CHAPTER

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GENERAL INTRODUCTION

INTRODUCTION The entire effort of human life is to proceed from uncertainty to certainty. The rigmarole of life proceeds with first acquiring the wherewithal to earn a living and then striving for its betterment and ensuring that the comfort and pleasure derived from a physical commodity or a human being continues. It is at the latter stage that the mechanism of Insurance comes in play.The concept of insurance is in essence related to the protection of the economic value of assets. Every asset whether physical or in form of a human being has a value. The asset is built up in the expectation that, either through the income generated there from or some other output, some needs of the individual would be met. For example, in the case of an industry its production is sold and income generated. In the case of a vehicle, it provides comfort and convenience in transportation.1ST Insurance in India started from 1817.Basically it is divided into two types such as General insurance & Life insurance. After freedom there are 245 companies in India who provide life insurance. In 1956 finance minister C.D.Deshmukh seize all those companies. There is only one life insurance company from1956-2000 that is LIC of India. In 1993 the finance secretary R.N.Malhotra introduce IRDA(Insurance Regulatory Development Authority) act. After that private life insurance companies came into existence. HDFC is the 1st private insurance company in India. After that ICICI prudential Life insurance corporation started its operation. From 2001-2008 ICICI place the 1st position among all private insurance company. Now days there are 12 private life insurance companies.As compare to past now a days insurance companies provides not only life cover plan but also provides investment plan. In recent trend there are two type of plan provided by the Life insurance company such as Traditional Plan ULIP (Unit Linked Insurance Plan)Traditional Plan consisting of a long maturity period where as ULIP consists of both insurance and investment having shorter maturity period.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.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 ofpeople insured against similar risk. Insurance is a plan, which spreads the risk and losses of few peopleamong 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, causes proximal, subrogation, etc. The scope of insurance is much wider and extensive.

Functions of insurance:Primary functions: Provide protection: - Insurance cannot check the happening of the risk, but can provide for the losses of risk. Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others. Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.Secondary functions: Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions. Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty. Contributes towards development of larger industries.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. The insurer should have sufficient knowledge about the risks he accepts.Fundamentals of InsuranceThe fundamental Principles of the Insurance are as follows: Insurable Interest: Insurable interest means the legal right 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 the Insured 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.3. Administrators and executors i.e. officials appointed by a court of law to take care of a property may also insure the property.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 under his policy and he may also have rights against third parties. If, after the insurance claim is settled, the insured is 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.Nature of Insurance ContractsWhen 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 theIndian Contract Act, 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: Offer and acceptance: Usually, the offer is made by the proposer, and acceptance made by the insurer. 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. Agreement between the parties: Both the parties should agree to the same thing in the same sense. 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. Legality: The object of the contract must be legal and the contract should not violate any legal requirements. E.g. no insurance can be had for smuggled goods.RiskReasonable 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.Approaches to Risk ManagementRisk 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: 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 produce any 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. 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. Assuming risk: Many companies draw on current revenues or set aside a "Contingency Fund" to cover unexpected 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. 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 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.

OVERVIEW OF THE INDUSTRYOrigin of life insuranceLife 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 IndiaIn 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 Shastra).The word `Yogakshema is used in the Rig Veda suggesting that some form of community insurance was 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. The concept of trusteeship was lacking. Many insurance companies went into liquidation. There were malpractices 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. To utilize the funds for nation-building activities. To avoid cut throat competition. To abolish mal-practices. 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 of 1956) 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.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 ReportIn 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 as independent- corporations. All the insurance companies should be given greater freedom to operate.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 Finance Ministry) should be made independent.Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time).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 whether equity should be payable in one go or should be brought in as installments. Also, the foreign equity participation 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 the funds should be invested? Currently 70% of the funds with LIC & GIC are invested in Government securities. Would new entrants be allowed to invest in GOI securities?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 all probability would be middle class individuals.Potentiality of Insurance in Indian MarketMarketing 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 area 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 of the individuals.By opening up the sector far more opportunities has came up in insurance and reinsurance market. After privatization of this sector presence of the foreign players has also increased. Therefore the insurers, in time to come, will have to change their attitude from selling of the product to marketing of the protection needs of the insured and for this is required is: Effective product planning Suitable pricing Efficient promotion and physical distribution. Proper physical evidence. Good and well trained sales force.

CHAPTER

2

INTRODUCTION TO THE PROBLEM

STATEMENT OF THE PROBLEMThe Project I have taken up is A STUDY ON MARKETING STRATEGIES OF ICICI PRUDENTIAL, The reason why I took up this subject is because today, insurance industry is among the fastest growing sector and it provides wonderful business marketing, where by people can use their free time for the purpose of not only earning money and rewards but also build meaningful relationships. Through this project work, I expect to come with meaningful analysis on awareness of public on A STUDY ON MARKETING STRATEGIES OF ICICI PRUDENTIAL. OBJECTIVES OF THE STUDY: To know the marketing strategy in ICICI Prudential Life Insurance. To know the public interest towards the insurance. To know the brand awareness towards ICICI Prudential Life Insurance Co. Ltd. To find out which parameter is motivating insurance advisers to join insurance field. To make suggestions and recommendations to improve upon the working of the company.SCOPE OF STUDYThe study is for the products of ICICI Prudential Life Insurance and Consumer Perception of life insurance product will be limited to the New Delhi and NCR only. The information will be based on the companys website, literature provided by the company and questionnaire analysis.PERIOD OF STUDYThe study was undertaken during the period of 2014 from 26th February 2014 to 26 March 2014. 2014, A total of 4 weeks.

HYPOTHESIS TESTSHypothesis: A tentative explanation for an observation, phenomenon, or scientific problem that can be tested by further investigation. A hypothesis describes in concrete terms, in the form of a statement, what you expect will happen in your study.H0: Null hypothesis: Null hypothesis states that there is no difference between the population parameter & the sample statistics being compared.H1: Alternative hypothesis: Alternate hypothesis states that there is a difference between the population parameter and sample statistics.:Following aspects should be kept in mind when formulating a hypothesisHypotheses can only be formulated after the researcher has gained enough knowledge regarding the nature, extent and intensity of the problem. Hypotheses should figure throughout the research process in order to give structure to the research. Hypotheses are tentative statements/solutions or explanations of the formulated problem. Care should be taken not to over-simplify and generalize the formulation of hypotheses.The research problem does not have to consist of one hypothesis only. The type of problem area investigated, the extent which encircles the research field.

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A BRIEF DESCRIPTION OF ORGANISATION PROFILEPROFILE OF THE ORGANISATION:ICICI Prudential Life InsuranceICICI Prudential Life Insurance is a joint venture between the ICICI Group and Prudential PLC, of the UK. ICICI started off its operations in 1955 with providing finance for industrial development, and since then it has diversified into housing finance, consumer finance, mutual funds to being a Virtual Universal Bank and its latest venture Life Insurance.Foreign Partner:Established in 1848, Prudential PLC. of U.K. has grown to be the largest life insurance and mutual fund company in U.K. Prudential PLC. has had its presence in Asia for the past 75 years catering to over 1 million customers across 11 Asian countries.Prudential is the largest life insurance company in the United Kingdom (Source: S&P's UK Life Financial Digest, 1998).ICICI and Prudential came together in 1993 to provide mutual fund products in India and today are the largest private sector mutual fund company in India.Their latest venture ICICI Prudential Life plans to take care of the insurance needs at various stages of life.ICICI Prudential Life Insurance was established in 2000 with a commitment to expand and reshape the life insurance industry in India. The company was amongst the first private sector insurance companies to begin operations after receiving approval from Insurance Regulatory Development Authority (IRDA), and in the time since, has taken several steps towards its realizing its goal.The company's wide range of products, distribution strengths and powerful brand has driven its growth across a cross-section of people and cities. As on March 31, 2003, the company had issued nearly 350,000 policies, with a total premium income of over INR 5 billion and a total sum assured in excess of INR 87 billion. Today, the company has established itself as the No. 1 private life insurer in the country.ICICI Prudential Life Insurance Company is a joint venture between ICICI, a premier financial powerhouse and Prudential PLC, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).ICICI Prudentials equity base stands at Rs.4.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. As of March 31, 2003, the company had issued nearly 350,000 policies with a sum assured in excess of Rs 8,700 crore and total premium income of over Rs. 500 crore. Today the company is the #1 private life insurers in the country.Company VisionTo make ICICI Prudential the dominant Life and Pensions player built on trust by world- class people and service.This is what ICICI Prudential hope to achieve by: Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to faster growth and learning for ICICI Prudential employees And above all, building transparency in all ICICI Prudential dealings.The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work.We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to ICICI Prudential growth.Board of DirectorsThe ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both abroad. from India and Mr. K.V. Kamath, Chairman Mr. Mark Tucker Mrs. Lalita D. Gupte Mr. Danny Bardin Mrs. Kalpana Morparia Mrs. Chanda Kochhar Mr. M.P. Modi Mr. R Narayanan Mr. S.P.Subhedar, (Alternate Director to Mr. Danny Bardin) Mr. Derek Stott, (Alternate Director to Mr. Mark Tucker) Ms. Shikha Sharma, Managing DirectorManagement Team Ms. Shikha Sharma, Managing Director Ms. Anita Pai, Chief - Operations & Underwriting Mr. Bill Lisle, Chief Agency Officer Mr. Sandeep Batra, Chief Financial Officer & Company Secretary Mr. Saugata Gupta, Chief Marketing Mr. Shubhro J. Mitra, Chief - Human Resources Mr. V. Rajagopalan, Appointed Actuary Mr. Anil Tikoo, Head - Information TechnologyProducts Insurance Solutions for Individuals:ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its 13 products can be enhanced with up to 4 riders, to create a customized solution for each policyholder.

Savings Solutions:ICICI Pru Save n Protect is a traditional endowment savings plan that offers life protection along with adequate returns.ICICI Pru CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset.Protection Solutions:ICICI Pru LifeGuard is a protection plan, which offers life covers at very low cost. It is available in 3 options - level term assurance, level term assurance with return of premium and single premium.Child Solutions:ICICI Pru SmartKid provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life.Market-linked Solutions:ICICI Pru LifeLink is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market .ICICI Pru .Life Time offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers 3 investment options - Growth Plan, Income Plan and Balanced Plan.Retirement Solutions:ICICI Pru ForeverLife is a retirement product targeted at individuals in their thirties. Market- linked retirement productsICICI PruLifeTime Pension is a regular premium market-linked pensionplanICICI Pru LifeLink Pension is a single premium market-linked pension plan.Single Premium Solutions:ICICI Pru AssureInvest is a single premium savings product with life cover for terms of 5, 7 or 10 years.ICICI Pru ReAssure is a retirement product for senior citizens who are on the verge of retirement or have just retired.ICICI Prudential also launched ''Salaam Zindagi'', a social sector group insurance policy targeted at the economically underprivileged sections of the society.Group Insurance Solutions:ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.ICICI Pru Group Gratuity Plan:ICICI Pru''s group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations.ICICI Pru Group Superannuation Plan:ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement.ICICI Pru Group Term Plan:ICICI Pru''s flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options:ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. Accident benefit: This rider option pays the sum assured under the rider on death due to accident. Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death. Major Surgical Assistance Benefit: provides financial support in the event of medical emergencies, ensuring that benefits are payable to the life assured for medical expenses incurred for surgical procedures. Cover is offered against 43 different surgical procedures.About The PartnersICICI Bank (NYSE:IBN) is Indias second largest bank with an asset base of Rs. 106812 crore. ICICI Bank provides a broad spectrum of financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards, corporate and agricultural finance. The Bank services a growing customer base of more than 7 million customer accounts and 5 million bondholders accounts through a multi-channel access network. This includes about 450 branches and extension counters, 1675 ATMs, call centres and Internet banking (www.icicibank.com). ICICI Bank posted a net profit of Rs.1, 206 crore for the year ended March 31, 2003. ICICI Bank is the only Indian company to be rated above the country rating by the international rating agency Moody''s and the only Indian company to be awarded an investment grade international credit rating. The Bank enjoys the highest AAA (or equivalent) rating from all leading Indian rating agencies.Established in 1848, Prudential plc is a leading international financial services company in the UK, with some US$250 billion funds under management and more than 16 million customers worldwide. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia, Prudential is UK''s largest life insurance company with a vast network of 22 life and mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Since 1923, Prudential has championed customer-centric products and services, supported by over 60,000 staff and agents across the region.Insurance Plans Savings Plans:Most endowment policies are a good way of saving for the future. A policy can be designed to make your savings grow and have them available to you at the end of a fixed number of years. Or, a policy could provide you with an income every three or four years.You can browse through these policies to find one that best suits your needs: SmartKid - a superior way to guarantee your childs future no matter what the uncertainty. LifeTime - a complete market-linked insurance plan that adapts itself to your changing protection and investment needs, throughout a lifetime. Save'n' Protect - a traditional endowment savings plan that offers both high returns and protection. CashBak - an endowment savings plan that allows you to get back substantial survival benefits without having to wait till the maturity date.

Depending on your particular needs, Savings Plans could allow you to do one or more of the following: Plan For Tangibles: buy that fashionable car, that huge refrigerator, etc. Plan For A Cosy Nest: by facilitating the purchase of that home you have always dreamt of. Plan For Milestones: ensure a good education for your children, children's wedding, etc. Save on Deferred Taxes: because the interest income and maturity benefits of the Policy are tax exempt. Lifestyle Planning: maintain your lifestyle - even if your income was to reduce in the future. Legacy Creation: buy property; invest in shares, bonds, etc. for your children or grandchildren. Attain Greater Heights: ensure that your children's education continues undisrupted.Protection PlansWe all hope to live a full life till a ripe old age... to ensure our children's sustenance and healthy growth. But what if a sudden disability or illness strikes? Besides the grief and the pain, such an event also completely disrupts life for all the people who are financially dependent on us. Our life insurance policies offer a comprehensive range of protection benefits:Lifeguard - A low cost-high protection plan that offers protection over a specified period.Riders - Additional benefits that one can add on to the policy. The rider can be opted for at the time of taking the basic policy. Additional premium is charged for each rider.An insurance policy can be tailor made to provide protection to you and your loved ones. If something were to happen to you, it can help:Safeguard Your Better Half: ensure life's continuity for your loved one.Dear and Near Ones: ensure continuity of lifestyle for your dependents.Attain Greater Heights: ensure your children's education continues undisrupted.Unforeseen circumstances: bear the cost of fighting an illness, disability, etc.

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4

THEORETICAL PERSPECTIVES

In spite of the vast potential, the retirement solutions category remained virtually untapped by the Indian Insurance players - until ICICI Prudential decided to build and explore this hidden goldmine. The following case study discusses how ICICI Prudential used smart marketing strategy to exploit this opportunity to its advantage.Sussan VergheseICICI Prudential.Market ScenarioWith increasing life expectancy on one hand and rising inflation and medical costs on the other, the need for planning ones retirement was emerging as an important one. However, it was quite surprising to know only 11 per cent of Indias total working population was adequately covered for post-retirement life. This was mainly due to low awareness of and attitudinal barriers with respect to these issues among consumers.The OpportunityAbout 90 per cent of the working population in India was without retirement cover. Of this, a sizeable portion belonged to the age group of 30-40 yrs - a big market left unexploited so far.Even the market leader LIC, which has been in the country for decades, had failed to truly drive growth of the retirement products category. Proof being the mere 4.16 per cent contribution of pension products to its entire portfolio (as of end 2002).The BarriersThe task of capturing the unexploited market however, turned out to be an uphill one. The first barrier was low awareness of the need for early retirement planning among consumers. Add to it the consumers notion that planning for retirement starts only in your 50s. The bigger issue however, was the consumers perceptions and fears as far as retirement was concerned. The word retirement itself brought to mind all the negatives associated with old age loss of independence (social, financial and physical), causing avoidance or deferment of decisions regarding the same.The Challenge To re-position the traditional concept of retirement planning and thus create relevance for it among the 30-40 yrs age group. To change behaviour, inducing consumers to invest in retirement planning early in life.CAMPAIGN OBJECTIVES Bring the concept of planning for retirement into the consideration set of 30-40 year old working men/ women thereby creating a new market 50 per cent of pensions contributions to come from persons below 40 years Sales and market share targets within six months post campaign (for the period Sep 2002 to Mar 2003):1. Sales target: INR 400 million2. Share of total pensions market: 10 per cent3. Contribution of pensions to portfolio: 20 per centTARGET AUDIENCE SEC A, B, 30-40 year old, chief wage earner, who: is at the prime of his working life, with a higher disposable income and majority of work life still at hand. Currently thinks that retirement planning holds very low importance, as compared to other needs of asset acquisition, childs education etc.CREATIVE STRATEGYConsumer Insight Retirement is a long way off why plan for it now?Retirement means the end of all good things in lifeCreative strategyTo a younger target group, for whom retirement is synonymous with growing old, the strategy was to offer a fresh perspective by mirroring the never say die attitude of the 35 yr old. If age doesnt stop him from sharing in the joys of life now, why should it stop him later? PropositionICICI Prudential Retirement solutions help you plan early for retirement, ensuring that you will continue to live life the way you always wanted to.The advertising messageRetire from work not life!OTHER COMMUNICATION PROGRAMSThe laddered task of share gain through changing consumer attitudes and behaviour, called for a multi-dimensional communication strategy that went beyond traditional mass media. Retirement Solutions Seminars: Through a tie up with The Times of India, full-page educative advertorials were released in three metros inviting consumers for a free seminar on early retirement planning. Over 2000 consumers attended these seminars. Direct Marketing Campaign: More than 15 databases were carefully chosen to accurately target the 30-40 yr old. Customers of/subscribers to ICICI Bank credit card holders, Safety Bond holders, Money control and Myiris are few of the databases that were used. Retirement Planner: An educative booklet in the form of a planner was created explaining why it made better sense to start planning for retirement several years in advance. The mode of distribution was an innovation in Brand Equity (The Economic Times). Retirement calculator: A user-friendly calculator was designed to help customers calculate the current savings required in order to meet post-retirement expenses. This was made available on the brand website and used extensively as a needs analysis tool at the time of sale.MEDIA STRATEGYThe overriding objective of the media strategy was customer interaction through various touch points using a 24-hour cycle. So a multi media strategy was developed to contact the target at every possible touch point. TV: This was the main medium for reach, impact and demonstrate the emotional pay off. For the first month of launch a high reach, high frequency plan was implemented, followed up with three months of sustained activity. The activity started with 40-second commercials and then moved to 20 and 30 seconds edits aimed at increasing frequency. Print: Press reinforced the rational benefit of saving early to cushion your retirement by highlighting the products comprehensive features. Vehicles were chosen based on the best cost per response i.e. the publication which would generate the maximum no of call ins. Radio: The new FM channels launched in the previous year were explored to reach audiences out of home. The spots were aired so as to get the morning and evening office-going traffic. Outdoor: A high visibility-high impact outdoor strategy was implemented across 21 cities. Morning traffic sites were specifically selected to target the office going consumer. Internet: Used innovatively to seek responses via click-throughs. Financial sites and general interest sites were chosen considering the net is used both in office and at home. Direct Marketing: Mailers and brochures played the dual role of educating the consumer on the rationale behind planning early for retirement and the advantages of ICICI Pru Retirement Solutions. Public Relations: Was effectively used to educate consumers on early retirement planning, making them more receptive towards the brands communication. Competitive Media Spends: The combined spend of just the top 2 competitors put to- gether amounted to Rs 16 crores approx. Comparatively the spends on the ICICI Pru campaign was Rs 4.8 crores.MEDIA Television Newspaper Consumer Magazine Radio Point-of-Purchase Out-of-Home Public Relations Sales Promotion Consumer SeminarsEVIDENCE OF RESULTS Overwhelming response To begin with, the campaign triggered a large number of consumer response calls and e-mails (35000 calls and 3000 emails). The response rate for mailers sent out (Direct Marketing) varied from five per cent to 7.5 per cent, far higher than both domestic and international norms across categories.Changing Attitudes The average age of a person investing in ICICI Pru retirement solutions dropped to 38.5 years.Sales and Market Shares:The success of the campaign was not limited to phone calls alone. The campaign contributed greatly to the organisations topline and bottomline as is evident form the charts below: 1. Sales achieved for the period Sept 02 to Mar 03, were INR 740 million as compared to a target of INR 400 million. 2. Market share Gain: The brand increased its share of pensions market to 23 per cent against target of 10 per cent for the period Sep 2002 to Mar 2003. The table below which compares ICICI Prus share in the pensions market with the overall life insurance category puts the campaigns success in perspective.

CHAPTER

5

METHODOLOGY

RESEARCH METHODOLOGYFor achieving the objectives of study, survey was conducted. For survey, personal interviews of the customers were undertaken. Personal interviews was selected as the mode of survey to make the study more meaningful & so that maximum information could be collected. For conducting the personal interviews of the customers, a questionnaire was made. The questionnaire was structured with open ended & close ended questions.Problem definition:-A Study Of Marketing Strategies Of ICICI Prudential Life InsuranceType of Research:-This research is Descriptive in nature.Descriptive research is used to describe something usually market characteristics , functions behavior Research PlanResearch planning is the process of developing the most efficient plan for gathering the needed information.Data sourceThe major source of data is Primary but Secondary data is also used for making the project.Primary dataPrimary data has been collected with the help of Questionnaires.Secondary dataSecondary data is collected through the company brochures, manuals, periodicals, newsletters, articles, internet and other publications.

Questionnaire structureFor the research multiple choice type of questions were prepared to collect primary data from the respondents.Sampling PlanThe plan includes the following-:Sampling unitsSampling units consist of all kinds of customer.Sample Size: I have covered 100 customers in Delhi.Types of Data: I have used printing as well as secondary data. Some data is been taken from internet, some from ICICI PRUDENTIAL LIFE INSURANCE COMPANY. literature and some is gathered through questionnaire.

CHAPTER

6

DATA PREPARATION

HYPOTHESIS TESTINGChi-square analysis is made to find out, whether the relationship between preference and differentiating factors of Debit Card.Hypothesis:H0: Null hypothesis: There is no significant relationship between preference and differentiating factors of Debit Card.

H1: Alternative hypothesis:There is a significant relationship between preference and differentiating factors of Debit Card.

OBSERVED FREQUENCYPARAMETERSSERVICEQUALITYSPECIALFEATURESAFETYHOLDINGSTOTAL

UNEDUCATED PERSON634720

EDUCATED PERSON109112454

PREFRENCE5761331

OTHERS334515

TOTAL24222549120

EXPECTED FREQUENCY

EXPECTED FREQUENCY = RESPECTIVE ROW TOTAL*RESPECTIVE COLUMN TOTAL/GRAND TOTAL

PARAMETERSSERVICEQUALITYSPECIALFEATURESAFETYHOLDINGS

UNEDUCATED PERSON43.664.168.16

EDUCATED PERSON10.89.911.2522.05

PREFRENCE6.25.686.4512.65

OTHERS32.753.126.12

APPLYING CHI SQUARE

OEO-E(O-E)2(O-E)2/E

64241

33.66-0.660.43560.119

44.16-0.160.02566.154

78.16-1.161.34560.165

1010.8-0.80.640.059

99.9-0.90.810.082

1111.25-0.250.06255.555

2422.051.953.80250.172

56.2-1.21.440.232

75.681.321.74240.307

66.45-0.450.20250.031

1312.650.350.12259.684

33000

32.750.250.06250.023

43.120.880.77440.248

56.12-1.121.25440.205

12024.036

Calculated Value = 24.04Table Value = (r-1)*(c-1) = (4-1)*(4-1) = (3)*(3) = 9LEVEL OF SIGNIFICANCE=5%TABLE VALUE FOR 9 = 16.CONCLUSION:Since the calculated value (34.19) is greater than the table value (16.92) the null hypothesis is rejected and the alternative hypothesis is accepted. There is a significant relationship between the preference and the differentiating factors

CHAPTER

7

FINDINGS

FINDINGS FROM THE STUDY Majority of the respondents believed that larger risk coverage of their policy was the main feature that attracted them to buy that policy, low premium was the next important feature. ICICI Prudential is the largest private player in the insurance industry in India. Due to the increasing concern of people towards their health/life the life insurance business has good prospects. There are few short term plans which are not known to the public. Company has high policy charges which are not affordable by the lower middle and lower class people. Out of total population of 1 billion of country, only 22% have insurance cover. So we can say that there is still large potential for both the public and private companies. Private companies have to give varied customized product to compete with the LIC which is holding about 97% of the total market.

CHAPTER

8

LIMITATION

LIMITATION OF THE STUDY: The area of study is limited to Delhi. The bias response from the respondents may have introduced errors in the survey findings. The sample is limited. Time constraint.

CHAPTER

9

RECOMMENDATIONS

RECOMMENDATIONS & SUGGESTIONS: Most of the people are interested on Sum Assured and Additional benefits and some people are interested in minimum premium, hence company has to formulate those policies which are mostly preferred by customers and prospects. Rural people are not interested and they are not understanding about life insurance. So, if the company concentrates on rural area and to make awareness of them, then they can assure their life of benefit. Company should make their products flexible for the convenience of their customer and the companies should now try to identify the gap between current level of customer service and customer expectations.

CHAPTER

10

CONCLUSION

CONCLUSIONThere is no equivalent way to learn things than learning it practically. Everyone learns from his mistakes, on experience. The practical experience is an entirely different aspect when considered about what we learnt in classroom. This project report would reveal the various learning process. How to talk with customers? , how to communicate with senior officials? I would like to convey my regards and sincere thanks to Mr. Rajiv (Sales Manager) of ICICI Prudential Life Insurance, guidance throughout my project and also for helping me to complete my project report successfully.I would like Conclude that ICICI Prudential Life Insurance provided me with a very good friendly learning environment; they are equipped with high quality infrastructure, pantry Facilities combined with neat and clean environment.

BIBLOGRAPHY

INTERNET SOURCES http://en.wikipedia.org/wiki/ICICI_Bank http://en.wikipedia.org/wiki/Prudential_plc http://www.slideshare.net/g_g_sharma1986/icici-prudential-presentation http://www.icicigroupcompanies.com/history.html

BOOKS Philip Kotler, Armstrong, Agnihotri and Haque, (2010), Principles of Marketing- A South Asian Perspective, 13th edition, Pearson Education. Beri, G.C., (2007), Marketing Research: Research Design, 4th Edition, McGraw Hill Education. Malhotra, Naresh,(2008), Marketing Research, 5th edition, pearson education Philip Kotler, KoshiJha, (2009), Marketing Management, 13th edition, pearson education.

APPENDICES

QUESTIONNAIRE

52