New Consumer Perception Towards Life Insurance in Banking Sector

CHAPTER-1
INTRODUCTION
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1.1 INDUSTRY PROFILE
OVERVIEW OF CURRENT INSURANCE INDUSTRY
1. WHAT IS INSURANCE?
Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous. Insurance is
a safeguard against uncertain events that may occur in the future.
It is an arrangement where the losses experienced by a few are extended over
several who are exposed to similar risks. It is a protection against financial loss
arising on the happening of an unexpected event. Insurance companies collect
premium to provide security for the purpose. Loss is paid out of the premium
collected from people and the insurance companies act as trustees to the amount so
collected. These companies have proposal forms which are filled to give details of
insurance required. Depending upon the answers in the proposal form insurance
companies assess the risk and decide on the premium.
Insurance companies are risk bearers. They underwrite the risk in return for an
insurance premium. the function of insurance is to provide protection, prevent losses,
capital formation etc. hence insurance can be defined as a tool in which a sum of
money as a premium is paid by the insured in consideration of the insurer’s bearing
the risk of paying a large sum .it may also be defined as a contract wherein one party
(insurer) agrees to pay the other party (insured) or his beneficiary, a certain sum upon
a given contingency against which insurance is required.
Insurance industry commands massive funds through sales of insurance
products to large number of clients. Insurers also create liabilities and commit
themselves to compensate for losses occurring to the policyholders on future date. It
also plays an important role in process of capital formation.
2. NATURE OF INSURANCE
a) Risk sharing and risk transfer: Insurance is used to share the financial losses that
might occur to an individual or his family on the happening of specified events. The
loss arising from such events are shared by all the insured in the form of premium.
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Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every
year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250
owners come together and contribute Rs.800 each, the common fund would be
Rs200000.This is enough to pay to the owner whose house gets burnt. Thus the risk of
one owner is spread over 250 house owners of the village.
b) Risk assessment in advance: Insurance companies are risk bearers. They assess
the risk before insuring to charge the amount of premium.
c) Its not gambling or charity: The uncertainty is changed to certainty by insuring

property and life because the insurer promises to pay a definite sum at damage or
death. Insurance is antithesis of gambling. Failure of insurance amounts to gambling
because the uncertainty of loss is always looming. Moreover insurance is not possible
without premium. So it is different from charity because charity is given without
consideration.
d) Huge number of insured people: It is essential to insure larger number of people

or property to make cost of insurance less consequently premium would also be less.
e) Assists in capital formation: Insurance provides capital to society. Accumulative

funds are invested in productive channels.
3. SEMANTICS
1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional decline
in or disappearance of value arising from contingency.
2. Policy: It is the document which embodies the insurance contract
3. Whole life policy: It is the policy under which the amount of policy will be paid only
on death of the insured. Premiums may be payable throughout the life or for a limited
period.
4. Endowment policy: Endowment policies entitle the insured to receive the amount of
the policy on his reaching a certain age and premiums also stops. If death occurs
earlier, amount of the policy will be paid at that time and payment of premium will
also stop at that time.
5. Claim: It is the amount which an insurer has to pay against a policy.
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6. Reinsurance: It refers to placing a part of the risk by an insurer with another insurer.
The object is to reduce the possible loss to be borne by the original insurer, who pays
premiums at the ordinary rates to the reinsurer. Reinsure must pay commission to the
original insurer.
7. Premium: A periodic payment made on an insurance policy.
8. Insurance penetration: It is defined as insurance premium as a share of gross
domestic product.
9. Insurance density: Insurance density is defined as per capita expenditure on
insurance premium i.e. premium per capita.
10. Actuary: The actuary is a specialist who combines an understanding of risks and
mathematical technique to develop financial products to manage these risks, price
these products. He helps in designing insurance plans and then evaluates the financial
risk of the company which it takes while selling an insurance policy.
4. TYPES OF INSURANCE
Insurance is broadly divided in two segments, based on the nature of insurance, those
are:
1. Life Insurance &

2. Non-Life Insurance or General Insurance. It can be again subdivided into the
following categories:
a) Fire Insurance.
b) Marine Insurance.
c) Social Insurance &
d) Miscellaneous Insurance. (Health insurance, Liability Insurance etc….)
5. HISTORY OF INSURANCE GLOBAL
For now we know the meaning of insurance, different types of insurance. Now
let us know the history and reasons for and behind different types of insurance.
Insurance has existed for thousands of years. The first ever type of insurance
was Property Insurance. It became popular about 3000 BC in China. It all started
when Chinese merchants, as well as their investors, wanted to ensure that they would
see a profit from their goods that they shipped overseas. In the event that a ship was
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lost at sea, an insuring partner would reimburse the owners of the ship and goods. To
pay for the loss the merchant would be sold into slavery to the insurer until the debt
was repaid. This was so because, a merchant could not afford to pay for the lost goods
or even to buy a ship unless someone invested.
Property insurance was also seen in Babylon as well. In Babylon, merchants
and investors entered into a contract, in which the supplier of money for a trade
agreed to cancel the loan if the trader was robbed of his goods. The trader who
borrowed the money paid an extra amount for this protection in addition to the usual
interest. As for the lender, collecting these premiums from many traders made it
possible for him to absorb the losses of the few. Later this contract was extended to
include provisions for a family's home and even the death of the insured, where life
insurance came into existence. Slowly this concept started to spread across other
places like Greek, Roman.
Since ancient times, communities have pooled some of their resources to help
individuals who suffer loss. Like, about 3500 years ago, Moses instructed the nation
of Israel to contribute a portion of their produce periodically for "the alien resident
and the fatherless boy and the widow."
Later the origin of credit insurance, which was included in the Code of
Hammurabi, a collection of Babylonian laws said to predate the Law of Moses. Credit
insurance means, in ancient times the ship owners obtained loans from investors to
finance their trading expeditions. In case, if a ship was lost, the owners were not
responsible to pay back the loans to the investors. The risk to the lenders was covered
by the interest paid by numerous ship owners, since many ships returned safely.
By the middle of the 14th century, marine insurance was one of the most
popular types of insurance among nations of Europe. Things changed dramatically in
the 17th century in Europe. In 1666, the Great Fire of London bought the need for fire
insurance .The Great Fire of London burned for four days and nights. It destroyed 436
acres, 13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom
House, the Royal Exchange and dozens of other public buildings. Only six people
were victims in the flames, but hundreds died from shock and exposure.
By 1688, Edward Lloyd was running a coffeehouse in London. Where,
London merchants and bankers met informally to do business. There financiers who
offered insurance contracts to seafarers wrote their names under the specific amount
of risk that they would accept in exchange for a certain payment, called premium.
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These insurers came to be known as underwriters. Finally, in 1769, Lloyd's became a
formal group of underwriters that in time grew as an insurance company.
The concept of insurance developed at a fast pace with the growth of British
commerce in the 17th and 18th century. The first stock companies to engage in
insurance were chartered in England in the year 1720.
In 1735, the first insurance company in the American colonies was founded
at Charleston. Later in the year 1787, fire insurance corporations were formed in New
York. Then later in the year 1759, the life insurance corporation was started in
Philadelphia, America.
The New York fire which occurred in the year 1835 was the main reason to
draw attention to create reserves to meet unexpected losses. In the year 1837,
Massachusetts was the first state to require companies by law to maintain such
reserves. After 1840, life insurance entered a boom period.
The Workmen's Compensation Act of 1897 in Britain required employers to
insure their employees against industrial accidents. Public liability insurance, fostered
by legislation, made its appearance in the 1880s.It attained major importance with the
advent of the automobile.
Until the 1950s, most insurance companies in the United States were restricted
to provide only one type of insurance, but then legislation was passed to permit fire
and casualty companies to underwrite several classes of insurance. Many firms have
since expanded and also were responsible for many mergers.
From this brief accounting of history we can see how insurance came into
existence. Fortunately for us we no longer have to sell ourselves into slavery if our car
is stolen nor we have to be scared of losses due to absence of reserves. However we
can be confident that we will be compensated for our loss. Without people wanting to
secure their investments and great tragedies throughout history we may not have
insurance as we know it today resulting in peace of mind.
6. HISTORY OF INSURANCE INDUSTRY IN INDIA

The insurance industry in India over the past century has gone through big
changes. In India this industry reveals the 360 degree turn. 360 degree turn means that
it started in India from being an open competitive market to nationalization and back
to a liberalized market again.
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Insurance industry in India started as a fully private system with no restriction
on foreign participation in the Nineteenth Century. Before independence, a few
British insurance companies dominated the Market. Life insurance was first set up in
India through a British company called the Oriental Life Insurance Company in 1818,
followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life
Insurance Society in 1829.All of these companies operated in India but did not insure
the lives of Indians. They were there insuring the lives of Europeans living in India.
Some of the companies that started later did provide insurance for Indians. But, they
were treated as "substandard" and therefore had to pay an extra premium of 20% or
more. The first company that had policies that could be bought by Indians with "fair
value" was the Bombay Mutual Life Assurance Society starting in 1871.
The first general insurance company, Triton Insurance Company Ltd., was
established in 1850. It was owned and operated by the British. The first general
insurance company was the Indian Mercantile Insurance Company Limited set up in
Bombay in 1907.By 1938; the insurance market in India had nearly 176 companies
(both life and non-life).
After the independence, the industry went to the other extreme. It became a
state-owned monopoly. The industry started to witness a problem like fraud. Hence
many regulations were put in place to reduce and control the problems in the industry.
After which Insurance was nationalized. In 1956, the then finance minister S. D.
Deshmukh announced nationalization of the life insurance business and then the
general insurance business was nationalized in 1972. Only in 1999 private insurance
companies have been allowed back into the business of insurance with a maximum of
26% of foreign holding.
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7. INDIAN SCENARIO
INDIAN
INSURANCE INDUSTRY
LIFE NON LIFE

INSURANCE INSURANCE
Public Private Public Private

Sector (1) Sector (15) Sector (4) Sector (9)
8. LIFE INSURANCE
After the entry of new players and increase in the penetration levels, could see
the insurance sector cross the Rs 2,00,000-core mark in business by 2010.The current
size of the sector is estimated to be at Rs 50,000 crore, which has seen a compound
annual growth rate (CAGR) of around 175 percent in the last few years.
The insurance sector, both life and non life, is likely to grow by over 200
percent, and private insurers are expected to achieve a growth rate of 140 percent as a
result of aggressive marketing technique. It added that state owned insurance
companies are likely to be 35-40 percent.
On account of intense marketing strategies adopted by the private insurance
players, the market share of state-owned insurance companies like GIC, LIC and
others has come down to 70 percent in last 4-5 years from over 97 percent. Despite
regulation, the private players are offering 35 percent rate of return to is policy
holders against 20 percent by public-sector insurers.
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The industry body also noted that India’s life insurance premium is 1.8
percent as a percentage of GDP whereas it is 5.2 percent in the US, 6.5 percent in the
South Korea.
The services sector offers immense opportunities for expansion opportunities
for expansion opportunities and the rural market, also, offers tremendous growth
opportunities for insurance companies.
9. GENERAL INSURANCE
General insurance in India has been expecting growth except in some
portfolios like motor insurance, fire and engineering. These portfolios are still under
tariff- this means that premium depends on a fixed predetermined rate structure.
In India, GDS as a proportion of GDP at current prices increased from 26.1%
in 2002-03 to 28.1% in 2003-04.house hold sector continued to be the major
contributor to GDS at 24.3% in 2003-04.this can be attributed to soft interest rates
prevailing in housing sector. General Insurance has low market penetration. It is
1.95% and ranks 51st. However in collection of premium it is ranked 23 rd. The ratio of
the premium collected to that of GDP is 0.58. The main reason for the general
insurance industry to perform very poorly was because of the slow settlement of
claims. Moreover the rates of claim in India were highest in the world. It was 70
percent compared to 40 percent internationally. This meant that out of 100 people
who had insured their commodities 70 claimed for a loss or damage. The main reason
for the lack of demand for general insurance is that people consider it as an
unnecessary expenditure. However it must be noted that the general insurance has
been earning consistent profits and has an efficient dividend paying record
accompanied by a steady growth in its financial resources. The industry is recognized
as one of the largest financial Institutions in the country. Some of the private players
in this sector are- ICICI – Lombard, Reliance, Royal-Sundaram, Chholamandalam
etc.
10. PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR
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The different private players in the life insurance sector and their associations
with foreign companies are being given below:
COMPANY INDIAN FOREIGN TOTAL FDI FOREIGN

PROMOTER/PARTNER INSURER CAPITAL (%) CAPITAL
(RS MN.) (RS MN.)
AMP RELIANCE None 2,170 0 0
SANMAR GROUP(ADAG)
Aviva Life Dabur Aviva (UK) 4,590 26 1193.4
Bajaj- Bajaj Auto Allianz 3680 26 960
Allianz (Germany)
Birla Sun Aditya Birla Group SunLife (Canada) 4,000 26 1,040
Life
HDFC HDFC StandardLife 2,500 18.9 470
Standard (UK)
ICICI ICICI Bank Prudential (UK) 10,850 26 2,820
Prudential
ING Vysya Vysya Bank ING Ins. 4,400 26 680
(Netherlands)
Kotak Kotak Mahindra Bank OldMutual (South 2,600 26 680
Mahindra Africa)
Old Mutual
Max Max India NewYorkLife 5,000 26 1,300
Newyork (US)
Met Life J&K Bank Met Life (US) 3,550 26 920
Sahara Life Sahara India None 1,000 0 0
Ins. I
SBI Life SBI Cardiff (France) 3,500 26 910
TATA AIG TATA Group AIG (US) 3,810 26 990
Shriram Shriram Sanlam Life Ins.
Bharti AXA Bharti Group AXA(Australia)
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Some of the new companies who are waiting to come in to the life insurance sector
are:
a. IDBI-FORTIS.
b. Syndicate Bank
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11. CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN
ECONOMY
Some surveys have predicted that India and China will play a very vital role in
the years to come. Indian economy can be termed as an emerging economy as it is
doubling its GDP in 3 to 5 years and moreover it is not dependent on any particular
sector for its GDP.
If we look at the GDP of the Indian economy very closely over the years, we
can easily come to know the changing structure of the economy. We can also come to
know the changing contribution of the various sectors like agriculture, manufacturing
and the service sector. In the financial year 1993-94, agricultural sector contributed to
31%, manufacturing accounted to 26.3% and the service sector contributed to 42.7%
of the total GDP of the country. Thus over the years as India became an emerging
economy in 2003-04 manufacturing sector contributed for 21.7 %, manufacturing
contributed for 26.8 whereas service sector contributed for 51.4% of the total GDP.
There has been 7.5% growth in the total GDP of the country and is estimated
to grow at 8.0% in 2006-07. The Indian economy has shown signs of strong
performance despite a rise in oil prices, high inflation rate and abnormal rains in many
parts of the country. The overall growth of the Indian economy has been equally
supported by all the three sectors of the economy, i.e. the agriculture, manufacturing
and the service sector. Insurance, together with the banking sector, contributes to
about 7.3 % of the total GDP of India, and the gross premium collected contributes to
about 2% of the total GDP of the country
The insurance sector in India has completed a full circle from being an open
competitive market to nationalization and back to a liberalized market again. Tracing
the developments in the Indian insurance sector reveals the 360 degree turn witnessed
over a period of almost 200 years.
12. GOVERNMENT POLICIES REGARDING LIFE INSURANCE
Insurance Regulatory and Development Authority (IRDA) 1999
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Reforms in the insurance sector were initiated with the passage of the IRDA bill in
December 1999.it was set up as an independent body and it has been able to frame
globally compatible legislations.
The IRDA was set up to protect the interests of holders of insurance policies ,to
regulate ,promote and insure orderly growth of the insurance industry and for matters
connected therewith or incidental thereto.
This act extends to whole of India. With the establishment of this act, government
amended Insurance act 1938, Life Insurance Act 1956 and General Insurance Act
1972.
IRDA was formed on the recommendations of Malhotra Committee. In 1999
government of India has set up Malhotra Committee to examine the structure of
insurance industry and recommend changes, under R.N Malhotra –former governor of
RBI.
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NEED OF THE STUDY
This study helps the company to identify its competitive position among its industrial
competitors by which the company can further improve its performance to enjoy high
reputation among clients.
This study also helps in making necessary changes in the attributes of the insurance
cover offered by the company so that the customers can enjoy the benefits of the
insurance cover.
The need for the study also arises to identify and offer additional insurance products
according to the expectations of the customers.
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OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVES
 To compare the performance of ICICI with other competitors in the general insurance
industry.
SECONDARY OBJECTIVES
 To identify the position ICICI holds among other private players.
 To find out the strengths and weaknesses of the company’s insurance schemes
 To study consumer’s awareness towards insurance products
 To identify the customer’s perception about the company and its products.
 To know about the various Investment alternatives that is mostly preferred by the
people.
 To find out the important criteria that people think about before investing in a life
insurance policy.
 To find out whether gender bias involved in investing life insurance or not.
 To find out the awareness of ICICI Prudential Life Insurance among the people.
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2.3 SCOPE OF THE STUDY
This study has a wider scope among the insurance sector. The study which focuses on
various aspects such as competitive position of ICICI, strengths and weaknesses of
insurance covers, customer’s perception, etc also holds good for other companies in
the life and non-life insurance segment.
The outcome of the study, which are based on the above aspects can be utilized by
the marketing department of both life and non-life insurance companies.
 The result of this research would help the company to have a better understanding
about the consumer’s perception towards life insurance.
 The study helps the company by creating awareness about the consumers of different
ages and income levels.
 The study also enables the company to focus the consumer’s preferences and
expectations on the product which they offer.
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2.4 LIMITATIONS OF THE STUDY
There were certain limitations in undertaking this research work. As it is understood

that the limitations are a part of the project, they have been overshadowed by the
benefits of the study.
 The survey conducted may not be considered as comprehensive as only limited

respondents could be contacted because of the time constraint.
 Objectives and the purposes of the study and the questions had to be explained to the
respondents and their responses may be biased.
 Some of the respondents were reluctant to give their responses.
 Only limited sample size had been considered for the study and therefore, the
conclusions drawn based on this may not be a reflection of the entire population.The
sample size chosen for the questionnaire was only 100 and that may not
represent the true picture of the consumer perception about the Life Insurance sector.
a) Nearly 98% of the respondent belonged to the age group of 20-50 years and only 2%
were above 50 years. So, the responses and the opinions of the experienced and aged
were not available. So, the findings may not be correct when we think about the
opinion of the elderly people about the life insurance.
b) The selection of people for the questionnaire was done on the basis of convenient
random sampling, so, there were certain cases in which the people selected did not
have any life insurance policy, so they could not give any positive feedback regarding
the important criteria to be considered before taking an life insurance policy. So, this
further reduced the actual number of respondents to 76 from 100.
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c) The product offered by different companies had different options and names in them,
so at the time of comparison it became very difficult. The parameters for comparison
were also different in the selected companies.
d) One of the important criteria that was selected by the respondents which they consider
before taking an insurance policy was ‘Company Image’, but there was no parameter
available to compare criteria like this between the companies.
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CHAPTER-2
REVIEW OF
LITERATURE
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2.5 REVIEW OF LITERATURE
According to the recent report of Lloyd, the Indian insurance market is likely to
change in the next few years significantly largely due to regulatory changes. In
addition, premium growth is being driven by other factors such as the growing
consumer class, increased foreign direct investment, infrastructure development, and
an increased awareness of catastrophe exposure.
Despite significant positive changes, the insurance market must still face the
challenge of poor customer perceptions and the danger that the pace of reform will
slow. Several significant structural changes are expected in the insurance market that
will influence the country’s development in the medium to long term
So far, the entry of a large number of Indian and foreign private companies has led to
greater choice in terms of products and services for Indian consumers. A growing
realisation of the benefits and importance of sophisticated insurance and reinsurance
tools has broadened the pool of potential buyers of insurance. Given this backdrop,
the Indian insurance market has experienced considerable growth since its
liberalisation in 2000. Over the next three years, the Indian insurance market is likely
to see its process of maturation accelerate. Regulatory changes in the four areas–
products, market players, distribution and reinsurance – will drive change in the
Indian insurance market in the medium term.
• Price competition has already begun to increase and is likely to continue to do so for
the next 18 to 24months.
• The practice of cross-subsidisation is likely to be phased out as risk-based pricing is

used increasingly for all products.
• As Indian insurers build a profitable portfolio, they are likely to have increased
access to the international reinsurance markets.
• Finally, rising demand for insurance is likely to be met by increased capacity as

foreign insurers look to access this growing market.
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As per the recent research by Moody’s – ICRA Global Insurance, the following facts
relating to the performance of both private and public sector general insurance
companies were made.
Private Sector’s Growing Influence

The private sector has been steadily growing market share despite the fact that public
sector companies have been around for a lot longer. The private insurers enjoy
considerable operational flexibility, whereas the public sector companies have been
constrained by their traditions and inability to innovate.
Market Share – Redistribution

Due to the effectiveness of private marketing strategies, the market share of public
insurers has consistently declined. Given a faster growth rate, the market share of the
private sector is catching that of the public sector and the two will likely converge
over the medium term.
The private sector share of third party motor business was much lower in the past than
that for public firms as the former did not pursue this market because of its negative
underwriting margins. However, with the formation of the common third party motor
pool, the situation has changed. The losses related to this segment now get shared
among all the players, leaving little incentive to avoid this segment.
Fire and engineering now broadly contribute a similar proportion of overall business
for the private and public sectors. In terms of overall business, the focus has shifted
towards the retail segments of motor and health, where good growth is expected.
Operational Flexibility
The public entities lack the operational flexibility enjoyed by the private players.
Their limited capacity to innovate has impacted their ability to tailor and aggressively
price products for large corporations. The private players by contrast have focused on
account-level profitability for large corporations and have expanded their shares by
cross-subsidizing tariffed products.
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Client Servicing
The public insurers have also been hampered in claims servicing by their process
oriented approach and limited operational flexibility. They have been unable to
expedite claim settlements through out-of-court negotiations since a large proportion
of their claims pertain to the third party motor segment, which is subject to
adjudication by the Motor Accident Claim Tribunal. The result is a time-consuming
and involved process.
Strong Infrastructure and Systems

Private players are not hindered by their charters or legacy systems and have
constructed technologically advanced infrastructure. They started with large
investments in technology, which helped them to build robust data management
systems. This characteristic enables in turn quick and effective decision-making for
pricing and claims settlements, attributes vital to building franchises.
On the other hand, public entities have only recently upgraded their systems and have
to grapple with transition issues, such as moving from paper to paper-less systems.
They are encumbered by legacy systems and fragmented databases, and have not fully
used their past claim experiences, something which could give them a strong pricing
edge in a de-tariffed environment.
Focused Underwriting Strategy

The private players, especially during their initial years, have selectively targeted the
more profitable lines of the public sector companies for growth. They benefit from the
experiences of the public sector as well as their international joint-venture partners.
They have drawn talent from public sector companies.
Superior Claim Paying/Processing Capability

The combination of superior technology and selective underwriting has allowed the
private sector to set high standards for policyholder services, thereby differentiating
themselves from public sector insurers. The claim settlement performance of the
private sector has also been superior because of the limited amount of third party
motor business that they have underwritten. Such claims normally take a longer time
to settle.
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Distribution – Rise of Bancassurance
The Indian general insurance industry has historically been dominated by the agency
channel, through which 75% of total premium income is sourced. But in recent
periods other channels – for example, bancassurance, brokers, corporate agents, direct
marketing and direct sales channels -- are gaining importance. Most insurers now
have tie-ups with the banks, which act as corporate agents and are remunerated on a
commission basis. For example, ICICI Lombard sources a major portion of its
business from a tie-up with ICICI Bank. Similarly, Bajaj Allianz General Insurance
Company Limited (BAIL, second largest private player) has tie-ups with large
number of banks, which contribute a big share of its total premium income.
As of December 31 2007, 267 brokers were registered with IRDA, including 228
direct brokers, 33 composite brokers and 6 reinsurance brokers. In a deregulated
environment, the broking community will have plenty of opportunity to become an
integral part of the insurance and risk financing process. At this time, low cost
channels like tele-sales and the internet are still not developed in India, mainly due to
relatively poor knowledge about insurance products and low internet penetration.
One conclusion is certain– the Indian non-life market is set to grow dramatically over
the next few years. The simplest forecasts suggest that premium income could double
in the next few years to reach USD11.6bn in 2010. When the structural changes above
are taken into consideration, this growth becomes exponential, with relatively slow
growth in 2007 rising to rapid growth by 2010.
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CHAPTER – III
COMPANY PROFILE
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1.2 COMPANY PROFILE
The Industrial Credit and Investment Corporation of India Limited (ICICI)

was formed in 1955 which is incorporated at the initiative of the World Bank, the
Government of India and representatives of Indian industry, with the objective of
creating a development financial institution for providing medium-term and long-term
project financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first
Chairman of ICICI Limited. ICICI emerges as the major source of foreign currency
loans to Indian industry. Besides funding from the World Bank and other multi-lateral
agencies, ICICI was also among the first Indian companies to raise funds from
international markets.
1. WHAT IS ‘ICICI GROUP’?

We are a part of the renowned ICICI Group, a diversified universal banking
group, with a track record of over 50 years in a variety of financial services.
ICICI was formed in 1955, as a result of the focused efforts of the World Bank,
the Government of India and the representatives of Indian Industry. Today, ICICI
Bank has grown to become India’s second largest bank, with over 24 million
customers worldwide. It is also the first bank from Asia (excluding Japan) to be
listed on the NYSE.
ICICI Bank is a truly global bank, with presence at key locations across the globe
in Bahrain, Bangladesh, Belgium, Canada, China, Dubai, Hong Kong,
Indonesia, Malaysia, Russia, Singapore, South Africa, Sri Lanka, Thailand, UK, USA
and Quatar.
ICICI Group’s expertise spans a vast range of financial services, including
banking, broking, mutual funds, insurance, home loans, venture funds and much
more. The Group is the largest consumer credit provider and the biggest private
sector, life and general insurer in India. Expertise across a vast range of products.
All blended to bring you seamless financial solutions that ensure you have the
advantage in every financial decision. Wherever you may be in the world.
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2. STRUCTURE OF ‘ICICI GROUP’
3. OBJECTIVES OF ICICI GROUP

TRUST
We view each client relationship as a “partnership for success”. We regard your
financial needs as our own and aim to achieve your investment goals with you. We
put our best resources behind you to ensure that your investment objectives are more
than met.
AGILITY
We seek to deliver superior value to you. We respond quickly and efficiently to
market opportunities, and offer the most apt financial solutions so that you can reap
the best possible benefits.
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INNOVATION
We believe that the cornerstone of success in today’s competitive environment is
Innovation. We seek newer opportunities constantly, to fulfill your emerging needs
and wants.
4. ICICI BANK
ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00
billion (US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion
for the nine months ended December 31, 2007. ICICI Bank is second amongst all the
companies listed on the Indian stock exchanges in terms of free float market
capitalization*. The Bank has a network of about 955 branches and 3,687 ATMs in
India and presence in 18 countries. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialised subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset
management. The Bank currently has subsidiaries in the United Kingdom, Russia and
Canada, branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar
and Dubai International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our
UK subsidiary has established branches in Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its
5. COMPANIES UNDER ‘ICICI BANK’

A) ICICI PRUDENTIAL AMC AND TRUST:
ICICI Prudential Asset Management Company enjoys the strong parentage of
prudential plc, one of UK's largest players in the insurance & fund management
sectors and ICICI Bank, a well-known and trusted name in financial services in India.
ICICI Prudential Asset Management Company, in a span of just over eight years, has
forged a position of pre-eminence in the Indian Mutual Fund industry as one of the
largest asset management companies in the country with assets under management of
Rs. 37,906.24 crore (as of March 31, 2007). The Company manages a comprehensive
27
range of schemes to meet the varying investment needs of its investors spread across
68 cities in the country.
Key Indicator:
During the year march 1998 Asset Under Management was Rs160 cores with
only two funds managed, as on February 29, 2008 now it raised up to Rs 62,008.95
cores with 35 funds.
B) ICICI SECURITIES – INDIA’S LEADING INVESTMENT BANK

A subsidiary of ICICI Bank - the largest and most recognized private bank in
India – ICICI Securities Ltd is premier Indian Investment Bank, with a dominant
position in its core segments of its operations - Corporate Finance including Equity
Capital Markets Advisory Services, Institutional Equities, Retail and Financial
Product Distribution With a full-service portfolio, a roster of blue-chip clients and
performance second to none, we have a formidable reputation within the industry.
The Corporate Finance team regularly ranks highest among the leading capital
markets league tables and recently topped the Prime Database League tables for funds
mobilized through equity instruments in the first half of CY 07.
ICICI Securities Inc., the step down wholly owned US subsidiary of the
company is a member of the National Association of Securities Dealers, Inc. (NASD).
As a result of this membership, ICICI Securities Inc. can engage in permitted
activities in the U.S. securities markets. These activities include Dealing in Securities
and Corporate Advisory Services in the United States and providing research and
investment advice to US investors.
ICICI Securities Inc. is also registered with the Financial Services Authority,
UK (FSA) and the Monetary Authority of Singapore (MAS) to carry out Corporate
Advisory Services and Dealing in Securities.
C) ICICI VENTURE
ICICI Venture is one of the largest and most successful private equity firms in
India with funds under management in excess of USD 2 billion.
ICICI Venture, over the years has built an enviable portfolio of companies across
sectors including pharmaceuticals, Information Technology, media, manufacturing,
logistics, textiles, real estate etc thereby building sustainable value.
28
It has several “firsts” to its credit in the Indian Private Equity industry. Amongst them
are India’s first leveraged buyout (Infomedia), the first real estate investment
( Cyber Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs)
and the first ‘royalty-based’ structured deal in Pharma Research & Development (Dr
Reddy’s).
ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial
services group in India.
D) ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED

ICICI Lombard General Insurance Company Limited is a 74:26 joint venture
between ICICI Bank Limited and the Canada 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.
E) ICICI PRUDENTIAL LIFE INSURANCE 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).
29
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 Life's capital stands at Rs. 37.72 billion (as on February,
2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively.
For the nine months period April 1 to December 31, 2007, the company garnered new
business weighted premium of Rs. 4,586 crore and has underwritten around 18 lakh
policies during the period. The company has assets held over Rs. 28,000 crore.
ICICI Prudential Life is also the only private life insurer in India to receive a
National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA
(Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability
to meet its obligations to customers at the time of maturity or claims.
For the past seven years, ICICI Prudential Life has retained its leadership
position in the life insurance industry with a wide range of flexible products that meet
the needs of the Indian customer at every step in life.
a) VISION
To be the dominant Life, Health 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
30
 Developing and implementing superior risk management and investment strategies to
offer sustainable and stable returns to our policyholders
 Providing an enabling environment to foster growth and learning for our employees
 And above all, building transparency in all our dealings
The success of the company will be founded in its unflinching commitment to 5 core
values ,Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the
values describe what the company stands for, the qualities of our people and the way
we work.
b) VALUES
Every member of the ICICI Prudential team is committed to 5 core values:

Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine
forth in all we do, and have become the keystones of our success.
c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL LIFE

INSURANCE COMPANY LIMITED
Branches:
ICICI Prudential Life has one of the largest distribution networks amongst
private life insurers in India. It has a strong presence across India with over 945
branches in addition to 550 micro-offices and an advisor base of 270,000.
Distribution Network:
There are four different ways of distributing a Life insurance product namely;
1. Agents (Financial Advisors):- Anybody possessing the minimum qualification of
10+2 after completing 100 hrs of training from the training institute approved by
IRDA can sell life insurance products of any particular company which has sponsored
him to take the training. This is the most popular distribution channel.
31
2. Corporate Agents Any corporate may apply for license to sell insurance after
complying with the requirements of IRDA.
3. Bancassurance If the corporate agent is a bank, then it is known as bancassurance.
Banks can sell the policies to their existing as well as prospective clients. This is
becoming quite popular these days and the bank earns huge fund based income.
Bancassurance has 1% share in total premium collection in 2004-05.
4. Broker They are like corporate agents with only difference that they can sell the
products of more than one insurance company.
Departments:
The various departments that can be seen in an insurance organization and that has
been observed by me are as follows:
a) Marketing Department: This department mainly deals with the marketing and
promotion part of the Insurance Company. They spend most of their time in
formulating strategies to make their products known to the common people and to
promote the same in a easy and cost effective way.
b) Sales Department: This department mainly deals with the sales part of the Insurance
Company; the department includes designations like Sales Manager and Financial
Advisor who personally contacts with people for performing the task of sales of
various products.
c) Accounts/ Financial Department: This department has the task of keeping track of
the various expenses incurred by the various other departments of the organization
and also performs the task of allocating various funds to different departments
according to their requirements.
d) Human Resource Department: This department is handled by the Human Resource
manager of the company. The function of this department involves the well being of
the employees of the company, I,e, to see whether there is employee grievance in the
organization or not and if it is there what are the possible causes for that and also try
to find out solutions for the same if possible.
e) Investment Department: This department deals with the task of investing the money
of the policy holders in such way that will ensure both safety of the money and also a
steady return on the same. The task of this department is very difficult as it deals with
the money given by the policy holders, so it requires lot of thinking on the part of the
personnel of this department before deciding where to invest the money.
32
f) Actuarial Department: This department is under the supervision of an Actuary who
decides the premiums and charges to be taken from the policy holder on the basis of
certain information’s (like Age, Annual Income etc.) provided by the prospective
customer. The task also involves the calculation of mortality charges which requires
high statistical knowledge from one’s point of view. So, this department involves in
the calculation of various amounts to be charged from the prospective customers.
d) ICICI PRUDENTIAL LIFE INSURANCE PRODUCTS

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 products can be
enhanced with up to 4 riders, to create a customized solution for each policyholder.
Savings & Wealth Creation Solutions

 Save'n'Protect is a traditional endowment savings plan that offers life protection
along with adequate returns.
 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a child's marriage, expenses for a child's higher education or purchase of an asset.
It is available for terms of 15 and 20 years.
 LifeTime Gold & LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at different
life stages. Each offer 6 fund options - Preserver, Protector, Balancer, Maximiser,
Flexi Growth and Flexi Balanced.
 LifeLink Super is a single premium unit linked insurance plan which combines life
insurance cover with the opportunity to stay invested in the stock market.
 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation.
 InvestShield Life New is a unit linked plan that provides premium guarantee on the
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation.
33
 InvestShield Cashbak is a unit linked plan that provides premium guarantee on the
invested premiums along with flexible liquidity options.
 LifeStage RP is a unique and powerful wealth creation insurance solution, which
combines the benefits of automatic asset allocation and quarterly rebalancing along
with increased protection.
Protection Solutions
 LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3
options - level term assurance, level term assurance with return of premium & single
premium.
 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner.
Education insurance plans
 Education insurance under the SmartKid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy. The policy is designed to provide money at important milestones in the child's
life. SmartKid plans are also available in unit-linked form - both single premium and
regular premium.
Retirement Solutions
 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually.
 LifeTime Super Pension is a regular premium unit linked pension plan that helps one
accumulate over the long term and offers 5 annuity options (life annuity, life annuity
with return of purchase price, joint life last survivor annuity with return of purchase
price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last
survivor annuity without return of purchase price) at the time of retirement.
 LifeLink Super Pension is a single premium unit linked pension plan.
 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement. It offers the benefit of 5 payout options.
 PremierLife Pension is a unique and convenient retirement solution with a limited
premium paying term of three or five years, to suit professionals and businessmen,
especially those who require more flexibility and customization while planning their
finances.
Health Solutions
34
 Health Assure Plus: Health Assure is a regular premium plan which provides long
term cover against 6 critical illnesses by providing policyholder with financial
assistance, irrespective of the actual medical expenses. Health Assure Plus offers the
added advantage of an equivalent life insurance cover.
 Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as
well as at different stages in the treatment of various cancer conditions.
 Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care
and also provides an additional benefit of free periodical cancer screenings.
 Diabetes Care: Diabetes Care is a unique critical illness product specially developed
for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis
on any of 6 diabetes related critical illnesses, and also offers a coordinated care
approach to managing the condition. Diabetes Care Plus also offers life cover.
 Diabetes Care Plus: is a unique insurance policy that provides an additional benefit
of life cover for Type 2 diabetics and pre-diabetics
 Hospital Care: is a fixed benefit plan covering various stages of treatment -
hospitalisation, ICU, procedures & recuperating allowance. It covers a range of
medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20
years.
 Crisis Cover : is a 360-degree product that will provide long-term coverage against
35 critical illnesses, total and permanent disability, and death.
Group Insurance Solutions
ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to
enhance benefits to their employees.
Flexible Rider Options

ICICI Prudential Life offers flexible riders, which can be added to the basic policy at
a marginal cost, depending on the specific needs of the customer.
35
1.3 PRODUCT PROFILE
Marine Insurance
ICICI peudentials brings to India a wide range of marine cargo products from various
international markets. Their products considerably widen the scope of coverage
presently enjoyed by the insured population without necessarily involving a high
premium.
Burglary insurance
Burglary Insurance for machinery, stock in trade, furniture, fixtures & fittings and for
goods held in trust or on commission for the insured is responsible. Burglary
Insurance covers burglary or housebreaking accompanied by either forcible or violent
entry into/exit from the premises and hold-up.
Engineering Insurance:
 Erection All Risks Insurance
The Erection All Risks policy is a comprehensive insurance, which provides complete
protection against all types of risks associated with erection, testing, commissioning
of machinery, plant and equipment during constructional stage.
 Boiler & Pressure Plant Insurance
It covers the risk of explosion and collapse of any boiler or other pressure plant in the
course of ordinary working.
 Contractor's All Risks Insurance
All types of civil engineering works, ranging from small buildings to massive dams
are exposed to damage from a wide range of causes such as fire, lightning, flood,
inundation, storm, cyclone and other accidental damages. It is a comprehensive
insurance which provides complete protection against all types of civil construction
risks.
 Machinery Breakdown Insurance

A COMPANY extends its hand offering Machinery Breakdown Insurance Cover ably
supported by most capable technocrats to throw more light about the mechanical side
of all machines.
 Marine-Cum-Erection Insurance
36
It is developed as a comprehensive product to manage the risk and insurance needs in
course of erection as well as during transit. It is a combination of Erection-All-Risks
and Marine Insurance to cater to the needs of the client where Marine/Transit
insurance is connected with Erection All Risks Insurance of any project.
 Contractor's Plant & Machinery

Contractor's Plant & Machinery is an exclusive all risks policy covering the plant &
machinery used by the contractors at the site for various projects. It covers the
property whether they are at work or at rest or being dismantled for the purpose of
cleaning or overhauling, or in the course of operations or when being shifted within
the premises or during subsequent re-erection, but in any case only after successful
commissioning.
Liability Insurance:
 Product Liability Insurance

Liability arises from a civil wrong or breach of personal duty imposed by law on a
person and owed to his/her fellow citizens. In some countries legal rights and duties
are framed in a Civil Code. In others they are not codified but drawn from the
precedent of decisions handed down in the courts over the centuries; this is known as
"Common Law".
 Workmen's Compensation Insurance

It provides Insurance against occupational accident or disease to an employee whilst
in course of his employment.
 Public Liability Act

It provides indemnity against the Insured's liability at law to the public in general
(excluding employees) for bodily injury and loss of or damage to property due to the
business activities carried on in insured's premises.
Business solutions:
 Industrial All Risks Policy
37
It’s a wide and comprehensive cover for the large sized business where the assets at
all locations of the insured exceed Rs.100 Corers. It is an All Risks Policy covering a
wide range of perils such as fire and allied perils, burglary, accidental damage,
breakdown as well as business interruption.
 Office Shield
A flexible policy specifically designed to meet the insurance needs of your modern
office, irrespective of the number of locations.
 Hotel Shield
Tailor-made cover designed to suit the specific needs of the Hotel Industry.
 Enterprise Shield.
It is a newly devised package providing total insurance solutions for industries. You
do not need to analyze and evaluate a large number of insurance policies to insure
your business completely.
 Education Shield
Tailor-made cover designed to suit the specific needs of Education Industry.
 Traders Shield
It is an attractive policy that provides shopkeepers with a basic insurance package and
a further range of optional covers.
 All Risks Policy for Portable Equipments

It offers an overall solution to cover portable items like laptops, mobiles, cameras and
projectors.
 Standard Fire and Special Perils Policy
It offers cover against fire and allied perils and the perils of nature. The policy can
cover building (including plinth and foundation), plant and machinery, stocks,
furniture, fixtures and fittings and other contents.
 Consequential Loss (Fire) Insurance
It provides protection against loss of profits in business due to an interruption in
business consequent upon an insured peril covered under the material damage policy.
Employee solutions:
 Group Personal Accident Policy
It is a worldwide cover providing protection for the employees against any accidental
injuries sustained by the individuals resulting in death and disablement.
 Group Health
38
Health Premium Platinum is a comprehensive health insurance package, designed for
the employees of company and their family members.
 Workmen's Compensation
Workmen's Compensation provides cover to target clients as required by law in
support to project insurances or property insurances.
39
40
CHAPTER -4
DATA ANALYSIS &

INTERPRETATION
41
3.1 RESEARCH METHODOLOGY
Methodology is a systematic way of solving a problem it includes the research

methods for solving a problem it includes the research methods for solving the
problem.
Type of research - Descriptive research
Data source -Primary and Secondary data
Data collection method -Interview and survey
Data collection tools -Questionnaires
Sampling universe -Shahjahanpur
Sample size -100
SAMPLE DESIGN
The target population of the study consists of various respondents of various
places. This survey was done by collecting the data from the respondents.
SAMPLE SIZE
After due consultation with the company supervisor as well as with the college
guide, also keeping in mind the requirements of the company for the research, the
sample size that was found to be appropriate for the study was 100.
SAMPLING TECHNIQUE
The sampling technique that adapted to conduct the survey was ‘Convenient
Random Sampling’ and the area of the research was concentrated in the city of Erode
only. The survey was conducted by visiting different places like colleges, corporate
offices, respondent’s home etc...
42
DATA SOURCE
The task of data collection begins after a research problem has been defined.
In this study data was collected through both primary and secondary data source.
A. PRIMARY DATA
A primary data is a data, which is collected for gathering information first time
and to analyze the problem. In this study the primary data was collected among the
consumers using questionnaire.
B. SECONDARY DATA
Secondary data consist of information that already exits somewhere, having
been collected for some other purpose. In this study secondary data was collected
from company websites, magazines and brochures.
STATISTICAL TOOLS
Simple percentage analysis, ranking method and chi square analysis are the
main statistical tool used for the study.
SIMPLE PERCENTAGE ANALYSIS

Percentage refers o a special king of ratio in making comparison between two
or more data and to describe relationships. Percentage can also be used to compare the
relation terms between two or more sources of data.
Percentage of respondents = Number of respondents * 100

Total respondents
RANKING METHOD (WEIGHTED AVERAGE METHOD)
43
This technique was used to rank out the opinion about the consumers
preference towards different investment alternatives. The order of merit given by the
respondents was converted into ranks by using the following formula.
Weightage Score =  Wi * Xj
Where Wi = Weightage value and Xj = Ranking position value
CHI SQUARE TEST

Chi Square is a statistical measure used in the context of sampling analysis for
comparing the variance to a theoretical variance. In order to judge the significance of
association between two attributes, we make use of chi square test by finding the
values of chi square using the chi square distribution.
44
3.2ANALYSIS AND INETERPRETATION
Market share of LIC and Private Players
Market Players Market share in

percentage
Private players 28.44
LIC 71.56
Total 100
Interpretation:
LIC market share continued to decline in the period up to June 2007, it declined to
71.56% from 78.23% in the same period last year. On the other hand the market share
of the private players is continuously growing up; it increased to 28.44% from
21.77% in terms of insurance premium.
Market share of LIC and Private Players
45
Market share of LIC and Private Players up to
June 2007
28.44%
Private Players
LIC
71.56%
46
Market Share among Private players
Private players Market share in Market share

percentage change in
percentage
ICICI Prudential 29 4
Bajaj Allianz 21 1
SBI Life 10 0
HDFC Standard 9 1
Reliance Life 9 0
Birla Sunlife 5 -1
Kotak Mahindra 3 0
Old Mutual
Met Life 3 1
Aviva 3 0
Tata AIG 3 1
Max New York 2 -4
ING Vysya 2 -1
Bharti Axa Life 1 0
Sahara Life 0 0
Shriram Life 0 -1
Private total 100
Interpretation:
ICICI PRUDENTIAL BECOMES THE MARKET LEADER AMONG

PRIVATE PLAYERS:
47
ICICI Prudential strengthens its position at the top of the heap by increasing its
market share by 4% in the month of Jan 2008, followed by Bajaj Allianze with 21%
market share. These two private players contribute 50% of the total insurance market
among the private players.
Market Share among Private players
Market share among private players ICICI Prudential

Bajaj Allianz
5%
SBI Life
9% 3% HDFC Standard
9%
3% Reliance Life
3% Birla Sunlife
10% 2% Kotak Mahindra
3%
Met Life
5% Aviva
2%
Tata AIG
21% 1% Max New York
0% ING Vysya
29% Bharti Axa Life
0%
Sahara Life
Shriram Life
48
Sales Growth among Private players
Private players Year to year

growth in sales in
percentage
ICICI Prudential 116
Bajaj Allianz 105
SBI Life 138
HDFC Standard 88
Reliance Life 335
Birla Sunlife 152

Kotak Mahindra 121
Old Mutual
Met Life 125
Aviva 60
Tata AIG 100
Max New York 40
ING Vysya 74
Bharti Axa Life 362
Sahara Life 238
Shriram Life 91
Private total 119
49
Interpretation:
Private sector sales continued to be robust at 119% year to year (YoY), up from 118%
YoY last month. The month also saw LIC make up some lost ground by growing
faster than the system at 133% YoY. Among the larger players, Reliance, SBI Life
and Birla Sun Life continued to be the rising stars with the fastest YoY growth rates.
Sales Growth among Private players
50
Various investment alternatives available to consumers
Let us see what are the various investment alternatives that are available to the people
and among that which are the most preferred one. Now, from the data collected from
the 100 respondents which were surveyed through the questionnaire, the following
representation can be made:
Investment Total Rank

Alternatives score
Bank Deposits 6.75 I
Insurance 6.46 II
Post office 5.57 III
Gold & Silver 5.33 IV

Real Estate 5.07 V
Mutual fund 4.83 VI
Equity/Shares 3.84 VII

Public Provident 3.78 VIII
Fund(PPF)
Bond & Debentures 1.74 IX
Interpretation:
From the above table-2.5 it can be seen that ranks for theses investment alternatives
where analyzed by weighted average method. From this analyze we found Bank
Deposits is the most preferred investment alternative among the people with the
average of 6.75, secondly Insurance with the average of 6.46, followed by other
investment alternatives like Post Office (5.57), Gold and Silver (5.33), Real Estate
(5.07), Mutual Fund (4.83), Equity (3.84), PPF (3.78) and least preferred alternative is
that Bond and Debenture (1.74).we understood from this analyze that people prefer
51
the safe and secure investment alternatives like bank deposits, insurance, real estates,
than risky investment alternatives like bonds, equities etc.. The reason that can be
attributed for the liking of people towards bank deposit is that people expect safety for
their money they deposit even though there is less appreciation on their deposit.
Secondly insurance, may be because that insurance provides both life cover as well as
security to the holder of the policy and also to the family members of the insurance
holders. Now a days insurance is also providing option to invest in the markets
through plans like ULIP, which gives the holder both the life cover as well as an
opportunity to earn income at the market rate. Then recently real estate is the major
investment alternative among the people particularly among Erode, this is mainly due
to the increase in land value and also good long term investment preference. Gold and
silver also good investment alternative among people due to the frequent appreciation
in the values of gold, next is that mutual fund which is also the preferable investment
alternative due to low risk on their investment, and other alternatives which are not
much preferred were equities, bonds etc. mainly due to the risk involved in it.
Various investment alternatives available to consumers
Investment Alternative Preffered by people Bank Deposits
Insurance
7 6.75
6.46
Post office
6 5.575.33
5.07 Gold & Silver
5 4.83
Total scores
4 3.843.78 Real Estate
3 Mutual fund
2 1.74
Equity/Shares
1
Public Provident
0 Fund(PPF)
Investment Alternatives Bond &
Debentures
52
Segmentation of the respondents on the basis of certain important criteria:
Now, let us turn our attention towards the respondent who were covered under this
study. These respondents can be categorized on the basis of certain important criteria
like age group, annual income, life insurance policy holders and awareness of ICICI
Prudential Life Insurance in the following way
Age Group
Age Group No of Percentage

Respondent
Below 30 Yrs 50 50
31-40 Yrs 32 32
41-50 Yrs 16 16
51-60 2 2
Above 60 Yrs 0 0
Total 100 100
Interpretation:
From this table-2.6 we can see that 50% of the respondent belonged to the age group
of below 30 years, followed by 32% who belonged to the age group between 31-40
years, then 16% of respondents belong to 41-50 years and only 2% from the
respondents belong to 51-60 years but there is no respondent from the age group
above 60.
53
Age Group
Age Group
50
50
45
40
35 32
Respondents
30
25
20 16
15
10
5 2 0
0
Below 31-40 41-50 51-60 Above
30 Yrs Yrs Yrs Yrs 60 Yrs
Age Group
Annual Income Level
Annual Income Level No of Percentage

Respondent
Below 1 Lakh 33 33
1.01-3 Lakh 60 60
3.01-5 Lakh 4 4
Above 5 Lakh 3 3
Total 100 100
Interpretations:
54
From the above table-2.7 we can see that 33% of the respondents belonged to a group
which has an annual income of below 1 lakh, followed by highly 60% who belonged
to the group of annual income between 1-3 lakh, then 4% who have an annual income
between 3-5 lakh and 3% of respondent who have an annual income above 5 lakh.
Annual Income Level
Annual Income Level
60
60
50
Respondents
40
33
30
20
10 4 3
0
Below 1 1.01-3 3.01-5 Above 5
Lakh Lakh Lakh Lakh
Annual income
Hold Life Insurance Policy
Hold life insurance No of Percentage

policy Respondent
Yes 76 76
No 24 24
Total 100 100
55
Interpretation:
Among the 100 respondents that were taken as a sample size, 76 of them had life
insurance policy that was either taken by him/her self or it was taken by their parents
on their name, while 24 of them did not have any kind of Life insurance policy from
any company.
24%
Yes
No
76%
Important criteria before taking an life insurance

On the basics of insurance policy:
Now, let us see what criteria people consider most important before taking a life
insurance policy (the criteria for the study have been mentioned before). Here, the
highly important criterion as perceived by the people is rated as 5, if people perceived
that is only important it is rated 4, if people perceived that it can be only neutrally
56
important is rated as 3, then the least important criterion is being rated as 2 and if
perceived that it is not important it is rated as 1(as there are 8 criteria that have been
suggested under the research study). Here the number of respondent is only 76,
because those 26 people who do not have any life insurance policy have been
excluded from the purview of the study.
Premium
Rating No of Percentage
Respondent
5 39 51.4
4 31 40.8
3 3 3.9
2 3 3.9
1 _ _
Total Insurance 76 100

holders
Total non users 24
Total 100
Premium
57
Prem ium
40 39
35
31
Respondents
30
25
20
15
10
5 3 3
0
0
5 4 3 2 1
Rating
Interpretation:
Now if we consider one of the criteria we can see that 51.4% of the respondent has
rated premium as the highly important thing that they consider before taking any
insurance policy from any company, and no body has rated it as the not important
criterion. So, it can be clearly interpreted that premium that the policy holder has to
pay to continue his/her policy plays a very important role before selecting the terms
and conditions of the policy and also the company from which the policy is to be
taken.
Policy Term
Respondent
5 29 38.1
4 36 47.4
3 10 13.2
2 1 1.3
58
1 _ _

holders
Total non users 24
Total 100
Interpretation:
The tenure of the policy i.e. the policy term depends on the policy holder but
sometimes the insurer can also influence the policy term by giving some additional
benefits on policies taken for a longer period of time or vice versa. In the study that
was conducted by us, we found out that nearly 48% of the respondents think that
policy term offered by the company is the important thing that one should consider
before taking any life insurance policy while 38.1% of the respondents think that it is
the highly important thing that one should consider before taking any life insurance
policy.
Policy Term
59
Policy Term
40 36
35
30 29
Respondents
25
20
15
10
10
5 1 0
0
5 4 3 2 1
Rating
Rider Benefits
Respondent
5 18 23.7
4 32 42.1
3 21 27.6
2 5 6.6
1 _ _

holders
Total non users 24
Total 100
Interpretation:
60
Rider benefits are the additional benefits that the insurer company provides to its
customers for attracting them. Things like accidental benefit, critical illness benefit,
and permanent disablement benefit are provided as a rider with the original policy
with a payment of some additional premium from the point of view of the customers.
According to the study nearly 42% of the respondents think that it is an important
criterion before selecting an insurance policy. On the other hand 27.8% and 23.7% of
the respondent feel it neutrally and the most important criterion, which indicates that
people are not much interested in additional benefits.
Rider Benefits
61
Rider Benefits
35 32
30
Respondents
25
21
20 18
15
10
5
5
0
0
5 4 3 2 1
Rating
Bo
nus and Interest Paid
Respondent
5 40 52.6
4 24 31.6
3 8 10.6
2 2 2.6
1 2 2.6

holders
Total non users 24
Total 100
Interpretation:
Bonus and interest are paid by the companies to the policy holder for the policies
which are with profit policy i.e. if a person takes a with profit policy, he/she also
becomes liable to get a certain percentage of the profit that the company makes in a
certain financial year. 53% of the respondents consider it as the highly important
62
criterion before taking a life insurance policy and only 2.6% of respondents
considered it to not important.
Bonus and Interest Paid
Bonus & Interest

40
40
35
Respondents
30
25 24
20
15
10 8
5 2 2
0
5 4 3 2 1
Rating
63
Services (Pre and Post Sales)
Respondent
5 26 34.3
4 35 46.0
3 11 14.5
2 2 2.6
1 2 2.6

holders
Total non users 24
Total 100
Interpretation:
While conducting the study we have met many respondents who think that many of
the companies provide them satisfactory services only till the policy is being taken by
the respondent, but after that if there is any requirement from the point of view of the
customer, the company does not pay the same attention to them as they had paid
earlier. So, nearly 34% of the respondents feel that services (both pre and post sales)
provided by the company is highly important to consider before undertaking any kind
of life insurance policy.
64
Services (Pre and Post Sales)
Services
35
35
30
26
25
Respondents
20
15
11
10
5 2 2
0
5 4 3 2 1
Rating
Accessibility
Respondent
5 21 27.6
4 47 61.8
3 6 8.0
2 2 2.6
1 _ _

holders
Total non users 24
Total 100
65
Interpretation:
The term accessibility here refers to the easy availability of the facilities that the
company provides to its customers. The facilities may be regarding information about
the company and the various products offered by them, it can be made available
through internet and other media. According to the study nearly 62% of the
respondents think it is highly important, while 2.6% of them feel that it is the least
important and no respondent considers that it is not important that one may consider
before taking any life insurance policy.
Accessibility
Accessibility
50 47
45
40
35
Respondents
30
25 21
20
15
10 6
5 2
0
0
5 4 3 2 1
Rating
66
67
Company Image
Respondent
5 41 54
4 24 31.6
3 10 13.1
2 1 1.3
1 _ _

holders
Total non users 24
Total 100
Interpretation:
Company image also plays an very important role in influencing the decision of a
prospective customer while taking the final decision. From the study it has been found
out that nearly 54% and 32% of the people feel that it is the highly and most
important thing, which has higher influence than any other criterion that influences
one’s decision regarding taking of life insurance policy, while for 1.3% of people it
does not provide any significant importance in their decision making.
68
Company Image
Com pany Im age
45
41
40
35
Respondents
30
25 24
20
15
10
10
5 1 0
0
5 4 3 2 1
Rating
So, to conclude from the above chart-2.18, it can be said that the company image that
the policy holder has to pay for taking any life insurance policy, plays a highly
important role in influencing their decision, followed by the factors like premium,
bonus and interest paid by the company, policy term and so on. So, those companies
who are having brand image or name as well as providing all other complementary
services, have a better chance of succeeding in the life insurance sector in comparison
to other companies who are in the same field.
69
To further analyze the perception of the respondents about what they think as
the important criteria before taking an insurance policy, I have taken two independent
parameters, namely:
a) Age of the People.
b) Annual Income of the People.
After taking these two independent parameters, the analysis is being made to see
which age group people think what criterion is important or what is the difference in
perception among the people who have annual income which are significantly
different from each other. The number of respondents taken here is only 76 as those
people who are not having any life insurance policy have been excluded from the
purview of the study and these 76 respondents were allowed to rate the criteria
according to their importance.
(Rating 5 represents highly important,4 represents only important,3 represents
neutrally important,2 represents least important and 1 represents not important).
2.19 Criteria before taking a life insurance policy

On the basics of Age group:
For conducting the study the ages of respondents are divided into five categories,
those are as follows:
a) Less than 30 years.
b) Between 31- 40 years.
c) Between 41 – 50 years.
d) Between 51 - 60 years.
e) More than 60 years.
70
Age Group – Premium
Age group 5 4 3 2 1 Total

Respondent
Below 30 20 11 2 1 _ 34
Yrs (58.8%) (32.4) (5.9) (2.9) (100%)
31-40 Yrs 14 10 1 1 _ 26
(53.8%) (38.6%) (3.8%) (3.8%) (100%)
41-50 Yrs 7 7 _ 1 _ 15
(46.7%) (46.7%) (6.6%) (100%)
51-60 Yrs _ 1 _ _ _ 1
(100%) (100%)
Above 60 _ _ _ _ _ _
Yrs
Total 41 29 3 3 _ 76
Respondent (54%) (38.2) (3.9) (3.0) (100%)
Interpretation:
Now, from the above table-2.20 we can see that nearly 59% of the people who belong
to the age group of less than 30 consider premium as the highly important criterion in
comparison to only 54% of the people who belong to an age group of 30-40. So,
people who have started their professional life consider more about the money that
has to be spent on the insurance policy in comparison to the people who are working
for a relatively longer period of time. Again, if we consider those people 41-50 years
who have come to the important stage of their working life, we can see that these
people also thing that the expense regarding the premium to be paid is the highly
important criteria for them because they likely to spend or save their money on
medical, education etc..
71
Age Group – Premium
72
Age group-Premium
Above 60 Yrs 0
5
51-60 Yrs 010
4
Age Group
41-50 Yrs 7 7 010 3

2
31-40 Yrs 14 10 110
1
Below 30 Yrs 20 11 2 10
0 10 20 30 40
Respondents
CHAPTER – 5
73
FINDINGS,
SUGGESTIONS AND
CONCLUSION
74
FINDINGS
The findings that can be drawn from the survey conducted by us can be summarized
in the following way:
a) Bank Deposits are the most preferred investment alternative which is available to
people followed by alternatives such as Insurance, Real Estate, Gold and Silver,
Mutual etc.
b) It was found that 61 respondents were willing to take a life insurance under LIC and
33 respondents under ICICI Prudential Life Insurance.
c) Among the 76 insurance holders 63 have policy of LIC whereas only 11 respondents
have policy of ICICI Prudential Life Insurance.
d) Only 47% of the total respondents are aware of the joint venture between ICICI bank
with Prudential of UK to form a company called ICICI Prudential Life Insurance in
the year 2000. 22 respondents are interested to invest in ICICI because of the
company’s growth potential and brand image that ICICI has.
e) The scheme mostly preferred by insurance holders was life protection schemes like
death benefits followed by money growth plans like wealth creation and high return
plans.
f) It was found that nearly 50% of the respondents usually save less than 15% and the
kind of investment mostly preferred by the respondents were both long and short
term.
g) According to the survey safety is the most important criterion which is excepted
among all the respondents towards their investment alternatives followed by Return,
Brand Name, Tax Benefits, Liquidity and Capital Growth.
h) According to the study company image is to be the highly important criteria which we
consider before taking up a life insurance this is mainly because people expect safety
and security for their money which they invest, followed by the factor Premium which
we pay to the insurer and then Bonus and Interest paid by the company, services etc.
i) People who belong to different age groups have different perception regarding the
most important criteria before taking the decision on a life insurance policy.
j) People who belong to different income groups also have different perception
regarding the important criteria concerned with the life insurance.
75
SUGGESTIONS
1. Consumer should be aware of company’s profile and returns associated with

insurance.
2. The Financial advisor should be right enough to serve the consumers. The
consumer
should also be aware of the advisor or others who is looking after their investments.
3. Company should publish their performance by comparing it with their competitors.
4. Company should adopt strategies to explore that private insurance companies are
safer and securer than public insurance company like LIC.
5. Middle income people suggest that premium can be collected on monthly basis
instead
of twice a year.
6. Company’s reputation is more important because bad impression on image or
brand name is considered while decision making among consumers.
76
ONCLUSION
Insurance is a tool by which fatalities of a small number are compensated out
of funds collected from plenteous. Insurance is a safeguard against uncertain events
that may occur in the future. Over the last 5 to 6 years, the ICICI Prudential life
insurance company have tripled investors money than the other competent, this
progress leads to increase the company image and makes a way to lead the total
insurance market.
Thus the study also comprise company image is the highly important criteria
that consumers consider before taking up a life insurance. This is mainly because
people expect safety and secure for their money which they invest, followed by the
factor Premium which we pay to the insurer and then Bonus and Interest paid by the
company, services etc.
77
Bibliography
 Books & Magazines
 Kothari, C.R, "Research Methodology" Wishwa Prakashan,
Delhi, 2004
 Sawyer, A.G and Howard, David J, Journal of Marketing
Research 1999
 Business World and Business India Magazine
 Varshney, P.N “Banking law and Practice”
 Websites
 http://www.google.co.in/
 http://www.en.wikipedia.org/
 http://www.rbi.org/
 http://www.ekikrat.in/
 http://www.seminarprojects.com/
 http://www.scribd.com/
 http://www.indiatimes.com/
 http://www.wikianswers.com/
 http://www.slideshare.net/
78
APPENDIX
A Study of Consumer’s Perception Towards Insurance Sector
Questionnaire
Dear respondent,
This questionnaire is aimed at understanding your perception about life
insurance .Your response will be dealt with strict confidentiality and it will be used
only for academic purpose. Thank you for spending your valuable time to fill this
questionnaire.
1. Name: Gender: Male Female
Contact No:
2. Age Group:
Below 30 31-40 41-50 51-60
Above 60
3. Educational Qualification:
Under Graduate Post Graduate Diploma
Others (Specify)………….
4. Occupation:
Student Employed Self-Employed
Others (Specify)………….
79
5. Annual Income Level:
Below 1 Lakh 1.01-3 Lakh 3.01-5 Lakh
Above 5 Lakh
SNO Investment Alternatives Rank
1. Bonds & Debentures
2. Equity/Shares
3. Mutual Fund
4. Public Provident Fund(PPF)

6. What percentage of your Salary do you usually save?
5. Post Office Less Than 15%
Greater Than 25%

6. Insurance
7. What kind of investment do you prefer?

7. Bank Deposits
Short Term
8. Real Estate
8. Rank these various investment alternatives according to your

9. Gold & Silver
preferences.
10. Other (specify)…………………….
80
9. State your expectation on investment alternatives by ticking according to its
importance.
Expectations on Highly Least Not

investment important Important Neutral important important
Safety
Capital Growth
Liquidity
Return
Tax Benefit
Company Profile &
Brand Name
10. Do you have life Insurance Policy? ( If ‘NO’ then please go to question no. 14)
Yes No
81
11. If ‘Yes’ Which Insurance Company Policy do you have?
LIC Bajaj Allianz Reliance life

ICICI Prudential
HDFC Standard Others (Specify)……..
12. What scheme of Insurance Policy have you taken?
Life protection plan Education plan Retirement plan

Health plan Money growth Others (Specify)……….
plan
13. What parameters do you look into before you take up a life insurance Policy? And
tick the following parameter according to your importance.
Parameters
considered before
insurance policy Highly Neutral Least Not
Important Important Important Important
Premium
Charges
Policy Term
Rider Benefits
Bonus & Interest
Services (Pre &

Post Sales)
Accessibility
82
Company Image
14. Among the following Life Insurance Companies in which company

you will be Willing to take a life insurance?
Birla Sunlife
Bajaj Allianz HDFC Standard Life
SBI Life ICICI Prudential TATA- AIG
Max New York
Reliance Met Life Max New York
Sahara ING
INGVysya
Vysya Aviva Dabur
OM- Kotak LIC AXA-Bharti

Mahindra
18. Suggestions _______________________________________

________________________________________________
________________________________________________
83

New Consumer Perception Towards Life Insurance in Banking Sector

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CHAPTER-1

OVERVIEW OF CURRENT INSURANCE INDUSTRY

c) Its not gambling or charity: The uncertainty is changed to certainty by insuring

d) Huge number of insured people: It is essential to insure larger number of people

e) Assists in capital formation: Insurance provides capital to society. Accumulative

1. Life Insurance &

6. HISTORY OF INSURANCE INDUSTRY IN INDIA

LIFE NON LIFE

Public Private Public Private

10. PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR

COMPANY INDIAN FOREIGN TOTAL FDI FOREIGN

12. GOVERNMENT POLICIES REGARDING LIFE INSURANCE

Insurance Regulatory and Development Authority (IRDA) 1999

 To identify the position ICICI holds among other private players.

 To study consumer’s awareness towards insurance products

There were certain limitations in undertaking this research work. As it is understood

 The survey conducted may not be considered as comprehensive as only limited

 Some of the respondents were reluctant to give their responses.

• The practice of cross-subsidisation is likely to be phased out as risk-based pricing is

• Finally, rising demand for insurance is likely to be met by increased capacity as

Private Sector’s Growing Influence

Market Share – Redistribution

Strong Infrastructure and Systems

Focused Underwriting Strategy

Superior Claim Paying/Processing Capability

The Industrial Credit and Investment Corporation of India Limited (ICICI)

1. WHAT IS ‘ICICI GROUP’?

3. OBJECTIVES OF ICICI GROUP

5. COMPANIES UNDER ‘ICICI BANK’

B) ICICI SECURITIES – INDIA’S LEADING INVESTMENT BANK

D) ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED

E) ICICI PRUDENTIAL LIFE INSURANCE COMPANY

This we hope to achieve by:

Every member of the ICICI Prudential team is committed to 5 core values:

c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL LIFE

d) ICICI PRUDENTIAL LIFE INSURANCE PRODUCTS

ICICI Prudential Life Insurance offers a range of innovative, customer-centric

Savings & Wealth Creation Solutions

Flexible Rider Options

 Machinery Breakdown Insurance

 Contractor's Plant & Machinery

 Product Liability Insurance

 Workmen's Compensation Insurance

 Public Liability Act

 All Risks Policy for Portable Equipments

DATA ANALYSIS &

Methodology is a systematic way of solving a problem it includes the research

SIMPLE PERCENTAGE ANALYSIS

Percentage of respondents = Number of respondents * 100

RANKING METHOD (WEIGHTED AVERAGE METHOD)

CHI SQUARE TEST

Market share of LIC and Private Players

Market Players Market share in

Private players Market share in Market share

Private total 100

ICICI PRUDENTIAL BECOMES THE MARKET LEADER AMONG

Market Share among Private players

Market share among private players ICICI Prudential

Private players Year to year

Bajaj Allianz 105

SBI Life 138

Birla Sunlife 152

Sahara Life 238