0601099 market survey & agency development

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  • 1. 1 A PROJECT REPORT ON “MARKET SURVEY & AGENCY DEVELOPMENT” FOR ICICI PRUDENTIAL IN PUNE SUBMITTED BY RAUT PRADEEP SUBMITTED TO UNIVERSITY OF PUNE IN PARTIAL FULFILMENT OF MASTER OF BUSINESS ADMINISTRATION SUBMITED THROUGH VISHWAKARMA INSTITUTE OF MANAGEMENT & RESEARCH-48 (2006-2008)
  • 2. 2 ACKNOWLEDGEMENT I sincerely express my thank to Dr. Sharad Joshi, director, VIM for developing environment for us in the tenure in the institute. He simply a remarkable director. The completion of the project would have been a dream without the help and support of people who gave their valuable time to me for collection of information needed for the project I would also like to express my gratitude to Prof. Sunil Doke for giving me guidance and encouragement as a very helpful and understanding project guide. I would like to give special thank to Mr. Amar Pacharne, UNIT MANAGER, Swargate Branch, Pune, ICICI Prudential, who has given all the necessary guidance to understand Industrial know-how and to complete my project. And lastly, I am thankful to my parents, friends and my colleagues for their valuable encouragement and support. PLACE - PUNE PRADEEP RAUT MBA-0689 INDEX Sr. no. Contents Page no. 1 Executive Summary
  • 3. 3 2 Objective 3 Introduction to Topic 4 Company Profile 5 Product profile 6 Research methodology 7 Data analysis and Findings 8 Suggestion’s and Conclusion 9 Limitation 10 Bibliography 11 Annexure
  • 4. 4 CHAPTER- 11 ANNEXURE QUESTIONNAIRE: Name: Sex: 1. Male______________ Female____________ Address: __________________________________________ _______________________________________
  • 5. 5 Contact no: ________________________ Qualification: _______________________________________ Occupation: _________________________ Age: __________ 1. Which insurance comes in your mind when you think about investment with insurance? a) ICICI PRU b) HDFC c) LIC d) Others 2. Do you have any insurance polices? 1. Yes 2. No 3. Do you know about insurance advisor? 1. Yes 2. No 4. Do you spare time to sell the insurance? 1. Yes 2. No 5. Do you visit any insurance company? 1. Yes 2. No
  • 6. 6 6. Do you thing that working in an insurance industry is really income an generating source. 1. Yes 2. No 7. Do you think that India is growing market for insurance? 1. Yes 2. No 8. Do you know how insurance companies are operating? 1. Yes 2. No 9. Do you have experience to convince people? 1. Yes 2. No 10. Are you aware of the brand name of ICICI-Prudential? 1. Yes 2. No
  • 7. 7 CHAPTER - 1 EXECUTIVE SUMMARY EXECUTIVE SUMMARY The task given was to look for the prospect and interested person who would work as an agency for insurance advisor and to help them in recruitment of the insurance advisors. The work of the Consultant business Development is to recruit and maintain Insurance Advisors. The project has been undertaken keeping in view the need for
  • 8. 8 Insurance in the Indian market. The basic aim of this project was to understand the growing sector of life insurance in the market and to analyze ICICI Prudential’s market status through a SWOT analysis that assesses what an organization can and cannot do as well as its potential opportunities and threats. These Insurance advisors act as a medium for the organization to reach out to customers and work as a strong distribution network in order to create an effective client base for ICICI Prudential The research conducted was descriptive in nature. In and around PUNE and nearest Villages region was surveyed to attain certain results. Find out the views of the people for being an agent of ICICI PRU. I selected this project on the INSURANCE industry because of my interest & recently the The main objective of the study is to know BEHAVIOR OF CONSUMERS FOR BEING AN AGENT OF ICICI PRU. The other objectives are to know the awareness of ICICI PRU name. Methodology: . To attain the objective of the project a research was carried out. The research work was different for every part of the project confined to the need of the related topic. The information on the insurance industry was collected from various websites. There was a series of personal interviews with the employees of the company conducted in order to prepare a SWOT analysis of the ICICI Prudential. On the other hand in order to study the recruitment of insurance advisors a series of tele-calls and personal interviews with the potential candidates was carried out. The audience targeted for the Market Research was basically comprises of advisors from the mass market and niche market. Special attentions have been given to Housewives, Students, self employed, and call centre executives Finding & suggestions: In present time only 30 %, people are insured 70 % people are not insured. India is mainly agricultural country so most of people live in rural area. The rural customers are different from their urban customers; they like it invest in companies whose reputation is good in Market. Rural India is succumbed in the illiteracy and many old myths but its illiteracy is reducing fast because of government initiative in rural areas. As the incomes rising fast and market is huge, companies are targeting rural area
  • 9. 9 because the urban area is saturated or it is highly competitive. The Insurance industry had a huge market. My suggestion is that they have to cover rural area first because they have sufficient money but don’t know where to invest. Conclusion: In summer training I found that company has good reputation in market and it has good monopoly, company have best experienced and knowledgeable sales managers, UM’S etc and the working environment is also healthy. The company’s aim is providing best services to his customers. CHAPTER- 2 OBJECTIVE
  • 10. 10 OBJECTIVE Every project is done for some or other objective. In this project, I also have some objectives in my mind. My Objectives for this project are as follows: PRIMARY OBJECTIVE: The primary objective is the development of agency and creating more efficient channel of Distribution. SECONDARY OBJECTIVE: The secondary objectives are as follows, • To understand business environment.
  • 11. 11 • To collect data for follow up • To search for advisors for ICICI PRU • To create awareness about working with ICICI PRU CHAPTER- 3 INTRODUCTION
  • 12. 12 INTRODUCTION: Insurance is a federal subject in India and has history dating back till 1818. Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the country's GDP while general insurance premiums to 0.65% of India's GDP.The Insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global insurance company wanting to have a lion's share. Currently, the largest life insurance company in India is still owned by the government. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It’s 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 country’s GDP. Gross premium
  • 13. 13 collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. 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 come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 percent to the country’s GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation “Malhotra Committee” was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas
  • 14. 14 insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. A BRIEF HISTORY Insurance in India has its history dating back till 1818, when Oriental Life Insurance Company started was started by Europeans in Kolkata to cater to the needs of European community. Pre-independent era in India saw discrimination among the life of foreigners and Indians with higher premiums being charged for the latter. It was only in the year 1870, Bombay Mutual Life Assurance Society, the first Indian insurance company covered Indian lives at normal rates. At the dawn of the twentieth century, insurance companies started mushrooming up. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. However, the disparage still existed as discrimination between Indian and foreign companies. The origin of insurance is very old .The time when we were not even born; man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. In India... The insurance came to India from UK; with the establishment of the Oriental Life insurance Corporation in 1818.The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By
  • 15. 15 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. In 1957 General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. In 1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. It was after this that 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. Present Scenario The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 12 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001 INDIA AGAINST THE GLOBAL MARKETS
  • 16. 16 India is an under-insured market India’s insurance market is still at an early stage of development. This is reflected in low penetration rates and low premiums per capita. Insurable population – only 10% of India’s population have life insurance According to ING only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured Global perspective – India ranks 19th on the global stage India represents only around 0.66% market share (ranked 19th) of global insurance premiums. As of 2004 the largest markets in size are the US (50x bigger than India), Japan and the UK. Out of the Asian countries (ex Japan),South Korea is the largest market Comprising 2.12% of global premiums, followed by China with 1.61%. While insurance continues to reach out to the masses, India’s insurance penetration (premiums as a percentage of GDP) still remains very low at 3.2%. This can be split between life penetration of 2.6% and non-life of 0.6%. On the world stage, penetration rates are significantly below developed markets such as the US (9.4%), UK (12.6%) and Australia (8%). Compared with Asian markets, India still falls well short of its nearest peers with countries such as Japan, South Korea and Taiwan having some of the highest penetration rates in the world (between 9% and 14%).
  • 17. 17 Nevertheless, despite current low spend on insurance, the trends in India remain positive. Since the opening up of the market to foreign players in 2000, penetration has more than doubled from 1.5%. With foreigners gaining momentum and building the insurance, coupled with India’s favorable macro overlay, we expect penetration rates to continue to expand. INSURANCE SECTOR REFORMS 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. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included: i) that mStructure 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 as independent corporations. All the insurance companies should be given greater freedom to operate. ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector. 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.
  • 18. 18 iii) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance- a part of the Finance Ministry- should be made independent iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time) v) 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. 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 Insurance Regulatory and Development Authority. Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products. Important milestones in the life insurance business in India:
  • 19. 19 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India. THE INSURANCE REGULATORY AND DEVLOPMENT AUTHORITY (IRDA): The IRDA since its incorporation as a statutory body has been framing regulations and registering the private sector insurance companies. IRDA being an independent statutory body has put a framework of globally compatible regulations Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year.
  • 20. 20 Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered. 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 premiums of the 12 private players have tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, 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 shows 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. For instance, the average size of a life insurance policy before privatization was around Rs 50,000. That has risen to about Rs 80,000.
  • 21. 21 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. THE BENEFITS OF LIFE INSURANCE Risk cover: -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future. Tax Deduction: - Under section 80C of the Income Tax Act of 1961 one can get tax deduction on premiums up to one hundred thousand rupees. Life Insurance policies thus decrease the total taxable income of an individual. Loans: - An individual can easily access loans from different financial institutions by pledging his insurance policies. Retirement Planning: - What had provided protection against the financial consequences of premature death may now be used to help them enjoy their retirement years. Moreover the cash value can be used as an additional income in the old age. Educational Needs: - Similar to retirement planning the cash values that flow from ones life insurance schemes can be utilized for educational needs of the insurer or his children. ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY The Life Insurance Industry has an enviable track record among public sector units. It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources. Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nation's development.
  • 22. 22 The industry is recognized as one of the largest financial Institutions in the country. The ventures initiated by the industry in the areas of Mutual Fund, Housing Finance has done exceedingly well in recent years. To protect the country's foreign exchange reserves, the reinsurance arrangement are so organizedaximum retention is made possible within the country while at the same time protecting interests of the policy holders. CHAPTER- 4 COMPANY PROFILE
  • 23. 23 COMPANY PROFILE ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). For the year ended March 31, 2007, the company garnered Rs 24.12 billion of weighted new business premium and wrote 837,963 policies. The sum assured in force stands at Rs 458.88 billion. The company has a network of over 72,000 advisors; as well as 9 bancassurance partners and over 200 corporate agent and broker tie-ups. It is also the only life insurer in India to be assigned AAA credit rating from Fitch Ratings. For the past five years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. VISION To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. This we hope to achieve by:
  • 24. 24 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 foster growth and learning for our employees And above all, building transparency in all our dealings. The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe 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 in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth. SOME OF THE MAJOR PLAYERS IN THE LIFE INSURNCE SECTOR OF INDIA PUBLIC SECTOR Life Insurance Corporation of India PRIVATE SECTOR ICICI Prudential Life Insurance HDFC Standard Life Insurance Max New York Life Insurance Birla Sun-Life Insurance TATA AIG Life Insurance SBI Life Insurance ING Vysya Life Insurance
  • 25. 25 Bajaj Allianz Life Insurance MetLife Insurance Aviva Life Insurance AMP Sanmar Life Insurance Om Kotak Mahindra Life Insurance Sahara India Insurance Shriram Life Insurance MAJOR MARKET PLAYERS Presently there are 15 Life insurance companies in the country. There is only one public sector company LIC and the rest 14 are private sector. Although LIC has been dominating the Life Insurance business since past few years the private players have now started to build up momentum. Major market players Birla Sun Life Insurance Company Birla Sun Life Insurance Company is a 74:26 joint venture between Birla group and Sun Life Financial. It is a private sector company. The company was registered on 31/1/2001. The market share for FY 2005-06 was 1.89%. HDFC – Standard Life HDFC Standard is a 74:26 joint venture between HDFC and Standard Life. It is a private sector company. The company was registered on 23/10/2000. The market share for FY 2005-06 was 2.87%. ICICI Prudential Life Insurance ICICI Prudential Life is a 74:26 joint venture between ICICI and Prudential. It is a private sector company. The company was registered on 24/11/2000. The market share for FY 2005-06 was 7.35%. Life Insurance Corporation of India (LIC) Life Insurance Corporation of India is a 100% government held Public Sector Company. Being the first to be established LIC is the forerunner in the Life Insurance sector. The market share for FY 2005-06 was 71.44%.
  • 26. 26 Kotak Mahindra OLD Mutual Kotak Mahindra OLD Mutual is a 74:26 joint venture between Kotak Mahindra bank and Old Mutual. It is a private sector company. The company was registered on 10/1/2001. The market share for FY 2005-06 was 1.11% Max New York Life Max New York Life is a 74:26 joint venture between J & Bank, Pallonji & Co and MetLife. It is a private sector company. The company was registered on 6/8/2001. The market share for FY 2005-06 was 1.23%. Aviva Life Insurance India Aviva Life insurance is a 74:26 joint venture between Aviva and Dabur. It is a private sector company. The company was registered on 14/5/2002. The market share for FY 2005-06 was 1.14%. ING Vysya Life insurance ING Vysya Life Insurance is joint venture between Exide (50%), Gujarat Cements (14.87%), Enam (9.13%) and ING (26 %). It is a private sector company. The company was registered on 2/8/2001. The market share for FY 2005-06 is 0.79%. MetLife India MetLife India is a 74:26 joint venture between 74:26 JV between J & K Bank, Pallonji & Co and MetLife. It is a private sector company. The company was registered on 6/8/2001. The market share for FY 2005-06 was 0.40%. Bajaj Allianz Life Insurance Co. Bajaj Allianz Life Insurance Company is a 74:26 Joint venture between Bajaj Auto limited and Allianz AIG. The company was registered on 3/8/2001. The market share for FY 2005-06 was 7.56%. SBI Life Insurance Company Ltd: SBI Life Insurance Company is a 74:26 Joint venture between SBI and Cardiff S.A. The company was registered on 31/3/2001.It is a private sector company. The market share for FY 2005-06 was 2.31%. The TATA AIG Group TATA AIG group is a 74:26 JV between Tata Group and AIG. It belongs to the private sector. The company was registered on 12/2/2001. The market share for FY 2005-06 was 1.29%. Sahara India Life Insurance Company Ltd.
  • 27. 27 First Wholly Indian Owned Private Life Insurance Company. TheCompany commenced operations from 30th October 2004. The market share for FY 2005-06 was 0.06 %. Shriram life insurance company Ltd Shriram Life is a recent entrant into the life insurance sector It is a 74:26 joint venture between the Shriram group through its Shriram Financial Holdings and Sanlam Life Insurance Limited, South Africa. The company expects to start operations soon. Here the pie-chart represents the overall market shares of the companies in India belonging to the public as well as the private sector. No Insurer Market Share (%) 1 LIC 71.44 2 Bajaj Allianz 7.56 3 ICICI Prudential 7.35 4 HDFC Standard Life 2.87 5 SBI Life 2.31
  • 28. 28 6 Birla SunLife 1.89 7 Tata AIG 1.29 8 Max New York 1.23 9 Aviva 1.14 10 Kotak Mahindra OLD Mutual 1.11 11 ING Vysya 0.79 12 Reliance Life 0.54 13 MetLife 0.40 14 Sahara Life 0.06 15 Shriram Life 0.03 DDDIIISSSTTTRRRIIIBBBUUUTTTIIIOOONNN ICICI Prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in over 116 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Amritsar in the north to Trivandrum in the south. The company has 8 bancassurance tie-ups, having agreements with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Ernakulam Bank, Lord Krishna Bank and some co-operative banks, as well as about 290 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies and organizations like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained more than 65,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers. ABOUT THE PROMOTERS
  • 29. 29 ICICI Bank (NYSE:IBN) is India’s second largest bank and largest private sector bank with assets of Rs. 1892.18 billion as on September 30, 2007. ICICI Bank provides a broad spectrum of financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards, corporate and agricultural finance. The Bank services a growing customer base of more than 14 million customers through a multi-channel access network which includes over 590 branches and extension counters, 2,030 ATMs, call centres and Internet banking (www.icicibank.com). Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 16 million customers, policyholder and unit holders worldwide. As of June 30, 2004, the company had over US$300 billion in funds under management. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia , Prudential is the leading European life insurance company with a vast network of 24 life and mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Tax Benefits on Insurance and Pension Life insurance and retirement plans are effective ways of saving taxes. The tax breaks that are available under our various insurance and pension policies are described below: 1 Our life insurance plans are eligible for deduction under Sec. 80C. 2 Our Pension plans are eligible for a deduction under Sec. 80CCC. 3 Our health insurance plans/riders are eligible for deduction under Sec. 80D. 4 The proceeds or withdrawals of our life insurance policies are exempt under Sec 10(10D), subject to norms prescribed in that section. ACHIEVEMENTS Beginning operations in December 2000, ICICI Prudential’s success has been meteoric, becoming the number one private life insurer within months of launch. Today, it has one of the largest distribution networks amongst private life insurers in
  • 30. 30 India, with branches in 54 cities. The total number of policies issued stands at more than 780,000 with a total sum assured in excess of Rs. 160 billion. ICICI Prudential closed the financial year ended March 31, 2007 with a total received premium income of Rs. 9.9 billion, up 135% from last years total premium income of Rs. 4.20 billion. New business premium income shows a 106% growth at Rs. 7.5 billion, driven mainly by the company’s range of unique unit-linked policies and pension plans. The company’s retail market share amongst private companies stood at 36%, making it a clear leader in the segment. To add to its achievements, in the year 2003/04 it was adjudged Most Trusted Private Life Insurer (Economic Times ‘Most Trusted Brand Survey’ by ACNielsen ORG- MARG). It was also conferred the ‘Outlook Money – Best Life Insurer’ award for the second year running. The company is also proud to have won Silver at EFFIES 2003 for its ‘Retire from work, not life’ campaign. Notably, ICICI Prudential was also short-listed to the final round for its ‘Sindoor’ campaign in EFFIES 2002. ICICI Prudential’s success is rooted in its philosophy to always offer the customer a choice. This has been the driving force behind its multi-channel distribution strategy, which includes advisors, banks, direct marketing and corporate agents. In fact, ICICI Prudential was the first life insurer to invest in multiple channels and offer the customer choice and access; thus reducing dependency on any one channel. ICICI Prudential also made great strides in the retirement solutions and pensions market. The company's penetration of the retirement market was driven by the focused approach towards creating awareness through a sustained campaign: ‘Retire from work, not life’. Within six months, the campaign rewarded ICICI Prudential with an increased share of 23% of the total pensions market and 78% amongst private players. Recent Developments In keeping with its belief that a happy customer is the best endorsement, ICICI Prudential has embraced the ‘Six Sigma’ approach to quality, an exercise that begins and ends with the customer – from capturing his voice to measuring and responding to
  • 31. 31 his experiences. This initiative is currently helping the company improve processes, turnaround times and customer satisfaction levels. Another novel introduction is the ICICI Prudential Lifestyle Rewards Club, India's first rewards programme for Life Advisors; it allows ICICI Prudential Advisors to redeem points for items ranging from kitchenware to gold, white goods, and even international holidays. What makes ICICI prudential no. 1 Commitment of promoters. Strong Brand. Most comprehensive product range. World class training. Multi channel distribution network. People-manager & partners. Advisor Being an ICICI Prudential advisor can be enriching and exiting career option. It’s an opportunity to associate with an industry leader, be in touch with the latest and finest insurance practices from around the globe and grow both personally and professionally. Here are some benefits of being an ICICI prudential Life insurance Advisor: - 1. Unlimited Earning potential 2. Ultimate career growth 3. All round support, in house consultant, World class training 4. Comprehensive benefit Package 5. Flexible timing, an independent job.
  • 32. 32 CAREER AS AN ADVISORS WITH ICICI PRUDENTIAL ICICI Prudential Life Insurance Co Ltd. provides excellent career opportunities to its quality advisors so that these advisors can grow and prosper with the company. Here quality advisors are those who bring excellent business for the company. Advisors are well equipped with. • Complete knowledge of products. • Diversified and lucrative products. • Full support of the company. • Latest information technology. • Marketing skills .Company offers the customers: • Complete and diversified product portfolio. • Faster and more accurate service. • Multi channel distribution systems. • Highly trained professional salespeople offering high quality pre and post sales service. As discussed the company is trying to identify the strategies to enhance and diversify the distribution channel of ICICI Prudential and for this the best way is to recruit quality advisors for the company, who can bring maximum premium for the company. The salient points that have been presented to the professional people to absorb them as Quality Advisors are as follows: • It is an opportunity where one’s earning potential is unlimited. • It is an opportunity where this earning will be additional without diverting the original career path. • Be your own boss. • The total benefit package will be comprehensive in nature. • And, in this effort to earn they will be extensively supported with exclusive advertising having own in-houses consultant, and superior training. Strengths that the company is looking in the professional individuals are: • Confidence • Self motivation. • Persuasion . • Effective Communication.
  • 33. 33 • Setting and Achieving goals. Company support to make successful advisors. • High Quality Management support. • Attractive Payments and Benefits. • Strong Reputation. • Excellent Customer service. • Extensive Training. • Superior Products. How to become Advisor of ICICI Prudential Life Insurance • Appear for an interview. • Get selected and go in for the mandatory training of 50 hour for CA’s and 100 hours for others • Pass the IRDA licensing examination and company specific training. Rewards and Recognition for the advisors Enhancement of distribution channel of ICICI Prudential doesn’t mean that to recruit new quality advisors but also to retain existing advisors and motivate them to bring new business for the company. So, ICICI Prudential assures that an insurance advisor can be one of the most rewarding careers. Career Prospects on Best Performance: • Tiger Team Programme • Pinnacle Programme • Certificate of Excellence • Life Style Rewards Club • ICICI Prudential Partner • Client Brochures Detailing of these Programmes; Tiger Team Programme:
  • 34. 34 • Part Time Career as a trainee • Conduct foundation programme • Share best field practices • Replicate your business • Continue doing your business • Performance Criteria: • Age group 25-45 years • At least 6 months in system Pinnacle Programme. • A full time career as a unit manager • Growth within ICICI Prudential • Greater earning potential • Personal Development • Performance Criteria: • Age Group 25-45 years • At least 1 year in system • Average 2 cases count per month Or • At least 6 months in system • 30 issuances within 6 months Certificate of excellence • Awarded to top 5 advisors • Awarded to top 3 advisors in each in each of the branches Lifestyle reward Club • President Club Qualifier • International Star Club Qualifier • MDRT (Million Dollar Round Table): Club Formed by those who gained 1 million dollar as premium • COT/TOT: Center of the Table and Top of the Table: Which represents the Highest Achievements? TRAINING .SPECIFICATIONS FOR BECOMING AN ADVISOR
  • 35. 35 ICICI Prudential laid down a 5 point scale based on which they could finalize on making a candidate an agency partner. Every candidate was marked a point if he/she fitted into the required category. Any candidate who scored less than 3 was considered a decline an was not allowed to become an advisor. Following are the 5 categories: i) Age limit – 25 to 45 years ii) Married. iii) Annual income more than or up to 3 lakhs. iv) Graduate PROCESS A database was prepared through the telephone directory and through personal references. The potential candidates were made phone calls and called to the office after fixing appointments with them. Every candidate was given a business opportunity presentation that explained every thing about the company profile and the details regarding the work that had to be undertaken by the potential candidates as advisors. Candidates were made to fill a form and sign necessary documents and a contract with ICICI Prudential after producing the necessary identification certificates. These involved: i) Education proof ii) Age proof iii) 12 colored recent passport size photographs Candidates were made to pay a sum of Rs. 1200/- as a fee for the IRDA examination that they had to appear in order to become an advisor. This fee included the fee for the
  • 36. 36 training sessions as well as the study material provided by the company for the examination purpose. The candidates were made to attend an eighteen day training by the IRDA which trained them about the insurance industry. The exam was held after the completion of the training. The duration of the exam was 2hrs. and he minimum passing marks were 50 out of 100. Candidates who cleared the examination received a license within 2 weeks and can start working immediately Following is the SWOT Analysis on ICICI Prudential. STRENGTHS • BRAND VALUE ICICI Prudential as a brand has the strongest hold over the market. The brand has been so well established among the masses, that it works as their most effective strength in the market. The values people associate with ICICI Prudential are, indeed, those that the company hopes to project: lifelong protection and value for money .It is a powerful proposition; one, which ICICI Prudential, is taking into the marketplace. The company has an excellent brand recall rate of 92%. • MARKET SHARE ICICI Prudential has the highest market share in the private sector of life insurance leaving behind over 14 other life insurance companies. it has been a market leader for 5 consecutive years and owns a highest share in terms of premium as well as policies.
  • 37. 37 • HIGHEST CAPITAL BASE The authorized capital of the company stands at Rs. 1200 crores, which is the highest capital base among all the life insurance companies in the country. • WORLD CLASS PRODUCT RANGE ICICI Prudential’s product range has been developed on the understanding that different people have their own sets of needs at various stages of their lives. It has thus built a flexible portfolio products that can be customized to cater to varying needs of people at each life stage, and thus ensure protection in every step of life. • CREDIT RATING ICICI prudential is the only private life insurance company which was assigned an AAA credit rating FITCH ratings, based on their claim settlements. • WIDEST DISTRIBUTION NETWORK The company has about 153 branches in over 110 locations spread across the country. It has the largest and the finest team of over 72,000 well trained insurance advisors from all walks of life. WEAKNESS • NO CO-OPERATION AMONG VARIOUS SUPPORT SYSTEMS
  • 38. 38 One of the major drawbacks for the company on an internal level is that there is no co-operation among the various support systems involved, such as Human Resources, Training, Operations etc. this is mainly due to the overload of work for all these departments that resists co-operation between them. • ONLY TARGET ORIENTED ICICI Prudential is a very target oriented company; therefore on an internal level there is a dilution of processes since concentration is more on the target than completion of processes in a sequence. This has also led to a weak base for core activities of the company. • HIGH STRESS LEVELS OF EMPLOYEES The employees of ICICI Prudential handle a lot of work load which has led to a high rate of stress levels among the employees, which in a long run can affect the growth prospects of both the company as well as the employees. • RESTRICTED TARGET MARKET APPROACH ICICI Prudential has a very restricted approach on the customer segment. They are concentrating more on the affluent and mass affluent market only. They need to concentrate on the mass market as well. • LOW PAY SCALES FOE EMPLOYEES Compared to the competitors in the market ICICI Prudential has comparatively lower pay structures for their employees which can lead to high attrition levels.
  • 39. 39 OPPORTUNITIES • DATA MINING There is a huge database of customers that is still untapped and needs to be properly leveraged. Target segments should be identified and tapped effectively. • HUGE UNTAPPED MARKET There is a huge untapped market for selling insurance. In India out of tax payers only 18% own insurance policies or are insured, there is still a huge segment of about 82% which needs to be worked on. • OPTIMUM USE OF ADVISORS CAPABILITIES ICICI Prudential has a large base of insurance advisors working for them, the company needs to utilize their capabilities and reward them accordingly to increase their growth prospects. • PRODUCT DEVELOPMENTS Being the market leader in private life insurance ICICI Prudential is in a position to launch variant new products to increase their market share and tap even the niche markets. • EMPHASIZING ON PENSION PLANS
  • 40. 40 Due to less percentage of premium payments on pension plans hampers the commission that the insurance advisors receive on those plans therefore compared to the sale of other policies pension plans sale share is negligible. By emphasizing more on pension plans ICICI can increase their market share. THREATS • AGGRESSIVE COMPETITORS ICICI Prudential has a huge number of competitors in the market. In all there are about 15 insurance companies in India who too have a significant market share. There is a rapid increase in the competition among private life insurance companies. Dealing in the same kind of products and having the same target segments can make life insurance a very competitive field. • IRDA CONSTRAINTS All the insurance companies in India are regulated by the guidelines of the insurance regulatory development authority. These tie down a company from doing business in a particular manner. Insurance companies cannot make additional changes in there policies or core activities without the approval of the IRDA. • LOW SAVINGS RATE Though the company has a huge market for insurance policies, the middle class who constitutes the bulk of this market is today burdened under inflationary pressures. The secret lies in inculcating savings habit but considering the amount of surplus funds available with the middle class for investing in future security, the ability to save is very nominal.
  • 41. 41 • ATTRITION RATES One of the major threats that ICICI Prudential may face are increasing attrition rates of the employees. Due to the increasing rate of competition in the life insurance market the new entrants are offering jobs to existing manpower’s of the insurance companies with higher pay packages. • LACK OF QUALITY MANPOWER Lack of quality manpower at every level also poses as a potential threat to ICICI Prudential. This may hamper the growth prospects of the company in a long run. . CHAPTER- 5 PRODUCT PROFILE
  • 42. 42 PRODUCT PROFILE Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 5 riders, to create a customized solution for each policyholder. Savings Solutions SecurePlus is a transparent and feature-packed savings plan that offers 3 levels of protection. CashPlus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options. Save’n’Protect is a traditional endowment savings plan that offers life protection along with adequate returns. CashBack 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 an asset.
  • 43. 43 LifeTime & LifeTimeII offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options? Preserver, Protector, Balancer and Maximiser. LifeLink II is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life is a limited premium paying plan that offers customers life insurance cover till the age of 75. InvestShield Life is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest. InvestShield Cash is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with flexible liquidity options. InvestShield Gold is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with limited premium payment terms. Protection Solutions • LifeGuard is a protection plan, which offers life cover at very low cost. It is available in 3 options? Level term assurance, level term assurance with return of premium and single premium. • HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost- effective manner. Child Plans • SmartKid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The
  • 44. 44 policy is designed to provide money at important milestones in the child’s life. SmartKid plans are also available in unit-linked form ? both single premium and regular premium. Retirement Solutions • Forever Life is a retirement product targeted at individuals in their thirties. • Secure Plus Pension is a flexible pension plan that allows one to select between 3 levels of cover. Market-linked retirement products • LifeTime Pension II is a regular premium market-linked pension plan • Life Link Pension II is a single premium market-linked pension plan. • Invest Shield Pension is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses. • Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and payout stages. ICICI Prudential also launched “Salaam Zindagi”, a social sector group insurance policy targeted at the economically underprivileged sections of the society. Health Solution • Health Assure: Is a regular premium plan which provides l ong term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. • Health Assure Plus: Is a regular premium plan which provides long term cover against 6 critical illnesses by providing financial assistance, irrespective of actual medical expenses, as well as an equivalent life insurance cover Group Insurance Solutions
  • 45. 45 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 can also 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. • 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 rider 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. • Accident Benefit: This rider option pays the sum assured under the rider on death due to accident. • 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.
  • 46. 46 • Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available on SmartKid, SecurePlus and CashPlus • Waiver of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with SecurePlus and CashPlus. . CHAPTER- 6 RESEARCH METHODOLOGY
  • 47. 47 REVIEW OF LITRETURE It is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. When we talk about research methodology we not only talk of the research methods but also consider the logic behind the methods we use in the context of our research study and explain why we are using particular method or technique and why we are not using others so that research are capable of being evaluated either by researcher himself or by others. Research methods refer to the behavior and instruments used in selecting and constructing research techniques, For instance, the reference between the methods and techniques of data collection can better be understood from the details given as follows- TYPES OF RESEARCH METHODS 1. Library research a) Analysis of historical records, recording of the notes, content analysis, tape and film listening, and their analysis. b) Analysis of documents: Statistical compilations and manipulations, reference and abstract guides, content analysis. 2. Field research
  • 48. 48 a) Non participant direct observation: observational behavioral scales, use of the score cards, etc b) Participant observation: interact ional recording; possible use of the tap reorders photographic techniques. c) Mass observation: Recording mass behaviors, interview using independent observer in public places d) Personal interview: interviewer uses a detailed schedule with open and closed ended questions. e) Opinionative: Use of the attitude scales, projective techniques, and use of socio metric scales. 3. Laboratory Research a) Small group study of random behavior, play and role analysis, Use of audio- visual recording devices, use of observers, etc CONCEPTUAL UNDERSTANDING OF MARKETING RESEARCH This chapter is an introduction to marketing research. It deals with preliminary concepts such as the definition of marketing research, the evolution and growth, application of marketing research. WHAT IS RESEARCH? Before defining marketing research, let us understand first what is research Research always starts with question through application of scientific method. It is a systematic and intensive study directed toward a more complete knowledge of the subject studied. Research can be classified into broad categories 1) Basic Research Basic is sometimes called “fundamental research”, “theoretical research”, or pure research”. It aims in expanding the frontiers of knowledge and does not directly involve pragmatic problems. The essence of basic research is that it addresses itself to more questions that are fundamental and not to the problems with immediate commercial potential. 2) Applied research
  • 49. 49 Applied research, on the other hand proceeds with a certain problems. Unlike basic research, it is prompted by commercial consideration. Though one may be easily able to distinguish between the two sometimes are blurred. MARKETING RESEARCH As marketing research does not address itself to basic research or fundamental questions, it does not qualify as basic research. On, the contrary it tackles questions which have immediate commercial potential. Marketing research can be defined as: a. The systematic and objectives search for and analysis of information relevant to the identification and solution of any problem in the field of marketing. b. Marketing research is the collection and interpretation of facts that help marketing management to get products more efficiently into the hands of customers. Market research encompasses all information pertinent to this task, all appropriate techniques. c. The systematic gathering, recording and analyzing of data about problems relating to marketing of good & services. d. Marketing research involves the diagnosis of relevant interrelated variable about which valid and reliable information is gathered, recorded and analyzed. RESEARCH DESIGN “A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine the relevance to research the research purpose with economy in procedure.” The types of research design are as follows: 1. Exploratory Design: An Exploratory Marketing data has to be obtained with regard to an predetermined objective or a hypothesis or an assumption and to test the hypothesis to arrive at conclusion of it holds or not.
  • 50. 50 2. Descriptive Design: in a descriptive marketing research data pertaining to the on going state of market affairs is obtained and to study the market situation in a SWOT from work. 3. Experimental Design: This research is a design in which a cause and effect study is carried out by conducting an experiment in the market to understand as what happen because of marketing experiment. SAMPLING METHODS A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting items for the sample. Sample design may as well lay down the number of items to be included in the sample i.e. the size of the sample. Sample design is determined before data are collected. TYPES OF SAMPLE DESIGN: Sample designs are of two types viz. a) Non probability sampling, b) Probability sampling. a) Non probability sampling It is the sampling procedure, which does not afford any basis for estimating the probability that each item in the population has being included in the sample. In this type of sampling, items for the sample are selected deliberately by the researcher; his choice concerning the items remains supreme. b) Probability sampling: It is also known a” random sampling”. Under this sampling design, every item of universe has an equal chance of inclusion in the sample. It is so say, a lottery method in which individual units are picked up from whole group not deliberately but by some mechanical process. Some of the complex Random sampling designs are as follows 1. Systematic sampling:
  • 51. 51 In this sampling, every item on a list is selected. An element of randomness is introduced into this kind of sampling by using random number to pick up that unit with which to start. It is an easier, less costly method and can be used on large population. 2. Stratified sampling: If a population from which a sample is to be drawn does not constitute a homogenous group, stratified sampling technique is generally applied in order to obtain a representative sample. In this method the population is divided into several sub-populations that are individually more homogenous than the total population (the different sub populations are called ‘strata’) and then we select items from each stratum to constitute a sample. 3. Cluster sampling: In Cluster, sampling the total population is divided into number of relatively small sub divisions which are they clusters of still smaller units and then some of these clusters are randomly selected for inclusion in the overall sample. 4. Area sampling: If cluster happen to be some geographic sub divisions, in that case cluster sampling is better known as area sampling. DATA COLLECTION There are two basic methods for data collection. Data Source: a) Primary Data It is the first hand information gathered. Primary data are those, which are collected afresh and for the first time and thus happen to be original character. The methods of collecting primary data are
  • 52. 52 1. Observation method Under this method, the information is sought by way of investigator’s own direct observation without asking from respondent. 2. Interview method The interview method of collecting data involves presentation of oral-verbal stimuli and reply in term of oral-verbal responses. The types of Interview are: a) Personal Interviews: This sort of interview may be in the form of direct personal investigation or indirect oral investigation. b) Telephone Interviews This method of collecting information consists in contacting respondents on telephone itself. 1. Collection of data through questionnaire: A questionnaire consists of number of questions printed or typed in a definite order on a form or set of forms. 2. Collection of data through Schedules: This method of data collection is very much like the collection of data through questionnaire with little difference, which lies in the fact that Schedules (Performa containing a set of questions) are being filled in by the enumerators. b) Secondary Data These are those data, which have already been collected, but someone else and which have already been through the statistical process. In this project, Primary Data was collected from respondents who employed in retail industry. The methods are as follows: 1. Various publications of central, state and local government.
  • 53. 53 2. Technical and trade journals. 3. Books, magazines and newspaper. 4. Reports and publications of various associations. 5. Various websites. SAMPLING SIZE The persons visited were 100 in all over PUNE area. RESEARCH METHODOLOGY USED IN PROJECT RESEARCH METHOD Research method used is the field research, as we were supposed to deal with the companies directly by interacting with them by going on field and market. A) RESEARCH DESIGN The research design used was of descriptive type. The market analysis and survey was done, and information was collected. B) SAMPLING METHODS The sampling method used is stratified sampling. The area was not homogenous in nature; hence, it was divided into different target and surveyed. The target with similar nature was selected and different groups were formed. C) DATA COLLECTION METHOD
  • 54. 54 The method used for collection is interview method. The data to be collected was primary type. Each person was personally interviewed. D) SAMPLING SIZE: The number of prospective agent to be covered 100. The persons visited were from Pune. E) QUESTIONNAIRE: The questionnaire used was structured type. The questions were of both closed ended and open ended. (Questionnaire format attached in annexure) CHAPTER- 7 DATA INTERPRETATION AND ANALYSIS
  • 55. 55 DATA INTERPRETATION AND ANALYSIS Do you have insurance any polices? PROFILE Yes No Total no. HOUSEWIVES 75 25 20 STUDENTS 15 85 35 PROFESSIONALS 90 10 20 RETIRED PERSONS 66 34 15 SELF EMPLOYED 60 40 10
  • 56. 56 DO YOU HAVE INSURANCE POLICY 75 25 15 85 90 10 34 60 40 66 0 10 20 30 40 50 60 70 80 90 100 Yes % No % RESPONDANT OPINION PERCENTAGE HOUSEWIVES STUDENTS PROFESSIONALS RETIRED PERSONS SELF EMPLOYED Interpretation: Among the policy holders 90 % are professionals while 15 % are students. Do you know about insurance advisor? PROFILE Yes No Total no. HOUSEWIVES 35 65 20 STUDENTS 60 40 35 PROFESSIONALS 75 25 20 RETIRED PERSONS 60 40 15 SELF EMPLOYED 40 60 10
  • 57. 57 Do you know about insurance advisors 35 65 60 40 75 25 60 4040 60 0 10 20 30 40 50 60 70 80 Yes % No % respondent opinion percentage HOUSEWIVES STUDENTS PROFESSION ALS RETIRED PERSONS SELF EMPLOYED Interpretation: Mostly Professionals, self employed and retired persons know about Insurance Advisors. Housewives usually do not know about advisors Can you spare time to sell the insurance policy? PROFILE Yes No Total no. HOUSEWIVES 20 80 20 STUDENTS 60 40 35 PROFESSIONALS 65 35 20 RETIRED PERSONS 55 45 15 SELF 20 80 10
  • 58. 58 EMPLOYED Can you spare time to sell insurance policy 20 80 60 40 65 35 55 45 20 80 0 10 20 30 40 50 60 70 80 90 Yes No respondent opinion percentage HOUSEWIVES STUDENTS PROFESSIONAL S RETIRED PERSONS SELF EMPLOYED Interpretation: Mostly students, professionals and retired persons are interested to sell insurance polices. Housewives are reluctant to sell insurance policy due to time constraint. Do you visit any insurance company? PROFILE Yes No Total no. HOUSEWIVES 40 60 20 STUDENTS 40 60 35 PROFESSIONALS 65 35 20 RETIRED PERSONS 73 27 15
  • 59. 59 SELF EMPLOYED 10 90 10 Do you visit any insurance company 40 60 40 60 65 35 73 27 10 90 0 20 40 60 80 100 Yes No respondent opinion percentage HOUSEWIVES STUDENTS PROFESSIONAL S RETIRED PERSONS SELF EMPLOYED Interpretation: Professionals, student and retired person have visited insurance company. Self employed visit to insurance company less compared to others. Do you think that working in an insurance industry is really an income generating source? PROFILE Yes No Total no. HOUSEWIVES 40 60 20 STUDENTS 35 65 35 PROFESSIONALS 50 50 20 RETIRED PERSONS 60 40 15 SELF 30 70 10
  • 60. 60 EMPLOYED view about insurance company 40 60 35 65 50 50 60 40 30 70 0 20 40 60 80 Yes No respondent opinion percentage HOUSEWIVES STUDENTS PROFESSIONAL S RETIRED PERSONS SELF EMPLOYED Interpretation: Retired persons, Students, and professionals find insurance sector as an income generating source. Do you think that insurance market is growing in India ? PROFILE Yes No Total no. HOUSEWIVES 40 60 20 STUDENTS 42 58 35 PROFESSIONALS 90 10 20 RETIRED PERSONS 53 47 15
  • 61. 61 SELF EMPLOYED 80 20 10 Do you think insurance market is growing 40 60 42 58 90 10 53 47 80 20 0 10 20 30 40 50 60 70 80 90 100 Yes No repondent opinion percentage HOUSEWIVES STUDENTS PROFESSIONAL S RETIRED PERSONS SELF EMPLOYED Interpretation: Among the group of people surveyed, 90 % of the professionals feel that insurance market is growing in India. 80 % of self employed people feel that insurance market is growing in India Do you have any experience to convince the people? PROFILE Yes No Total no. HOUSEWIVES 35 65 20 STUDENTS 71 29 35 PROFESSIONALS 75 25 20
  • 62. 62 RETIRED PERSONS 87 13 15 SELF EMPLOYED 20 80 10 Any experience to convince people 35 65 71 29 75 25 87 13 20 80 0 20 40 60 80 100 Yes No respondent opinion percentage HOUSEWIVES STUDENTS PROFESSIONAL S RETIRED PERSONS SELF EMPLOYED Interpretation: Mostly students, professionals and retired persons have more experience to convince people easily. Are you aware of the brand name of ICICI Prudential? PROFILE Yes No Total no. HOUSEWIVES 50 50 20 STUDENTS 40 60 35 PROFESSIONALS 100 0 20
  • 63. 63 RETIRED PERSONS 86 14 15 SELF EMPLOYED 30 70 10 Awareness about brand name 50 50 40 60 100 0 86 14 30 70 0 20 40 60 80 100 120 Yes No respondent opinion percentage HOUSEWIVES STUDENTS PROFESSION ALS RETIRED PERSONS SELF EMPLOYED Interpretation:-Mostly professionals, retired persons and students know the brand name of ICICI Prudential. Self employed persons are less aware of brand name of ICICI Prudential FINDING During the project, I discovered some finding. These finding are based on data collected. Housewives are interested to do this job, but they are reluctant to carry out Fieldwork. Professionals and retired people are interested because they have more
  • 64. 64 practical experience and more personal contacts in the market. Majority of the respondents are not ready to work on commission basis. There was no proper data with companies to recruit advisors. Customers were not interested in listening to issues like life insurance even if they were not insured. Most of them are of the thought that private life insurance company will not last for long and hence; they prefer to invest in Government insurance companies. After carrying out fieldwork, it was identified that many people do not give Their correct contact numbers or other references for feedback. There is no fix payment structure for advisors.
  • 65. 65 CHAPTER-8 SUGGESTION’S AND CONCLUSION
  • 66. 66 SUGGESTION Due to the increasing competition in the market it is extremely important to have a competent base of advisors as distributors. There is an existence of a huge untapped market for competent workforce. But competitors are equally aggressive therefore ICICI Prudential should make the best use of their brand name to attract insurance advisors. For this purpose firstly the company must advertise in an effective way to attract potential candidates. And secondly the examination fee must be reduced as it has been acting as the biggest reason for decline by potential candidates. To give corporate agencies to firms which have the capability to give good business. Many firms are interested in becoming business associate of ICICI Prudential but since the company is not giving license in the name of their firm, they tie up with other insurance company who give corporate agencies. These type of firms are few but they are important because they can give both large number of policies and big policies. As existing advisors know much about the market so company should motivate these advisors for the enhancement of distribution channel. This can be done by rewarding them for recruiting advisors in monetary terms Rural Marketing is also one of the major strategies for the enhancement of distribution channel in rural areas. Special emphasis should be given to cover these markets by arranging seminar and brand awareness programs. The company should go for presentation and seminars in colleges, Women’s Club, Retired Persons Club and various other places. Most common hindrances where employed persons refuse to join as a financial advisor is are lack of time for compulsory training. So there should be alternate solution for this problem like flexible timing and examination before actual IRDA exam.
  • 67. 67 CONCLUSION While doing the project, I have come on following conclusion. • There is bottleneck competition in the insurance sector. Like ICICI PRU many major player are there hence there is cutthroat competition. • A vast rural area is yet to be covered under insurance. As most of the companies are concentrating on urban area. • LIC is still number one player in insurance sector. People still prefer to go with LIC. • AS compared to developed countries, Indian insurance sector is yet to develop more. ICICI Prudential is the most powerful brand in the market. • ICICI Prudential is an extremely strong brand in the private life insurance sector. • The company is extremely aggressive when it comes to profit making. • Their market competition is rising at a very fast pace. • The company needs to emphasize their focus on expanding their network geographically. • Workload on the employees needs to be brought down for significant changes in performance levels. • The company needs to emphasize on selling of retirement solutions and pension plans. • The company should provide effective monetary benefits to the employees. • Majority of targeted prospective advisors know about ICICI Prudential Life Insurance Company and also, that it is number one Private Life Insurance Company in India. • Some prospective advisors are interested in becoming Advisor of ICICI Prudential but they wouldn’t want to work under any target pressure. • Targeted prospective advisors in the age group of 25 to 35 years are more attracted by the career opportunity given by ICICI Prudential.. • The examination fee worked as the strongest limitation as far as recruiting advisors was concerned.
  • 68. 68 . CHAPTER- 9 LIMITATIONS
  • 69. 69 LIMITATIONS 1. A major limitation was the fee payment of Rs.1200/- for the examination. People directly refused to pay the sum. 2. For professionals time investment was the biggest drawback. 3. Candidates did not attend the training sessions regularly which led to failing of the candidates in the IRDA exam. 4. People were not satisfied with the commission structures that were being provided for the work. 5. Some prospective advisors are interested in becoming Advisor of ICICI Prudential but they wouldn’t want to work under any target pressure. 6. Some professional thinks that becoming advisor of any life insurance company is against the ethics of their profession
  • 70. 70 CHAPTER- 10 BIBLIOGRAPHY
  • 71. 71 BIBLIOGRAPHY BOOKS Marketing Management By Kotler and Keller 12th edition of Pretice-Hall India Publications. Page no-101& above. Basic marketing By William D. Perreault & Jr E. Jerome McCarthy 14th edition of Mc Graw Hill Publications. Page no. 450 & above Research Methodology By Kothari WEB SITES: • www.moneycontrol.com • www.behaviouralfinance.net • www.google.com • www.icicipru.com
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