possible Cost effectiveness.

Re-structuring of premiums.

Due Priority to profit generating investments.

Paving ways for generating business.


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PROMOTION MIX STRATEGIES:

In the formulation of marketing mix, the promotional

decisions play an effective role. If the promotional

decisions are the tune with changing socio-economic

environment, the marketers find it convenient to

influence the potential users. Like banking services, the

insurance services also depend on effective promotional

measures. It is right to say that magnitude of

dependence in the insurance services is of high

magnitude. The creation of awareness is found very

much instrumental in the generation of impulse buying.

Particularly in the countries like ours where the rate of

illiteracy is very high and the rural economy has a

dominance in the national economy; it is essential that

both the wings of promotion, e.g., personal and

impersonal are given due weight age. The selection of

agents and rural career agents and imparting to them

proper training facilities so as to create the impulse

buying is a part of personal communication where the

agents exercise their best tact and ability to activate the

task of transforming the potential policyholders into

actual policyholders. The advertising and publicity

measures, organization of conferences and seminars,

incentives to the policyholders are impersonal

communications. This makes, it clear that

communication efforts between the Corporation and


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actual or potential users either at the personal level or

as a mass communication effort to change the villagers'attitude in particular become an integral part of

marketing of insurance services. No doubt, a number of

steps have been taken, especially after nationalization of

insurance business; still the communication has not

been so effective to get cent-per-cent result.

Personal Promotion Strategies:

The extent of dependence of insurance business on the

services of agents or rural career agents is found of high

magnitude. Since nationalization, we have tried our best

to innovate the possible necessary changes in the

regulatory provisions. It can't refute that some positivetrends have emerged even in the rural business still

there are wider avenues for initiating qualitative

improvements. The Rural Career Agents bear the

responsibility of expanding rural business. They need to

influence the illiterate masses, a task which is found

more complicated, a goal which is found morecomplicated, a goal which is found partially

accomplished and an obligation which is found un-ful-

filled. The agents are required to be more active or say,

the number of active agents is required to be increased.

Millionaire agents also divert an intensive care. Agents

who complete Rs. 10 lakhs and over new businessduring a year are known as millionaire agents. The


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strengthening of agents' club can't be overlooked, if we

are really interested in having a team-spirit of accomplishing the organizational goal. The most

important thing here is to promote the "Career Agents'

Scheme", in the urban areas and the "Rural Career

Agents' Scheme" in the rural areas.

Impersonal Promotion Strategies:

Strateg ies can't serve our purpose and so, the

impersonal promotion strategies are also required to

be revamped. This diverts our attention on

advertising, public relations and publicity measures.

I t is fe lt that active co-ordination between the

divisional offices and State Governments publicityset-up is required to keep up through our

participation in the meetings and programmes of the

Inter Media Publicity Co-ordination Committees.

Newspaper advertisements can also serve our

purpose. It is grati fying to note that some of the

newspaper advertisements released during the yester-

years have earned wide acclaim.

PHYSICAL EVIDENCE:

Physical evidence is yet an other marketing tool available to

the service marketer. The service firms must consciously

make efforts to manage the physical evidence associated with


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their services. In services the product itself being intangible

the need is to tangibalised it as far as possible. Thus physicalentities can be successfully employed to describe the service

product and its distinguishing qualities. Many service

marketer s who continue to look at service operations

through product oriented glasses fail to realize the marketing

potential of physical evidence. The physical evidence

associated in a service form can be broken into two

categories

1. Dominant

2. Peripheral

The dominant evidence is the once, which constitute a

dominant part of the service facilities. E.g. Aircrafts in

airlines, hotel building and interiors, cars and office of car

rental company etc.

The Peripheral physical evidence is not very visible in relation

to dominant physical evidences. They include letterheads,

cheques books, stationary, pens etc.

Marketing Information System in Insurance:

The incoming multi-faceted changes in the socio-

economic environment have raised the significance of

information-based decisions. To be more specific for

making marketing decisions, the Marketing Information


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System plays an important role. Like other services, the

insurance business is also influenced by themanagement of information. The marketers in particular

feel that for making the marketing decisions is required

to be minimized. This naturally diverts our attention on

MIS. The top marketing executive has to shoulder the

responsibility of making available to the organization an

effective MIS which brings creativity. In the Insurance

business, this vital responsibility is to be shouldered by

marketing manager. The system analysts would be

delegated the responsibility of designing the shape.

Here, an advisory group made up of different

representatives from marketing, finance, operation

research, data processing and other organizational units

would assist the system analyst. They would also be

helpful in maintaining a continual surveillance over the

MIS would suggest and would be effective in preparing

the initial design. Here, it is significant to mention that

designing of blue prints is a difficult task and if it is

done satisfactorily, the system analysis find it

convenient to finalize the growing and changing

information requirements of organization. The need of

the hour is to combat the marketing problems, and the

system designer has to be exceptionally vigilant so that

the nature of decision is studied minutely.


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IRDA ACT

1999


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IRDA ACT 1999

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatoryand Development Authority (IRDA, which was constituted byan act of parliament) specify the composition of Authority

The Authority is a ten member team consisting of

(a) a Chairman;(b) five whole-time members;(c) four part-time members,

(all appointed by the Government of India)

Duties, Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powersand functions of IRDA..(1) Subject to the provisions of thisAct and any other law for the time being in force, theAuthority shall have the duty to regulate, promote andensure orderly growth of the insurance business and re-insurance business.(2) Without prejudice to the generality of the provisionscontained in sub-section (1), the powers and functions of theAuthority 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 inmatters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim,surrender value of policy and other terms and conditions ofcontracts of insurance;


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(n) Supervising the functioning of the Tariff Advisory

Committee;

(o) specifying the percentage of premium income of theinsurer to finance schemes for promoting and regulatingprofessional organizations referred to in clause (f);

(p) Specifying the percentage of life insurance businessand general insurance business to be undertaken by theinsurer in the rural or social sector; and

(q) Exercising such other powers as may be prescribed


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INDIAN INSURANCE INDUSTRY:

Insurers:

Insurance industry, as on 1.4.2000, comprised mainly twoplayers: the state insurers:

Life Insurers:

Life Insurance Corporation of India (LIC)

General Insurers:

General Insurance Corporation of India (GIC) (witheffect from Dec'2000, a National Reinsure)

GIC had four subsidiary companies, namely ( with effect fromDec'2000, these subsidaries have been de-linked from theparent company and made as independent insurancecompanies.

1. The Oriental Insurance Company Limited

2. The New India Assurance Company Limited,

3. National Insurance Company Limited

4. United India Insurance Company Limited .
http://www.licindia.com/http://www.licindia.com/http://www.gicoi.com/http://www.gicoi.com/http://www.orientalinsurance.nic.in/http://www.niacl.com/http://www.niacl.com/http://www.nationalinsuranceindia.com/http://www.licindia.com/http://www.gicoi.com/http://www.orientalinsurance.nic.in/http://www.niacl.com/http://www.nationalinsuranceindia.com/


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Yr: 2000-2001: (From 2nd April '2000 to 31stDecember'2001)

Insurance Industry in the year 2000-2001 had 16 newentrants, namely:

Life Insurers:

S.No.

RegistrationNumber

Date ofReg.

Name of the Company

1 101 23.10.2

000

HDFC Standard Life InsuranceCompany Ltd.

2 104 15.11.2000

Max New York Life Insurance Co.Ltd.

3 105 24.11.2000

ICICI Prudential Life InsuranceCompany Ltd.

4 107 10.01.2001 Om Kotak Mahindra LifeInsurance Co. Ltd.

5 109 31.01.2001

Birla Sun Life InsuranceCompany Ltd.

6 110 12.02.2001

Tata AIG Life Insurance CompanyLtd.

7 111 30.03.2001

SBI Life Insurance CompanyLimited .

8 114 02.08.2001

ING Vysya Life InsuranceCompany Private Limited

9 116 03.08.2001

Allianz Bajaj Life InsuranceCompany Ltd.

10 117 06.08.2001

Metlife India Insurance CompanyPvt. Ltd.

General Insurers :
http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.omlotakmahindra.com/http://www.omlotakmahindra.com/http://www.birlasunlife.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.tata-aig.com/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.allianzbajaj.co.in/http://www.metlife.com/http://www.metlife.com/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.omlotakmahindra.com/http://www.omlotakmahindra.com/http://www.birlasunlife.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.tata-aig.com/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.allianzbajaj.co.in/http://www.metlife.com/http://www.metlife.com/


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S.No.

Registration

Number

Date ofRegistr

ation

Name of theCompany

1 102 23.10.2000

Royal SundaramAlliance InsuranceCompany Limited

2 103 23.10.2000

Reliance GeneralInsurance CompanyLimited.

3 106 04.12.2

000

IFFCO Tokio

General InsuranceCo. Ltd

4 108 22.01.2001

TATA AIG GeneralInsurance CompanyLtd.

5 113 02.05.2001

Bajaj AllianzGeneral InsuranceCompany Limited

6 115 03.08.2

001

ICICI Lombard

General InsuranceCompany Limited.
http://www.royalsun.com/http://www.royalsun.com/http://www.royalsun.com/http://www.itgi.co.in/http://www.itgi.co.in/http://www.itgi.co.in/http://www.tata-aig.com/http://www.tata-aig.com/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.icicilombard.com/http://www.icicilombard.com/http://www.royalsun.com/http://www.royalsun.com/http://www.royalsun.com/http://www.itgi.co.in/http://www.itgi.co.in/http://www.itgi.co.in/http://www.tata-aig.com/http://www.tata-aig.com/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.icicilombard.com/http://www.icicilombard.com/


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Yr: 2001-2002 : ( From 1st Jan 2001 to till date)

Insurance Industry in this year, so far has 5new entrants;namely

Life Insurers:

S.No.

RegistrationNumber

Date ofReg.

Name of the Company

1 121 03.01.2002

AMP SANMAR AssuranceCompany Ltd.

2 122 14.05.2002

Aviva Life Insurance Co.India Pvt. Ltd.

General Insurers :

S.No

.

Registr

ationNumber

Date of

Registration

Name of the

Company

1 123 15.07.2002

CholamandalamGeneral InsuranceCompany Ltd.

2. 124 27.08.2002

Export CreditGuaranteeCorporation Ltd.

3. 125 27.08.2002 HDFC-ChubbGeneral InsuranceCo. Ltd.
http://www.ampsanmar.com/http://www.ampsanmar.com/http://www.avivaindia.com/http://www.avivaindia.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.ampsanmar.com/http://www.ampsanmar.com/http://www.avivaindia.com/http://www.avivaindia.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.com


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INSURANCE BUSINESS:

Insurance business is divided into four classes :1) Life Insurance 2) Fire Insurance 3) Marine Insurance and4) Miscellaneous Insurance.Life Insurers transact life insurance business; GeneralInsurers transact the rest.No composites are permitted as per law.

LEGISLATION (as on 1.4.2000):Insurance is a federal subject in India. The primary

legislation that deals with insurance business in India is:Insurance Act, 1938, and Insurance Regulatory &Development Authority Act, 1999.

INSURANCE PRODUCTS (as on 1.4.2000) (for latestinformation get in touch with the current insurers websiteinformation of insurers is provided at the web page forinsurers):

Life Insurance:Popular Products: Endowment Assurance (Participating) andMoney Back (Participating). More than 80% of the lifeinsurance business is from these products.

General Insurance:Fire and Miscellaneous insurance businesses arepredominant. Motor Vehicle insurance is compulsory. Tariff Advisory Committee (TAC) lays down tariff rates for

some of the general insurance products

New products have been launched by life insurers. Theseinclude linked-products. For details, please visit the websitesof life insurers.


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insurer pools all its premiums into a large fund, and when apolicyholder has a loss, the insurer draws funds from the

pool to pay for the loss. Life is full of unexpected events thatcan create large financial losses. For example, whenever youdrive, it is possible that you may have a costly accident.Risks affect you by causing worry about potential loss andhow to deal with the consequences. Insurance reducesanxiety over a possible loss and absorbs the financial bruntof its consequences. However, while insurance coverage isessential, how much and what type of insurance people needdiffer with each individual. You must decide how much risk

you're willing to tolerate without insurance. For example,benefits for disability policies typically begin after a waitingperiod of one to six months. Therefore, you should ensurethat you have some form of coverage or financial resourcesbefore the policy period begin.

Where Can I Get Insurance?Since insurance can be expensive, it makes sense to get morethan one price quote for coverage. At one time, we in India

had no option but the nationalized insurance companies likeLIC, GIC, etc. Now several private players, often with foreigntie-ups, are entering the fray. There are now severalcompanies selling any one type of insurance, each with itsown price structures, coverage, and policy exclusions. Tohelp consumers choose among the various types ofcoverages, companies train sales representatives in thetechnical points of their insurance products. Manyrepresentatives work for just one insurance company. There

are also brokers and independent agents -- self-employedbusiness people who sell insurance on commission forseveral insurers -- who claim they can comparison shop toget the best coverages for consumers. Certain banks also sellinsurance.


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What Type of Insurance Agent Should I Trust?

With multiple players in the life insurance field now, a choiceshould be first made regarding the the insurance companybefore choosing an agent. To determine a company'swillingness to pay claims, ask a policyholder who has filedseveral claims. Obviously, the more claims an insurer hashandled with no complaints, the more likely that thecompany will provide you with good service. Barring LIC, theremaining players in life insurance are still new in the field,so this kind of information will not be available for another

few years at the least. It remains to be seen how the newerplayers will perform on the claims front, but given theregulatory framework and their strong parentage, theirperformance should be comparable, if not better than LIC.

It is quite imperative that your insurance agent be competentand professional enough to clearly understand yourinsurance requirements and suggest a suitable scheme. Also, with insurance companies offering varying rate ofcommissions on different schemes, there is a likelihood that

a 'not-so-professional' agent may be tempted to recommend ascheme which pays him a higher commission, though it maynot be very suitable for your needs. This is especially so inthe case of LIC, sole provider of life insurance in our countrytill recently, where the eligibility criteria are not very rigorousand very often the level of knowledge and competence of theagents leaves a lot to be desired. The new players seem to bemuch more stringent in appointing agents and morecommitted in providing training to them. In today's context,

especially in case of LIC, it may be advisable to go in for anagent who comes recommended from one of your friends,relatives or associates. Further, the agent should be able toprovide you with a comparison of multiple schemes and alsoexplain them in simple terms, so that you are are able tomake an informed decision. In case an agent is not inclinedto spend the time and resources to provide you with relevantinformation and solve your queries, it may be better to give ago-by to such a person and start looking for a new


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Contact Information

ICICI Prudential Life Insurance Company LimitedRegistered Office

ICICI Towers

9th floor, Bandra-Kurla Complex

Mumbai - 400 051.

Tel: 494 3232

Delhi office:

3rd Floor,

Videocon Towers,

E-1, Rani

Jhansi Road,

New Delhi-110055

Tel: 601 3232

Email: [email protected]

Visit us on: www.iciciprulife.com


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Life Insurance Players:

Bajaj Allianz General InsuranceBajaj Allianz General Insurance Company Limited is ajoint venture between Bajaj Auto Limited and Allianz AG ofGermany. Both enjoy a reputation of expertise, stabilityand strength.

Birla Sun Life Insurance

The Aditya Birla Group contributes its knowledge of theIndian market while Sun Life Financial contributes globalexpertise in the areas of protection and wealthmanagement.

HDFC Standard Life InsuranceHDFC and Standard Life have a long and closerelationship built upon shared values and trust. Providinglong term financial security to policy holders will be the

constant endeavor. ICICI Prudential Life Insurance

The Company was granted Certificate of Registration forcarrying out Life Insurance business, by the InsuranceRegulatory and Development Authority.

ING Vysya Life InsuranceING, the worlds second largest life insurance companytogether with Vysya Bank, one of Indias leading private

sector banks, forms ING Vysya Life Insurance. Life Insurance Corporation (LIC)

Life Insurance Corporation (LIC) has been one of thepioneering organizations in India who introduced use ofInformation Technology in their business.

MetLife IndiaThe Metropolitan Life Insurance Company is the numberone insurer in the U.S. It is helping build financial

independence for its customers.
http://www.hdfcinsurance.com/http://www.iciciprulife.com/index.jsphttp://www.ingvysyalife.com/http://www.licindia.com/lichome/index.shtmlhttp://www.metlifeindia.com/http://www.hdfcinsurance.com/http://www.iciciprulife.com/index.jsphttp://www.ingvysyalife.com/http://www.licindia.com/lichome/index.shtmlhttp://www.metlifeindia.com/


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Oriental InsuranceThe Oriental Insurance Company Ltd. (OICL) is one of theleading General Insurance companies in India and is asubsidiary of the General Insurance Corporation (GIC) ofIndia.

Royal Sundaram Alliance InsuranceRoyal Sundaram marks the coming together of SundaramFinance, one of Indias most respected and trusted financecompanies, and Royal and Sun Alliance, one of the largest

insurance groups in the world.

Tata AIG InsuranceLife insurance & general insurance for individuals &

corporates by Tata AIG. This site will guide you on how tocapitalize on opportunities and protect againstuncertainties.
http://orientalinsurance.nic.in/http://orientalinsurance.nic.in/


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COMPANY

PROFILE


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COMPANY PROFILE

About ICICI PRUDENTIAL:

ICICI Prudential Life Insurance was established in 2000 witha commitment to expand and reshape the life insuranceindustry in India. The company was amongst the first privatesector insurance companies to begin operations afterreceiving approval from Insurance Regulatory Development

Authority (IRDA), and in the time since, has taken severalsteps towards its realizing its goal.The company's wide range of products, distribution strengthsand powerful brand has driven its growth across a cross-section of people and cities. As on March 31, 2003, thecompany had issued nearly 350,000 policies, with a totalpremium income of over INR 5 billion and a total sumassured in excess of INR 87 billion. Today, the company hasestablished itself as the No. 1 private life insurer in the

country.

Our vision:To make ICICI Prudential the dominant Life and Pensionsplayer built on trust by world-class people and service.

This we hope to achieve by:

Understanding the needs of customers and offeringthem superior products and service

Leveraging technology to service customers quickly,efficiently and conveniently

Developing and implementing superior riskmanagement and investment strategies to offersustainable and stable returns to our policyholders


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Providing an enabling environment to foster growth andlearning for our employees

And above all, building transparency in all our dealings.

The success of the company will be founded in itsunflinching commitment to 5 core values -- Integrity,Customer First, Boundary less, Ownership and Passion.Each of the values describes what the company stands for,the qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new

opportunity, where we can play a significant role inredefining and reshaping the sector. Given the quality of ourparentage and the commitment of our team, there are nolimits to our growth.


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Board of DirectorsThe ICICI Prudential Life Insurance Company Limited Boardcomprises reputed people from the finance industry bothfrom India and abroad.Mr. K.V. Kamath, ChairmanMr. Mark TuckerMrs. Lalita D. GupteMr. Danny BardinMrs. Kalpana Morparia

Mrs. Chanda KochharMr. M.P. ModiMr. R NarayananMr. S.P.Subhedar, (Alternate Director to Mr. Danny Bardin)Mr. Derek Stott, (Alternate Director to Mr. Mark Tucker)Ms. Shikha Sharma, Managing Director

Management Team

Ms. Shikha Sharma, Managing DirectorMs. Anita Pai, Chief - Operations & UnderwritingMr. Bill Lisle, Chief Agency OfficerMr. Sandeep Batra, Chief Financial Officer & CompanySecretaryMr. Saugata Gupta, Chief - MarketingMr. Shubhro J. Mitra, Chief - Human ResourcesMr. V. Rajagopalan, Appointed Actuary

Mr. Anil Tikoo, Head - Information Technology


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Fact Sheet

THE COMPANY

ICICI Prudential Life Insurance Company is a joint venturebetween ICICI, a premier financial powerhouse andPrudential plc, a leading international financial servicesgroup headquartered in the United Kingdom. ICICIPrudential was amongst the first private sector insurance

companies to begin operations in December 2000 afterreceiving approval from Insurance Regulatory DevelopmentAuthority (IRDA).

ICICI Prudentials equity base stands at Rs. 4.25 billion withICICI Bank and Prudential plc holding 74% and 26% stakerespectively. As of March 31, 2003, the company had issuednearly 350,000 policies with a sum assured in excess of Rs8,700 crore and total premium income of over Rs. 500 crore.

Today the company is the #1 private life insurer in thecountry.

DISTRIBUTION:

ICICI Prudential has one of the largest distribution networksamongst private life insurers in India, having commencedoperations in 29 cities and towns in India. These are:Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore,

Gurgaon, Hyderabad, Indore, Jaipur, Jalandhar, Kanpur,Kochi, Kolkata, Kottayam, Lucknow, Ludhiana, Madurai,Mangalore, Meerut, Mumbai, Nagpur, Nasik, Noida, NewDelhi, Pune, Surat, Thane, Vadodara and Vashi.

The company has the largest number of bancassurance tie-ups, having agreements with ICICI Bank, Citibank,Allahabad Bank, Federal Bank, South Indian Bank, Bank ofIndia, Lord Krishna Bank, and Punjab & Maharashtra Co-operative Bank, as well as some corporate agents. It has also

tied up with organizations like Dhan for distribution of


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ICICI Prudential Life Insurance offers a range of innovative,customer-centric products that meet the needs of customers

at every life stage. Its 13 products can be enhanced with upto 4 riders, to create a customized solution for eachpolicyholder.

Savings Solutions- ICICI Pru Save n Protect is a traditional endowmentsavings plan that offers life protection along with adequatereturns.- ICICI Pru CashBak is an anticipated endowment policy

ideal for meeting milestone expenses like a child''s marriage,expenses for a child''s higher education or purchase of anasset.

Protection SolutionsICICI Pru LifeGuard is a protection plan, which offers lifecover at very low cost. It is available in 3 options - level termassurance, level term assurance with return of premium andsingle premium.

Child SolutionsICICI Pru SmartKid provides guaranteed educationalbenefits to a child along with life insurance cover for theparent who purchases the policy. The policy is designed toprovide money at important milestones in the child''s life.Market-linked Solutions- ICICI Pru LifeLink is a single premium Market LinkedInsurance Plan which combines life insurance cover with theopportunity to stay invested in the stock market.

- ICICI Pru LifeTime offers customers the flexibility andcontrol to customize the policy to meet the changing needs atdifferent life stages. It offers 3 investment options - GrowthPlan, Income Plan and Balanced Plan.

Retirement Solutions- ICICI Pru ForeverLife is a retirement product targeted atindividuals in their thirties.Market-linked retirement products

- ICICI Pru LifeTime Pension is a regular premium market-


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linked pension plan- ICICI Pru LifeLink Pension is a single premium market-

linked pension plan.

Single Premium Solutions- ICICI Pru AssureInvest is a single premium savingsproduct with life cover for terms of 5, 7 or 10 years.- ICICI Pru ReAssure is a retirement product for seniorcitizens who are on the verge of retirement or have justretired.ICICI Prudential also launched ''Salaam Zindagi'', a social

sector group insurance policy targeted at the economicallyunderprivileged sections of the society.

Group Insurance SolutionsICICI Prudential also offers Group Insurance Solutions forcompanies seeking to enhance benefits to their employees.

ICICI Pru Group Gratuity Plan: ICICI Pru''s group gratuityplan helps employers fund their statutory gratuity obligationin a scientific manner. The plan can also be customized tostructure schemes that can provide benefits beyond thestatutory obligations.

ICICI Pru Group Superannuation Plan: ICICI Pru offers aflexible defined contribution superannuation scheme toprovide a retirement kitty for each member of the group.Employees have the option of choosing from various annuityoptions or opting for a partial commutation of the annuity atthe time of retirement.

ICICI Pru Group Term Plan: ICICI Pru''s flexible group termsolution hel

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