A PROJECT REPORT

ON
CONSUMER ATTRACTION & MARKETING OF
GENERAL INSURANCE PRODUCTS

A CASE STUDY

SUBMITTED BY :

PREETI GOEL

ENROLLMENT NO : 52102517

COURSE : MBA

(MARKETING)

SESSION : 2005-2008
 INSTITUTE OF
MANAGEMENT TECHNOLOGY
CENTER OF DISTANCE LEARNING
GHAZIABAD

PROFORMA FOR PROJECT REPORT

Name: PREETI GOEL_____________________________________

Enrollment No : 52102517__________________________________

Venue Preferred for Viva-Voce : IMT- CDL GHAZIABAD_____

Mobile No : 9873573530___________________________________

Documents Enclosed:

1. Photocopy of approved synopsis.

2. Photocopy of Evaluation Sheet form IMT- CDL
3. Photocopy of Identity Card issued by IMT-CDL
4. Acknowledgment letter from Project Guide.

Designation : UNIT SALES MANAGER______________________

Office Address : ICICI LOMBARD, 5TH FLOOR BIRLA TOWER, 25

BARAKHAMBA ROAD, NEW DELHI-110001____

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Date of Submission : _________________________________________

ACKNOWLEDGEMENT

The present work is an effort to throw some light on CONSUMER ATTRACTION &
MARKETING OF GENERAL INSURANCE PRODUCTS, A CASE STUDY OF ICICI
LOMBARD. The work would not have been possible to come to the present shape
without the able guidance, supervision and help to me by number of people.

With deep sense of gratitude I acknowledge the encouragement and guidance

received by my organizational guide Mr. Raheel Zuberi (Sales Manager of ICICI
Lombard) and other staff members.

I convey my heartfelt affection to all those people who helped and supported me
during the course, for completion of my Project Report.

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 TABLE OF CONTENTS

Chapter1.0 INTRODUCTION
1.1 Structure Of Indian Insurance Industry
1.2 Insurance Products
1.3 Insurance Service at ICICI Lombard
1.4 Business Model
1.5 Customer Sales Promotion
1.6 Competitors Information
Chapter 2.0 RESEARCH OBJECTIVE
Chapter 3.0 REVIEW OF LITERATURE
Chapter 4.0 RESEARCH METHODOLOGY
Chapter 5.0 DATA ANALYSIS
5.1 Questionnaire Analysis
5.2 Limitation Of Research
5.3 Data Presentation
5.4 Indian Non- Life Insurance
5.5 Market Positioning
5.6 Industry Product Composition
Chapter 6.0 RESEARCH FINDING
Chapter 7.0 CONCLUSION & IMPLICATION
Chapter 8.0 RECOMMENDATION
Chapter 9.0 BIBLIOGRAPHY
Chapter 10.0 APPENDIX

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 INTRODUCTION

Insurance A Definition : Spreading the risk of loss from the individual to

a group of individuals .Main purpose of insurance is to protect against unforeseen
risks. Where General Insurance takes care of a person while he/she is alive.
ICICI Lombard General Insurance Company Limited is a 74:26 joint venture
between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial
Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial
Holdings is a diversified financial corporate engaged in general insurance,
reinsurance, insurance claims management and investment management. Lombard
Canada Ltd., a group company of Fairfax Financial Holdings Limited, is one of
Canada's oldest property and casualty insurers.
ICICI Lombard General Insurance Company received regulatory approvals to
commence general insurance business in August 2001.
The INDIA MOTOR VEHICLES ACT, 1938 passed by the Government of India
makes insurance mandatory for any vehicle that is being run on petrol or diesel
on Indian roads. However some companies like the United India Insurance
Company also insures cars and two-wheelers fitted with a CNG or LPG kit
against a payment of an additional premium.
India 's number one private general insurance company
First general insurance company in India to be ISO 9001:2000 certified
Assigned the iAAA rating by ICRA indicating highest claims paying ability.
Awarded the NDTV Profit Business Leadership Awards 2007 in the General
Insurance category on July 27, 2007.
Adjudged at the General Insurance company of the Year at the 11th Asian
insurance industry Awards 2007.
The Institute of Chartered accountants of India has conferred the Gold Shield
award for Excellence in Financial Reporting to ICICI Lombard under the

5
 category Banking , Insurance & Financial Institutions based on the annual report
and accounts for the year ended March 31,2006.
ICICI Lombard has won the Economic Times Awaya Global Connect Customer
Responsiveness Awards 2006 for the most Customer responsive Company in
the insurance category. The Awards are a measure of excellence in product
innovation and service quality in response to the customer needs. In this context
they are a reflection of the core values tat drive ICICI Lombard
There are quite a few companies in the market which provide you the much
needed relief and peace of mind when you start your two-wheeler and leave for
your destination.
1. ICICI Lombard General Insurance
2. Oriental Insurance Company Limited
3. United India Insurance Company
4. New India Assurance Company Limited
The Indian Motor Vehicles Act makes it mandatory for all vehicles plying in the
country to have a valid insurance policy, to bail you out of trouble when you get
into an unforeseen incident. Though the exact nature of insurance policies may
differ from company to company a general review of the two-wheeler insurance
policy is as follows.

Features of ICICI Lombard

First general insurance company in India to be ISO 9001:2000 certified
Highest brand recall
Simple and fast documentation
Lightning fast claims settlement
Instant online policy issuance
Comprehensive product line
Highest security level offered through 128-bit encryption in case of online data
exchange.

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 First company to provide
digitally signed documents through an online interface.

Achieved financial breakeven in first full year of operations

Achieved underwriting breakeven in second year of operations

PRIVATISATION IN THE INSURANCE INDUSTRY

Causes
Breaking of Monopoly
Possibility of Insurance cover taken to the remote rural areas
Better service proposition for customers.
Possibility of innovation.

Result
Better pricing for the consumer.
Better service proposition
Innovation (launch of new products)

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STRUCTURE OF INDIAN INSURANCE INDUSTRY

Insurance Regulatory and Development Authority

General Insurance

Public Sector Private Sector

New India ICICI Lombard

National Bajaj Allianz
United TATA-AIG
Oriental IFFCO Tokio
Cholamandalam
Royal Sundaram
HDFC- Ergo
Reliance

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Car Insurance Introduction
ICICI Lombard brings a comprehensive Package Policy for your four-wheelers,
which covers Third Party Liability (TPL) for bodily injury and/or death, Personal
Accident cover for owner-driver and loss or damage to the vehicle insured (Own
Damage or OD).

Policy Coverage

a) Loss or damage to your vehicle: The policy covers you against any loss or
damage caused to the vehicle or its accessories due to the following natural
and man made calamities.
b) Natural Calamities Fire, explosion, self-ignition or lightning, earthquake,
flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm,
frost, landslide, rockslide.
c) Man made Calamities Burglary, theft, riot, strike, malicious act, accident by
external means, terrorist activity, any damage in transit by road, rail, inland
waterway, lift, elevator or air. The rates of the vehicle and its parts are subject
to depreciation as per the schedule provided by the Indian Motor Tariff.
d) Personal accident cover: The motor insurance provides compulsory
personal accident cover for individual owners of the vehicle while driving. You
can also opt for a personal accident cover for passengers.
e) Third party legal liability: This protects you against legal liability arising due
to accidental damages

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 -Any permanent injury/ death of a person
-Any damage caused to the property.
f) No Claim Bonus: If you do not make a claim during the policy period, a No
Claim Bonus (NCB) is offered on renewals.
g) Additional discounts: You can also avail of additional discounts if you are a
member of a recognized Automobile Association in India.
h) ARAI devices: In case you have installed ARAI approved anti theft device in
your vehicle, you get a discount of 2.5 % on the OD Premium to a maximum
of Rs. 500.

Key Benefits
A digitally signed policy is issued immediately through online facility.
You can claim towing charges up to Rs 1,500 through 24*7 call centers.
Cashless claim settlement at network garages all across India.

Policy Exclusions
Under this policy, you are not covered against -
Normal wear, tear and general aging of the vehicle
Depreciation or any consequential loss
Mechanical/ electrical breakdown
Wear and tear of consumables like tyres and tubes
Vehicle being used otherwise than in accordance with limitations as to use
Damage to/ by a person driving the vehicle without a valid license
Damage to/ by a person driving the vehicle under the influence of drugs or
liquor / Loss/ damage due to war, mutiny or nuclear risk

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Travel Insurance Introduction
To ensure Travel exciting and happy , ICICI Lombard offers a comprehensive range
of travel insurance plans , catering to specific individual needs , covering any
eventually.

Features
ICICI Lombard General Insurance has introduced overseas travel cover for
senior citizens aged between 71 years and 85 years under its Globetrotter
Overseas Travel Insurance umbrella.
The policy is aimed to meet the needs of approximately one lakh senior
citizens per year, who mainly travel to the US, Europe and West Asia, said a
press release.
"We are happy to introduce a policy for senior citizens. With life expectancies
going up, we are becoming older as a nation. The need for adequate
protection through insurance is also on the rise. But senior citizens have
limited insurance options available to them," said the release, Head
Marketing, ICICI Lombard General Insurance.
"With the increasing number of Indians going abroad for studies and work,
the number of parents going to visit them is also on the rise. Our research
showed that there was a strong felt need to make insurance policies available
for senior citizens," Mr. Jain said.

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 This insurance cover is designed to take care of emergencies such as
medical expenses incurred for illness or accident, including any extra
additional medical costs, if necessary, and prescribed transportation to India,
loss of checked-in baggage etc. It also covers reasonable expenses
necessarily incurred for emergency purchase of essential items in case of a
delay in checked-in baggage for more than 12 hours, loss of passport,
accidental body injury, personal liability resulting from death, injury or
damage to a third party and hijack.

Plan Options
Single Trip: For a one-time individual traveler.
Multi Trip: annual policy for frequent travelers.
Family Trip: preferential pricing for a family of 3 or more.
Platinum Plan: a comprehensive plan with a SUPER BASKET of benefits.
Gold Plan: a value for money cover, covering more than medical risks.
Silver Plan: a pure health cover for your basic needs.
Bronze Plan: the short trip for neighboring countries plan.
Salt & Pepper Plan: applicable for customers aged between 71 to 85 years.
Student Travel Insurance: Designed to comply with University norms.
Students traveling abroad have to take a compulsory MEDICAL
INSURANCE .

What is not covered in this Policy ?

Some Main Exclusions are : Medical expenses arising out of pre- existing conditions
(except in case of life threatening situations ), addiction to alcohol *, drugs*, mental
disorder*, anxiety , depression , venereal disease, HIV ,radiation , sporting activities*
war and war like consequences, expenses arising out of loss of valuables, money
,securities and tickets; loss of passport in public places; employers contractual
liability. Sub-limits applicable.

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 *include for Student Travel
Insurance

Travel Insurance- Comparative Statement

Benefits ICICI Lom ba rd Ba ja j Allia nz Ta ta AIG

1. E xtensio n fo r a S ec o nd Y ear
2. M edic al E xpenses fo r ac c ident and sic kness #

3. E nhanc ed M edic al benefits that are c om pliant to university no rm s

a. Treatment for m ental and nervous disorders, including alcoholism and drug

dependency
b. In-patient medical expenses related to pregnancy

c. M edical expenses for inter-collegiate sports injuries

d. Cancer screening and mammographic examinations

e. C hildcare benefits

4. S ic kness C o verage fo r 1 full year *
5. O utpatient treatm ent fo r sic kness fo r full 365 days
5. Dental T reatm ent
6. Repatriatio n o f Rem ains
7. C hec ked Baggage Lo ss
8. Perso nal A c c ident
9. Perso nal Liability
10. Bail Bo nd
11. S tudy Interruptio n
12. S po nso r Benefit
13. 2 W ay C o m passionate V isit ^

14. Felo nio us A ssault +

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Home Insurance-Introduction
Home is where the heart is. There are no truer words than these. However natural
calamities & man-made dangers can threaten the security of our home. Painful as it
can be we need to secure it and provide for re-creating it, in case of damage due to
unforeseen circumstances. So that insurance company has introduced Home
insurance to guarantee absolute peace of mind form all uncertainties in our day-to-
day life with this unique policy.
ICICI Lombard Home Insurance Policy has a comprehensive range of covers to
protect your Home and your life.

What Does The Policy Cover?

1. Structure Cover : The compensation under this cover will be paid to repair
damages to the structure caused by natural and man-made calamities.
2. Contents cover : This is for the possessions inside the home. If these are
damaged or burgled then the insurance covers the loss incur for the same.
3. Personal Accident Cover : Death of Insured person on account of an
Accident.

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Exclusions
Structure and Contents Insurance
Willful destruction of property.
Loss, Damages and destruction caused by war, perils, Wear and tear
atmospheric conditions etc.
Losses if your house has been unoccupied for more than 30 days without any
notice to ICICI Lombard.
Cash, Bullion, Paintings, works of art antiques, mobiles and laptops.
Theft.
Losses due to electrical fluctuations.
Electrical /Mechanical Breakdown.

Personal Accident Cover

Intentional self injury, suicide or attempted suicide.
Whilst under the influence of intoxicating liquor or drugs.
Directly or indirectly caused by venereal disease or AIDS.
Directly or indirectly caused by contributed to or aggravated or prolonged by
children or pregnancy or in consequence thereof.
Engagement in dangerous activities.
Mounting into dismounting form or traveling in any aircraft other than as a
fare paying passengers on a scheduled flight.
Mental disorder or psychosomatic dysfunction.

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Health Insurance-Introduction
Life is full of surprises.some bitter some sweet. For Medical emergencies like
surgeries, accidents and sudden illnesses. ICICI Lombard General Insurance
Company Limited brings Family Protect, a complete Health insurance Plan that is
flexible enough to cover all members of the family.

Product Benefits
Cover medical expenses during hospitalization Cost of bed, medical care,
doctors fees, medicines as per the doctors recommendations.
Medical expenses for a 30- day period immediately before hospitalization
Medical expenses for a 60- day period immediately after hospitalization.
Cashless Hospitalization at 3400+ hospitals pan- India.
Modern Day care treatments covered.
Plans available : Individual, and Floater: 2Adults, 2 Adults + 1 Kid, 2 Adults +
2 Kids.
No Sub-Limits for coverages except for Cataract.
Income tax benefit under Section 80 D up to Rs 15,000/

Exclusions
Diseases / injury existing before the inception of health Insurance Policy.

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 Any disease contracted
during the first 30 days of inception of Policy.
Non- allopathic treatment.

Pregnancy & Children related diseases.

Intentional self- injury.
Diseases such as HIV or AIDS.
Diseases existing from the time of birth (Congenital diseases).
Cosmetic, aesthetic, obesity related treatment.
Abuse of Liquor, intoxicating substances or drugs
War, riot, strike, terrorism, nuclear weapons induced hospitalization.

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 INSURANCE SERVICES AT ICICI LOMBARD

ICICI LOMBARD is a livelihood promotion institution working in several arid and

backward districts spread over seven states. ICICI LOMBARD works towards its
mission of livelihood promotion by providing a comprehensive set of services, which
include

I. Livelihood Financial Services (Credit, Insurance & Savings),

II. Agricultural and Business Development Services (Productivity enhancement

&Market linkages),

III. Institutional Development Services. ICICI LOMBARD is head quartered at

Hyderabad.

As part of its mission to deliver comprehensive financial services to rural customer,

ICICI LOMBARD began its initiatives to deliver insurance services four years ago,
coinciding with the opening up of the insurance sector. From the beginning ICICI
LOMBARD has actively partnered with multiple insurance companies to design
insurance products for rural customers. In the area of life insurance ICICI
LOMBARD has worked with ICICI Prudential to begin with and is currently working
with AVIVA Life Insurance Company. ICICI LOMBARD has worked with Royal

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Sundaram general insurance company for the delivery of Livestock insurance,
Health Insurance and Micro-Enterprise cover for rural non-farm enterprises and with
ICICI Lombard for the delivery of rainfall insurance. In 2003, ICICI LOMBARD was
also given a Corporate Agency license by IRDA to distribute retail life insurance
products from AVIVA.

VISION
All poor households, especially those served by ICICI LOMBARD, will have access
to risk-management services covering their lives and livelihoods, and insurance
companies will provide these services willingly on a financially sustainable basis.
Some Examples are-
1. Public Awareness Campaign in Assam
ICICI Lombard along with the government of Assam has introduced
Mukhyomantrir Jibon Jyoti Bima Achoni- a group PA (Personal Accident)
policy Assamese residents who feature on the voters list. While this is a
scheme specially sensitive to the treatment worries of the common man, one
of the local media alleged the government of not settling claims of the
common man. This called for ICICI Lombard to take tactful steps to ensure
the companys image remains untarnished in the unprecedented media
controversy.
In order to increase awareness of this socially oriented scheme .ICICI
Lombard released full page & double spread ads across all the major 40 local
language & English dailies providing the complete and updated list of the
names of the thousands of people whose claims had already been processed
and cheques waiting to be picked up. This in effect refuted the false
allegation made by the stray local media. Thereafter in a bid to consolidate
the awareness and goodwill, front page solus ads were released highlighting
specific instances in which claims had been settled.
The awareness communication was also carried across 125 bus panels and
500 banners across the state.

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2. Weavers Health Insurance Scheme
Product Weavers Health Insurance Scheme, in a tie-up with the Development
Commissioner Handlooms, Ministry of Textiles, Govt. Of India, was launched
by Mr. Shanker Singh Waghela on 7th Nov 2005. It was launched with the
objective of ensuring adequate healthcare facilities for the less fortunate
weavers community ( handloom).
The primary marketing objective is to generate more and more enrolments.
This could be achieved by educating the existing weavers on the health care
benefits and facilities provided by ICICI Lombard on behalf of Development
Commissioner Handlooms, Ministry of Textiles , Govt. of India. Marketing
initiatives has been undertaken for states across the country- Tamil Nadu,
Rajasthan, etc. A host of posters and banners in regional languages for
display in the local hospitals across the country are being developed and
rolled out in phases. Also, health check are being organized in UP.
Over 3 lacs weaver have already been enrolled for the Weavers Policy
during the course of this nation wide awareness drive.

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Business Model Of ICICI LOMBARD

Area: Rainfall Insurance

ICICI Lombard General Insurance Company Limited. (ICICI Lombard) is a 74:26
venture between ICICI Bank, India's largest private sector bank and Lombard,
one of the oldest property and casualty insurance companies in Canada. The
company received regulatory approvals to commence general insurance
business in August 2001.

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 ICICI LOMBARD and ICICI
Lombard along with the Commodity Risk Management Group, World Bank, have
done pioneering work in piloting rainfall insurance in India, starting with the first
time introduction of the product in the year 2003. In 2005, the product has been
rolled out in all six states where ICICI LOMBARD has an operational presence.
In the three product cycles that have been completed so far, significant progress
has been achieved in terms of the product design and delivery mechanism.

a. Products
ICICI LOMBARD has today the experience of delivering a wide range of products in
both Life and Asset Insurance. Most of these products have been designed with
active participation between ICICI LOMBARD and the insurance companies to bring
out products that are tailor made to the rural customers that we serve. The current
product portfolio that ICICI LOMBARD is delivering to its customers is given below:

Asset Insurance
Livestock Insurance: A group policy insuring cattle, sheep and goat.
Micro Enterprise cover: Insuring rural non-farm enterprises
Rainfall Insurance: insuring agricultural activities against deviation in rainfall.

Health Insurance
ICICI LOMBARD has launched on in May-05 a health insurance product for its credit
customers which covers risks related to permanent total disability, critical illnesses
and hospitalization expenses to a certain limit. In Mar-06 ICICI LOMBARD has also
launched this product for covering SHG members.

b. Outreach
Geographic presence: ICICI LOMBARD is today delivering and servicing insurance
products across all the 8 states where it has operations, with a direct presence in

22
over 10,000 villages. By the end of
Mar 06 ICICI LOMBARD has delivered insurance services, both life health and
asset insurance to over 200,000 rural households. Has settled claims to more than
1800 rural households.

c. IT and Process developments

To enable smooth processing of insurance policies across various product
categories and across various geographic locations, ICICI LOMBARD has
developed robust IT applications. These applications provide support to policy
processing and claims servicing.
ICICI LOMBARD has also developed clear financial and operational procedures
for administering the various insurance products, which have supported our
insurance operations for the past three years.

d. Service Levels
Today ICICI LOMBARD is delivering insurance services at the doorstep of our
customers, which has resulted in 1.increased awareness levels among household
members on features and benefits of various products and 2. providing the entire life
and livelihood protections services through a single channel.
ICICI LOMBARD has also worked with insurance companies to achieve quick
turn around time for claim settlements. Today through ICICI LOMBARD channel,
claims are being settled within within 30 days from the day of submission of
claim

documents to insurance companies. ICICI LOMBARD is further working with the

insurance companies to better this performance. In case of rainfall insurance, the
claims have been settled to eligible farmers even before the harvesting season
has been completed.

e. Training

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ICICI LOMBARD has conducted
extensive classroom and field level training on Insurance to over 900 staff over the
past two years.
120 executives in the company have undergone the IRDA prescribed online
insurance training and qualified in the course.

f. ICICI Bank
As per the referral agreement between ICICI Lombard and ICICI Bank , the lead is
generated by the ICICI Bank representatives and if the customer shows interest,
the customer is referred to the ICICI Lombard representative present in the branch
for explanation of the product features and completion of the sales fulfillment
process. ICICI Bank is a referral agent of ICICI Lombard.

CUSTOMER SALES PROMOTION

In a study conducted by IMRB, an internationally acclaimed research agency, ICICI

Lombard has scored the highest Total Brand Awareness, with 90% of General
Insurance Holders and 87% of Non- Holders across India being aware of ICICI

24
Lombard. These awareness levels
include and aided recall. We also delivered the highest Top of Mind Recall( first
unaided mention of a general Insurance Company). Not only this but also ICICI
Lombard has a progressive and a dynamic human resource (HR) philosophy. The
company believes in transforming its human capital into a key source of competitive
advantage. There is a strong value system in place, which is driven by result
orientation, adaptability to change, humility and respect for subordinates and peers.
The company believes that investment in human capital is critical for achieving and
sustaining growth.
The companys constant Endeavour is to create a performance driven work culture
with focus on employee satisfaction and retention.

Challenges and growth

Indian consumers will not buy a car online. However, s/he is most willing to get
empowered before entering into a buying & selling decision. Even today, Car
buying is not a pleasant experience. With all the hassles, haggle and time spent,
people often face frictions and come of the experience not feeling so good about
it.
There are opportunities to improve Car buying and ownership experience by
delivering information and tools which help consumer spend his/her money on
the right car at right price and at right place. Today, With car valuation / car
recommendation services, today, some 80% consumers report that we have
helped them in their car buying/selling experience (And Im talking at least a few
lacs here). Besides, user generated content / reviews etc are a high hit,
consumers refer to them a lot.

And our figures says that around 35% of buyers who came online were genuine
who finally entered into a transaction.
On the dealer side, used car market is also fragmented and dominated by a
large number of small brokers/ dealers (Mumbai will have around 4000

25
 dealers/brokers and Delhi have
at least 1000 mid size dealerships). Web actually helps them reduce their cost of
acquiring customer and reach beyond their geography. Of course, this was not
so obvious to them. Over time, we generated multiple thousands of car
purchase inquiries and distributed those free to dealers. And for which their
reaction was not encouraging enough. However, today dealers are willing to
experiment more with us and are actually paying us to get them consumers
through web.
We also see more encouraging figures. Google ad spent of automotive
companies this year is around Rs. 10 million (IAMAI & Pinstorm report). I know at
least of one company who successfully delivered lead aggregator model in US,
have actually started working in India on similar lines.
We see more of Maruti/ Tata/ Toyota ads online than ever before. ICICI Lombard
have aggressively focused to acquire consumers online.

Some Examples are

a) No Parking Gate Boards- In keeping with focus on effective media
solution, ICICI Lombard pioneered the NON- PARKING SIGNBOARDS as a
marketing initiative. This activity combining a relevant message and brand
awareness across the country.

b) Traffic Barricade Campaign- The traffic barricade campaign has

been one of the most intensive activities undertaken with a large number of
barricades planted across Mumbai alone. The barricades with a relevant road

26
safety message reflect ICICI
Lombards commitment as a socially responsible corporate. Furthermore, these
public utilities have simultaneously provided us
with unique branding opportunity to make the presence felt in a clutter breaking
manner.

c) Outdoor Campaign For Overseas Travel A month long

sustained awareness cum lead generation drive was undertaken in Delhi for
Overseas Travel Insurance. The creative was developed to communicate the
benefits of the product and a call to action upfront. In a city with limited outdoor
opportunity, 3 mobile vans carrying the communication constantly moved around
the city in mapped ot routes to get maximum mileage and leads from the activity.

d) Rural- Sumo Campaign- Sumo Campaign gains its name from

Sumos moving around with the Weather Insurance Communication. This activity

27
meant to mark the launch of I
Lombard- weather Insurance product for soyabean in Kota & Jhalawar
(Rajasthan). Aside from the visual branding these sumos also generated
considerable interest by announcing the product launch and the features on
speaker phones. The creative was a simple and reliable one for the rural
audience, highlighting the key benefits in language script. 7500 farmers enrolled
as a result of this communication drive.

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 COMPETITORS INFORMATION

A. NEW INDIA INSURANCE

New India Insurance was Incorporated on July 23rd, 1919 Founded by
the House of Tata Founder member- Sir Dorab, Nationalised in 1973
with merger of Indian Companies.
Gross Premium (in India) of Rs.5017.20crores in the year 2008-2007
as against Rs4791.49crores as on 31st March 2007. Network of Offices-
26 Regional Offices, 393 Divisional Offices, 314 Branches and 34
Direct Agent Branches. Overseas presence in countries like Japan, U.K,
Middle East, Fiji and Australia.

B. ORIENTAL INSURANCE
The Oriental Insurance Company Ltd was incorporated at Mumbai on 12 th
September 1947. The Company was a wholly owned subsidiary of the Oriental
Government Security Life Assurance Company Ltd and was formed to carry out
the General Insurance Business. The Company was a subsidiary of Life
Insurance Corporation of India from 1956 to 1973 (till the General Insurance
Business was nationalized in the country). In 2003 all shares of the company
held by the General Insurance Corporation of India has been transferred to
Central Government. The company is a pioneer in laying down systems for
smooth and orderly conduct of the business.
The companys Gross Direct premium Income in India during the year 2007-08
(Audited) was Rs3808.13crores and the Premium Income outside India was
Rs92.07crores. The Gross Direct Premium in India & abroad showed a growth of

29
 3.00%. The Net Premium Income (Domestic and Foreign), on the other hand
grew by -0.04% from Rs2879.74crores in 2006-07 to Rs2878.67crores in 2007-
08.

C. NATIONAL INSURANCE
National Insurance Company Limited was incorporated in 1906 with its
Registered office in Kolkata. Consequent to passing of the General Insurance
Business Nationalization Act in 1972, 21 Foreign and 11 Indian Companies were
amalgamated with it and National became a subsidiary of General Insurance
corporation of India (GIC) which is fully owned by the Government of India. After
the notification of the General Insurance Business (Nationalization) Amendment
Act, on 7th August 2002.National has been de-linked from its holding company
GIC and presently operating as a Government of India undertaking. National has
Headquarters in Kolkata , network of about 1000 offices, manned by more than
16000 skilled personnel . NICs foreign operations are carried out from its branch
offices in Nepal and Hong Kong.
The paid-up share capital of National is Rs100crores . Starting of with a premium
base of 500 million rupees (50crores rupees) in 1974. NICs gross direct
premium income has steadily grown to 35236.7 million rupees (3523.67crores
rupees) in the financial year 205-2006.

D. BAJAJ ALLIANZ
Bajaj Allianz General Insurance Company Limited is a joint venture between
Bajaj Finserv Limited (recently remerged from Bajaj Auto Limited) and Allianz
SE. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz
General Insurance received the Insurance Regulatory and Development
Authority (IRDA) certificate of Registration on 2nd May,2001 to conduct General
Insurance business (including Health Insurance business ) in India. The
Company has an

30
 authorized and paid up capital of Rs.110 crores , Bajaj Finserv Limited holds
74% and the remaining 26% is held by Allainz, SE.
As on 31st March 2008, Bajaj Allianz General Insurance maintained its premier
position in the industry by garnering a premium income of Rs2578crore,
achieving a growth of 43% over the last year. Bajaj Allianz has made a profit
before taxes of Rs167crore and is the first company to cross the Rs100crores
mark in profit after tax by generating Rs105crores. In the first quarter of 2008-
2009, the company garnered a gross premium of Rs733.53crores against
Rs573.73crore last year for the same period registering a growth of 28%.

E. RELIANCE GENERAL INSURANCE CO LTD

Reliance General Insurance is one of Indias leading private general Insurance
companies with over 94 customized insurance products catering to the
corporate, SME and individual customers. The Company has launched
innovative products like Indias first Over-The Counter health & home insurance
policies. Reliance General Insurance has extended network of over 200 offices
spread across 173 cities in 22 states, a wide distribution channel network, 24x7
customer service assistance and a full fledged website. It is also Indias first
insurance company to be awarded the ISO 9001:2000 certification across all
functions , processes, products and locations pan-India.

F. ROYAL SUNDARAM
Royal Sundaram Allianz Insurance Company Limited has been at the forefront
of providing innovative insurance solutions for people , their families and
business. The company got license post privatization in 2001. Royal Sundaram
brings the reliability of Sundaram Finance (AAA), one of the most respected non-
banking financial institution in India, and RSA, one of the oldest and the second
largest general insurer in the UK.

31
G. TATA AIG
Tata AIG General Insurance Company Limited (Tata AIG General ) is a joint
venture company, formed by the Tata Group and American International Group,
Inc(AIG).

Tata AIG General combines the Tata Groups pre-eminent leadership position in
India and AIGs global presence as the worlds leading international insurance
and financial organization. The Tata Group holds 74% stake in the insurance
venture with AIG holding the balance 26%. Tata AIG General Insurance
Company ,which started its operations in India on January 22,2001.
The Tata Group has generated the revenue of $28.8billion (Rs129,994crore) in
2006-07 ,the equivalent of about 3.2% of the countrys GDP and a market
capitalization of $72.8 billion as on January 10,2008. The groups 27 publicly
listed enterprises-among them stand out names such as Tata Steel, Tata
Consultancy Services, Tata Motors and Tata Tea- have a combined market
capitalization and a shareholder base of over 2.9 million.

H. POLICY BAZZAR
Policy Bazaar is Indias leading online life and non-life insurance aggregator. It
helps in comparing the insurance products from leading insurance companies,
basis their quality and price, and offer the customer the power to choose the best
suited insurance plan. Make the Right Choice tagline builds the expertise in
Insurance and e-commerce. It empower the customer through providing accurate
and complete information on Insurance products combined with the Solution-
Focused Customer Service. In short Policy Bazaar provides comparison of
general and life insurance products (including quotes)with the facility to purchase
the insurance online.

32
 RESEARCH OBJECTIVE

1. To study the trends, status and potential of general Insurance Industry in

India
2. To analyze the consumer behavior towards ICICI Lombard products
3. To critically appraise the marketing strategies of ICICI Lombard
4. To determine that what factors should the company focus on to attract
greater Market share

33
 RESEARCH DESIGN /METHODOLOGY

1. Target Population: Target population for this research will be the existing

customers of ICICI Lombard and the officials of ICICI Lombard in the area of the

Delhi and NCR.

2. Sampling Technique: Judgmental and convenience sampling will be

used to conduct the survey of the research.

3. Sample Size: As the research will be conducted on the existing customers

of ICICI Lombard and its officials, it will include some judgmental questions about

the company so many of them will be skeptical that whether the information

provided by them would be kept confidential or not. A medium sample size of 50

customers and 10 ICICI Lombard officials will be chosen who are willing to share

information and want to be a part of the survey.

4. Research Tool and Questionnaire: For this research, personal

contacts, personal observation and market survey tools will be used. I will

personally contact the customers of ICICI Lombard, and officicials of the

company after getting the data from the company and get the questionnaires

filled. The questionnaire will be designed after conducting a pilot survey in the

company.

34
5. Action Plan for Data Collection: In the first stage Secondary data will

be collected from different websites and books to know more about general

insurance and study the work already done in this field on this topic. After that

primary data will be collected by using questionnaire and getting them filled

personally from the customers and officials of ICICI Lombard. The customers

and officials of ICICI Lombard will be chosen from the different parts of the Delhi

and NCR which will include East Delhi, West Delhi, North Delhi, South Delhi,

Central Delhi, NOIDA, Ghaziabad, Gurgaon and Faridabad.

35
 LITERATURE REVIEW

Mapping for risk management

ICICI Lombards use of a GIS solution for risk management was the first project
of its kind in the Indian insurance industry.
Risk management is defined as the process of planning, organizing, leading and
controlling the activities of an organisation in order to minimize the effects of risk
on the said organizations capital and earnings. Enterprise risk management
expands this process to include not just the risks associated with accidental
losses, but also financial, strategic, operational, and other risks as well.
ICICI Lombard used a Risk Management System (RMS) that helped it zoom into
spatial level risk data representing real-world entities including both geo-
referenced and quantitative attributes attached to it at a national scale. It also
used GIS solutions to use tools, maps, and latest census demographic data.
This helped the company get a clearer picture of the levels of risks associated
not just with financial information, but also with natural risk-prone geographies. It
allowed the company to understand its customers better and make strategies
according to the more accurate levels of perception offered by the solution.

A Unique Deployment
The use of a GIS-based RMS was essentially to identify areas on a map with
high population density, a large concentration of rental properties, or other
demographic characteristics that affect whether to underwrite a property for fire
or burglary insurance.
Further he reckons that it can determine if a home is in a flood plain, near a fault
area, or is susceptible to wild fires and other hazards to make informed decisions
on whether to underwrite a property for hazard insurance or find the driving
distance to the nearest fire station or police station.

36
 For an insurance organisation like us it makes sense to have such systems as it
helps in determining the correct details of a property. It is interesting to note that
the project began in February 2004 and was completed in seven months
(September 2004) flat. The Web part of the project took about ten months
(began in November 2004 and ended in September 2005). All together it cost Rs
35 lakh.

OBJECTIVES ACCOMPLISHED
In managing insurance policies, getting the correct details is of prime importance.
Gulati believes that if the system for analyzing the information related to policy and
customer concentration service is available, decisions are much more accurate,
efficient and quick.
Another reason for deploying such systems was to incorporate regulatory
requirements of Nat-Cat (Natural Catastrophic) limits in reinsurance treaties,
provide real-time information of potential damages in case of a natural calamity
and provide business intelligence requirement at the geographical level to
ensure elimination of bad risk.
Since the implementation of the new systems, the claims processing takes a
shorter turnaround time. Says Gulati, GIS helps claims processors use the
customer or claim location address on a map relative to other claims and to
boundaries such as flood and storm limits. In case of reinsurance, it helps in
better premium count by identifying good and bad risks. Damages are assessed
and modeled to help the rein surer predict the results of future events, thus
providing more accurate underwriting.
A big advantage has been the increase in the number of customers. The GIS
software combined with Government of Indias census demographic data
packages allows insurers to profile potential and existing customers and perform
predictive modeling to find new opportunities.

37
 The RMS helps to zoom into spatial level risk data representing real-world
entities including both geo-referenced and quantitative attributes attached to it at
a national scale. This application helps to manage risks in a better way, and
operate more efficiently by geographically assessing and analyzing information
about underwriting, risk management, and customer service.
Map Info, a Geographical Information System (GIS) based desktop
application is used for deploying the RMS and help assess and analyze
information related to policy and customer concentrations. It includes risk
information and analysis of different nature, such as estimated impact of
frequency and severity of earthquakes or other natural calamities, which
ultimately leads to efficient management of risk and correct pricing of policies.
Though it is too early for the company to talk on ROI, it has predicted that
over a period of three years, it would be able to increase the revenues by Rs.
47.85 crore.
The systems have already benefited nearly 50 employees in reinsurance and
underwriting. According to Gulati, once the Web-based module is rolled out, it
will benefit 800 more employees and around 35,000 customers.
ICICI Lombard Insurance Services implements Talisma v6 CRM
TalismaTM, a provider of multi-channel CRM solutions, announced that its
solution has been deployed by ICICI Lombard, a leading provider of customized
insurance solutions. Talisma v6 will provide ICICI Lombard's customers with
enhanced customer service through quicker and more accurate claims
processing.
ICICI Lombard customer service representatives now have a single-screen
view that provides a 360-degree perspective and complete audit trail of each
customer enquiry. This enquiry includes contact information, customer profiles,
appointments, and service queries, regardless of communication method (chat,
email, or phone). The improved speed and accuracy of claims powered by
Talisma v6, has led to increased customer retention rates for ICICI Lombard.

38
 Implementation of Talisma v6 has allowed ICICI Lombard to map its internal
claims process, eliminating the need for call centre agents to process and
forward each document individually to the company's claims managers. Once
information has been added into the system and verified, Talisma v6 records
each detail of each claim and assigns the claim to the organizations
operations team for payment. This new integration permits agents to manage
claim requests quickly and accurately saving time by matching information
from a range of back office systems.
"Our CRM strategy spans the entire organisation from front-office to back-
office. It is a commitment that we have made to put customers at the heart of
our company. We are focused on using multi-channel and self-service
capabilities to help in our business growth. With the success of Talisma v6,
we plan to expand the footprint to include our partners through Talisma's Web
client, giving them access to relevant functions over the internet," said Sudhir
Salian, head IT and retail , ICICI Lombard.
From a marketing perspective, Talisma's v6 enables ICICI Lombard to
proactively build customer relationships through outbound-targeted
campaigns. Contact databases can now be integrated into the CRM solution,
providing staff with campaign management tools. This ensures that each
contact receives the correct outbound communication, thereby dramatically
increasing customer acquisition levels.
"Improving customer retention and acquisition is vital in today's competitive
global insurance market. We have helped ICICI Lombard reduce the
complexity and time spent on each claim by eliminating the need to process
information from a variety of different back-end systems.Our partnership with
ICICI Lombard underlines the value Talisma brings to the insurance services
marketplace. "
ICICI Lombard Gen Insurance expands southern operations
Even as the city-based private insurers are finding it tough to crack the
market, ICICI Lombard General Insurance Company is going great guns in

39
 the southern market. After storming the fire insurance market, the company is
now looking at marine hull insurance.
The company has got sizeable share of coinsurance from Sanmar Shipping
and West Asia Maritime hull insurance policies. "Our share in the Sanmar
policy is 25 per cent while it is 35 per cent in the West Asia policy. According
to him the southern region will close the first quarter with a premium income
of Rs 30 crore as against Rs 40 crore earned last fiscal. The company has
got good entry in the Sanmar group, India Cements, Madras Cements, KCP
and other leading industrial groups in south.
.More than the basic fire insurance policy, we are focusing on selling the
Consequential Loss of Profits insurance policy that fetches good premium
income.
ICICI Lombard is also into liability insurance in a major way. The company
has sold unique clinical trial insurance policies to couple of pharma
companies based in Hyderabad. The policy covers the drug companies
against any claims from persons who are volunteers for human clinical trials.
"Sufficient reinsurance cover has been taken by us while selling the clinical
trial and marine hull insurance policies," Bharathan says.
Meanwhile, ICICI Lombard is expanding its reach in the four southern states
by leveraging ICICI Bank's branch network. By paying rent and other charges
to its parent, ICICI Bank, the insurance company will operate from the bank
premises.
According to Bharathan each branch should fetch a premium income of at
least Rs 1 crore per annum to be economically viable.
With brokers being its major source of corporate business, ICICI Lombard
conducts regular training courses to broking officials so that they are well
aware of the products, and terms and conditions

40
41
 QUESTIONNAIRE ANALYSIS

DATA ANALYSIS & INTERPRETATION

1. Data gives preference of respondents of insurance company

COMPANYS NAME NO.OF SHARE (%)

RESPONDENT
L.I.C. 78 78
SBI LIFE INSURANCE 7 7
ICICI LOMBARD 10 10
OM KOTAK MAHENDRA 3 3
HDFC 2 2

TOTAL 100 100

PREFERENCE FOR INSURANCE

COMPANY
L.I.C.

100
SBI LIFE
RESPONDENT
NUMBER OF

80 INSURANCE
60 ICICI
40 LOMBARD

20 OM KOTAK
MAHENDRA
0
HDFC
1
NAME OF POLICY

42
INTERPRETATION

78% of the people have LIC policy and is ranked number one by that percent

of respondent.

2. Data gives benefits of insurance cover perceived by respondents.

BENEFITS NO.OF RESPONDENTS SHARE (%)

COVER FUTURE 55 55
UNCERTANITY

TAX DEDUCTIONS 20 20

FUTURE INVESTMENT 25 25

TOTAL 100 100

BENEFITS OF INSURANCE COVER

C OVER F UT UR E
UNC ER TA NITY
TA X DEDUC TIONS

FUTUR E
INVESTM ENT

43
INTERPRETATION
55% of the respondent believe that covering future uncertainty is the biggest

benefit of insurance policy

20% & 25% of them believe that other benefit are tax deduction & future

investment

3. Data provides features of insurance policy attracted the respondents

FEATURE NO.OF RESPONDENTS SHARE (%)

MONEY BACK 15 15
GUARENTEE
LARGER RISK 37 37
COVERANCE
EASY ACCESS TO 7 7
AGENTS
LOW PREMIUM 30 30

REPUTATION OF 11 11
COMPANY
TOTAL 100 100

FEATURES OF INSURANCE POLICY MONEY BACK

GUAARENTEE
LARGER RISK
COVERANCE
EASY ACCESS TO
AGENTS
LOW PREMIUM

REPUTATION OF
COMPANY

44
INTERPRETATION
Majority of the respondent found larger risk conversance as the most

attracted feature of their policy.

4. Data provides number of insurance policy type respondents

POLICY TYPE NO. OF SHARE (%)

RESPONDENTS

LIFE POLICY 75 75

NON LIFE POLICY 25 25

BOTH 45 45

NATURE OF POLICY

80
NUMBER 60
OF LIFE
RESPOND 40 POLICY
NON LIFE
ENTS 20 POLICY
BOTH
0
1 TYPE
POLICY

45
INTERPRETATION
75% of the respondents have a life insurance policy while

45% have both.

5. Do you know that commercial vehicles be insured online at ICICI LOMBAR?

40

60

YES NO

Currently, only private cars can be insured online. But we are in the process of

launching online insurance for commercial vehicles too.

46
6. Do you know , one can take a policy for a vehicle belonging to someone

else?

40

60

YES NO

Yes,

The person who buys the policy need not be the owner himself. Anyone can buy

47
the policy acting on behalf of the

insured.

48
 7. Why do we need to insure

our vehicle?

For the safety

of
passengers
25 25
For the safety
of fellow
drivers

25 Because it is
25 Other peoples
property

Insurance
helps cover
the costs of
potential
damages

Your car is probably one of the expensive things you own. Insurance protects this

asset and helps you in coping with the expense of accidents, damage or theft.

While driving, you are responsible for the safety of:

For the safety of passengers

49
 For the safety of fellow

drivers

Because it is Other peoples property

Insurance helps cover the costs of potential damages

Insurance helps cover the costs of potential damages or injuries in case of an

unforeseen accident or theft. And above all, in India it is mandatory to have

motor insurance before you can drive on the roads.

Analysis of data has been done with help of various statistical tools. There are
percents simple average and time series analysis of the market report of ICICI
Lombard .

50
 LIMITATION OF THE RESEARCH

As far as limitations are concerned present research work has

been completed in the face of following major constraints.
The data used in my research study is both primary and
secondary data.
Latest data and information about the market report of ICICI
Lombard . The data is available of almost a decade.

51
 DATA PRESENTATION
Financial Year 2005-06 2004-05
Figures in nos.
No. of policies sold 1,461,039 607,926
No. of claims settled 243,951 84,970
No. of employees 2,283 1,249
No. of offices 154 96
Figures in Million
Gross Written Premium 15,920 8,852</TD< tr>
Net Earned Premium 5,277 2,156
Profit before Tax 545 539
Profit after Tax 503 484
Share Capital 2,450 2,200
Net Worth 3,729 2,494
Investments 9,065 4,641
Total asset 16,391 7,689
Ratios in %
Claim Ratio 74% 70%
Commission Ratio (17%) (28%)
Expense Ratio 41% 47%
Combined Ratio 97% 89%

Business Booms for

Non-life Companies

The May issue of IRDA Journal carried the premium performance figures of the
general insurers for 2002-03. These indicate that the industry, at least revenue-wise,
never had it so good. A comparative analysis of the public and private players for
the last two years sends out a powerful message that liberalization has worked
wonders, as the industrys pie has grown by over 20 per cent in 2002-03 to record a
premium level of about Rs. 14,000crores from the previous Rs. 11, 600crores. Both

52
the sectors seem to have
performed well. The four public players have recorded an impressive growth of 13
per cent to reach Rs. 12,500crores up from Rs. 11,140 crores. It is, however, the
private players that have stolen the annual show for the brighter performance. Not
only have they pulled up the industrys overall growth rate higher to 20 per cent by
their sect oral performance of 180 per cent growth rate but they have also made
heavy inroads into the profitable segments of Fire, Marine and Engineering
portfolios of the market.

Private players While the private players have garnered a 9.5 per cent share
of the market up from 3.5 per cent last year, it is even more remarkable that
they have captured 14 per cent (Rs. 3,000crores) market share in the Fire,
seven per

Cent (Rs. 1200crores) of the Marine and eight per cent (Rs. 9,700crores) of
the miscellaneous portfolios, including 18 per cent (Rs. 720crores) of the
Engineering portfolio. (Figures in bracket are the figures for the market as a
whole.) The marketing strategies of the private players seem pretty clear and
that is to ambush the public players in the most sacred of their profitable

53
 portfolios that is the Fire
and Engineering portfolios that have a market volume of Rs. 3,700crores.
The most interesting piece of information for analysts is the fact that the
Health premium, a late starter in the market, at a volume of over Rs.
1000crores, has outstripped the traditional Engineering business (Rs.
720crores) transacted in the country for over 50 years! Who deserves the
motivational credit for the rapid rise in volumes, the insuring public, who
desperately want to buy medical insurance or the insurers salesmen who
want to penetrate the market? Is medical insurance going on the Motor trail,
though it is not mandatory? It seems to be demand driven like the Motor
business.
Motor Business Private players have a market share of only seven per cent in
Motor, a very wise move, to avoid getting in to too much paper work, litigation
and losses

54
55
56
Low
Increa
involv
57
Ch
58
Indian non- life insurance market is under- penetrated.

Country Premium as per Per capita spend in

share of GDP India is one of the
India 1.2%
lowest.
Zimbabwe 2.15%
GI plays a major share
Malaysia 2.19%
Japan 2.45% in the insurance
South Korea 3.79% industry worldwide.
England 3.34% Corporate spend is
USA 4.64% limited largely to
asset insurance

59
 Market Positioning

High

ICICI Lombard
Government Bajaj Allianz
Companies Iffco Tokio

Niche Players TATA AIG

HDFC Ergo Royal Sundaram
Reliance Cholamandalam

Low PRODUCT $ SERVICES High

60
Industry Product Composition

Marine Cargo
Health
Misc
Fire
Eng
Marine Hull
Motor
Marine Cargo

64% of the portfolio is

Fire
Engineering
Motor

36% of the Portfolio is

Marine Cargo
Health
Liabilities
Miscellaneous

61
 RESEARCH FINDINGS

ICICI Lombard Facilitates Anywhere, Anytime Business with Citrix Technology

ICICI Lombard is a joint venture between ICICI Bank the second largest bank in
India and Lombard General Insurance Canadas oldest insurance provider.
With over 50 products and sales of 3,000 policies per day, the company offers a
host of insurance solutions to corporate, small and medium enterprises (SME) and
retail customers. ICICI Lombard employs 1,000 workers in 75 locations all over
India.

The Challenge: Enable Business Mobility for End-users

The insurance business is information-driven and competitive. In an emerging
market where both private and government players vie for a huge customer pie,
ICICI Lombard understands the value of fast, efficient and centralized information
access.
Not only are ICICI Lombards offices dispersed geographically throughout
India, but its employees are also mobile within their respective locations,
bringing sales and services to the homes and businesses of their clients. The
company needed an efficient technology solution that would enable its
employees and agents to administer and present insurance services and
products from anywhere and at any time. Moreover, in addition to providing
information access, the company needed to be able to support these mobile
users cost-effectively, to easily deploy applications to them, and to minimize
the cost of bandwidth required for remote connectivity.
Said Mr. Sanjay Motwani, national manager, Technology at ICICI Lombard
General Insurance Company Limited, With the diversity of locations at ICICI
Lombard and a high volume of products and sales, we had an acute need to
centralize applications for faster rollouts. This is where Citrix stepped in and
streamlined our processes.

62
Implementing a Citrix Solution for Workforce Mobility
ICICI Lombard partnered with system integrator WIPRO to implement a
solution using Citrix Presentation Server running on HP ProLiant 380 and
Dell 1750 Servers. Currently, more than 400 users connect to the centralized
system to access relevant modules like Premia (an ERP application), Final 7
(insurance accounting system) and an Investment System via Windows-
based thin clients and laptops. Unlike in the past, ICICI Lombards insurance
employees and agents are now able to structure all types of the companys
available insurance products, independent of time and location.

Averred Mr. Motwani, Citrix technology has helped to maintain and

consolidate our competitiveness in the marketplace. Our employees enter our
system through a WAN, broadband internet, and dial-up and access the
advanced end-to-end policy issuance framework, including customer
profiling, quotation processing, policy issuance and payment process. The
system is designed to generate a policy in less than 10 minutes.

Improved System Administration Generates Cost Savings

Thanks to the Citrix solution, ICICI Lombard has seen a significant reduction
in process and administrative costs. These savings come largely from the
centralized administration inherent to using Presentation Server, which
enables IT staff to deploy, manage and update users systems without
needing to be at the location of the end-user. Said Mr. Motwani, Our high
travel costs were eating into the bottom line, but now our total reduction in the
travel component is 70 percent, which means an annual saving of about Rs.
10 lakhs.

Centralized management also allows ICICI Lombard to rapidly scale its

system according to changing business needs. Adding or removing

63
 applications or users is
simple and can be accomplished from the main

location without travel. This makes the entire process hassle-free and fast,
saving on manpower and costs. In nutshell, with the effective use of Citrix
technology, we have made our operations cost-effective, said Mr. Motwani.

Better Customer Service for Competitive Advantage

Another major benefit of the Citrix solution is improved business efficiency,
which translates to faster close-of-sale and higher customer retention. Since
employees are able to access the most up-to-date information and
applications on-demand from one of the companys multiple offices or on
the road they can provide clients with needed information instantly, on the
spot. The new infrastructure means customers can be serviced faster, and all
policies related issues can be monitored and tracked at any point at any time.
For instance, a discrepancy can be tracked and corrected immediately,
thereby saving considerable time, and more customers can be efficiently
serviced with existing resources. The higher manageability characteristics of
Citrix Presentation Server also mean negligible downtimes a key element
to maintain business mobility and customer satisfaction.

64
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2006

ICICI Lombard General Insurance Company Limited (the Company) was

incorporated on October 30, 2000. The Company obtained regulatory
approval to undertake General Insurance business on August 3, 2001 from
the Insurance Regulatory and Development Authority (IRDA) and has also
obtained its certificate of renewal of registration.

Basis of preparation of financial statements

The financial statements have been prepared and presented under the
historical cost convention, on the accrual basis of accounting, and comply
with the applicable accounting standards issued by the Institute of Chartered
Accountants of India (ICAI), and in accordance with the provisions of the
Insurance Act, 1938, Insurance Regulatory and Development Authority Act,
1999, the Insurance Regulatory and Development Authority (Preparation of
Financial Statements and Auditors Report of Insurance Companies

65
 Regulations), 2002 (the
Regulations) and orders / directions prescribed by the IRDA in this behalf ,
the Companies Act, 1956 to the extent applicable in

the manner so required and current practices prevailing within the insurance
industry in India.
The preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities as of the balance sheet date,
reported amounts of revenues and expenses for the year and disclosure of
contingent liabilities as of the balance sheet date. The estimates and assumptions
used in these financial statements are based upon managements evaluation of the
relevant facts and circumstances as of the date of the financial statements.

Actual results may differ from those estimates. Any revision to accounting estimates
is recognized prospectively in current and future periods.
Significant accounting policies
Revenue recognition
Premium income
Premium is recorded for the policy period at the commencement of risk and
for installment cases, it is recorded on installment due dates.
Premium earned is recognized as income over the period of risk or the
contract period based on 1/365 method, whichever is appropriate on a gross
basis net of service tax. Any subsequent revision to premium is recognized
over the remaining period of risk or contract period.
Adjustments to premium income arising on cancellation of policies are
recognized in the year in which it is cancelled. Income from reinsurance
business .
Commission on reinsurance business is recognized as income in the year of
ceding the risk.

66
 Profit commission under
reinsurance treaties, wherever applicable, is recognized as income in the
year of final determination of profits and combined with commission on
reinsurance ceded.
Income earned on investments.

Interest income on investments is recognized on an accrual basis.

Accretion of discount and amortization of premium relating to debt.
Securities is recognized over the holding/maturity period on a straight line
basis.
Dividend income is recognized when the right to receive dividend is
established. Realized gain/loss on securities, which is the difference between
the sale consideration and the carrying value in the books of the Company is
recognized on the trade date.
In determining the realized gain/loss, cost of securities is arrived at on
Weighted average cost basis. However, in case of listed equity shares and
mutual fund units the profit or loss on sale also includes the accumulated
changes in the fair value previously recognized in the fair value change
account in respect of the particular security, which is transferred to the profit
and loss account on the trade date.
Sale consideration for the purpose of realized gain/loss is net of brokerage
and taxes, if any, and excludes interest received on sale. Commences
subsequent to the balance sheet date.
Reinsurance premium.
Insurance premium on ceding of the risk is recognized in the year in which
the risk commences. Any subsequent revision to premium ceded is
recognized in the year of such revision. Adjustment to reinsurance premium
arising on cancellation of policies is recognized in the year in which it is
cancelled.

67
Reserve for unexpired risk
Reserve for unexpired risk is recognized net of reinsurance ceded and represents
premium written that is attributable and to be allocated to succeeding accounting
periods for risks to be borne by the Company under contractual obligations on a
contract period basis or risk period basis, whichever is appropriate. It is calculated
on a daily pro-rata basis subject to a minimum of 50% of the premium, written on
policies during the twelve months preceding the balance sheet date for fire, marine

Cargo and miscellaneous business and 100% for marine hull business, on all
unexpired policies at year end, in accordance with section 64 V(1)(ii)(b) of the
Insurance Act, 1938.

Claims
Claims incurred comprise claims paid, estimated liability for outstanding claims
made following a loss occurrence reported and estimated liability for claims Incurred
But Not Reported (IBNR) and claims Incurred But Not Enough Reported (IBNER).
Further, claims incurred also include specific claim settlement costs such as
survey/legal fees and other directly attributable costs.

Claims (net of amounts receivable from reinsures/coinsurers) are recognized

on the date of intimation based on estimates from surveyors/ insured in the
respective revenue accounts.
Estimated liability for outstanding claims at balance sheet date is recorded in
the respective revenue accounts, net of claims recoverable from/ payable to co-
insurers/reinsures and salvage to the extent there is certainty of realization.
Estimated liability for outstanding claims is determined by management on
the basis of ultimate amounts likely to be paid on each claim based on past
experience. These estimates are progressively revalidated on availability of
further information.

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 IBNR represents that
amount of claims that may have been incurred during the accounting period but
have not been reported or claimed.
The IBNR provision also includes provision, if any, required for claims.
IBNER. IBNR/ER liabilities are based on an actuarial estimate duly certified
by the Appointed Actuary of the Company. The assumption used by the
Appointed Actuary are disclosed in note 5.2.4.

Acquisition costs
Acquisition costs are those costs that vary with, and are primarily costs
related to the acquisition of new and renewal of insurance contracts viz.
commission, policy issue expenses, etc. These costs are expensed in the year in
which they are incurred.

Premium Deficiency
Premium deficiency is recognized when the sum of expected claim costs and
related expenses exceed the reserve for unexpired risks and is computed at a
business segment level.

Investments
Investments are recorded at cost on trade date and include brokerage,
transfer charges, stamps etc, if any, and excludes interest accrued up to the
date of purchase.

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Classification
Investments maturing within twelve months from balance sheet date and
investments made with the specific intention to dispose off within twelve
months are classified as short term investments.
Investments other than short term investments are classified as long term
investments.

Valuation
In accordance with the Regulations, investments are valued as follows:

Debt securities

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All debt securities including
government securities are considered as held to maturity and accordingly stated at
historical cost subject to

Forming part of the financial statements

Continued amortization of premium or accretion of discount on a straight line basis
over the holding/maturity period.

Equity shares
Listed equity shares as at the balance sheet date are stated at fair value, being the
lowest of last quoted closing price on the National Stock Exchange or The Stock
Exchange, Mumbai.

Mutual fund units

Mutual fund investments are stated at fair value, being the closing net asset value
as at balance sheet date. In accordance with the Regulations, unrealized gain / loss
arising due to changes in fair value of listed equity shares and mutual fund
investments are taken to the fair value change account. This balance in the fair
value change account is not available for distribution, pending realization.

Employee Stock Option Scheme (ESOS)

The Company follows the intrinsic method for computing the compensation cost, for
options granted under the scheme(s). The difference if any, between the intrinsic
value and the grant price, being the compensation cost is amortized over the vesting
period of the options.
1. Fixed assets and Intangibles
2. Fixed assets and depreciation
3. Fixed assets are stated at cost less accumulated depreciation. Cost includes the
purchase price and any cost directly attributable to bringing the asset to its
working condition for its intended use.

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4. Depreciation on assets
purchased/disposed off during the year is provided on pro rata basis with
reference to the month of additions / deductions.
Depreciation is provided on a straight-line basis, pro-rata for the period of use at
the rates prescribed in Schedule XIV to the Companies Act, 1956 except in the
case set out below where depreciation is provided at a rate higher than those
prescribed under Schedule XIV to the Companies Act, 1956.
Depreciation on information technology equipment is provided @ 25 percent.

Intangibles
Intangible assets comprising computer software are stated at cost less amortization.
Computer software including improvements are amortized over a period of 5 years,
being the managements estimate of the useful life of such intangibles.
All assets including intangibles individually costing less than Rs 5,000 are fully
depreciated/amortized in the year in which acquired.

Impairment of assets
The Company assesses at each balance sheet date whether there is any indication
that any asset may be impaired. If any such indication exists, the carrying value of
such assets is reduced to its recoverable amount and the impairment loss is
recognized in the profit and loss account. If at the balance sheet date there is any

indication that a previously assessed impairment loss no longer exists, then such
loss is reversed and the asset is restated to that effect.
Retirement benefits
Provident fund
This is a defined contribution scheme and contributions payable to the
Regional Provident Fund Authority is provided on the basis of specified
percentage of salary and is charged to profit and loss account and revenue
account(s).

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Gratuity
Gratuity, which is a defined benefit scheme is provided on the basis of actuarial
valuation at year end and is recognized in the profit and loss account and
revenue account(s).

Basis of allocation
Retirement benefit expenses are allocated to profit and loss account and
revenue account(s) on the basis as explained in paragraph 5.1.10.

Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the rates
prevailing on the date of the transaction. Foreign exchange denominated current
assets and liabilities, are translated at the rates prevalent at the date of the
balance sheet. The resultant gains/ losses are recognized in the profit and loss
account and revenue account(s).
Taxation
Current tax
The Company provides for income tax on the basis of estimated taxable income
for the current accounting period in accordance with the provisions of the Income
Tax Act, 1961.

Deferred tax
Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to timing differences between the accounting income as per the
Companys financial statements and the taxable income for the year.
Deferred tax charge or credit and the corresponding deferred tax liabilities or
assets are recognized using the tax rates that have been enacted or
substantively enacted by the balance sheet date.

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 Deferred tax assets are
recognized only to the extent there is reasonable certainty that the assets can be
realized in future, however, where there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax assets are recognized only if there
is virtual certainty of realization of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
appropriately adjusted to reflect the amount that is reasonably/virtually certain to
be realized.

Fringe benefit tax

Provision for fringe benefit tax is made on the basis of expenses incurred on
employees/other expenses as prescribed under the Income Tax Act, 1961.
Share issue expenses
Share issue expenses are adjusted against share premium account.

Contingencies
Contingent losses arising from claims other than insurance claims, litigation,
assessment, fines, penalties, etc. are recorded when it is probable that a liability
has been incurred and the amount can be reasonably estimated.
A disclosure for a contingent liability other than those under policies is made
when there is a possible obligation or a present obligation that may, but probably
will not require an outflow of resources.

ICICI Lombard to focus on health

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 ICICI Lombard General Insurance the largest private non-life insurer has
decided to increase the share of health insurance in its portfolio to close to 18%.
The company has decided to have an independent health set up within the
organisation.
We have created an independent health vertical and have already employed 10
doctors. It is like having a health insurance company within the company said
Sandeep Bakhshi, managing director, ICICI Lombard General Insurance.
Health insurance currently accounts for around 10% of total non-life business in
the country. While there is a huge demand for health covers the public sector
companies had been reluctant to increase their share because of a claims ratio
that is increasingly turning adverse.
Claims for the industry are almost 100% of the premium. However, of late private
companies have been showing a renewed interest in the sector because of the
huge potential. Bajaj Allianz General Insurance has set up a Health

75
 Administration Team within the
company to manage its health business. The IRDA has also received one
proposal from a stand-alone health insurance

company Star Health to be promoted by private investors led by former

United India Insurance chairman . If group mediclaim were to be taken into
account our claim ratio is quite adverse. However, if you look only at individual
policies than the claims ratio is around 60%.
ICICI Lombard has secured the topslot in the new business collection among the
private general insurers of the country in the first-half of the current fiscal.
Reliance General Insurance has clocked the highest growth in the period, as per
the figures released by the Insurance Regulatory Development Authority (Irda).
In absolute terms.
ICICI Lombard has generated new business of Rs 702 crore followed by
Reliance General Insurance with absolute new business of Rs 302 crore. The
Anil-Ambani led general insurance company in this period has witnessed a
growth of nearly 397 percent followed by ICICI Lombard which registered a
percentage change of 85 percent over the corresponding period of 2005-06, Ida
figures state. IFFCO-Tokio, Bajaj Allianz and Tata AIG secured the next three
positions with absolute new business collections of Rs 227 crore, Rs 218 crore
and Rs 108 crore, respectively.

Amex, ICICI Lombard. HPCL launch credit card

American Express has launched a general insurance credit card in association
with ICICI Lombard and Hindustan Petroleum Corporation Ltd (HPCL).
The card comes loaded with attractive freebies like American Express RPM
(Rewards, Points and More). Cardholders can pay their motor insurance
premium over a period of three, six, nine or 12 months as interest-free equated
monthly installments (EMIs) and can avail of cashless car insurance claim
settlement at 400 select automobile garages in around 70 cities.

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 According to ICICI Lombard, the
card would best meet the needs of car owners in every aspect service level,
first EMI and auto renewal.
The card also offers 5 per cent savings on fuel bills whenever members use the
card to purchase fuel at HPCL outlets. While the 2.5 per cent service charge will

be waived off, savings will also be accumulated as rewards points. These points
can be redeemed into fuel vouchers. To become a member, the customer should
have a gross taxable income of at least Rs4 lakh per year. The annual fee is
Rs2,000.

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78
 CONCLUSION
The challenges in the insurance industry and the accelerating pace of developments
have provided the much-needed impetus to ICICI Lombard to enhance its
performance. The company has witnessed a profit after tax of Rs 317.8 million for
the year ended March 31, 2004 as against Rs 32.98 million in the corresponding
period last year. The company is growing at a steady pace and has carved a niche
for itself in the general insurance segment.

ICICI Lombard General Insurance has obtained ISO 9001:2000 certification from
DET Norske Veritas (DNV) for establishing a quality management system with
regard to settlement of motor claims, according to a release.

ICICI Lombard has an aggressive future road map. it plans to add various BI related
features, such as time-series analysis and trend analysis, which will be available to
the sales force. The system would also allow rural data mapping, weather
insurance, analysing historical weather information depicting natural catastrophes
and allow for corporate database mapping.

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 BIBLIOGRAPHY

1. Alessandra Del Conte, Roundtable on Micro insurance Services in the Informal

Economy: The Role of Microfinance Institutions,

http://www.microinsurancecentre.org/resources/Documents/Roundtable.pdf, July
21,2000.

2 .Warren Brown et al., A Cautionary Note for Microfinance Institutions and Donors
Considering Developing Micro insurance Products,

http://www.microinsurancecentre.org/resources/Documents/Cautionary_Note.pdf,
December 2000.

3 .Ulrich Hess, Innovative Financial Services for Rural India- Monsoon Indexed
Lending and Insurance for Smallholders,

http://www.itf-commrisk.org/documents/indiafinsvc.pdf, July 2003.

4 .Monique Cohen and Jennifer Sebstad, Reducing Vulnerability: The Demand for
Micro insurance, MicroSave-Africa, 2003.

5 .Gilles Davignon, The Poor and Their Risk- How to Alleviate Poverty by Reducing
the Impact of Hazard? The Micro insurance Promise,

http://www.microfinancegateway.org/files/20620_The_poor_and_their_risk.pdf,
June 2004.

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6 .Michael J. McCord and Craig Churchill, Delta Life- CGAP Working Group on
Micro insurance Good and Bad Practices,

http://www.ilo.org/public/english/employment/finance/download/delta1.pdf,
February,2005.

7 .Vijay Mahajan and Sonu Aggarwal, Risks Faced by Rural Poor in India and Risk
Mitigation Measures,

http://www.isb.edu/tgif/Risk%20Mitigation%20for%20the%20Poor%20_2_.pdf,
May 6, 2005.

8 .http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=206

9 http://www.einsuranceprofessional.com/artgeneva.htm

10 .www.basix.com

11 www.icicilombard.com

12 www.irdaindia.org

13.www.microinsurancecentre.org

14. www.yearofmicrocredit.org

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82
 QUESTIONNAIRE

1. ARE YOU EMPLOYED?

YES NO

2. DO YOU HAVE ANY INSURANCE POLICY?

YES NO

IF ANS. OF Q.2 IS YES, THEN PROCEED ELSE ANSWER Q.8

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE`` BOTH

4. WHICH COS INSURANCE POLICY YOU PREFER THE MOST? (RANK

THEM)

a) LIC

b) ICICI LOMBARD

c) SBI LIFE INSURANCE

d) ING VYSYA LIFE

e) OM KOTAK MAHINDRA

f) TATA AIG LIFE

g) ANY OTHER___________(PLEASESPECIFY)

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5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY? (PLEASE
TICK)

a) <5YRS b) 5-10 YRS c) 10-15 YRS d) ANY OTHER______ (PLEASE

SPECIFY)

6. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COMVER?

(RANK THEM)

a) COVER FUTURE UNCERTAINITY

b) TAX DEDUCTIONS

c) FUTURE INVESTMENT

d) ANY OTHER ____________ (PLEASE SPECIFY)

7. WHICH FEATURE OF YOUR POLICYATTRACTED YOU TO BUY IT? (RANK

THEM)

a) LOW PREMIUM

b) LARGER RISK COVERANCE

c) MONEY BACK GUARNTEE

d) REPUTATION OF COMPANY

e) EASY ACCESS TO AGENTS

f) ANY OTHER ____________ (PLEASE SPECIFY)

8. YOUR MONTHLY HOUSEHOLD INCOME?

a)<10k b)10k-20k c)20k-30k d)30k-40k e)ANY OTHER_____(PLEASE SPECIFY)

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9. DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAYS
SCENARIO IS NOT ESSENTIAL?
________________________________________________________
________________________________________________________

THANKYOU!

NAME:______________________________

ADDRESS:___________________________
____________________________________
____________________________________

OCCUPATION:_______________________

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