Description
Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."
INTRODUTION
1.1. Overview
ICICI Bank is India's second-largest bank with total assets of about Rs.146,214 crore at December 31, 2004 and profit after tax of Rs. 1,391 crore in the nine months ended December 31, 2004 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 530 branches and extension counters and over 1,880 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom and Canada, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank's equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). As required by the stock exchanges, ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. At April 4, 2005, ICICI Bank, with free float market capitalization* of about Rs. 308.00 billion (US$ 7.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of
India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transactionbanking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity. *Free float holding excludes all promoter holdings, strategic investments and cross holdings among public sector entities. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the period April-December 2004, the company garnered Rs 12.6 billion of new business premium for a total sum assured of over Rs 120 billion and wrote nearly 14,00000 policies. The company has a network of over 42,000 advisors; as well as 7 bank assurance tie-ups. Today, ICICI Prudential has emerged as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. Current share including LIC is 7.5% were as in the private sector it is 41%. Our vision: To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. This we hope to achieve by: Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders providing an enabling environment to foster growth and learning for our employees and above all, building transparency in all our dealings. The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values 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 our growth. Board of Directors
The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Mr. Mark Norbom Mrs. Lalita D. Gupte Mrs. Kalpana Morparia Mrs. Chanda Kochhar Mr. Kevin Holmgren Mr. M.P. Modi Mr. R Narayanan Ms. Shikha Sharma, Managing Director Management Team Ms. Shikha Sharma, Managing Director, CEO Mr. Sandeep Batra, Chief Financial Officer & Company Secretary Mr. Shubhro J. Mitra, Chief - Human Resources Mr. Puneet Nanda, Head - Investments Ms. Anita Pai, Chief - Customer Service and Operations Mr. V. Rajagopalan, Appointed Actuary Mr. Dipan Bhattacharya - Chief Information Technology ICICI and Prudential came together in 1993 to form Prudential ICICI Asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial service brands in Asia, known for their professionalism, excellent quality of service and long term commitment to YOU. Riding on the success of this relationship, the two companies joined hands once more in 2000, to form ICICI Prudential Life Insurance, with a commitment to provide leading-edge life insurance solutions. ICICI Bank has 74% stake in the company, and Prudential plc has 26%. ICICI Bank (NYSE:IBN) is India''s second largest bank with an asset base of Rs.
146,214 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. Prudential plc Established in 1848, Prudential plc is a leading international financial services company in the UK, with around 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. Now is the time to ask which is a better portfolio – one with large-cap orientation or one wit mid-cap orientation. On this issue too there is a lot of research, but with no conclusive evidence. Mid-cap enthusiasts talk of “size premium” – they assert that a basket of mid-cap companies would consistently outperform a basket of large-cap companies. However this is widely contested by several leading academicians as well as practitioners. They argue that excess returns, if any, are either due to statistical quirks in the sample data or a rational compensation for excess risks of mid-size
companies. After all only a certain percentage of mid-size companies go on to become large companies. In Indian markets over the last 12 months mid-cap stocks have done much better than large –cap stocks – however it is important to test a rule for consistency across time before asserting it as a fundamental principle. Akin to the study on value versus growth orientation, we have also done a detailed research on long-term returns of mid-cap and large portfolios in India, using data spanning a ten-year period. We did not find midcap portfolios to have any superior returns to large-cap portfolios – in fact, they were inferior. In terms of percentage gains, and in times bearishness, mid-caps fall more than large-caps. Summary There is no investment rule such as growth or value, large-cap or mid-cap which when applied indiscriminately will yield to superior investment results. The characterization is used by investment managers and media to simplify what is essentially a complex activity. What is important in investing is looking at every investment from first principles in terms of financial performance and valuation, rather than resorting to mechanical investing paradigms. Warren Buffet, the most successful professional investor of all times, aptly pointed out in the year 2000 annual report of Berkshire Hathaway. “Market commentators and investment managers who glibly refer to “growth” and “value” style as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component usually a plus, sometimes a minus – in the value equation”. Something similar can be about the large-cap versus mid-cap contrast as well. Smaller size means better growth prospects and likely higher returns-sometimes but not always.
1.2 COMPANY PROFILE:
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 being 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-section of people and cities. On Aug 31,2004, the company crossed the 10,00000 policies milestone with a premium income of around Rs. 1000 crore and a total sum assured of over Rs. 2,700 crore to establish itself as the No.1 Private Life Insurer in the Country. Our vision is to make ICICI Prudential Life Insurance Company the dominant new insurer in the Life Insurance Industry. This we hope to achieve through our commitment to excellence, focus on service, speed and innovation, and leveraging our technological expertise. The success of this organization will be founded on its strong focus on values and clarity of purpose. These include: 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 stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all building transparency in all our dealings.
We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in reading and reshaping the sector. Given the quality of our parentage and commitment of our team, there are no limits to our growth. ICICI and prudential came together in 1993 to from prudential ICICI Asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial service brands in Asia, known for their professionalism, excellent quality of service and long term commitment to you. Riding on the success of this relationship, the two companies joined hands once more in 2000, to form ICICI Prudential Life Insurance, with a commitment to provide leading edge Life Insurance Solutions. ICICI Bank has 74% stake in the company, and Prudential Plc has 26%. ICICI BANK: ICICI Bank (NYSE: IBN) is the largest private sector bank in the country with an asset base of over Rs. 100,000 Crore. The Bank offers a broad spectrum of financial services to individuals and companies including deposit accounts, commercial banking, mortgages, car loans, personal loans, corporate and trade finance, credit and debit cards and other Banking services. ICICI Bank today services a growing customer base of more than 5 million customer accounts and 5 million bondholder accounts across the country through a multi-channel access net work. This includes over 400 branches and extent ion counters, 120 retail centers, 1005 ATMs, call centers and Internet banking. For the year ended march 31, 2003, ICICI Bank posted net profit of Rs. 358 crore. Prudential plc: Establishing in 1848, prudential plc is a leading international financial services company I the UK, with around US$276 billion funds under management, and more than 13 million customer’s world wide. 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 across the region. 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 being operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential’’s equity base stands at Rs. 190 crore With ICICI and Prudential Plc holding 74% and 26% stake respectively. On March 31,2004, the company crossed the 5,50000 policies milestone with a premium income of approximately Rs. 1000 crore. The total sum assured has crossed Rs. 10,700 crore and today the company has established itself as the #1 Private Life Insurer in the country. Ms. Shikha Sharma is the Managing Director of the company. Mr. Kevin Wright is Executive Vice President, Sales and Distribution Mr. Saugata Gupta is Chief – Marketing & Services. DISTRIBUTION: ICICI Prudential has one of the largest distribution networks amongst Private life Insurers in India, having commenced operations in 74 cities and towns in India. These are: Ahmedabad, Bangalore, Chennai, Chandigarh, Coimbatore, Gurgaon, Hyderabad, Vijayawada, Guntur, Visakapatnam, Indore, Jaipur, Kochi, Kolkata, Lucknow, Madurai, Mangalore, Meerut, Mumbai, Nasik, Nodia, New Delhi, Pune and Vadodara etc.
The company has distribution agreements with several corporate agents as well as banks such as ICICI Bank, federal Bank, south Indian Bank, Bank Of India and Punjab & Maharashtra Co-Operative Bank. It has also tied up with BASIX, Dhan, CASPOR, and Shepherd and world vision for distribution of salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained over 55,000Insurance agents and corporate Advisors to interface with and advice customers. Further it leverages its state- of – the –art IT infrastructure to provide superior quality of service to customers. The Life Insurance Scenario in India: Since 1956, with the nationalization of insurance industry, the state-run Life Insurance Corporation of India (LIC) has held the monopoly in that country’s life insurance sector. General insurance corporation of India (GIC), with its four subsidiaries, was its counterpart in the casually sector. Over time, taking advantage of its monopoly and virtual prerogative in establishing premiums, LIC has evolved into a monolith. With around 6, 00,000 agents in every nook and corner of the vast country, it has created an enviable brand name, particularly among the rural population of the country. It has around $40 billion as its life fund and is a strong player in the financial sector. However, on the qualitative side, it has very little to take pride in. and there lies the potential for foreign players to challenge this behemoth. As is typical with monopolies, the premium rates charged by LIC are among the highest in the world, and its track record in customer service can, at best, be called shabby. With a huge unionized, rigid workforce mostly in the clerical category, LIC runs the risk of high fixed cost, which will be the deciding factor in productivity in the competitive scenario. While boasting full- scale automation of its operation, the truth is that its technology is outdated. The new players, with the state-of-the-art technology under their belt, will be in an advantageous position. 80% of LIC’s business is procured by 20% of its ill-trained agent force.
The foreign player, with the domestic partner’s strong brand value, can test the unconventional distribution channels like brokers, the internet, the banking distribution
system, etc. although foreign players may be tempted to keep their operation in the big cities for the creamy layer of the society, the real market lies in rural India, which accounts for the lions share of LIC’s present business. The foreign player must learn to adapt to Indian realities. The well-publicized failures of world famous consumer goods companies like Electrolux, whirlpool, Reebok, Nike etc.to gauge the Indian psyche and sentiments demonstrate the concept. They failed in the areas of realistic pricing, product promotion and reaching to the consumer. The foreign companies need to know the “ground realities” to the details. Political scenario move a resolution or vetoing a resolution in Board Of Directors’ Meeting). Until recently, India continued to be one of the few remaining countries of the world to remain insulated from the direct foreign investment in its insurance sector. However, things are changing now with the passage of insurance Regulatory Development Act (IRDA) through Indian parliament in late 1999. A much awaited and much debated act, it meets with strong resistance from the political institutions of India and took almost six years to see daylight. Though first recommended by Malhothra Committee on insurance Reforms in 1994, what emerges is a diluted from of the original recommendations. However in the long awaited period of its passage, the issue was nationally debated and was finally ‘de-politicized’, meaning that the reform path is ‘irreversible’. IRDA, for the time being, prohibits 100% foreign equity in insurance. It requires the Indian promoter to invest either wholly in an insurance venture or team up with a foreign insurer, with a cap of 26% of equity for a foreign partner. The Indian promoter is permitted to divest only after 10 years to the Indian public, through a public offering of shares, at which time the equity structure will provide for equal participation between the Indian and foreign partner with a share of 26% each in the share capital.
The underlying tone of the 26% cap for the foreign insurer is to ensure that financial intrest substantially vests with the Indian promoter, permitting the foreign co-promoter a define say in direction and management (By Indian Company Law, 26% is the minimum equity to
It is important to note that the 26% level is the bargained solution by the privatization proponents (read Government) in the face of stiff political resistance. The main two political poles of Indian politics – the Congress party and the Bharatiya Janata Party (BJP) – are both in favor of the reform. Only the extent of the reform and who-willbell-the-cat-and-get-the- (dis) credit factor bar them in reaching a consensus for more sweeping reforms. The populist out-of-fashioned socialistic jingoism, making these parties rightist ideology, is fast losing its appeal to the masses. This will only hasten the reform process. COMPARISON WITH CHINA: Currently India and china are the most lucrative insurance markets in the world. India and china constitute the home of half of the population of the world and their recent rapid economic development makes them attractive for foreign investment. Though India’s economic development is not as rapid as china’s, it enjoys comparative strength in the socio-political front. India is the world’s largest democracy and democracy is deep- rooted in its social and political institutions. The executive and the judiciary system are the continuation of British legacy, which ruled India for 200 years. English, the unofficial language of correspondence and instruction, is well spoken by the educated. Another strength is its abundant highly educated skilled workforce. India’s stride in the fields of software and logical ability is well known in the world. The savings rate is quite high in US standards. All this makes India an attractive destination of US insurance companies. Insurance sector reforms have been slow to take shape, taking nearly a decade. Thanks to the proposed reforms, quite a few global insurance majors are streaming into the country. A burgeoning middle class, high per capita savings, and low penetration of insurance are some of the key factors responsible for the tremendous intrest foreign insurance companies are showing in the Indian insurance industry. An insurance survey by LIC and KPMG reveals intresting facets of the emerging trends in the emerging trends in the Indian insurance industry. The annual growth in the average insurance premium in India has been 8.2 per cent compared with the global average of 3-4 per
cent. Insurance density stood at $3,236 in Japan, $1,079 in the US, $ 18 in Brazil and $ 14 in Mexico. The share of life insurance premium to GDP was 1.29 per cent in India, which is abysmal in the global standard. Despite these opportunities, however, there is also a through ride ahead for the new players in India. This is because, unlike in the west, insurance is sold more as an instrument of savings in India than as a product offering protection and security. LIC’s 1996 insurance survey reveals that more than 40 percent of insurance – buyers look at insurance products as a means of savings. Risk coverage is only a secondary objective. Nearly 26 percent of the insurance policies sold are on considerations of old age security. Only 18 per cent of insurance policies are sold on death risk considerations. Between expectation and reality, of course, there is a bridge. Will the average citizen reach out to private players and invest his lifetime’s earnings with them? Here, the new companies probably will be fighting a mindset. The life insurance corporation and general insurance corporation, by virtue of their monopoly status, are so deeply idea of private insurance products. They have to educate the people, and integrate the sector with its world counterpart by shifting its shifting its learning from savings to risk entrenched in the popular psyche that it would likely require Herculean effort to sell the hedging. The economic reform process in India is ‘irreversible’ and is producing a strong efficient financial system in the model of its US counterpart. The insurance companies will only hasten the process. From a socio-economic development point of view, the huge amount of funds that will be at the disposal of players will be directed in desired avenues like infrastructure, housing, safe drinking water, electricity and primary education. The growth of the debt market, which hitherto had been a neglected child of the capital market, will also get a boost as the funds from insurance companies start flowing into the kitty of the corporate sector. Once again this will boost demand and growth by raising employment levels. Similarly, stock market investments will further aid the growth of the capital market and equity cult. The multiplier effect will be enormous. Policyholders will get better pricing of products from insurance majors. Permission to invest more in corporate equity and debt instruments would also enhance returns on policy funds. Once the benefit of opening the sector becomes noticed in the
society, the misplaced concern regarding ‘fight of money outside the country’ will be removed from the mindset of people, which should aid in garnering popular support for the free, competitive liberalized economy.
Facing the reality of a saturated home market, the US insurance companies must look outward and concentrate on the real growth economies like India and china. Since the gestation period of the typical insurance business is around ten years, it is high time to make their presence felt in India. The new players will have to prove their creditworthiness. It will be a time consuming and difficult task to win customers away from LIC and gain their trust. Their track record and brand value in overseas market will not help them much in getting immediate brand recognition in India. Through they may piggyback on the brand name of their local partner, I the long run; it is their persistent track record and creditworthiness, which will matter. So, being among the first will be a deciding factor in the success in this business. Already several components have entered into the market and a dozen companies have joined with foreign partners (see table). The real growth in twenty- first century will come from countries like India and china. Delay may doom future efforts to stake a claim in these high potential markets.
Note: the list of foreign players entering the Indian insurance sector and their Indian partners: Indian partner Aditya Birla Group Kotak Finance HDFC Foreign insurer Sun Life, Canada Specialization Life Present status Received License Received License Received License, Commences Reliance No Foreign Alliance operation Life, Non- Life and Received Health ICICI Prudential, UK Life License for Non-Life Received License, Commences ICICI Max India Sundaram IFFCO Tata Group Vsya Bank Hero Group Choolamandalam Group Hindustan- Times Dabur Bajaj Auto Lombard, Canada New York Life, USA Non-Life Life Operation Not applied Received License Received License Received License Received License Applied for license Not Applied Not Applied Not Applied Not Applied IRDASeeks more
Mahindra Old Mutual, South Africa Life Standard Life, UK Life
Royal & Sun Alliance Non-Life Plc, UK Tokyo Marine, Japan AIG,USA Ing Non-life Non-Life Insurance, Life Life Life Life Life Non Life
Netherlands Zurich, Switzerland Undecided Undecided CGNU Life, UK Allianz
Undecided Sanmar Group SBI S Kumar’s, J&K Bank Corporation Bank Undisclosed Undisclosed Undisclosed
Met life, USA AMP, Australia Cardiff, France Undisclosed Undisclosed Aegon, Netherlands Cigna, USA Chubb, USA
Life Life Life Non Life Life Life and Pensions Life and Health Property & Caualty
information Not Applied Not Applied Not Applied Finalizing Partner Finalizing Partner Finalizing Partner Finalizing Partner Fina lizing Partner
Undisclosed
Yasuda Marine And Fire
Non – Life
Fina lizing Parter
Undisclosed Undisclosed Citi Bank, India Undisclosed Videocon International
Mitsui Marine and Fire Nation Wide, USA Undecided GE Captial
Non – Life Life And Pensions Non Life
Finalizing Partner Finalizing Partner Finalizing Partner Finalizing Partner Finalizing Partner
Services LIFE
international, USA Talks on with BNP Non-life Paribas, AXA, France
1.2 PRODUCT PROFILE 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 6 Riders, to create a Customized Solution for Each Policyholder. Terminologies: DB: Death Benefit: Death Benefit paid in a Life Insurance Policy or an annuity Plan with lives cover in the event of the Life Assured passing away during the term. LA: Life Assured:
Person who is Insured under the Plan. SA: Sum Assured: Amount of Money for which the Insurance is taken. VB: Vested Bonus: Bonuses that have accrued over the term of the plan in with profits plans. PP: Purchase Price: The accumulation of the money in a deferred annuity plan. GA: Guaranteed Additions: Guaranteed return that the insurer adds to the Sum Assured. Prospect: Individual that has the potential to purchase a life insurance policy – i.e. age, health and money. Proposer: The person who buys the policy – Proposer and life assured can be the same person or different – but should fulfill the principle of insurable intrest Proposer is the nominee. Nominee: The custodian to the claim – may or may not be the rightful owner to the claim money. When the Proposer and the life assured are different individuals then by default the Proposer is the nominee.
Annuitant: The policyholder who has pensioned / annuity plan. Claimant: The person who makes a claim Beneficiary: The rightful successor to the claim.
WHAT ARE RIDERS: Riders are features attachable with a main policy, which provide added protection against specific risks at extra cost. General Features of Riders: Riders can be attached to policies from the beginning or on each policy anniversary date. Once attached, a rider can now be discontinued at a later date. The combined premiums of all Riders attached to a policy cannot be grater than 30% of the premium of the basic plan. (As per IRDA Regulations). The SA of an individual Rider cannot exceed Rs 10 Lakhs and cannot exceed the SA of the basic plan. Riders are pure risk covers and hence have no maturity benefits.
ICICI- Prudential offers the following Riders along with their main policies. Critical Illness Benefit Rider Major Surgical Assistance Rider Accident Benefit Rider Accident and Disability Benefit Rider Income Benefit Rider Waiver of Premium Benefit Rider Rider Benefits Riders carry either of 2 benefits. They are: Accelerated Benefit: In this type of benefit, the rider, along with a claim on itself, essentially accelerates or brings forward the claim of the base policy before its time. After the claim settlement, the base policy terminates. Standalone Benefit: In this kind of benefit, the rider has no bearing on the baser policy. Even after the rider claim has been paid, the base policy continues uninterrupted. THE CRITICAL ILLNESS BENEFIT RIDER This Rider is meant to give financial assistance to the family in case the life assured contracts a critical illness. The ideal prospect 1. Young, busy executives who are too stressed out with work and hence need grater protection. 2. Young people who are just about to settle down in life
. 3. Minimum monthly in come of Rs.10, 000. CIBR covers 9 different critical illnesses. These are Major Organ Transplant Complete Renal Failure Stroke Paralysis Heart Attack Valve Replacement Surgery Major Surjery of the Arota Coronary Artery Graft Surgery Cancer
Pointers on CIBR Claims CIBR claims are not honored if they arise within 6 months of purchasing the policy. Notice of claim has to be filed within 60 days of diagnosis. Only diagnosis is required for the claim. The CIBR can be attachable with the following base plans. Save ‘n’ Protect CashBak ForeverLife – here the CIBR is standalone, which means that the plan continues even when the claim of CIBR has been made.
MAJOR SURGICAL ASSISTANCE RIDER
This is a rider, which gives financial assistance in the event of a major surgery. The ideal prospect: Young, busy executives who are too stressed out with work and hence need grater protection. Young people who are just about to settle down in life. Minimum monthly income of Rs. 10,000 The MSAR covers 43 surgical procedures. These are categorized as Minor surgeries (11 surgeries), intermediate (15 surgeries) or major surgeries. (17 surgeries) Pointers on MSAR claims MASR claims are not honored if they arise within 6 months of purchasing the policy. Claim is entertained only after surgery is performed and discharge report obtained. However, bills are not required for the claim. The MSAR is attachable with the following base plans. 1. Save ‘n’ protect 2. CashBak 3. ForeverLife
Accident Benefit Rider The ABR is a Rider, which gives financial assistance in the event of accidental death. The ideal prospect ? Young, busy executives who are too exposed to traveling and commuting. ? Young people who are just about to settle down in life. ? . Minimum monthly in come of Rs.10, 000.
Product Features: Benefits payable during the term: 100% of Rider SA paid on death due to an accident. 200% of Rider SA paid on death due to traveling in a mass public transport system. On disability: Waiver of premium of basic plan to the extent of Rider SA. 10% of SA is paid every year for the next 10 years. The ADBR is attachable with the following base plans: 1. Save ‘n’ protect 2. CashBak
3. Smart kid 4. Lifeguard Regular Premium 5. ForeverLife INCOME BENEFIT RIDER: IBR enables giving more financial support to near and dear ones in case of premature death. The IBR is only available with the smart kid. It has been designed keeping in mind that bestowing the best to a child in his formative years includes diverse expenses on developmental growth. This means money spent on extra curricular activities, picnics, trips etc.
Benefits: In this rider in the event of the life assured dying – 10% of the sum assured is paid annually to the end of the term. WAIVER OF PREMIUM RIDER: This rider gives an additional benefit, which ensures freedom from the burden of premium payment on the main policy in the event of total and permanent disability. Benefit: On total or permanent disability, future premiums on the policy waived.
2.1 RESEARCH OBJECTIVES ICICI Prudential Life Insurance Com. Ltd., wanted a feedback of the following from the consumers. 2.1.1. Primary objective:
? To find out the brand awareness and customer satisfaction on ICICI Prudential life insurance. ? To find out why ICICI Prudential is in their selling strong market. ? To find out the awareness of the newly introduced products of ICICI Prudential among the potential customers. 2.1.2. Secondary object: ? To find out the level of awareness among consumers regarding ICICI Prudential. ? To find out the factors influencing the purchase of insurance products. ? To find out the various brands owned by the consumers.
? To find out the various source of brand awareness. ? To study the customer satisfaction of ICICI Prudential. ? To find out the reasons for the brand switch over by the customer. ? To know attitude of customer in Chennai city towards ICICI Prudential in terms of service premium, scheme.
2.2 RESEARCH METHODOLOGY Research is growing need in any organization of the present world. It is helpful in identifying the consumer needs and wants so as to launch a product or to bring about improvement in the existing products. This is done to gain competitive edge over others. Success of the research depends upon the methodology adopted. The study was based on descriptive research (also known as explanatory design). The research methodology deals with the research design, data collection methods, sampling method, fieldwork, and the analysis and interpretation of research work.
2.2.1 RESEARCH DESIGN A research design is the specification of methods and procedure for acquiring the information needed. Research design classified under three
broad categories – explanatory, casual and descriptive. But the researcher was concerned mainly with descriptive research design. The study was conducted in order to find out the aware & consumer satisfaction of the ICICI Pru Life Insurance Com. Ltd., at Chennai city.
2.3. SAMPLING DESIGN & TOOLS APPLIED Sampling techniques 2.3.1 Sampling Plan: One of the main elements in the research design is sampling plan which is further divided into sampling unit, sampling size, sampling type. 2.3.2Sampling Unit: Sampling unit can be defined as the basic unit containing the brand awareness and consumer satisfaction in Chennai.
2.3.3. Sampling Size: In this research, the sample size amount to one hundred, which are surveyed from consumers in Chennai. 2.3.4. Sampling Type: Convenience sampling I adapted in this research. It is a non-probability sampling and it is refers to selecting a sample based on convenience. And also, the stastical tool are applied viz. (a) chi-square test, k-s test and z-test. 2.4. DATA COLLECTION
The primary data the respondents which or collected with a questionnaire schedule was used with consumers were conducted in Chennai. Secondary data were collected from the company profile, manuals, journals, magazines and newspapers etc. 2.4.1. Tertiary Data: The data were collected from the various literatures which are related to the subject of brand awareness viz. (a) Philip Kotler, Rajan Nair, peter M. Chisnall Shanthi Sopis. 2.4.2. Research Tool Structures self administered questionnaire had been used as a research tool for collecting 2.4.3. Primary data. The questionnaire from is designed in the multi choice pattern and has the following technique. 2.4.4. Direct questions In this type, the respondents were asked to answer directly to their questions.
2.4.5. Indirect questions
Indirect questions refer to those whose responses are used
Occupation Business Professional Salaried person Others Total No. of Respondents 37 26 27 10 100
to indicate or suggest
information.
Open ended questions In this type, respondents are likely to choose their answers. Closed ended questions Respondents are offered to select their options given.
? Dichotomous types (yes or no pattern) ? Multiple choice type ( objective type)
Table showing occupation of the respondent Table 3.1 .1
Interpretation: The above table indicates that out of 100 samples, 37%respondents are business people, 26% are professionals, 27 % are salaried people, and 10% respondents are related to other professional.
Graph 3.1.1
No. of Respondents occupation
120 100 80 60 40 20 0
es Pr s of es sio Sa na lar l ie dp er so n Ot he rs Bu sin To ta l
No. of Respondents
Table showing income level of the respondent Table 3.1.2
Income level (monthly) 5000-10000 10000-15000 15000-20000 More than 20000 Total No. of Respondents 25 30 28 17 100
Interpretation: The above table indicates that out of 100 samples, 25% respondents are earning 5000-10000,30% respondents are earning 10000-15000,28% respondents are earning 15000-20000,more than 20000 earn by the17% of the respondents.
Graph 3.1.2
No. of Respondents income level
120 100 80 60 40 20 0 5000- 10000- 15000- More 10000 15000 20000 than 20000 Total No. of Respondents
Table showing Age group of respondents Table 3.1.3
Age (Years) 20-30 30-40 40-50 50 Above Total No. of Respondents 25 36 30 9 100
Interpretation: The above table indicates that out of 100 samples, 25% respondents are age group between 20-30, 36% respondents are age group between3040, 30% respondents are age group between40-50, 9% respondents are age falling under 50 & above.
Graph 3.1.3
No. of Respondents Age group
120 100 80 60 40 20 0 20-30 30-40 40-50 50 Above Total No. of Respondents
Table showing identified the respondent insurance policy holder (or) not Table 3.1.4
Policy holder Yes No Total No. of Respondents 78 22 100
Interpretation: The above table indicates that out of 100 samples, 78% respondents are holding insurance policy. 22% respondents are not having insurance policy.
Graph 3.1.4
identified the respondent insurance policy holder (or) not
120 100 80 60 40 20 0 Yes No Total No. of Respondents
How Many years do you investing in insurance sector Table 3.1.5
Period (yrs) 0-1 1-2 2-3 More than 3 No Total No. of Respondents 17 30 17 14 22 100
Interpretation: The above table indicates that out of 100 samples, 17% respondents are investing insurance sector from0-1 yr, 30% respondents are investing insurance sector from1-2 yr,17% respondents are investing insurance sector from 2-3 yr,14% respondents are in this sector from more than 3 yrs,22% respondents are don’t investing in insurance sector.
Graph 3.1.5
How many years do you investing in insurnace sector
120 100 80 60 40 20 0
0 to1
1 to 2
2 to 3
More than 3
No
Total No. of Respondents
Brand prefer by the customer Table 3.1.6
Company name ICICI Prudential LICI Birla sun Life SBI Life Total No. of Respondents 18 58 11 13 100
Interpretation: The above table indicates that out of 100 samples,18% respondents are prefer ICICI Prudential,58% respondents are prefer LICI, 11%respondents are prefer Birala Sun Life,13% respondents are prefer SBI Life.
Graph 3.1.6
Brand perfer by the customer
120 100 80 60 40 20
de nt ia l
0
ife
Li fe
su n
ru
IC IC IP
B
irl
a
S
Responds of Brand awareness Table 3.1.7
Company name ICICI Prudential LICI Birla sun Life SBI Life Total No. of Respondents 28 44 12 16 100
Interpretation: The above table indicates that out of 100 samples,28% respondents are prefer to take ICICI Prudential,44% respondents are prefer to take LICI ,12%respondents are prefer to take Birla Sun Life , respondents are prefer to take SBI Life.
B I
No. of Respondents
T ot al
LI C I
L
Graph 3.1.7
Responds of Brand awareness
120 100 80 60 40 20
ia l ife
0
ru
de nt
Li fe
LI C I
su n
IC IC IP
B
irl
a
S
Table showing major the respondent insurance policy product Table 3.1.8
Factors Security Risk Free Loans Brand Image Total No. of respondents 27 29 16 28 100
Interpretation: The above table indicates that out of 100 samples, 27% people logged policy because of security, 29% people logged policy because of risk free, 16%people logged policy because of loans, and 28% people logged policy because of brand image.
Graph 3.1.8
B I
No. of Respondents
T
ot al
L
major the respondent insurance policy product
120 100 80 60 40 20 0
ag e ec ur it y Lo an s Im To ta l Fr ee
No. of respondents
k
R is
S
Table showing aware of ICICI Prudential Table 3.1.9
Aware Yes No Total No. of respondents 88 12 100
Interpretation: The above table indicates that out of 100 samples, 88% respondents are aware of ICICI Prudential, 12% respondents are not aware of ICICI Prudential.
B
Graph 3.1.9
ra n
d
No. of respondents aware of ICICI Prudential
120 100 80 60 40 20 0 Yes No Total No. of respondents
Table showing know about ICICI Prudential Table 3.1.10
Knowing ICICI Prudential Magazines Friends & Relatives News papers Agents Television Total No. of respondents 9 31 21 14 25 100
Interpretation: The above table indicates that out of 100 samples,9% respondents are aware of ICICI Prudential,31 % of respondents know about the ICICI Prudential through friends & relatives.21% respondents as came across ICICI Prudential through news paper,14 %respondents through agents,25% respondents as aware of ICICI Prudential through television.
Graph 3.1.10 No. of respondents know about ICICI Prudential
120 100 80 60 40 20 0
Magazines
Television
Friends &
Relatives
papers
Agents
News
Table showing interested in investing ICICI Prudential Table 3.1.11
Interested Investment Yes No Total No. of respondents 65 35 100
Interpretation: The above table indicates that out of 100 samples, 65% respondents are interested in investing ICICI Prudential, 35% of respondents are not interested in investing ICICI Prudential.
Graph 3.1.11
Total
No. of respondents
No. of respondents interested in investing ICICI Prudential
120 100 80 60 40 20 0 Yes No Total No. of respondents
Table showing No. of respondents policy issued by ICICI Prudential Life Table 3.1.12
No. of respondents Yes No Total 48 52 100
Interpretation: The above table indicates that out of 100 samples, 48%of respondents have policy issued by the ICICI Prudential insurance, 52% of respondents not having policy issued by the ICICI Prudential.
Graph 3.1.12
No. of respondents policy issued by ICICI Prudential Life
120 100 80 60 40 20 0 Yes No Total No. of respondents
Table showing respondent prefer which type of policy Table 3.1.13
Policy name Yes, save ‘n’ protect Life time Money back Life Guard No Total No. of respondents 12 10 16 10 52 100
Interpretation: The above table indicates that out of 100 samples,12% of respondents will prefer Save ‘n’ Protect,10% of respondents will prefer life time,16% of respondents will prefer money back,10% of respondents will prefer life guard,52% of respondents not having any policy.
Graph 3.1.13
No. of respondents prefer which type of policy
120 100 80 60 40 20 Yes, save ‘n’ 0 Money back No No. of respondents
Table showing respondent opinion about which insurance product sells more? Table 3.1.14
Policy type Smart kid Life time pension Money back Riders Total No. of respondents 22 37 25 16 100
Interpretation: The above table indicates that out of 100 samples,22% respondents are given the opinion that smart kid sell more, 37% respondents are given the opinion that life time pension sell more, 25% respondents are given the opinion that money back sell more, 16% respondents are given the opinion that riders sell more.
Graph 3.1.14
No. of respondents opinion about which insurance product sells more
120 100 80 60 40 20 0 Smart kid Life time pension Money back Riders Total
No. of respondents
Table showing comment on the rate of premium charged by ICICI Prudential Table 3.1.15
Type of Rate Very high High Mode rest Normal Total No. of respondents 18 26 37 19 100
Interpretation: The above table indicates that out of 100 samples, 18% of respondents as given comment the rate of premium charged by ICICI Prudential is very high, 26 % of respondents as given comment the rate of premium charged by ICICI Prudential is high, 37% of respondents as given comment the rate of premium charged by ICICI Prudential is mode rest, 19% of respondents as given comment the rate of premium charged by ICICI Prudential is normal.
Graph 3.1.15
No. of respondents comment on the rate of premium charged by ICICI Prudential 120 100 80 60 40 20 0 Very high High Mode Normal Total rest No. of respondents
Factors of market position about ICICI Table 3.1.16
Factors Aggressive advertisement Availability Sales promotion Better service Total No. of respondents 28 22 25 25 100
Interpretation: The above table indicates that out of 100 samples, 28% of respondents as given their opinion in aggressive advertisements, 22% of respondents as given their opinion in availability, 25% of respondents as given their opinion in sales promotion, 25% of respondents as given their opinion better service.
Graph 3.1.16
Factors of market position about ICICI
120 100 80 60 40 20 0
er tis em en t io n ce se r vi ty A va pr om ot ila To ta l bi li
e
ss iv
S
al es
B et te r
ad v
Respondents feel ICICI potential is superior than other brands Table 3.1.17
Aspects More security High returns Smart interest High yield Total No. of respondents 13 30 32 25 100
A
people feel ICICI Prudential is superior than other brands by means of more security, 30% of respondents feels ICICI prudential is superior than other brands because of high returns, 32% of respondents for smart interest rates is superior than other products, 25% of respondents feel ICICI Prudential is superior than other products by means high yield.
gg re
No. of respondents
Interpretation: The above table indicates that out of 100 samples, 13% of
Graph 3.1.17
No. of respondents feel ICICI potential is superior than other brands
120 100 80 60 40 20 0 More security High returns Smart interest High yield Total
No. of respondents
Table showing recommend to any of your friends Table 3.1.18
Recommendation Yes No Total No. of respondents 40 60 100
Interpretation: The above table indicates that out of 100 samples, 40% of respondents as recommended to their friends, 60% of respondents as not recommended to their friends.
Graph 3.1.18
Recommend to any of your friends
120 100 80 60 40 20 0 Yes No Total No. of respondents
Present level of advertisement adequate for expansion Table 3.1.19
Advertisements Yes No Total No. of respondents 63 37 100
Interpretation: The above table indicates that out of 100 samples, 63% of respondents stated yes that present level of advertisements adequate for expansion in this sector. 37% of respondents stated no expansion in this sector. that present level of advertisements adequate for
Graph 3.1.19
Present level of advertisement adequate for expansion
120 100 80 60 40 20 0 Yes No Total No. of respondents
Respondents prefer medium of advertisement Table 3.1.20
Prefer medium of advertisements No. of respondents News paper 10 Television 8 DTHS 8 Cable 2 FM 5 Others 4 Total 37 Interpretation: The above table indicates that out of 100 samples,10% respondents prefer the medium of advertisements through NEWSPAPER,8% respondents prefer the medium of advertisements through TELEVISION, 8% respondents prefer the medium of advertisements through DTHS, 2% respondents prefer the medium of advertisements through CABLE, 5% respondents prefer the medium of advertisements through FM,
4% respondents prefer other mode of advertisements direct from the company.
Graph3.1.20
No. of respondents prefer medium of advertisement
40 35 30 25 20 15 10 5 0
pa pe r Te le vi sio n S Ca bl e O th er s D TH To ta l FM
No. of respondents
Ne ws
Prefer mode of buying Table 3.1.21
Mode of buying Direct from company Insurance advisors Total No. of respondents 53 47 100
Interpretation: The above table indicates that out of 100 samples, 53% of respondents prefer mode of buying direct from the company. 47% of respondents prefer mode of buying direct from the insurance advisor.
Graph 3.1.21
Prefer mode of buying respondents 120 100 80 60 40 20 0 Direct from company Insurance advisors Total No. of respondents
Are you aware of ICICI Prudential Table 3.1.22
Are you aware Yes No Total No. of respondents 67 33 100
Interpretation: The above table indicates that out of 100 samples,67% of respondents as suggested to change the brand of the policy,33% of respondents as suggested to not change the brand of the policy.
Graph 3.1.22
No. of respondents aware of ICICI Prudential 120 100 80 60 40 20 0 Yes No Total No. of respondents
Respondents prefer immediate brand go for Table 3.1.23
Prefer immediate brand Bajaj AMP Sanmar SBI Life Met Life Total No. of respondents 15 30 16 16 67
Interpretation: The above table indicates that out of 100 samples, 15% of respondents will go for BAJAJ, 20% of respondents will go for AMP SANMAR, 16% of respondents will go for SBI LIFE, and 16% of respondents will go for MET LIFE.
Graph 3.1.23
No. of respondents prefer immediate brand go for
80 70 60 50 40 30 20 10 0 Bajaj AMP Sanmar SBI Life Met Life Total No. of respondents
Respondent’s opinion about satisfied with operations of claim procedure Table 3.1.24
Respondent’s opinion Yes No sTotal No. of respondents 60 40 100
Interpretation: The above table indicates that out of 100 samples, 60% of respondents satisfied with operations of the company, 40% of respondents not satisfied with operations of the company.
Graph 3.1.24
No. of respondents opinion about satisfied with operations of claim procedure 120 100 80 60 40 20 0 Yes No Total No. of respondents
doc_950746910.doc
Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."
INTRODUTION
1.1. Overview
ICICI Bank is India's second-largest bank with total assets of about Rs.146,214 crore at December 31, 2004 and profit after tax of Rs. 1,391 crore in the nine months ended December 31, 2004 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 530 branches and extension counters and over 1,880 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom and Canada, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank's equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). As required by the stock exchanges, ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. At April 4, 2005, ICICI Bank, with free float market capitalization* of about Rs. 308.00 billion (US$ 7.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of
India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transactionbanking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity. *Free float holding excludes all promoter holdings, strategic investments and cross holdings among public sector entities. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the period April-December 2004, the company garnered Rs 12.6 billion of new business premium for a total sum assured of over Rs 120 billion and wrote nearly 14,00000 policies. The company has a network of over 42,000 advisors; as well as 7 bank assurance tie-ups. Today, ICICI Prudential has emerged as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. Current share including LIC is 7.5% were as in the private sector it is 41%. Our vision: To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. This we hope to achieve by: Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders providing an enabling environment to foster growth and learning for our employees and above all, building transparency in all our dealings. The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values 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 our growth. Board of Directors
The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Mr. Mark Norbom Mrs. Lalita D. Gupte Mrs. Kalpana Morparia Mrs. Chanda Kochhar Mr. Kevin Holmgren Mr. M.P. Modi Mr. R Narayanan Ms. Shikha Sharma, Managing Director Management Team Ms. Shikha Sharma, Managing Director, CEO Mr. Sandeep Batra, Chief Financial Officer & Company Secretary Mr. Shubhro J. Mitra, Chief - Human Resources Mr. Puneet Nanda, Head - Investments Ms. Anita Pai, Chief - Customer Service and Operations Mr. V. Rajagopalan, Appointed Actuary Mr. Dipan Bhattacharya - Chief Information Technology ICICI and Prudential came together in 1993 to form Prudential ICICI Asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial service brands in Asia, known for their professionalism, excellent quality of service and long term commitment to YOU. Riding on the success of this relationship, the two companies joined hands once more in 2000, to form ICICI Prudential Life Insurance, with a commitment to provide leading-edge life insurance solutions. ICICI Bank has 74% stake in the company, and Prudential plc has 26%. ICICI Bank (NYSE:IBN) is India''s second largest bank with an asset base of Rs.
146,214 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. Prudential plc Established in 1848, Prudential plc is a leading international financial services company in the UK, with around 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. Now is the time to ask which is a better portfolio – one with large-cap orientation or one wit mid-cap orientation. On this issue too there is a lot of research, but with no conclusive evidence. Mid-cap enthusiasts talk of “size premium” – they assert that a basket of mid-cap companies would consistently outperform a basket of large-cap companies. However this is widely contested by several leading academicians as well as practitioners. They argue that excess returns, if any, are either due to statistical quirks in the sample data or a rational compensation for excess risks of mid-size
companies. After all only a certain percentage of mid-size companies go on to become large companies. In Indian markets over the last 12 months mid-cap stocks have done much better than large –cap stocks – however it is important to test a rule for consistency across time before asserting it as a fundamental principle. Akin to the study on value versus growth orientation, we have also done a detailed research on long-term returns of mid-cap and large portfolios in India, using data spanning a ten-year period. We did not find midcap portfolios to have any superior returns to large-cap portfolios – in fact, they were inferior. In terms of percentage gains, and in times bearishness, mid-caps fall more than large-caps. Summary There is no investment rule such as growth or value, large-cap or mid-cap which when applied indiscriminately will yield to superior investment results. The characterization is used by investment managers and media to simplify what is essentially a complex activity. What is important in investing is looking at every investment from first principles in terms of financial performance and valuation, rather than resorting to mechanical investing paradigms. Warren Buffet, the most successful professional investor of all times, aptly pointed out in the year 2000 annual report of Berkshire Hathaway. “Market commentators and investment managers who glibly refer to “growth” and “value” style as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component usually a plus, sometimes a minus – in the value equation”. Something similar can be about the large-cap versus mid-cap contrast as well. Smaller size means better growth prospects and likely higher returns-sometimes but not always.
1.2 COMPANY PROFILE:
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 being 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-section of people and cities. On Aug 31,2004, the company crossed the 10,00000 policies milestone with a premium income of around Rs. 1000 crore and a total sum assured of over Rs. 2,700 crore to establish itself as the No.1 Private Life Insurer in the Country. Our vision is to make ICICI Prudential Life Insurance Company the dominant new insurer in the Life Insurance Industry. This we hope to achieve through our commitment to excellence, focus on service, speed and innovation, and leveraging our technological expertise. The success of this organization will be founded on its strong focus on values and clarity of purpose. These include: 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 stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all building transparency in all our dealings.
We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in reading and reshaping the sector. Given the quality of our parentage and commitment of our team, there are no limits to our growth. ICICI and prudential came together in 1993 to from prudential ICICI Asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial service brands in Asia, known for their professionalism, excellent quality of service and long term commitment to you. Riding on the success of this relationship, the two companies joined hands once more in 2000, to form ICICI Prudential Life Insurance, with a commitment to provide leading edge Life Insurance Solutions. ICICI Bank has 74% stake in the company, and Prudential Plc has 26%. ICICI BANK: ICICI Bank (NYSE: IBN) is the largest private sector bank in the country with an asset base of over Rs. 100,000 Crore. The Bank offers a broad spectrum of financial services to individuals and companies including deposit accounts, commercial banking, mortgages, car loans, personal loans, corporate and trade finance, credit and debit cards and other Banking services. ICICI Bank today services a growing customer base of more than 5 million customer accounts and 5 million bondholder accounts across the country through a multi-channel access net work. This includes over 400 branches and extent ion counters, 120 retail centers, 1005 ATMs, call centers and Internet banking. For the year ended march 31, 2003, ICICI Bank posted net profit of Rs. 358 crore. Prudential plc: Establishing in 1848, prudential plc is a leading international financial services company I the UK, with around US$276 billion funds under management, and more than 13 million customer’s world wide. 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 across the region. 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 being operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential’’s equity base stands at Rs. 190 crore With ICICI and Prudential Plc holding 74% and 26% stake respectively. On March 31,2004, the company crossed the 5,50000 policies milestone with a premium income of approximately Rs. 1000 crore. The total sum assured has crossed Rs. 10,700 crore and today the company has established itself as the #1 Private Life Insurer in the country. Ms. Shikha Sharma is the Managing Director of the company. Mr. Kevin Wright is Executive Vice President, Sales and Distribution Mr. Saugata Gupta is Chief – Marketing & Services. DISTRIBUTION: ICICI Prudential has one of the largest distribution networks amongst Private life Insurers in India, having commenced operations in 74 cities and towns in India. These are: Ahmedabad, Bangalore, Chennai, Chandigarh, Coimbatore, Gurgaon, Hyderabad, Vijayawada, Guntur, Visakapatnam, Indore, Jaipur, Kochi, Kolkata, Lucknow, Madurai, Mangalore, Meerut, Mumbai, Nasik, Nodia, New Delhi, Pune and Vadodara etc.
The company has distribution agreements with several corporate agents as well as banks such as ICICI Bank, federal Bank, south Indian Bank, Bank Of India and Punjab & Maharashtra Co-Operative Bank. It has also tied up with BASIX, Dhan, CASPOR, and Shepherd and world vision for distribution of salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained over 55,000Insurance agents and corporate Advisors to interface with and advice customers. Further it leverages its state- of – the –art IT infrastructure to provide superior quality of service to customers. The Life Insurance Scenario in India: Since 1956, with the nationalization of insurance industry, the state-run Life Insurance Corporation of India (LIC) has held the monopoly in that country’s life insurance sector. General insurance corporation of India (GIC), with its four subsidiaries, was its counterpart in the casually sector. Over time, taking advantage of its monopoly and virtual prerogative in establishing premiums, LIC has evolved into a monolith. With around 6, 00,000 agents in every nook and corner of the vast country, it has created an enviable brand name, particularly among the rural population of the country. It has around $40 billion as its life fund and is a strong player in the financial sector. However, on the qualitative side, it has very little to take pride in. and there lies the potential for foreign players to challenge this behemoth. As is typical with monopolies, the premium rates charged by LIC are among the highest in the world, and its track record in customer service can, at best, be called shabby. With a huge unionized, rigid workforce mostly in the clerical category, LIC runs the risk of high fixed cost, which will be the deciding factor in productivity in the competitive scenario. While boasting full- scale automation of its operation, the truth is that its technology is outdated. The new players, with the state-of-the-art technology under their belt, will be in an advantageous position. 80% of LIC’s business is procured by 20% of its ill-trained agent force.
The foreign player, with the domestic partner’s strong brand value, can test the unconventional distribution channels like brokers, the internet, the banking distribution
system, etc. although foreign players may be tempted to keep their operation in the big cities for the creamy layer of the society, the real market lies in rural India, which accounts for the lions share of LIC’s present business. The foreign player must learn to adapt to Indian realities. The well-publicized failures of world famous consumer goods companies like Electrolux, whirlpool, Reebok, Nike etc.to gauge the Indian psyche and sentiments demonstrate the concept. They failed in the areas of realistic pricing, product promotion and reaching to the consumer. The foreign companies need to know the “ground realities” to the details. Political scenario move a resolution or vetoing a resolution in Board Of Directors’ Meeting). Until recently, India continued to be one of the few remaining countries of the world to remain insulated from the direct foreign investment in its insurance sector. However, things are changing now with the passage of insurance Regulatory Development Act (IRDA) through Indian parliament in late 1999. A much awaited and much debated act, it meets with strong resistance from the political institutions of India and took almost six years to see daylight. Though first recommended by Malhothra Committee on insurance Reforms in 1994, what emerges is a diluted from of the original recommendations. However in the long awaited period of its passage, the issue was nationally debated and was finally ‘de-politicized’, meaning that the reform path is ‘irreversible’. IRDA, for the time being, prohibits 100% foreign equity in insurance. It requires the Indian promoter to invest either wholly in an insurance venture or team up with a foreign insurer, with a cap of 26% of equity for a foreign partner. The Indian promoter is permitted to divest only after 10 years to the Indian public, through a public offering of shares, at which time the equity structure will provide for equal participation between the Indian and foreign partner with a share of 26% each in the share capital.
The underlying tone of the 26% cap for the foreign insurer is to ensure that financial intrest substantially vests with the Indian promoter, permitting the foreign co-promoter a define say in direction and management (By Indian Company Law, 26% is the minimum equity to
It is important to note that the 26% level is the bargained solution by the privatization proponents (read Government) in the face of stiff political resistance. The main two political poles of Indian politics – the Congress party and the Bharatiya Janata Party (BJP) – are both in favor of the reform. Only the extent of the reform and who-willbell-the-cat-and-get-the- (dis) credit factor bar them in reaching a consensus for more sweeping reforms. The populist out-of-fashioned socialistic jingoism, making these parties rightist ideology, is fast losing its appeal to the masses. This will only hasten the reform process. COMPARISON WITH CHINA: Currently India and china are the most lucrative insurance markets in the world. India and china constitute the home of half of the population of the world and their recent rapid economic development makes them attractive for foreign investment. Though India’s economic development is not as rapid as china’s, it enjoys comparative strength in the socio-political front. India is the world’s largest democracy and democracy is deep- rooted in its social and political institutions. The executive and the judiciary system are the continuation of British legacy, which ruled India for 200 years. English, the unofficial language of correspondence and instruction, is well spoken by the educated. Another strength is its abundant highly educated skilled workforce. India’s stride in the fields of software and logical ability is well known in the world. The savings rate is quite high in US standards. All this makes India an attractive destination of US insurance companies. Insurance sector reforms have been slow to take shape, taking nearly a decade. Thanks to the proposed reforms, quite a few global insurance majors are streaming into the country. A burgeoning middle class, high per capita savings, and low penetration of insurance are some of the key factors responsible for the tremendous intrest foreign insurance companies are showing in the Indian insurance industry. An insurance survey by LIC and KPMG reveals intresting facets of the emerging trends in the emerging trends in the Indian insurance industry. The annual growth in the average insurance premium in India has been 8.2 per cent compared with the global average of 3-4 per
cent. Insurance density stood at $3,236 in Japan, $1,079 in the US, $ 18 in Brazil and $ 14 in Mexico. The share of life insurance premium to GDP was 1.29 per cent in India, which is abysmal in the global standard. Despite these opportunities, however, there is also a through ride ahead for the new players in India. This is because, unlike in the west, insurance is sold more as an instrument of savings in India than as a product offering protection and security. LIC’s 1996 insurance survey reveals that more than 40 percent of insurance – buyers look at insurance products as a means of savings. Risk coverage is only a secondary objective. Nearly 26 percent of the insurance policies sold are on considerations of old age security. Only 18 per cent of insurance policies are sold on death risk considerations. Between expectation and reality, of course, there is a bridge. Will the average citizen reach out to private players and invest his lifetime’s earnings with them? Here, the new companies probably will be fighting a mindset. The life insurance corporation and general insurance corporation, by virtue of their monopoly status, are so deeply idea of private insurance products. They have to educate the people, and integrate the sector with its world counterpart by shifting its shifting its learning from savings to risk entrenched in the popular psyche that it would likely require Herculean effort to sell the hedging. The economic reform process in India is ‘irreversible’ and is producing a strong efficient financial system in the model of its US counterpart. The insurance companies will only hasten the process. From a socio-economic development point of view, the huge amount of funds that will be at the disposal of players will be directed in desired avenues like infrastructure, housing, safe drinking water, electricity and primary education. The growth of the debt market, which hitherto had been a neglected child of the capital market, will also get a boost as the funds from insurance companies start flowing into the kitty of the corporate sector. Once again this will boost demand and growth by raising employment levels. Similarly, stock market investments will further aid the growth of the capital market and equity cult. The multiplier effect will be enormous. Policyholders will get better pricing of products from insurance majors. Permission to invest more in corporate equity and debt instruments would also enhance returns on policy funds. Once the benefit of opening the sector becomes noticed in the
society, the misplaced concern regarding ‘fight of money outside the country’ will be removed from the mindset of people, which should aid in garnering popular support for the free, competitive liberalized economy.
Facing the reality of a saturated home market, the US insurance companies must look outward and concentrate on the real growth economies like India and china. Since the gestation period of the typical insurance business is around ten years, it is high time to make their presence felt in India. The new players will have to prove their creditworthiness. It will be a time consuming and difficult task to win customers away from LIC and gain their trust. Their track record and brand value in overseas market will not help them much in getting immediate brand recognition in India. Through they may piggyback on the brand name of their local partner, I the long run; it is their persistent track record and creditworthiness, which will matter. So, being among the first will be a deciding factor in the success in this business. Already several components have entered into the market and a dozen companies have joined with foreign partners (see table). The real growth in twenty- first century will come from countries like India and china. Delay may doom future efforts to stake a claim in these high potential markets.
Note: the list of foreign players entering the Indian insurance sector and their Indian partners: Indian partner Aditya Birla Group Kotak Finance HDFC Foreign insurer Sun Life, Canada Specialization Life Present status Received License Received License Received License, Commences Reliance No Foreign Alliance operation Life, Non- Life and Received Health ICICI Prudential, UK Life License for Non-Life Received License, Commences ICICI Max India Sundaram IFFCO Tata Group Vsya Bank Hero Group Choolamandalam Group Hindustan- Times Dabur Bajaj Auto Lombard, Canada New York Life, USA Non-Life Life Operation Not applied Received License Received License Received License Received License Applied for license Not Applied Not Applied Not Applied Not Applied IRDASeeks more
Mahindra Old Mutual, South Africa Life Standard Life, UK Life
Royal & Sun Alliance Non-Life Plc, UK Tokyo Marine, Japan AIG,USA Ing Non-life Non-Life Insurance, Life Life Life Life Life Non Life
Netherlands Zurich, Switzerland Undecided Undecided CGNU Life, UK Allianz
Undecided Sanmar Group SBI S Kumar’s, J&K Bank Corporation Bank Undisclosed Undisclosed Undisclosed
Met life, USA AMP, Australia Cardiff, France Undisclosed Undisclosed Aegon, Netherlands Cigna, USA Chubb, USA
Life Life Life Non Life Life Life and Pensions Life and Health Property & Caualty
information Not Applied Not Applied Not Applied Finalizing Partner Finalizing Partner Finalizing Partner Finalizing Partner Fina lizing Partner
Undisclosed
Yasuda Marine And Fire
Non – Life
Fina lizing Parter
Undisclosed Undisclosed Citi Bank, India Undisclosed Videocon International
Mitsui Marine and Fire Nation Wide, USA Undecided GE Captial
Non – Life Life And Pensions Non Life
Finalizing Partner Finalizing Partner Finalizing Partner Finalizing Partner Finalizing Partner
Services LIFE
international, USA Talks on with BNP Non-life Paribas, AXA, France
1.2 PRODUCT PROFILE 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 6 Riders, to create a Customized Solution for Each Policyholder. Terminologies: DB: Death Benefit: Death Benefit paid in a Life Insurance Policy or an annuity Plan with lives cover in the event of the Life Assured passing away during the term. LA: Life Assured:
Person who is Insured under the Plan. SA: Sum Assured: Amount of Money for which the Insurance is taken. VB: Vested Bonus: Bonuses that have accrued over the term of the plan in with profits plans. PP: Purchase Price: The accumulation of the money in a deferred annuity plan. GA: Guaranteed Additions: Guaranteed return that the insurer adds to the Sum Assured. Prospect: Individual that has the potential to purchase a life insurance policy – i.e. age, health and money. Proposer: The person who buys the policy – Proposer and life assured can be the same person or different – but should fulfill the principle of insurable intrest Proposer is the nominee. Nominee: The custodian to the claim – may or may not be the rightful owner to the claim money. When the Proposer and the life assured are different individuals then by default the Proposer is the nominee.
Annuitant: The policyholder who has pensioned / annuity plan. Claimant: The person who makes a claim Beneficiary: The rightful successor to the claim.
WHAT ARE RIDERS: Riders are features attachable with a main policy, which provide added protection against specific risks at extra cost. General Features of Riders: Riders can be attached to policies from the beginning or on each policy anniversary date. Once attached, a rider can now be discontinued at a later date. The combined premiums of all Riders attached to a policy cannot be grater than 30% of the premium of the basic plan. (As per IRDA Regulations). The SA of an individual Rider cannot exceed Rs 10 Lakhs and cannot exceed the SA of the basic plan. Riders are pure risk covers and hence have no maturity benefits.
ICICI- Prudential offers the following Riders along with their main policies. Critical Illness Benefit Rider Major Surgical Assistance Rider Accident Benefit Rider Accident and Disability Benefit Rider Income Benefit Rider Waiver of Premium Benefit Rider Rider Benefits Riders carry either of 2 benefits. They are: Accelerated Benefit: In this type of benefit, the rider, along with a claim on itself, essentially accelerates or brings forward the claim of the base policy before its time. After the claim settlement, the base policy terminates. Standalone Benefit: In this kind of benefit, the rider has no bearing on the baser policy. Even after the rider claim has been paid, the base policy continues uninterrupted. THE CRITICAL ILLNESS BENEFIT RIDER This Rider is meant to give financial assistance to the family in case the life assured contracts a critical illness. The ideal prospect 1. Young, busy executives who are too stressed out with work and hence need grater protection. 2. Young people who are just about to settle down in life
. 3. Minimum monthly in come of Rs.10, 000. CIBR covers 9 different critical illnesses. These are Major Organ Transplant Complete Renal Failure Stroke Paralysis Heart Attack Valve Replacement Surgery Major Surjery of the Arota Coronary Artery Graft Surgery Cancer
Pointers on CIBR Claims CIBR claims are not honored if they arise within 6 months of purchasing the policy. Notice of claim has to be filed within 60 days of diagnosis. Only diagnosis is required for the claim. The CIBR can be attachable with the following base plans. Save ‘n’ Protect CashBak ForeverLife – here the CIBR is standalone, which means that the plan continues even when the claim of CIBR has been made.
MAJOR SURGICAL ASSISTANCE RIDER
This is a rider, which gives financial assistance in the event of a major surgery. The ideal prospect: Young, busy executives who are too stressed out with work and hence need grater protection. Young people who are just about to settle down in life. Minimum monthly income of Rs. 10,000 The MSAR covers 43 surgical procedures. These are categorized as Minor surgeries (11 surgeries), intermediate (15 surgeries) or major surgeries. (17 surgeries) Pointers on MSAR claims MASR claims are not honored if they arise within 6 months of purchasing the policy. Claim is entertained only after surgery is performed and discharge report obtained. However, bills are not required for the claim. The MSAR is attachable with the following base plans. 1. Save ‘n’ protect 2. CashBak 3. ForeverLife
Accident Benefit Rider The ABR is a Rider, which gives financial assistance in the event of accidental death. The ideal prospect ? Young, busy executives who are too exposed to traveling and commuting. ? Young people who are just about to settle down in life. ? . Minimum monthly in come of Rs.10, 000.
Product Features: Benefits payable during the term: 100% of Rider SA paid on death due to an accident. 200% of Rider SA paid on death due to traveling in a mass public transport system. On disability: Waiver of premium of basic plan to the extent of Rider SA. 10% of SA is paid every year for the next 10 years. The ADBR is attachable with the following base plans: 1. Save ‘n’ protect 2. CashBak
3. Smart kid 4. Lifeguard Regular Premium 5. ForeverLife INCOME BENEFIT RIDER: IBR enables giving more financial support to near and dear ones in case of premature death. The IBR is only available with the smart kid. It has been designed keeping in mind that bestowing the best to a child in his formative years includes diverse expenses on developmental growth. This means money spent on extra curricular activities, picnics, trips etc.
Benefits: In this rider in the event of the life assured dying – 10% of the sum assured is paid annually to the end of the term. WAIVER OF PREMIUM RIDER: This rider gives an additional benefit, which ensures freedom from the burden of premium payment on the main policy in the event of total and permanent disability. Benefit: On total or permanent disability, future premiums on the policy waived.
2.1 RESEARCH OBJECTIVES ICICI Prudential Life Insurance Com. Ltd., wanted a feedback of the following from the consumers. 2.1.1. Primary objective:
? To find out the brand awareness and customer satisfaction on ICICI Prudential life insurance. ? To find out why ICICI Prudential is in their selling strong market. ? To find out the awareness of the newly introduced products of ICICI Prudential among the potential customers. 2.1.2. Secondary object: ? To find out the level of awareness among consumers regarding ICICI Prudential. ? To find out the factors influencing the purchase of insurance products. ? To find out the various brands owned by the consumers.
? To find out the various source of brand awareness. ? To study the customer satisfaction of ICICI Prudential. ? To find out the reasons for the brand switch over by the customer. ? To know attitude of customer in Chennai city towards ICICI Prudential in terms of service premium, scheme.
2.2 RESEARCH METHODOLOGY Research is growing need in any organization of the present world. It is helpful in identifying the consumer needs and wants so as to launch a product or to bring about improvement in the existing products. This is done to gain competitive edge over others. Success of the research depends upon the methodology adopted. The study was based on descriptive research (also known as explanatory design). The research methodology deals with the research design, data collection methods, sampling method, fieldwork, and the analysis and interpretation of research work.
2.2.1 RESEARCH DESIGN A research design is the specification of methods and procedure for acquiring the information needed. Research design classified under three
broad categories – explanatory, casual and descriptive. But the researcher was concerned mainly with descriptive research design. The study was conducted in order to find out the aware & consumer satisfaction of the ICICI Pru Life Insurance Com. Ltd., at Chennai city.
2.3. SAMPLING DESIGN & TOOLS APPLIED Sampling techniques 2.3.1 Sampling Plan: One of the main elements in the research design is sampling plan which is further divided into sampling unit, sampling size, sampling type. 2.3.2Sampling Unit: Sampling unit can be defined as the basic unit containing the brand awareness and consumer satisfaction in Chennai.
2.3.3. Sampling Size: In this research, the sample size amount to one hundred, which are surveyed from consumers in Chennai. 2.3.4. Sampling Type: Convenience sampling I adapted in this research. It is a non-probability sampling and it is refers to selecting a sample based on convenience. And also, the stastical tool are applied viz. (a) chi-square test, k-s test and z-test. 2.4. DATA COLLECTION
The primary data the respondents which or collected with a questionnaire schedule was used with consumers were conducted in Chennai. Secondary data were collected from the company profile, manuals, journals, magazines and newspapers etc. 2.4.1. Tertiary Data: The data were collected from the various literatures which are related to the subject of brand awareness viz. (a) Philip Kotler, Rajan Nair, peter M. Chisnall Shanthi Sopis. 2.4.2. Research Tool Structures self administered questionnaire had been used as a research tool for collecting 2.4.3. Primary data. The questionnaire from is designed in the multi choice pattern and has the following technique. 2.4.4. Direct questions In this type, the respondents were asked to answer directly to their questions.
2.4.5. Indirect questions
Indirect questions refer to those whose responses are used
Occupation Business Professional Salaried person Others Total No. of Respondents 37 26 27 10 100
to indicate or suggest
information.
Open ended questions In this type, respondents are likely to choose their answers. Closed ended questions Respondents are offered to select their options given.
? Dichotomous types (yes or no pattern) ? Multiple choice type ( objective type)
Table showing occupation of the respondent Table 3.1 .1
Interpretation: The above table indicates that out of 100 samples, 37%respondents are business people, 26% are professionals, 27 % are salaried people, and 10% respondents are related to other professional.
Graph 3.1.1
No. of Respondents occupation
120 100 80 60 40 20 0
es Pr s of es sio Sa na lar l ie dp er so n Ot he rs Bu sin To ta l
No. of Respondents
Table showing income level of the respondent Table 3.1.2
Income level (monthly) 5000-10000 10000-15000 15000-20000 More than 20000 Total No. of Respondents 25 30 28 17 100
Interpretation: The above table indicates that out of 100 samples, 25% respondents are earning 5000-10000,30% respondents are earning 10000-15000,28% respondents are earning 15000-20000,more than 20000 earn by the17% of the respondents.
Graph 3.1.2
No. of Respondents income level
120 100 80 60 40 20 0 5000- 10000- 15000- More 10000 15000 20000 than 20000 Total No. of Respondents
Table showing Age group of respondents Table 3.1.3
Age (Years) 20-30 30-40 40-50 50 Above Total No. of Respondents 25 36 30 9 100
Interpretation: The above table indicates that out of 100 samples, 25% respondents are age group between 20-30, 36% respondents are age group between3040, 30% respondents are age group between40-50, 9% respondents are age falling under 50 & above.
Graph 3.1.3
No. of Respondents Age group
120 100 80 60 40 20 0 20-30 30-40 40-50 50 Above Total No. of Respondents
Table showing identified the respondent insurance policy holder (or) not Table 3.1.4
Policy holder Yes No Total No. of Respondents 78 22 100
Interpretation: The above table indicates that out of 100 samples, 78% respondents are holding insurance policy. 22% respondents are not having insurance policy.
Graph 3.1.4
identified the respondent insurance policy holder (or) not
120 100 80 60 40 20 0 Yes No Total No. of Respondents
How Many years do you investing in insurance sector Table 3.1.5
Period (yrs) 0-1 1-2 2-3 More than 3 No Total No. of Respondents 17 30 17 14 22 100
Interpretation: The above table indicates that out of 100 samples, 17% respondents are investing insurance sector from0-1 yr, 30% respondents are investing insurance sector from1-2 yr,17% respondents are investing insurance sector from 2-3 yr,14% respondents are in this sector from more than 3 yrs,22% respondents are don’t investing in insurance sector.
Graph 3.1.5
How many years do you investing in insurnace sector
120 100 80 60 40 20 0
0 to1
1 to 2
2 to 3
More than 3
No
Total No. of Respondents
Brand prefer by the customer Table 3.1.6
Company name ICICI Prudential LICI Birla sun Life SBI Life Total No. of Respondents 18 58 11 13 100
Interpretation: The above table indicates that out of 100 samples,18% respondents are prefer ICICI Prudential,58% respondents are prefer LICI, 11%respondents are prefer Birala Sun Life,13% respondents are prefer SBI Life.
Graph 3.1.6
Brand perfer by the customer
120 100 80 60 40 20
de nt ia l
0
ife
Li fe
su n
ru
IC IC IP
B
irl
a
S
Responds of Brand awareness Table 3.1.7
Company name ICICI Prudential LICI Birla sun Life SBI Life Total No. of Respondents 28 44 12 16 100
Interpretation: The above table indicates that out of 100 samples,28% respondents are prefer to take ICICI Prudential,44% respondents are prefer to take LICI ,12%respondents are prefer to take Birla Sun Life , respondents are prefer to take SBI Life.
B I
No. of Respondents
T ot al
LI C I
L
Graph 3.1.7
Responds of Brand awareness
120 100 80 60 40 20
ia l ife
0
ru
de nt
Li fe
LI C I
su n
IC IC IP
B
irl
a
S
Table showing major the respondent insurance policy product Table 3.1.8
Factors Security Risk Free Loans Brand Image Total No. of respondents 27 29 16 28 100
Interpretation: The above table indicates that out of 100 samples, 27% people logged policy because of security, 29% people logged policy because of risk free, 16%people logged policy because of loans, and 28% people logged policy because of brand image.
Graph 3.1.8
B I
No. of Respondents
T
ot al
L
major the respondent insurance policy product
120 100 80 60 40 20 0
ag e ec ur it y Lo an s Im To ta l Fr ee
No. of respondents
k
R is
S
Table showing aware of ICICI Prudential Table 3.1.9
Aware Yes No Total No. of respondents 88 12 100
Interpretation: The above table indicates that out of 100 samples, 88% respondents are aware of ICICI Prudential, 12% respondents are not aware of ICICI Prudential.
B
Graph 3.1.9
ra n
d
No. of respondents aware of ICICI Prudential
120 100 80 60 40 20 0 Yes No Total No. of respondents
Table showing know about ICICI Prudential Table 3.1.10
Knowing ICICI Prudential Magazines Friends & Relatives News papers Agents Television Total No. of respondents 9 31 21 14 25 100
Interpretation: The above table indicates that out of 100 samples,9% respondents are aware of ICICI Prudential,31 % of respondents know about the ICICI Prudential through friends & relatives.21% respondents as came across ICICI Prudential through news paper,14 %respondents through agents,25% respondents as aware of ICICI Prudential through television.
Graph 3.1.10 No. of respondents know about ICICI Prudential
120 100 80 60 40 20 0
Magazines
Television
Friends &
Relatives
papers
Agents
News
Table showing interested in investing ICICI Prudential Table 3.1.11
Interested Investment Yes No Total No. of respondents 65 35 100
Interpretation: The above table indicates that out of 100 samples, 65% respondents are interested in investing ICICI Prudential, 35% of respondents are not interested in investing ICICI Prudential.
Graph 3.1.11
Total
No. of respondents
No. of respondents interested in investing ICICI Prudential
120 100 80 60 40 20 0 Yes No Total No. of respondents
Table showing No. of respondents policy issued by ICICI Prudential Life Table 3.1.12
No. of respondents Yes No Total 48 52 100
Interpretation: The above table indicates that out of 100 samples, 48%of respondents have policy issued by the ICICI Prudential insurance, 52% of respondents not having policy issued by the ICICI Prudential.
Graph 3.1.12
No. of respondents policy issued by ICICI Prudential Life
120 100 80 60 40 20 0 Yes No Total No. of respondents
Table showing respondent prefer which type of policy Table 3.1.13
Policy name Yes, save ‘n’ protect Life time Money back Life Guard No Total No. of respondents 12 10 16 10 52 100
Interpretation: The above table indicates that out of 100 samples,12% of respondents will prefer Save ‘n’ Protect,10% of respondents will prefer life time,16% of respondents will prefer money back,10% of respondents will prefer life guard,52% of respondents not having any policy.
Graph 3.1.13
No. of respondents prefer which type of policy
120 100 80 60 40 20 Yes, save ‘n’ 0 Money back No No. of respondents
Table showing respondent opinion about which insurance product sells more? Table 3.1.14
Policy type Smart kid Life time pension Money back Riders Total No. of respondents 22 37 25 16 100
Interpretation: The above table indicates that out of 100 samples,22% respondents are given the opinion that smart kid sell more, 37% respondents are given the opinion that life time pension sell more, 25% respondents are given the opinion that money back sell more, 16% respondents are given the opinion that riders sell more.
Graph 3.1.14
No. of respondents opinion about which insurance product sells more
120 100 80 60 40 20 0 Smart kid Life time pension Money back Riders Total
No. of respondents
Table showing comment on the rate of premium charged by ICICI Prudential Table 3.1.15
Type of Rate Very high High Mode rest Normal Total No. of respondents 18 26 37 19 100
Interpretation: The above table indicates that out of 100 samples, 18% of respondents as given comment the rate of premium charged by ICICI Prudential is very high, 26 % of respondents as given comment the rate of premium charged by ICICI Prudential is high, 37% of respondents as given comment the rate of premium charged by ICICI Prudential is mode rest, 19% of respondents as given comment the rate of premium charged by ICICI Prudential is normal.
Graph 3.1.15
No. of respondents comment on the rate of premium charged by ICICI Prudential 120 100 80 60 40 20 0 Very high High Mode Normal Total rest No. of respondents
Factors of market position about ICICI Table 3.1.16
Factors Aggressive advertisement Availability Sales promotion Better service Total No. of respondents 28 22 25 25 100
Interpretation: The above table indicates that out of 100 samples, 28% of respondents as given their opinion in aggressive advertisements, 22% of respondents as given their opinion in availability, 25% of respondents as given their opinion in sales promotion, 25% of respondents as given their opinion better service.
Graph 3.1.16
Factors of market position about ICICI
120 100 80 60 40 20 0
er tis em en t io n ce se r vi ty A va pr om ot ila To ta l bi li
e
ss iv
S
al es
B et te r
ad v
Respondents feel ICICI potential is superior than other brands Table 3.1.17
Aspects More security High returns Smart interest High yield Total No. of respondents 13 30 32 25 100
A
people feel ICICI Prudential is superior than other brands by means of more security, 30% of respondents feels ICICI prudential is superior than other brands because of high returns, 32% of respondents for smart interest rates is superior than other products, 25% of respondents feel ICICI Prudential is superior than other products by means high yield.
gg re
No. of respondents
Interpretation: The above table indicates that out of 100 samples, 13% of
Graph 3.1.17
No. of respondents feel ICICI potential is superior than other brands
120 100 80 60 40 20 0 More security High returns Smart interest High yield Total
No. of respondents
Table showing recommend to any of your friends Table 3.1.18
Recommendation Yes No Total No. of respondents 40 60 100
Interpretation: The above table indicates that out of 100 samples, 40% of respondents as recommended to their friends, 60% of respondents as not recommended to their friends.
Graph 3.1.18
Recommend to any of your friends
120 100 80 60 40 20 0 Yes No Total No. of respondents
Present level of advertisement adequate for expansion Table 3.1.19
Advertisements Yes No Total No. of respondents 63 37 100
Interpretation: The above table indicates that out of 100 samples, 63% of respondents stated yes that present level of advertisements adequate for expansion in this sector. 37% of respondents stated no expansion in this sector. that present level of advertisements adequate for
Graph 3.1.19
Present level of advertisement adequate for expansion
120 100 80 60 40 20 0 Yes No Total No. of respondents
Respondents prefer medium of advertisement Table 3.1.20
Prefer medium of advertisements No. of respondents News paper 10 Television 8 DTHS 8 Cable 2 FM 5 Others 4 Total 37 Interpretation: The above table indicates that out of 100 samples,10% respondents prefer the medium of advertisements through NEWSPAPER,8% respondents prefer the medium of advertisements through TELEVISION, 8% respondents prefer the medium of advertisements through DTHS, 2% respondents prefer the medium of advertisements through CABLE, 5% respondents prefer the medium of advertisements through FM,
4% respondents prefer other mode of advertisements direct from the company.
Graph3.1.20
No. of respondents prefer medium of advertisement
40 35 30 25 20 15 10 5 0
pa pe r Te le vi sio n S Ca bl e O th er s D TH To ta l FM
No. of respondents
Ne ws
Prefer mode of buying Table 3.1.21
Mode of buying Direct from company Insurance advisors Total No. of respondents 53 47 100
Interpretation: The above table indicates that out of 100 samples, 53% of respondents prefer mode of buying direct from the company. 47% of respondents prefer mode of buying direct from the insurance advisor.
Graph 3.1.21
Prefer mode of buying respondents 120 100 80 60 40 20 0 Direct from company Insurance advisors Total No. of respondents
Are you aware of ICICI Prudential Table 3.1.22
Are you aware Yes No Total No. of respondents 67 33 100
Interpretation: The above table indicates that out of 100 samples,67% of respondents as suggested to change the brand of the policy,33% of respondents as suggested to not change the brand of the policy.
Graph 3.1.22
No. of respondents aware of ICICI Prudential 120 100 80 60 40 20 0 Yes No Total No. of respondents
Respondents prefer immediate brand go for Table 3.1.23
Prefer immediate brand Bajaj AMP Sanmar SBI Life Met Life Total No. of respondents 15 30 16 16 67
Interpretation: The above table indicates that out of 100 samples, 15% of respondents will go for BAJAJ, 20% of respondents will go for AMP SANMAR, 16% of respondents will go for SBI LIFE, and 16% of respondents will go for MET LIFE.
Graph 3.1.23
No. of respondents prefer immediate brand go for
80 70 60 50 40 30 20 10 0 Bajaj AMP Sanmar SBI Life Met Life Total No. of respondents
Respondent’s opinion about satisfied with operations of claim procedure Table 3.1.24
Respondent’s opinion Yes No sTotal No. of respondents 60 40 100
Interpretation: The above table indicates that out of 100 samples, 60% of respondents satisfied with operations of the company, 40% of respondents not satisfied with operations of the company.
Graph 3.1.24
No. of respondents opinion about satisfied with operations of claim procedure 120 100 80 60 40 20 0 Yes No Total No. of respondents
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