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Transcript of Stragey and Tactics for the Developmentof the Agency by Icici
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STRAGEY AND TACTICS FOR THEDEVELOPMENTOF THE AGENCY BY ICICI
COMPARISION TO OTHER LEADINGINSURANCE COMPANY
Submitted By:
Name: ANKUR JAINRoll no: 05014
INSTITUTE OF MANAGEMENT EDUCATION
G.T. ROAD, SAHIABABAD, GHAZIABAD.
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ACKNOWLEDGEMENT
There is always a sense of gratitude which one express to other for the helpful so needy
services they render during all phases of life. I would like to express my gratitude
towards all those who have been helpful to me in getting this mighty task of training to
a successful end.
First of all, I consider it a pleasant duty to express my heart felt appreciation, gratitude
and indebtedness to my guide for his keen interest, invaluable pain taking & excellent
guidance, patience, endurance, encouragement & thoughtful advice throughout the
project work duration.
I would also like to be thankful to Mr. VISHAL SHARMA Unit Manager (ICICI
Prudential Life Insurance, New Delhi), who has given me the right way to prepare
my project report.
I would like to thank COL. ASHOK PANDIT whose guidance inspride me to complete
this project easily
I would take this opportunity to thank all my family members for their helps &
suggestions during the course of project work. I am also thankful to all my friends who
gave me constant & continuous inspiration to complete this project.
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CONTENTS
CHAPTER 1:EXECUTIVE SUMMARY
CHAPTER 2:
INSURANCE AN INTRODUCTION
CHAPTER 3:
INDUSTRY PROFILE
3.1:ORIGIN OF INSURANCE
3.2: INSURANCE SECTOR REFORMS3.3:POTENTIALITY OF INSURANCE IN INDIAN MARKET
CHAPTER 4:
INSURANCE MARKETING
4.1: EFFECTIVE PRODUCT PLANNING
4.2: PRODUCT AND PROMOTION MIX
4.3: PRICING DECISIONS
4.4: PERSONAL PROMOTION STRATEGIES
4.5: FAQs
CHAPTER 5:
LIFE INSURANCE PRODUCTS
5.1: WHOLE LIFE POLICY
5.2: ENDOWMENT POLICY
5.3: MONEY BACK POLICY
5.4: TERM POLICY
5.5: ANNUITY
5.6: JOINT LIFE POLICY
5.7: GROUP INSURANCE
CHAPTER 6:
IRDA ACT 1999
6.1: DUTIES, POWERS, FUNCTIONS
CHAPTER 7:
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PLAYERS IN INDIAN INSURANCE INDUSTRY
7.1: LIFE INSURERS
7.2: GENERAL INSURERS
7.3: INSURANCE BUSINESS
CHAPTER 8:
COMPANY PROFILE
9.1: ABOUT ICICI PRUDENTIAL
9.2: PRODUCTS
9.3: RIDERS
9.4: INSURANCE PLANS
9.5 PREMIUM PAY
CHAPTER 9:
COMPARATIVE ANALYSIS
ICICI PRUDENTIAL LIFE INSURANCE
VS
1 HDFC STANDARD LIFE INSURANCE
2 BIRLA SUN LIFE INSURANCE
3 AVIVA LIFE INSURANCE
CHAPTER 10:
CONCLUSION
CHAPTER 11:
RECOMMENDATION
CHAPTER 12:
BIBLIOGRAPHY
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EXECUTIVESUMMARY
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EXECUTIVE SUMMARY
The Indian Insurance Industry is broadly segmented into
public and private insurance companies. Before year 2000,
only public sector insurance companies were allowed to do
business in India. But after year 2000, insurance sector was
thrown open for private insurance companies as well.
But as of now there now around12 private life insurance
companies and around 9 private non-life insurance
companies doing business in India.
This report is prepared with an aim to provide the
development of present Indian Insurance Industry. Also with
LIC, heading the public life insurance companies and ICICI
Prudential heading the private life insurance players, this
report also provides a comparative analysis of HDFC
Standard life insurance, Aviva life insurance, Birla sunlife
insurance Vs. ICICIs Forever Life policies.
Based on this report , the prospecting insurance customers
would get help in choosing the right insurance products for
themselves.
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INSURANCE AN
INTRODUCTION
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Insurance An Introduction
Insurance may be described as a social device to ensure
protection of economic value of life and other assets. Under
the plan of insurance, a large number of people associate
themselves by sharing risks attached to individuals. The
risks, which can be insured against, include fire, the perils of
sea, death and accidents and burglary. Any risk contingentupon these, may be insured against at a premium
commensurate with the risk involved. Thus collective bearing
of risk is insurance.
Insurance is a contract whereby, in return for the payment of
premium by the insured, the insurers pay the financial
losses suffered by the insured as a result of the occurrence of
unforeseen events. The term "risk" is used to describe the
possibility of adverse results flowing from any occurrence or
the accidental happenings, which produce a monetary loss.
Insurance is a pool in which a large number of people
exposed to a similar risk make contributions to a common
fund out of which the losses suffered by the unfortunate few,
due to accidental events, are made good. The sharing of risk
among large groups of people is the basis of insurance. The
losses of an individual are distributed over a group of
individuals.
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Definitions:
General definition:
In the words of John Magee, Insurance is a plan by
themselves which large number of people associate and
transfer to the shoulders of all, risks that attach to
individuals.
Fundamental definition:
In the words of D.S. Hansell, Insurance accumulated
contributions of all parties participating in the scheme.
Contractual definition: In the words of justice Tindall,
Insurance is a contract in which a sum of money is paid to
the assured as consideration of insurers incurring the risk of
paying a large sum upon a given contingency.
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Characteristics of insurance
Sharing of risks
Cooperative device
Evaluation of risk
Payment on happening of a special event
The amount of payment depends on the nature of losses
incurred.
The success of insurance business depends on the large
number of people insured against similar risk.
Insurance is a plan, which spreads the risk and losses of
few people among a large number of people.
The insurance is a plan in which the insured transfers his
risk on the insurer.
Insurance is a legal contract which is based upon certain
principles of insurance which includes, utmost good faith,insurable interest, contribution, indemnity, causas
proxima, subrogation, etc.
The scope of insurance is much wider and extensive.
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Functions of insurance:
Primary functions:
1. Provide protection:- Insurance cannot check the
happening of the risk, but can provide for the losses of
risk.
2. Collective bearing of risk: - Insurance is a device to share
the financial losses of few among many others.
3. Assessment of risk: - Insurance determines the probable
volume of risk by evaluating various factors that give rise
to risk.
4. Provide certainty: - Insurance is a device, which helps to
change from uncertainty to certainty.
Secondary functions:
1. Prevention of losses: - Insurance cautions businessman
and individuals to adopt suitable device to prevent
unfortunate consequences of risk by observing safety
instructions.
2. Small capital to cover large risks: - Insurance relives the
businessman from security investment, by paying small
amount of insurance against larger risks and uncertainty.
3. Contributes towards development of larger industries.
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Other Function:
Means of savings and investment:
Insurance companies are business houses. The product they
sell is financial protection. To succeed and survive, they
must cover their costs, which include payments to cover the
losses of policyholders, as well as sales and administrative
expenses, taxes and dividends.
Insurance companies have two sources of income for
covering these costs: premiums and investment income.
The premiums are collected on a regular basis and invested
in Government Bonds, Gilt, stocks, mutual funds, real
estates and other conservative avenues. However, investment
income depends on market conditions, interest rates,
economy etc. and varies from year to year. Because of the
uncertainty associated with the investment income,
insurance companies must generate enough income from
premiums to cover the bulk of their expenses.
The risk becomes insurable if the following requirements
are complied with:
The insured must suffer financial loss if the risk operates.
The loss must be measurable in money,
The object of the insurance contract must be legal.
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The insurer should have sufficient knowledge about the
risks he accepts.
Fundamentals of Insurance
The fundamental Principles of the Insurance are as follows:
Insurable Interest: Insurable interest means the legalright to insure. Insurable Interest is a must and only then
the insurance contract is enforceable at law. This principle
differentiates a Contract of insurance from wager. Lack of
insurable interest renders the contract null and void. For
Insurable Interest to exist there must be Property, Rights,
Interest, Life or Liability; this must be insured and theInsured should have a legally recognizable relationship
thereto. The Insured should be benefited by the safety of
the property or is prejudiced by its loss. Insurable Interest
may arise in the following manner:
1. Ownership: Absolute ownership entitles the owner to
insure the property. This is the commonest method
whereby Insurable Interest arises.
2. Partial Interest is also insurable e.g. a mortgagee. A
creditor can also insure the life of his debtor but only to
the extent of his loan.
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3. Administrators and executors i.e. officials appointed by a
court of law to take care of a property may also insure theproperty.
4. Relationship does not automatically constitute insurable
interest. The only relationship recognized by law for this
purpose is the one between a husband and wife.
5. An employer can insure his employee under a Personal
Accident Policy as he has insurable interest in them.
Proximate cause: Generally, the claims are payable under
insurance policies if they arise out of events which are
proximately caused by the insured perils. In other words,
the proximate cause of the event has to be peril covered by
the policy, so as to constitute a valid claim.
Contribution: An insured may have several insurance on
the same subject matter. If he recovers his loss under all
these insurance, he will obviously make a profit out of
loss. This will be an infringement of the principle of
indemnity. Common Law has, therefore, evolved the
doctrine of contribution whereby the insured is prevented
from recovering more than his loss, despite his having
several insurance on the subject matter.
Subrogation: The principle of indemnity seeks to prevent
the insured from making profit out of loss. However, it
may so happen that that the insured may recover his loss
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under his policy and he may also have rights against third
parties. If, after the insurance claim is settled, the insuredis allowed to enforce his rights against third parties and to
retain whatever damages he receives from them, he will
certainly make a profit and the principle of indemnity will
be infringed.
Common Law has therefore, evolved the doctrine of
subrogation as corollary to the principle of indemnity.
Subrogation may be defined as the transfer of rights and
remedies of the insured to the insurers who have
indemnified the insured in respect of the loss. The
Common Law right of subrogation is implied an all
contracts on indemnity, as it arises only after payment of
loss.
Utmost Good Faith: In all General Insurance contracts
we know that a property or interest or liability or life is
offered for insurance and the insured has to take decisions
on the acceptance of the proposal. If he decides to accept
the proposal a premium commensurate with the risk has
to be charged. To enable him to take necessary decision in
this regard, the insurer must have certain facts about the
risk offered. These facts influence the judgment of the
insurer in deciding about the acceptance or otherwise of
the risk and the rate of premium to be charged, if
accepted. Such facts are known as material facts.
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INDUSTRY
PROFILE
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NATURE OF INSURANCE CONTRACTS:
When the insured pays the premium and the insurers accept
the risks, the contract of insurance is concluded. The policy
issued by the insurers is the evidence of the contract. The
contract of insurance, like any other contract, for example a
contract for the sale of goods, is subject to the general law of
contract as embodied in the Indian ContractAct,1872.
According to this Act, a contract must have certain essential
features in order to make it legally valid and enforceable. The
following are the essential elements:
a) Offer and acceptance: Usually, the offer is made by the
proposer, and acceptance made by the insurer.
b) Consideration: This means that the contract must involve
some mutual benefit to the parties. The premium is the
consideration from the insured and the promise to indemnity
is the consideration from the insurers.
c) Agreement between the parties: Both the parties should
agree to the same thing in the same sense.
d) Capacity of the parties: Both the parties to the contract
must legally competent to enter into the contract. For
example, minors cannot enter into insurance contracts.
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e) Legality: The object of the contract must be legal and the
contract should not violate any legal requirements. E.g. noinsurance can be had for smuggled goods.
RISK
Reasonable or not, risks are inescapable in business. Every
business venture is something of a gamble, because the
possibility of loss is as real as the prospects for profits. And
even though managers do everything possible to ensure that
their business succeed, they cannot guard against every
conceivable form of risk.
Pure Risk versus Speculative Risk:
Pure Risk: Events representing the kind of risk that no
business can predict or escape, known as Pure Risk, it is
the threat of a loss without the possibility of gain. In other
words, a disaster such as avalanche or fire is costly for the
business it strikes, but the fact that no disaster occurs
contributes nothing to a firm's profit.
Speculative Risk: It is the type of risk that offers the
prospect of making profit - and prompts people to go into
business in the first place. Every business accepts the
possibility of losing money in order to make money.
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Approaches to Risk Management
Risk Management is the process of reducing the threat of
loss due to uncontrollable events. Steps in selecting a risk
management approach:
To identify all the things those can possibly go wrong.
To consider the probability that an event will occur.
Techniques of Risk Management are:
1. Avoiding the Risk: When a company avoids risk, it
eliminates the possibility that a particular event will occur.
To avoid the possibility of a suit, for example, not to produceany products -which would, of course, eliminate both the
threats of a lawsuit and the opportunity to profit. With rare
exceptions, avoiding risk entirely is extremely difficult.
2. Reducing Risk: A more practical approach is to reduce
the risk by taking precautions. Risk reduction is an
important element in most companies' approach to risk
management. Typical precautions include putting safety
locks on doors to prevent robberies, installing overhead
sprinklers to minimize fire damage, and periodic checking
motor vehicles to prevent accidents.
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3. Assuming risk: Many companies draw on current
revenues or set aside a "Contingency Fund" to coverunexpected losses. Setting aside money on regular basis
could be cheaper than purchasing insurance. Moreover, the
company can earn interest on the reserved cash. Such
assumption of risk is also called self-insurance or risk
retention.
4. Transferring the risk: Most companies still rely on
outside insurance firms for financial protection against
catastrophic losses. In buying insurance, companies transfer
the risk of loss to an insurance firm, which agrees to pay for
certain types of losses. In exchange, the insurance firm
collects a fee known as a premium.
Insurable and uninsurable risks:
Insurable risks: An insurable risk - one that an insurable
company will cover - Generally meets the following
requirements. The peril insured against must not be under
the control of the Insured. This means, of course that insurer
do not pay for losses that are intentionally caused by an
insured, caused at the Insured's direction, or caused with the
insured's collusion. For example, a fire insurance policy
excludes loss caused by the Insureds own arson. It does,
however, include loss caused by an employee's arson. Losses
must be calculable, and the cost of insuring must be
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economically feasible. To operate profitably, insurance
companies must have data on the frequency of losses caused
by a given peril. If this information covers a long period of
time and is based on a large number of cases, Insurance
companies can usually predict quite accurately how many
losses will occur in the future. For example, the insurance
companies to fix up the rate of premium of Personal Accident
Insurance may use the information of the number of people
who will die each year in India in accidents. The peril must
be unlikely to affect all insured simultaneously. Unless an
insurance company spreads its coverage over large
geographic areas or a broad population base or different
classes of Insurance, a single disaster might force it to pay
out all its policies at once. The possible loss must be
financially serious to the Insured. An Insurance company
could not afford the paperwork involved in handling
numerous small claims of a few Rupees each. As a result,
many policies have a clause specifying that the insurance
company will pay only that part of a loss greater than an
amount - the deductible or excess - stated in the policy. The
excess represents small losses that the Insured has to
absorb.
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ORIGIN OF LIFE INSURANCE
Life Assurance was born in England when the first
policy providing temporary cover for a period of 12
months was issued as easy as 1583 A.D. The Amicable
Society started granting fluctuating sum on death since
1705 and a fix sum since 1757, With the development of
mortality tables, the life Assurance acquired a scientific
character. The Equitable Society founded in 1762 was
the first Society established on scientific basis.
ORIGIN OF LIFE ASSURANCE IN INDIA
In India, after failure of two British companies, the
European and the Albert in 1870, which attempted
writing business on Indian lives, first Indian Life
Assurance Society was formed in the same year called
Bombay Mutual Assurance Society Ltd. It was followed
by the Oriental Life Assurance Company Limited in
1874, Bharat in 1896 and Empire of India in 1897. The
Idea of insurance was born out of a desire of the people
to share loss of an individual by many. Originally it
restricted to forms other than life assurance. It started
with Marine Insurance, where the losses on account of
perils of sea were shared by all who were engaged in
trade. Reference to some forms of insurance, is found in
the codes of Hammurabi, Manu (Manav Dharma
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Shastra). The word `Yogakshema is used in the Rig
Veda suggesting that some form of community insurancewas practiced by the Aryans in India over 3000 years
ago. In India during Buddhist period burial societies
existed which were mutual in their character and used
to help a family by building a house, protecting the
widow, marrying the girls.
The Swadeshi Movement of 1905 provided impetus to
the formation of several companies such as the
`Hindustan Cooperative, the `United India, the
`Bombay Life, the `National. Further in the wake of
freedom movement number of companies such as the
`New India, the `Jupiter the `Lakshmi emerged.
The Government began to exercise a certain measure of
control on Insurance business by passing the
`Insurance Act in 1912. For controlling investment of
funds, expenditure and management, a comprehensive
Act was passed known as `The Insurance Act 1938. For
controlling the affairs, the office of Controller of
Insurance was established. The act was extensively
amended in 1950.
In the year 1955, approximately 170 Insurance Offices
and 80 Provident Fund Societies had been registered for
transacting Life Assurance business in India. There
were, however, no full guarantees to the policyholders.
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The concept of trusteeship was lacking. Many insurance
companies went into liquidation. There weremalpractices in insurance business. For achieving the
following purposes it was felt necessary to nationalize
the insurance business in India. To provide security to
the policyholders
(i) To utilize the funds for nation-building activities.
(ii) To avoid cut throat competition
(iii) To abolish mal-practices
(iv) To spread the insurance message to the rural
areas.
The first step in this direction was taken by the
Government of India by issuing the Life Insurance (the
Emergency provisions) Ordinance, 1956 on 19th
January, 1956. The then Finance Minister, Shri C. D.
Deshmukh mentioned the purpose of nationalisation as
reaching the goal of socialistic pattern of society,
rendering genuine service to the people in the rural
area. The Life Insurance Corporation Act (Act XXXI
of1956) was passed by the Parliament in June 1956
which came in force on 1st July 1956. The Life
Insurance Corporation of India came into existence on
1st September 1956.
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Insurance Sector Reforms
Having looked at the insurance sector, let us look at the
efforts made by the government to make the industry more
dynamic and customer friendly. To begin with, the Malhotra
committee was set up with the objective of suggesting
changes that would achieve the much required dynamism.
The Malhotra Committee Report
In 1993, Malhotra Committee, headed by former Finance
Secretary and RBI Governor R. N. Malhotra, was formed to
evaluate the Indian insurance industry and recommend its
future direction. In 1994, the committee submitted the report
and gave the following recommendations:
Structure
Government stake in the insurance Companies to be
brought down to 50%
Government should take over the holdings of GIC and its
subsidiaries so that these subsidiaries can act asindependent-corporations
All the insurance companies should be given greater
freedom to operate
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Market Regulations :
Private Companies with a minimum paid up capital of
Rs.1bn should be allowed to enter the industry
No Company should deal in both Life and General
Insurance through a single entity
Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies
Postal Life Insurance should be allowed to operate in the
rural market
Only one State Level Life Insurance Company should be
allowed to operate in each state
Regulatory Body
The Insurance Act should be changed
An Insurance Regulatory body should be set up
Controller of Insurance (Currently a part from the FinanceMinistry) should be made independent
Investments
Mandatory Investments of LIC Life Fund in government
securities to be reduced from 75% to 50%
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GIC and its subsidiaries are not to hold more than 5% in
any company (There current holdings to be brought downto this level over a period of time)
Customer Service
LIC should pay interest on delays in payments beyond 30
days
Insurance companies must be encouraged to set up unit
linked pension plans
Computerization of operations and updating of technology
to be carried out in the insurance industry
Overall, the committee strongly felt that in order to improve
the customer services and increase the coverage of the
insurance industry should be opened up to competition.
But at the same time, the committee felt the need to exercise
caution as any failure on the part of new players could ruin
the public confidence in the industry.
Hence, it was decided to allow competition in a limited way
by stipulating the minimum capital requirement of Rs.1 bn.
This amount is not very high for foreign firms, as it
translates to only about US$25 million. Further, to date it is
unclear
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whether equity should be payable in one go or should be
brought in as installments. Also, the foreign equityparticipation was to be restricted to only 40%.
The committee felt the need to provide greater autonomy to
insurance companies in order to improve their performance
and enable them to act as independent companies with
economic motives. For this purpose, it had proposed setting
up an independent regulatory body.
The industry and analysts find that there is lack of clarity in
the following areas:-
Though coverage of rural areas was to be made
compulsory, it raises the question as to who would
subsidies the rural policies as they would be difficult to
service and hence costs will go up.
There is some confusion with respect to investments.
Where should the funds be invested? Currently 70% of the
funds with LIC & GIC are invested in Government
securities. Would new entrants be allowed to invest in GOIsecurities?
The report also does not enumerate exit options available
to the new entrants. In the event of failure, there should
be an arrangement made whereby the other
Companies pool in to bail the customers, who in allprobability would be middle class individuals.
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Potentiality of Insurance in Indian market
Marketing inefficiency of general insurers has kept
society in dark even when so many personal as well as
commercial lines of insurance covers are available for
them. Insurers have failed to identify the need of the
individual risk factors and thereafter selecting proper
market segments and developing demand of these needs
by adopting proper marketing mix. There is great scope
of commercial line of insurance as we are developing at
a very fast rate but the potentiality and scope of
personal lines of insurance is vast as this areas is still
under-tapped. Product designing and pricing is also
simple and growth of this portfolio is guaranteed in this
country which has a base of over 100 crore population,
where there are about 25 crore dwellings, 20 crore
schools, colleges and educational institutions and about
5 crore small and big shops. But despite this the Indian
insurers share in personal line of business is very low or
negligible.
There are enormous growth opportunities to Indian as
well as foreign insurers because of such a huge base of
population there is ample scope to introduce the new
line of covers as per the changing needs and to increase
the per capita share of the insurance by encouraging
risk transfer by investing small portion of the savings ofthe individuals.
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INSURANCE
MARKETING
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INSURANCE MARKETING :
Marketing was accepted as a organizational imperative.
It was felt that alignment of marketing in the insurance
business would identify the most profitable markets now
and in future; would be helpful in assessing the present
and future needs of the users; would be instrumental in
setting business development goals; would be successful
in making time honored plans to translate them into
realities and would manage various customer services,
in addition to their promotion in the socio-economic
parlance. All these outstanding properties of marketing
practices make it clear that insurance business can't
flourish unless overall marketing decisions are
innovated, more so when the industrially advanced
countries of the world have been found successful in
drawing the positive results by including marketing
principles.
The term insurance marketing refers to the marketing of
insurance services with the motto of customerorientation which makes possible a * blending of
customer satisfaction and profit generation. It is meant
growing the market; it is meant needs oriented
development of product; it is meant formulation of
product mix; it is meant making of suitable pricing
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decisions; it is meant designing of sensitive promotional
strategies and further it is also meant scientificapproach to the management of events so that
qualitative or quantitative improvements are made
possible.
No doubt a few insurance companies have effective
marketing operations, however there are a few typical
insurance companies where the marketing functions
diffused throughout the organization with no one
executive responsible for overall marketing activities,
such as advertising at the expense of others, such as
providing adequate customer service at teller windows.
On the other hand, it is also found that some of the
insurance companies have recently recognized the
significance of marketing concern where executives are
responsible for overall marketing performance.
Insurance companies tend toward a strong sales
orientation, sin the services they sell, although certainly
necessary ones, rarely sell themselves. Potential
policyholders are reluctant to think about disaster a
death. So they postpone planning for these possibilities
until they are contacted and influenced by insurance
agents. Thus the insurance company's natural
orientation is toward sales, not marketing. But in the
modern business world, the marketing concept insists
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on fixing of account ability for overall marketing
performance.
The selection of risks (Product planning), policy writing
(customer service), rating or actuarial (pricing) and
agency management (distraction) - all marketing
activities make up an integrated market strategy.
Effective Product Planning
Insurance Product:
The insurance business is concerned with the
guaranteeing compensation in the event of loss, damage
to property, or death. The present day insurance or the
protection as provided by the Life Insurance Corporationor other companies pertaining to life has its basis
concept that the individual or groups seeking protection
must earn a surplus over the cost of maintaining and
then pay a premium out of the income. For this purpose
the insurance business is based on a mutual and basic
desire to protect the loss of one's property and loss dueto death of an individual.
In the insurance business, the Insurance companies are
found engaged in selling services. And so, services are
their products. Thus a product is also called a bundle of
utilities consisting of various product features and
accompanying services. When a man or a company buys
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a policy from the insurance companies, not only the
policies a bought but the agent's assistance and advice,the prestige of the insurance companies, the facilities of
claims and compensations are also bought.
In the Indian context, the Life Insurance Corporation of
India (LIC) and the General Insurance Corporation of
India (GICI) are the two leading Corporations engaged in
offering insurance services to the concern users. The
LIC's main products are policies, annuities, cre facilities
to individual and companies and consultancy service
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that policy makers consider the needs and requirements
of almost all the segments.
The policy makers have to frame such strategies, which
help corporations in accomplishing the objectives. The
product decisions become significant to make the
marketing decisions sensitive. This automatically throws
a sense of responsibility on the shoulders of Date
Processing Department to manage the information in
such a way that provides authentic or reliable
information regarding the needs - hierarchy and taste -
preferences of the potential policyholders. The feed back
received from the factual policyholders would influence
the elimination process. If they are not responding
positively, either the produce should be eliminated or in
place or opting for a new policy; some amendments in
the provisions of old policies or annuities may also serve
our purpose.
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LIFE
INSURANCE
PRODUCTS
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LIFE INSURANCE PRODUCTS:
Whole life policy: These are low-cost insurance
plans where the sum assured is payable on the death of
the insured
A typical whole life policy runs as long as the policyholder is
alive. In other words, the risk is covered for the entire life of
the policyholder, which is why it is known as whole life
policies.
The policy money and the bonus are payable only to the
nominee of the beneficiary upon the death of the
policyholder. The policyholder is not entitled to any money
during his or her own lifetime, i.e. there is no survival
benefit.
Whole life policies are fairly rigid and inflexible and are
suitable only in a few, very specific cases.
Whole Life Policy can be a good initial policy to buy since its
cost is very low. That is an important consideration when one
is just starting a care
Endowment policy: Under these plans, the sum assured is
pay-able on the maturity of the policy or in case of death of
the insured individual before maturity of the policy.
Endowment policies cover the risk for a specified period at
the end of which the sum assured is paid back to the
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policyholder along with the entire bonus accumulated during
the term of the policy. It is this feature - the payment of theendowment to the policyholder upon the completion of the
policys term -, which rightly accounts for the popularity of
endowment policies. The original sum assured and the
accumulated bonus - received back comes handy from the
endowment can either be used for buying an annuity policy
to generate a monthly pension for the whole life, or put it in
any other suitable investment of his choice. As compared to
whole life policies, the premium rates for endowment policies
are higher and the bonus rates are lower. On the plus side,
these polices offer an endowment - representing a return on
his premium payments payable to him in his own lifetime
when the policy comes to an end.
Money back policy:
Unlike ordinary endowment insurance plans where the
survival benefits are payable only at the end of the
endowment period, money back policies provide for periodic
payments of partial survival benefits during the term of thepolicy, of course so long as the policy holder is alive.
An important feature of this type of policies is that in the
event of death at any time within the policy term, the death
claim comprises full sum assured without deducting any of
the survival benefit amounts, which may have already been
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paid as money-back components. Similarly, the bonus is also
calculated on the full sum assured
Under money back policies premiums can be paid as per the
insurance companys policy. These could be quarterly, half
yearly or annually. The premiums for these policies are
payable for the selected term of years, or till death if it occurs
earlier.
By buying such policies one can receive income at regular
intervals other than the risk cover it provides. Also a good
amount of bonus on the full sum assured is quite a good
bargain
Term policy:
Under these plans, the sum assured is payable only on the
death of the insured individual before expiry of the policy.
Term policies; cover only the risk during the selected term
period. If the policyholder survives the term, the risk cover
comes to an end.
A Term plan is designed to meet the needs of people who are
initially unable to pay the larger premium required for a
whole life or an endowment assurance policy, but they hope
to be able to pay for such a policy in the near future.
No surrender, loan or paid-up values are granted under
these policies because reserves are not accumulated. If the
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premium is not paid with the days of grace, the policy will
lapse without acquiring a paid-up value.
However, a lapsed policy may be revived during the lifetime of
the life assured but before the expiry of the period of two
years from the due date of the first unpaid premium on the
usual terms. Accident and / or Disability benefits are not
granted on policies under the Term plan.
Annuity (Pension Plan):
These plans provide for either immediate or deferred pension
for life. The pension payments are made till the death of the
annuitant (per-son who has a pension plan) unless the policy
has provision of guaranteed period.
An annuity is an investment that one make, either in
a single lump sum or through installments paid over
a certain number of years, in return for which one
receive back a specific sum every year, every half-
year or every month, either for l ife or for a f ixed
number ofyears.
After the death of the annuitant or after the f ixed
annuity period expires for annuity payments, the
invested annuity fund is refunded, perhaps along
with a small addition, calculated at that time.
Annuit ies di ffer from all the other forms of life
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insurance discussed so far in one fundamental way -
an annuity does not provide any life insurance croverbut, instead, offers a guaranteed income either for
life or a certain period.
Typically annuities are bought to generate income
during ones retired life, which is why they are also
called pension plans. Annuity premiums and
payments are fixed with reference to the duration of
human life. Joint life policy:
Joint life policies are similar to endowment policies in as
much as these policies also offer maturity benefits to thepolicyholders, apart form covering the risks as all life
insurance policies.
But these are categorized separately as these cover two lives
together thus offering a unique advantage in some cases;
notable, for a married couple or for partners in a business
firm
Under a joint life policy the sum assured is payable on the
first death and again on the death of the survivor during the
term of the policy. Vested bonuses would also be paid
besides the sum assured after the death of the survivor. If
one or both the lives survive to the maturity date, the sum
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assured as well as the vested bonuses are payable on the
maturity date.
The premiums payable cease on the first death or on the
expiry of the selected term, whichever is earlier.
Accident benefits equivalent to the sum assured are available
under this plan on the first death. However, if both lives are
covered under Double Accident Benefit (DAB), the surviving
life is covered under DAB until the end of the policy year, in
which the first life dies under the cover of the policy.
These benefits are available with respect to both lives if
Both lives perish simultaneously owing to an accident. To
avoid such an eventuality, nomination is allowed under
the policy OR
Both die within the specified period as a result of the same
accident OR
The second life also dies in the same policy year as result of
another accident. To avoid such an eventuality, nomination
is allowed under the policy.
Particularly for couples - Joint life policies provide dual-
purpose income and risk protection for both belonging to
every income group and class of society.
Under a joint life plan though the premium payment stops
after the first life's death, bonuses continue to accrue on the
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basic Sum Assured till Maturity Date or till the death of the
second life, if earlier.
Group insurance:
Group Insurance offers life insurance protection under group
policies to various groups such as employer-employee,
professionals, co-operatives, weaker sections of society etc. It
also provides insurance coverage to people under certainapproved occupations at the lowest possible premium cost.
Besides providing insurance coverage, it also offers group
schemes to employers, which provide funding of gratuity and
pension liabilities of the employers Group insurance plans
have low premiums. Such plans are particularly beneficial to
those for whom other regular policies are a costlierproposition. Group insurance plans extend cover to large
segments of the population including those who cannot
afford individual insurance. As such the premia one need to
pay is comparatively lower and at the same time one can
avail of insurance benefits.
The main features of the schemes are low premium and
simple insurability conditions. Premiums are based upon age
combination of members, occupation and working conditions
of the group.
A number of group insurance schemes have been designed
for various groups. These include employer-employee groups,associations of professionals (such as doctors, lawyers,
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chartered accountants etc.), and members of cooperative
banks, welfare funds, credit societies and weaker sections ofsociety. Creditor-Debtor groups are also offered group
insurance schemes.
Group insurance schemes providing uniform cover can be
granted to outstanding loans. These groups are Members of
primary housing societies where housing loans are granted
by State Apex housing societies, borrowers granted loans by
Institutional agencies in Public/Joint Sectors for housing
purposes and borrower members of cooperative
societies/banks formed by employees of the same employers
Special plan:
Special plans are insurance policy plans available from the
national insurance providers to serve the needs of citizens
that cannot be commonly classified or segregated. These
special plans are designed to satisfy needs ranging from
debt-clearance in event of the death of the insured to
financial aid in the event of a medical mishap.
Special plans also provide financial assistance for
handicapped dependants as well as emergency surgery
required if and when a medical condition arises. Since
special plans are designed for people with diverse and
specific needs, the average citizen may not necessarily need
or use them. Yet, in the normal course of life, situations may
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arise when one may need to provide for unplanned or
unexpected contingencies and mishaps.
Pricing Decisions
In the insurance business, the pricing decisions are
concerned with the premium charged against the
policies, interest charged for defaulting the payment of
premium and credit facilities, commission charged forunderwriting and consultancy activities etc. The
formulation of pricing strategies becomes significant
with the viewpoint of influencing the target market or
the prospects. Particularly in the developing countries
where the disposable income in the hands of prospects
is low, the pricing decisions also govern thetransformation of potential policyholders into actual
policyholders. Hence, this component of marketing mix
occupies an outstanding place in the making of
marketing decisions. The strategies may be in both the
forms - high pricing strategy and the low pricing
strategy, keeping in view the level or standard ofcustomers or the policyholders. Particularly when the
Corporations have been fixing premium on the policies
meant for the weaker sections of the society, it is very
natural that the pricing strategies are low but the same
strategy can't be followed for the affluent sections of the
society. Even in insurance services, the Corporations fixpremium on the basis of costs, thus the cost of
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insurance is found here a determining factor. The
important bases for determining the cost are rate ofdeath, rate of interest and the expenses incurred on the
insurance business. The mortality table helps
determination of death rate. It is such data which record
the past mortality and is put in such a form that can be
used in estimating the course of future data. It is to
predict future mortality. A large number of persons are
selected and observed for death and survival rates. The
best method of construction of mortality table is to
select a large number of persons at attained age, which
is meant age nearer to birth rate. The second important
element to be considered is the interest rate. On the
basis of mortality rate, it is estimated that when and
how much amount would be received as premium and
would be paid as claims but on the basis of interest
rate, it is estimated that how much interest can be
earned by investing the insurance funds. Interest table
is prepared for computing the rate of interest. The last
element is expanses. There are certain expenses which
are incurred in the inception of the policy, certain
expenses are recurring which incur every year on the
policy, certain expenses incur only at the time of the
end of the policy. This necessitates determination of the
nature of expenses according to occurrence and equal
distribution of the expenses every year for equable
distribution of loading.
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In view of the above, it emerges that in the making of
pricing decisions, the calculation of premium rate isinfluenced by a number of factors. The growing
management expenses or the growing costs of
administration make the insurance policy costly.
Besides, the investment decisions also govern the cost
as unproductive investments are proved to be a burden.
Contrary to it, if the insurance funds are invested in
private companies, the rate of profitability can multiply.
The expenses to be incurred on a policy also aggravate
the costs of insurance. All these facts necessitate cost
effectiveness.
The pricing decisions make it essential that insures
keep in mind the nature of policy and the category of
prospects. An important task before the policy makers is
to minimize the cost. Important positive developments in
the socio-economic environment, growing health care
facilities, rising standard of living, growing disposable
income, increasing literacy are some of the important
factors governing the rate of premium. The investment
decisions of Insurance Corporations have also been
instrumental in affecting the costs. If the Corporations
prefer investments in government securities, no doubt
the security would be of high magnitude but the rate of
return of investments would be woefully low. This would
prove to be a barrier, especially while minimizing the
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costs, Contrary to it when the Insurance Corporations
favour investments in the private sector, the rate ofreturn on investments would be handsome which would
be helpful in minimizing the costs. Particularly in the
Indian setting, the Corporations have been liberal to the
public investments. This trend needs a departure, or at
least a contraction in public investments.
In the yester-decades, there has been a phenomenal
growth in the standard of living of the masses. The
medical facilities have also been increased to a
considerable extent. The level of income shows a positive
trend. All these positive developments have made
possible a sharp reduction in the death rate.
Particularly in the Life Insurance business, the rate of
premium is directly linked with the death rate. "Higher
the death rate, higher the premium" - "lower the death
rate, it is judicious that the rate of premium is brought
down. This would induce the potential policyholders and
the insurance business would gain a rapid momentum.
Thus, the thrust areas are:-
Making Possible Cost effectiveness.
Re-structuring of premiums.
Due Priority to profit generating investments.
Paving ways for generating business.
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PROMOTION MIX STRATEGIES:
In the formulation of marketing mix, the promotional
decisions play an effective role. If the promotional
decisions are the tune with changing socio-economic
environment, the marketers find it convenient to
influence the potential users. Like banking services, the
insurance services also depend on effective promotional
measures. It is right to say that magnitude of
dependence in the insurance services is of high
magnitude. The creation of awareness is found very
much instrumental in the generation of impulse buying.
Particularly in the countries like ours where the rate of
illiteracy is very high and the rural economy has a
dominance in the national economy; it is essential that
both the wings of promotion, e.g., personal and
impersonal are given due weight age. The selection of
agents and rural career agents and imparting to them
proper training facilities so as to create the impulse
buying is a part of personal communication where the
agents exercise their best tact and ability to activate the
task of transforming the potential policyholders into
actual policyholders. The advertising and publicity
measures, organization of conferences and seminars,
incentives to the policyholders are impersonal
communications. This makes, it clear that
communication efforts between the Corporation and
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actual or potential users either at the personal level or
as a mass communication effort to change the villagers'attitude in particular become an integral part of
marketing of insurance services. No doubt, a number of
steps have been taken, especially after nationalization of
insurance business; still the communication has not
been so effective to get cent-per-cent result.
Personal Promotion Strategies:
The extent of dependence of insurance business on the
services of agents or rural career agents is found of high
magnitude. Since nationalization, we have tried our best
to innovate the possible necessary changes in the
regulatory provisions. It can't refute that some positivetrends have emerged even in the rural business still
there are wider avenues for initiating qualitative
improvements. The Rural Career Agents bear the
responsibility of expanding rural business. They need to
influence the illiterate masses, a task which is found
more complicated, a goal which is found morecomplicated, a goal which is found partially
accomplished and an obligation which is found un-ful-
filled. The agents are required to be more active or say,
the number of active agents is required to be increased.
Millionaire agents also divert an intensive care. Agents
who complete Rs. 10 lakhs and over new businessduring a year are known as millionaire agents. The
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strengthening of agents' club can't be overlooked, if we
are really interested in having a team-spirit of accomplishing the organizational goal. The most
important thing here is to promote the "Career Agents'
Scheme", in the urban areas and the "Rural Career
Agents' Scheme" in the rural areas.
Impersonal Promotion Strategies:
Strateg ies can't serve our purpose and so, the
impersonal promotion strategies are also required to
be revamped. This diverts our attention on
advertising, public relations and publicity measures.
I t is fe lt that active co-ordination between the
divisional offices and State Governments publicityset-up is required to keep up through our
participation in the meetings and programmes of the
Inter Media Publicity Co-ordination Committees.
Newspaper advertisements can also serve our
purpose. It is grati fying to note that some of the
newspaper advertisements released during the yester-
years have earned wide acclaim.
PHYSICAL EVIDENCE:
Physical evidence is yet an other marketing tool available to
the service marketer. The service firms must consciously
make efforts to manage the physical evidence associated with
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their services. In services the product itself being intangible
the need is to tangibalised it as far as possible. Thus physicalentities can be successfully employed to describe the service
product and its distinguishing qualities. Many service
marketer s who continue to look at service operations
through product oriented glasses fail to realize the marketing
potential of physical evidence. The physical evidence
associated in a service form can be broken into two
categories
1. Dominant
2. Peripheral
The dominant evidence is the once, which constitute a
dominant part of the service facilities. E.g. Aircrafts in
airlines, hotel building and interiors, cars and office of car
rental company etc.
The Peripheral physical evidence is not very visible in relation
to dominant physical evidences. They include letterheads,
cheques books, stationary, pens etc.
Marketing Information System in Insurance:
The incoming multi-faceted changes in the socio-
economic environment have raised the significance of
information-based decisions. To be more specific for
making marketing decisions, the Marketing Information
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System plays an important role. Like other services, the
insurance business is also influenced by themanagement of information. The marketers in particular
feel that for making the marketing decisions is required
to be minimized. This naturally diverts our attention on
MIS. The top marketing executive has to shoulder the
responsibility of making available to the organization an
effective MIS which brings creativity. In the Insurance
business, this vital responsibility is to be shouldered by
marketing manager. The system analysts would be
delegated the responsibility of designing the shape.
Here, an advisory group made up of different
representatives from marketing, finance, operation
research, data processing and other organizational units
would assist the system analyst. They would also be
helpful in maintaining a continual surveillance over the
MIS would suggest and would be effective in preparing
the initial design. Here, it is significant to mention that
designing of blue prints is a difficult task and if it is
done satisfactorily, the system analysis find it
convenient to finalize the growing and changing
information requirements of organization. The need of
the hour is to combat the marketing problems, and the
system designer has to be exceptionally vigilant so that
the nature of decision is studied minutely.
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IRDA ACT
1999
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IRDA ACT 1999
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatoryand Development Authority (IRDA, which was constituted byan act of parliament) specify the composition of Authority
The Authority is a ten member team consisting of
(a) a Chairman;(b) five whole-time members;(c) four part-time members,
(all appointed by the Government of India)
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powersand functions of IRDA..(1) Subject to the provisions of thisAct and any other law for the time being in force, theAuthority shall have the duty to regulate, promote andensure orderly growth of the insurance business and re-insurance business.(2) Without prejudice to the generality of the provisionscontained in sub-section (1), the powers and functions of theAuthority shall include
(a) issue to the applicant a certificate of registration, renew,modify, withdraw, suspend or cancel such registration;
(b) protection of the interests of the policy holders inmatters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim,surrender value of policy and other terms and conditions ofcontracts of insurance;
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(n) Supervising the functioning of the Tariff Advisory
Committee;
(o) specifying the percentage of premium income of theinsurer to finance schemes for promoting and regulatingprofessional organizations referred to in clause (f);
(p) Specifying the percentage of life insurance businessand general insurance business to be undertaken by theinsurer in the rural or social sector; and
(q) Exercising such other powers as may be prescribed
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INDIAN INSURANCE INDUSTRY:
Insurers:
Insurance industry, as on 1.4.2000, comprised mainly twoplayers: the state insurers:
Life Insurers:
Life Insurance Corporation of India (LIC)
General Insurers:
General Insurance Corporation of India (GIC) (witheffect from Dec'2000, a National Reinsure)
GIC had four subsidiary companies, namely ( with effect fromDec'2000, these subsidaries have been de-linked from theparent company and made as independent insurancecompanies.
1. The Oriental Insurance Company Limited
2. The New India Assurance Company Limited,
3. National Insurance Company Limited
4. United India Insurance Company Limited .
http://www.licindia.com/http://www.licindia.com/http://www.gicoi.com/http://www.gicoi.com/http://www.orientalinsurance.nic.in/http://www.niacl.com/http://www.niacl.com/http://www.nationalinsuranceindia.com/http://www.licindia.com/http://www.gicoi.com/http://www.orientalinsurance.nic.in/http://www.niacl.com/http://www.nationalinsuranceindia.com/ -
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Yr: 2000-2001: (From 2nd April '2000 to 31stDecember'2001)
Insurance Industry in the year 2000-2001 had 16 newentrants, namely:
Life Insurers:
S.No.
RegistrationNumber
Date ofReg.
Name of the Company
1 101 23.10.2
000
HDFC Standard Life InsuranceCompany Ltd.
2 104 15.11.2000
Max New York Life Insurance Co.Ltd.
3 105 24.11.2000
ICICI Prudential Life InsuranceCompany Ltd.
4 107 10.01.2001 Om Kotak Mahindra LifeInsurance Co. Ltd.
5 109 31.01.2001
Birla Sun Life InsuranceCompany Ltd.
6 110 12.02.2001
Tata AIG Life Insurance CompanyLtd.
7 111 30.03.2001
SBI Life Insurance CompanyLimited .
8 114 02.08.2001
ING Vysya Life InsuranceCompany Private Limited
9 116 03.08.2001
Allianz Bajaj Life InsuranceCompany Ltd.
10 117 06.08.2001
Metlife India Insurance CompanyPvt. Ltd.
General Insurers :
http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.omlotakmahindra.com/http://www.omlotakmahindra.com/http://www.birlasunlife.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.tata-aig.com/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.allianzbajaj.co.in/http://www.metlife.com/http://www.metlife.com/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.omlotakmahindra.com/http://www.omlotakmahindra.com/http://www.birlasunlife.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.tata-aig.com/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.allianzbajaj.co.in/http://www.metlife.com/http://www.metlife.com/ -
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S.No.
Registration
Number
Date ofRegistr
ation
Name of theCompany
1 102 23.10.2000
Royal SundaramAlliance InsuranceCompany Limited
2 103 23.10.2000
Reliance GeneralInsurance CompanyLimited.
3 106 04.12.2
000
IFFCO Tokio
General InsuranceCo. Ltd
4 108 22.01.2001
TATA AIG GeneralInsurance CompanyLtd.
5 113 02.05.2001
Bajaj AllianzGeneral InsuranceCompany Limited
6 115 03.08.2
001
ICICI Lombard
General InsuranceCompany Limited.
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Yr: 2001-2002 : ( From 1st Jan 2001 to till date)
Insurance Industry in this year, so far has 5new entrants;namely
Life Insurers:
S.No.
RegistrationNumber
Date ofReg.
Name of the Company
1 121 03.01.2002
AMP SANMAR AssuranceCompany Ltd.
2 122 14.05.2002
Aviva Life Insurance Co.India Pvt. Ltd.
General Insurers :
S.No
.
Registr
ationNumber
Date of
Registration
Name of the
Company
1 123 15.07.2002
CholamandalamGeneral InsuranceCompany Ltd.
2. 124 27.08.2002
Export CreditGuaranteeCorporation Ltd.
3. 125 27.08.2002 HDFC-ChubbGeneral InsuranceCo. Ltd.
http://www.ampsanmar.com/http://www.ampsanmar.com/http://www.avivaindia.com/http://www.avivaindia.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.ampsanmar.com/http://www.ampsanmar.com/http://www.avivaindia.com/http://www.avivaindia.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.cholainsurance.com/http://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.comhttp://www.irdaindia.org/http;//www.ecgcindia.com -
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INSURANCE BUSINESS:
Insurance business is divided into four classes :1) Life Insurance 2) Fire Insurance 3) Marine Insurance and4) Miscellaneous Insurance.Life Insurers transact life insurance business; GeneralInsurers transact the rest.No composites are permitted as per law.
LEGISLATION (as on 1.4.2000):Insurance is a federal subject in India. The primary
legislation that deals with insurance business in India is:Insurance Act, 1938, and Insurance Regulatory &Development Authority Act, 1999.
INSURANCE PRODUCTS (as on 1.4.2000) (for latestinformation get in touch with the current insurers websiteinformation of insurers is provided at the web page forinsurers):
Life Insurance:Popular Products: Endowment Assurance (Participating) andMoney Back (Participating). More than 80% of the lifeinsurance business is from these products.
General Insurance:Fire and Miscellaneous insurance businesses arepredominant. Motor Vehicle insurance is compulsory. Tariff Advisory Committee (TAC) lays down tariff rates for
some of the general insurance products
New products have been launched by life insurers. Theseinclude linked-products. For details, please visit the websitesof life insurers.
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insurer pools all its premiums into a large fund, and when apolicyholder has a loss, the insurer draws funds from the
pool to pay for the loss. Life is full of unexpected events thatcan create large financial losses. For example, whenever youdrive, it is possible that you may have a costly accident.Risks affect you by causing worry about potential loss andhow to deal with the consequences. Insurance reducesanxiety over a possible loss and absorbs the financial bruntof its consequences. However, while insurance coverage isessential, how much and what type of insurance people needdiffer with each individual. You must decide how much risk
you're willing to tolerate without insurance. For example,benefits for disability policies typically begin after a waitingperiod of one to six months. Therefore, you should ensurethat you have some form of coverage or financial resourcesbefore the policy period begin.
Where Can I Get Insurance?Since insurance can be expensive, it makes sense to get morethan one price quote for coverage. At one time, we in India
had no option but the nationalized insurance companies likeLIC, GIC, etc. Now several private players, often with foreigntie-ups, are entering the fray. There are now severalcompanies selling any one type of insurance, each with itsown price structures, coverage, and policy exclusions. Tohelp consumers choose among the various types ofcoverages, companies train sales representatives in thetechnical points of their insurance products. Manyrepresentatives work for just one insurance company. There
are also brokers and independent agents -- self-employedbusiness people who sell insurance on commission forseveral insurers -- who claim they can comparison shop toget the best coverages for consumers. Certain banks also sellinsurance.
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What Type of Insurance Agent Should I Trust?
With multiple players in the life insurance field now, a choiceshould be first made regarding the the insurance companybefore choosing an agent. To determine a company'swillingness to pay claims, ask a policyholder who has filedseveral claims. Obviously, the more claims an insurer hashandled with no complaints, the more likely that thecompany will provide you with good service. Barring LIC, theremaining players in life insurance are still new in the field,so this kind of information will not be available for another
few years at the least. It remains to be seen how the newerplayers will perform on the claims front, but given theregulatory framework and their strong parentage, theirperformance should be comparable, if not better than LIC.
It is quite imperative that your insurance agent be competentand professional enough to clearly understand yourinsurance requirements and suggest a suitable scheme. Also, with insurance companies offering varying rate ofcommissions on different schemes, there is a likelihood that
a 'not-so-professional' agent may be tempted to recommend ascheme which pays him a higher commission, though it maynot be very suitable for your needs. This is especially so inthe case of LIC, sole provider of life insurance in our countrytill recently, where the eligibility criteria are not very rigorousand very often the level of knowledge and competence of theagents leaves a lot to be desired. The new players seem to bemuch more stringent in appointing agents and morecommitted in providing training to them. In today's context,
especially in case of LIC, it may be advisable to go in for anagent who comes recommended from one of your friends,relatives or associates. Further, the agent should be able toprovide you with a comparison of multiple schemes and alsoexplain them in simple terms, so that you are are able tomake an informed decision. In case an agent is not inclinedto spend the time and resources to provide you with relevantinformation and solve your queries, it may be better to give ago-by to such a person and start looking for a new
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Contact Information
ICICI Prudential Life Insurance Company LimitedRegistered Office
ICICI Towers
9th floor, Bandra-Kurla Complex
Mumbai - 400 051.
Tel: 494 3232
Delhi office:
3rd Floor,
Videocon Towers,
E-1, Rani
Jhansi Road,
New Delhi-110055
Tel: 601 3232
Email: [email protected]
Visit us on: www.iciciprulife.com
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Life Insurance Players:
Bajaj Allianz General InsuranceBajaj Allianz General Insurance Company Limited is ajoint venture between Bajaj Auto Limited and Allianz AG ofGermany. Both enjoy a reputation of expertise, stabilityand strength.
Birla Sun Life Insurance
The Aditya Birla Group contributes its knowledge of theIndian market while Sun Life Financial contributes globalexpertise in the areas of protection and wealthmanagement.
HDFC Standard Life InsuranceHDFC and Standard Life have a long and closerelationship built upon shared values and trust. Providinglong term financial security to policy holders will be the
constant endeavor. ICICI Prudential Life Insurance
The Company was granted Certificate of Registration forcarrying out Life Insurance business, by the InsuranceRegulatory and Development Authority.
ING Vysya Life InsuranceING, the worlds second largest life insurance companytogether with Vysya Bank, one of Indias leading private
sector banks, forms ING Vysya Life Insurance. Life Insurance Corporation (LIC)
Life Insurance Corporation (LIC) has been one of thepioneering organizations in India who introduced use ofInformation Technology in their business.
MetLife IndiaThe Metropolitan Life Insurance Company is the numberone insurer in the U.S. It is helping build financial
independence for its customers.
http://www.hdfcinsurance.com/http://www.iciciprulife.com/index.jsphttp://www.ingvysyalife.com/http://www.licindia.com/lichome/index.shtmlhttp://www.metlifeindia.com/http://www.hdfcinsurance.com/http://www.iciciprulife.com/index.jsphttp://www.ingvysyalife.com/http://www.licindia.com/lichome/index.shtmlhttp://www.metlifeindia.com/ -
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Oriental InsuranceThe Oriental Insurance Company Ltd. (OICL) is one of theleading General Insurance companies in India and is asubsidiary of the General Insurance Corporation (GIC) ofIndia.
Royal Sundaram Alliance InsuranceRoyal Sundaram marks the coming together of SundaramFinance, one of Indias most respected and trusted financecompanies, and Royal and Sun Alliance, one of the largest
insurance groups in the world.
Tata AIG InsuranceLife insurance & general insurance for individuals &
corporates by Tata AIG. This site will guide you on how tocapitalize on opportunities and protect againstuncertainties.
http://orientalinsurance.nic.in/http://orientalinsurance.nic.in/ -
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COMPANY
PROFILE
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COMPANY PROFILE
About ICICI PRUDENTIAL:
ICICI Prudential Life Insurance was established in 2000 witha commitment to expand and reshape the life insuranceindustry in India. The company was amongst the first privatesector insurance companies to begin operations afterreceiving approval from Insurance Regulatory Development
Authority (IRDA), and in the time since, has taken severalsteps towards its realizing its goal.The company's wide range of products, distribution strengthsand powerful brand has driven its growth across a cross-section of people and cities. As on March 31, 2003, thecompany had issued nearly 350,000 policies, with a totalpremium income of over INR 5 billion and a total sumassured in excess of INR 87 billion. Today, the company hasestablished itself as the No. 1 private life insurer in the
country.
Our vision:To make ICICI Prudential the dominant Life and Pensionsplayer built on trust by world-class people and service.
This we hope to achieve by:
Understanding the needs of customers and offeringthem superior products and service
Leveraging technology to service customers quickly,efficiently and conveniently
Developing and implementing superior riskmanagement and investment strategies to offersustainable and stable returns to our policyholders
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Providing an enabling environment to foster growth andlearning for our employees
And above all, building transparency in all our dealings.
The success of the company will be founded in itsunflinching commitment to 5 core values -- Integrity,Customer First, Boundary less, Ownership and Passion.Each of the values describes what the company stands for,the qualities of our people and the way we work.
We do believe that we are on the threshold of an exciting new
opportunity, where we can play a significant role inredefining and reshaping the sector. Given the quality of ourparentage and the commitment of our team, there are nolimits to our growth.
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Board of DirectorsThe ICICI Prudential Life Insurance Company Limited Boardcomprises reputed people from the finance industry bothfrom India and abroad.Mr. K.V. Kamath, ChairmanMr. Mark TuckerMrs. Lalita D. GupteMr. Danny BardinMrs. Kalpana Morparia
Mrs. Chanda KochharMr. M.P. ModiMr. R NarayananMr. S.P.Subhedar, (Alternate Director to Mr. Danny Bardin)Mr. Derek Stott, (Alternate Director to Mr. Mark Tucker)Ms. Shikha Sharma, Managing Director
Management Team
Ms. Shikha Sharma, Managing DirectorMs. Anita Pai, Chief - Operations & UnderwritingMr. Bill Lisle, Chief Agency OfficerMr. Sandeep Batra, Chief Financial Officer & CompanySecretaryMr. Saugata Gupta, Chief - MarketingMr. Shubhro J. Mitra, Chief - Human ResourcesMr. V. Rajagopalan, Appointed Actuary
Mr. Anil Tikoo, Head - Information Technology
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Fact Sheet
THE COMPANY
ICICI Prudential Life Insurance Company is a joint venturebetween ICICI, a premier financial powerhouse andPrudential plc, a leading international financial servicesgroup headquartered in the United Kingdom. ICICIPrudential was amongst the first private sector insurance
companies to begin operations in December 2000 afterreceiving approval from Insurance Regulatory DevelopmentAuthority (IRDA).
ICICI Prudentials equity base stands at Rs. 4.25 billion withICICI Bank and Prudential plc holding 74% and 26% stakerespectively. As of March 31, 2003, the company had issuednearly 350,000 policies with a sum assured in excess of Rs8,700 crore and total premium income of over Rs. 500 crore.
Today the company is the #1 private life insurer in thecountry.
DISTRIBUTION:
ICICI Prudential has one of the largest distribution networksamongst private life insurers in India, having commencedoperations in 29 cities and towns in India. These are:Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore,
Gurgaon, Hyderabad, Indore, Jaipur, Jalandhar, Kanpur,Kochi, Kolkata, Kottayam, Lucknow, Ludhiana, Madurai,Mangalore, Meerut, Mumbai, Nagpur, Nasik, Noida, NewDelhi, Pune, Surat, Thane, Vadodara and Vashi.
The company has the largest number of bancassurance tie-ups, having agreements with ICICI Bank, Citibank,Allahabad Bank, Federal Bank, South Indian Bank, Bank ofIndia, Lord Krishna Bank, and Punjab & Maharashtra Co-operative Bank, as well as some corporate agents. It has also
tied up with organizations like Dhan for distribution of
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ICICI Prudential Life Insurance offers a range of innovative,customer-centric products that meet the needs of customers
at every life stage. Its 13 products can be enhanced with upto 4 riders, to create a customized solution for eachpolicyholder.
Savings Solutions- ICICI Pru Save n Protect is a traditional endowmentsavings plan that offers life protection along with adequatereturns.- ICICI Pru CashBak is an anticipated endowment policy
ideal for meeting milestone expenses like a child''s marriage,expenses for a child''s higher education or purchase of anasset.
Protection SolutionsICICI Pru LifeGuard is a protection plan, which offers lifecover at very low cost. It is available in 3 options - level termassurance, level term assurance with return of premium andsingle premium.
Child SolutionsICICI Pru SmartKid provides guaranteed educationalbenefits to a child along with life insurance cover for theparent who purchases the policy. The policy is designed toprovide money at important milestones in the child''s life.Market-linked Solutions- ICICI Pru LifeLink is a single premium Market LinkedInsurance Plan which combines life insurance cover with theopportunity to stay invested in the stock market.
- ICICI Pru LifeTime offers customers the flexibility andcontrol to customize the policy to meet the changing needs atdifferent life stages. It offers 3 investment options - GrowthPlan, Income Plan and Balanced Plan.
Retirement Solutions- ICICI Pru ForeverLife is a retirement product targeted atindividuals in their thirties.Market-linked retirement products
- ICICI Pru LifeTime Pension is a regular premium market-
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linked pension plan- ICICI Pru LifeLink Pension is a single premium market-
linked pension plan.
Single Premium Solutions- ICICI Pru AssureInvest is a single premium savingsproduct with life cover for terms of 5, 7 or 10 years.- ICICI Pru ReAssure is a retirement product for seniorcitizens who are on the verge of retirement or have justretired.ICICI Prudential also launched ''Salaam Zindagi'', a social
sector group insurance policy targeted at the economicallyunderprivileged sections of the society.
Group Insurance SolutionsICICI Prudential also offers Group Insurance Solutions forcompanies seeking to enhance benefits to their employees.
ICICI Pru Group Gratuity Plan: ICICI Pru''s group gratuityplan helps employers fund their statutory gratuity obligationin a scientific manner. The plan can also be customized tostructure schemes that can provide benefits beyond thestatutory obligations.
ICICI Pru Group Superannuation Plan: ICICI Pru offers aflexible defined contribution superannuation scheme toprovide a retirement kitty for each member of the group.Employees have the option of choosing from various annuityoptions or opting for a partial commutation of the annuity atthe time of retirement.
ICICI Pru Group Term Plan: ICICI Pru''s flexible group termsolution hel