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                                      CHAPTER I
                                  INTRODUCTION


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                           1.1 INTRODUCTION OF THE STUDY

 “The Business of Insurance is related to the protection of the economic values of the
assets”.
               Every human being has the tendency to save to protect him from risks or
events of future. Insurance is one form of savings where in people try to assure
themselves against risks or uncertainties of future. It is assurance against risks or events
or losses. People can save their earnings either in the form gold, fixed assets like property
or in banking and insurances. All the savings of people of a country account for gross
domestic savings. In India, although savings rate is high but people prefer to invest either
in gold or fixed assets so that they can make money out of it. Hence insurance sector is
still untapped in India.
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                             1.2 INDUSTRY PROFILE

                OVERVIEW OF CURRENT INSURANCE INDUSTRY

1. WHAT IS INSURANCE?
                          Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous. Insurance is a
safeguard against uncertain events that may occur in the future.
       It is an arrangement where the losses experienced by a few are extended over
several who are exposed to similar risks. It is a protection against financial loss arising on
the happening of an unexpected event. Insurance companies collect premium to provide
security for the purpose. Loss is paid out of the premium collected from people and the
insurance companies act as trustees to the amount so collected. These companies have
proposal forms which are filled to give details of insurance required. Depending upon the
answers in the proposal form insurance companies assess the risk and decide on the
premium.
       Insurance companies are risk bearers. They underwrite the risk in return for an
insurance premium. the function of insurance is to provide protection, prevent losses,
capital formation etc. hence insurance can be defined as a tool in which a sum of money
as a premium is paid by the insured in consideration of the insurer’s bearing the risk of
paying a large sum .it may also be defined as a contract wherein one party (insurer)
agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given
contingency against which insurance is required.
       Insurance industry commands massive funds through sales of insurance products
to large number of clients. Insurers also create liabilities and commit themselves to
compensate for losses occurring to the policyholders on future date. It also plays an
important role in process of capital formation.


2. NATURE OF INSURANCE
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a) Risk sharing and risk transfer: Insurance is used to share the financial losses that
might occur to an individual or his family on the happening of specified events. The loss
arising from such events are shared by all the insured in the form of premium.
Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every
year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250 owners
come together and contribute Rs.800 each, the common fund would be Rs200000.This is
enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread
over 250 house owners of the village.


b) Risk assessment in advance: Insurance companies are risk bearers. They assess the
risk before insuring to charge the amount of premium.


c) Its not gambling or charity: The uncertainty is changed to certainty by insuring
property and life because the insurer promises to pay a definite sum at damage or death.
Insurance is antithesis of gambling. Failure of insurance amounts to gambling because
the uncertainty of loss is always looming. Moreover insurance is not possible without
premium. So it is different from charity because charity is given without consideration.


d) Huge number of insured people: It is essential to insure larger number of people or
property to make cost of insurance less consequently premium would also be less.


e) Assists in capital formation: Insurance provides capital to society. Accumulative
funds are invested in productive channels.


3. SEMANTICS
   1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional
       decline in or disappearance of value arising from contingency.
   2. Policy: It is the document which embodies the insurance contract
   3. Whole life policy: It is the policy under which the amount of policy will be paid
       only on death of the insured. Premiums may be payable throughout the life or for
       a limited period.
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   4. Endowment policy: Endowment policies entitle the insured to receive the
       amount of the policy on his reaching a certain age and premiums also stops. If
       death occurs earlier, amount of the policy will be paid at that time and payment of
       premium will also stop at that time.
   5. Claim: It is the amount which an insurer has to pay against a policy.
   6. Reinsurance: It refers to placing a part of the risk by an insurer with another
       insurer. The object is to reduce the possible loss to be borne by the original
       insurer, who pays premiums at the ordinary rates to the reinsurer. Reinsure must
       pay commission to the original insurer.
   7. Premium: A periodic payment made on an insurance policy.
   8. Insurance penetration: It is defined as insurance premium as a share of gross
       domestic product.
   9. Insurance density: Insurance density is defined as per capita expenditure on
       insurance premium i.e. premium per capita.
   10. Actuary: The actuary is a specialist who combines an understanding of risks and
       mathematical technique to develop financial products to manage these risks, price
       these products. He helps in designing insurance plans and then evaluates the
       financial risk of the company which it takes while selling an insurance policy.




4. TYPES OF INSURANCE

Insurance is broadly divided in two segments, based on the nature of insurance, those are:

   1. Life Insurance &
   2. Non-Life Insurance or General Insurance. It can be again subdivided into the
       following categories:
   a) Fire Insurance.
   b) Marine Insurance.
   c) Social Insurance &
   d) Miscellaneous Insurance. (Health insurance, Liability Insurance etc….)
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5. HISTORY OF INSURANCE GLOBAL
       For now we know the meaning of insurance, different types of insurance. Now let
us know the history and reasons for and behind different types of insurance.
        Insurance has existed for thousands of years. The first ever type of insurance was
Property Insurance. It became popular about 3000 BC in China. It all started when
Chinese merchants, as well as their investors, wanted to ensure that they would see a
profit from their goods that they shipped overseas. In the event that a ship was lost at sea,
an insuring partner would reimburse the owners of the ship and goods. To pay for the loss
the merchant would be sold into slavery to the insurer until the debt was repaid. This was
so because, a merchant could not afford to pay for the lost goods or even to buy a ship
unless someone invested.
        Property insurance was also seen in Babylon as well. In Babylon, merchants and
investors entered into a contract, in which the supplier of money for a trade agreed to
cancel the loan if the trader was robbed of his goods. The trader who borrowed the
money paid an extra amount for this protection in addition to the usual interest. As for the
lender, collecting these premiums from many traders made it possible for him to absorb
the losses of the few. Later this contract was extended to include provisions for a family's
home and even the death of the insured, where life insurance came into existence. Slowly
this concept started to spread across other places like Greek, Roman.
       Since ancient times, communities have pooled some of their resources to help
individuals who suffer loss. Like, about 3500 years ago, Moses instructed the nation of
Israel to contribute a portion of their produce periodically for "the alien resident and the
fatherless boy and the widow."
       Later the origin of credit insurance, which was included in the Code of
Hammurabi, a collection of Babylonian laws said to predate the Law of Moses. Credit
insurance means, in ancient times the ship owners obtained loans from investors to
finance their trading expeditions. In case, if a ship was lost, the owners were not
responsible to pay back the loans to the investors. The risk to the lenders was covered by
the interest paid by numerous ship owners, since many ships returned safely.
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       By the middle of the 14th century, marine insurance was one of the most popular
types of insurance among nations of Europe. Things changed dramatically in the 17th
century in Europe. In 1666, the Great Fire of London bought the need for fire
insurance .The Great Fire of London burned for four days and nights. It destroyed 436
acres, 13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom House,
the Royal Exchange and dozens of other public buildings. Only six people were victims
in the flames, but hundreds died from shock and exposure.
       By 1688, Edward Lloyd was running a coffeehouse in London. Where, London
merchants and bankers met informally to do business. There financiers who offered
insurance contracts to seafarers wrote their names under the specific amount of risk that
they would accept in exchange for a certain payment, called premium. These insurers
came to be known as underwriters. Finally, in 1769, Lloyd's became a formal group of
underwriters that in time grew as an insurance company.
       The concept of insurance developed at a fast pace with the growth of British
commerce in the 17th and 18th century. The first stock companies to engage in insurance
were chartered in England in the year 1720.
         In 1735, the first insurance company in the American colonies was founded at
Charleston. Later in the year 1787, fire insurance corporations were formed in New York.
Then later in the year 1759, the life insurance corporation was started in Philadelphia,
America.
       The New York fire which occurred in the year 1835 was the main reason to draw
attention to create reserves to meet unexpected losses. In the year 1837, Massachusetts
was the first state to require companies by law to maintain such reserves. After 1840, life
insurance entered a boom period.
       The Workmen's Compensation Act of 1897 in Britain required employers to
insure their employees against industrial accidents. Public liability insurance, fostered by
legislation, made its appearance in the 1880s.It attained major importance with the advent
of the automobile.
       Until the 1950s, most insurance companies in the United States were restricted to
provide only one type of insurance, but then legislation was passed to permit fire and
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casualty companies to underwrite several classes of insurance. Many firms have since
expanded and also were responsible for many mergers.
        From this brief accounting of history we can see how insurance came into
existence. Fortunately for us we no longer have to sell ourselves into slavery if our car is
stolen nor we have to be scared of losses due to absence of reserves. However we can be
confident that we will be compensated for our loss. Without people wanting to secure
their investments and great tragedies throughout history we may not have insurance as we
know it today resulting in peace of mind.


6. HISTORY OF INSURANCE INDUSTRY IN INDIA
        The insurance industry in India over the past century has gone through big
changes. In India this industry reveals the 360 degree turn. 360 degree turn means that it
started in India from being an open competitive market to nationalization and back to a
liberalized market again.
        Insurance industry in India started as a fully private system with no restriction on
foreign participation in the Nineteenth Century. Before independence, a few British
insurance companies dominated the Market. Life insurance was first set up in India
through a British company called the Oriental Life Insurance Company in 1818, followed
by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance
Society in 1829.All of these companies operated in India but did not insure the lives of
Indians. They were there insuring the lives of Europeans living in India. Some of the
companies that started later did provide insurance for Indians. But, they were treated as
"substandard" and therefore had to pay an extra premium of 20% or more. The first
company that had policies that could be bought by Indians with "fair value" was the
Bombay Mutual Life Assurance Society starting in 1871.
        The first general insurance company, Triton Insurance Company Ltd., was
established in 1850. It was owned and operated by the British. The first general insurance
company was the Indian Mercantile Insurance Company Limited set up in Bombay in
1907.By 1938; the insurance market in India had nearly 176 companies (both life and
non-life).
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       After the independence, the industry went to the other extreme. It became a state-
owned monopoly. The industry started to witness a problem like fraud. Hence many
regulations were put in place to reduce and control the problems in the industry. After
which Insurance was nationalized. In 1956, the then finance minister S. D. Deshmukh
announced nationalization of the life insurance business and then the general insurance
business was nationalized in 1972. Only in 1999 private insurance companies have been
allowed back into the business of insurance with a maximum of 26% of foreign holding.
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7. INDIAN SCENARIO



                                INDIAN
                          INSURANCE INDUSTRY




                 LIFE                                          NON LIFE
              INSURANCE                                       INSURANCE




  Public                  Private                 Public                  Private
 Sector (1)              Sector (15)             Sector (4)              Sector (9)




8. LIFE INSURANCE
       After the entry of new players and increase in the penetration levels, could see the
insurance sector cross the Rs 2,00,000-core mark in business by 2010.The current size of
the sector is estimated to be at Rs 50,000 crore, which has seen a compound annual
growth rate (CAGR) of around 175 percent in the last few years.
       The insurance sector, both life and non life, is likely to grow by over 200 percent,
and private insurers are expected to achieve a growth rate of 140 percent as a result of
aggressive marketing technique. It added that state owned insurance companies are likely
to be 35-40 percent.
       On account of intense marketing strategies adopted by the private insurance
players, the market share of state-owned insurance companies like GIC, LIC and others
has come down to 70 percent in last 4-5 years from over 97 percent. Despite regulation,
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the private players are offering 35 percent rate of return to is policy holders against 20
percent by public-sector insurers.
        The industry body also noted that India’s life insurance premium is 1.8 percent as
a percentage of GDP whereas it is 5.2 percent in the US, 6.5 percent in the South Korea.
       The services sector offers immense opportunities for expansion opportunities for
expansion opportunities and the rural market, also, offers tremendous growth
opportunities for insurance companies.




9. GENERAL INSURANCE
       General insurance in India has been expecting growth except in some portfolios
like motor insurance, fire and engineering. These portfolios are still under tariff- this
means that premium depends on a fixed predetermined rate structure.
       In India, GDS as a proportion of GDP at current prices increased from 26.1% in
2002-03 to 28.1% in 2003-04.house hold sector continued to be the major contributor to
GDS at 24.3% in 2003-04.this can be attributed to soft interest rates prevailing in housing
sector. General Insurance has low market penetration. It is 1.95% and ranks 51st.
However in collection of premium it is ranked 23rd. The ratio of the premium collected to
that of GDP is 0.58. The main reason for the general insurance industry to perform very
poorly was because of the slow settlement of claims. Moreover the rates of claim in India
were highest in the world. It was 70 percent compared to 40 percent internationally. This
meant that out of 100 people who had insured their commodities 70 claimed for a loss or
damage. The main reason for the lack of demand for general insurance is that people
consider it as an unnecessary expenditure. However it must be noted that the general
insurance has been earning consistent profits and has an efficient dividend paying record
accompanied by a steady growth in its financial resources. The industry is recognized as
one of the largest financial Institutions in the country. Some of the private players in this
sector are- ICICI – Lombard, Reliance, Royal-Sundaram, Chholamandalam etc.
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         10. PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR


           The different private players in the life insurance sector and their associations with
   foreign companies are being given below:




COMPANY INDIAN                                FOREIGN               TOTAL        FDI FOREIGN
               PROMOTER/PARTNER INSURER                             CAPITAL (%)         CAPITAL
                                                                    (RS MN.)            (RS MN.)
AMP            RELIANCE                       None                  2,170        0      0
SANMAR         GROUP(ADAG)
Aviva Life     Dabur                          Aviva (UK)            4,590        26     1193.4
Bajaj-         Bajaj Auto                     Allianz               3680         26     960
Allianz                                       (Germany)
Birla   Sun Aditya Birla Group                SunLife (Canada)      4,000        26     1,040
Life
HDFC           HDFC                           StandardLife          2,500        18.9 470
Standard                                      (UK)
ICICI          ICICI Bank                     Prudential (UK)       10,850       26     2,820
Prudential
ING Vysya      Vysya Bank                     ING             Ins. 4,400         26     680
                                              (Netherlands)
Kotak          Kotak Mahindra Bank            OldMutual (South 2,600             26     680
Mahindra                                      Africa)
Old Mutual
Max            Max India                      NewYorkLife           5,000        26     1,300
Newyork                                       (US)
Met Life       J&K Bank                       Met Life (US)         3,550        26     920
Sahara Life    Sahara India                   None                  1,000        0      0
Ins. I
SBI Life       SBI                            Cardiff (France)      3,500        26     910
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TATA AIG      TATA Group                   AIG (US)            3,810         26    990
Shriram       Shriram                      Sanlam Life Ins.
Bharti AXA    Bharti Group                 AXA(Australia)


   Some of the new companies who are waiting to come in to the life insurance sector are:
              a. IDBI-FORTIS.
              b. Syndicate Bank
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11. CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN ECONOMY

       Some surveys have predicted that India and China will play a very vital role in the
years to come. Indian economy can be termed as an emerging economy as it is doubling
its GDP in 3 to 5 years and moreover it is not dependent on any particular sector for its
GDP.
       If we look at the GDP of the Indian economy very closely over the years, we can
easily come to know the changing structure of the economy. We can also come to know
the changing contribution of the various sectors like agriculture, manufacturing and the
service sector. In the financial year 1993-94, agricultural sector contributed to 31%,
manufacturing accounted to 26.3% and the service sector contributed to 42.7% of the
total GDP of the country. Thus over the years as India became an emerging economy in
2003-04 manufacturing sector contributed for 21.7 %, manufacturing contributed for 26.8
whereas service sector contributed for 51.4% of the total GDP.
          There has been 7.5% growth in the total GDP of the country and is estimated to
grow at 8.0% in 2006-07. The Indian economy has shown signs of strong performance
despite a rise in oil prices, high inflation rate and abnormal rains in many parts of the
country. The overall growth of the Indian economy has been equally supported by all the
three sectors of the economy, i.e. the agriculture, manufacturing and the service sector.
Insurance, together with the banking sector, contributes to about 7.3 % of the total GDP
of India, and the gross premium collected contributes to about 2% of the total GDP of the
country
       The insurance sector in India has completed 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 200 years.
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12. GOVERNMENT POLICIES REGARDING LIFE INSURANCE


Insurance Regulatory and Development Authority (IRDA) 1999
Reforms in the insurance sector were initiated with the passage of the IRDA bill in
December 1999.it was set up as an independent body and it has been able to frame
globally compatible legislations.
The IRDA was set up to protect the interests of holders of insurance policies ,to
regulate ,promote and insure orderly growth of the insurance industry and for matters
connected therewith or incidental thereto.
This act extends to whole of India. With the establishment of this act, government
amended Insurance act 1938, Life Insurance Act 1956 and General Insurance Act 1972.
IRDA was formed on the recommendations of Malhotra Committee. In 1999 government
of India has set up Malhotra Committee to examine the structure of insurance industry
and recommend changes, under R.N Malhotra –former governor of RBI.
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                            1.3 COMPANY PROFILE


       The Industrial Credit and Investment Corporation of India Limited (ICICI) was
formed in 1955 which is incorporated at the initiative of the World Bank, the
Government of India and representatives of Indian industry, with the objective of creating
a development financial institution for providing medium-term and long-term project
financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman
of ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian
industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI
was also among the first Indian companies to raise funds from international markets.


1. WHAT IS ‘ICICI GROUP’?
       We are a part of the renowned ICICI Group, a diversified universal banking
group, with a track record of over 50 years in a variety of financial services.
ICICI was formed in 1955, as a result of the focused efforts of the World Bank, the
Government of India and the representatives of Indian Industry. Today, ICICI Bank has
grown to become India’s second largest bank, with over 24 million customers worldwide.
It is also the first bank from Asia (excluding Japan) to be listed on the NYSE.
ICICI Bank is a truly global bank, with presence at key locations across the globe in
Bahrain, Bangladesh, Belgium, Canada,          China, Dubai, Hong Kong, Indonesia,
Malaysia, Russia, Singapore, South Africa, Sri Lanka, Thailand, UK, USA and Quatar.
ICICI Group’s expertise spans a vast range of financial services, including banking,
broking, mutual funds, insurance, home loans, venture funds and much more. The
Group is the largest consumer credit provider and the biggest private sector, life and
general insurer in India. Expertise across a vast range of products. All blended to bring
you seamless financial solutions that ensure you have the advantage in every financial
decision. Wherever you may be in the world.
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2. STRUCTURE OF ‘ICICI GROUP’




3. OBJECTIVES OF ICICI GROUP
TRUST
We view each client relationship as a “partnership for success”. We regard your financial
needs as our own and aim to achieve your investment goals with you. We put our best
resources behind you to ensure that your investment objectives are more than met.
AGILITY
We seek to deliver superior value to you. We respond quickly and efficiently to market
opportunities, and offer the most apt financial solutions so that you can reap the best
possible benefits.
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INNOVATION
We believe that the cornerstone of success in today’s competitive environment is
Innovation. We seek newer opportunities constantly, to fulfill your emerging needs and
wants.


4. ICICI BANK

         ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00 billion
(US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion for the
nine months ended December 31, 2007. ICICI Bank is second amongst all the companies
listed on the Indian stock exchanges in terms of free float market capitalization*. The
Bank has a network of about 955 branches and 3,687 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain,
Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia
and Indonesia. Our UK subsidiary has established branches in Belgium.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its


5. COMPANIES UNDER ‘ICICI BANK’
A) ICICI PRUDENTIAL AMC AND TRUST:
         ICICI Prudential Asset Management Company enjoys the strong parentage of
prudential plc, one of UK's largest players in the insurance & fund management sectors
and ICICI Bank, a well-known and trusted name in financial services in India. ICICI
Prudential Asset Management Company, in a span of just over eight years, has forged a
position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset
management companies in the country with assets under management of Rs. 37,906.24
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crore (as of March 31, 2007). The Company manages a comprehensive range of schemes
to meet the varying investment needs of its investors spread across 68 cities in the
country.
Key Indicator:
       During the year march 1998 Asset Under Management was Rs160 cores with only
two funds managed, as on February 29, 2008 now it raised up to Rs 62,008.95 cores with
35 funds.


B) ICICI SECURITIES – INDIA’S LEADING INVESTMENT BANK

       A subsidiary of ICICI Bank - the largest and most recognized private bank in
India – ICICI Securities Ltd is premier Indian Investment Bank, with a dominant position
in its core segments of its operations - Corporate Finance including Equity Capital
Markets Advisory Services, Institutional Equities, Retail and Financial Product
Distribution With a full-service portfolio, a roster of blue-chip clients and performance
second to none, we have a formidable reputation within the industry.

       The Corporate Finance team regularly ranks highest among the leading capital
markets league tables and recently topped the Prime Database League tables for funds
mobilized through equity instruments in the first half of CY 07.

       ICICI Securities Inc., the step down wholly owned US subsidiary of the company
is a member of the National Association of Securities Dealers, Inc. (NASD). As a result
of this membership, ICICI Securities Inc. can engage in permitted activities in the U.S.
securities markets. These activities include Dealing in Securities and Corporate Advisory
Services in the United States and providing research and investment advice to US
investors.

       ICICI Securities Inc. is also registered with the Financial Services Authority, UK
(FSA) and the Monetary Authority of Singapore (MAS) to carry out Corporate Advisory
Services and Dealing in Securities.
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C) ICICI VENTURE
       ICICI Venture is one of the largest and most successful private equity firms in
India with funds under management in excess of USD 2 billion.


ICICI Venture, over the years has built an enviable portfolio of companies across sectors
including pharmaceuticals, Information Technology, media, manufacturing, logistics,
textiles, real estate etc thereby building sustainable value.


It has several “firsts” to its credit in the Indian Private Equity industry. Amongst them are
India’s first leveraged buyout (Infomedia), the first real estate investment ( Cyber
Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs) and the first
‘royalty-based’ structured deal in Pharma Research & Development (Dr Reddy’s).


ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services
group in India.


D) ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
       ICICI Lombard General Insurance Company Limited is a 74:26 joint venture
between ICICI Bank Limited and the Canada based $ 26 billion Fairfax Financial
Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial
Holdings is a diversified financial corporate engaged in general insurance, reinsurance,
insurance claims management and investment management.
       Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is
one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance
Company received regulatory approvals to commence general insurance business in
August 2001.
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E) ICICI PRUDENTIAL LIFE INSURANCE COMPANY
       ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
a premier financial powerhouse, and Prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).


       ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
a premier financial powerhouse, and Prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).


       ICICI Prudential Life's capital stands at Rs. 37.72 billion (as on February, 2008)
with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the
nine months period April 1 to December 31, 2007, the company garnered new business
weighted premium of Rs. 4,586 crore and has underwritten around 18 lakh policies
during the period. The company has assets held over Rs. 28,000 crore.


       ICICI Prudential Life is also the only private life insurer in India to receive a
National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA
(Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to
meet its obligations to customers at the time of maturity or claims.


       For the past seven years, ICICI Prudential Life has retained its leadership position
in the life insurance industry with a wide range of flexible products that meet the needs of
the Indian customer at every step in life.
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   a) VISION
        To be the dominant Life, Health and Pensions player built on trust by world-class
people and service.


This we 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 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.


b) VALUES

        Every member of the ICICI Prudential team is committed to 5 core values:
Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine
forth in all we do, and have become the keystones of our success.
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c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL LIFE
INSURANCE COMPANY LIMITED
Branches:
       ICICI Prudential Life has one of the largest distribution networks amongst private
life insurers in India. It has a strong presence across India with over 945 branches in
addition to 550 micro-offices and an advisor base of 270,000.


Distribution Network:

       There are four different ways of distributing a Life insurance product namely;

       1. Agents (Financial Advisors):- Anybody possessing the minimum qualification
       of 10+2 after completing 100 hrs of training from the training institute approved
       by IRDA can sell life insurance products of any particular company which has
       sponsored him to take the training. This is the most popular distribution channel.

       2. Corporate Agents Any corporate may apply for license to sell insurance after
       complying with the requirements of IRDA.

       3. Bancassurance If the corporate agent is a bank, then it is known as
       bancassurance. Banks can sell the policies to their existing as well as prospective
       clients. This is becoming quite popular these days and the bank earns huge fund
       based income. Bancassurance has 1% share in total premium collection in
       2004-05.

       4. Broker They are like corporate agents with only difference that they can sell
       the products of more than one insurance company.

Departments:
   The various departments that can be seen in an insurance organization and that has
   been observed by me are as follows:


   a) Marketing Department: This department mainly deals with the marketing and
       promotion part of the Insurance Company. They spend most of their time in
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     formulating strategies to make their products known to the common people and to
     promote the same in a easy and cost effective way.
  b) Sales Department: This department mainly deals with the sales part of the
     Insurance Company; the department includes designations like Sales Manager and
     Financial Advisor who personally contacts with people for performing the task of
     sales of various products.
  c) Accounts/ Financial Department: This department has the task of keeping track
     of the various expenses incurred by the various other departments of the
     organization and also performs the task of allocating various funds to different
     departments according to their requirements.
  d) Human Resource Department: This department is handled by the Human
     Resource manager of the company. The function of this department involves the
     well being of the employees of the company, I,e, to see whether there is employee
     grievance in the organization or not and if it is there what are the possible causes
     for that and also try to find out solutions for the same if possible.
  e) Investment Department: This department deals with the task of investing the
     money of the policy holders in such way that will ensure both safety of the money
     and also a steady return on the same. The task of this department is very difficult
     as it deals with the money given by the policy holders, so it requires lot of
     thinking on the part of the personnel of this department before deciding where to
     invest the money.
  f) Actuarial Department: This department is under the supervision of an Actuary
     who decides the premiums and charges to be taken from the policy holder on the
     basis of certain information’s (like Age, Annual Income etc.) provided by the
     prospective customer. The task also involves the calculation of mortality charges
     which requires high statistical knowledge from one’s point of view. So, this
     department involves in the calculation of various amounts to be charged from the
     prospective customers.
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d) ICICI PRUDENTIAL LIFE INSURANCE 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 products can be
enhanced with up to 4 riders, to create a customized solution for each policyholder.


Savings & Wealth Creation Solutions

   •   Save'n'Protect is a traditional endowment savings plan that offers life protection
       along with adequate returns.
   •   CashBak is an anticipated endowment policy ideal for meeting milestone
       expenses like a child's marriage, expenses for a child's higher education or
       purchase of an asset. It is available for terms of 15 and 20 years.
   •   LifeTime Gold & LifeTime Plus are unit-linked plans that offer customers the
       flexibility and control to customize the policy to meet the changing needs at
       different life stages. Each offer 6 fund options - Preserver, Protector, Balancer,
       Maximiser, Flexi Growth and Flexi Balanced.
   •   LifeLink Super is a single premium unit linked insurance plan which combines
       life insurance cover with the opportunity to stay invested in the stock market.
   •   Premier Life Gold is a limited premium paying plan specially structured for
       long-term wealth creation.
   •   InvestShield Life New is a unit linked plan that provides premium guarantee on
       the invested premiums and ensures that the customer receives only the benefits of
       fund appreciation without any of the risks of depreciation.
   •   InvestShield Cashbak is a unit linked plan that provides premium guarantee on
       the invested premiums along with flexible liquidity options.
   •   LifeStage RP is a unique and powerful wealth creation insurance solution, which
       combines the benefits of automatic asset allocation and quarterly rebalancing
       along with increased protection.
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Protection Solutions

   •   LifeGuard is a protection plan, which offers life cover at low cost. It is available
       in 3 options - level term assurance, level term assurance with return of premium
       & 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.

Education insurance plans

   •   Education insurance under the SmartKid brand 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. SmartKid plans are also available in unit-linked form - both single
       premium and regular premium.

Retirement Solutions

   •   ForeverLife is a traditional retirement product that offers guaranteed returns for
       the first 4 years and then declares bonuses annually.
   •   LifeTime Super Pension is a regular premium unit linked pension plan that helps
       one accumulate over the long term and offers 5 annuity options (life annuity, life
       annuity with return of purchase price, joint life last survivor annuity with return of
       purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter,
       joint life, last survivor annuity without return of purchase price) at the time of
       retirement.
   •   LifeLink Super Pension is a single premium unit linked pension plan.
   •   Immediate Annuity is a single premium annuity product that guarantees income
       for life at the time of retirement. It offers the benefit of 5 payout options.
   •   PremierLife Pension is a unique and convenient retirement solution with a
       limited premium paying term of three or five years, to suit professionals and
       businessmen, especially those who require more flexibility and customization
       while planning their finances.
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Health Solutions

   •   Health Assure Plus: Health Assure is a regular premium plan which provides
       long term cover against 6 critical illnesses by providing policyholder with
       financial assistance, irrespective of the actual medical expenses. Health Assure
       Plus offers the added advantage of an equivalent life insurance cover.
   •   Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis
       as well as at different stages in the treatment of various cancer conditions.
   •   Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care
       and also provides an additional benefit of free periodical cancer screenings.
   •   Diabetes Care: Diabetes Care is a unique critical illness product specially
       developed for individuals with Type 2 diabetes and pre-diabetes. It makes
       payments on diagnosis on any of 6 diabetes related critical illnesses, and also
       offers a coordinated care approach to managing the condition. Diabetes Care Plus
       also offers life cover.
   •   Diabetes Care Plus: is a unique insurance policy that provides an additional
       benefit of life cover for Type 2 diabetics and pre-diabetics
   •   Hospital Care: is a fixed benefit plan covering various stages of treatment -
       hospitalisation, ICU, procedures & recuperating allowance. It covers a range of
       medical conditions (900 surgeries) and has a long term guaranteed coverage upto
       20 years.
   •   Crisis Cover : is a 360-degree product that will provide long-term coverage
       against 35 critical illnesses, total and permanent disability, and death.

Group Insurance Solutions
ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to
enhance benefits to their employees.


Flexible Rider Options
ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a
marginal cost, depending on the specific needs of the customer.
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                         1.4 SCOPE OF THE STUDY


  •   The result of this research would help the company to have a better understanding
      about the consumer’s perception towards life insurance.
  •   The study helps the company by creating awareness about the consumers of
      different ages and income levels.
  •   The study also enables the company to focus the consumer’s preferences and
      expectations on the product which they offer.
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                      1.5 OBJECTIVES OF THE STUDIES


  a) To know about the various Investment alternatives that is mostly preferred by the
    people.
  b) To find out the important criteria that people think about before investing in a life
     insurance policy.
  c) To find out whether gender bias involved in investing life insurance or not.
  d) To find out the awareness of ICICI Prudential Life Insurance among the people.
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                        1.6 RESEARCH METHODOLOGY


           Methodology is a systematic way of solving a problem it includes the research
   methods for solving a problem it includes the research methods for solving the
   problem.
   Type of research           - Descriptive research
   Data source                -Primary and Secondary data
   Data collection method     -Interview and survey
   Data collection tools      -Questionnaires
   Sampling universe          -Erode
   Sample size                -100


SAMPLE DESIGN
           The target population of the study consists of various respondents of various
   places. This survey was done by collecting the data from the respondents.


SAMPLE SIZE
       After due consultation with the company supervisor as well as with the college
guide, also keeping in mind the requirements of the company for the research, the sample
size that was found to be appropriate for the study was 100.


SAMPLING TECHNIQUE
       The sampling technique that adapted to conduct the survey was ‘Convenient
Random Sampling’ and the area of the research was concentrated in the city of Erode
only. The survey was conducted by visiting different places like colleges, corporate
offices, respondent’s home etc...
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        DATA SOURCE
        The task of data collection begins after a research problem has been defined. In
this study data was collected through both primary and secondary data source.


        A. PRIMARY DATA
        A primary data is a data, which is collected for gathering information first time
and to analyze the problem. In this study the primary data was collected among the
consumers using questionnaire.


        B. SECONDARY DATA
        Secondary data consist of information that already exits somewhere, having been
collected for some other purpose. In this study secondary data was collected from
company websites, magazines and brochures.


        STATISTICAL TOOLS
        Simple percentage analysis, ranking method and chi square analysis are the main
statistical tool used for the study.


        SIMPLE PERCENTAGE ANALYSIS
        Percentage refers o a special king of ratio in making comparison between two or
more data and to describe relationships. Percentage can also be used to compare the
relation terms between two or more sources of data.


        Percentage of respondents =    Number of respondents        * 100
                                        Total respondents
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       RANKING METHOD (WEIGHTED AVERAGE METHOD)
       This technique was used to rank out the opinion about the consumers preference
towards different investment alternatives. The order of merit given by the respondents
was converted into ranks by using the following formula.
       Weightage Score = Σ Wi * Xj
       Where Wi = Weightage value and Xj = Ranking position value


       CHI SQUARE TEST
       Chi Square is a statistical measure used in the context of sampling analysis for
comparing the variance to a theoretical variance. In order to judge the significance of
association between two attributes, we make use of chi square test by finding the values
of chi square using the chi square distribution.
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                1.7 LIMITATIONS OF THE RESEARCH


      The following limitations can be pointed out from the research that I conducted in
relation to the problems that were given to me by ICICI Prudential Life Insurance
Company Limited:


          a) The sample size chosen for the questionnaire was only 100 and that may
             not represent the true picture of the consumer perception about the Life
             Insurance sector.


          b) The research got confined to the city of Erode. The respondent belonged
             only to Erode and not others who were out of Erode.


          c) Nearly 98% of the respondent belonged to the age group of 20-50 years
             and only 2% were above 50 years. So, the responses and the opinions of
             the experienced and aged were not available. So, the findings may not be
             correct when we think about the opinion of the elderly people about the
             life insurance.


          d) The selection of people for the questionnaire was done on the basis of
             convenient random sampling, so, there were certain cases in which the
             people selected did not have any life insurance policy, so they could not
             give any positive feedback regarding the important criteria to be
             considered before taking an life insurance policy. So, this further reduced
             the actual number of respondents to 76 from 100.


          e) The product offered by different companies had different options and
             names in them, so at the time of comparison it became very difficult. The
             parameters for comparison were also different in the selected companies.
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        f) One of the important criteria that was selected by the respondents which
           they consider before taking an insurance policy was ‘Company Image’,
           but there was no parameter available to compare criteria like this between
           the companies.
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                          CHAPTER-II
               DATA ANALYSIS AND INETERPRETATION

                                       Table-2.1

             GLOBAL SCENARIO OF THE INSURANCE INDUSTRY
If we see the table-2.1 in terms of both the premium value and the total market share of
some of the leading countries operating in the Insurance sector, the following picture
emerges in front of us.



                   Country     Total Life Premium        Market
                                     (in $bn.)          Share in
                                                       percentage
                  US                   517.0              26.2
                  Japan                375.9              19.5
                  UK                   194.0              10.11
                  France               154.0              7.81
                  Italy                    91.7           4.65
                  Germany                  90.2           4.57
                  China                    39.5            2.1
                  Taiwan                   38.8           1.97
                  India                    20.1           1.08
                  Others               452.8              22.07


The above table shows that US is still the leader in Life Insurance sector, closely
followed by Japan. India’s share in the global market has doubled since 2000 (0.50%) to
2006 (1.08%), but the growth of china is the maximum from 0.79% in 2000 to 2.10% in
2006. The total premium received in life insurance sector has increased from $ 1,521 bn.
in 2000 to $ 1,974 bn. in the year 2006.
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                                  Chart-2.1

              Shares of different countries in Life Insurance


               Shares of different countries in Life Insurance



                                                                     US
                      452.8                   517                    Japan
                                                                     UK
                                                                     France
               80.1                                                  Italy
               38.8                                                  Germany
                                                                     China
               39.5
                                                                     Taiwan
               90.2                           375.9                  India
                 91.7 154                                            Others
                                 194



              Source: The Economic Times, dated – 20th July, 2006.
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                                         Table-2.2

                    Market share of LIC and Private Players

                       Market Players        Market share in
                                             percentage
                       Private players       28.44
                       LIC                   71.56
                       Total                 100



Interpretation:

LIC market share continued to decline in the period up to June 2007, it declined to
71.56% from 78.23% in the same period last year. On the other hand the market share of
the private players is continuously growing up; it increased to 28.44% from 21.77% in
terms of insurance premium.
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                               Chart-2.2

                Market share of LIC and Private Players



                 Market share of LIC and Private Players up to
                                  June 2007


                                              28.44%


                                                          Private Players
                                                          LIC



                  71.56%
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                                     Table-2.4.3
                          Market Share among Private players

               Private players       Market share in       Market share
                                      percentage             change in
                                                            percentage
               ICICI Prudential             29                   4

                    Bajaj Allianz           21                   1

                      SBI Life              10                   0
               HDFC Standard                 9                   1
                    Reliance Life            9                    0
                    Birla Sunlife            5                   -1
               Kotak Mahindra                3                   0
                 Old Mutual

                      Met Life               3                   1
                       Aviva                 3                   0
                      Tata AIG               3                   1
                   Max New York              2                   -4
                     ING Vysya               2                   -1
                   Bharti Axa Life           1                   0

                     Sahara Life             0                   0

                    Shriram Life             0                   -1

                    Private total           100


Interpretation:

ICICI PRUDENTIAL BECOMES THE MARKET LEADER AMONG PRIVATE
PLAYERS:

ICICI Prudential strengthens its position at the top of the heap by increasing its market
share by 4% in the month of Jan 2008, followed by Bajaj Allianze with 21% market
share. These two private players contribute 50% of the total insurance market among the
private players.
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                                Chart-2.3

                  Market Share among Private players


             Market share among private players        ICICI Prudential
                                                       Bajaj Allianz
                           5%
                                                       SBI Life
                    9%        3%                       HDFC Standard
             9%
                                3%                     Reliance Life
                                3%                     Birla Sunlife
       10%                                        2%   Kotak Mahindra
                                   3%
                                                       Met Life
                                5%                     Aviva
                                                  2%
                                                       Tata AIG
       21%                                        1%   Max New York
                                                  0%   ING Vysya
                          29%                          Bharti Axa Life
                                                  0%
                                                       Sahara Life
                                                       Shriram Life
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                                           Table-2.4
                        Sales Growth among Private players

                         Private players        Year to year growth
                                                    in sales in
                                                    percentage
                         ICICI Prudential               116

                          Bajaj Allianz                105

                             SBI Life                  138

                         HDFC Standard                  88
                          Reliance Life                335

                           Birla Sunlife               152
                         Kotak Mahindra                121
                           Old Mutual
                            Met Life                   125

                              Aviva                     60
                            Tata AIG                   100
                         Max New York                   40

                           ING Vysya                    74
                         Bharti Axa Life               362

                           Sahara Life                 238

                           Shriram Life                 91

                          Private total                119


Interpretation:

Private sector sales continued to be robust at 119% year to year (YoY), up from 118%
YoY last month. The month also saw LIC make up some lost ground by growing faster
than the system at 133% YoY. Among the larger players, Reliance, SBI Life and Birla
Sun Life continued to be the rising stars with the fastest YoY growth rates.
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                              Chart-2.4

                  Sales Growth among Private players
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                                         Table-2.5
            Various investment alternatives available to consumers

Let us see what are the various investment alternatives that are available to the people
and among that which are the most preferred one. Now, from the data collected from the
100 respondents which were surveyed through the questionnaire, the following
representation can be made:


                         Investment                  Total         Rank
                         Alternatives                score
                         Bank Deposits               6.75          I

                         Insurance                   6.46          II

                         Post office                 5.57          III

                         Gold & Silver               5.33          IV
                         Real Estate                 5.07          V

                         Mutual fund                 4.83          VI

                         Equity/Shares               3.84          VII
                         Public Provident            3.78          VIII
                         Fund(PPF)
                         Bond & Debentures           1.74          IX



Interpretation:

    From the above table-2.5 it can be seen that ranks for theses investment alternatives
   where analyzed by weighted average method. From this analyze we found Bank
   Deposits is the most preferred investment alternative among the people with the
   average of 6.75, secondly Insurance with the average of 6.46, followed by other
   investment alternatives like Post Office (5.57), Gold and Silver (5.33), Real Estate
   (5.07), Mutual Fund (4.83), Equity (3.84), PPF (3.78) and least preferred alternative
   is that Bond and Debenture (1.74).we understood from this analyze that people prefer
   the safe and secure investment alternatives like bank deposits, insurance, real estates,
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  than risky investment alternatives like bonds, equities etc.. The reason that can be
  attributed for the liking of people towards bank deposit is that people expect safety
  for their money they deposit even though there is less appreciation on their deposit.
  Secondly insurance, may be because that insurance provides both life cover as well as
  security to the holder of the policy and also to the family members of the insurance
  holders. Now a days insurance is also providing option to invest in the markets
  through plans like ULIP, which gives the holder both the life cover as well as an
  opportunity to earn income at the market rate. Then recently real estate is the major
  investment alternative among the people particularly among Erode, this is mainly due
  to the increase in land value and also good long term investment preference. Gold and
  silver also good investment alternative among people due to the frequent appreciation
  in the values of gold, next is that mutual fund which is also the preferable investment
  alternative due to low risk on their investment, and other alternatives which are not
  much preferred were equities, bonds etc. mainly due to the risk involved in it.
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                                            Chart-2.5
                    Various investment alternatives available to consumers



     Investment Alternative Preffered by people                  Bank Deposits

                                                                 Insurance
                    7   6.75
                           6.46
                                                                 Post office
                    6          5.575.33
                                      5.07                       Gold & Silver
                    5                     4.83
     Total scores




                    4                         3.84
                                                 3.78            Real Estate

                    3                                            Mutual fund
                    2                                 1.74
                                                                 Equity/Shares
                    1
                                                                 Public Provident
                    0                                            Fund(PPF)
                            Investment Alternatives              Bond &
                                                                 Debentures
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Segmentation of the respondents on the basis of certain important criteria:
Now, let us turn our attention towards the respondent who were covered under this study.
These respondents can be categorized on the basis of certain important criteria like age
group, annual income, life insurance policy holders and awareness of ICICI Prudential
Life Insurance in the following way


                                      Table-2.6
                                      Age Group


                      Age Group               No of          Percentage
                                           Respondent
                    Below 30 Yrs               50                 50
                     31-40 Yrs                 32                 32
                     41-50 Yrs                 16                 16
                       51-60                    2                  2
                    Above 60 Yrs                0                  0
                         Total                  100              100

Interpretation:

From this table-2.6 we can see that 50% of the respondent belonged to the age group of
below 30 years, followed by 32% who belonged to the age group between 31-40 years,
then 16% of respondents belong to 41-50 years and only 2% from the respondents belong
to 51-60 years but there is no respondent from the age group above 60.
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                                            Chart-2.6
                                           Age Group




                                      Age Group
                             50
                     50
                     45
                     40
                     35              32
       Respondents




                     30
                     25
                     20                       16
                     15
                     10
                      5                                  2       0
                      0
                          Below    31-40    41-50     51-60   Above
                          30 Yrs    Yrs      Yrs       Yrs    60 Yrs
                                          Age Group
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                                       Table-2.7
                                Annual Income Level

              Annual Income Level           No of           Percentage
                                         Respondent
                   Below 1 Lakh               33                33
                    1.01-3 Lakh               60                60
                    3.01-5 Lakh                4                 4
                   Above 5 Lakh                3                 3

                       Total                 100                100




Interpretations:

        From the above table-2.7 we can see that 33% of the respondents belonged to a
group which has an annual income of below 1 lakh, followed by highly 60% who
belonged to the group of annual income between 1-3 lakh, then 4% who have an annual
income between 3-5 lakh and 3% of respondent who have an annual income above 5
lakh.
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                                         Chart-2.7
                                  Annual Income Level


                                 Annual Income Level

                                          60
                        60

                        50
          Respondents




                        40
                                33
                        30

                        20

                        10                           4       3
                        0
                             Below 1   1.01-3   3.01-5   Above 5
                              Lakh      Lakh     Lakh     Lakh
                                       Annual income
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                                         Table-2.8
                             Hold Life Insurance Policy

                   Hold life insurance        No of       Percentage
                          policy           Respondent

                           Yes                  76            76

                           No                   24            24
                          Total                100            100




Interpretation:

Among the 100 respondents that were taken as a sample size, 76 of them had life
insurance policy that was either taken by him/her self or it was taken by their parents on
their name, while 24 of them did not have any kind of Life insurance policy from any
company.
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                               Table-2.8
                       Hold Life Insurance Policy




                      Hold Life Insurance Policy

                24%




                                                    Yes
                                                    No




                                             76%
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                                      Table-2.4.9
        Awareness about Joint venture between ICICI and Prudential



                  Awareness about              No of         Percentage
                  ICICI Prudential          Respondent


                         Yes                     47              47
                         No                      53              53

                        Total                   100              100



Interpretation:

   Now coming to the point of awareness among the people about ICICI Prudential Life
   Insurance, the response was very disappointing from the point of view of the
   company. Out of 100 respondents 53 respondents did not have the knowledge about
   the joint venture between ICICI bank with Prudential Plc of UK to form a first private
   sector insurance company in India called ICICI Prudential Life Insurance in
   December 2000, while the rest 47 had knowledge of the joint venture of Prudential by
   ICICI.
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                               Table-2.9
       Awareness about Joint venture between ICICI and Prudential




                       Awarness-ICICI Prudential




                                                         47%
                                                            Yes
         53%                                                No
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               2.10 Important criteria before taking an life insurance
On the basics of insurance policy:
   Now, let us see what criteria people consider most important before taking a life
   insurance policy (the criteria for the study have been mentioned before). Here, the
   highly important criterion as perceived by the people is rated as 5, if people perceived
   that is only important it is rated 4, if people perceived that it can be only neutrally
   important is rated as 3, then the least important criterion is being rated as 2 and if
   perceived that it is not important it is rated as 1(as there are 8 criteria that have been
   suggested under the research study). Here the number of respondent is only 76,
   because those 26 people who do not have any life insurance policy have been
   excluded from the purview of the study.


                                        Table-2.11


                                        Premium

                      Rating              No of           Percentage
                                       Respondent


                         5                   39               51.4
                         4                   31               40.8
                         3                    3                3.9
                         2                    3                3.9
                         1                    _                 _


                 Total Insurance             76               100
                 holders
                 Total non users             24
                    Total                   100
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                                       Chart-2.11


                                           Premium


                                             Prem ium


                             40   39
                             35
                                       31
               Respondents




                             30
                             25
                             20
                             15
                             10
                             5                   3           3
                                                                    0
                             0
                                  5    4        3        2          1
                                             Rating


Interpretation:

Now if we consider one of the criteria we can see that 51.4% of the respondent has rated
premium as the highly important thing that they consider before taking any insurance
policy from any company, and no body has rated it as the not important criterion. So, it
can be clearly interpreted that premium that the policy holder has to pay to continue
his/her policy plays a very important role before selecting the terms and conditions of the
policy and also the company from which the policy is to be taken.
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                                        Table-2.12
                                         Charges


                   Rating             No of           Percentage
                                   Respondent
                         5              17                22.4
                         4              46                60.5
                         3              12                15.8
                         2               1                 1.3
                         1               _                  _

              Total Insurance           76                100
              holders
              Total non users            24
                 Total                  100




   Interpretation:
Now if we consider the charges the customer has to pay to the insurance company like
Fund Management charges, administration charges etc. most of the people nearly 61%
respondent consider it as an important criterion which can dictate the terms before
deciding on whether to take the policy or not. But a few people (only 22.4% of the total
respondents), consider it to be the highly important criterion before taking the decision on
life insurance policy.
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                                      Chart-2.12


                                       Charges


                                      Charges


                        50        46
          Respondents




                        40

                        30

                        20   17
                                           12
                        10
                                                   1   0
                        0
                             5    4       3        2   1
                                       Rating
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                                       Table-2.13

                                      Policy Term

                          Rating             No of   Percentage
                                          Respondent
                             5                 29            38.1
                             4                 36            47.4
                             3                 10            13.2
                             2                  1             1.3
                             1                  _              _


                    Total Insurance            76            100
                    holders
                    Total non users            24
                       Total                  100


Interpretation:

The tenure of the policy i.e. the policy term depends on the policy holder but sometimes
the insurer can also influence the policy term by giving some additional benefits on
policies taken for a longer period of time or vice versa. In the study that was conducted
by us, we found out that nearly 48% of the respondents think that policy term offered by
the company is the important thing that one should consider before taking any life
insurance policy while 38.1% of the respondents think that it is the highly important thing
that one should consider before taking any life insurance policy.
projectsformba.blogspot.com

                                       Chart-2.13

                                      Policy Term



                                 Policy Term


                       40        36
                       35
                       30   29
         Respondents




                       25
                       20
                       15
                                          10
                       10
                        5                           1   0
                        0
                            5    4       3          2   1
                                      Rating
projectsformba.blogspot.com

                                        Table-2.14

                                      Rider Benefits

                          Rating             No of          Percentage
                                          Respondent
                             5                 18              23.7
                             4                 32              42.1
                             3                 21              27.6
                             2                  5               6.6
                             1                  _                _

                    Total Insurance            76               100
                    holders
                    Total non users             24
                       Total                   100


Interpretation:

Rider benefits are the additional benefits that the insurer company provides to its
customers for attracting them. Things like accidental benefit, critical illness benefit, and
permanent disablement benefit are provided as a rider with the original policy with a
payment of some additional premium from the point of view of the customers. According
to the study nearly 42% of the respondents think that it is an important criterion before
selecting an insurance policy. On the other hand 27.8% and 23.7% of the respondent feel
it neutrally and the most important criterion, which indicates that people are not much
interested in additional benefits.
projectsformba.blogspot.com

                                         Chart-2.14

                                    Rider Benefits




                                    Rider Benefits

                          35         32
                          30
            Respondents




                          25
                                                21
                          20   18
                          15
                          10
                                                      5
                           5
                                                              0
                           0
                               5     4         3      2   1
                                            Rating
projectsformba.blogspot.com

                                         Table-2.15

                                Bonus and Interest Paid

                     Rating                No of          Percentage
                                        Respondent
                        5                    40               52.6
                        4                    24               31.6
                        3                     8               10.6
                        2                     2                2.6
                        1                     2                2.6

             Total Insurance                 76               100
             holders
             Total non users                  24
                Total                        100

Interpretation:

Bonus and interest are paid by the companies to the policy holder for the policies which
are with profit policy i.e. if a person takes a with profit policy, he/she also becomes liable
to get a certain percentage of the profit that the company makes in a certain financial
year. 53% of the respondents consider it as the highly important criterion before taking a
life insurance policy and only 2.6% of respondents considered it to not important.
projectsformba.blogspot.com

                                         Table-2.15

                                 Bonus and Interest Paid




                                  Bonus & Interest
                            40
                       40
                       35
         Respondents




                       30
                       25            24
                       20
                       15
                       10                       8
                        5                             2    2
                        0
                            5        4        3       2    1
                                           Rating
projectsformba.blogspot.com

                                       Table-2.16

                              Services (Pre and Post Sales)


                       Rating              No of         Percentage
                                        Respondent
                          5                 26               34.3
                          4                 35               46.0
                          3                 11               14.5
                          2                  2                2.6
                          1                  2                2.6

                  Total Insurance            76              100
                  holders
                  Total non users            24
                     Total                  100



Interpretation:

While conducting the study we have met many respondents who think that many of the
companies provide them satisfactory services only till the policy is being taken by the
respondent, but after that if there is any requirement from the point of view of the
customer, the company does not pay the same attention to them as they had paid earlier.
So, nearly 34% of the respondents feel that services (both pre and post sales) provided by
the company is highly important to consider before undertaking any kind of life insurance
policy.
projectsformba.blogspot.com

                                        Chart-2.16

                                 Services (Pre and Post Sales)



                                      Services
                                   35
                       35
                       30
                            26
                       25
         Respondents




                       20
                       15
                                           11
                       10
                       5                             2    2
                       0
                            5     4        3         2   1
                                        Rating
projectsformba.blogspot.com

                                         Table-2.17

                                       Accessibility
                        Rating                No of          Percentage
                                           Respondent
                           5                    21               27.6
                           4                    47               61.8
                           3                     6                8.0
                           2                     2                2.6
                           1                     _                 _

                  Total Insurance               76                100
                  holders
                  Total non users               24
                     Total                     100


Interpretation:

The term accessibility here refers to the easy availability of the facilities that the company
provides to its customers. The facilities may be regarding information about the company
and the various products offered by them, it can be made available through internet and
other media. According to the study nearly 62% of the respondents think it is highly
important, while 2.6% of them feel that it is the least important and no respondent
considers that it is not important that one may consider before taking any life insurance
policy.
projectsformba.blogspot.com

                                        Chart-2.17

                                    Accessibility


                                    Accessibility

                          50        47
                          45
                          40
                          35
            Respondents




                          30
                          25   21
                          20
                          15
                          10                      6
                           5                          2
                                                          0
                           0
                               5    4         3       2   1
                                           Rating
projectsformba.blogspot.com

                                       Table-2.18

                                    Company Image
                        Rating              No of          Percentage
                                         Respondent
                           5                  41                54
                           4                  24               31.6
                           3                  10               13.1
                           2                   1                1.3
                           1                   _                 _

                  Total Insurance             76                100
                  holders
                  Total non users              24
                     Total                    100



Interpretation:

Company image also plays an very important role in influencing the decision of a
prospective customer while taking the final decision. From the study it has been found
out that nearly 54% and 32% of the people feel that it is the highly and most important
thing, which has higher influence than any other criterion that influences one’s decision
regarding taking of life insurance policy, while for 1.3% of people it does not provide any
significant importance in their decision making.
projectsformba.blogspot.com

                                            Chart-2.18

                                          Company Image


                                            Com pany Im age

                                 45
                                      41
                                 40
                                 35
                   Respondents



                                 30
                                 25           24
                                 20
                                 15
                                                      10
                                 10
                                  5                           1    0
                                  0
                                      5       4      3      2     1
                                                   Rating




  So, to conclude from the above chart-2.18, it can be said that the company image that
  the policy holder has to pay for taking any life insurance policy, plays a highly
  important role in influencing their decision, followed by the factors like premium,
  bonus and interest paid by the company, policy term and so on. So, those companies
  who are having brand image or name as well as providing all other complementary
  services, have a better chance of succeeding in the life insurance sector in comparison
  to other companies who are in the same field.
projectsformba.blogspot.com

        To further analyze the perception of the respondents about what they think as the
important criteria before taking an insurance policy, I have taken two independent
parameters, namely:
           a) Age of the People.
           b) Annual Income of the People.

After taking these two independent parameters, the analysis is being made to see which
age group people think what criterion is important or what is the difference in perception
among the people who have annual income which are significantly different from each
other. The number of respondents taken here is only 76 as those people who are not
having any life insurance policy have been excluded from the purview of the study and
these 76 respondents were allowed to rate the criteria according to their importance.
(Rating 5 represents highly important,4 represents only important,3 represents neutrally
important,2 represents least important and 1 represents not important).


   2.19 Criteria before taking a life insurance policy
   On the basics of Age group:
   For conducting the study the ages of respondents are divided into five categories,
   those are as follows:
           a) Less than 30 years.
           b) Between 31- 40 years.
           c) Between 41 – 50 years.
           d) Between 51 - 60 years.
           e) More than 60 years.
projectsformba.blogspot.com

                                        Table-2.20
                                 Age Group – Premium


  Age group         5            4           3           2          1          Total
                                                                            Respondent
  Below 30           20         11           2           1          _           34
    Yrs           (58.8%)     (32.4)       (5.9)       (2.9)                  (100%)
 31-40 Yrs           14         10           1           1          _           26
                  (53.8%)    (38.6%)      (3.8%)      (3.8%)                  (100%)
 41-50 Yrs           7          7            _           1          _           15
                  (46.7%)    (46.7%)                  (6.6%)                  (100%)
 51-60 Yrs          _            1           _           _          _            1
                              (100%)                                          (100%)
 Above 60           _            _           _           _          _               _
   Yrs
   Total            41          29           3           3          _           76
Respondent        (54%)       (38.2)       (3.9)       (3.0)                  (100%)


Interpretation:
Now, from the above table-2.20 we can see that nearly 59% of the people who belong to
the age group of less than 30 consider premium as the highly important criterion in
comparison to only 54% of the people who belong to an age group of 30-40. So, people
who have started their professional life consider more about the money that has to be
spent on the insurance policy in comparison to the people who are working for a
relatively longer period of time. Again, if we consider those people 41-50 years who have
come to the important stage of their working life, we can see that these people also thing
that the expense regarding the premium to be paid is the highly important criteria for
them because they likely to spend or save their money on medical, education etc..
projectsformba.blogspot.com

                                           Chart-2.20
                                       Age Group – Premium




                                  Age group-Premium

    Above 60 Yrs 0
                                                                              5
             51-60 Yrs 00
                       1
 Age Group




                                                                              4
             41-50 Yrs       7         7   00
                                           1                                  3
                                                                              2
             31-40 Yrs           14             10      110
                                                                              1
   Below 30 Yrs                       20                11         210

                         0            10         20           30         40
                                           Respondents
projectsformba.blogspot.com

                                      Table-2.21

                               Age Group – Charges


Age group         5            4           3            2           1         Total
                                                                           Respondent
 Below 30         5            22          7            _           _          34
    Yrs        (14.8%)      (64.7%)     (20.5%)                              (100%)
 31-40 Yrs        4            18          3            1           _          26
               (15.4%)      (69.3%)     (11.5%)      (3.8%)                  (100%)
 41-50 Yrs        8             5          2            _           _          15
               (53.4%)      (33.3%)     (13.3%)                              (100%)
 51-60 Yrs        _             1          _            _           _           1
                            (100%)                                           (100%)
 Above 60         _             _          _            _           _           _
    Yrs
   Total          17           46          12           1           _           76
Respondent     (22.4%)      (60.5%)     (15.8%)      (1.3%)                   (100%)


Interpretation:

Now, if we consider the different charges (like Fund management charges, administration
charges etc.) that the companies take from their policy holders, we can see that people
who are having age less than 30 years and those who belong to the group of 30-40 years
think in the same way in this matter. Nearly 15% of both the groups consider these
charges are highly important, but not as much as they consider the cost relating to the
premium they have to pay to the company.
projectsformba.blogspot.com

                                                  Chart-2.21

                                        Age Group – Charges


.




                                        Age group-Charge

       Above 60 Yrs 0
                                                                                 5
                51-60 Yrs 00
                          1
                                                                                 4
    Age Group




                41-50 Yrs           8    5    20                                 3
                                                                                 2
                31-40 Yrs       4            18             3 10
                                                                                 1
      Below 30 Yrs              5                 22                7   0

                            0           10             20          30       40
                                                  Respondents
projectsformba.blogspot.com

                                          Table-2.22
                                Age Group – Policy Term


 Age group           5            4             3           2          1          Total
                                                                               Respondent
  Below 30           10            14          9            1          _           34
    Yrs           (29.4%)       (41.2%)      (26.5)      (2.9%)                  (100%)

 31-40 Yrs           10            15           1           _          _            26
                  (38.5%)       (57.7%)       (3.8)                               (100%)
 41-50 Yrs            8             7           _           _          _            15
                  (53.3%)       (46.7%)                                           (100%)
 51-60 Yrs            1             _           _           _          _             1
                  (100%)                                                          (100%)
 Above 60             _           _             _           _          _             _
    Yrs
   Total             29            36           10          1          _             1
Respondent        (38.2%)       (47.4%)      (13.1%)     (1.3%)                   (100%)


Interpretation:
The policy term mainly depends on the wishes of the policy holder, so here we can see
that only 29% and 41% of the people whose age is below 30 years, think this is highly
important criterion, but people who a little bit more experienced know that insurer
companies sometime provide extra benefits for longer policies in comparison to policies
which have a shorter span of life, that’s why nearly 39% and 58% of people belonging to
the age group of 31-40 years think that it is a highly important criterion which affects the
decision regarding insurance.
projectsformba.blogspot.com

                                             Chart-2.22
                                   Age Group – Policy Term



                                  Age group-Policy Term

    Above 60 Yrs 0
                                                                                5
             51-60 Yrs 10
                                                                                4
 Age Group




             41-50 Yrs       8           7    0                                 3
                                                                                2
             31-40 Yrs       10                   15        10
                                                                                1
    Below 30 Yrs             10                   14             9    10

                         0          10                 20        30        40
                                             Respondents
projectsformba.blogspot.com

                                      Table-2.23
                            Age Group – Rider Benefits
Age group         5            4            3            2            1          Total
                                                                              Respondent
Below 30          6            15            8           5            _           34
   Yrs          (17.6)      (44.2%)      (23.5%)      (14.7%)                   (100%)
31-40 Yrs         6            10           10           _            _           26
                (23%)       (38.5%)      (38.5%)                                (100%)
41-50 Yrs         5             7            3           _            _           15
               (33.3%)      (46.7%)       (20%)                                 (100%)
51-60 Yrs         1             _            _           _            _            1
               (100%)                                                           (100%)
 Above 60         _            _            _            _            _            _
    Yrs
   Total          18           32           21           5            _           76
Respondent     (23.7%)      (42.1%)      (27.6%)      (6.6%)                    (100%)


Interpretation:

   Mostly all the respondents of different age group are not interested in rider benefits,
   nearly 42% of the age group below 30, 31-40 and 41-50 years think that it is
   important ,where as only 23% of all age group think that it is highly important. So,
   most of them think that rider benefits are not so important and it does not influence
   their decision in a broad way.
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance
A project report on customer perception towards insurance

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A project report on customer perception towards insurance

  • 1. projectsformba.blogspot.com CHAPTER I INTRODUCTION Visit projectsformba.blogspot.com for more project reports, notes etc. 1.1 INTRODUCTION OF THE STUDY “The Business of Insurance is related to the protection of the economic values of the assets”. Every human being has the tendency to save to protect him from risks or events of future. Insurance is one form of savings where in people try to assure themselves against risks or uncertainties of future. It is assurance against risks or events or losses. People can save their earnings either in the form gold, fixed assets like property or in banking and insurances. All the savings of people of a country account for gross domestic savings. In India, although savings rate is high but people prefer to invest either in gold or fixed assets so that they can make money out of it. Hence insurance sector is still untapped in India.
  • 2. projectsformba.blogspot.com 1.2 INDUSTRY PROFILE OVERVIEW OF CURRENT INSURANCE INDUSTRY 1. WHAT IS INSURANCE? Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance is a safeguard against uncertain events that may occur in the future. It is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks. It is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premium to provide security for the purpose. Loss is paid out of the premium collected from people and the insurance companies act as trustees to the amount so collected. These companies have proposal forms which are filled to give details of insurance required. Depending upon the answers in the proposal form insurance companies assess the risk and decide on the premium. Insurance companies are risk bearers. They underwrite the risk in return for an insurance premium. the function of insurance is to provide protection, prevent losses, capital formation etc. hence insurance can be defined as a tool in which a sum of money as a premium is paid by the insured in consideration of the insurer’s bearing the risk of paying a large sum .it may also be defined as a contract wherein one party (insurer) agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given contingency against which insurance is required. Insurance industry commands massive funds through sales of insurance products to large number of clients. Insurers also create liabilities and commit themselves to compensate for losses occurring to the policyholders on future date. It also plays an important role in process of capital formation. 2. NATURE OF INSURANCE
  • 3. projectsformba.blogspot.com a) Risk sharing and risk transfer: Insurance is used to share the financial losses that might occur to an individual or his family on the happening of specified events. The loss arising from such events are shared by all the insured in the form of premium. Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250 owners come together and contribute Rs.800 each, the common fund would be Rs200000.This is enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread over 250 house owners of the village. b) Risk assessment in advance: Insurance companies are risk bearers. They assess the risk before insuring to charge the amount of premium. c) Its not gambling or charity: The uncertainty is changed to certainty by insuring property and life because the insurer promises to pay a definite sum at damage or death. Insurance is antithesis of gambling. Failure of insurance amounts to gambling because the uncertainty of loss is always looming. Moreover insurance is not possible without premium. So it is different from charity because charity is given without consideration. d) Huge number of insured people: It is essential to insure larger number of people or property to make cost of insurance less consequently premium would also be less. e) Assists in capital formation: Insurance provides capital to society. Accumulative funds are invested in productive channels. 3. SEMANTICS 1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional decline in or disappearance of value arising from contingency. 2. Policy: It is the document which embodies the insurance contract 3. Whole life policy: It is the policy under which the amount of policy will be paid only on death of the insured. Premiums may be payable throughout the life or for a limited period.
  • 4. projectsformba.blogspot.com 4. Endowment policy: Endowment policies entitle the insured to receive the amount of the policy on his reaching a certain age and premiums also stops. If death occurs earlier, amount of the policy will be paid at that time and payment of premium will also stop at that time. 5. Claim: It is the amount which an insurer has to pay against a policy. 6. Reinsurance: It refers to placing a part of the risk by an insurer with another insurer. The object is to reduce the possible loss to be borne by the original insurer, who pays premiums at the ordinary rates to the reinsurer. Reinsure must pay commission to the original insurer. 7. Premium: A periodic payment made on an insurance policy. 8. Insurance penetration: It is defined as insurance premium as a share of gross domestic product. 9. Insurance density: Insurance density is defined as per capita expenditure on insurance premium i.e. premium per capita. 10. Actuary: The actuary is a specialist who combines an understanding of risks and mathematical technique to develop financial products to manage these risks, price these products. He helps in designing insurance plans and then evaluates the financial risk of the company which it takes while selling an insurance policy. 4. TYPES OF INSURANCE Insurance is broadly divided in two segments, based on the nature of insurance, those are: 1. Life Insurance & 2. Non-Life Insurance or General Insurance. It can be again subdivided into the following categories: a) Fire Insurance. b) Marine Insurance. c) Social Insurance & d) Miscellaneous Insurance. (Health insurance, Liability Insurance etc….)
  • 5. projectsformba.blogspot.com 5. HISTORY OF INSURANCE GLOBAL For now we know the meaning of insurance, different types of insurance. Now let us know the history and reasons for and behind different types of insurance. Insurance has existed for thousands of years. The first ever type of insurance was Property Insurance. It became popular about 3000 BC in China. It all started when Chinese merchants, as well as their investors, wanted to ensure that they would see a profit from their goods that they shipped overseas. In the event that a ship was lost at sea, an insuring partner would reimburse the owners of the ship and goods. To pay for the loss the merchant would be sold into slavery to the insurer until the debt was repaid. This was so because, a merchant could not afford to pay for the lost goods or even to buy a ship unless someone invested. Property insurance was also seen in Babylon as well. In Babylon, merchants and investors entered into a contract, in which the supplier of money for a trade agreed to cancel the loan if the trader was robbed of his goods. The trader who borrowed the money paid an extra amount for this protection in addition to the usual interest. As for the lender, collecting these premiums from many traders made it possible for him to absorb the losses of the few. Later this contract was extended to include provisions for a family's home and even the death of the insured, where life insurance came into existence. Slowly this concept started to spread across other places like Greek, Roman. Since ancient times, communities have pooled some of their resources to help individuals who suffer loss. Like, about 3500 years ago, Moses instructed the nation of Israel to contribute a portion of their produce periodically for "the alien resident and the fatherless boy and the widow." Later the origin of credit insurance, which was included in the Code of Hammurabi, a collection of Babylonian laws said to predate the Law of Moses. Credit insurance means, in ancient times the ship owners obtained loans from investors to finance their trading expeditions. In case, if a ship was lost, the owners were not responsible to pay back the loans to the investors. The risk to the lenders was covered by the interest paid by numerous ship owners, since many ships returned safely.
  • 6. projectsformba.blogspot.com By the middle of the 14th century, marine insurance was one of the most popular types of insurance among nations of Europe. Things changed dramatically in the 17th century in Europe. In 1666, the Great Fire of London bought the need for fire insurance .The Great Fire of London burned for four days and nights. It destroyed 436 acres, 13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom House, the Royal Exchange and dozens of other public buildings. Only six people were victims in the flames, but hundreds died from shock and exposure. By 1688, Edward Lloyd was running a coffeehouse in London. Where, London merchants and bankers met informally to do business. There financiers who offered insurance contracts to seafarers wrote their names under the specific amount of risk that they would accept in exchange for a certain payment, called premium. These insurers came to be known as underwriters. Finally, in 1769, Lloyd's became a formal group of underwriters that in time grew as an insurance company. The concept of insurance developed at a fast pace with the growth of British commerce in the 17th and 18th century. The first stock companies to engage in insurance were chartered in England in the year 1720. In 1735, the first insurance company in the American colonies was founded at Charleston. Later in the year 1787, fire insurance corporations were formed in New York. Then later in the year 1759, the life insurance corporation was started in Philadelphia, America. The New York fire which occurred in the year 1835 was the main reason to draw attention to create reserves to meet unexpected losses. In the year 1837, Massachusetts was the first state to require companies by law to maintain such reserves. After 1840, life insurance entered a boom period. The Workmen's Compensation Act of 1897 in Britain required employers to insure their employees against industrial accidents. Public liability insurance, fostered by legislation, made its appearance in the 1880s.It attained major importance with the advent of the automobile. Until the 1950s, most insurance companies in the United States were restricted to provide only one type of insurance, but then legislation was passed to permit fire and
  • 7. projectsformba.blogspot.com casualty companies to underwrite several classes of insurance. Many firms have since expanded and also were responsible for many mergers. From this brief accounting of history we can see how insurance came into existence. Fortunately for us we no longer have to sell ourselves into slavery if our car is stolen nor we have to be scared of losses due to absence of reserves. However we can be confident that we will be compensated for our loss. Without people wanting to secure their investments and great tragedies throughout history we may not have insurance as we know it today resulting in peace of mind. 6. HISTORY OF INSURANCE INDUSTRY IN INDIA The insurance industry in India over the past century has gone through big changes. In India this industry reveals the 360 degree turn. 360 degree turn means that it started in India from being an open competitive market to nationalization and back to a liberalized market again. Insurance industry in India started as a fully private system with no restriction on foreign participation in the Nineteenth Century. Before independence, a few British insurance companies dominated the Market. Life insurance was first set up in India through a British company called the Oriental Life Insurance Company in 1818, followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829.All of these companies operated in India but did not insure the lives of Indians. They were there insuring the lives of Europeans living in India. Some of the companies that started later did provide insurance for Indians. But, they were treated as "substandard" and therefore had to pay an extra premium of 20% or more. The first company that had policies that could be bought by Indians with "fair value" was the Bombay Mutual Life Assurance Society starting in 1871. The first general insurance company, Triton Insurance Company Ltd., was established in 1850. It was owned and operated by the British. The first general insurance company was the Indian Mercantile Insurance Company Limited set up in Bombay in 1907.By 1938; the insurance market in India had nearly 176 companies (both life and non-life).
  • 8. projectsformba.blogspot.com After the independence, the industry went to the other extreme. It became a state- owned monopoly. The industry started to witness a problem like fraud. Hence many regulations were put in place to reduce and control the problems in the industry. After which Insurance was nationalized. In 1956, the then finance minister S. D. Deshmukh announced nationalization of the life insurance business and then the general insurance business was nationalized in 1972. Only in 1999 private insurance companies have been allowed back into the business of insurance with a maximum of 26% of foreign holding.
  • 9. projectsformba.blogspot.com 7. INDIAN SCENARIO INDIAN INSURANCE INDUSTRY LIFE NON LIFE INSURANCE INSURANCE Public Private Public Private Sector (1) Sector (15) Sector (4) Sector (9) 8. LIFE INSURANCE After the entry of new players and increase in the penetration levels, could see the insurance sector cross the Rs 2,00,000-core mark in business by 2010.The current size of the sector is estimated to be at Rs 50,000 crore, which has seen a compound annual growth rate (CAGR) of around 175 percent in the last few years. The insurance sector, both life and non life, is likely to grow by over 200 percent, and private insurers are expected to achieve a growth rate of 140 percent as a result of aggressive marketing technique. It added that state owned insurance companies are likely to be 35-40 percent. On account of intense marketing strategies adopted by the private insurance players, the market share of state-owned insurance companies like GIC, LIC and others has come down to 70 percent in last 4-5 years from over 97 percent. Despite regulation,
  • 10. projectsformba.blogspot.com the private players are offering 35 percent rate of return to is policy holders against 20 percent by public-sector insurers. The industry body also noted that India’s life insurance premium is 1.8 percent as a percentage of GDP whereas it is 5.2 percent in the US, 6.5 percent in the South Korea. The services sector offers immense opportunities for expansion opportunities for expansion opportunities and the rural market, also, offers tremendous growth opportunities for insurance companies. 9. GENERAL INSURANCE General insurance in India has been expecting growth except in some portfolios like motor insurance, fire and engineering. These portfolios are still under tariff- this means that premium depends on a fixed predetermined rate structure. In India, GDS as a proportion of GDP at current prices increased from 26.1% in 2002-03 to 28.1% in 2003-04.house hold sector continued to be the major contributor to GDS at 24.3% in 2003-04.this can be attributed to soft interest rates prevailing in housing sector. General Insurance has low market penetration. It is 1.95% and ranks 51st. However in collection of premium it is ranked 23rd. The ratio of the premium collected to that of GDP is 0.58. The main reason for the general insurance industry to perform very poorly was because of the slow settlement of claims. Moreover the rates of claim in India were highest in the world. It was 70 percent compared to 40 percent internationally. This meant that out of 100 people who had insured their commodities 70 claimed for a loss or damage. The main reason for the lack of demand for general insurance is that people consider it as an unnecessary expenditure. However it must be noted that the general insurance has been earning consistent profits and has an efficient dividend paying record accompanied by a steady growth in its financial resources. The industry is recognized as one of the largest financial Institutions in the country. Some of the private players in this sector are- ICICI – Lombard, Reliance, Royal-Sundaram, Chholamandalam etc.
  • 11. projectsformba.blogspot.com 10. PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR The different private players in the life insurance sector and their associations with foreign companies are being given below: COMPANY INDIAN FOREIGN TOTAL FDI FOREIGN PROMOTER/PARTNER INSURER CAPITAL (%) CAPITAL (RS MN.) (RS MN.) AMP RELIANCE None 2,170 0 0 SANMAR GROUP(ADAG) Aviva Life Dabur Aviva (UK) 4,590 26 1193.4 Bajaj- Bajaj Auto Allianz 3680 26 960 Allianz (Germany) Birla Sun Aditya Birla Group SunLife (Canada) 4,000 26 1,040 Life HDFC HDFC StandardLife 2,500 18.9 470 Standard (UK) ICICI ICICI Bank Prudential (UK) 10,850 26 2,820 Prudential ING Vysya Vysya Bank ING Ins. 4,400 26 680 (Netherlands) Kotak Kotak Mahindra Bank OldMutual (South 2,600 26 680 Mahindra Africa) Old Mutual Max Max India NewYorkLife 5,000 26 1,300 Newyork (US) Met Life J&K Bank Met Life (US) 3,550 26 920 Sahara Life Sahara India None 1,000 0 0 Ins. I SBI Life SBI Cardiff (France) 3,500 26 910
  • 12. projectsformba.blogspot.com TATA AIG TATA Group AIG (US) 3,810 26 990 Shriram Shriram Sanlam Life Ins. Bharti AXA Bharti Group AXA(Australia) Some of the new companies who are waiting to come in to the life insurance sector are: a. IDBI-FORTIS. b. Syndicate Bank
  • 13. projectsformba.blogspot.com 11. CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN ECONOMY Some surveys have predicted that India and China will play a very vital role in the years to come. Indian economy can be termed as an emerging economy as it is doubling its GDP in 3 to 5 years and moreover it is not dependent on any particular sector for its GDP. If we look at the GDP of the Indian economy very closely over the years, we can easily come to know the changing structure of the economy. We can also come to know the changing contribution of the various sectors like agriculture, manufacturing and the service sector. In the financial year 1993-94, agricultural sector contributed to 31%, manufacturing accounted to 26.3% and the service sector contributed to 42.7% of the total GDP of the country. Thus over the years as India became an emerging economy in 2003-04 manufacturing sector contributed for 21.7 %, manufacturing contributed for 26.8 whereas service sector contributed for 51.4% of the total GDP. There has been 7.5% growth in the total GDP of the country and is estimated to grow at 8.0% in 2006-07. The Indian economy has shown signs of strong performance despite a rise in oil prices, high inflation rate and abnormal rains in many parts of the country. The overall growth of the Indian economy has been equally supported by all the three sectors of the economy, i.e. the agriculture, manufacturing and the service sector. Insurance, together with the banking sector, contributes to about 7.3 % of the total GDP of India, and the gross premium collected contributes to about 2% of the total GDP of the country The insurance sector in India has completed 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 200 years.
  • 14. projectsformba.blogspot.com 12. GOVERNMENT POLICIES REGARDING LIFE INSURANCE Insurance Regulatory and Development Authority (IRDA) 1999 Reforms in the insurance sector were initiated with the passage of the IRDA bill in December 1999.it was set up as an independent body and it has been able to frame globally compatible legislations. The IRDA was set up to protect the interests of holders of insurance policies ,to regulate ,promote and insure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. This act extends to whole of India. With the establishment of this act, government amended Insurance act 1938, Life Insurance Act 1956 and General Insurance Act 1972. IRDA was formed on the recommendations of Malhotra Committee. In 1999 government of India has set up Malhotra Committee to examine the structure of insurance industry and recommend changes, under R.N Malhotra –former governor of RBI.
  • 15. projectsformba.blogspot.com 1.3 COMPANY PROFILE The Industrial Credit and Investment Corporation of India Limited (ICICI) was formed in 1955 which is incorporated at the initiative of the World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI was also among the first Indian companies to raise funds from international markets. 1. WHAT IS ‘ICICI GROUP’? We are a part of the renowned ICICI Group, a diversified universal banking group, with a track record of over 50 years in a variety of financial services. ICICI was formed in 1955, as a result of the focused efforts of the World Bank, the Government of India and the representatives of Indian Industry. Today, ICICI Bank has grown to become India’s second largest bank, with over 24 million customers worldwide. It is also the first bank from Asia (excluding Japan) to be listed on the NYSE. ICICI Bank is a truly global bank, with presence at key locations across the globe in Bahrain, Bangladesh, Belgium, Canada, China, Dubai, Hong Kong, Indonesia, Malaysia, Russia, Singapore, South Africa, Sri Lanka, Thailand, UK, USA and Quatar. ICICI Group’s expertise spans a vast range of financial services, including banking, broking, mutual funds, insurance, home loans, venture funds and much more. The Group is the largest consumer credit provider and the biggest private sector, life and general insurer in India. Expertise across a vast range of products. All blended to bring you seamless financial solutions that ensure you have the advantage in every financial decision. Wherever you may be in the world.
  • 16. projectsformba.blogspot.com 2. STRUCTURE OF ‘ICICI GROUP’ 3. OBJECTIVES OF ICICI GROUP TRUST We view each client relationship as a “partnership for success”. We regard your financial needs as our own and aim to achieve your investment goals with you. We put our best resources behind you to ensure that your investment objectives are more than met. AGILITY We seek to deliver superior value to you. We respond quickly and efficiently to market opportunities, and offer the most apt financial solutions so that you can reap the best possible benefits.
  • 17. projectsformba.blogspot.com INNOVATION We believe that the cornerstone of success in today’s competitive environment is Innovation. We seek newer opportunities constantly, to fulfill your emerging needs and wants. 4. ICICI BANK ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00 billion (US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion for the nine months ended December 31, 2007. ICICI Bank is second amongst all the companies listed on the Indian stock exchanges in terms of free float market capitalization*. The Bank has a network of about 955 branches and 3,687 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its 5. COMPANIES UNDER ‘ICICI BANK’ A) ICICI PRUDENTIAL AMC AND TRUST: ICICI Prudential Asset Management Company enjoys the strong parentage of prudential plc, one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a well-known and trusted name in financial services in India. ICICI Prudential Asset Management Company, in a span of just over eight years, has forged a position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset management companies in the country with assets under management of Rs. 37,906.24
  • 18. projectsformba.blogspot.com crore (as of March 31, 2007). The Company manages a comprehensive range of schemes to meet the varying investment needs of its investors spread across 68 cities in the country. Key Indicator: During the year march 1998 Asset Under Management was Rs160 cores with only two funds managed, as on February 29, 2008 now it raised up to Rs 62,008.95 cores with 35 funds. B) ICICI SECURITIES – INDIA’S LEADING INVESTMENT BANK A subsidiary of ICICI Bank - the largest and most recognized private bank in India – ICICI Securities Ltd is premier Indian Investment Bank, with a dominant position in its core segments of its operations - Corporate Finance including Equity Capital Markets Advisory Services, Institutional Equities, Retail and Financial Product Distribution With a full-service portfolio, a roster of blue-chip clients and performance second to none, we have a formidable reputation within the industry. The Corporate Finance team regularly ranks highest among the leading capital markets league tables and recently topped the Prime Database League tables for funds mobilized through equity instruments in the first half of CY 07. ICICI Securities Inc., the step down wholly owned US subsidiary of the company is a member of the National Association of Securities Dealers, Inc. (NASD). As a result of this membership, ICICI Securities Inc. can engage in permitted activities in the U.S. securities markets. These activities include Dealing in Securities and Corporate Advisory Services in the United States and providing research and investment advice to US investors. ICICI Securities Inc. is also registered with the Financial Services Authority, UK (FSA) and the Monetary Authority of Singapore (MAS) to carry out Corporate Advisory Services and Dealing in Securities.
  • 19. projectsformba.blogspot.com C) ICICI VENTURE ICICI Venture is one of the largest and most successful private equity firms in India with funds under management in excess of USD 2 billion. ICICI Venture, over the years has built an enviable portfolio of companies across sectors including pharmaceuticals, Information Technology, media, manufacturing, logistics, textiles, real estate etc thereby building sustainable value. It has several “firsts” to its credit in the Indian Private Equity industry. Amongst them are India’s first leveraged buyout (Infomedia), the first real estate investment ( Cyber Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs) and the first ‘royalty-based’ structured deal in Pharma Research & Development (Dr Reddy’s). ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services group in India. D) ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED ICICI Lombard General Insurance Company Limited is a 74:26 joint venture between ICICI Bank Limited and the Canada based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001.
  • 20. projectsformba.blogspot.com E) ICICI PRUDENTIAL LIFE INSURANCE COMPANY ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 37.72 billion (as on February, 2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the nine months period April 1 to December 31, 2007, the company garnered new business weighted premium of Rs. 4,586 crore and has underwritten around 18 lakh policies during the period. The company has assets held over Rs. 28,000 crore. ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
  • 21. projectsformba.blogspot.com a) VISION To be the dominant Life, Health and Pensions player built on trust by world-class people and service. This we 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 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. b) VALUES Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.
  • 22. projectsformba.blogspot.com c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED Branches: ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 945 branches in addition to 550 micro-offices and an advisor base of 270,000. Distribution Network: There are four different ways of distributing a Life insurance product namely; 1. Agents (Financial Advisors):- Anybody possessing the minimum qualification of 10+2 after completing 100 hrs of training from the training institute approved by IRDA can sell life insurance products of any particular company which has sponsored him to take the training. This is the most popular distribution channel. 2. Corporate Agents Any corporate may apply for license to sell insurance after complying with the requirements of IRDA. 3. Bancassurance If the corporate agent is a bank, then it is known as bancassurance. Banks can sell the policies to their existing as well as prospective clients. This is becoming quite popular these days and the bank earns huge fund based income. Bancassurance has 1% share in total premium collection in 2004-05. 4. Broker They are like corporate agents with only difference that they can sell the products of more than one insurance company. Departments: The various departments that can be seen in an insurance organization and that has been observed by me are as follows: a) Marketing Department: This department mainly deals with the marketing and promotion part of the Insurance Company. They spend most of their time in
  • 23. projectsformba.blogspot.com formulating strategies to make their products known to the common people and to promote the same in a easy and cost effective way. b) Sales Department: This department mainly deals with the sales part of the Insurance Company; the department includes designations like Sales Manager and Financial Advisor who personally contacts with people for performing the task of sales of various products. c) Accounts/ Financial Department: This department has the task of keeping track of the various expenses incurred by the various other departments of the organization and also performs the task of allocating various funds to different departments according to their requirements. d) Human Resource Department: This department is handled by the Human Resource manager of the company. The function of this department involves the well being of the employees of the company, I,e, to see whether there is employee grievance in the organization or not and if it is there what are the possible causes for that and also try to find out solutions for the same if possible. e) Investment Department: This department deals with the task of investing the money of the policy holders in such way that will ensure both safety of the money and also a steady return on the same. The task of this department is very difficult as it deals with the money given by the policy holders, so it requires lot of thinking on the part of the personnel of this department before deciding where to invest the money. f) Actuarial Department: This department is under the supervision of an Actuary who decides the premiums and charges to be taken from the policy holder on the basis of certain information’s (like Age, Annual Income etc.) provided by the prospective customer. The task also involves the calculation of mortality charges which requires high statistical knowledge from one’s point of view. So, this department involves in the calculation of various amounts to be charged from the prospective customers.
  • 24. projectsformba.blogspot.com d) ICICI PRUDENTIAL LIFE INSURANCE 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 products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Savings & Wealth Creation Solutions • Save'n'Protect is a traditional endowment savings plan that offers life protection along with adequate returns. • CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years. • LifeTime Gold & LifeTime Plus are unit-linked plans that offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 6 fund options - Preserver, Protector, Balancer, Maximiser, Flexi Growth and Flexi Balanced. • LifeLink Super is a single premium unit linked insurance plan which combines life insurance cover with the opportunity to stay invested in the stock market. • Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation. • InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. • InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. • LifeStage RP is a unique and powerful wealth creation insurance solution, which combines the benefits of automatic asset allocation and quarterly rebalancing along with increased protection.
  • 25. projectsformba.blogspot.com Protection Solutions • LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & 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. Education insurance plans • Education insurance under the SmartKid brand 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. SmartKid plans are also available in unit-linked form - both single premium and regular premium. Retirement Solutions • ForeverLife is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. • LifeTime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement. • LifeLink Super Pension is a single premium unit linked pension plan. • Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options. • PremierLife Pension is a unique and convenient retirement solution with a limited premium paying term of three or five years, to suit professionals and businessmen, especially those who require more flexibility and customization while planning their finances.
  • 26. projectsformba.blogspot.com Health Solutions • Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover. • Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. • Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care and also provides an additional benefit of free periodical cancer screenings. • Diabetes Care: Diabetes Care is a unique critical illness product specially developed for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover. • Diabetes Care Plus: is a unique insurance policy that provides an additional benefit of life cover for Type 2 diabetics and pre-diabetics • Hospital Care: is a fixed benefit plan covering various stages of treatment - hospitalisation, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years. • Crisis Cover : is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death. Group Insurance Solutions ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. Flexible Rider Options ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.
  • 27. projectsformba.blogspot.com 1.4 SCOPE OF THE STUDY • The result of this research would help the company to have a better understanding about the consumer’s perception towards life insurance. • The study helps the company by creating awareness about the consumers of different ages and income levels. • The study also enables the company to focus the consumer’s preferences and expectations on the product which they offer.
  • 28. projectsformba.blogspot.com 1.5 OBJECTIVES OF THE STUDIES a) To know about the various Investment alternatives that is mostly preferred by the people. b) To find out the important criteria that people think about before investing in a life insurance policy. c) To find out whether gender bias involved in investing life insurance or not. d) To find out the awareness of ICICI Prudential Life Insurance among the people.
  • 29. projectsformba.blogspot.com 1.6 RESEARCH METHODOLOGY Methodology is a systematic way of solving a problem it includes the research methods for solving a problem it includes the research methods for solving the problem. Type of research - Descriptive research Data source -Primary and Secondary data Data collection method -Interview and survey Data collection tools -Questionnaires Sampling universe -Erode Sample size -100 SAMPLE DESIGN The target population of the study consists of various respondents of various places. This survey was done by collecting the data from the respondents. SAMPLE SIZE After due consultation with the company supervisor as well as with the college guide, also keeping in mind the requirements of the company for the research, the sample size that was found to be appropriate for the study was 100. SAMPLING TECHNIQUE The sampling technique that adapted to conduct the survey was ‘Convenient Random Sampling’ and the area of the research was concentrated in the city of Erode only. The survey was conducted by visiting different places like colleges, corporate offices, respondent’s home etc...
  • 30. projectsformba.blogspot.com DATA SOURCE The task of data collection begins after a research problem has been defined. In this study data was collected through both primary and secondary data source. A. PRIMARY DATA A primary data is a data, which is collected for gathering information first time and to analyze the problem. In this study the primary data was collected among the consumers using questionnaire. B. SECONDARY DATA Secondary data consist of information that already exits somewhere, having been collected for some other purpose. In this study secondary data was collected from company websites, magazines and brochures. STATISTICAL TOOLS Simple percentage analysis, ranking method and chi square analysis are the main statistical tool used for the study. SIMPLE PERCENTAGE ANALYSIS Percentage refers o a special king of ratio in making comparison between two or more data and to describe relationships. Percentage can also be used to compare the relation terms between two or more sources of data. Percentage of respondents = Number of respondents * 100 Total respondents
  • 31. projectsformba.blogspot.com RANKING METHOD (WEIGHTED AVERAGE METHOD) This technique was used to rank out the opinion about the consumers preference towards different investment alternatives. The order of merit given by the respondents was converted into ranks by using the following formula. Weightage Score = Σ Wi * Xj Where Wi = Weightage value and Xj = Ranking position value CHI SQUARE TEST Chi Square is a statistical measure used in the context of sampling analysis for comparing the variance to a theoretical variance. In order to judge the significance of association between two attributes, we make use of chi square test by finding the values of chi square using the chi square distribution.
  • 32. projectsformba.blogspot.com 1.7 LIMITATIONS OF THE RESEARCH The following limitations can be pointed out from the research that I conducted in relation to the problems that were given to me by ICICI Prudential Life Insurance Company Limited: a) The sample size chosen for the questionnaire was only 100 and that may not represent the true picture of the consumer perception about the Life Insurance sector. b) The research got confined to the city of Erode. The respondent belonged only to Erode and not others who were out of Erode. c) Nearly 98% of the respondent belonged to the age group of 20-50 years and only 2% were above 50 years. So, the responses and the opinions of the experienced and aged were not available. So, the findings may not be correct when we think about the opinion of the elderly people about the life insurance. d) The selection of people for the questionnaire was done on the basis of convenient random sampling, so, there were certain cases in which the people selected did not have any life insurance policy, so they could not give any positive feedback regarding the important criteria to be considered before taking an life insurance policy. So, this further reduced the actual number of respondents to 76 from 100. e) The product offered by different companies had different options and names in them, so at the time of comparison it became very difficult. The parameters for comparison were also different in the selected companies.
  • 33. projectsformba.blogspot.com f) One of the important criteria that was selected by the respondents which they consider before taking an insurance policy was ‘Company Image’, but there was no parameter available to compare criteria like this between the companies.
  • 34. projectsformba.blogspot.com CHAPTER-II DATA ANALYSIS AND INETERPRETATION Table-2.1 GLOBAL SCENARIO OF THE INSURANCE INDUSTRY If we see the table-2.1 in terms of both the premium value and the total market share of some of the leading countries operating in the Insurance sector, the following picture emerges in front of us. Country Total Life Premium Market (in $bn.) Share in percentage US 517.0 26.2 Japan 375.9 19.5 UK 194.0 10.11 France 154.0 7.81 Italy 91.7 4.65 Germany 90.2 4.57 China 39.5 2.1 Taiwan 38.8 1.97 India 20.1 1.08 Others 452.8 22.07 The above table shows that US is still the leader in Life Insurance sector, closely followed by Japan. India’s share in the global market has doubled since 2000 (0.50%) to 2006 (1.08%), but the growth of china is the maximum from 0.79% in 2000 to 2.10% in 2006. The total premium received in life insurance sector has increased from $ 1,521 bn. in 2000 to $ 1,974 bn. in the year 2006.
  • 35. projectsformba.blogspot.com Chart-2.1 Shares of different countries in Life Insurance Shares of different countries in Life Insurance US 452.8 517 Japan UK France 80.1 Italy 38.8 Germany China 39.5 Taiwan 90.2 375.9 India 91.7 154 Others 194 Source: The Economic Times, dated – 20th July, 2006.
  • 36. projectsformba.blogspot.com Table-2.2 Market share of LIC and Private Players Market Players Market share in percentage Private players 28.44 LIC 71.56 Total 100 Interpretation: LIC market share continued to decline in the period up to June 2007, it declined to 71.56% from 78.23% in the same period last year. On the other hand the market share of the private players is continuously growing up; it increased to 28.44% from 21.77% in terms of insurance premium.
  • 37. projectsformba.blogspot.com Chart-2.2 Market share of LIC and Private Players Market share of LIC and Private Players up to June 2007 28.44% Private Players LIC 71.56%
  • 38. projectsformba.blogspot.com Table-2.4.3 Market Share among Private players Private players Market share in Market share percentage change in percentage ICICI Prudential 29 4 Bajaj Allianz 21 1 SBI Life 10 0 HDFC Standard 9 1 Reliance Life 9 0 Birla Sunlife 5 -1 Kotak Mahindra 3 0 Old Mutual Met Life 3 1 Aviva 3 0 Tata AIG 3 1 Max New York 2 -4 ING Vysya 2 -1 Bharti Axa Life 1 0 Sahara Life 0 0 Shriram Life 0 -1 Private total 100 Interpretation: ICICI PRUDENTIAL BECOMES THE MARKET LEADER AMONG PRIVATE PLAYERS: ICICI Prudential strengthens its position at the top of the heap by increasing its market share by 4% in the month of Jan 2008, followed by Bajaj Allianze with 21% market share. These two private players contribute 50% of the total insurance market among the private players.
  • 39. projectsformba.blogspot.com Chart-2.3 Market Share among Private players Market share among private players ICICI Prudential Bajaj Allianz 5% SBI Life 9% 3% HDFC Standard 9% 3% Reliance Life 3% Birla Sunlife 10% 2% Kotak Mahindra 3% Met Life 5% Aviva 2% Tata AIG 21% 1% Max New York 0% ING Vysya 29% Bharti Axa Life 0% Sahara Life Shriram Life
  • 40. projectsformba.blogspot.com Table-2.4 Sales Growth among Private players Private players Year to year growth in sales in percentage ICICI Prudential 116 Bajaj Allianz 105 SBI Life 138 HDFC Standard 88 Reliance Life 335 Birla Sunlife 152 Kotak Mahindra 121 Old Mutual Met Life 125 Aviva 60 Tata AIG 100 Max New York 40 ING Vysya 74 Bharti Axa Life 362 Sahara Life 238 Shriram Life 91 Private total 119 Interpretation: Private sector sales continued to be robust at 119% year to year (YoY), up from 118% YoY last month. The month also saw LIC make up some lost ground by growing faster than the system at 133% YoY. Among the larger players, Reliance, SBI Life and Birla Sun Life continued to be the rising stars with the fastest YoY growth rates.
  • 41. projectsformba.blogspot.com Chart-2.4 Sales Growth among Private players
  • 42. projectsformba.blogspot.com Table-2.5 Various investment alternatives available to consumers Let us see what are the various investment alternatives that are available to the people and among that which are the most preferred one. Now, from the data collected from the 100 respondents which were surveyed through the questionnaire, the following representation can be made: Investment Total Rank Alternatives score Bank Deposits 6.75 I Insurance 6.46 II Post office 5.57 III Gold & Silver 5.33 IV Real Estate 5.07 V Mutual fund 4.83 VI Equity/Shares 3.84 VII Public Provident 3.78 VIII Fund(PPF) Bond & Debentures 1.74 IX Interpretation: From the above table-2.5 it can be seen that ranks for theses investment alternatives where analyzed by weighted average method. From this analyze we found Bank Deposits is the most preferred investment alternative among the people with the average of 6.75, secondly Insurance with the average of 6.46, followed by other investment alternatives like Post Office (5.57), Gold and Silver (5.33), Real Estate (5.07), Mutual Fund (4.83), Equity (3.84), PPF (3.78) and least preferred alternative is that Bond and Debenture (1.74).we understood from this analyze that people prefer the safe and secure investment alternatives like bank deposits, insurance, real estates,
  • 43. projectsformba.blogspot.com than risky investment alternatives like bonds, equities etc.. The reason that can be attributed for the liking of people towards bank deposit is that people expect safety for their money they deposit even though there is less appreciation on their deposit. Secondly insurance, may be because that insurance provides both life cover as well as security to the holder of the policy and also to the family members of the insurance holders. Now a days insurance is also providing option to invest in the markets through plans like ULIP, which gives the holder both the life cover as well as an opportunity to earn income at the market rate. Then recently real estate is the major investment alternative among the people particularly among Erode, this is mainly due to the increase in land value and also good long term investment preference. Gold and silver also good investment alternative among people due to the frequent appreciation in the values of gold, next is that mutual fund which is also the preferable investment alternative due to low risk on their investment, and other alternatives which are not much preferred were equities, bonds etc. mainly due to the risk involved in it.
  • 44. projectsformba.blogspot.com Chart-2.5 Various investment alternatives available to consumers Investment Alternative Preffered by people Bank Deposits Insurance 7 6.75 6.46 Post office 6 5.575.33 5.07 Gold & Silver 5 4.83 Total scores 4 3.84 3.78 Real Estate 3 Mutual fund 2 1.74 Equity/Shares 1 Public Provident 0 Fund(PPF) Investment Alternatives Bond & Debentures
  • 45. projectsformba.blogspot.com Segmentation of the respondents on the basis of certain important criteria: Now, let us turn our attention towards the respondent who were covered under this study. These respondents can be categorized on the basis of certain important criteria like age group, annual income, life insurance policy holders and awareness of ICICI Prudential Life Insurance in the following way Table-2.6 Age Group Age Group No of Percentage Respondent Below 30 Yrs 50 50 31-40 Yrs 32 32 41-50 Yrs 16 16 51-60 2 2 Above 60 Yrs 0 0 Total 100 100 Interpretation: From this table-2.6 we can see that 50% of the respondent belonged to the age group of below 30 years, followed by 32% who belonged to the age group between 31-40 years, then 16% of respondents belong to 41-50 years and only 2% from the respondents belong to 51-60 years but there is no respondent from the age group above 60.
  • 46. projectsformba.blogspot.com Chart-2.6 Age Group Age Group 50 50 45 40 35 32 Respondents 30 25 20 16 15 10 5 2 0 0 Below 31-40 41-50 51-60 Above 30 Yrs Yrs Yrs Yrs 60 Yrs Age Group
  • 47. projectsformba.blogspot.com Table-2.7 Annual Income Level Annual Income Level No of Percentage Respondent Below 1 Lakh 33 33 1.01-3 Lakh 60 60 3.01-5 Lakh 4 4 Above 5 Lakh 3 3 Total 100 100 Interpretations: From the above table-2.7 we can see that 33% of the respondents belonged to a group which has an annual income of below 1 lakh, followed by highly 60% who belonged to the group of annual income between 1-3 lakh, then 4% who have an annual income between 3-5 lakh and 3% of respondent who have an annual income above 5 lakh.
  • 48. projectsformba.blogspot.com Chart-2.7 Annual Income Level Annual Income Level 60 60 50 Respondents 40 33 30 20 10 4 3 0 Below 1 1.01-3 3.01-5 Above 5 Lakh Lakh Lakh Lakh Annual income
  • 49. projectsformba.blogspot.com Table-2.8 Hold Life Insurance Policy Hold life insurance No of Percentage policy Respondent Yes 76 76 No 24 24 Total 100 100 Interpretation: Among the 100 respondents that were taken as a sample size, 76 of them had life insurance policy that was either taken by him/her self or it was taken by their parents on their name, while 24 of them did not have any kind of Life insurance policy from any company.
  • 50. projectsformba.blogspot.com Table-2.8 Hold Life Insurance Policy Hold Life Insurance Policy 24% Yes No 76%
  • 51. projectsformba.blogspot.com Table-2.4.9 Awareness about Joint venture between ICICI and Prudential Awareness about No of Percentage ICICI Prudential Respondent Yes 47 47 No 53 53 Total 100 100 Interpretation: Now coming to the point of awareness among the people about ICICI Prudential Life Insurance, the response was very disappointing from the point of view of the company. Out of 100 respondents 53 respondents did not have the knowledge about the joint venture between ICICI bank with Prudential Plc of UK to form a first private sector insurance company in India called ICICI Prudential Life Insurance in December 2000, while the rest 47 had knowledge of the joint venture of Prudential by ICICI.
  • 52. projectsformba.blogspot.com Table-2.9 Awareness about Joint venture between ICICI and Prudential Awarness-ICICI Prudential 47% Yes 53% No
  • 53. projectsformba.blogspot.com 2.10 Important criteria before taking an life insurance On the basics of insurance policy: Now, let us see what criteria people consider most important before taking a life insurance policy (the criteria for the study have been mentioned before). Here, the highly important criterion as perceived by the people is rated as 5, if people perceived that is only important it is rated 4, if people perceived that it can be only neutrally important is rated as 3, then the least important criterion is being rated as 2 and if perceived that it is not important it is rated as 1(as there are 8 criteria that have been suggested under the research study). Here the number of respondent is only 76, because those 26 people who do not have any life insurance policy have been excluded from the purview of the study. Table-2.11 Premium Rating No of Percentage Respondent 5 39 51.4 4 31 40.8 3 3 3.9 2 3 3.9 1 _ _ Total Insurance 76 100 holders Total non users 24 Total 100
  • 54. projectsformba.blogspot.com Chart-2.11 Premium Prem ium 40 39 35 31 Respondents 30 25 20 15 10 5 3 3 0 0 5 4 3 2 1 Rating Interpretation: Now if we consider one of the criteria we can see that 51.4% of the respondent has rated premium as the highly important thing that they consider before taking any insurance policy from any company, and no body has rated it as the not important criterion. So, it can be clearly interpreted that premium that the policy holder has to pay to continue his/her policy plays a very important role before selecting the terms and conditions of the policy and also the company from which the policy is to be taken.
  • 55. projectsformba.blogspot.com Table-2.12 Charges Rating No of Percentage Respondent 5 17 22.4 4 46 60.5 3 12 15.8 2 1 1.3 1 _ _ Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: Now if we consider the charges the customer has to pay to the insurance company like Fund Management charges, administration charges etc. most of the people nearly 61% respondent consider it as an important criterion which can dictate the terms before deciding on whether to take the policy or not. But a few people (only 22.4% of the total respondents), consider it to be the highly important criterion before taking the decision on life insurance policy.
  • 56. projectsformba.blogspot.com Chart-2.12 Charges Charges 50 46 Respondents 40 30 20 17 12 10 1 0 0 5 4 3 2 1 Rating
  • 57. projectsformba.blogspot.com Table-2.13 Policy Term Rating No of Percentage Respondent 5 29 38.1 4 36 47.4 3 10 13.2 2 1 1.3 1 _ _ Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: The tenure of the policy i.e. the policy term depends on the policy holder but sometimes the insurer can also influence the policy term by giving some additional benefits on policies taken for a longer period of time or vice versa. In the study that was conducted by us, we found out that nearly 48% of the respondents think that policy term offered by the company is the important thing that one should consider before taking any life insurance policy while 38.1% of the respondents think that it is the highly important thing that one should consider before taking any life insurance policy.
  • 58. projectsformba.blogspot.com Chart-2.13 Policy Term Policy Term 40 36 35 30 29 Respondents 25 20 15 10 10 5 1 0 0 5 4 3 2 1 Rating
  • 59. projectsformba.blogspot.com Table-2.14 Rider Benefits Rating No of Percentage Respondent 5 18 23.7 4 32 42.1 3 21 27.6 2 5 6.6 1 _ _ Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: Rider benefits are the additional benefits that the insurer company provides to its customers for attracting them. Things like accidental benefit, critical illness benefit, and permanent disablement benefit are provided as a rider with the original policy with a payment of some additional premium from the point of view of the customers. According to the study nearly 42% of the respondents think that it is an important criterion before selecting an insurance policy. On the other hand 27.8% and 23.7% of the respondent feel it neutrally and the most important criterion, which indicates that people are not much interested in additional benefits.
  • 60. projectsformba.blogspot.com Chart-2.14 Rider Benefits Rider Benefits 35 32 30 Respondents 25 21 20 18 15 10 5 5 0 0 5 4 3 2 1 Rating
  • 61. projectsformba.blogspot.com Table-2.15 Bonus and Interest Paid Rating No of Percentage Respondent 5 40 52.6 4 24 31.6 3 8 10.6 2 2 2.6 1 2 2.6 Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: Bonus and interest are paid by the companies to the policy holder for the policies which are with profit policy i.e. if a person takes a with profit policy, he/she also becomes liable to get a certain percentage of the profit that the company makes in a certain financial year. 53% of the respondents consider it as the highly important criterion before taking a life insurance policy and only 2.6% of respondents considered it to not important.
  • 62. projectsformba.blogspot.com Table-2.15 Bonus and Interest Paid Bonus & Interest 40 40 35 Respondents 30 25 24 20 15 10 8 5 2 2 0 5 4 3 2 1 Rating
  • 63. projectsformba.blogspot.com Table-2.16 Services (Pre and Post Sales) Rating No of Percentage Respondent 5 26 34.3 4 35 46.0 3 11 14.5 2 2 2.6 1 2 2.6 Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: While conducting the study we have met many respondents who think that many of the companies provide them satisfactory services only till the policy is being taken by the respondent, but after that if there is any requirement from the point of view of the customer, the company does not pay the same attention to them as they had paid earlier. So, nearly 34% of the respondents feel that services (both pre and post sales) provided by the company is highly important to consider before undertaking any kind of life insurance policy.
  • 64. projectsformba.blogspot.com Chart-2.16 Services (Pre and Post Sales) Services 35 35 30 26 25 Respondents 20 15 11 10 5 2 2 0 5 4 3 2 1 Rating
  • 65. projectsformba.blogspot.com Table-2.17 Accessibility Rating No of Percentage Respondent 5 21 27.6 4 47 61.8 3 6 8.0 2 2 2.6 1 _ _ Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: The term accessibility here refers to the easy availability of the facilities that the company provides to its customers. The facilities may be regarding information about the company and the various products offered by them, it can be made available through internet and other media. According to the study nearly 62% of the respondents think it is highly important, while 2.6% of them feel that it is the least important and no respondent considers that it is not important that one may consider before taking any life insurance policy.
  • 66. projectsformba.blogspot.com Chart-2.17 Accessibility Accessibility 50 47 45 40 35 Respondents 30 25 21 20 15 10 6 5 2 0 0 5 4 3 2 1 Rating
  • 67. projectsformba.blogspot.com Table-2.18 Company Image Rating No of Percentage Respondent 5 41 54 4 24 31.6 3 10 13.1 2 1 1.3 1 _ _ Total Insurance 76 100 holders Total non users 24 Total 100 Interpretation: Company image also plays an very important role in influencing the decision of a prospective customer while taking the final decision. From the study it has been found out that nearly 54% and 32% of the people feel that it is the highly and most important thing, which has higher influence than any other criterion that influences one’s decision regarding taking of life insurance policy, while for 1.3% of people it does not provide any significant importance in their decision making.
  • 68. projectsformba.blogspot.com Chart-2.18 Company Image Com pany Im age 45 41 40 35 Respondents 30 25 24 20 15 10 10 5 1 0 0 5 4 3 2 1 Rating So, to conclude from the above chart-2.18, it can be said that the company image that the policy holder has to pay for taking any life insurance policy, plays a highly important role in influencing their decision, followed by the factors like premium, bonus and interest paid by the company, policy term and so on. So, those companies who are having brand image or name as well as providing all other complementary services, have a better chance of succeeding in the life insurance sector in comparison to other companies who are in the same field.
  • 69. projectsformba.blogspot.com To further analyze the perception of the respondents about what they think as the important criteria before taking an insurance policy, I have taken two independent parameters, namely: a) Age of the People. b) Annual Income of the People. After taking these two independent parameters, the analysis is being made to see which age group people think what criterion is important or what is the difference in perception among the people who have annual income which are significantly different from each other. The number of respondents taken here is only 76 as those people who are not having any life insurance policy have been excluded from the purview of the study and these 76 respondents were allowed to rate the criteria according to their importance. (Rating 5 represents highly important,4 represents only important,3 represents neutrally important,2 represents least important and 1 represents not important). 2.19 Criteria before taking a life insurance policy On the basics of Age group: For conducting the study the ages of respondents are divided into five categories, those are as follows: a) Less than 30 years. b) Between 31- 40 years. c) Between 41 – 50 years. d) Between 51 - 60 years. e) More than 60 years.
  • 70. projectsformba.blogspot.com Table-2.20 Age Group – Premium Age group 5 4 3 2 1 Total Respondent Below 30 20 11 2 1 _ 34 Yrs (58.8%) (32.4) (5.9) (2.9) (100%) 31-40 Yrs 14 10 1 1 _ 26 (53.8%) (38.6%) (3.8%) (3.8%) (100%) 41-50 Yrs 7 7 _ 1 _ 15 (46.7%) (46.7%) (6.6%) (100%) 51-60 Yrs _ 1 _ _ _ 1 (100%) (100%) Above 60 _ _ _ _ _ _ Yrs Total 41 29 3 3 _ 76 Respondent (54%) (38.2) (3.9) (3.0) (100%) Interpretation: Now, from the above table-2.20 we can see that nearly 59% of the people who belong to the age group of less than 30 consider premium as the highly important criterion in comparison to only 54% of the people who belong to an age group of 30-40. So, people who have started their professional life consider more about the money that has to be spent on the insurance policy in comparison to the people who are working for a relatively longer period of time. Again, if we consider those people 41-50 years who have come to the important stage of their working life, we can see that these people also thing that the expense regarding the premium to be paid is the highly important criteria for them because they likely to spend or save their money on medical, education etc..
  • 71. projectsformba.blogspot.com Chart-2.20 Age Group – Premium Age group-Premium Above 60 Yrs 0 5 51-60 Yrs 00 1 Age Group 4 41-50 Yrs 7 7 00 1 3 2 31-40 Yrs 14 10 110 1 Below 30 Yrs 20 11 210 0 10 20 30 40 Respondents
  • 72. projectsformba.blogspot.com Table-2.21 Age Group – Charges Age group 5 4 3 2 1 Total Respondent Below 30 5 22 7 _ _ 34 Yrs (14.8%) (64.7%) (20.5%) (100%) 31-40 Yrs 4 18 3 1 _ 26 (15.4%) (69.3%) (11.5%) (3.8%) (100%) 41-50 Yrs 8 5 2 _ _ 15 (53.4%) (33.3%) (13.3%) (100%) 51-60 Yrs _ 1 _ _ _ 1 (100%) (100%) Above 60 _ _ _ _ _ _ Yrs Total 17 46 12 1 _ 76 Respondent (22.4%) (60.5%) (15.8%) (1.3%) (100%) Interpretation: Now, if we consider the different charges (like Fund management charges, administration charges etc.) that the companies take from their policy holders, we can see that people who are having age less than 30 years and those who belong to the group of 30-40 years think in the same way in this matter. Nearly 15% of both the groups consider these charges are highly important, but not as much as they consider the cost relating to the premium they have to pay to the company.
  • 73. projectsformba.blogspot.com Chart-2.21 Age Group – Charges . Age group-Charge Above 60 Yrs 0 5 51-60 Yrs 00 1 4 Age Group 41-50 Yrs 8 5 20 3 2 31-40 Yrs 4 18 3 10 1 Below 30 Yrs 5 22 7 0 0 10 20 30 40 Respondents
  • 74. projectsformba.blogspot.com Table-2.22 Age Group – Policy Term Age group 5 4 3 2 1 Total Respondent Below 30 10 14 9 1 _ 34 Yrs (29.4%) (41.2%) (26.5) (2.9%) (100%) 31-40 Yrs 10 15 1 _ _ 26 (38.5%) (57.7%) (3.8) (100%) 41-50 Yrs 8 7 _ _ _ 15 (53.3%) (46.7%) (100%) 51-60 Yrs 1 _ _ _ _ 1 (100%) (100%) Above 60 _ _ _ _ _ _ Yrs Total 29 36 10 1 _ 1 Respondent (38.2%) (47.4%) (13.1%) (1.3%) (100%) Interpretation: The policy term mainly depends on the wishes of the policy holder, so here we can see that only 29% and 41% of the people whose age is below 30 years, think this is highly important criterion, but people who a little bit more experienced know that insurer companies sometime provide extra benefits for longer policies in comparison to policies which have a shorter span of life, that’s why nearly 39% and 58% of people belonging to the age group of 31-40 years think that it is a highly important criterion which affects the decision regarding insurance.
  • 75. projectsformba.blogspot.com Chart-2.22 Age Group – Policy Term Age group-Policy Term Above 60 Yrs 0 5 51-60 Yrs 10 4 Age Group 41-50 Yrs 8 7 0 3 2 31-40 Yrs 10 15 10 1 Below 30 Yrs 10 14 9 10 0 10 20 30 40 Respondents
  • 76. projectsformba.blogspot.com Table-2.23 Age Group – Rider Benefits Age group 5 4 3 2 1 Total Respondent Below 30 6 15 8 5 _ 34 Yrs (17.6) (44.2%) (23.5%) (14.7%) (100%) 31-40 Yrs 6 10 10 _ _ 26 (23%) (38.5%) (38.5%) (100%) 41-50 Yrs 5 7 3 _ _ 15 (33.3%) (46.7%) (20%) (100%) 51-60 Yrs 1 _ _ _ _ 1 (100%) (100%) Above 60 _ _ _ _ _ _ Yrs Total 18 32 21 5 _ 76 Respondent (23.7%) (42.1%) (27.6%) (6.6%) (100%) Interpretation: Mostly all the respondents of different age group are not interested in rider benefits, nearly 42% of the age group below 30, 31-40 and 41-50 years think that it is important ,where as only 23% of all age group think that it is highly important. So, most of them think that rider benefits are not so important and it does not influence their decision in a broad way.