Final Insurance Project Report

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A

PROJECT REPORT

ON

INSURANCE SERVICE

UNDER THE GUIDANCE OF

Mr. Ajayraj Vyas

Mr.Ankur Amin

SUBMITTED BY:

PATEL YOGESH (56)

PATEL SUKETU (50)

PATEL ARPAN (04)

IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE

OF

BACHELOR OF BUSINESS ADMINISTRATION

IN

INDUSTRY AWARENESS AND EXPOSURE - III

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EVOLUTION OF SERVICE

At the dawn of modern human history, widely dispersed groups of

tightly knit kin, whom we today refer to collectively as hunter-gatherers, relied almost exclusively on clan relatedness as their only

bulwark against the ever- present risk of death, debilitating injury,

and starvation. For these early ancestors, the concept of risk can

be thought of almost exclusively in terms of the physical persons

of individuals, mitigated by the guarantee of personal and kin

relationships, rather than objects and possessions.

The later development of agrarian/pastoral societies necessitatedalmost everywhere the development of the notion of private

property as the agricultural revolution made possible the storage

of food and hence more complex societies. The efficiency gains

accruing to these new social structures enabled specialization of

labor into various trades, such as merchants, warriors, and

blacksmiths, each requiring tools - of trade assets.1 The price of this

progress was that individual self - interest was no longer so closely

aligned with that of the collective.

Ever since, individuals have recognized their need to mitigate risks

that have the potential for ruin, either as a result of the assets they

hold or simply by the fact of their existence in this world. In other

words, a means was required for individuals to achieve at least a

primitive form of financial diversification. Because risk is

nonfungible at the individual level but the outcome of loss is

transferable in aggregate, individuals exposed to losses throughcommon risks naturally formed themselves into groups to

aggregate those risks, price the risk, and eventually even

sell it to investors.

Perceptions of risk and the institutional arrangements that have

developed in response closely mirror philosophical advances in

society s stance on the sanctity of the persons of individuals. Risk is

commonly understood to exist and require management at thelevel of the individual rather than the group. The market economy

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is the ultimate expression of this freedom to transact, preservation

of which requires the existence of regulations such as Solvency II to

protect individuals rights. While it is apparent that Solvency II and

similar regulations are implemented by national regulators acting

as agents on behalf of an international body and bestowed on

organizations across an industry, the ultimate goal of suchregulations is to promote a socially optimal balance between the

profit motive of organizations and individuals rights. Article 27 of

the Solvency II Directive states:

The main objective of (re)insurance regulation and supervision is

adequate policyholder protection. Other objectives such as financial

stability and fair and stable markets should also be taken into

account but should not undermine that main objective.

A BRIEF HISTORY OF THE INSURANCE SECTOR

The business of life insurance in India in its existing form started in India

in the year 1818 with the establishment of the Oriental Life Insurance

Company in Calcutta. Some of the important milestones in the life

insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first

statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the

government to collect statistical information about both life and non-life

insurance businesses.

1938: Earlier legislation consolidated and amended to by the InsuranceAct with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over

by the central government and nationalised. LIC formed by an Act of

Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore

from the Government of India. The General insurance business in India,

on the other hand, can trace its roots to the Triton Insurance Company

Ltd., the first general insurance company established in the year 1850 in

Calcutta by the British.

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Some of the important milestones in the general insurance business in

India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to

transact all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of

India, frames a code of conduct for ensuring fair conduct and sound

business practices.

1968: The Insurance Act amended to regulate investments and set

minimum solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalisation) Act, 1972

nationalised the general insurance business in India with effect from 1 st

January 1973. 107 insurers amalgamated and grouped into four

companies viz. the National Insurance Company Ltd., the New India

Assurance Company Ltd., the Oriental Insurance Company Ltd. and the

United India Insurance Company Ltd. GIC incorporated as a company.

INSURANCE INDUSTRY: CLASSIFICATION

Fire Insurance Marine Insurance MediclaimMotor Vehicle

INSURANCE

LIFE INSURANCE GENERAL INSURANCE

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MAJOR PLAYERS

MAJOR INDIAN PLAYERS IN INSURANCE SECTOR:

Life Insurance General Insurance

Life Insurance Corporation of

India.

General Insurance Corporation of

India.

1. Oriental Insurance Company

Ltd.

2. New India Assurance

Company Ltd.3. National Insurance Company

Ltd.

4. United India Insurance

Company Ltd.

New Entrants

ICICI Prudential Life Insurance

Ltd.

Bajaj Allianz General Insurance

Company Ltd.

Tata AIG Life Insurance

Corporation Ltd.

Reliance General Insurance

Company Ltd.

ING Vysya Life Insurance

Corporation Ltd.

Tata AIG General Insurance

Company Ltd.

Om Kotak Mahindra Life

Insurance Corporation Ltd.

Royal Sundaram Alliance Insurance

Company Ltd.

MAJOR GLOBAL PLAYERS IN INSURANCE SECTOR:

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Position

Global

position

(all

industries)

Company Country

Sales

(USD

bil.)

Profits

(USD

bil.)

Assets

(USD

bil.)

Market

value

(USD

bil.)

1 9ING

GroupNetherlands 197.93 12.65 1932.15 75.78

2 14 Allianz Germany 139.12 10.9 1547.48 80.3

3 18AIG

GroupUSA 110.06 6.2 1060.51 118.2

4 20

AXA

Group France 151.7 7.75 1064.67 70.33

5 62Generali

GroupItaly 102.16 3.17 486.43 60.79

6 65

Zurich

Financial

Services

Switzerland 55.05 5.63 387.67 45.76

7 70Munich

Re

Germany 67.57 5.63 306.03 37.34

8 73 MetLife USA 53.01 4.32 558.56 41.32

9 91Manulife

FinancialCanada 33.08 4.01 178.58 59.18

10 101 Aviva United

Kingdom81.83 2.65 633.91 31.9

THREE MAJOR PLAYERS OF INSURANCE SECTOR IN INDIA

1)LIC2)TATA AIG3) ICICI PRUDENTIAL LIFE INSURANCE

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LIC

COMPANY PROFILE

The Life Insurance Corporation of India (LIC) is the largest state-

owned life insurance company in India, and also the country's largest

investor. It is fully owned by the Government of India. It also funds closeto 24.6% of the Indian Government's expenses. It has assets estimated

of 13.25 trillion (US$295.48 billion). It was founded in 1956 with the

merger of 243 insurance companies and provident societies.

Headquartered in Mumbai, financial and commercial capital of India, the

Life Insurance Corporation of India currently has 8 zonal Offices and 113

divisional offices located in different parts of India, around 3500 servicing

offices including 2048 branches, 54 Customer Zones, 25 Metro Area

Service Hubs and a number of Satellite Offices located in different cities

and towns of India and has a network of 13,37,064 individual agents, 242

Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on

31.3.2011) for soliciting life insurance business from the public.

The slogan of LIC is "Zindagikesaathbhi,Zindagikebaadbhi"

The Oriental Life Insurance Company, the first corporate entity in India

offering life insurance coverage, was established in Calcutta in 1818 by

Bipin Bernard Dasgupta and others. Europeans in India were its primarytarget market, and it charged Indians heftier premiums. The Bombay

Mutual Life Assurance Society, formed in 1870, was the first native

insurance provider. Other insurance companies established in the pre-

independence era included

Bharat Insurance Company (1896)

United India (1906)

National Indian (1906) National Insurance (1906)

Co-operative Assurance (1906)

Hindustan Co-operatives (1907)

Indian Mercantile

General Assurance

Swadeshi Life (later Bombay Life)

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The first 150 years were marked mostly by turbulent economic

conditions. It witnessed, India's First War of Independence, adverse

effects of the World War I and World War II on the economy of India, and

in between them the period of world wide economic crises triggered by

the Great depression. The first half of the 20th century also saw a

heightened struggle for India's independence. The aggregate effect ofthese events led to a high rate ofbankruptcies and liquidation of life

insurance companies in India. This had adversely affected the faith of the

general public in the utility of obtaining life cover.

The Life Insurance Act and the Provident Fund Act were passed in 1912,

providing the first regulatory mechanisms in the Life Insurance industry.

The Indian Insurance Companies Act of 1928 authorized the government

to obtain statistical information from companies operating in both life

and non-life insurance areas. The subsequent Insurance Act of 1938

brought stricter state control over an industry that had seen several

financially unsound ventures fail. A bill was also introduced in the

Legislative Assembly in 1944 to nationalize the insurance industry.

TYPES OF PRODUCTS LIC OFFERS

1)LIFE INSURANCE2)PENSIONS

3)MUTUAL FUND

Products Offered by LIC

Children's Policy

KomalJeevan - Plan No. 159

Children Deferred - Plan no.41

Jeevan Kishore - Plan no.102

JeevanChhaya - Plan no.103

Marriage Endowment/Educational Annuity - Plan No. 90

JeevanAnurag - Plan no.168

Endowment Policy

Endowment with Profits - Plan no.14

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Limited Payment Endowment with Profits - Plan no.48

JeevanMitra - Plan no.88

New JanaRaksha Policy - Plan no.91

JeevanAnand Plan no. 149

JeevanMitra Triple Cover - Plan no.133

Group Insurance Policy

JanashreeBimaYojana

Group Insurance Scheme in lieu of EDLI

Group (Term) Insurance Scheme

Group Savings Linked Insurance Scheme

Group Superannuation Scheme

Group Mortgage Redemption Assurance Scheme

ShikshaSahayogYojana

Joint Life Policy

JeevanSaathi - Plan no.89

Money Back Policy

Money Back with Profit - Plan no.75

New Money Back - Plan no.93

JeevanSurabhi 15 yrs - Plan no.106

JeevanSurabhi 20 yrs - Plan no.107

JeevanSurabhi 25 yrs - Plan no.108

JeevanBharati Plan No 160

JeevanSamriddhi Plan No 154, 155, 156 157

BimaBachat- Plan no.175

Pension Plans or Annuities

New JeevanDhara - Plan no.148

New JeevanSuraksha Plan no. 147

JeevanAkshay II Plan no. 163

JeevanNidhi Plan no. 169

JeevanAkshay V Plan no. 183

Special Plans

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Term Assurance - Plan no.43

Mortgage Redemption - Plan no.52

JeevanAadhar - Plan no.114

Market Plus - Plan No 181

JeevanVishwas Plan No. 136

JeevanSaral Plan No. 165JeevanPramukh Plan No. 167

BimaNivesh 2005 Plan No 171

Money Plus-Plan No 180

Term Policy

Convertible Term Assurance - Plan no.58

New BimaKiran

Term Assurance

AnmolJeevan I Plan No- 164

AmulyaJeevan-Plan No-177

Whole Life Policy

Whole Life with Profits - Plan no.2

Limited Payment Whole Life with Profits - Plan no.5

Single Premium Whole Life - Plan no.8JeevanTarang- Plan no.178

PRODUCT DEVELOPMENT

In a competitive market, there is a greater need to provide insurance

products that meet the needs of our customers. LIC therefore offers a

wide variety of products which fulfills the needs of different segments of

the society. As at the end of the financial year 2009-10, the Corporation

had 54 plans available for sale.

During the year Corporation introduced 5 new plans viz. JeevanSathi Plus,

JeevanMangal,Health Protection Plus, JeevanNischay& Wealth Plus Plan,

out of which JeevanNischay& Wealth Plus were close ended plans.

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MAJOR CUSTOMERS

The first thing is to target the right audience by focusing on selected

groups of customers, but don't worry, appealing to more than one

group of customers will attract more buyers interested in your

unique product. Customer diversity is the reason to appeal to

different groups of customers, because a broader market expands

knowledge of the product. This is why it is necessary to know about

customer lifestyles. Compiling a list of customers who buy small

appliances is one type of buying habit attributed to certain

customers. They are usually individuals who work outside the

home. Other target audiences are customers who work at home,

those with children,singles, and retired customers. Whatever their

needs may be, they all seek to make improvements in their lifestyle.

Gender is also another consideration in customer-focused

marketing. Women are important customers who not only work but

take care of families. They make a great many purchases not only

for themselves but for others. Singles usually rent and want

affordable furnishings; whereas, married customers own their own

homes and want new furnishings. This may not be true for every

single or married person, but historically, it is a trend. It is

important to know that marital status is one consideration, but all

customers seek affordable and useful products.

Age groups are important and over the years, studies have shown

that succeeding generations spend money differently. According

to Lets Talk Business, Issue 73, September 2002, customers born

between 1977 and 1994, with an average age of twenty-one, spend

most of their money on education and personal appearance. Olderadults, or older boomers, whose average age is around fifty, spend

money on upgrading their homes and taking vacations. The empty-

nesters or seniors, spend more money on insurance, cars, and

furniture. The chart illustrates other groups and also includes

generation X, or the thirty something group, who spends money on

food for their families.

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MARKET COVERAGE :

Insurance giant LIC had a healthy market share of 74.18 per cent in the

last financial year with a premium collection of Rs 55,934.6 crore while

nearly a dozen private insurers accounted for the rest 25.82 per cent.

However, in terms of number of new policies, the state- owned company

enjoyed a much better market share of 82.83 per cent with 3.82 crore

new policies, LIC Chairman T S Vijayan said in his presentation of the

financial performance in 2006-07.

"In total LIC planned to invest around Rs 117 lakh crore this financial year

of which Rs 52,000 crore had been already invested," T S Vijayan said.

LIC's investment in the capital market as on March 31, 2007 stood at Rs

1,24,643 crore and it intended to invest between Rs 10,000 to 12,000

crore in equities and preference shares in the current fiscal.

Till March 31, 2007 LIC's total investment was of Rs 6,13,266.58 crore of

which 2,72,497.82 crore was invested in Central Government securities,

Rs 64,284.80 crore in State Government and other approved securities, Rs

73,746 crore in infrastructure and social investments and Rs 44,217 crorein bond and debentures.

The popular unit-linked insurance plans (ULIP) contributed 80 per cent in

LIC's new business premium of Rs 39,541 crore as compared to the

traditional business products.

PRICING POLICY:

PREMIUMS of some of the policies of Life Insurance Corporation (LIC) are

set to go up. The southward march of interest rates has made LIC rethink

its investment strategies and pricing of policies.

The institution is considering re-pricing some of its insurance plans.

Top LIC sources told Business Line that even though most of the policies

would not be affected, the premiums of some of the plans would be

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increased. While refusing to divulge which policies would be re-priced,

they, however, said the increase would be o nly on new policies.

According to the sources, LIC's rate of returns in terms of interest on

investments, which is a major factor in pricing policies, has come down.

Over the past year, the interest rates have eased considerably. Twenty-year Government stock is now going at 10.25 per cent, and at the short-

end, three-year gilts fetch under 8.5 per cent. This is in comparison with

YTMs of 11.60 per cent for 20-year debt and 10 per cent at the shorter

end a year ago.

LIC's investments in the current year would be of the order of Rs 55,000

crore. The squeeze on returns has forced the institution to rework its

conservative investment strategy. LIC, which was only a buyer of

securities and equities, is now becoming more dynamic. The corporation

is getting aggressive in the secondary markets, both capital and debt.

The sources said, ``We are actively playing the markets. Now our effort is

to maximise returns, so we have also started booking profits, something

we hardly did earlier. We have the team, strategy, and more important,

the money to make sustained profits. ''

The aim is to increase returns from the secondary markets to ``subsidise''premiums. There are two major factors that go into the pricing of a policy

-- returns from investments and mortality rate. The sources said even if

there was a slight change in mortality rate, especially in places where the

volumes are less, it created an aberration.

MARKETING POLICY

DIRECT MARKETING

In the financial year 2009-10 Corporation took a new initiative of

Direct Marketing.

This vertical was started with an objective of "CREATING NEW

SYSTEMS FOR BUSINESS GENERATION, SALES PROCESS

MONITORING AND BUSINESS PROCESSING WITH A VIEW TO REACH

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OUT TO UNTAPPED MARKETS AND PROVIDE IMPROVED BUYING

EXPERIENCE TO CUSTOMERS".

In a short span of 8 months, the channel has expanded and has

presence at 21 centers with 542 professionally trained Direct Sales

Executives (DSEs) to provide financial advice to prospectivecustomers.

During the year 2009-10, main focus of the channel was setting up

systems and processes. A state of art Lead Management System has

been established to provide easy access to prospective customers

to reach out to LIC to buy a policy. Such leads captured through our

websitewww.licindia.inare passed on to well-trained DSEs on real

time basis who can contact the customer instantly.This channel procured a New Business of 25.55 crore under 8887

polocies giving average FP per policy as 28,759.

AGENTS

a) Agency Strength

The total number of agents on our roll is 14,02,807as at 31.03.2010 as

against 13,44,856 as on 31.03.2009. The number of active agents is13,40,067as at 31.03.2010 as compared to 12,75,611 as on 31.03.2009.

b) Agents' Club Membership

In order to motivate and recognize high performers amongst agents a

premium club called the Corporate Club was formed w.e.f the

membership year 2004-2005.

The other 5 clubs which were formed to recognize agents who perform

consistently year after year, viz. Chairman, Zonal Manager, DivisionalManager, Branch Manager and Distinguished Agents have shown good

growth.

INFORMATION TECHNOLOGY

The year 2009-10 saw the consolidation of the major technology

initiatives such as the Corporate Active Data Warehouse (CADW),

Enterprise Document Management System (EDMS) and the Portal

resulting in tremendous value addition for our customers. This year also

saw the initiation of the modernizationof our Core Insurance system, the Front End Applications Package (FEAP).

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a) New channels for premium Payment:-

It has been our endeavor to bring more and more services to the

doorsteps of the customer. As part of these initiatives more channels

were added this year to facilitate payment of renewal premium by ourcustomers. A major addition was the Premium Point where policy holders

could pay premium 24 x 7 and get a final receipt from the offices of

Empowered LIC Agents across the country. Nearly 12000 Empowered

Agents and 700 Senior Business Associates (SBAs) were collecting

premium from the policy holders by the end of the year. We also

introduced SMS based enquiry services using which our customers can

now get information on the date of the next installment of premium.

Nomination, bonus, loan and revival details by sending a simple sms:asklic policy no premium/ nom/bonus /loan /revival to 56677.

b) Corporate Active Data Warehouse (CADW):-

LICs CADW is one of the largest life insurance customer databases in the

world with records of more than 400 million policies being stored in it.

The Warehouse has enabled LIC to launch many customer focused

campaigns like the customer contact programs and Gold Club customercampaigns launched all over the country in 2009-10. Another major

achievement has been to send a single notice for premium falling due in

the same month for various polices of an individual customer. The project

was also successfully used for generating marketing leads and running a

host of targeted marketing campaigns.

c) Enterprise Document Management System (EDMS):-

LIC has implemented Enterprise Document Management System (EDMS)

in its offices to digitize the customer records and to offer Anytime

Anywhere service to its customers.

After all the policy records are scanned it will be possible to offer various

services like loan disbursement and claims payment from any branch in

the country irrespective of the branch where the policy is serviced.

average of 16 documents in each docket) and enabled for online access

from any office. This has helped us to improve the quality of customerservice quite substantially. In addition, the use of the work-flow

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automation feature has helped to greatly speed up inter office

communication and decision making processes. As a socially committed

organization, we have also made use of the electronic archival feature of

EDMS to do away with office copies and thereby, reduce the usage of

paper to a large extent.

d) Network - achievement during 2009-10

1. New network architecture has been finalized and network hardware

has been installed and commissioned in approx 3000 SOs and BOs .The

leased lines connecting branches to

divisional offices are being up graded to 2Mbps; this will ensure fast data

transfer between the connected offices. The new concept of ISDN

connectivity has been introduced as back up link for branch offices.2. Network Implementation and Support Plan, which contains all the

details like IP addressing, physical connectivity of routers/ servers and so

on for uniformity and ease in troubleshooting was prepared. Online

Leased link requisition module has been developed for better

management of the leased link portfolio in the centralised billing with

BSNL. At presentthere are more than 3000 links which are being managed

at CO level.

FINANCIAL INFORMATION

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TATA AIG

COMPANY PROFILE

ABOUT TATA-AIG

Tata AIG Insurance Solutions is one of the leading insurance companies

that provide both life insurance as well as general insurance. This pioneer

company is a joint

collaboration between the American International Group, Inc. (AIG) and

Tata Group.

They own the company in the ratio of 26:74. It is a leading financial

institution that has carved a niche for itself all over the world. Tata AIGInsurance provides facilities to both corporate and individuals. Starting its

operations on April 1, 2001, it seeks to serve different categories of

people. It acquired its license for carrying out operations in India on

February 12, 2001. Tata AIG Insurance Solutions is one of the most

prestigious organizations in the business world. It employs thousands of

employees and offers various opportunities to people to build a

prospective career. As a leading name in the financial world, it identifies

the potential and experience of the individual. This insurance companyidentifies the clients needs and works accordingly. It stresses on

innovative aspect and opening of new markets. It believes in new

economy and latest Internet technology. Tata AIG Insurance offers a

number of products for the General Insurance holders. General insurance

products include:

Individual insurance

Small business insurance

Corporate insuranceTata AIG Insurance offers flexible life insurance to the individuals,

business organization and other association. For the corporate, there are

various insurance products like group pensions, employee benefits, work

place solutions and credit life. For the individuals, Tata AIG Insurance

offers various products for adults, children and for retirement planning.

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MAJOR PRODUCTS

PRODUCTS FOR ADULTS

The company has a slew of life insurance of plans for adults as follows.1. Life Assure Lifeline Plans: High coverage at an affordable cost

2. Life Assure Growth Plans: It is an Endowment policy which keeps your

money safe and has

it grow

3. Life Assure 21 years Money Saver: Cash payments at the end of every 3

years.

Life insurance coverage plus the flexibility of periodic payments.

4. Life Assure Golden Years Plan: It is an Endowment policy which givesSafety as well as returns.

5. Life Easy Retire: It is an Annuity plan with Return of Purchase Price

Single premium payment.

6. Life Invest Assure Health: It is a Unit linked investment plan and helps

to achieve financial goals along with a comprehensive health policy.

7. Life HospiCashBack: It gives multiple claims against unforeseen

hospitalization

expenses.8. Life Health Investor: Benefit on diagnosis of 12 critical illnesses. It

provides cover in case of unfortunate death.100% return of premium in

case of no claims.

9. Life Invest Assure II: Life cover plus high returns.

10. Life Invest Assure Apex: Unit-linked life insurance plan. Guaranteed

Maturity Unit Price.

11. Life Invest Assure Care: Non-participating unit linked insurance plan

Inbuilt Critical Illness benefit .12. Life Invest Assure Flexi: Unit linked endowment plan. Helps one

achieve financial goals

13. Life Invest Assure Gold: There is a flexibility to invest more money. It

takes care of emergency cash requirements

14. Life Life Plus: If you outlive the term get premium back. In case of

death by natural causes get sum assured.

15. Life MahaLife Gold: Good for retirement planning. Provides for steady

income and insurance coverage.16. Life Raksha: Large cover at a small premium.

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17. Life Shubh Life: Life insurance protection and high returns.

18. Life Health First: Covers health contingencies.

19. Life Health Protector: Covers cost of major surgery or treatment.

CHILDREN FUTURE PLANNING

To ensure your children lead happy and successful lives, its important toplan now so that they will have the financial support they need in the

future.

Tata AIG has a range of flexible insurance products to help you secure

your childrens financial future.

Tata AIG provides products for childrens which include the following:

Tata AIG Life Invest Assure Superstar

Tata AIG Life Invest Assure Superstar is a non- participating unit linked

endowment planthat allows you to secure a financial future for your child.

Tata AIG Life United UjjwalBhawishya Plus

This is a unit linked endowment plan which provides you the assurance to

realize yourchilds dreams.

Tata AIG Life Assure Career Builder

This money-back policy provides financial assistance at key stages of your

childs life, from education to their first steps into a new career.

Tata AIG Life Assure Educare at 18 & Tata AIG Life Assure Educare at 21This first of its kind juvenile endowment policy is geared toward funding

your childs

education. You can choose between Assure Educare 18 and Assure

Educare 21,

depending on your childs needs.

Tata AIG Life Assure 21 years Money Saver

This savings plan provides you with cash payments in the form of survival

benefits atregular intervals to fund your childs needs at critical milestones or

support your financial obligations. You get the dual benefits of life

insurance coverage plus the flexibility of periodic payments.

Tata AIG Life MahaLife Gold

This unique policy ensures that your child will have a steady income and

insurance

coverage for life! Premiums are payable only for the first 15 years.

Tata AIG Life Starkid

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An exceptional endowment policy that ensures you can afford to give

your child the very best for his career & marriage. Get more details like

Key features, Tax Benefits, Riders and Age Eligibility about any of above

mention products for children.

MICRO INSURANCE PLANSMicro Insurance is the process of delivering and servicing relevant and

affordable life

insurance products to the low-income socio economic strata. The focus of

Tata AIG

Lifes Micro insurance program is rural India, where traditionally the far-

flung, lower and lower middle-income segments have had limited access

to life insurance services.

How do Tata operate there?It operates in 11 states with a specific relationship management team for

each state. A dedicated & trained sales and marketing team manages the

front end of the Micro

insurance program. Its micro insurance distribution model collaborates

with NGOs

(Non-governmental organizations) and Rural organizations with

community level SHG (Self Help Group) women advisors who provide

insurance advisory services to the rural customers at their doorstep.The grassroots level agents explain the product details in the local

language of the

customer, thereby enabling the customer to make a decision. The training

programs,

brochures, contract documents, and application forms are available in 8

different

languages other than English and Hindi.

Cost of Micro Insurance plans:

Tata AIG Life Micro insurance plans are available with or without survival

benefits and with death benefits ranging from Rs.5,000 to Rs.50,000.

With premiums as low as Rs.5** per month, there is now an affordable

life insurance product for nearly every rural household in India.

Term Plans

/ 25

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Years Lifeline Plans, and Term to age 60 known as Assure Lifeline to Age

60

Money back Plans

Pension Plans

Health Plans

G Life Health First

- 5 Year Guaranteed Renewal Accident

and

Health Plan

Endowment Plans

Plans

Wholelife Plans

Annuity Plans

Children Plans

sure Educare at 21

Unit Linked Plans

Tata AIG Life Invest Assure SwarnaJeevan Plus

PRODUCT DEVELOPMENT

Designing micro-insurance policies requires intensive work and not just reduced prices of existing insurance policies. It requires among

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other things different marketing, distribution, and servicing channels.

Life micro-insurance is the easiest and widely offered cover. An insurer

would need to create a very attractive policy if they want to stay with

life micro-insurance. It is worth exploring other types of micro-

insurance as a means of attracting good partners. Crop insurance has

by and large proved unsuccessful. Health insurance is difficult becauseof the lack of private hospitals in poor rural areas. Weather indexing is

proving a possible insurance option.

MAJOR CUSTOMERS

The first thing is to target the right audience by focusing on selected

groups of customers, but don't worry, appealing to more than one group

of customers will attract more buyers interested in your unique product.Customer diversity is the reason to appeal to different groups of

customers, because a broader market expands knowledge of the product.

This is why it is necessary to know about customer lifestyles. Compiling a

list of customers who buy small appliances is one type of buying habit

attributed to certain customers. They are usually individuals who work

outside the home. Other target audiences are customers who work at

home, those with children,singles, and retired customers. Whatever their

needs may be, they all seek to make improvements in their lifestyle.

Gender is also another consideration in customer-focused marketing.

Women are important customers who not only work but take care of

families. They make a great many purchases not only for themselves but

for others. Singles usually rent and want affordable furnishings; whereas,

married customers own their own homes and want new furnishings. This

may not be true for every single or married person, but historically, it is a

trend. It is important to know that marital status is one consideration, but

all customers seek affordable and useful products.

Age groups are important and over the years, studies have shown that

succeeding generations spend money differently. According to Lets Talk

Business, Issue 73, September 2002, customers born between 1977 and

1994, with an average age of twenty-one, spend most of their money on

education and personal appearance. Older adults, or older boomers,

whose average age is around fifty, spend money on upgrading their

homes and taking vacations. The empty-nesters or seniors, spend moremoney on insurance, cars, and furniture. The chart illustrates other

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groups and also includes generation X, or the thirty something group,

who spends money on food for their families

MARKET COVERAGE :Making the market successfully work for the low-income families would

require a completely different distribution channel and a new approach

to marketing and contracting because a micro-insurance policy is not

merely a low-premium policy, as is usually perceived in India. This is

because the poor are more susceptible to risks, cannot afford the same

defences asthe urban clients, are illiterate and unaware of the concept of

insurance, have minimal exposure to the formal financial institutions, and

have high policyholder transaction costs.

A reduction in the prices of the present insurance policies is not

sufficient. Intensive work and innovation, much beyond the existing

concepts, is required to design a micro-insurance policy. To reach the

poor is still a difficult task for the private players alone due to

infrastructure and cost considerations. The partnership model uses a

synergistic approach that involves collaboration of the public sector

banks, Microfinance Institutions (MFIs) and the community, including the

self-help groups (SHGs). They help promote marketing of the product,

premium collection, and claims, and hence, providethe required

infrastructure.

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MARKETING POLICY1) Doctors

2) Call Center + Insurance Gallery

3) SMS campaigns

4) Help lines

5) E- Commerce

6) Network Marketing

7) E- Insurance Port folio (Individuals) Insurance Department B.P.O.(Companies).

8) Wealth Port folio Finance aggregation

9) Portal Services

10) Crystal claims services (Unsettled claims +consumer court services)

FINANCIAL INFORMATION

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USE OF INFORMATION TECHNOLOGY

There is a evolutionary change in the technology that has revolutionized

the entire insurance sector. Insurance industry is a data-rich industry,

and thus, there is a need to use the data for trend analysis and

personalization.

With increased competition among insurers, service has become a key

issue. Moreover, customers are getting increasingly sophisticated and

tech-savvy. People today dont want to accept the current value

propositions, they want personalized interactions and they look formore and more features and add ones and better service

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The insurance companies today must meet the need of the hour for

more and more personalized approach for handling the customer. Today

managing the customer intelligently is very critical for the insurer

especially in the very competitive environment. Companies need to

apply different set of rules and treatment strategies to different

customer segments. However, to personalize interactions, insurers are

required to capture customer information in an integrated system.

With the explosion of Website and greater access to direct product or

policy information, there is a need to developing better techniques to

give customers a truly personalized experience. Personalization helps

organizations to reach their customers with more impact and togenerate new revenue through cross selling and up selling activities. To

ensure that the customers are receiving personalized information, many

organizations are incorporating knowledge database-repositories of

content that typically include a search engine and lets the customers

locate the all document and information related to their queries of

request for services. Customers can hereby use the knowledge database

to mange their products or the company information and invoices, claim

records, and histories of the service inquiry. These products also may be

able to learn from the customers previous knowledge database and to

use their information when determining the relevance to the customers

search request.

CHALLENGESThe awareness regarding insurance is strong among people, butthere are problems. The peculiarity of this market is that peopletend to buy policies to save tax, which is why the three monthsprior to the end of financial year are when most of our business isconducted; this is followed by nothing periods. But insurance alsooffers protection against death and disability, besides being asavings instrument.The challenge for us is to change the mindsets of people througheducation about the need-based sale of life insurance. We have toconvince people to park their hard-earned money in long-terminsurance and savings. This will take us time. We are using our

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trained agents and advisors to bring about this change inperception.Also, consumers were accustomed to having a single, dominantplayer for too long. With privatisation, plenty of companies haveentered the fray and they are offering too much choice. This hasresulted in the consumer getting confused and either makingwrong decisions or making none at all. Hence our focus oninsurance education.

ICICI PRUDENTIAL LIFE INSURANCE LTD.

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 crores (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 crores 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 crores as on September 30, 2010.

For the past nine years, ICICI Prudential Life has maintained a wide

range of Life Insurance products that meet the needs of the Indian

customer at every step in life.

ICICI Prudential Life recently completed 10 years on the IndianInsurance scape on 12th December 2010

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MAJOR PRODUCTS

SAVINGS PLAN

ICICI Pru SmartKid -a superior way to guarantee childs future no matter what the

uncertainty.

ICICI Pru LifeTime - a complete market-linked insurance plan that adapts itself to changing

protection and investment needs, throughout a lifetime.

ICICI Pru Save'n' Protect - a traditional endowment savings plan that offers both high

returns and protection.

ICICI Pru CashBak - an endowment savings plan that allows one to get back substantial

survival benefits without having to wait till the maturity date.

PROTECTION PLAN

ICICI Pru LifeGuard - a low cost-high protection plan that offers protection over a specified

period.

RETIREMENT PLAN

ICICI Pru ForeverLife -

a deferred annuity plan that helps one save for retirementwhile providing life insurance protection.

ICICI Pru LifeLink Pension- a single premium plan that allows one to park a lump

sum amount for a secure future.

ICICI Pru LifeTime Pension - a plan that gives one the twin benefit of market-

linked annuity and life insurance cover.

ICICI Pru ReAssure - a plan that helps to invest money prudently and safely and

offers the benefit of a regular income while providing life insurance protection.

INVESTMENT PLAN

ICICI Pru LifeLink - an investment plan that gives the flexibility of choosing your

investment options while keeping you insured for life.

ICICI Pru AssureInvest - a single premium endowment plan that gives potentially

high returns coupled with insurance protection.

Each of these policies cater to different segments of the consumers who take the policy to satisfy the

needs, wants and desires that are different from each other.

PRODUCT DEVELOPMENT

Designing micro-insurance policies requires intensive work and not just

reduced prices of existing insurance policies. It requires among other

things different marketing, distribution, and servicing channels. Life

micro-insurance is the easiest and widely offered cover. An insurer would

need to create a very attractive policy if they want to stay with life micro-

insurance. It is worth exploring other types of micro-insurance as a means

of attracting good partners. Crop insurance has by and large proved

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unsuccessful. Health insurance is difficult because of the lack of private

hospitals in poor rural areas. Weather indexing is proving a possible

insurance option.

MAJOR CUSTOMERS

The first thing is to target the right audience by focusing on selected

groups of customers, but don't worry, appealing to more than one group

of customers will attract more buyers interested in your unique product.

Customer diversity is the reason to appeal to different groups of

customers, because a broader market expands knowledge of the product.

This is why it is necessary to know about customer lifestyles. Compiling a

list of customers who buy small appliances is one type of buying habit

attributed to certain customers. They are usually individuals who workoutside the home. Other target audiences are customers who work at

home, those with children,singles, and retired customers. Whatever their

needs may be, they all seek to make improvements in their lifestyle.

Gender is also another consideration in customer-focused

marketing. Women are important customers who not only work

but take care of families. They make a great many purchases not

only for themselves but for others. Singles usually rent and want

affordable furnishings; whereas, married customers own their

own homes and want new furnishings. This may not be true for

every single or married person, but historically, it is a trend. It is

important to know that marital status is one consideration, but

all customers seek affordable and useful products.

Age groups are important and over the years, studies have

shown that succeeding generations spend money differently.

According to Lets Talk Business, Issue 73, September 2002,

customers born between 1977 and 1994, with an average age oftwenty-one, spend most of their money on education and

personal appearance. Older adults, or older boomers, whose

average age is around fifty, spend money on upgrading their

homes and taking vacations. The empty-nesters or seniors,

spend more money on insurance, cars, and furniture. The chart

illustrates other groups and also includes generation X, or the

thirty something group, who spends money on food for their

families

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FINANCIAL INFORMATION

MARKET COVERAGE

ICICI Prudential Life Insurance hiked its market share to 42.72 per cent in the October-November

period last year, up from 37.92 per cent in first quarter and 38.85 per cent in the second quarter of the

current fiscal.

Its total share of the Rs 439.2-crore premium collected by private players during the April-November

period stood at 39.66 per cent. Its aggregate estimated premium income amounted to Rs 174.2 crore

as at the end of November. According to ICICI officials, while the premium mop-up by private

companies in April-June 2002 was about Rs 117 crore, the corresponding figures for the July-

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September and October-November periods were Rs 201.3 crore and Rs 120.8 crore. Out of this,

ICICIs premium income stood at Rs 44.4 crore, Rs 78.2 crore and Rs 51.6 crore, respectively.

They cited Irda statistics saying the total premium income of the life sector was Rs 1,191 crore in

April-June, 2002, and Rs. 3,512.8 crore uptil September.

CHALLENGES

Facing challenges in managing their leads for health insuran- ce, the

company developed a customized software to fulfill their needs.

ICICI Prudential Life Insurance offers wide-ranging financial solutions

to meet the varied needs of customers. The company intends to

improve customer segmentation and also enable their sales force

with lead management frameworks that are based on customer

segmentation. The company's health insurance products from the

extensive portfolio were one of the major focus of business

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segments and was a fast growing one also. For this segment, the

company sold their health insurance policies via distribution

channels like doc channel and retail pharmacy. The doc channel has

more than 31000 doctors listed while there are 23000 chemists

under retailer channel across 65 towns that are used as referralpartners to sell health insurance, apart from 2300 Feet on Street

Consultants (FSCs). The company faced challenges in managing this

highly segmented channel. There wasn't an effective lead

management system. The monitoring and reporting framework was

also not as reliable. Issues like, as a referral partner, a doctor is giving

desired results to the FSCs or not, couldn't be tracked and

monitored. The company felt the need to have a customized

software application that could address the differential needs of

health insurance segment.

USE OF INFORMATION TECHNOLOGY

The Information Technology function at ICICI Prudential is committed

to enable business through the use of technology. It is segmented

into 4 groups to enable highest levels of delivery to the customers:

Life Asia Solutions Group that provides flexibility in designing better

product offerings to end-users, the Solutions Group- Web that

provides real-time information to customers and is responsible for

customer relationship management, IT Architecture & Corporate

Solutions Group is in charge of developing and maintaining ablueprint for the IT architecture for the enterprise as a whole. This

team works as an in house R&D Solution Group, exploring new

technological initiatives and also caters to information needs of

corporate functions in the organization. IT Infrastructure group is

responsible for providing hardware, software, network services to

the whole organization. This group runs the 'Digital Nervous System'

of the Enterprise at the highest levels of efficiency and provide

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robust, scalable and highly available platform for deployment of

business application.

MARKETING POLICIES

The Marketing function at ICICI Prudential covers an array of

activities - brand and media management, channel support, direct

marketing and corporate communications. The Brand and

Communications team is in charge of advertising, consumer

research, media planning & buying and Public Relations; that helps

develop and nurture ICICI Prudential's corporate identity while

effectively communicating its varied product offerings to the

customer. Channel marketing provides support to the sales force bystreamlining the design and development of collaterals and sales

tools across distribution channels. The Direct marketing team was set

up to generate high quality leads for profitable business. The team

achieves this through target database acquisition and

communicating customized product information through e-mailers,

telemarketing and innovative direct mailers.

PRICING POLICY

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FUTURE TRENDS

There is presently building in India an upsurge in consumer

awareness, putting immense and unavoidable pressure on theinsurance industry. A lifting of the bar on composite insurance,

where companies are allowed to do only life or non-life business

today, can also be expected. Instead of categorizing insurance by

class, the focus may shift more to the period for which the cover

was offered and the risk underwritten. Already there is demand

for permitting the industry to underwrite pure risk and leaving

investment decisions to policyholders.

With the entry of competition, the rules of the game are set to

change. The market is already beginning to witness a wide array of

products from players whose number is set to grow. In such a

scenario, the differentiators among the different players are the

products, pricing, and service. Meanwhile, the profile of the Indian

consumer is also evolving. Consumers are increasingly more

aware and are actively managing their financial affairs. Today,while boundaries between various financial products are blurring,

people are increasingly looking not just at products, but also at

integrated financial solutions that can offer stability of returns

along with total protection.

To satisfy these myriad needs of customers, insurance products

will need to be customized. Insurance today has emerged as an

attractive and stable investment alternative that offers total

protection Life, Health and Wealth. In terms of returns,

insurance products today offer competitive returns ranging

between 7% and 9%. Besides returns, what really increases the

appeal of insurance is the benefit of life protection from insurance

products along with health cover benefits.