Icici Prudential - Marketing and Promotional Studies[1]

8/7/2019 Icici Prudential - Marketing and Promotional Studies[1]

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CHAPTER - 1

INTRODUCTION

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RESEARCH OBJECTIVES

The functioning and the growth prospects of the life insurance industry in India.

The regulators and general regulations pertaining to this industry.

The kinds of promotional and distribution strategies adopted by ICICI Prudential.

The kinds of plans offered by the major players and how they segment and target

market with the help of these plans.

This learning will help me during my final year of the course, placement and the

job which I will do if I take up this industry as a career.

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RESEARCH METHODOLOGY

The methodology section is the blue print for researcher activity and specifies bow the

investigator intents to study the people or describe social settings. In other words the

methodology section make explicit the study desire and constitutes the how to do it

phase.

The project study has been conducted by collecting primary data only using structured

questionnaire. No secondary data is used.

I have put my best possible effort to do this research and collect the necessary

information to learn about this topic thoroughly.

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TYPES OF RESEARCH

The type of research used for our study was an exploratory research, as the objective of

the research was to have in depth understanding of the sales agents.

Since the research was qualitative, the need for formal and rigid questionnaire was not

felt. However I covered a specific list of topics and sub areas. This was done in the

form of Open-ended question, where the timing, exact wordings and time allocated

to each question area was left at the interviewers discretion open structure ensured

that inspected facts or attitudes could perused easily.

Data Collection:

It consists of primary data and secondary data. Primary data was collected by holding

semi- structured and focused individual interviews of sales Agent, executive,

Consultant and Personnel associated with Corporate Direct sales associate.

For the primary data Interviewed 35 insurance personnel, out these 15 were Executives

including Consultants, Executive (Managerial), and associated Executive from other tiedorganization.

Whereas secondary data was obtained by different records, magazines, newspapers, inter

nets and various pamphlets of ICICI Prudential Life Insurance.

Secondary Data:

Already published data formed the launch pad for the study. This included: -

I) Internal Data: which originates within the organization?

Brochures, pamphlets

Official reports, specially the Annual report(s)

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II) External Data: which originates outside the organization?

Books

Periodicals (magazines, journals)

The World Wide Web for Information or the Internet

Primary Data:

Data was collected specifically for the research need at hand. This includes:-

Interviews and surveys of people with informed ideas about the subject of the

project.

Questionnaire survey of corporate

Sample size:

I have selected sample on the basis of performance of the premium collected by agent at

least 25 policies per year. Other has been taken from the branch Manager andConsultant, branch Executives. All are taken randomly.

Analytical Tools:

The data was analyzed statically, by frequency distribution tally method and interpreted

by tables and figures.

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CHAPTER 2

COMPANY PROFILE

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OVERVIEW

The insurance sector was opened up for private participation four years ago and FICCI

has doing yeoman service to the development of this sector by facilitating exchange of

views between the industry, policymakers, and the regulator through the annual

conference. This has provided a forum to take stock of the developments and discuss the

future course of action. These annual conferences before and after the reforms in the

sector have provided useful inputs to the policy makers and the regulatory body and the

FICCI deserves appreciation for the professional manner in which these conferences are

organized and should be legitimately proud of the contribution made by it in the growth

and development of insurance sector.

The reasons that prompted the government to bring in reform in the insurance sector are

well known. While the Public Sector insurance companies made enormous contribution

in the spread of awareness about insurance, and expanded the market, it was recognized

that their reach was still limited, the range of products offered restricted and the service to

the consumer inadequate. It was also felt that the rapid economic growth witnessed in the

90s cannot be sustained without a thriving insurance sector.

It was also recognized that India has a vast potential that is waiting to be tapped and this

could be achieved when sufficient competition is generated and it is exposed to the

developments in the rest of the world. The insurance sector was, therefore, opened up for

private sector participation with provision for limited foreign equity exposure. We have

now four years experience of the public and private sector together operation in the

market.

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ORIGIN OF LIFE INSURANCE

The concept of insurance probably began in China over five thousand years ago. Others

will argue that insurance began slightly later, in Babylonia. In any case, ancient peoples

were interested in protecting against loss. They devised insurance systems to protect the

investments underpinning trade efforts, particularly with respect to goods shipped across

the seas. It was centuries after the first "insurance policies" were drafted in efforts to aid

commerce, that the concept of life insurance took hold in ancient Rome.

The ancient Romans believed that anyone who was wrongly buried would become "anunhappy ghost." This idea of a "forlorn and shivering spirit in an agony of loneliness" so

bothered the Romans that they tended to invest large sums in elaborate burials

Although the belief in the importance of "correct" burial reached through all levels of

society, resources did not. Roman society suffered a rather large gap between the rich and

the poor. Those on the lower socioeconomic strata, including many soldiers, lacked the

requisite resources for a proper Roman burial.

These factors led to the creation of burial clubs. Groups of individuals formed and all

members were required to regularly donate to a common fund that was used in the event

of a member's death to fund his funeral. A Roman military leader, Marius, created a

burial club among his troops in approximately 100 B.C. and many similar organizations

came into being in this era. Eventually, the practice grew to include providing a stipend

to the survivors of the deceased.

The Roman burial clubs represent the beginning of life insurance as we know it. A group

of people enters into a voluntary agreement to pay premiums that are used to provide

benefits to any paying member of the group who happens to die. Stripped to its essence,

life insurance today, in all of its complexity and with all of its variations, still bears a

remarkable resemblance to the burial clubs of ancient Rome.

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The idea of the Roman burial club was compelling then. The Roman government was not

fond of organizations of any sort forming-perceiving them as potential breeding grounds

for challengers to the power structure. The burial clubs, however, were allowed to exist.

The sensibility of their plan was obvious even to tyrants.

Today we may be more concerned with providing replacement income for the family of

the deceased than we are about funerary expenses. We also tend to worry considerably

less about whether or not a funeral might produce a forlorn or shivering ghost. We still

do, however, embrace the principle that the financial strength of many, when combined,

can produce necessary results for others in difficult times. Life insurance continues today

because those underlying principles remain unchanged.

We don't often see ourselves as being akin to Roman legionnaires marching into battle,

but those of us who pay our life insurance premiums in an effort to protect ourselves and

our family from expense and difficulty do share a common trait with the ancients who

invented life insurance in the form of burial clubs.

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INDUSTRY PROFILE

A thriving insurance sector is of vital importance to every modern economy. Firstly

because it encourages the habit of saving, secondly because it provides a safety net to

rural and urban enterprises and productive individuals. And perhaps most importantly it

generates long- term invisible funds for infrastructure building. The nature of the

insurance business is such that the cash inflow of insurance companies is constant while

the payout is deferred and contingency related.

This characteristic feature of their business makes insurance companies the biggest

investors in long-gestation infrastructure development projects in all developed and

aspiring nations. This is the most compelling reason why private sector (and foreign)

companies, which will spread the insurance habit in the societal and consumer interest are

urgently required in this vital sector of the economy. Opening up of insurance to private

sector including foreign participation has resulted into various opportunities and

challenges in India.

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LIFE INSURANCE MARKET

The Life Insurance market in India is an underdeveloped market that was only tapped by

the state owned LIC till the entry of private insurers. The penetration of life insurance

products was 19 percent of the total 400 million of the insurable population. The state

owned LIC sold insurance as a tax instrument, not as a product giving protection. Most

customers were under- insured with no flexibility or transparency in the products. With

the entry of the private insurers the rules of the game have changed.

The 12 private insurers in the life insurance market have already grabbed nearly 9 percent

of the market in terms of premium income. The new business premium of the 12 private

players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, with regard to

state owned LIC's new premium business has fallen

Innovative products, smart marketing and aggressive distribution. That's the triple

whammy combination that has enabled fledgling private insurance companies to sign up

Indian customers faster than anyone ever expected. Indians, who have always seen life

insurance as a tax saving device, are now suddenly turning to the private sector and

snapping up the new innovative products on offer.

The growing popularity of the private insurers is evidenced in other ways. They are

coining money in new niches that they have introduced. The state owned companies still

dominate segments like endowments and money back policies. But in the annuity or

pension products business, the private insurers have already wrested over 33 percent of

the market. And in the popular unit-linked insurance schemes they have a virtual

monopoly, with over 90 percent of the customers. The private insurers also seem to be

scoring big in other ways- they are persuading people to take out bigger policies. Forinstance, the average size of a life insurance policy before privatization was around Rs

50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game

and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh- way bigger

than the industry average.

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INSURANCE TODAY

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. The Malhotra committee was set up with the objective of

complementing the reforms initiated in the financial sector.

With the setup of Insurance Regulatory Development Authority (IRDA) the reforms

started in the Insurance sector. It has became necessary as if we compare our Insurance

penetration and per capita premium we are much behind then the rest of the world. The

table above gives the statistics for the year 2000.

With the expected increase in per capita income to 6% for the next 10 year and with the

improvement in the awareness levels the demand for insurance is expected to grow. As

per an independent consultancy company, Monitor Group has estimated a growth form

Rs. 218 Billion to Rs. 1003 Billion by 2008. The estimations seems achievable as the

performance of 13 life Insurance players in India for the year 2002-2003 (up to October,

based on the first year premium) is Rs. 66.683 million being LIC the biggest contributor

with Rs. 59,187 million. As of now LIC has 2050 branches in 7 zones with strong team of

5,60,000 agents.

IMPACT OF GLOBALISATION:

While nationalized insurance companies have done a commendable job in extending the

volume of the business, opening up insurance sector to private players was a necessity in

the context of globalization of financial sector. If traditional infrastructural and

semipublic goods industries such as banking, airlines, telecom, power etc., havesignificant private sector presence, continuing a state of monopoly in provision of

insurance was indefensible and therefore, the globalization of insurance has been done as

discussed earlier. Its impact has to be seen in the form of creating various opportunities

and challenges.

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The introduction of private players in the industry has added colours to the dull industry.

The initiatives taken by the private players are very competitive and have given immense

competition to the on time monopoly of the market LIC. Since the advent of the private

players in the market the industry has seen new and innovative steps taken by the players

in the sector. The new players have improved the service quality of the insurance. As a

result LIC down the years have seen the declining in its career. The market share was

distributed among the private players. Though LIC still holds 75% of the insurance sector

the upcoming nature of these private players are enough to give more competition to LIC

in the near future. LIC market share has decreased from 95%(2002-03) to 81% (2004-

05). The following company holds the rest of the market share of the insurance industry.

NAME OF THE PLAYER MARKET SHARE (%)LIC 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJA ALLIANZ 2.03

SBI LIFE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YORK 0.90

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYASA 0.37

AMP SANMAR 0.26

METLIFE 0.21

PRESENT SCENARIO OF GLOBALISATION

In a tough battle to expand market shares the private sector life insurance industry

consisting of 14 life insurance companies at 26% have lost 3% of market share to the

state owned Life Insurance Corporation(LIC) in the domestic life insurance industry in

2006-07. According to the figures released by Insurance Regulatory & Development

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Authority, the total premium of these 14 companies have shot up by 90% to Rs 19,471.83

crore in 2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilization of Rs 55,934 crore has been able to retain a

market share of 74.26 % during the reporting period. In total the life insurance industry in

first year premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07

performance has thrown a few surprises in the ranking among the private sector life

insurance companies. New entrants like ICICI Prudential Life and SBI Life had shown a

huge growth of over 381% and 210% respectively during the year. ICICI Prudential Life

which has become one of the top five companies ended the year with a premium of Rs

930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sector life

insurance company during the year. Bajaj Allianz overtook ICICI Prudential in terms of

monthly market share in March, for the first time ever. Bajaj's market share among

private players in non-single premium for March stood at 29.1% vs. ICICI Prudential's

23.8%. Bajaj gained 4.6 percentage point market share among private sector players for

FY07.

Among other private players, SBI Life and ICICI Prudential Life continued to do well,each gaining 4% market share in FY07. SBI Life's growth was driven by increasing

contribution from ULIP premiums. Another notable developments of the 2006-07

performance has been the expansion of retail markets by the life insurance comapnies.

Bajaj Alliannz Life insurance has added 20 lakh policies while ICICI Prudential has

expanded over 19 lakh policies during the year.

With the largest number of life insurance policies in force in the world, Insurance

happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per

cent annually and presently is of the order of Rs 450 billion. Together with banking

services, it adds about 7 per cent to the countrys GDP. Gross premium collection is

nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of

GDP.

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Yet, nearly 80 per cent of Indian population is without life insurance cover while health

insurance and non-life insurance continues to be below international standards. And this

part of the population is also subject to weak social security and pension systems with

hardly any old age income security. This itself is an indicator that growth potential for the

insurance sector is immense.

A well-developed and evolved insurance sector is needed for economic development as it

provides long term funds for infrastructure development and at the same time strengthens

the risk taking ability. It is estimated that over the next ten years India would require

investments of the order of one trillion US dollar. The Insurance sector, to some extent,

can enable investments in infrastructure development to sustain economic growth of the

country.

Insurance is a federal subject in India. There are two legislations that govern the sector-

The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has

become a full circle from being an open competitive market to nationalisation and back to

a liberalised market again. Tracing the developments in the Indian insurance sector

reveals the 360 degree turn witnessed over a period of almost two centuries.

Important milestones in the life insurance business in India

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with theobjective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalised. LIC formed by an Act of Parliament- LIC Act 1956- with a

capital contribution of Rs. 5 crore from the Government of India.

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In a tough battle to expand market shares the private sector life insurance industry

consisting 14 life insurance companies at 26% have lost 3% of market share to the state

owned Life Insurance Corporation (LIC) in the domestic life insurance industry in 2006-

07. According to the figures released by Insurance Regulatory & Development Authority

the total premium these 14 companies have shot up by 90% to Rs 19,471.83 crore in

2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilisation of Rs 55,934 crore has been able retain a market

share of 74.26 % during the reporting period. In total the life insurance industry in first

year premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07

performance has thrown a few surprises in the ranking among the private sector life

insurance companies. New entrants like ICICI Prudential Life and SBI Life had shown a

huge growth of over 381% and 210% respectively during the year. ICICI Prudential Life

which has become one of the top five companies ended the year with a premium of Rs

930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sector life

insurance company during the year Bajaj Allianz overtook ICICI Prudential in terms of

monthly market share in March, for the first time ever. Bajaj's market share among

private players in non-single premium for March stood at 29.1% vs. ICICI Prudential's

23.8%. Bajaj gained 4.6 percentage point market share among private sector players for

FY07.

Among other private players, SBI Life and ICICI Prudential Life continued to do well,

each gaining 4% market share in FY07. SBI Life's growth was driven by increasing

contribution from ULIP premiums. Another notable development of the 2006-07

performance has been the expansion of retail markets by the life insurance companies.

Bajaj Alliannz Life insurance has added 20 lakh policies while ICICI Prudential hasexpanded over 19 lakh policies during the year.

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CHAPTER - 3

COMPANY PROFILE

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PROFILE OF THE ORGANIZATION

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance is a joint venture between the ICICI Group and

Prudential PLC, of the UK. ICICI started off its operations in 1955 with providing

finance for industrial development, and since then it has diversified into housing finance,

consumer finance, mutual funds to being a Virtual Universal Bank and its latest venture

Life Insurance

Foreign Partner:

Established in 1848, Prudential PLC. of U.K. has grown to be the largest life insurance

and mutual fund company in U.K. Prudential PLC. has had its presence in Asia for the

past 75 years catering to over 1 million customers across 11 Asian countries.

Prudential is the largest life insurance company in the United Kingdom (Source: S&P's

UK Life Financial Digest, 1998).

ICICI and Prudential came together in 1993 to provide mutual fund products in India and

today are the largest private sector mutual fund company in India.

Their latest venture ICICI Prudential Life plans to take care of the insurance needs at

various stages of life.

ICICI Prudential Life Insurance was established in 2000 with a commitment to expand

and reshape the life insurance industry in India. The company was amongst the first

private sector insurance companies to begin operations after receiving approval from

Insurance Regulatory Development Authority (IRDA), and in the time since, has taken

several steps towards its realizing its goal.

The company's wide range of products, distribution strengths and powerful brand has

driven its growth across a cross-section of people and cities. As on March 31, 2003, the

company had issued nearly 350,000 policies, with a total premium income of over INR 5

billion and a total sum assured in excess of INR 87 billion. Today, the company has

established itself as the No. 1 private life insurer in the country.

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ICICI Prudential Life Insurance Company is a joint venture between ICICI, 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 Prudentials equity base stands at Rs. 4.25 billion with ICICI Bank and Prudential

plc holding 74% and 26% stake respectively. As of March 31, 2003, the company had

issued nearly 350,000 policies with a sum assured in excess of Rs 8,700 crore and total

premium income of over Rs. 500 crore. Today the company is the #1 private life insurers

in the country.

Company Vision

To make ICICI Prudential the dominant Life and Pensions player built on trust by world-

class people and service.

This is what ICICI Prudential hope to achieve by:

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 our policyholders

Providing an enabling environment to faster growth and learning for ICICI Prudential

Employees

And above all, building transparency in all ICICI Prudential dealings.

The success of the company will be founded in its unflinching 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.

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We do believe that we are on the threshold of an exciting new opportunity, where we can

play a significant role in redefining and reshaping the sector. Given the quality of our

parentage and the commitment of our team, there are no limits to ICICI Prudential

growth.

Board of Directors

The ICICI Prudential Life Insurance Company Limited Board comprises reputed people

from the finance industry both from India and abroad.

Mr. K.V. Kamath, Chairman

Mr. Mark Tucker

Mrs. Lalita D. Gupte

Mr. Danny Bardin

Mrs. Kalpana Morparia

Mrs. Chanda Kochhar

Mr. M.P. Modi

Mr. R Narayanan

Mr. 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 Director

Ms. Anita Pai, Chief - Operations & Underwriting

Mr. Bill Lisle, Chief Agency Office

Mr. Sandeep Batra, Chief Financial Officer & Company Secretary

Mr. Saugata Gupta, Chief - Marketing

Mr. Shubhro J. Mitra, Chief - Human Resources

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PRODUCTS

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 13 products can be enhanced with up to 4 riders, to create a customized

solution for each policyholder

Savings Solutions: ICICI Pru Save n Protect is a traditional endowment savings

plan that offers life protection along with adequate returns.

ICICI Pru Cashbookis an anticipated endowment policy ideal for meeting milestone

expenses like a child's marriage, expenses for a child's higher education or purchase of an

asset.

Protection Solutions: ICICI Pru Lifeguard is a protection plan, which offers life

covers at very low cost. It is available in 3 options - level term assurance, level term

assurance with return of premium and single premium.

Child Solutions: ICICI Pru Smart Kid provides guaranteed educational benefits to a

child along with life insurance cover for the parent who purchases the policy. The policy

is designed to provide money at important milestones in the child's life.

Market-linked Solutions: ICICI Pru Lifeline is a single premium Market Linked

Insurance Plan which combines life insurance cover with the opportunity to stay invested

in the stock market.

ICICI Pru Lifetime offers customers the flexibility and control to customize the policy

to meet the changing needs at different life stages. It offers 3 investment options - Growth

Plan, Income Plan and Balanced Plan.

Retirement Solutions: ICICI Pru Forever Life is a retirement product targeted at

individuals in their thirties. Market-linked retirement products:-

ICICI Pru Lifetime Pension a regular premium market-linked pension plan.

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

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Single Premium Solutions: ICICI Pru Assure Invest is a single premium savings

product with life cover for terms of 5, 7 or 10 years.

ICICI Pru Reassure is a retirement product for senior citizens who are on the verge of

retirement or have just retired.

ICICI Prudential also launched ''Salaam Zindagi'', a social sector group insurance

policy targeted at the economically underprivileged sections of the society.

Group Insurance Solutions: ICICI Prudential also offers Group Insurance

Solutions for companies seeking to enhance benefits to their employees.

ICICI Pru Group Gratuity Plan: ICICI Pru''s group gratuity plan helps

employers fund their statutory gratuity obligation in a scientific manner. The plan canalso be customized to structure schemes that can provide benefits beyond the statutory

obligations.

ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined

contribution superannuation scheme to provide a retirement kitty for each member of the

group. Employees have the option of choosing from various annuity options or opting for

a partial commutation of the annuity at the time of retirement.

ICICI Pru Group Term Plan: ICICI Pru''s flexible group term solution helps

provide affordable cover to members of a group. The cover could be uniform or based on

designation/rank or a multiple of salary. The benefit under the policy is paid to the

beneficiary nominated by the member on his/her death.

Flexible Rider Options: ICICI Pru Life offers flexible riders, which can be added to

the basic policy at 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.

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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. Cover is offered against 43 different surgical

procedures.

INSURANCE PLANS

SAVINGS PLANS

Most endowment policies are a good way of saving for the future. A policy can be

designed to make your savings grow and have them available to you at the end of a fixed

number of years. Or, a policy could provide you with an income every three or four

years.

Smart Kid - a superior way to guarantee your childs future no matter what the

uncertainty

Lifetime - a complete market-linked insurance plan that adapts itself to your changing

protection and investment needs, throughout a lifetime.

Sevens' Protect - a traditional endowment savings plan that offers both high returns

and protection.

Cashbook- an endowment savings plan that allows you to get back substantial survival

benefits without having to wait till the maturity date.

Depending on your particular needs, Savings Plans could allow you to do

one or more of the following:

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Plan for Tangibles: buy that fashionable car, that huge refrigerator, etc.

Plan for a Cozy Nest: by facilitating the purchase of that home you have always

dreamt of.

Plan for Milestones: ensure a good education for your children, children's wedding,

etc.

Save on Deferred Taxes: because the interest income and maturity benefits of the

Policy are tax exempt.

Lifestyle Planning: maintain your lifestyle - even if your income was to reduce in the

future.

Legacy Creation: buy property; invest in shares, bonds, etc. for your children or

grandchildren.

Attain Greater Heights: ensure that your children's education continues undisrupted.

PROTECTION PLANS

We all hope to live a full life till a ripe old age... to ensure our children's sustenance and

healthy growth. But what if a sudden disability or illness strikes? Besides the grief and

the pain, such an event also completely disrupts life for all the people who are financially

dependent on us. Our life insurance policies offer a comprehensive range of protection

benefits

Lifeguard - A low cost-high protection plan that offers protection over a specified

period.

Riders- Additional benefits that one can add on to the policy. The rider can be opted forat the time of taking the basic policy. Additional premium is charged for each rider.

An insurance policy can be tailor made to provide protection to you and your loved ones.

If something were to happen to you, it can help:

Safeguard Your Better Half: ensure life's continuity for your loved one.

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Dear and Near Ones: ensure continuity of lifestyle for your dependents.

Attain Greater Heights: ensure your children's education continues undisrupted

Unforeseen circumstances: bear the cost of fighting an illness, disability, etc.

RETIREMENT PLAN

Most of you picture yourselves enjoying the fruits of labor after retirement, going on your

dream vacation, or helping your children's career take wing. But do you realize that

financing all this will most likely depend partly on your personal savings? Because

personal savings and investments represent a significant source of retirement income for

many people, you can never save too much.

Currently, you are at a stage where you are juggling many roles, as nurturing parents,

dutiful caregivers to elders, supportive life partners, while trying to maintain a career. It

is too easy to get carried away handling and solving the day-to-day problems to not look

into your retirement needs. It may also seem too far away to be of concern. But a look at

the issues below will make the need for some strategic planning at this stage amply clear.

Today, thanks to a healthier lifestyle and advances in medicine, the average Indian lives

longer. This makes the challenge of accumulating enough money for retirement even

more difficult, since it may have to last longer. Also, with the falling interest rate scenario

and the rising costs of medical expenses retirement means monetary uncertainty for most

of us. More so, because there is also the ever-persistent evil of inflation, which erodes

your purchasing power. The graph below illustrates how much Rupees will 10,000/-

amount to after some years:

ICICI Prudential Life Insurance believes in the philosophy of providing meaningful and

comprehensive insurance solutions to plan your retirement. Our insurance solutions are

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the most optimal tools to plan your retirement because they give you Safety, Liquidity,

Tax benefits, Health cover and Life protection and thus ensure that you are

comprehensively covered.

ICICI Prudential offers flexible products for planning your retirement:

Forever Life - A deferred annuity plan that helps you save for retirement while

providing you life insurance protection.

Life Link Pension - A single premium plan which allows you to park a lump sum

amount for a secure future.

Life Time Pension- A plan which gives you the twin benefit of market-linked annuity

and life insurance cover.

Reassure -A plan that helps you invest your money prudently and safely and offers you

the benefit of a regular income while providing you life insurance protection.

Depending on your particular needs, our Retirement Solutions could allow you to do one

or more of the following:

Maintaining the Same Living Standard Post-retirement: Get your retirementmonies to earn you the benefit of a regular income while providing life insurance

protection. So now you can really enjoy even your post-retirement days.

Provide for a Lifetime of Pension: Annuities can play a valuable role in

retirement saving. A deferred annuity allows you to accumulate money for

retirement on a tax-deferred basis. You are also in control of when you want to

begin receiving payments. An annuity gives you a fixed income for life.

Protect Your Better Half: If you are married, it is preferable that your retirement

plan includes your spouse. The "Joint Life Last Survivor" annuity option in ICICI

Forever Life pays benefits as long as either one of you is living.

INVESTMENT PLANS

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Often you may have some ingestible funds lying idle - a bonus or maybe a windfall. You

can either secure your family through insurance or invest it for growth. The need for

insurance is crucial but you also want to see your money grow through market

investments. But in volatile market conditions how do you secure both?

Relax, because now you can hedge your investments with safer investment vehicles that

provide you with a diversified portfolio.

ICICI Prudential Life Insurance presents a package of Investment Solutions, which

provide you high returns, while guaranteeing complete peace of mind.

This follows from our understanding that life has many facets and they are manifested

through its various needs. Therefore our philosophy is to provide you with

comprehensive insurance solutions that cater to your dual needs of earning potentially

high returns as well as stay insured for life. Thus we offer you a unique package of

Investment Solutions that combine the best of insurance and investment.

ICICI Prudential offers flexible solutions for planning your investment:

Lifeline - an investment plan that gives you the flexibility of choosing your

investment options while keeping you insured for life.

Assure Invest - a single premium endowment plan that gives you potentially highreturns coupled with insurance protection.

GROUP INSURANCE SOLUTIONS

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Employee care - the defining edge

In this new age of rapid developments and just-in-time methodologies, one big challenge

that organizations face is to establish and maintain a competitive edge over others.

Today's cutting-edge product or service becomes tomorrow's undifferentiated

commodity. In an era of competitive parity, the only asset that makes a decisive

difference between corporate success and failure is the quality of human capital.

Investment in ones employees is an investment in the future:

Employees are a companys human capital. Not only do companies care for them, but

also provide an environment that fosters a deep and lasting sense of belonging.

Employees determine the present and decide the future of a company.

Employee benefits have proven to be an excellent tool to optimize the retention of talent

and improve an organizations bottom line. The quality of an organizations employee

benefits establishes and maintains a company's image as a caring employer. Optimum

care of employees is a long-term investment that results in a sustained competitive

advantage for an organization in the times to come.

ICICI Pru Group Insurance Solutions Advantage:

An integrated basket of flexible group insurance solutions that offer incomparable

flexible benefits.

Sound investment management that focuses on safety, stability and profitability of the

portfolio.

Personalized financial planning for your employee that takes care of his/her changing

financial needs at every stage of life.

Group Gratuity Plan: A plan that helps employers fund their statutory gratuity

obligation in a scientific manner

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Group Term Assurance: A plan that helps provides affordable cover to members

of a group.

Group Superannuation Plan: A flexible Defined Contribution Superannuation

scheme that provides for a retirement kitty for each member of the group.

In the insurance industry the sales team following the typical organization

structure:

Hierarchy in Insurance Company

COMPETITION INFORMATION

29

SALES

MANAGER

AREA SALESMANAGER

AREA SALESMANAGER

AREA SALESMANAGER

UNIT

MANAGER

UNIT

MANAGER

UNIT

MANAGER

ADVISORS ADVISORS ADVISORS


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AVIVA LIFE INSURANCE, INDIA

Aviva Life Insurance Company India Pvt. Ltd. is a joint venture between Aviva of UK

and Dabur, one of India's leading producers of traditional healthcare products. Aviva

holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74

per cent share.

Aviva is UK's largest and the world's sixth largest insurance Group. It is one of the

leading providers of life and pensions products to Europe and has substantial businesses

elsewhere around the world.

Aviva pioneered the concept of Banc assurance in India. Currently, Aviva has Banc

assurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank,

Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 11

Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir and Maharashtra and one

regional Bank in Sikkim.

Aviva has 40 Branches in India (including rural branches) supporting its distribution

network. Through its Banc assurance partner locations, Aviva products are available in

378 towns and cities across India.

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BAJAJ ALLIANZ

Bajaj Allianz is a joint venture between Allianz AG one of the worlds largest insurance

companies, and Bajaj Auto, one of the biggest 2 and 3 wheeler manufacturers in the

world. Bajaj Allianz is into both life insurance and general insurance.

Allianz Group is one of the worlds leading insurers and financial services providers.

Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost

174,000 employees. Bajaj group is the largest manufacturer of two-wheelers and three-wheelers in India and one of the largest in the world.

Today, Bajaj Allianz is one of Indias leading and fastest growing insurance companies.

Currently, it has presence in more than 550 locations with over 60,000 Insurance

Consultants.

BIRLA SUN LIFE INSURANCE

Birla Sun Life Insurance Company Limited is a joint venture between Aditya Birla Group

and Sun Life Financial of Canada. Aditya Birla Group is an Indian multinational

conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt,

Canada, Australia and China. Sun Life Assurance, Sun Life Financials primary insurance

business, is one of the leading insurance companies of the world and ranks amongst the

largest international financial services 31organizations in the world. The Group has

presence in several countries such as Canada, United States, Philippines, Japan,

Indonesia, India and Bermuda.

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ICICI PRUDENTIAL LIFE INSURANCE

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a

premier financial powerhouse and prudential plc, a leading international financial

services group headquartered in the United Kingdom.

ICICI was established in 1955 to lend money for industrial development. Today, it has

diversified into retail banking and is the largest private bank in the country.

Prudential plc was established in 1848 and is presently the largest life insurance

company in the UK.

ICICI Prudential is curently the No. 1 private life insurer in the country. For 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.

ING VYSYA LIFE INSURANCE

ING Vysya Life Insurance Company Limited is a joint venture between Vysya Bank and

ING Group of Holland, the world's 4th largest financial services group, with presence

across 50 countries, and a heritage of over 150 years.

ING Vysya Life Insurance Company Private Limited entered the private life insurance

industry in India in September 2001. With in a short span of time ING Vysya LifeInsurance has registered an impressive growth. The company currently has over 10,000

active advisors working from 75 branches (in 30 cities) across the country and over 2300

employees.

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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak

Mahindra Bank Ltd.(KMBL), and Old Mutual plc. Kotak Mahindra is one of India's

leading financial institutions and offers a range of financial services such as commercial

banking, stock broking, mutual funds, life insurance, and investment banking.

Old Mutual was established more than 150 years ago and offers a diverse range of

financial services in South Africa, the United States and the United Kingdom. The

company is listed on the London Stock Exchange with a market capitalization and has itsheadquarters in London.

LIFE INSURANCE CORPORATION OF INDIA (LIC)

Life Insurance Corporation of India (LIC) is an autonomous body authorized to run the

life insurance business in India with its Head Office at Mumbai. It has been established

by an act of the Parliament and started functioning from 1/9/1956.

LIC is the biggest insurance player in the country. Out of the total premium of Rs 3766

crore generated by the insurance industry through group business in the year 2005-06,

LIC alone accounted for Rs 3051 crore.

In the financial year 2005-06, LIC has grown at 30.68%. In respect of number of lives

insured, LIC has shown a growth of over 152%. In respect of number of schemes, LIC

has a growth of 2%. LIC's market share in number of individuals covered and number of

policies stands at 77% and 81%, respectively.

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MAX NEW YORK LIFE INSURANCE

Max New York Life Insurance Company Limited is a joint venture between Max India

Limited, a multi-business corporate, and New York Life International, a global expert in

life insurance. New York Life is a Fortune 100 company that has over 160 years of

experience in the life insurance business. Max India Limited is a multi-business corporate

dealing in Clinical Research, IT and Telecom Services, and Specialty Plastic Products

businesses. Max New York Life Insurance started its operations in India in 2000. It is the

first life insurance company in India to be awarded the IS0 9001:2000 certifications. Max

New York offers customized products tailored to suit individual's needs. With its various

Products and Riders, there are more than 400 product combinations to choose from.

Today, Max New York Life Insurance has a network of 57 offices spread over 37 cities

all over India.

METLIFE INDIA INSURANCE

MetLife India Insurance Co. Pvt. Ltd is a joint venture between MetLife Group and its

Indian partners. The Indian partners include J&K Bank, Dhanalakshmi Bank, Karnataka

Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu. Met Life

Group has presence in America and Asia and has an experience of over 137 years in

providing financial services. The MetLife companies are the number one life insurer in

the U.S. with approximately US $2.8 trillion of life insurance in force. MetLife serves 88

of the top one hundred FORTUNE 500 companies. MetLife entered Indian insurance

sector in 2001.

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SBI LIFE INSURANCE

SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of

France. SBI Life Insurance is registered with an authorized capital of Rs 500 crore and a

paid up capital of Rs 350 crores.

State Bank of India is the largest banking franchise in India. Along with its 7 Associate

Banks, SBI Group has a network of over 14,000 branches across the country, the largest

in the world.

Cardiff is a wholly owned subsidiary of BNP Paribas, which is The Euro Zone's leading

Bank. BNP is one of the oldest foreign banks with a presence in India dating back to

1860.

SHRIRAM LIFE INSURANCE

Shriram Life Insurance Company Ltd is a joint venture between the Chennai-based

Shriram Group and the South African insurance major Sanlam.

The company launched its operations in India in December 2005.

Shriram Life has set a target of achieving a premium income of Rs 110 crore during the

first year of operations. While focusing largely on the strong network of over 65,000

agents and distribution network of more than 550 branches, Shriram Life is also

contemplating banc assurance alliances with couple of banks.

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TATA AIG LIFE INSURANCE

Tata AIG Life Insurance Company Limited is a joint venture between Tata Group and

American International Group, Inc. (AIG). Tata Group is one of the oldest and leading

business groups of India. Tata Group has had a long association with India's insurance

sector having been the largest insurance company in India prior to the nationalization of

insurance. The Late Sir Dorab Tata was the founder Chairman of New India Assurance

Co. Ltd., a group company incorporated way back in 1919.

American International Group, Inc is the leading U.S. based international insurance and

financial services organization and the largest underwriter of commercial and industrial

insurance in the United States. AIG has one of the most extensive life insurance networks

in the world.

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S .W.O.T. ANALYSIS

SWOT Analysis is a tool used for understanding an organization's strengths, weaknesses,

opportunities and threats

The SWOT Analysis tool can be used in identifying an organization's strengths (S) and

weaknesses (W), and examining the opportunities (O) and threats (T) it is facing. The

outcome from a SWOT Analysis enables organizations to focus on strengths, minimize

weaknesses, address threats, and take the greatest possible advantage of opportunities

available.

Strengths:

Our members value the professional designation.

We have a lower course fee structure than similar programs.

We provide good customer service.

Our instructors are highly-regarded in the profession.

We have a small staff and low overhead.

Weaknesses:

We are slow to make decisions and adapt to changes that

affect the profession.

The professional designation is rarely included as a condition

of employment.

We are overly dependent on key volunteers who developed

and teach our certification courses.

We do not have the resources to research the market and

promote the designation.

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Opportunities

A developing market such as the Internet

Mergers, joint ventures or strategic alliances

Moving into new market segments that offer improved

profits

A new international market

A market vacated by an ineffective competitor

Threats

A new competitor in your home market

Price wars with competitors

A competitor has a new, innovative product or service

Competitors have superior access to channels of distribution

Taxation is introduced on your product or service

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CHAPTER - 4

CONCEPTUAL

DISCUSSION

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MARKETING AND SELLING OF LIFE INSURANCE

PLANS

With relation to life insurance in simple terms it can be said that

Marketingis the process of attracting people to you, your services, and your products.

Prospectingis generating a flow of names for you to contact.

Sellingis getting someone to say yes.

Now coming closer to my project title, this reminds me of the trainer who gave us thetraining at ICICI Prudential. She used to often say that Life Insurance is often sold and

not boughtand life insurance marketing at the macro-level deals with concept selling

rather than selling a plan of insurance.

Taking into mind the above comments the following understanding can be made:

Life insurance plans are not like FMCG products which has a physical presence.

The utility factor for a life insurance plan is different from other physical

products. For others the utility benefit is immediate on consumption, but the same

will not hold good for a life insurance plan.

Marketing and subsequent selling of a life insurance plan is harder than a physical

product.

This is because a common man finds it hard to understand a financial product inthis case a life insurance plan. He often fails to understand his need for the plan,

structure of the plan, benefit illustration etc.

Therefore, a marketing manager of a life insurance company has to sit with the head of

distribution and the advertisement agency to resolve these issues. They have to make

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strategies to over-ride all the above difficulties and be innovative in Marketing

Communication and devise their branding, advertising, segmenting and distribution

strategies to gain maximum customer attention.

Promotional Strategy of ICICi Prudential Life Insurance

The promotional strategies adopted by ICICI Prudential, has now changed the way

insurance plans are being marketed in India. Life insurers in India always followed a

sell and push strategy.

But with the entry of ICICI Prudential, the scenario has changed dramatically. With its

marketing campaigns concentrating on consumer preference and consumer pull

approach it is now the undisputed leader in the private insurance space for the past 8

years.

When ICICI Prudential started its business in India it faced the following problems:

Attitudinal barriers of consumers in buying life insurance plans.

Perception of life insurance as a tax-saving instrument.

Lack of variety of product offering (or plans).

Lack of customer centric approach in servicing.

It also had a huge market before it which it had to tap and that too at a faster pace.

The above challenges were faced effectively by the company. Each problem was given

individual attention and they went with a concrete marketing plan to counter all these

problems.

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They tackled the problems like consumers perception, lack of product offering etc with awell thought out Marketing Mix, by giving the policy holders an improvement in terms

of:

Product quality

Cost effective pricing

Innovative distribution channels

Successful promotional campaigns

Well defined process

Product Quality

ICICI Prudential was the first life insurer to bring out product innovations in a big way.

Its product range in both traditional and ULIP plans have been built soundly. It offers

different plans for different age, income segment, customer preference etc. It has

achieved large product coverage.

This company was also the first to come out with innovate Health Plans.

Below I have categories various plans depending on the prospects need:

Pure Protect: Pure Protect is a traditional plan. It offers only life cover. The premium

under this plan is very low starting from Rs. 2400 p.a. This plan will suit the conservative

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For Conservative Investors: Only life cover, Risk Appetite is Low


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investors. Under this plan the premium paid is not returned on survival. Therefore the

sum assured under this plan is high. The investor enjoys a huge cost advantage

Save n Protect: This is same as Pure Protect except that the premium paid is returnable on

survival. The premium is invested in government securities

Invest Shield Life New: Invest Shield Life New is a one of its kind market linked policy

that gives the policyholder the chance of enjoying the potentially higher returns of a

market linked instrument. This is a Premium Guarantee Plan where the company

undertakes to pay the policy holder a certain sum whatever the market condition is.

Smart Kid: Smart Kid offers a choice of 3 education insurance plans: Smart Kid New

Unit-linked Regular Premium, Smart Kid New Unit-linked Single Premium and SmartKid Regular Premium. The variants under the Smart Kid plan are to make it customized

for the various categories of investors.

Life Stage Assure: This plan primarily aims at wealth creation for the policy holder

coupled with giving a life cover. This is a life stage plan which varies the allocation of

premium among various funds, in accordance with the age of the policy holder. A risky

fund is chosen at a young age and a stable fund is chosen at the retirement age.

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For Moderate Investors: Life cover, Investment and Risk Appetite is Moderate

Educational Plans: Father is the life assured, benefits go the child

For Aggressive Investors: Life cover, Wealth Creation, and Risk Appetite is High


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Life Time Gold: This is also a wealth creation plan which gives life cover also. This is a

regular premium unit-linked policy that offers potentially higher returns through the

Multiplier Fund that invests in the top 50 large cap companies.

Life Time Super Pension: Life Time Super Pension is designed to help the policy holder

save for his retirement systematically. The policy holder can opt for periodic pension

payout or a lump sum pay out. This is a unit linked plan which invests various funds.

Forever Life: This is insurance cum pension plan that performs two crucial roles: it acts

as a protective cover while the plan also earns for the policy holders retirement. This is a

pure traditional plan with no risks attached.

ICICI Prudential has a large health portfolio unlike other insurance companies who haveonly a few numbers of plans.

Health Saver: This plan provides comprehensive health insurance coverage. This plan

provide you complete health coverage through a hospitalization cover while at the same

time also creating a health fund to cover any other healthcare expenses.

(Comprehensive health insurance coverage)

Hospital Care and Medi Assure: These health insurance plans cover your expenses incase you need to be hospitalized. Within this category, products may have different

payout structures and limits for various heads of expenditure. The hospitalization

coverage may be reimbursement based plans or fixed benefit plans. These plans aim to

cover the more frequent medical expenses. (Hospitalization Plans)

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Health Plans


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Crisis Cover: These health insurance plans provide you coverage against critical illnesses

such as heart attack, organ transplants, stroke, and kidney failure among others. These

plans aim to cover infrequent and higher ticket size medical expenses. (Critical Illness

Plans)

Diabetes Care and Cancer Care: These plans are designed specifically to offer health

insurance against certain complications due to diabetes or cancer. They may also include

features such as disease management programs which are specific to the condition

covered.

Customized Product Features Offered By ICICI Prudential

1. Funds: The Company offers choice of 7 investment funds. The policy holder can

choose to invest fully in any one fund or allocate premiums into various funds in a

proportion that suits their investment needs. The funds are Rich, Multiplier, Flexi

Growth, Flexi Balanced, Balancer, Protector and Preserver. These funds vary

according to their asset mix and potential risk and reward ratio.

2. Switching Option: Under this option the policy holder can switch the investment

made between funds at any time, depending on the market conditions. Switches can

be done online.

3. Partial Withdrawal Benefit: Under this feature in certain ULIP plans partial

withdrawals are allowed after completion of 3 policy years.

4. Extended Death Benefit: Certain plans offer death benefit even after the completion

of the term of the policy. This is done without any fresh medical examination.

Normally the extended years vary from 3 to 5 years.

5. Cover Continuance Option: this option ensures that the life insurance cover

continues in case the policy holder is unable to pay premiums, any time after payment

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of first three years premium. All applicable charges will be deducted from the units

available in the fund.

6. Increased Sum Assured: Policy holder may choose to increase the sum assured at

any time during the policy term.

7. Available Riders: Accident and disability benefit rider, Critical illness benefit rider

and Waiver of premium rider is available under most plans.

Pricing of Plans

Pricing of life insurance plans are very important. It should be priced in such a manner

that the company is able to book profits and also gives value to the policy holders.

Life insurance industry is characterized by long break-even period. Only SBI Life and

Shriram Life were able to achieve break-even and book profits. SBI Life is not an

aggressive player and Shriram Life has small geographic presence.

ICICI Prudential with its aggressive strategy and vast geographical presence has to price

its products suitably to break-even at the earliest.

In a developing country like India where the disposable income in the hands of prospects

is low, the pricing decision is difficult to take. The company should transform the

potential policy holders into actual policy holders.

The pricing in insurance is in the form of premium rates. The three main factors used for

determining premium rates are:

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1. Mortality Rate: Mortality rate is a measure of the number of deaths in some

population, scaled to the size of that population, per unit time. Mortality rate is

typically expressed in units of deaths per 1000 individuals per year.

2. Expenses: The cost of processing, commission to agents, reinsurance companies as

well as registration is all incorporated into cost of installments and premium sum.

3. Interest Rate: This is one of the major factors which determines peoples willingness

to invest in a particular companys plan.

ICICI Prudential has one of the lowest premium structures in the industry. It is also active

in alternate distribution channels apart from the traditional agent channel. By this it is

able to cut down cost. The commission cost paid to intermediaries reduced.

Distribution Channels

ICICI Prudential has the following distribution channels:

Tied Agency: Agent channel is the traditional channel in life insurance distribution.

Life insurance being a financial product is best sold by talking to the prospect on a

one to one basis. This channel contributes more than 60% to the companys business.

Banc assurance: The banc assurance distribution channel is currently attracting

maximum attention in India from both insurers and banks. While less than 2% of total

premium are generated through this channel, there are expectation that banc assurance

will grow to register a dominant share. ICICI Prudential has ICICI Bank as its

backbone, which helps in distribution. Banc assurance in India is at very initial stage.

Corporate Agents and Brokers: The Company has also tied up with corporate

agents and insurance broker firms to distribute its plans. Corporate agents and broker

firms have a larger reach and financial strength than an individual agent.

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MRTA Channel: Mortgage Reducing Term Assurance is an exclusive channel under

banc assurance with distributes life policies to persons who are taking loans. If the

borrower dies before loan payment the insurance company pays the loan on behalf of

the borrower and also gives the borrower life cover. This channel is active in ICICI

Prudential and is slowly being adopted by other players.

Suggestions on Distribution Channels:

I propose the following suggestions for making distribution more effective and reduce

cost.

New channels of insurance distribution through post offices, district co-operative

banks have to be opened up. Post offices have a large reach and district co-operative

banks have customers who have not been tapped yet.

Rural Insurance Distribution should be given attention since there is a huge market

potential in rural areas.

Shop assurance, distributing insurance products through major retail chains can be

done. Theses shops get a large number of footfalls per day.

More emphasis should be given to distributing insurance plans online to cut down

commission cost paid to intermediaries.

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Promotional Campaigns of ICICI Prudential

ICICI Prudential gave a new dimension to life insurance advertising. It was the first

insurer to think of a plan where it was able to connect to the prospect emotionally while

advertising a boring subject like insurance.

ICICI Prudential portrayed life insurance buying as good thing to do for a person with a

family. Chintamani the cartoon which often comes on ICICI Prudentials

advertisements as the mascot of the middle class, has now become household name.

It is now running its Jeetey Raho advertisement campaign which gives the positive

aspects of life. I have also included a question on this advertisement (Question No.10) in

my survey.

Historically, for financial products print was the traditional choice for the medium of

advertising. The break with tradition came when ICICI Prudential arguably became the

first private insurance company to recognize and harness the power of Television

advertising, with its Sindoor' campaign in 2001. Then came its retirement solutions

campaign with the tagline `Retire from work, not life.'

In my survey I have set aside a part, for the Effectiveness of promotional campaigns of

ICICI Prudential. Survey results and inferences are given at the last part of this project.

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A note on ICICI Prudential competitive advantage:

ICICI Prudential has the following competitive advantage than other players in the

industry:

Its joint venture status with Prudential Plc which is a respected partner helps it

maintain a strong presence.

With valuable product inputs from Prudential Plc a pension plan specialist in UK,

ICICI Prudential is able to design diversified plans.

The ICICI Bank brand always helps the company.

ICICI Prudential Life is one of few life insurance companies which is operating in

multi-channel platform.

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CHAPTER - 5

DATA ANALYSIS

AND

INTERPRETATION

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Question 1: Do you own a life insurance policy?

Interpretation: When I started the survey I was also looking for respondents who had no

life insurance plans and pooled their resources on other instruments. But, all the

respondents had a life policy in one form or the other. It can be inferred that most people

have a life policy but their objectives may be different.

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Question 2: What kinds of life insurance policies you own?

Inference: ULIPs occupies a major share with 42 respondents. We can infer that the

major promotional campaigns for ULIPs by both LIC and private insurance players have

shown results. Traditional plans still constitute a major share. Mostly, persons who go for

traditional plans are interested only in life cover unlike ULIP takers who have an

investment motive also. The reach of pension, child and health plan is at a very minimum

level.

Question 3: In your view, what would you consider the main objectives for having a

life insurance policy?

Inference: 58 respondents have ranked life cover as their main objective for taking a

policy followed by 23 and 19 for tax planning and investment respectively. The low

response for using a policy for tax planning may be because of alternative tax planning

instruments available such a tax saving mutual funds.

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Question 4: The deciding factors you will take into consideration before buying a

policy of a company are? Please rank them, 1 for highest to 6 for lowest.

Inference: Most respondents ranked brand of the company as rank 1. This means

companys financials, its setup, promotional campaigns plays a very important role in

buying behavior. The design of the plan and flexibility it offered was another important

criteria which respondents kept in mind before buying a life plan.

Question 5: How comfortable are you with Private Life Insurance Companies?

Inference: Largely respondents are willing to buy life policies from private companies if

their product offering is good. This is a good trend for the private players. But there are

also respondents who are not comfortable with them, but their numbers are very less.

These investors are conservative and their risk appetite is small.

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Part B Effectiveness of the promotional campaigns of ICICI

Prudential Life

Question 6: You are regularly connected to which of the following media for

advertisement? Please rank them, from 1 for highest to 5 for lowest.

Inference: 78 respondents have indicated that they are connected to television for

purpose of advertisement viewing and ranked it as 1. This is followed by internet,

magazines at rank 2 and 3 respectively. Mobile and radio has got the least rank.

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Question 7: Have you seen the advertisements of ICICI Prudential Life Insurance?

Inference: The above chart indicates most respondents have seen the advertisement of

ICICI Prudential Life. This indicates good coverage of promotional campaigns of the

company among various sections of population.

Question 8: In which of the following media have you seen these advertisements the

most?

Inference: Most respondents have viewed advertisements of the company in television

followed by internet, print media and radio. ICICI Prudential Life has made its presence

felt in television by innovate and emotional advertisements.

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Question 9: Based on your observation of the ICICI Prudential Life Insurance

advertisements please tick inside the appropriate boxes.

Parameters Strongly

Agree

Agree Neutr

al

Disagre

e

Strongly

Disagree

I was able to understand the message of theadvertisement.

59 20 6 15 0

The advertisement message was relevant tome.

71 14 0 1 14

The advertisement was believable. 16 48 3 20 13

The monetary benefits described in theadvertisements can be attained. 6 20 6 53 15

After viewing the advertisement, I wouldconsider purchasing a plan from ICICIPrudential Life.

17 53 11 19 0

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Inference: Most respondents strongly agreed that they were able to understand and

connect with the advertisements of ICICI Prudential Life. Therefore as far as the content

of the advertisements, they are well designed and are able to appeal the respondents.

But, will these advertisements translate into sales is a big question, since only a few

respondents were ready to buy a policy after seeing the advertisements.

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Question 10: Have you seen advertisements of Health Plans of ICICI Prudential Life

Insurance, say about its Cancer Care, Diabetes Care plans etc.?

Inference: Very low numbers of respondents have seen advertisements of ICICI

Prudential Lifes Health Plans. Therefore the awareness level of availability of health

plans is completely absent.

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Question 11: Rank the following life insurance companies as per your brand recall

capacity?

Inference: Brand recall for LIC is the highest. 92 respondents have ranked LIC at rank

one, followed by ICICI Prudential Life, SBI Life, and HDFC Life for rank two, three and

four respectively. Brand recall for LIC is higher than other players is understandable, LIC

being a monopoly 8 years ago. The previous chart clearly shows private insurance

companies are climbing up fast. The example for this is the good brand recall rate for

ICICI and SBI Life.

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CHAPTER - 6

FINDINGS

AND

RECOMMENDATIONS

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FINDINGS

The Project study report has the following findings with it:

Most people have a life policy but their objectives may be different.

The reach of pension, child and health plan is at a very minimum level.

The low response for using a policy for tax planning may be because of

alternative tax planning instruments available such a tax saving mutual funds.

Companies make their policies simple and also conduct policy holder

education workshops.

Alternate channels like banc assurance, mortgage life insurance, and

online distribution should be aggressively marketed.

The design of the plan and flexibility it offered was another important

criteria which respondents kept in mind before buying a life plan.

Large number of respondents is willing to bypass intermediaries for the

sake for getting a discount on premium and administration charges which forms a

major part of cost for the consumers.

Largely respondents are willing to buy life policies from private

companies if their product offering is good.

In the area of policy holder service private players are far ahead of LIC

opting for view.

Private companies offer more product offerings than LIC. Private

companies have a wide variety of plans to offer depending upon the needs of the

individuals unlike the LIC.

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Respondents have not taken a health policy, and their view towards having

a health policy is not encouraging. Only a very few think that a taking a health

policy is very important. Respondents are willing to spend for medical expenses

from their savings rather than to buy a health plan which refunds them with the

expenses incurred.

Respondents have indicated that they are connected to television for

purpose of advertisement viewing and ranked it as 1

This indicates good coverage of promotional campaigns of the company

among various sections of population.

ICICI Prudential Life has made its presence felt in television by innovate

and emotional advertisements.

Advertisements of ICICI Prudential Life are effective. Their television

advertisements are so designed to capture the attention of the target audience and

also remain in their mind of the customer. This gives their brand a high recall rate.

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RECOMMENDATIONS

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