REPORT

ON
AGENCY SELECTION &
INVESTMENT BEHAVIOR OF
GOVERNMENT EMPLOYEES

AT
ICICI PRUDENTIAL LIFE
INSURANCE COMPANY LTD.,
RAJKOT

A PROJECT REPORT
SUBMITTED IN PARTIAL
FULFILLMENT
OF SUMMER TRANING OF M.B.A.
DEGREE.

BY
MANIAR NISHIT P.

ROLL NO.

3041

Acknowledgement
It is a matter of great pleasure for
me, to get this opportunity of
expressing my deep and sincere sense
of gratitude to my reserved and learned
professor of M.B.A department Shri
M.N.Khandelwala, Shri Neeraj Amarnani
whose inspiration and guidance gave
me sufficient strength t finish the
Industrial Awareness Training.
On occasion for submitting the
Industrial Awareness Training it is with
profound feelings of gratitude, I place
on record my extreme indebtness to
Shri Pankaj Agrawal (A.S.M.) and Shri
Abhay Raj (Branch Manager) ICICI
Prudential Life Insurance Company Ltd,
Rajkot for permitting me to undergo
training as a part of my study in M.B.A.
after 1st year.
I shall fail in my duty if I do not
express my sincere feelings of thanks
and gratitude to Shri Amit Doshi, under
whom I undergo my training His
punctuality, discipline, hard working
nature and sincerity will inspire me,
whenever I go.
2

My sincere thanks also goes to all

the member of the company for giving
me information and clarifying my
doubts, obligatory.
Last but not the least, I extend my
thanks to all who shared with me at any
stage.
-MANIAR NISHIT
P.

Preface
As a part of our syllabus of after 1 st
year in M.B.A. we have to go through
eight weeks of Summer Training in any
reputed Industry.
During this period we have to
observe/critically analyse our own live
experience about the culture, the
procedure and people at work.
We
have
to
understand
basic
interrelationship between sales and
Marketing
function,
Human
management
department,
Finance
department
and
different
service
functions
for
integration
of
an
organization.
We have to prepare a Report based
on our own exposures and experiences
during training and give update and
relevant information regarding making
of a Marketing strategy and changes in
product applied in industry.
For this, I select ICICI PRUDENTIAL
LIFE INSURANCE COMPANY LTD. branch
at Rajkot, which is selling life insurance
policy.
The subject of Marketing is the
creation of new better idea and
improving the existing ones. A new and
better marketing strategy is one, which
give more strength to business. From
the study of existing ideas, a new idea
4

is to be conceived. For the successful

implementation
of
the
marketing
strategy into an actual reality.
Taking this in consideration, I select
the subject of my Project Work as A
study of Agency selection process in
ICICI Prudental Life Insurance Co. Ltd.
Rajkot Branch & Investment Behavior
study of Government employees in
Rajkot
-

MANIAR NISHT P.

Executive Summary
The oldest theory given by Darwin has
always proved its existence. It is not the
most strongest of the species which
survives and nor the most intelligent of
them, but it is one who is most responsive
to change At last the Indian Government
have realized this for the insurance sector
resulting in its liberalization.
The History of insurance goes back to
the 12th century. It was used as a tool for
protection against financial loss to the
seafarers involved in foreign trade. Form
then the insurance industry has undergone
several changes. The changes in needs and
risks involved in human life and possessions
have given a new look to the insurance
industry

India has witnessed its insurance

industry taking a full turn, Privatization to
Nationalizations and back to Privatization.
The Indian Life Insurance sector, which was
dominated
by
private
players,
was
nationalized in 1956 and The Life Insurance
Corporation of India was formed. The Nonlife insurance business was nationalized in
1972 under the aegis of General Insurance
Corporation, under which four subsidiaries
were established. And now the government
intends to give both the LIC and the GIC
some real competition by privatizing the
insurance sector. As the doors are being
opened, Insurers worldwide are spreading
wings to have a bite in the vast Indian
Insurance pie.
India has an amorphous middle-class of
about 300 million people who can afford to
buy life, health, and disability and pension
plan products. Out of this, only 20% have
insurance -and that too covers only 25% of
their needs and financial capacity. The
remaining 80% have no insurance cover.
The life insurance market of India,
therefore, is practically untapped.
With the liberalization and entry of
foreign players in the field, the already
existing players - LIC and GIC are going to
face a tough competition. One of the factors
in favor of LIC and GIC is that they have a
very good network to tap the rural and
market. But still they will have to bring
6

changes in their policies to stand the fierce

competition. So the state owned insurance
companies are feeling the warming up of
competition as private players are queuing
up to capture some portion of the accounts.
ICICI Prudential Life Insurance Co. Ltd.,
give high competition to national player in
insurance industry company capture 8% out
of 100%. And in private insurance sector
ICICI Prudential is No. 1 company with 40%
share. Company has flexible product, which
is suitable for any person.
Company gives market link product,
which give high return with some risk.
People who wants high return company give
with low risk. All type of product for all age
of person.
For achieve 1st rank in insurance
industry company recruit best advisor.
Because they are main strength of the
company. By this advisor, a force company
can reach at every part of the country.
Company has 30,000 advisors in all part of
the country. Company looking for different
segment for recruit best advisor, which can
give good business for company like
Jewelers, Share-Broker, Businessman and
Marketing Executive etc.. These are the
segments, in which company looking for
recruit businessman.
For knowing awareness about Section
88, Section 80ccc (i) and investment
behavior in Central Government employee
doing a research. And went to Custom
7

Department, Telephone Department and

other department. Here sample size is 130,
in this sample all employees are in different
income tax slab.
In 21st century, in a competition era
ICICI Prudential Company wants to be No.1
in Insurance industry. And therefore looking
best advisor and also doing survey to check
awareness in people.

CONTENT
PART 1: INTRODUCTION
CONTENT 1:
02
CONTENT 2:
INSURANCE
CONTENT 3:
16

3 WHY OF PROJECT
INTRODUCTION OF
05
ABOUT COMPANY

PART 2: AGENCY RECRUITMENT

CONTENT 1: AGENCY RECRUITMENT
PROCESS
28
CONTENT 2: WORKING SEGMENT
29
CONTENT 3: RESULTS
32

PART 3: INVESTMENT BEHAVIOR

STUDY

 CONTENT 1: OBJECTIVE
34
CONTENT 2: GRAPHS & CALCULATIONS
36
CONTENT 3: INFERENCES
47

ANNEXURE
48

CONCLUSION
50

BIBLIOGRAPHY

51

PART
1

10

INTRODUCTIO
N

11

3 WHY OF PROJECT
Why we have selected the life
insurance sector?
Life insurance sector acts as the backbone of any economy.
This sector pools large funds from masse and then invests in the
infrastructure projects as sell as other long-term projects, which
produce a regular income flow in coming years. Traditionally, life
insurance was just taken to the sector new customized products
have been introduced. Hence, now if you want to sell life
insurance product to anyone you have to analyze his/her life stage,
risk preference, priorities and then suggest the appropriate product
to that investor.
This would need a great deal of financial planning
knowledge, as well as the knowledge about the current financial
market thus you can compare the other financial product to the
insurance product and then convince your client about the
insurance product. Also insurance companies has to manage their
investment in such a way that the principle amount should not
erode, and investor should get the assured returns those the
company has promised. This would involve a great deal of
knowledge about the portfolio management of the investments and
hedging the risk. Thus this would give us a great exposure to
financial markets as well as the intricacies of different financial
institutions, how they work and what difficulties they face.

12

Why we have selected ICICI

Prudential?
ICICI Prudential is first number among the private life
insurance players. There is a vast potential in the Indian market
hence, the company is expanding its operations in different regions
of India. As well as not only the company stands at first number
but it treats its employees like no 1. Company gives many rewards
& recognition to their employees and advisors for their
performances. The culture of ICICI Prudential is like an Hindu
Undivided Family. As we look at the current performance of ICICI
Prudential, it brings in our mind the words of Robert Frost
the woods are lovely

dark and deep

and miles to go before I sleep.
Hence we firmly believe that we could not get better exposure to
life insurance sector, if we would not have joined the ICICI
Prudential.
Ad line:

We cover you at every step

of life

13

Why we have selected Rajkot

city?
When you go in any down town of any metro city in US you
will find a huge number of financial institutions are established
over there. The same thing is here in Rajkot, 9 out of 12 private
life insurance companies have their branches in Rajkot. Small
Scale Industries are growing like anything in Rajkot and it is said
to be the hub of India for the diesel engines and its spare parts.
This would attract many financial institutions to tape this virgin
market. Rajkot is one of the most expensive cities in Gujarat;
hence the denizens of Rajkot have a good purchasing power. Thus
we believe that we would get a good exposure regarding the
investment pattern of any middle class family.
Rajkot Branch of ICICI Prudential is fastest growing branch
in Himalayan region. Which has completed its first year of
operation on 9th June 2004. With premium collection of Rs. 2.5
crore and in present quarter it has already collected premium of Rs.
1.05 crore. With its advisor force of 330.

14

INTRODUCTION OF INSURANCE
Fundamentals of Insurance
In life every human being-you and we included is exposed to an
element of risk, commonly defined as the possibility of loss. These
broadly relate to two spheres-our lives and our material
possessions. Further, every loss has two implications: financial and
non-financial. For instance when a person dies, the family suffers a
grievous emotional loss, which can perhaps never be compensated.
But the family also suffers another significant loss-financial loss;
particularly person who dies was an earning member or even
potentially earning member. There are then concerns about the
financial stability of the dependents. Similarly, when a factory is
gutted in a fire, in addition to the loss of property, there are other
considerations: the effort to rebuild the factory, the future of
workers and the fate of suppliers and consumer attached to the
business.
In both instances, little can be done about non-financial losses. But
financial losses can-and must-be addressed and using risk
management tool and that is Insurance.

15

What is Insurance?
Insurance is a financial service for collecting the saving of the
public and providing them with a risk coverage.
Thus in insurance,
The Risk
The insured

The insurer

General definition: In the words of John Magee, Insurance is a

plan by which large number of people associate and transfer to the
shoulders of all risks that attach to individuals.
Fundamental definition: In the words of D.S. Hansell, Insurance
is accumulated contributions of all parties participating in the
scheme.
Contractual definition: In the words of justice Tindall, Insurance
is a contract in which a sum of money is paid to the assured as
consideration of insurers incurring the risk of paying a large sum
upon a given contingency.

Why do you need Insurance cover?

Insurance will help provide protection to investors from certain or
uncertain risks. Certain risk includes events like death, retirement,
pension, education, marriage, etc. Uncertain risk includes events
like theft
A human life is also an income-generating asset. This asset
also can be lost through unexpectedly early death or made
non-functional through sickness and disability caused by
accident. Accident may or may not happen. Death will
happen, but the timing is uncertain. If it happens around the
time of retirement, when it could be expected that the
income will normally cease or the person could have made
some other arrangement to meet the continuing needs. But if
it happens much earlier when the alternative arrangements
are not in place, insurance is necessary to help those
dependent on income.

16

 In case of a human being, he may have made arrangements

for his need after his retirement. These would have been
made on the basis of some expectations like he may live for
another 15 years or that his children will look after him. If
any of these expectations would become inadequate and
there could be difficulties. Living too long can be as much a
problem as dying too young. These are risks, which need to
be safeguard against thorough insurance.

Categories Of Insurance
The following are major categories of Insurance
Insurance
Life
Endowment

Health Medical

General

Whole Life Mutual fund return

And risk coverage Partially

Pension/Annuity contracts with profit or

Without profit for fixed amounts on maturity

17

History of Insurance Sector

Insurance Law had its genesis in London. In the early
London Coffeehouses were centers not only of commerce and
literature but of debate and intellectual exercise as well. They also
had a political influence that moved the reigning king Charles II to
attempt unsuccessfully their suppression.
Among such seventeen century London coffee houses was
one called Lloyds Coffee house owned by Edward Lloyd and
situated in Tower Street. The coffee house and the advantage of
being near to river Thames thus attracting the patronages of men
interested and connected with marine activities.
In the seventeenth century there were no corporate entities
engaged in insurance activities. The practice prevalent was that
individuals wrote their names below some clauses to guarantee
commercial ventures on personal basis, Lloyds Coffee house was
thus the favorite venue for such guarantors who came to be called
Underwrites to conduct business informally over cups of coffee.
With passage of time Lloyds Coffee house become recognized as a
place for people wanting insurance cover to fine the underwriters.
Edward Lloyd encouraged the business by providing the
customers in the coffee house with pen, ink, paper and shipping
information obtained fro the waterfront. The insurance activities in
the coffee house culminated in the formation of Corporation of
Lloyds under the Act of 1871. The name was immortalized
although Edward Lloyds passed away in the year 1713.
Lloyds Marine Insurance policy originally adopted in the
year 1779 is still commonly used as standard form with suitable
additional clauses to suit modern requirements. Lloyds may thus
be rightly known as the creators of insurance concept. Marine
insurance law was thus the first form of insurance, other forms of
insurance evolved gradually with dynamic requirements of the
society.
British statutes inspire the statutes in India. In England
Marine a specific statute regulates insurance while other forms of
18

insurance are covered by general legislation. In India the marine

Insurance Act 1963 base on the English Marine Insurance Act,
1906 is the legislation dealing only with aspect of Marine
Insurance policies. The provisions of the Insurance Act 1938
regulate the other variations of insurance policies.
All insurance policies have to be in agreement with the
provisions of law if contracts. A policy of insurance codifies a
contract between the insurer and the insured hence all principles of
law of contract have to be followed. The legislation dealing
specifically with contracts between two or more is the Indian
Contract Act, 1872.

19

BRIEF HISTORY OF LIFE

INSURANCE SECTOR IN INDIA
The early developments of life insurance were closely linked with
that of marine insurance. The first insurers of life were the marine
insurance underwriters who started issuing life insurance policies
on the life of master and crew of the ship, and the merchants. The
early insurance contracts took the nature of policies for a short
period only. The underwriters issued annuities and pension for a
fixed period or for life to provide relief to widows on the death of
their husbands. The first life insurance policy was issued on 18 th
June 1583, on the life of William Gibbons for a period of 12
months. It was in the eighteenth century, societies began to be
formed for issuing life insurance policies. Among such societies
the Amicable Society (1705), The Equitable Life Assurance
Society (1762), the West Minister Society (1792) was the important
societies. The premium rates were varied in view of reputation and
the health condition of the insured.
The British companies started life insurance business in India, by
issuing policies exclusively on the lives of European soldiers and
civilians. They sometimes issued policies on the lives of Indians
by charging extra. Different insurance companies like Bombay
Insurance Company LTD. (1793) and Oriental Life Assurance
Company (1818) was formed to issue life assurance policies in
India. Gradually, the first Indian Company named as Bombay
Mutual Life Insurance Society Ltd. was formed in Dec. 1870.
During the period from 1870 to 1900, a large number of Indian
companies were formed under the Indian Companies Act, 1866.
The business was confined to few communities and occupations
only. During the period from 1900 to 1912, the insurance business
attracted attention among middle class people. As a result,
Government of India passed the Insurance Act on the model of
British Assurance Act. During the period from 1912-1930, the
insurance business witnessed a set back.
After several changes have been made for the period from 1930 to
1938, the Government of India passed Insurance Act, 1938. The act
still applies to all kinds of insurance business by instituting
necessary amendments from time to time.
20

By 1956, 154 Indian insurers, 16 foreign insurers and 75 provident

societies were carrying on life insurance business in India. At that
time life insurance business was concentrated in urban areas and
confined to the higher strata of the society. January 1956 the
management of life insurance business of 245 Indian and foreign
insurers and provident societies were taken over by the central
Government with a capital contribution of Rs.50 mn, and than
nationalized on 1st September 1956 in the Parliament an Life
Insurance Corporation (LIC).
The Indian insurance market was restricted sector. Only two
government giants namely LIC & GIC ruled it till it was set open
to the private players.
The Narasimha Rao government unleashed liberal changes in
Indias rigid economic sector. The Rao government appointed a
Committee of Reforms in the Insurance sector in April 1993 under
the chairmanship of R.N. Malhotra. The insurance Regulatory
Authority was set up. After over five years Insurance Regulatory
& Development Authority (IRDA) Act, 1999 could be passed by
the Parliament During November 1999. IRDA open its window for
Application for giving new licenses to the prospective players on
16th August, 2000.

21

The following players have applied and some have got licenses and
even started operations in India.

Indian
Partner

Foreign
Partner

HDFC

Standard life Life

UK
No Partner
Non-life

Reliance
Sundaram

Specialization Present
Status
In operation
Operation to
begin shortly
In operation

Royal & Sun Non-life

Alliance
Max India
New York Life Life
In operation
Bajaj Auto
Allianz
Non-life and Life Applied
for
licence
Kotak
Old
Mutual Life
Started
Mahindra
south
operation
ICICI
Prudential,
Life
In Operation
UK
ICICI
Lombard
Non-Life
Applied
for
licence
IFFCO
Tokiyo Marin, Non-life
Received
Japan
Licence
Tata group
AIG, USA
Life, Non-life
In operation
Aditya Birla Sun life
Life
In operation
Group
SBI
Cardif france Life
Received
licence
Vysya Bank
ING
Life
Received
licence
Dabur
CGNU, UK
Life
To apply
Hero Group + Zurich
Life, Non-life
To apply.
Punjab

22

NEED FOR PRIVATIZATION OF

INSURANCE SECTOR
Liberalization and reforms have the potential to change the
complexion of an industry. The Indian insurance is no exception. In
bid to make it more effective, the government has opened up
insurance sector for private players. Let us see rationale for
opening up an insurance sector in India.
Untapped Potential
Life Insurance: India has an amorphous middleclass of about 300 million people who can afford to
buy life, health, and disability and pension plan
products. Out of this only 20% have insurance -and
that too covers only 25% of their needs and
financial capacity. The remaining 80% have no
insurance cover. The life insurance market of India,
therefore, is practically untapped.
The low level of penetration of life insurance in India
compared to other developed nations can be judged by a
comparison of per capita life premium.
Country
Japan
UK
USA
India

Life Premium Per Capita US $ in 1994

3,817
1,280
964
4

Clearly, there is considerable scope to raise per capita life premium

if the market is effectively tapped. With an insurable population
of 300 million, per capita life premium can be raised to a level of
US $ 200 - $300 and hence the market can expand by 50 to 75
times over the existing size through the extensive and efficient
reach to this untapped area by private players. The insurance
business in India is pegged at $6.6 billion whereas industry leaders
feel privatization would open up as much as $26 billion.

23

 Growing Need For insurance:

In India, insurance is traditionally considered as an instrument
of savings. The potential of insurance products as risk
compensators has always been underemphasized.
According to finding of an LIC survey as many as 40% of
insurance buyers consider insurance products avenue for
compulsory savings. Only 26% see insurance as old age pension
while just about 18% consider insurance a provision for risk and
uncertainties.
This trend is in for a change soon. Now customers prefer more
options. They want not just basic insurance products but
investment based insurance products, pension products and
health care products as well. Factors such as increasing life
expectancy, disintegration of the traditional joint family system
and rising cost of health care are bound to make market clamour
for variety of insurance products with need based features. Life
expectancy, which was just 32 years during fifties moved up to
an average of 61 years during 1996-97. The result: a long
retired life. Naturally, there is an increasing need for pension
insurance products.
Prerequisites For Entering into insurance
Any private player wants to enter insurance sector has to comply
with the following requirement without which it will not be
considered eligible for obtaining license.
Minimum capita requirements:
The private sector is allowed to enter insurance industry. The
minimum paid-up capital for new entrants is mentioned below.
Minimum paid-up capital for life and non-life insurance
companies of Rs 1 billion
Minimum paid up capital for reinsurance companies is Rs 2
billion.
Share Holding:
The promoters' holding in private insurance company
should not exceed 40% and should, at no time, be less
than 26% of the total paid-up capital.
24

 No person other than the promoters should be allowed to

hold more than 1% of the equity.
Entry of Foreign Players:
If and when entry of foreign insurance companies is permitted,
they have to enter the market by way of joint venture with
Indian partners.
Equity Participation for Joint Venture:
It is proposed that in the private insurance joint venture, the
Indian promoter will come to hold 74 per cent stake in the
venture initially, leaving the foreign partner with 26 per cent. It
is also proposed that the Indian promoter will have to
mandatory lower its stake in the private insurance firm from the
initial 74 per cent to 26 per cent in a period of ten years.
Minimum Rural Business:
New entrants in life insurance should be required to
transact a certain minimum business in rural areas.
It should be ensured that such insurers do not avoid
writing small policies.
Similarly, new general insurers should also write a
certain minimum rural non-traditional business.
Those who fail to comply with these stipulations
should be subject to a penal assessment by the
Insurance Regulatory Authority.
Requirements for Financial Institutions
The RBI has stipulated that a minimum of 15% of Capital
Adequacy Ratio for FI to enter in insurance sector.
The NPA should not be more than 5% of the total out standing and
advances of the institutions.

25

ABOUT COMPANY
ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank, a premier financial powerhouse and
Prudential plc, a leading international financial services
group headquartered in the United Kingdom. ICICI
Prudential was amongst the first private sector insurance
companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development
Authority
(IRDA).
ICICI Prudential equity base stands at Rs. 6.75 billion with
ICICI Bank and Prudential plc holding 74% and 26% stake
respectively. In the year ended March 31, 2004, the
company had issued over 430,000 policies, for a total sum
assured of over Rs 8,000 crore and premium income in
excess of Rs. 980 crore. The company has a network of
about 30,000 advisors; as well as 12 bancassurance tie-ups.
Today the company is the #1 private life insurer in the
country.

26

ICICI Bank
INDUSTRIAL CREDIT INVESTMENT
CORPORATION OF INDIA
ICICI Bank is Indias second largest bank with an asset base of Rs.
106812 crore. ICICI Bank provides a broad spectrum of financial
services to individuals and companies. This includes mortgages,
car and personal loans, credit and debit cards, corporate and
agricultural finance. The Bank services a growing customer base of
more than 7 million customer accounts and 5 million bondholders
accounts through a multi-channel access network. This includes
about 450 branches and extension counters, 1675 ATMs, call
centers 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.

27

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.

28

The success of the company will be founded in its unflinching

commitment to 5 core values -- Integrity, Customer First, Boundary
less, Ownership and Passion. Each of the values describe what the
company stands for, the qualities of our people and the 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.
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 leadingedge life insurance solutions.

ICICI Prudential Life Insurance Company, Indias leading private

life insurer, has increased its capital base by Rs 50 crore, taking its
total paid-up equity capital to Rs 675 crore. This is the ninth equity
hike since the company was incorporated in December 2000. The
two partners, ICICI Bank and Prudential plc, contributed capital in
29

their existing proportions, 74:26 respectively. The authorized

capital of the company stands at Rs 1200 crore.
The additional capital will be used to meet capital adequacy norms
as stipulated by the regulator, to fund the high up-front expenses
typical to a life insurance business, and expansion such as opening
new branches.
'ICICI Prudential has grown exponentially over the past 3 years,
making its mark in a number of segments such as retirement
solutions, child plans and market-linked plans. The success of the
business thus far, has reaffirmed the commitment of both the
partners - ICICI Bank and Prudential plc - towards achieving the
companys vision of being a leader in life insurance business in
India,' said Ms Shikha Sharma, Managing Director, ICICI
Prudential Life Insurance Company.
In the life insurance business, a number of expenses are incurred
up-front, but the revenue, in the form of premia, flows over a 10-15
year time frame. Because of this, a life insurer must regularly
infuse capital during the first 5-7 years, in order to support growth
in the business. Typically, the more business a company writes, the
greater the capital requirements.
ICICI Prudential is the leading private sector life insurer in India.
In December 2003, it crossed the Rs 1000 crore total premium
mark, the first private life insurer to do so. It has over 550,000
policies and a sum assured in excess of Rs 13,000 crore. In line
with its strategy to expand distribution, the company has grown to
54 locations today, the most recent branches being opened in
Allahabad, Bhatinda and Kota.

30

What Is Human Life?

Insurance Solutions for Individuals
ICICI Prudential Life Insurance offers a range of innovative,
customer-centric products that meet the needs of customers at
every life stage. Its 17 products can be enhanced with up to 6
riders, to create a customized solution for each policyholder.

Savings Solutions
- Secure Plus is a transparent and feature-packed savings
plan that offers 3 levels of protection.
- Cash Plus is a transparent, feature-packed savings plan that
offers 3 levels of protection as well as liquidity options.

- Save n Protect is a traditional endowment savings plan

that offers life protection along with adequate returns.
- Cash Bak is an anticipated endowment policy ideal for meeting
milestone expenses like a childs marriage, expenses for a childs
higher education or purchase of an asset.

Protection Solutions
Lifeguard is a protection plan, which offers life covers at very
low cost. It is available in 3 options - level term assurance, level
term assurance with return of premium and single premium.

Child Solutions
Smart Kid child plans provide guaranteed educational
benefits to a child along with life insurance cover for the parent
who purchases the policy. The policy is designed to provide money
at important milestones in the childs life. Smart Kid child plan are
also available with in unit-linked form - both single premium and
regular premium.

Market-linked Solutions
- LifeLink II is a single premium Market Linked Insurance Plan
31

that combines life insurance cover with the opportunity to stay

invested in the stock market.
- LifeTime II offers customers the flexibility and control to
customize the policy to meet the changing needs at different life
stages. It offers 3 investment options - Growth Plan, Income Plan
and Balanced Plan.

Retirement Solutions
- ForeverLife

is a retirement product targeted at individuals

in their thirties.

- SecurePlus Pension is a flexible pension plan that

allows one to select between 3 levels of cover.

Market-linked retirement products

- LifeTime Pension II is a regular premium marketlinked pension plan

- LifeLink Pension II is a single premium market-linked

pension plan.
ICICI Prudential also launched ''Salaam Zindagi'', a social sector
group insurance policy targeted at the economically
underprivileged sections of the society.

Group Insurance Solutions

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

Group Gratuity Plan: ICICI Pru''s group gratuity plan helps

employers fund their statutory gratuity obligation in a scientific
manner. The plan can also be customized to structure schemes that
can provide benefits beyond the statutory obligations.

Group Superannuation Plan: ICICI Pru offers a flexible

defined contribution superannuation scheme to provide a
retirement kitty for each member of the group. Employees have the
32

option of choosing from various annuity options or opting for a

partial commutation of the annuity at the time of retirement.
Group Term Plan: ICICI Pru's flexible group term solution
helps provide affordable cover to members of a group. The
cover could be uniform or based on designation/rank or a
multiple of salary. The benefit under the policy is paid to the
beneficiary nominated by the member on his/her death.

Flexible Rider Options

ICICI Pru Life offers flexible riders, which can be added to the
basic policy at a marginal cost, depending on the specific needs of
the customer.
1. Accident & disability benefit: If death occurs as the
result of an accident during the term of the policy, the
beneficiary receives an additional amount equal to the sum
assured under the policy. If the death occurs while traveling
in an authorized mass transport vehicle, the beneficiary will
be entitled to twice the sum assured as additional benefit.
2. Accident benefit: This rider option pays the sum assured
under the rider on death due to accident.
3. Critical Illness Benefit: protects the insured against
financial loss in the event of 9 specified critical illnesses.
Benefits are payable to the insured for medical expenses
prior to death.
4. Major Surgical Assistance Benefit: provides financial
support in the event of medical emergencies, ensuring that
benefits are payable to the life assured for medical expenses
incurred for surgical procedures. Cover is offered against 43
different surgical procedures.
5. Income Benefit: This rider pays the 10% of the sum
assured to the nominee every year, till maturity, in the event of
the death of the life assured. It is available on Smart Kid, Secure
Plus and Cash Plus.
33

6. Waiver of Premium: In case of total and permanent

disability due to an accident, the premiums are waived till
maturity. This rider is available with Secure Plus and Cash Plus.

34

SWOT ANALYSIS
Strengths

Flexible products
Partners having experience in different markets of the world
Synergy with their existing operations
Expertise in the field of insurance
Professional management
Good Customer service
Create a brand name

Weakness
Low capital base
Yet to build strong distribution network
Cannot tap rural market

Opportunity
Untapped market
Banks ready to tie up for as a readymade distribution network

for a small fee.

Threat
Large distribution network of LIC
Decades of experience and brand name of LIC
5% service tax on investments

35

PART-2
AGENCY
RECRUITME
NT

36

Agency Recruitment
For insurance industry direct marketing is a main marketing tool
for business. ICICI Prudential also try to make best advisor force
for the business. In India there is 30,000-advisor force in company.
Company always works for recruit best advisor. In this force
Businessmen, Marketing Executive, C.A., Tax Consultant,
Jewelers, Housewives, Student, Dealer etc.. Some of them work
full time or others part-time. Who have a high net worth or
network, willing to work sincerely can join the company as an
advisor. Company always looking for those people who wants to
work sincerely and recruit them.

37

RECRUITMENT PROCESS
Person must 12th pass or 10+3 year Diploma course. This is
a minimum eligible criterion.
Then there is a hundred hour training, which is compulsory
by Insurance Regulatory and Development Authority
(I.R.D.A.).
After training there is an examination which is taken by
I.R.D.A. , which is compulsory.
After passing this exam person get license and person can do
business. He/She can do business any part of the country.

Facility provide by the company

There is a 100% management support to an advisor. Advisor
can do unlimited phone calls, other peripherals like Xerox
machine, fax, computer, and printer. Company does not put
any restriction for using these peripherals.
Company give broachers, pamphlets and other material free
of cost.
In starting time of advisor Unit Manager go with them and
help to get business and give practical knowledge of
marketing.
Any time Unit Manager always ready to help their advisor.
For any advisor appointment Unit Manager ready to go with
them if any advisor feel uncomfortable in call.
Company also provides career opportunity to advisor by
giving permanent job in a company as a Unit Manager. For
this advisor fulfill some criteria by continuous performance.
Also there is an every month & every quarter contest for
advisor get gift like watch, gold, car etc.
Also contest like Million Dollar Round table advisor can go
for a foreign trip by collect 1million premium in a year.
Company provides all expense. And also trip in different
place of India. Also provide club membership.

38

Working Segment
Any person can work as an advisor. There is number of
segments which give better advisor. Segment in which I work
are
Jewelers
Dealer of Mobile and sim card
C.A. & Tax Consultant
L.I.C. & Post office agent
Marketing Executive
Cyber Caf
Accountants
Share Broker
Businessman

HOW TO APPROACH

Appointments
References
Mailing
Cold Call

OTHER ACTIVITY
Medical camp at Joggers park.
Seminar at G.I.D.C. (Metoda).
Camp at Government Quarters.

39

LIMITATION
C.A., Share Broker and Businessman have a problem in
training.
L.I.C. & Post Office agents are not interested in private
company.
Most of the people still do not put trust upon private
company.

40

FINDINGS
Still there is untouched market of Share Broker and
Jewelers.
In this segment there is lot of potential.
Because they have high individual net worth and network.

41

RESULTS

I have contacted 230

And get appointment of 105
Recruited 3
Hot 2

42

PART 3
Investment
Behavior Study Of
Central
Government
Employees In
Rajkot City.

43

Objective
- To check the awareness of Section 88 of Income Tax Act
among Central Government Employees.
- To study the level of priority given to tax benefits while
investing by Government Employees.
- To check the awareness of Section 80CCC(I) of Income Tax
Act among Government Employees.

44

Methodology of Study
Research methodology used here is Survey. Data Collection
Method used is Primary Data.

45

Percentage of persons in
different Income Tax Slabs
Tax Slab
No. of persons
out of 130

Of 10%
(Legend 1)
54

Of 20%
(Legend 2)
57

Of 30%
(Legend 3)
19

1
48%

2
52%

Awareness of Section 80ccc

1

Priorities of Investment
46

Total =130
High Return
(1)

Tax Benefit
(2)

16

68

Children
Education
(3)
17

5
9%

Wealth
Creation (4)

Retirement
Planning (5)

17

11

1
12%

4
13%

3
13%

2
53%

Investment Priorities
1

47

Inference:
Most of the Government employees, 53% of total 130
employees interviewed, give priority to Tax Benefits while
investing.
It is because of the fact that Govt. is giving Tax benefits
under Sec.88 and Sec.80CCC (I) & Sec.80L.
So Govt. employees are achieving twin objective of saving,
investment as well as tax saving.
Also employees are giving importance to Childrens
education/other expenses investment, the same way as they
do to wealth creation.
(Both 13 % each)
Employees investing for high returns (12 % employees) are
next to them.
Least persons are thinking of retirement planning (9 % of
employees).

48

Awareness of Section 88
Total = 130
Aware
(1)
102

Not
Aware
(2)
28

2
22%

1
78%

Awareness of Section 88
1

Inferences:
Seventy eight percent of the sample is aware about Sec88
of Income Tax Act.
This is because of the fact that this section gives tax
rebate and subsequent tax saving.

49

The Investment
Total = 130
Less than
Rs.20,000
46

Between Rs.20,000
& Rs.50,000
32

Above Rs. 50,000

22

3
22%

1
46%

2
32%

Investment for Tax Planning

1

50

Inferences:
About 46 percent of govt. employees are investing below
Rs.20,000. This is because I have interviewed all the tax slab
govt. employees, so that a fair representation of the
investment behavior is seen.
Thirty Two percent of the employees are investing between
Rs.20,000 and Rs.50,000. Out of 130, 22% of employees
invest Rs.50,000 & above.

51

Awareness of Section 80CCC(i)

Total = 130
Aware Not
(1)
Aware
(2)
62
68

1
48%

2
52%

Awareness of Section 80ccc

1

52

Inferences:
Employees who are aware about Sec.80CCC (i) are 48% and
who are not aware are 52%.
This gives the hard fact the almost half of the employees are
not aware about this important section of Income Tax. This
section states that Rs.10,000 that is paid for life insurance
premium per year are fully deductible from taxable income.
So govt. employees are not only paying tax but also not
availing the opportunity of their retirement planning given
by Government.

53

Hypothesis
:
Null Hypothesis H0 :
The proportion in the population giving priority to Tax Benefits
while investing is independent of Income Tax slab rates.

Alternate Hypothesis H1:

The proportion in the population giving priority to Tax Benefits
while investing is not independent of Income Tax slab rates.

54

Statistical Test Applied

As the data I have collected is of Nominal type and the case is of
one sample, the statistical test applicable for hypothesis testing is
Chi-square One Sample Test.

Significance Level:
= 0.05

The Calculation:
Tax
Slab
Rates

10 %
20 %
30 %
Total

Giving
priority
to Tax
benefits
while
investing
(O)
27
30
12
69

Number
Percent (No.
Expected
interviewed Interviewed/130) Frequencies
(Percent X
69) (E)

54
57
19
130

0.415
0.438
0.146
1

28
30
10
68

55

Degree of Freedom:
d.f. = k 1
Where, k= The number of categories.
Here k=3,
therefore d.f. = 3 1 =2
d.f. = 2

Chi-Square Calculation :

2 = k I=1 (Oi Ei)2/Ei

2 = (27-28)2/28 + (30-30)2/30 + (12-10)2/10
= 0.0357 + 0 + 0.4
= 0.4357

Critical Test Value:

From the Critical Values of the Chi-Square Distribution table, with
degree of freedom equal to two and confidence level equal to 0.05,
the critical value is 5.99.
But the calculated Chi-square value is 0.4357, which is less than
the Critical Value, so Null Hypothesis is not rejected & Alternate
hypothesis is rejected.

56

Inference:
Most of the Government Employees take into account tax
benefits while investing.
This is seen across the category of Income Tax slabs.
Each and every government employees first invest for
reducing and if possible for zero tax in the instruments that
give tax benefit.
The instruments of investment and saving like PPF/GPF,
Life insurance, and National Savings Certificates etc. are
heavily investment mostly by government employees
because of the said reason.

57

Annexure
Questionnaire
Date. ______

Personal Information
Name:
Residence Address:
M:
Organization:

R:

O:

1. In which of the following tax bracket does your income fall?

[ ] 10%
[ ] 20%
[ ] 30%
2. What are your priorities while investing?
(a) High Returns
[ ]
(b) Tax Benefits
[ ]
(c) Childrens education
[ ]
(d) Wealth creation
[ ]
(e) Retirement planning
[ ]
3. Have you availed fully benefits offered by Sec. 88 of I.T.
Act?
[ ] Yes
[ ] No
4. In a year approximately how much do you invest for tax
planning?
[ ] >20,000 [ ] Between 20,000 & 50,000 [ ] 50,000 &
Above

5. What investment options are you using for tax planning?

[ ] PPF/GPF
[ ] Bonds
[ ] NSC
[ ] Post Office Savings
[ ] Life Insurance
[ ] UTI-ULIP
58

6. What factors do you consider for meeting your long/short

term (above) plans?
[ ] Safety
[ ] High returns
[ ] Liquidity
[ ] Tax Free Income
[ ] Regular income
7. Apart from tax planning where do you invest to meet your
long/short term plans?
[ ] Mutual Fund
[ ] Equities
[ ] Life Insurance
[ ] Postal Investment
Certificates (KVP)
[ ] Bank fixed Deposits
[ ] Post office schemes
8. Are you aware about Sec. 80ccc (i) of IT Act?
[ ] Yes
[ ] No
9. Would you like to know more about investment & tax
planning products offered by ICICI Prudential?
[ ] Yes
[ ] No

59

Conclusion
After coming out of cool and mild
climates of College and University, it was
the period for me to serve huge Industrial
Management and Organization. Over here I
faced lot of hardship in work and as the
saying is one learns from good and bad
experience sooner or latter, this was true
for me. Also the fear of industries was
ransacked from my mind and I got the
experience of working effectively by the
background of this training.
During my training, I came to know the
way one must deal with people, how to
communicate in more efficient manner so
that we may reach our target in more
efficient and easy manner.
After completing training the extract of
the achievements is presented in the
report. I realized the essence of Industrial
training when I met people who were
employed as fresher without previous
industrial exposure.
For present day M.B.A. of India, the
need of the hour is field exposure with
theoretical knowledge. This is essential to
60

make them valuable in the liberalized and

Global Market of India.

61

BIBLIOGRAPHY
Donald R. Cooper, Pamela S. Schindler.
Business Research Methods. (New
York: Tata McGraw Hill, 2003), 531-537.
Websites
www.indiainfoline.com
www.google.com
www.bimaonline.com
www.lic-india.com
www.gic-india.com
www.dhan.com
www.walletwatch.com

62