Introduction

What is Insurance?

Insurance is a tool by which facilities 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.

Nature of Insurance

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.
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.

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) Miscellaneous Insurance. (Health insurance, Liability Insurance etc….)
Industry Profile

History of Insurance Industry in India

The history of life insurance in India dates back to 1818 when it was conceived as a means to
provide for English Widows. Interestingly in those days a higher premium was charged for
Indian lives than the non - Indian lives, as Indian lives were considered more risky to cover.
The Bombay Mutual Life Insurance Society started its business in 1870. It was the first
company to charge the same premium for both Indian and non-Indian lives.
The Oriental Assurance Company was established in 1880.The General insurance business in
India, on the other hand, can trace its roots to Triton Insurance Company Limited, the first
general insurance company established in the year 1850 in Calcutta by the British. Till the
end of the nineteenth century insurance business was almost entirely in the hands of overseas
companies.
Insurance regulation formally began in India with the passing of the Life Insurance
Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the 1920's
and 1930's sullied insurance business in India. By 1938 there were 176 insurance companies.
The first comprehensive legislation was introduced with the Insurance Act of 1938 that
provided strict State Control over the insurance business. The insurance business grew at a
faster pace after in dependence. Indian companies strengthened their hold on this business but
despite the growth that was witnessed, insurance remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life insurers and
provident societies under one nationalized monopoly corporation and Life Insurance
Corporation (LIC) was born. The non-life insurance business continued to thrive with the
private sector till 1972. Their operations were restricted to organized trade and industry in
large cities. The general insurance industry was nationalized in 1972. With this, nearly 107
insurers were amalgamated and grouped into four companies.
Potential of life insurance business in India
India’s life insurance market has grown rapidly over the past six years, with new business
premiums growing at over 40% per year. The premium income of India’s life insurance
market is set to double by 2012 on better penetration and higher incomes. Insurance
penetration in India is currently about 4 percent of its GDP, much lower than the developed
market level of 6-9 percent. In several segments of the population, the penetration is lower
than potential. For example, in urban areas, the penetration of life insurance in the mass
market is about 65 percent, and it’s considerably less in the low-income unbanked segment.
In rural areas, life insurance penetration in the banked segment is estimated to be about 40
percent, while it is marginal at best in the unbanked segment. The total premium could go up
to $80-100 billion by 2012 from the present $40 billion as higher per capita income increases
per capita insurance intensity. The average household premium will rise to Rs3,000-4,100
from the current Rs1,300 as will penetration by the existing and new players. India’s ratio of
life insurance premium to its GDP is around 4 percent against 6-9 percent in the developed
world. It could rise to 5.1-6.2 by 2012 in tandem with the country’s demographic profile.
India has 17 life insurers and the state owned Life Insurance Corp. of India dominates the
industry with over 70 percent market share, though private players have been growing
aggressively.

Foreign holding in Indian insurance companies is limited to 26 percent. LIC has been in
business for 50 years now and has not covered the entire population base yet. About 250 to
300 million Indians are still insurable. LIC has issued about 120 million policies till now,
with new premium income of US$ 1 billion. Its assets have been estimated at $37 billion and
in the last quarter it reported a 60 percent growth in new business. LIC’s business is growing
at the rate of 20 percent every year. That is the kind of potential one is talking about in life
insurance in India. It would not be wrong to say that a lot of the advantage of advertising by
new private sector insurance companies has by default gone to LIC. While they have created
a lot of awareness through private insurer’s advertisements, LIC has benefited. Why?
Because LIC has a much wider branch network, and buyers are sure about its safety.

Growth of Insurance Sector in India

India's insurance sector is zooming to show an unprecedented progressive growth of more

than 200% by the period of 2009-12. The Associated Chambers of Commerce and Industry of
India has clocked out the fact that during this period, private players in the industry will see a
growth of about 140 percent, owing to the adoption of the aggressive marketing techniques in
comparison of the growth rate of 35 percent - 40 percent achieved by the state owned
insurance companies.
The chamber is expected to poise the business of insurance to reach at Rs.2000 billions in
coming 2 years from the present level of Rs.500 billion. With the result of adoption of the
intense marketing strategies by the private players, the declination has been witnessed in
respect of the share of the state owned insurance companies captured in the market. The
market share fallout has been noticed in context of such companies like GIC, LIC, which
have come down to nearly 70 percent in the past 4-5 years from the 97 percent. The experts
have forecasted the more severe competition in the insurance sector likely to be occurred in
the near future.
Till recently, insurance sector was majority driven by the government sector players but now
many private sector multinational players have come into the picture. Like HDFC, ICICI,
Kotak, Mahindra and Birla Sun life. Insurance sector has been characterized as the booming
sector of the Indian arena, which has shown the growth rate of more than 15 percent to 20
percent. Insurance in India is put under the federal subject and is governed by the Insurance
Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business
(Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act,
1999 and by various other acts.

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.
Insurance Sector’s contribution to our GDP

With the largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. It’s a business growing at the rate of 20-25
percent annually and presently is of the order of Rs1560.41 billion (for the financial year
2008 – 2009). Together with banking services, it adds about 7 percent to the country’s Gross
Domestic Product (GDP). The gross premium collection is nearly 2 percent of GDP and
funds available with LIC for investments are 8 percent of the GDP.
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.
Even so nearly 65% of the Indian population is without life insurance cover while
health insurance and non-life insurance continues to be below international standards. A
Large part of our population is also subject to weak social security and pension systems with
hardly any old age income security.

Contribution of Insurance Sector to the 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 percent, manufacturing
accounted to 26.3 percent and the service sector contributed to 42.7 percent 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 percent, manufacturing contributed for 26.8
whereas service sector contributed for 51.4 percent of the total GDP.
There has been 7.5 percent growth in the total GDP of the country and is estimated to grow
at 8.0 percent 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 the entire 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 percent of the total GDP of India,
and the gross premium collected contributes to about 2 percent 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.

Challenges to the Insurance Industry

Challenges are mounting for insurers. Increased pressure for profitability translates into a
hard look at cost reduction and top-line revenue growth. Profitability is linked to the ability to
accurately assess risk and manage customer relationships over time to achieve financial
success.
Insurers recognize that in order to respond to these pressures, they need to eliminate
inefficient back-office processing functions. Another priority is improving the quality of
service to the distribution channel. As agents have more choice in choosing carriers, they are
looking to align with an organization that makes it easy to conduct business, pays
commission on a timely basis and reduces the time to process business.

The other kinds of challenges faced by the insurance industry are:

Economic challenges- like adequacy of capital, interest rate, inflation rate and market
related factors.
Socio-cultural challenges- Population, Life style, Educational level, Level of earning

Technological factors- Maintaining the database, E-business insurance in India, Impact on

distribution channels
2. Company Profile

Background and Inception

ICICI Prudential Life Insurance Company Limited (‘the Company’) a joint venture between
ICICI Bank Limited and Prudential plc of UK was incorporated on July 20, 2000 as a
company under the Companies Act, 1956 (‘the Act’). The Company is licensed by the
Insurance Regulatory and Development Authority (‘IRDA’) for carrying life insurance
business in India.

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 (UK). The company brings together the local market
expertise and financial strength of ICICI Bank and Prudential’s International life insurance
experience. The company was granted a certificate of Registration by the IRDA on
November 24, 2000 and eighteen days later, issued its first policy on December 12. 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).

From its early days, ICICI Prudential seemed to have the wherewithal for a large-scale
business. By March 31, 2002, a little over a year since its launch, the company had issued
100,000 policies translating into premium income of approximately Rs. 1,200 million on a
sum assured of over Rs.23 billion. When the company began its operations, the need was to
build a brand that was relatable to, symbolized trust and was easily recognized and
understood.

It launched a corporate campaign ICICI Prudential also made using the theme of ‘Sindoor’ to
epitomize protection, trust, togetherness and all that is Indian; endearing itself to the masses.
The success of the campaign, ‘the calling card of the company’ saw the brand awareness
scores almost at par with its 40 year old competitor. The theme of protection was also
extended to subsequent product and category specific campaigns –from child plans to
retirement solutions –which highlight how the company will be with its customers at every
step of life.

From day one, the company has unflinchingly focused on being mass-market player,
developing products, creating a distribution network and deploying resources that would
further its goal. Apart from ramping up thoroughly training its advisors, the company has
twelve ‘Bancasurance’ partners –the largest in the country. It swiftly revised and added to its
initial range of products, pioneering market-linked products and pension plans, to offer
customers the most flexible life insurance policies in the country. In February 2004, ICICI
Prudential increased its capital base by Rs. 500 million, its ninth capital hike, bringing the
total paid –up equity capital to Rs. 6,750 million. With the authorized capital of the company
standing at Rs. 12 billion, ICICI Prudential continues to have the highest capital base
amongst all life insurers in the country. The challenge ICICI Prudential now faces is to retain
its top-notch position and continue to deliver the finest life insurance and pension solutions to
its ever-growing customer base.

ICICI Prudential’s equity base stands at Rs. 1185 crore with ICICI Bank and Prudential plc
holding 74% and 26% stake respectively. For the year ended March 31, 2006, the company
garnered Rs.2, 412 crore of weighted new business premium and wrote 837,963 policies. The
sum assured in force stands at Rs.45, 888 crore. The company has a network of over 72,000
advisors; as well as 9 bancasurance partners and over 200 corporate agent and broker tie-ups.

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

For the past five years, ICICI Prudential has retained its position as the No.1 private insurer
in the country, with a wide range of flexible products that meet the needs of the Indian
customer at every step in life.

Beginning operations in December 2000, ICICI Prudential’s success has been meteoric,
becoming the number one private life insurer within months of launch. Today, it has one of
the largest distribution networks amongst private life insurers in India, with branches in 54
cities. The total number of policies issued stands at more than 780,000 with a total sum
assured in excess of Rs.160 billion.

ICICI Prudential closed the financial year ended march 31, 2004 with a total received
premium income of Rs. 9.9 billion; up 135% last years total premium income of Rs.4.20
billion. New business premium income shows a 106% growth at Rs. 7.5 billion, driven
mainly by the company’s range of unique unit-linked policies and pension plans. The
company’s retail market share amongst private companies stood at 36%, making it clear
leader in the segment. To add to its achievements, in the year 2003/04 it was adjudged Most
Trusted Private Life Insurer (Economic Times ‘Most Trusted Brand Survey’ by AC Nielsen
ORG-MARG). It was also conferred the ‘Outlook Money-Best Life Insurer’ award for the
second year running. The company is also proud to have won Silver at EFFIES 2003 for its
‘Retire from work, not life’ campaign. Notably, ICICI Prudential was also short-listed to the
final round for its ‘Sindoor campaign in EFFIES 2002.

ICICI Prudential’s success is rooted in its philosophy to always offer the customer a choice.
This has been the driving force behind its multi-channel distribution strategy, which includes
advisors, banks, direct marketing and corporate agents. In fact, ICICI Prudential was the first
life insurer to invest in multiple channels and offer the customer choice and access; thus
reducing dependency on any one channel, great strides in the retirement solutions and
pensions market.

The Company’s penetration of the retirement market was driven by the focused approach
towards creating awareness through sustained campaign; ‘Retire from work, not life’. Within
six months, the campaign rewarded ICICI Prudential with an increased share of 23% of the
total pensions market and 78% amongst private players. ICICI Prudential has one of the
largest distribution networks amongst private life insurers in India, having commenced
operations in 132 cities and towns in India, stretching from Bhuj in the west to Guwahati in
the east, and Jammu in the north to Trivandrum in the south.
The company has 9 bank partnerships for distribution, having agreements with ICICI Bank,
Bank of India, Federal Bank, South Indian Bank, Lord Krishna Bank, and some co-operative
banks, as well as over 200 corporate agents and brokers, it has also tied up with NGOs, MFIs
and corporate for the distribution of rural policies.

ICICI Prudential has recruited and trained more than 72,000 insurance advisors to interface
with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to
provide superior quality of service to customers.

Promoters

ICICI Bank

ICICI Bank Limited (NYSE:IBN) About ICICI Bank: ICICI Bank Ltd (NYSE:IBN) is India's

largest private sector bank and the second largest bank in the country with consolidated total

assets of over US$ 100 billion as of March 31, 2010. ICICI Bank’s subsidiaries include

India’s leading private sector insurance companies and among its largest securities brokerage

firms, mutual funds and private equity firms. ICICI Bank’s presence currently spans 19

countries, including India.

PRUDENTIAL plc,

Established in London in 1848, Prudential plc is an international retail financial services

group with significant operations in Asia, the US and the UK serving around 25 million

customers, policyholder and unit holders worldwide. The company has £290 billion of assets

under management and it is one of the best capitalised insurers in the world with an Insurance

Groups Directive (IGD) capital surplus estimated at £3.4 billion (at 31 December 2009).

Prudential is a leading life insurer in Asia with a presence in 12 markets and have the top

three positions in seven key locations of Hong Kong, India, Indonesia, Malaysia, Singapore,

the Philippines and Vietnam.

b. Nature of business carried

ICICI Prudential Life Insurance Company Limited is a service oriented company, the nature
of business carried out in ICICI Prudential Life Insurance Company Limited, in their day
today activities is to meet their customers or the prospects who can be the future customers of
the company, renewing the policies, collection of premiums through agents, third parties and
providing various other services and seasonal benefits. This involves meeting the existing
customers to know if they are interested in new insurance plans of ICICI Prudential Life
Insurance Company Limited, taking feed back from the customers about the existing services,
getting to know if they need any new services. The services are improved constantly based on
the convenience of the customers, aggressive marketing techniques are used to reach a greater
part of the population to create awareness about insurance as well as to improve their
business.

c. Vision, Mission and Quality policy

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

Values

 Integrity
 Customer First
 Boundaryless
 Ownership
 Passion

d. Products/ Services Profile

Individual Plans
Savings & Wealth Creation Solutions

 ICICI Pru LifeStage Wealth II is a unit linked insurance plan that offers multiple

choices to decide how your savings would be invested based on your risk appetite.

 ICICI Pru Pinnacle II is a unit linked insurance plan that gives you the advantage of

varying exposure to equities with downside protection, so that your investments are

protected in financially volatile times.

 ICICI Pru LifeTime Premier is a comprehensive savings plan that offers you a

choice of portfolio strategies for your savings and at the same time secures you

against uncertainties of life.

 ICICI Pru LifeLink Wealth SP is a unique single premium ULIP that provides you

the opportunity to enjoy potentially higher returns over the long term on your

investments, with just a single premium.

 ICICI Pru Guaranteed Savings Insurance Plan is a limited pay endowment

product that allows you to enjoy the benefits of a long term savings plan ensuring that

you and your family are free of any financial worries.

  ICICI Pru Whole Life provides you with a unique double advantage of savings and

protection that not only allows you to meet your goals but also seeks to ensure that

your dear ones will continue to live their lives in comfort without financial worries in

case of unforeseen eventuality.

 ICICI Pru Save 'n' Protect is an ideal plan for those who want to accumulate funds

on a regular basis while enjoying insurance protection.

 ICICI Pru CashBak is a single policy that combines the triple benefit of protection,

savings & periodic liquidity.

Protection Solutions

 ICICI Pru iProtect is a term insurance plan that you can buy online at your

convenience at their home loans in a simple and cost-effective manner.

 ICICI Pru Pure Protect is a flexible and affordable term product, with which you

can ensure your life and provide total security for your family in case of an

unfortunate event.

 ICICI Pru LifeGuard is a protection plan, which offers life cover at low cost. It is

available in 2 options –level term assurance with return of premium & single

premium.

 ICICI Pru HomeAssure is a mortgage reducing term assurance plan designed

specifically to help customers cover their home loans in a simple and cost-effective

manner.

Child Plans

 ICICI Pru SmartKid Regular Premium is a fixed-term insurance plan that provides

you with funds at regular intervals.

Retirement Solutions
  ICICI Pru LifeLink Pension SP is a single premium pension policy that provides

you the opportunity to enjoy regular income post retirement by paying just a single

premium.

 ICICI Pru ForeverLife is a traditional retirement product that offers guaranteed

returns for the first 4 years.

 ICICI Pru 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.

Health Solutions 

 ICICI Pru Hospital Care II is a family floater plan covering your spouse and

children. This fixed benefit hospitalisation and surgical plan complements your

existing coverage by offering payouts over and above any health plan you have, thus

availing best possible medical treatment, without having to bother about the cost of

the treatment or quality of care.

 ICICI Pru Crisis Cover is a 360-degree product that will provide long-term

coverage against 35 critical illnesses, total and permanent disability, and death.

 ICICI Pru Health Saver is a whole of life comprehensive health insurance policy

which provides a hospitalisation cover for you and your family and reimburses all

other medical expenses not covered in the hospitalisation benefit by building a health

fund for you and your family.

Group Insurance Solutions

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees.

 Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers

fund their statutory gratuity obligation in a scientific manner and also avail of tax

benefits as applicable to approved gratuity funds.

 Group Leave encashment Plan: ICICI Prudential Life’s Group offers a market

linked and traditional leave encashment plan designed to aid the employer to build a

fund to meet their future leave encashment liability. The contributions made will be

invested as per the chosen investment plans and will be available for payment of the

benefit when it falls due. Additionally, the product also provides for term cover for all

the employees covered under the policy.

 Group Superannuation Plan: ICICI Prudential Life offers a flexible market linked

and traditional schemes that provide substantial benefits to both employers and

employees. Both defined contribution (DC) and defined benefit (DB) schemes are

offered to optimise returns for members of the trust and rationalise cost. Members

have the option of choosing from various annuity options or opting for a partial

commutation of the annuity at the time of retirement.

 Group Immediate Annuities: ICICI Prudential Life realises the importance of

prudent retirement planning. With this in mind, it has developed a suite of life and

joint life annuities which guarantee periodic payment to annuitants upto death. Further

there are options which return the purchase price on death of annuitants. These

annuity options are offered to our existing superannuation customers, and also to

superannuation funds not managed by us.

 Group Term Plan: ICICI Prudential Life's flexible group term solution helps provide

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

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

beneficiary nominated by the member on his/her death.

Flexible Rider Option

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.

 Accident & disability benefit: If death occurs as the result of an accident during the

term of the policy, the beneficiary receives an additional amount equal to the rider

sum assured under the policy. If an accident results in total and permanent disability,

10% of rider sum assured will be paid each year, from the end of the 1st year after the

disability date for the remainder of the base policy term or 10 years, whichever is

lesser.

 Critical illness benefit: Critical Illness Benefit Rider provides protection against 9

critical illnesses to the policyholder when attached to the basic plan.

e. Areas of Operation

ICICI Prudential Life Insurance has a network of over 2100 branches, which include 1,116
micro-offices, over 290,000 advisors and 18 banc assurance partners. , as on September 30,
2010. covering all over India. It started its operations in 2000 and set up its first branch in
Mumbai in December 2000. ICICI Prudential has an extensive coverage in 22 states in-
coordination with 274 partners aimed to reach the remote rural areas in a sustainable manner
ICICI Prudential Life Insurance operates regionally, covering almost all the cities in India.
They currently operate in 6 regions namely North, East, West1, West2, South1, and South2.

f. Ownership Pattern
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of
India's foremost financial services companies-and Prudential plc - a leading international
financial services group headquartered in the United Kingdom. Total capital infusion stands
at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

Board of Directors
The ICICI Prudential Life Insurance Company Limited Board comprises reputed people
 from the finance industry both from India and abroad.
Ms. Chanda D. Kochhar, Chairperson
Mr. N. S. Kannan, Director
Mr. K. Ramkumar, Director
Mr. Rajiv Sabharwal, Director
Mr. Barry Stowe, Director
Mr. Adrian O’Connor, Director
Mr. Keki Dadiseth, Independent Director
Prof. Marti G. Subrahmanyam, Independent Director
Ms. Rama Bijapurkar, Independent Director
Mr. Vinod Kumar Dhall, Independent Director
Mr. Sridar Iyengar, Independent Director
Mr. Sandeep Bakhshi, Managing Director & CEO
Mr. Puneet Nanda, Executive Director
Mr. Madhivanan Balakrishnan, Executive Director

g. Competitors Information

BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD:

Allianz Bajaj life insurance company ltd with a capital base of RS.1.5 billions is a joint
venture between ALLIANZ AG and BAJAJ AUTO LTD. The company was incorporated on
MARCH 12, 2001 and received the IRDA certificate of registration on august 3, 2001 to
conduct life insurance business in India. Bajaj auto. The flagship company of Bajaj group is
one of the largest two and three- wheeler manufactures, and forth-largest manufacturer of
two- wheelers in the world, with annual turnover of RS. 42.16 billion. The company enjoys a
very strong brand image in this industry. Founded in 1890, the Allianz Group is one of the
world’s leading insurance companies with over a 100 years’ experience in insurance and
related services. It is also the largest insurer in Europe

AVIVA LIFE INSURANCE COMPANY LTD:

The Aviva Life Insurance Company, a joint venture between Dabur India and CGU, a wholly
owned subsidiary of Aviva Plc., is capitalized at Rs1 billion. Established in 1884, Dabur
India Limited is one of India’s oldest groups of companies, with interests in ayurvedic
specialties, pharmaceuticals, personal care and Health-care products, the annual sales
turnover of the group is over Rs12 billion. Aviva plc. is the largest life and general insurance
group of the UK, and the world’s seventh largest insurer with world-wide premium income
and retail investment sales of ₤28 billion and more than ₤200 billion in assets under
management. Aviva plc. is the holding company of the Aviva group of companies which is
involved in the life assurance business, log-term savings, all classes of general insurance
business and fund management.

BIRLA SUN LIFE INSURANCE COMPANY LTD:

The Birla Sun Life Insurance Company, is a 74.26 joint venture between the Aditya Birla
Group and Sun Life Financial Services of Canada, and has an equity capital of Rs1.5 billion.
The Aditya Birla Group is one of India’s largest business houses, with a turnover of over
$4.75 billion and an asset base of $3.8 billion. The Group is a well diversified conglomerate
spanning 40 companies spread across 17 countries.
Sun Life Assurance Co., of Canada, established in 1871, has a strong presence in
Canada, the USA, the Philippines, Hong Kong, and the UK. Its major lines of business are
life insurance, annuities and mutual fund and investment services. In Canada, the company is
especially strong in the corporate life and health insurance and savings markets.

HDFC STANDARD LIFE INSURANCE COMPANY LTD:

HDFC Standard Life Insurance Company Ltd. was incorporated o August 14, 2000. HDFC is
the majority stakeholder with an 81.4 per cent stake. Standard Life holds a stake of 18.6 per
cent. Incorporated in 1977 with a share capital of Rs 100 million, HDFC has since emerged
as the largest residential mortgage finance institution in the country, raising its capital to
Rs1.19 billion and an asset base of Rs150 billion. It operates through 75 locations throughout
India, and has an international office in Dubai, UAE, with service associates in Kuwait,
Oman and Qatar.
Standard Life, which has been in the life insurance business for the past 175 years, is
Europe’s largest mutual life assurance company. With an asset base of Rs6000 billion, it has
the distinction of being accorded the ‘AAA’ rating by Standard & Poor for the past six years.

ING-VYSYA LIFE INSURANCE COMPANY PVT. LTD:

As per the joint venture agreement, Vysya Bank holds 49 per cent, ING 26 percent, and the
GMR Group. The Vysya Bank, which has equity participation from Bank Brussels Lamberts,
is one of the largest private banks in India with 480 retail outlets, the bank, given its
significant branch penetration, has a high degree of retail focus.
The ING Group, with an asset base of over Rs284.2 billion is a global financial
institution of Dutch origin, which is active in the field of banking, insurance and asset
management in over 60 countries. ING Insurance is the world’s second largest life insurance
company as per the latest Fortune rankings.

MAX NEW YORK LIFE INSURANCE COMPANY LTD:

Max New York Life is a partnership between Max India Limited, one of India’s leading
multi-business corporations and New York Life. The paid-up capital of the joint venture is
Rs2.5 billion.
Max India has significant presence in the most vital and fast growing sectors of the
Indian economy, viz., telecommunication services, Electronic components distribution,
specialty plastic films and bulk pharmaceuticals. It is also active in the emerging knowledge-
based areas of health care, financial services and IT.
In 1998, New York Life International Inc., had total revenues amounting to almost US
$20 billion, and was rated the number one provider of new life insurance policies in the USA.
In the same year, New York Life was also the leader in insurance sales to the growing Indian
community in the USA.

MET LIFE INDIA INSURANCE COMPANY LTD.:

The Met Life India Insurance Company, joint venture between the US insurance major
Metropolitan Life Insurance Co., the Jammu and Kashmir Bank Ltd., the Pallonji Group and
some high net worth individuals, was incorporated in India on April 11, 2001. The company
started its operation with an initial capital of Rs1.25 billion.
The Metropolitan Life Insurance Co., established in 1867a, is a member of the
Metropolitan Life Group and is licenses in the USA, Canada and a few other countries. Its
major lines of business are individual and group life insurance. Pallonji & Co. Pvt. Ltd., is
primarily engaged in contracting and has under taken major contract for power generating
situation, chemical and fertilizer factories petroleum refineries and gas platform.

OM KOTAK MAHINDRA LIFE INSURANCE COMPANY LTD.

The joint venture OM KOTAK MAHINDRA life insurance started off with an initial capital
of Rs.1.5 billions, with a 74:26 stake between Kotak Mahindra life insurance and old mutual.
Kotak Mahindra finance ltd is one of the India’s premier financial groups, with a range
of highly specialized products and services, and a very large client base of Indian and
international firms. Starting as are non-product company in the mid eighties, it has evolved
into a full service financial conglomerate. It operates across 30 centers in India and in Dubai,
London, New York and Mauritius. Old mutual is a leading global financial services provider,
providing a broad range of financial services in the area of insurance, assets management and
banking. It is a leading life insurer in South Africa.

TATA AIG LIFE INSURANCE COMPANY LIMITED:-

Tata AIG life insurance company ltd, is capitalized at Rs.1.85 billion of which
74 percent has been brought in by Tata sons and 26 percent by the American partner.
Tata enterprise with 82 companies, spread over 7 sectors, have an annual turnover exceeding
US $ 8.8 billion. The Tata group has made pioneering contribution in various fields including
insurance, aviation, iron and steel. The group has had a long association with India’s
insurance sector, having set up the largest insurance company viz. new Indian assurance
company ltd. (1919), and prior to the nationalization of this sector. The American insurance
group (AIG) is the leading US based international insurance and financial services
organization and the largest underwriter of commercial and industrial insurance in the USA.

h. Infrastructural Facilities

 Technical: All the employees are provided with the digital computer which is
connected with high speed internet. All the senior managers are awarded laptops
based on their performance, target achievements and experience.
 Telephone facilities
 Conference rooms
 Training and development rooms
 Company e-mail: for each and every employee and advisors of the company are
provided with a personal id wherein they can login from anywhere and update things.
 Pantry: There is a neatly maintained pantry at the office wherein employees can have
tea and coffee whenever they feel relaxed.
  Parking facilities: Employees are provided with the free parking facility at the
underground space of the building.
 
I. Achievements/ Awards

 India's Most Customer Responsive Insurance Company. AGC Networks - Economic

Times, Customer Responsiveness Awards, 2010.

 ICICI Pru Life ranked as the Most Trusted Pvt Life Insurance brand in the Brand

Equity "Most Trusted Brands 2009" survey.

 ICICI Prudential Life Insurance has won the first runner up award for the Best Defect
Elimination in Service & Transaction category at Asian Six Sigma Excellence
Summit 2009.

 ICICI Prudential Life Insurance was awarded with the coveted 'ICAI Award for

Excellence in Financial Reporting' by the Institute of Chartered Accountants of India

(ICAI) for the financial year ended March 31, 2008.

 ICICI Prudential Life was awarded the Life Insurance Company of the Year at
the12th Asia Insurance Industry Awards 2008.
 ICICI Prudential Life won the Award for Brand Excellence in the Banking and

Financial services category at the Asia Brand Congress 2008.

 ICICI Prudential Life won the UK Trade & Investment India Business Awards 2008

in the Business Partnership Award-Large Company category.

 India's Most Customer Responsive Insurance Company . Avaya Global Connect -

Economic Times. Customer Responsiveness Awards, 2007.

 ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at

the Outlook Money & NDTV Profit Awards 2007.

 Innovation Award for launching Diabetes Care – Prudence Award 2006. People

Award for excellence in training and people development - Prudence Award 2006

 Most Trusted Private Life Insurer. The Economic Times - A C Nielsen Survey of

Most Trusted Brands – 2003, 2004 and 2005.

  Prudence Customer Centricity Award 2004 & 2005. Prudential Corporation Asia.

Best Life Insurer 2003. Outlook Money Awards 2003 & 2004, IMM Award for

Excellence. Institute of Marketing & Management Organisation with Innovative HR

Practices Indira Group of Institutes.

Recognitions

 ICICI Prudential Life was recognized as the most trusted brand amongst private life

insurers in the Economic Times-Most Trusted Brand survey 2008.

 IMM Award for Excellence, Institute of Marketing & Management.

 Organisation with Innovative HR Practices, Indira Group of Institutes.

 Organisation with Innovative HR Practices, Asia-Pacific H R Congress Awards for

HR Excellence.
j. Work flow model (Table: 1.1)

MOA (Manager of agent)

Activities Data Base Natural Market Lead generation

Prospecting

Appointment

Company products

Post Prospecting or
Documentation

Sales

Documentation

Login

Branch Level
Scrutiny

System Entry
Risk Evaluation

UW Dept.

Medical check up

Issuance 15 DAYS

Free look
k. Future growth and prospects
As we can see the growth which has taken place ICICI Prudential Life is at very high speed
so the future growth prospectus of its are as follows:

 To diversify the portfolio’s in other sector like IT sector , industrial sector ,

manufacturing sector , etc.,
 There would be opening of new branch and new location in different areas.
 There is lot of employment opportunity as there will increase in branch location and
new location.
 They want to maintain their branding consistency.
 To achieve a top market position in India through a multi-distribution, multi-product
platform.
 To adapt Prudential 's best practice blueprints as a sound platform for profitable
growth.
 To leverage ICICI 's local knowledge, infrastructure and customer base.
 To deliver high levels of shareholder return.
 To build long term value with the business partners by enhancing the proposition to
their customers.
 To be the employer of choice to attract and retain the best talent in India.
 To be recognized as being close and qualified by our customers.

3. Functional Analysis
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
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.

4.Mckensey’s 7s frame work

Application of 7s Mckinsey

McKinsey & Co’s 7S framework provides a useful framework for analyzing the strategic
attributes of an organization. Together seven factors determine the way in which a
corporation operates. The model indicates the major aspects in the company and the way in
which they are co-ordinate.

These seven elements are distinguished is no called hard S’s and soft S’s. The hard elements
are feasible and easy to identify. They can be found in strategy statement, corporate plans,
organizational charts and other documents.
The four soft S's however, re feasible. They are difficult to describe since capabilities, values
and elements of corporate culture are continuously developing and changing. They are highly
determined by the people at work in the organization. Therefore, it is much more difficult to;
plan or to influence the characteristics of the soft elements.

System
A system means all the procedures, formal and informal that makes the organization go day
by day, year by year. The organization is an open system organization because they interact
with the environment.
 Direct sale system
 Computerization system
The developments in information system are working wonders in all fields of activity. It has
become possible to send and receive information almost instantly. If circulars do not reach
the agents on time or doubts are not cleared quickly the agent might face awkward situations
with the prospects. These problems can be totally avoided with the use of IT. Rapid strides
have been made by ICICI Prudential in the field of computerization.

Shared values:
Shared values are what engender trust. Values are the identity by which a company is known
throughout its business area. These values must be explicitly stated as both corporate
objectives and individuals or attribute are promoted by the organization to motivate the
behavior of member of the organization.
 Corporate Governance
During the year, the Board adopted a Corporate Governance Policy and Code of Ethics
applicable to Directors and all employees of the company.

 Code of Conduct
The Company has framed and adopted a Code of Conduct, which is approved by the Board of
Directors. The Code is applicable to all Directors and all Management of the Company.

 Rural and Social Sector Obligations

The company has issued over124639 policies in the rural areas during the year. In addition,
during the current financial year, the company has covered 46327 lives under the social
sector category.

Staff:
The human resource management- processes used to develop managers, socialization
processes, and ways of shaping basic values of management cadre, ways of introducing
young recruits to the company, ways of helping to manage the careers of employees.
The human resource department of ICICI Prudential develops the people resource through
Performance management: connected in creating a performance driven culture through
effective management of performance of all staff members in a way that is mutually
beneficial.
Training: develop key competitive skills among staff members so as to facilitate attainment
of full people potential. Partner to make learning a shared responsibility. 
Style:
Style stands for the pattern of actions taken by the top management over a period of time.
Style is visible through reporting relationship amongst the three levels of management or
managers. The style has to change with the change in strategy system and the structure.
The various style followed are democratic, centralized etc
Open door policy: In ICICI Prudential all the subordinates are allowed to communicate with
their superiors at anytime they want so they can keep a good relationship among the whole
human resource in the organization.
Team approach: ICICI Prudential management gives importance to team spirit rather than
individual achievements by which employees are able to build a strong bond between them.
Participative culture: every employee in the organization is given opportunity to come up
with their suggestions in the issues confronting. 
Skills:
A skill is an ability or proficiency in performing a particular task. It is an acquired or learnt
ability to translate knowledge in to performance. It is the competency that allows for superior
performance in the field in which the employee has acquired the ability.

 Selling skills: selling skills include many aspects like

 Provide ongoing financial advice for his /her customer.
 Identify the future customer.
 Constantly make appointment: just making contact will not be enough to develop a
good life insurance business.
 Conduct financial review meetings with the customers.
 Close sale: ultimately success is defined in terms of sales.
 Presentation skills: presentation skill is very important in the insurance business,
because insurance is not an easy matter for unaware customer. The advisors/unit
managers should present the product details and benefit illustration very effectively so
as to convince the customer.
 Need analysis skills: the customers will not come to the office. Advisors should
search prospective customer and he must be able to assess the need of the customer
and he should go according to that.
  Developing solutions: customers will definitely have a lot of clarification for their
problems. The advisor should be able to give solution to those problems like tax
planning, pension planning and financial advice.

Strategy
Strategies are actions a company plans to or anticipation of changes in its external
environment. Liberalization and rapid growth of Indian economy provides ICICI Prudential
with significant opportunities to provide superior insurance products and services to the
public. The objective of ICICI Prudential is to enhance its position as India’s premier
insurance service provider.

The strategies adopted by ICICI Prudential are:

 To achieve a top market position in India through a multi-distribution, multi-product
platform.
 To adapt Prudential's best practice blueprints as a sound platform for profitable
growth.
 To leverage ICICI's local knowledge, infrastructure and customer base.
 To deliver high levels of shareholder return.
 To build long term value with our business partners by enhancing the proposition to
their customers.
 To be the employer of choice to attract and retain the best talent in India.
 To be recognized as being close and qualified by our customers.

Structure
Structure describes the hierarchy of authority and accountability in an organization. These
relationships are frequently diagrammed in organizational charts. Most organizations use
some mix of structures like pyramidal, matrix or structural ones to accomplish their goals. A
structure is the formalizing of relationships, rules and responsibilities in order to recognize
and perform work.
 VP Corporate Agent, Broker & BANCA
ORGANIZATIONAL CHART OF ICICI Prudential

CEO

4.
Executive Assistant Business Analyst

Strengths
Swot
Director HR VP- Marketing & External comm.
CFO COO VP TELCASSURANCE
Sr. VP Agency SalesChief Actuary CIO

Staffing Financial Control IT

Analysis
Service Delivery & Underwriting
Internal Audit
Comp & Ben + HR Ops
Pricing
Procurement PMO
Organization Development

Valuation & Reporting

Legal & compliance Infra & Administration

Employee relations & Regional HR

Strategic Planning & Corporate Finance Persistency Mgmt. Corporate Actuarial

Tab: 3.1

Distribution Training

Dist. Ops

ICICIWAY

Business Information
Product & Intelligence
& customer Mgmt
  The company’s wide range of products has driven its growth across section of people
and cities.
 The strong distribution channel and powerful brand has also driven its growth.

 High quality infrastructure.

 Providing innovative products and services.

 Strong growth of unit linked market at the mass affluent end.

 Healthy regulatory environment

 Excellent quality of services and long term commitment.

 The brand name ICICI Prudential itself is a strength to the company which
distinguishes it from other service industries.

Weaknesses

 Life insurance penetration at 3% still largely uninsured or underinsured population.

 Private players have limited focus on mass market and lower income section, and an
tier 3, semi urban and rural market.
 Market growth largely investment driven, protection market still under developed.
 High cost operating models unable to yield profitability in low ticker high volume
business.
 Lack of brand image in rural areas.
 Absence in rural market.
 Lic , the largest player in India has created a myth in the minds of Indians

Opportunities
  Expand beyond proprietary branch outlets through a large number of partner points of
presence.
 Establish extensive distribution spreading to tier 3, semi urban and rural location with
access to the large mass and low income population.
 Develop the pure market through large volume lower ticket products.
 Sustainable business supported through low cost operations and service model.
 It can enter in to more and more service oriented schemes.
 Ever growing population- which in turn increases the demand for insurance.
 ICICI is already a largest player in Bamking industry, with such a strong base
company, it can march in to great heights every time in future.

Threats

 Insurance sector is the fastest growing sector where there is lots of scope for the
companies but competitors is increasing in this market.
 Competitors like Birla sun life, Reliance life insurance, Aviva etc.
 The new service that the company provides should be effectively formulated to
overcome other service providers.
 Non existence in rural market.
 Arrival of more insurance companies in India.
 Increasing tax percentage on services.
 Short term policy with drawls.

5. Analysis of Financial Statement

 The share capital of ICICI Prudential Life has increased from RS. 1,42,727 to
1,42,827 lakhs when compared to the year 2009 to 2010. There is an increase of 8
percent in the share capital of the company.

 The Share application money pending allotment was Rs. 99.21 lakhs in the year
2009 and Rs 164.49 lakhs in the year 2010. As the share capital of the company has
increased the share application pending amount have also increased.

 The Reserves and Surplus of the company for the year 2009 is Rs 3, 35,304.61 lakhs
and Rs 3, 35,985.94 lakhs for the year 2010. The reserve of the company has
increased by 2 percent in the year 2010 which will be helpful to the company during
unexpected contingencies.

 The policy liabilities of the company for the year 2009 are Rs 3, 57,407.57
lakhs and Rs 4, 50,071.69 lakhs for the year 2010.

 The Provision for linked liabilities of the company for the year 2009 is Rs 47,
13,836.86 lakhs and Rs 58, 04,424.81 lakhs for the year 2009. The provision has been
set aside by the company to meet unexpected contingencies.

 The investment of shareholders of the company was Rs 85,079.27 lakhs in the year
2009 and Rs 1, 73,315.71 lakhs for the year 2009. Where as the investment of
policyholders in the year 2009 is 4, 28,593.96 lakhs and 5, 59,754.66 in the year 2010.

 Assets held to cover linked liabilities by the company for the year 2009 is Rs 48,
35,703.52 lakhs and Rs 58, 82,971.83 lakhs for the year 2010. This shows that the
Provision for linked liabilities of the company is held by the company in the form of
asset.

 The Fixed Assets of the company for the year 2009 is Rs 26,996.96
lakhs and Rs. 22, 332.27 lakhs for the year 2010. The Fixed Assets Ratio of the
company has increased by 20 percent in the year 2009.
 The Cash and Bank Balances of the company for the year 2009 are Rs 21,785.44
lakhs and Rs 11,654.03 lakhs for the year 2010. The Cash and Bank Balances of the
company has decreased up to 50 percent in the year 2010.

 The Advances and Other Assets of the company was Rs 28,576.68 lakhs in the year
2009 and Rs 34,719.57 lakh for the year 2009. It has increased to 25 percent in the
year 2009.

 The provision of the company is Rs 348 lakhs and it remains the same in the year
2008 and 2009.

 The Net Current Assets of the company during the year 2009 is Rs 74, 456.58 lakhs
and Rs 82,973.02 lakhs in 2009.

 The Debit balance in profit and loss account (Shareholders’ Account) is Rs 32244
lakhs in the year 2009 and Rs 32475 in 2010. The debit balance has increased by 0.7
percent in the year 2009.

 The Debit Balance in Policyholders’ A/c is Rs 41515 lakhs in the year 2009 and nil in
the year 2008.