FINANCE PROJECT

Submitted bySaurabh kakhani PCL -1 WLCI, noida campus

Executive Summary
Someone has greatly said that practical knowledge is better than classroom teaching During this project I fully realized this and come to know about the present real world of Insurance sector it includes all the actives involved in providing insurance products to The final customers aim pleased to know about the customers wants and competitors Actives in the real world of insurance The subject of my study is to analyze the present insurance sector and products offered by lic by Appling various tools like sold calling and Through direct interaction with customers have also done research on the growth of Private life insurance companies in the last five years lic provides stats factory in the Sector

ICICI prudential life insurance is one of the largest Insurance networks in the country 2nd life insurance company in India the icici group has Been in existence in 1995 when icici ltd was created icici prudential started in 2002 is Subsidiary of icici ltd today icici life insurance has 4 customer million with total 100000 cr making 2nd the largest life insurance company in the country of lic

CONTENTS
Introduction of industry 2. Terminology used in insurance sector 3. Types of insurance 4. Classification of Indian insurance industry
1. A.

Govt company
1. Life insurance corporation of India introduction 2. Types of life insurances 3. Products of life insurance India 4. Risks and gains

B.

Private company
1. Icici prudential life insurance introduction 2. Products of icici prudential life insurance 3. Risks and gains

Compartivitive analysis of icici and prudential life insurance

Conclusion

Industry profile Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed amount of money on the happening of a certain event. Insurance is a protection against financial loss arising on the happening of an unexpected event. The primary purpose of Life Insurance is the protection of the family. Insurance in it's various forms protects against such misfortunes by having the losses of the unfortunate few paid by the contribution of the many who are exposed to the same risk. This is the essence of insurance- the sharing of losses and substitution of certainty for uncertainty. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the insurance companies act as trustees of the amount collected. In is a system by which the losses suffered by a few are spread over many, exposed to similar risks. In the western world, life insurance evolved mainly from the maritime industry. Started by private financiers who used to gamble on the lives of seafarers by offering five times the money deposited with them in case of certain contingencies? In its present form, life insurance has its origin in England and made its debit in India in the year 1818.Initially, Indians were not considered on par with Europeans as far as their insurability was concerned. There were also many other failures. It was in the early part of the 20th century that some kind of legislation was made to regulate the industry. From then on life insurance made great strides in the country. At the time of independence and thereafter, there were more than 200 companies operating in India and not all of them on sound ethical principles. Many factors combined together to prompt the then government to nationalize the life insurance industry in 1956 to form the Life Insurance Corporation of India. The years from 1956 to 1999 saw the life insurance corporation of India emerge as a giant financial institution and the lone organization purveying life insurance, if we ignore the minimal presence of postal life insurance. The institution succeeded in penetrating in many areas and segments of the population and in garnering public money for public welfare. It was in the 1990s that the winds of change started sweeping over India and brought in their wake many changes in the economy. Liberalization ensured competition in many fields and there was a clamor that the insurance industry too is opened up to Private Indian and foreign players to provide the customer with a choice. The Malhotra committee, appointed in 1993 was given the mandate to study the industry and to suggest the changes that were necessary to make it modern and in tune with peoples aspirations. The report submitted by the committee was the precursor of the IRDA Bill.

By the passing of the IRDA Bill, the Insurance sector has been opened up for the private companies to carry on insurance business. Now the life insurance industry in India is rapidly evolving and growing. It has witnessed a big growth as many Indian and foreign were entered in to the Indian insurance sector. The life insurance industry in India has become fiercely competitive with the entry of several new players including major multinational insurers after the deregulation of the sector. It has opened up a range of untapped opportunities for new entrants into the industry, as the potential market for buyers is high since the emerging market in India has a low insurance penetration and high growth rates. Terminology used in insurancePrinciples Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.

Insurability Risk which can be insured by private companies typically share seven common characteristics: 1. Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates. 2. Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious

conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. 3. Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable. 4. Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. 5. Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. 6. Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. Legal When a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include:

1. Indemnity the insurance company indemnifies, or compensates, the insured in the case of certain losses only up to the insured's interest. 2. Insurable interest the insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons. 3. Utmost good faith the insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed. 4. Contribution insurers which have similar obligations to the insured contribute in the indemnification, according to some method. 5. Subrogation the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss. 6. Causa proxima, or proximate cause the cause of loss (the peril) must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded 7. Mitigation - In case of any loss or casualty, the asset owner must attempt to keep the loss to a minimum, as if the asset was not insured. Indemnification To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured: 1. 2. an "indemnity" policy, and a "pay on behalf" or "on behalf of"[4] policy.

The difference is significant on paper, but rarely material in practice. An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to

come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000). Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner in the above example) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance policy. Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the premium. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims in theory for a relatively few claimants and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves), the remaining margin is an insurer's profit. Effects Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud, on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through moral hazard, insurance fraud, and preventive steps by the insurance company. Insurance scholars have typically used morale hazard to refer to the increased loss due to unintentional carelessness and moral hazard to refer to increased risk due to intentional carelessness or indifference. Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction,

some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures - particularly to prevent disaster losses such as hurricanes because of concerns over rate reductions and legal battles. However, since about 1996 insurers began to take a more active role in loss mitigation, such as through building codes. Insurers' business modelUnderwriting and investing The business model is to collect more in premium and investment income than is paid out in losses, and to also offer a competitive price which consumers will accept. Profit can be reduced to a simple equation: Profit = earned premium + investment income - incurred loss - underwriting expenses. Insurers make money in two ways: 1. Through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks; 2. By investing the premiums they collect from insured parties.

The most complicated aspect of the insurance business is the actuarial science of ratemaking (price-setting) of policies, which uses statistics and probability to approximate the rate of future claims based on a given risk. After producing rates, the insurer will use discretion to reject or accept risks through the underwriting process. At the most basic level, initial ratemaking involves looking at the frequency and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss data, bring the loss data to present value, and compare these prior losses to the premium collected in order to assess rate adequacy. Loss ratios and expense loads are also used. Rating for different risk characteristics involves at the most basic level comparing the losses with "loss relativities" - a policy with twice as many losses would therefore be charged twice as much. More complex multivariate analyses are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses. Upon termination of a given policy, the amount of premium collected and the investment gains thereon, minus the amount paid out in claims, is the insurer'sunderwriting profit on that policy. Underwriting performance is measured by something called the "combined ratio" which is the ratio of expenses/losses to premiums. A combined ratio of less than 100

percent indicates an underwriting profit, while anything over 100 indicates an underwriting loss. A company with a combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn investment profits on "float". Float, or available reserve, is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out. The Association of British Insurers (gathering 400 insurance companies and 94% of UK insurance services) has almost 20% of the investments in the London Stock Exchange. In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the float method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards, so a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the underwriting, or insurance, cycle. Claims Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by ACORD. Insurance company claims departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment.

The policyholder may hire their own public adjuster to negotiate the settlement with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim. Adjusting liability insurance claims is particularly difficult because there is a third party involved, the plaintiff, who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge. If a claims adjuster suspects under-insurance, the condition of average may come into play to limit the insurance company's exposure. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation (see insurance bad faith).

Marketing Insurers will often use insurance agents to initially market or underwrite their customers. Agents can be captive, meaning they write only for one company, or independent, meaning that they can issue policies from several companies. Commissions to agents represent a significant portion of an insurance cost and insurers that sell policies directly via mass marketing campaigns can offer lower prices. The existence and success of companies using insurance agents (with higher prices) is likely due to improved and personalized service

TYPES OF INSURANCE Insurance can be termed as a form of risk management which is mainly used to protect an individual against the risk of prospective financial loss, if any. Insurance can be used

as a tool to shield an individual against potential risks like travel accidents, death, unemployment, theft, property destruction by natural calamities, fire mishaps etc. Different types of insurance is used to cover different properties and assets such as vehicles, home, health care etc. Basically, an insurance policy can also be known as a protection net which secures you from any financial losses in future. All you have to do is pay the insurance agencies a specified amount every month, known as premium, so that they can take care of you by providing you financial back up in case of a sudden health emergency or a fatal incident. There are two ways for getting an insurance done. One way is to visit an agent and consult him for the best option you can avail for your situation. And then, trust him/her for their suggestion on the type of insurance they feel is right for you. The other way is to research and choose on your own, the type of insurance which will be best suited for your situation. You should research the market as well as the net, to look for the best insurance companies, and furthermore, the most suitable type of insurance that they offer. Also explore the various types of policies which are available to you in the market, and then compare to decide which one to choose finally. TheLoanBazaar.com offer our clients with various types of insurance schemes and policies such as health insurance, travel insurance, life insurance etc, to name a few. The detail about all these types of insurance offered by us is as follows: Health Care Insurance With such high medical and health care costs these days, its hard to even think about visiting a doctor. But what about an unexpected mishap or an unforeseen disability or attack, where the potential medical bills could shoot up to a sky? Where would you get so much money from? These are exactly the situations where you feel you had a security, something which could come to your rescue and save you from such financial crisis. While some companies do provide its employees with health insurance, for others, this is a must. Especially for the aging couples, who have a comparatively more chances of needing emergency bill money. The health insurance does it all, so that they do not have to worry for the huge payments at the last minute. A health insurance can cover all from a routine immunization to a major illness. Life Insurance Loss of a family member is a catastrophe which glooms a familys life. But even more tragic is the death of a sole bread earner for the family, who then has to go through the

pain of losing their loved one, as well as the financial loss putting their survival in jeopardy. This financial hardship due to a sudden death of a family member or a disability resulting to a loss of job or inability to work can be avoided to a great extent by taking up a life insurance policy. A Life insurance or disability insurance covers such losses and pays a family, compensation to restore the earnings lost by them due to a sudden death or disability. The monthly premiums for a life insurance are generally based upon the age, health, and occupation information of the applicant, in addition to the total benefits to be paid to him for his policy. Home Insurance Real estate property and hard assets are subject to accidental risks like theft, destruction due to natural disasters or fire accidents etc. with such huge investments gone into buying a real estate property like your home or office, the risk involved is a loss of large amount of money. Home and property insurance helps you in managing and protecting against these risks. The cost of a real estate property and its insurance is mostly based upon the worth of the already insured hard assets and also the location in which the assets are situated. Travel Insurance This is intended to cover any of the financial or any other losses which were incurred by the insured while traveling, be it nationally or internationally, such as mountain trekkers, cruise travelers etc. Auto Insurance Any vehicle on road, no matter how safe its driver is, is bound to meet with an accident or two, which may leave it with just a few scratches, or crash it up totally. Most countries today require you to have an auto insurance while on road in your vehicles. If you have an accidental car crash, a total repair could cost you a fortune. On the other hand, a little scratch on your Land Cruiser might also soar up your bills to a high. Whether or not you need an auto insurance mostly depends on the type of car you own. If you have an expensive car and a little repair could wipe you out financially, you should very well go in for a buying an all-inclusive and crash insurance which could protect you against any and every harm done to your vehicle.

Introduction of insurance company

Introduction to insurance companies an accident or emergency can cripple you financially to prepare yourself use the guide to learn what type of coverage insurance companies offer and how to pick best policy for your budget.General insurance companies have willingly castrated to these increasing demands and have offered plethora of insurance covers that almost cover any thing under the sun. Any insurance other than life insurance falls under the classification of general insurance it comprises

Personal insurance such as accidents policy health insurance and liability insurance which covers legal liabilities. Insurance of property against fire theft burglary terrorism natural disasters etc Errors and omissions insurance for professional and credit insurance etc Insurance of motor vehicle against damage of accidents and theft

Classification of Indian Insurance Industry

General Insurance is also known as Non-Life Insurance in India. There are totally 16 General Insurance (Non-Life) Companies in India. These 16 General Insurance companies have been classified into two broad categories namely:

1. PSUs (Public Sector Undertakings) These insurance companies are wholly owned by the Government of India. There are totally 4 plus in India namely: National Insurance Company Ltd Oriental Insurance Company Ltd The New India Assurance Put Ltd United India Insurance Company Ltd 2. Private Insurance Companies:There are totally 12 private General Insurance companies in India namely:o Apollo DKV Health Insurance o Bajaj Allianz General Insurance Co. Ltd o Cholamandalam MS General Insurance Co. Ltd

o HDFC Ergo General Insurance Co Ltd. o ICICI Lombard General Insurance Ltd o Iffco Tokio General Insurance Pvt Ltd. o ***Some Facts in Insuarance Sector Insurance Act, 1938 In 1938, with a view to protect the interest of insuring public, earlie legislation(1928) was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for detailed and effective control over the activities of insurer. For the first time in the history of insurance in India, the whole business was brought under a unified system of control and its structure strengthened by statutory regulations. Weaker elements were weeded out; indiscriminate promotion was checked and speculative insurance was eliminated. The best proof the soundness of the law was the effective check on large scale liquidations which had marred the name of insurance in the thirties. In due course, various amendments were made in the Indian Insurance Act 1938 in subsequent years to improve the regulatory mechanism. The Act of 1938, which in many respects codified and modernized the laws relating to insurance in the country, suggest the same noteworthy changes in regulation and organization of business. It was considerable step forward in the direction to envelop all forms of insurance. Malhotra Committee In 1993, the first step towards insurance sector reforms was initiated with the formation of Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra. The committee was formed to evaluate the Indian insurance industry and recommend its future direction with the objective of complementing the reforms initiated in the financial sector. Key Recommendations of Malhotra Committee Structure Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.Competition Private Companies with a minimum paid up capital of Rs.1billion should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a single Entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. 5

 Only one State Level Life Insurance Company should be allowed to operate in each state. Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance should be made independent. Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company. Customer Service LIC should pay interest on delays in payments beyond 30 days Insurance companies must be encouraged to set up unit linked pension plans. Computerisation of operations and updating of technology to be carried out in the insurance industry. Malhotra Committee also proposed setting up an independent regulatory body The Insurance Regulatory and Development Authority (IRDA) to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. Insurance sector in India was liberalized in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. There is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the insurance sector has led to rapid growth of the sector. Presently, there are 16 life insurance companies and 15 non-life insurance companies in the market. The potential for growth of insurance industry in India is immense as nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be well below international standards.

Regulator Of Insurance Industry In India : IRDA The Insurance Regulatory and Development Act of 1999 were set out as follows. To provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972. The Act effectively reinstituted the Insurance Act of 1938 with (marginal) modifications.

 Whatever was not explicitly mentioned in the 1999 Act referred back to the 1938 Act? (1) It specified the creation and functioning of an Insurance Advisory Committee that sets out rules and regulation. (2) It stipulates the role of the Appointed Actuary. He/she has to be a Fellow of the Actuarial Society of India. For life insurers the Appointed Actuary has to be an internal company employee, but he or she may be an external consultant if the company happens to be a non-life insurance company. The Appointed Actuary would be responsible for reporting to the Insurance Regulatory and Development Authority a detailed account of the company. (3) Under the Actuarial Report and Abstract, pricing of products have to be given in detail. It also requires details of the basic assumptions for valuation. There are prescribed forms that have to be filled out by the Appointed Actuary including specific formulas for calculating solvency ratios. (4) It stipulates the requirements for an agent. For example, insurance agents should have at least a high school diploma along with training of 100 hours from a recognized institution. (5) Under Assets, Liabilities, and Solvency Margin of Insurers, the Insurance Regulatory and Development Authority has set up strict guidelines on asset and liability management of the insurance companies along with solvency margin requirements. Initial margins are set high (compared with developed countries). The margins vary with the lines of business. Life insurers have to observe the solvency ratio, defined as the ratio of the amount of available solvency margin to the amount of required solvency margin: (a) the required solvency margin is based on mathematical reserves and sum at risk, and the assets of the policyholders fund; (b) the available solvency margin is the excess of the value of assets over the value of life insurance liabilities and other liabilities of policyholders and Shareholders funds. (6) It sets the reinsurance requirement for (general) insurance business. For all general insurance, a compulsory cession of 20% regardless of line of business to the General Insurance Corporation, the designated national reinsurer was stipulated. (7) Under the Registration of Indian Insurance Companies, it sets out details of registration of an insurance company along with renewal requirements. For renewal, it stipulates a fee of one-fifth of one percent of total gross premium written direct by an insurer in India during the financial year preceding the year. It seeks to give detailed background for each of the following key personnel: Chief Executive, Chief Marketing Officer, Appointed Actuary, Chief Investment Officer, Chief of Internal Audit and Chief Finance Officer. Details of sales force, activities in rural business and projected values of each line of business are also required.

 (8) Under Insurance Advertisements and Disclosure, details of insurance advertisement in physical and electronic media has to be detailed with the Insurance Regulatory and Development Authority. The advertisements have to comply with the regulation prescribed in section 41 of the Insurance Act, 1938. The Act of 1938 says, No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurer. (9) All insurers are required to provide some coverage for the rural sector. It is called the Obligations of Insurers to Rural Social Sectors

GOVT COMPANY LIC (LIFE INSURANCE Corporation)

Date of Establishment 1 Sep. 1956 Address 1st Floor,West Wing, Mumbai Do-Iv, Yogakshema, Jeevan Bima Marg, Mumbai - 400 021, India Branches 8 Zonal Offices and 101 Divisional Offices Management Team T.S. Vijayan - Chairman D.K. Mehrotra - MD, LIC Thomas Mathew T - MD, LIC A K Dasgupta - MD, LIC Arun Ramanathan - Secretary, Financial Services, Dept. of Financial Services, Ministry of Finance, Govt of India
5

Sindhushree Khullar - Addl. Secretary, Dept of Economic Affairs, Ministry of Finance Yogesh Lohiya - Chairman cum MD, GIC of India T.C. Venkat Subramanian - Chairman & MD, Export Import Bank of India. Overview The largest life insurance company in India, Life Insurance Corporation is fully owned by the government. It provides individual life insurance, group insurance and pension plans. Its subsidiaries include Life Insurance Corporation of India International, LIC Nepal, LIC Lanka, LIC Housing Finance and LICHFL Care Homes. It has over 12 million policy holders and over 9 lakh agents. It has underwritten more than 120 million policies. LIC saw computers in 1964. Today the company is on the Internet and is utilizing Information Technology in servicing its clients. It has bagged various award including Loyalty Awards 2008 in Insurance Sector, NDTV Profit Business Leadership Award 2007, CNBC Awaaz Consumer Awards 2007 and Outlook Money NDTV Profit Awards 2007. LIC provides a rewarding career as sales agents. It offers world class training, freedom to work and unmatched financial strength.

Types of life insurance

There are two basic forms of life insurance term life and permanent life, the latter of which comes in several flavors. Heres a quick breakdown of the basic policy types: 1. Team life 2. whole life 3. universal life

TEAM LIFE
Term life is the simplest and (typically) cheapest form of life insurance. Term life is designed to provide coverage for a fixed period of time, such as 5, 10, or 20 years. The premium for the term policy is guaranteed for the duration of the term; if it is a renewable policy, the premium will increase with each renewal. The premiums for renewals are generally guaranteed when the original policy is issued. Because term life policy is for a specific period of time and the payout does not increase, the overall cost of term life insurance is usually very low.

Whole life
policies, for example, are designed to provide you and your loved one with coverage until your death. Unlike term life, there are no fixed periods for whole life coverage. Whole life is sometimes referred to as cash value insurance because it builds cash value over your lifetime. Whole life coverage contains both investment and insurance components. The investment portion invests your premiums, earns interest, and accumulates a cash value. On the other hand, the policy also has a stated insurance coverage amount that is paid upon the death of the insured.

Universal life
is a popular option that acts like whole life. It is a renewable policy the investment component, premiums, and death benefits can be renewed and changed based upon the policy owners needs. The policy owner has flexibility over the policy money can be moved between the insurance and investment components of the policy. The premiums, unlike whole life policies, can be paid out of interest from the accumulated savings.

Products line Life Insurance Corporation

Insurance Plan

Pension Plans

Unit Plan

Special Plan

Group Scheme

Insurance Plans:
LIC understands that each individual is different from others and also their needs and requirements are not the same. This applies even to their insurance and other financial needs. LIC as such has designed various products which can be customized according to individual's needs and helps the policy holders to choose the best product for themselves. Under individual plans further sub categories have been created. A-Children Plans:
LIC- Jeevan Anurag LIC- CDA Endowment Vesting At 21 LIC- CDA Endowment Vesting At 18 LIC- Jeevan Kishore LIC- Child Career Plan

B-Plans For handicapped Dependents

LICJeevan Aadhar LICJeevan Vishwas

C-Endowment Assurance Plans:

LIC-The Endowment Assurance Policy LIC-The Endowment Assurance Policy-Limited Payment

LIC-Jeevan Mira(Double Cover Endowment Plan) LIC-Jeevan Mitra(Triple Cover Endowment Plan) LIC-Jeevan Anand LIC-New Janaraksha Plan LIC-Jeevan Amrit

Pension Plans:
Pension Plans helps in providing financial security to an individual after his retirement so that they are able to lead the same standard of life and that too without any tension.

LIC-Jeevan Nidhi LIC-Jeevan Akshay-V LIC-New Jeevan Dhara-I LIC-New Jeevan Suraksha-I

Unit Plans:
Unit plans are meant for those people who aim to earn a good return on their investments and also reap the benefits of an insurance cover. It also helps in getting tax benefit on the invested sum.
LIC-Market Plus (Closed for Sale) LIC-Profit Plus LIC-Fortune Plus

LIC RISKS AND GAINS

RISKS 1.
The traditional model has changed

2. Concern for out living retirement assets is becoming a greater concern than premature death. 3. This has caused growth in assets accumulation products 4 investment risks and competition with banks and securities firms is significant for insures

GAINs
1. The life insurance industry recorded 68 per cent increase to Rs 25,399 core in new business premium collected in March 2010 compared to Rs15, 090 cores in the corresponding month in 2009.

2.Insurers witnessed a spurt in business during the last month of the financial year with contributions over 23 per cent of the total collection in 2009-10 as individuals opted to purchase covers to avail tax benefits.
3. Private players registered a whopping 47 per cent growth in the new business premium while state-owned Life Insurance Corporation of India (LIC) posted 83 per cent increase in new business income in March.

4. Last quarter contribute to 40 per cent of sales. But March experienced the maximum inflow, said a senior executive of a life insurance company.

PRIAVATE COMPANY

ICICI PRUDENTIAL

Introduction
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, one of the foremost financial services companies of India and Prudential plc, one of the leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector life 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. 4,780 corers (as of September 30, 2010) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 1, 2010 to September 30, 2010, the company garnered Rs 7,267 cores of total premiums and has underwritten over 10 million policies since inception. The company has a network of over 1,500 offices and over 1, 60,000 advisors, as on September 30, 2010. The company has assets held over Rs. 65,000 cores as on September 30, 2010. Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has been one of the earliest private players. Since the time, ICICI Pru Life has been the leader in terms of market share as indicated by the IRDA (Insurance Regulatory and Development Authority, the regulator for Indian Insurance Industry) In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK Healthcare to settle insurance claims of its users.
ICICI Prudential's life insurance products may be loosely categorized under four forms- Life Plans (further categorized into Term Plans and Wealth Plans), Child Plans, Retirement Plans and Health Plans.

Overview ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over 2100 branches (inclusive of 1,116 micro-offices), over 290,000 advisors; and 18 bancassurance partners. ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India. Our 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 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. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth. Our values : 5

Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success. Mangement Profile: Board of Director The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Ms. Chanda Kochhar, Director Mr. Barry Stowe, Director Mr. Adrian OConnor, Director Prof. Marti G. Subrahmanyam, Director Mr. Mahesh Prasad Modi, Director Ms. Rama Bijapurkar, Director Mr. Keki Dadiseth, Director Ms. Shikha Sharma, Managing Director Mr. N.S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director Management Team The ICICI Prudential Life Insurance Company Limited Management team comprises reputed people from the finance industry both from India and abroad. Ms. Shikha Sharma, Managing Director & CEO Mr. N. S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director Ms. Anita Pai, Executive Vice President Customer Service & Technology Dr. Avijit Chatterjee, Appointed Actuary Mr. Puneet Nanda, Executive Vice President & Chief Investment Officer

PRODUCTS OF ICICI PRUDENTIAL LIFE INSURANCE

ICICI has grouped its various products into two main categories. Under these:

Categories there are further sub-categories. They are 1. Individual plans 2. group plan

Individual Plans:
ICICI Prudential Life Insurance has designed various customized and innovative insurance products to meet the various needs of the customer which keeps on changing with the changing phases of life. Theirs are various riders available which can be adding to products to make them utmost customized.

A-Savings & Wealth Creation Solutions

1. ICICI Prudential Life Insurance-Save'n'Protect

2. ICICI Prudential Life Insurance-CashBakLifeTime Gold & Lifetime Plus 3. ICICI Prudential Life Insurance-Life Link Super. 4. ICICI Prudential Life Insurance-Premier Life GoldInvestShield Life New 5. ICICI Prudential Life Insurance-Invest Shield Cashbook 6. ICICI Prudential Life Insurance-Life Stage RP

B-Protection Solutions
1. ICICI Prudential Life Insurance-Lifeguard 2. ICICI Prudential Life Insurance-Home Assure

C-Education insurance plans

1. ICICI Prudential Life Insurance-Smart Kid

D-Retirement Solutions
1. 2. 3. ICICI Prudential Life Insurance-Forever Life ICICI Prudential Life Insurance-Lifetime Super Pension ICICI Prudential Life Insurance-Life Link Super Pension

4. ICICI Prudential Life Insurance-Immediate Annuity 5. ICICI Prudential Life Insurance-Premier Life Pension

E-Health Solutions
1.

ICICI Prudential Life Insurance-Health Assure Plus ICICI Prudential Life Insurance-Cancer Care. ICICI Prudential Life Insurance-Cancer Care Plus.

2. 3. , 5.

4. ICICI Prudential Life Insurance-Diabetes Care. ICICI Prudential Life Insurance-Diabetes Care Plus

Group Plans:
ICICI Prudential Life also offers Group Insurance Solutions for companies which aim to provide tension free working environment for their employees.
1. 2. 3. 4. ICICI Prudential Life Insurance-Group Gratuity Plan ICICI Prudential Life Insurance-Group Superannuation Plan ICICI Prudential Life Insurance-Group Immediate Annuities ICICI Prudential Life Insurance-Group Term Plan

ICICI PRUDENTIAL INSURANCE RISKS AND ANALAYSIS RISKS

1. The past performance of other funds of the Company is not necessarily Indicative of the future performance of any of these funds. 2. The investments in the funds are subject to market and other risks and There can be no assurance that the objectives of any of the Funds will be achieved. 3. The premium paid in Unit Linked Life Insurance policies are subject to Investment risks associated with capital markets and debt markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the Capital market and the insured is responsible for his/her decisions

Gains
1. ICICI Pru Lifetime Maxima with Trigger Portfolio Strategy allows investors to protect gains made through their equity market investments from any future market volatility. In addition, you are also provided with an insurance cover.
2. More than 100% allocation to funds on premium payment from the 6th policy year onwards

3. There will be additional allocation of units @ 2% of annual premium every year

starting from the 6th year.

COMPERATIVE OF ANALAYSIS OF LIC &ICICI PRUDENTI

Insurance is an upcoming sector in India the year 2000 was a landmark year of the insurance industry in this year the life insurance industry was liberalized after more than fifty years insurance sector was a monopoly with l;ic as the only company a public sector enterprise but onwards the market opened up and there are many private players competing the market the market shall of lice have been considerable reduced in the last five years industry in terms of products market channels and advertisement of products agent training and customers services etc The entry of foreign MNCs and the conductive business environment fostered by the government, it is no wonder that the re-entry of private insurance has marked a second coming for the sector. In just five years, the sector has undergone a makeover, offering more choice, better services, quicker settlement, tighter regulation and greater awareness s the environment become more and more competitive and services and products become alike, creating a differentiation is becoming extremely tough.

.Understanding the needs of customers and offering them superior products

and service

o Leveraging technology to service customers quickly, efficiently and conveniently o Developing and implementing superior risk management and investment o Strategies to offer sustainable and stable returns to our policyholder

CONCLUSION
The financial markets have continued to witness

Unprecedented liberalization, growth and reforms over the last decade prompted by Regulatory compulsions and rapid integration between domestic and global markets. And As a result, one has seen substantial growth in the number of financial firms (insurance Companies, mutual funds, brokerages, banks etc.) And in the number and variety of Financial products and services offered by them. As the need of the people is changing so Is changing the investment habits of the people and this has brought in a spate of new Products and schemes where people can invest. The concept of insurance as an Investment option has arrived where people first identify the varying needs of money Then converts the needs into specific amount of money and time required to achieve the Objective of investments plans.

In addition to the above, companies should also innovate to come Up with better products that would suit the Indian population and should also try to Market and sell their products through new channels of distribution that can be effective Selling their products to the masses. People should identify their needs and then decide On the type of policy they want to invest in. insurance is a good investment option for Those people who do not know where to invest and who do not want to the risk of capital Erosion But, people who are financially savvy can opt for term insurance and invest the Rest other options that may give them higher return