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Transcript of ICICI Channel Development
A
SUMMER TRAINING REPORT
ON
CHANNEL DEVELOPMENT
OF TIED AGENCY
OF
ICICI PRUDENTIAL LIFE INSURANCE
COMPANY
Submitted By: Project
Guide
Rajesh Mr.H.S.ParharUniversity Roll No.543221000 Unit Manager
Session (2005-2007)CT INSTITUTE OF MANAGEMENT & IT
JALANDHAR
CHANNELDEVELOPMENT
2
ACKNOWLEDGEMENT
I am thankful to and owe a deep debt of gratitude to all those who have helped me in preparing this report. I am grateful to Mr.Harpreet Singh Parhar (Unit Manager) and to staff of ICICI Prudential and a host of other officials for their active help and cooperation at each stage of the study.
I would also like to thank my parents, family members, colleagues and every one concerned who has been instrumental in successful completion of the project.
RAJESH
3
EXECUTIVE
SUMMARY
4
EXECUTIVE SUMMARY
The objective of this project was to assist ICICI
Prudential Life Insurance in expanding their channel
by recruiting Tied Agents For the company. For the
company to successfully continue its operations , it
needs to undergo change to get some new
customers and to get some new ideas.Moreover
insurance is such a growing sector that it has full
potential to have new customers.so it very
essential to have new people in the system which
can add new customers to the company.
This was achieved through a three pronged efforts.
The First objective of the study was to look for
different segments of the people. The Second
5
objective of the project was to analyze the person
to find whether he is fit for doing insurance.The
Third objective of the project was to finally
introduce some people in the system by
recruiting them as advisors of the company.
The research methodology consisted of a survey
using simple Questionnaire and personal interview
with the general public at exibhition site mostly
based in Chandigarh, Panchkula and Mohali. The
questionnaire used is given at the end of report.
I would like to thank my mentor who provided me the opportunity to do some sales for the company which had given me a lot of new experience which will help me in my future.
----------
6
CONTENTS
LITERATURE REVIEW-----------------------------------------------
Introduction to Insurance---------------------------------------------Purpose and Need For Insurance------------------------------------Role of Insurance in Economic Development---------------------Classification of Insurance---------------------------------------------
LEGISLATIVE AND REGULATORY MATTERS----------------
7
IRDA Act, 1999---------------------------------------------------------Constitution of IRDA--------------------------------------------------Functions of IRDA-----------------------------------------------------Life Insurance Corporation of India Act, 1956--------------------
REPORT CARD OF LIFE INSURANCE SECTOR-------------
Report Card: The Current Scenario----------------------------------How They Stack Up (Graph)------------------------------------------
COMPANY’S PROFILE------------------------------------------------
ICICI Prudential Life Insurance Co. Ltd.---------------------------Distribution--------------------------------------------------------------Products------------------------------------------------------------------About the Partners-----------------------------------------------------
OBJECTIVES OF THE STUDY-------------------------------------- Main Objective--------------------------------------------------------- Sub Objectives--------------------------------------------------------
CHARACTERISTICS OF A GOOD INSURANCE SALES PERSON
RESEARCH METHODOLOGY-------------------------------------
Research Process-------------------------------------------------------Data Collection---------------------------------------------------------Survey--------------------------------------------------------------------
FINDING AND DATA ANALYSIS----------------------------------
Age Composition-------------------------------------------------------
Occupation Scenario---------------------------------------------------
Income Scenario--------------------------------------------------------
8
Most Preferable Investment
Area------------------------------------
Most Important Criteria While
Investment------------------------
Awareness in Life
Insurance------------------------------------------
Most Important Criteria In Life
Insurance-------------------------
Brand Reliability---------------------------------------------------------
SWOT
ANALYSIS--------------------------------------------------------
CHALLENGES BEFORE
INDUSTRY-----------------------------
Broadening the Benefits-----------------------------------------------
Channel of Distribution-----------------------------------------------
Expectation of the
Consumers---------------------------------------
Consumer Education---------------------------------------------------
Catering the Rural
Area------------------------------------------------
LIC Awakes at a long period of
time--------------------------------
Large Number of Private
Companies-------------------------------
9
Consumer Grievance
Redressal--------------------------------------
Future Scenario of the Insurance
Sector---------------------------
FUTURE
OUTLOOK---------------------------------------------------
REFERENCES-------------------------------------------------------
----
Questionnaire : Market
Survey-----------------------------------------
----------
10
LITERATUR
E REVIEW
INTRODUCTION TO INSURANCE
WHAT IS INSURANCE?
11
Insurance is the method of spreading and transfer of
risks.
Losses of unfortunate few are shared by and spread
over to many exposed to the same risk.
Assets created by the owner in expectation of future
needs or benefits have a value.
Loss of assets for any reasons deprives the owner of
the expected benefit.
Insurance in this context is a mechanism that helps to
reduce the adverse consequences due to loss of assets.
PURPOSE AND NEED FOR INSURANCE
Assets are likely to be destroyed or made non-
functional due to perils like fire, floods, breakdowns,
lightning and earthquake.
Damage to assets caused by any peril is the risk that
assets are exposed to.
Insurance becomes relevant only if there are
uncertainties of occurrence of event leading to loss.
We can say that human life is an income generating
assets which can be lost on early death or disabilities
caused by accidents.
Insurance does not protect the assets but only
compensates the economic or financial loss.
12
ROLE OF INSURANCE IN ECONOMIC
DEVELOPM ENT
Investments are necessary for economic development.
Life insurance plays a major role in mobilization of
public savings.
Savings out of life insurance funds are utilized in
investments for growth.
Looking to general insurance business, industry, trade
would be seriously handicapped in the absence of
insurance cover relating to fire and engineering risks.
CLASSIFICATION OF INSURANCE
Life is full of uncertainty. Trials and tribulations abound in
each and every aspect of life. No one can truly predict or
even estimate what the future has in store for him. Life
offers no guarantees by itself, except the incidences of
death and taxation.
This lack of security present throughout life can be
overcome partially through insurance. Insurance can never
replace or repair a loss. But the monetary value offered by
insurance helps in adjusting to the new circumstances.
13
Despite offering innumerable options and immense scope,
insurance can be classified into four main categories.
Insurance of Person
Insurance of Property
Insurance of Interest
Insurance of Liability
Insurance of Person
Under the purview of this class of insurance, the risks
associated with human life in general can be covered up to
the limit specified. A person can insure his or her life and
his health against any unplanned contingencies.
In event of his death, his dependants will be reimbursed to
the full amount that he was insured for. Or if the insured
person meets with an accident or suffers from an illness
that cripples him forever, he will be compensated with the
complete sum assured anyway since he may not be able to
lead a normal life again.
In case, the accident is not that severe, he should be able to
recover after medical treatment and rehabilitation. If he has
opted for medical cover, then his medical expenses,
treatment and medication will be paid for by his insurance
policy.
14
Insurance of Property
Everyone possesses material value in the form of tangible
assets. Assets can be in the form of a landed estate or a
vehicle, share holdings or plain old paper money.
Since tangible property has a physical shape and
consistency, it is subject to many risks ranging from fire,
allied perils to theft and robbery. An individual's lifetime of
hard work can be wiped out in a blink of an eye.
But if a person judiciously invests in insurance for his
property prior to any unexpected contingency then he will
be suitably compensated for his loss as soon as the extent of
damage is ascertained.
Insurance of Interest
Every individual has to discharge certain specific duties.
Everyone is expected to maintain a standard of conduct. But
then, it is an intrinsic part of human nature to err. No one is
infallible and no one will ever be.
Owing to an occasional error or omission committed by us,
our clients or customers might suffer a loss. In turn we
might have to pay those damages or compensation out of
our own personal resources.
15
However, if our chosen profession qualifies for insurance of
interest, then our insurance policy will more than suffice in
arranging for the funds and court formalities that might
ensue in the aftermath of legal libel.
Insurance of Liability
Every person has to regulate his actions and behaviour so
as not to cause injury or damage to other people and their
property. Everyone is personally responsible and liable for
his actions.
If due to lack of control over his actions or prejudiced
behaviour, a person incurs any liability then he has to
provide compensation out of his personal resources.
Liabilities: legal, civil or criminal can have severe
repercussions on social standing and prestige besides the
financial status.
By investing in liability insurance, an individual can ward off
any liabilities he might incur due to his actions and
behaviour. Besides, the premiums payable on liability
insurance are fairly minimal when compared to the
damages that have to be compensated in the long run.
16
----------
17
LEGISLATIV
E AND
REGULATO
RY
MATTERS
18
INSURANCE REGULATORY & DEVELOPMENT
AUTHORITY (IRDA) ACT, 1999 .
Under this Act an authority called IRDA has been set
up.
This is a corporate body established for the purpose
and objects as set out in the explanation to the title.
The Authority replaces “Controller” under Insurance
Act 1938.
The first schedule amends Insurance Act 1938.
It states that if Authority is superceded by Central
Government, the Controller of Insurance may be
appointed till such time as “Authority” is reconstituted.
CONSTITUTION OF IRDA.
The Insurance Regulatory and Development Authority
consists of the following members:
1. Chairperson.
2. Less than five whole time members.
3. Less than four part time members.
Members should be persons of Ability, Integrity &
Standing.
They should have experience in the fields of
19
1. Life Insurance
2. General Insurance
3. Actuarial Science
4. Finance
5. Economics
6. Law
7. Accountancy
8. Administration
Chairperson, members, officers and other employees of
Authority shall be public servants.
FUNCTIONS OF IRDA
1. To issue certificate of registration, renew, withdraw,
suspend or cancel such registration.
2. To protect the interest of policyholders/insured in the
matter of insurance contract with the insurance
company.
3. To specify requisite qualification, code of conduct and
training for insurance intermediaries and agents.
4. To specify code of conduct for surveyors/loss
assessors.
5. To promote efficiency in the conduct of insurance
business.
20
6. To promote and regulate professional organizations
connected with the insurance and reinsurance
business.
7. To undertake inspection, conduct enquiries and
investigations including audit of insurers and
insurance intermediaries.
8. To control and regulate the rates, terms and conditions
to be offered by the insurer regarding general
insurance business not so controlled by Tariff Advisory
Committee u/s 604 of Insurance Act, 1938.
9. To regulate investment of funds by the insurance
companies.
10. To adjudicate dispute between insurers and
intermediaries of insurance.
LIFE INSURANCE CORPORATION OF INDIA
ACT, 1956
Life insurance business was nationalized in India with
effect from 19th January 1956.
The life insurance business of 154 Indian life offices
constituted by 16 non-Indian insurers operation in
India and 75 Provident Societies was taken over by the
Government of India.
21
LIC of India Act was passed by the Parliament on 18th
June 1956 and it came into effect from 1st July 1956.
----------
22
REPORT
CARD OF
LIFE
INSURANC
E SECTOR
23
REPORT CARD: THE CURRENT
SCENARIO
During the first half of the current financial year, the 13 life
insurers have underwritten first year premium of
Rs.5,43,595.87 lakhs towards 87,38,024 policies. Of this
individual business accounted for Rs.4,41,760.09 lakhs for
87,32,435 policies. The group business accounted for
Rs.1,01,835.78 lakhs for 5,589 policies.
Interestingly about 60% of the business done by the
life insurers during the current financial year has been in
the second quarter. Correspondingly 63% of the policies
underwritten during the six month period have been
accounted for in July to September 2003.
Analysis of individual business statistics shows that
LIC accounted 88% of the business in the terms of
premium. As against this the private insurers captured 12%
of the premium. In terms of group business LIC captured
93.63% of the premium. The twelve private insurers
captured only 6.37% of the premium in the total group
business.
A review of the performance of the private players
further reveals of rapid business expansion. The latest
quarterly figures released by the Insurance Regulatory
Development Authority (IRDA) show that ICICI Prudential
Life Insurance Company is continued to lead with a
24
premium income of Rs.70.2 Crore in the first quarter of this
year followed by HDFC Standard Life Insurance. “The
maximum growth in the first quarter has come from unit-
linked products (ULIP’s) which contributed over 60% of
business, along with retirement products,” said Saugata
Gupta, head of marketing at ICICI Prudential Life
Insurance. She added, “In fact we have identified
retirement solutions and child plans as two growth areas
and have decided to invest the
Resources necessary to raise awareness and build brand
recognition and loyalty in these two segments.”
The insurer has grown its premium income by almost
130% over the corresponding period last year. Similarly
Tata AIG Life Insurance has also grown by over 150% in
premium income from April-June 2002 to the same period
this year.
THE PECKING ORDER
COMPANY APR – MAR
2002 – 2003
APR - JUNE
2003 - 2004
ICICI Prudential 365 70.2
HDFC Standard 132.2 34.7
TATA AIG 61 26.5
25
Birla Sun Life 149 24.2
Allianz Bajaj 53.8 18.2
Max NewYork 76.8 17.5
OM Kotak 31.6 9.4
SBI Life 73 8.5
Aviva 21 7.2
ING Vysya 17.5 4.4
Premium Income Figures in Rs. Crore
26
0
50
100
150
200
250
300
350
400
PR
EM
IUM
INC
OM
E IN
Rs.
Cro
res
ICICIPrudential
HDFCStandard
TATA AIG Birla SunLife
AllianzBajaj
MaxNew York
OM Kotak SBI Life Aviva INGVysya
PRIVATE PLAYERS
HOW THEY STACK UP
APR-MAR 2002-03 APR-JUN 2003-04
27
COMPANY’s
PROFILE
28
ICICI PRUDENTIAL LIFE INSURANCE CO.
ICICI Prudential Life Insurance Company is a joint venture
between ICICI, a premier financial powerhouse and
Prudential, a leading international financial services group
headquartered in the United Kingdom. ICICI Prudential
was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval
from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential’s equity base stands at Rs.525 Crore with
ICICI Bank and Prudential holding 74% and 26% stake
respectively. As of September 30, 2003, the company had
issued over 450,000 policies, with a sum assured
exceeding Rs.11,000 Crore and premium income of nearly
Rs.800 Crore. Today the company is the #1 private life
insurer in the country.
DISTRIBUTION
ICICI Prudential has one of the largest distribution
networks amongst private life insurers in India, having
commenced operations in 41 cities and towns in India.
These are: Ahmedabad, Bangalore, Bhopal,
Bhubhaneshwar, Chandigarh, Chennai, Coimbatore,
29
Dehradun, Goa, Guntur, Gurgaon, Hyderabad, Indore,
Jaipur, Jalandhar, Jodhpur, Kanpur, Karnal, Kochi, Kolkata,
Kottayam, Lucknow, Ludhiana, Madurai, Mangalore,
Meerut, Mumbai, Nagpur, Nasik, Noida, New Delhi, Patiala,
Pune, Rajkot, Surat, Thane, Thrissur, Vadodara, Vashi,
Vijayawada and Vizag.
The company has eleven banc assurance tie-ups, having
agreements with ICICI Bank, Allahabad Bank, Federal
Bank, South Indian Bank, Bank of India, Lord Krishna Bank,
and Punjab & Maharashtra Co-operative Bank, Goa State
Co-operative Bank, Indoor Paraspar Sahakari Bank, Manipal
State Co-operative Bank and Jalgaon People’s Co-operative
Bank, as well as some corporate agents. It has also tied up
with organizations like Dhan for distribution of Salaam
Zindagi, a policy for the socially and economically
underprivileged sections of society.
ICICI Prudential has recruited and trained over 25,000
insurance agents to interface with and advise customers.
Further, it leverages its state-of-the-art IT infrastructure to
provide superior quality of service to customers.
PRODUCTS
30
Insurance Solutions for Individuals
ICICI Prudential Life Insurance offers a range of innovative,
customer-centric products that meet the needs of customers
at every life stage. Its 17 products can be enhanced with
up to 6 riders, to create a customized solution for each
policyholder.
Savings Solutions
- SecurePlus is a transparent and feature-packed savings
plan that offers 3 levels of protection.
- CashPlus is a transparent, feature-packed savings plan
that offers 3 levels of protection as well as liquidity options.
- Save n Protect is a traditional endowment savings plan
that offers life protection along with adequate returns.
- CashBak is an anticipated endowment policy ideal for
meeting milestone expenses like a child’s marriage,
expenses for a child’s higher education or purchase of an
asset.
Protection Solutions
LifeGuard is a protection plan, which offers life cover at
very low cost. It is available in 3 options - level term
assurance, level term assurance with return of premium
and single premium.
Child Solutions
31
SmartKid child plans provide guaranteed educational
benefits to a child along with life insurance cover for the
parent who purchases the policy. The policy is designed to
provide money at important milestones in the child’s life.
SmartKid child planed are also available with in unit-linked
form - both single premium and regular premium.
Market-linked Solutions
- LifeLink is a single premium Market Linked Insurance
Plan which combines life insurance cover with the
opportunity to stay invested in the stock market.
- LifeTime offers customers the flexibility and control to
customize the policy to meet the changing needs at
different life stages. It offers 3 investment options - Growth
Plan, Income Plan and Balanced Plan.
Retirement Solutions
- ForeverLife is a retirement product targeted at
individuals in their thirties.
Market-linked retirement products
- LifeTime Pension is a regular premium market-linked
pension plan
- LifeLink Pension is a single premium market-linked
pension plan.
32
Single Premium Solutions
- AssureInvest is a single premium savings product with
life cover for terms of 5, 7 or 10 years.
- ReAssure is a retirement product for senior citizens who
are on the verge of retirement or have just retired.
ICICI Prudential also launched ''Salaam Zindagi'', a social
sector group insurance policy targeted at the economically
underprivileged sections of the society.
Group Insurance Solutions
ICICI Prudential also offers Group Insurance Solutions for
companies seeking to enhance benefits to their employees.
Group Gratuity Plan: ICICI Pru's group gratuity plan
helps employers fund their statutory gratuity obligation in a
scientific manner. The plan can also be customized to
structure schemes that can provide benefits beyond the
statutory obligations.
Group Superannuation Plan: ICICI Pru offers a flexible
defined contribution superannuation scheme to provide a
retirement kitty for each member of the group. Employees
have the option of choosing from various annuity options or
opting for a partial commutation of the annuity at the time
of retirement.
Group Term Plan: ICICI Pru’s flexible group term solution
helps provide affordable cover to members of a group. The
33
cover could be uniform or based on designation/rank or a
multiple of salary. The benefit under the policy is paid to the
beneficiary nominated by the member on his/her death.
Flexible Rider Options
ICICI Pru Life offers flexible riders, which can be added to
the basic policy at a marginal cost, depending on the
specific needs of the customer.
1. Accident & Disability benefit: If death occurs as the
result of an accident during the term of the policy, the
beneficiary receives an additional amount equal to the sum
assured under the policy. If the death occurs while traveling
in an authorized mass transport vehicle, the beneficiary will
be entitled to twice the sum assured as additional benefit.
2. Accident benefit: This rider option pays the sum
assured under the rider on death due to accident.
3. Critical Illness Benefit: protects the insured against
financial loss in the event of 9 specified critical illnesses.
Benefits are payable to the insured for medical expenses
prior to death.
4. Major Surgical Assistance Benefit: provides financial
support in the event of medical emergencies, ensuring that
benefits are payable to the life assured for medical expenses
incurred for surgical procedures. Cover is offered against
43 different surgical procedures.
5. Income Benefit: This rider pays the 10% of the sum
assured to the nominee every year, till maturity, in the
34
event of the death of the life assured. It is available on
SmartKid, SecurePlus and CashPlus.
6. Waiver of Premium: In case of total and permanent
disability due to an accident, the premiums are waived till
maturity. This rider is available with SecurePlus and
CashPlus.
ABOUT THE PARTNERS
ICICI Bank (NYSE:IBN) is India’s second largest bank with
an asset base of Rs. 106812 Crore. ICICI Bank provides a
broad spectrum of financial services to individuals and
companies. This includes mortgages, car and personal
loans, credit and debit cards, corporate and agricultural
finance. The Bank services a growing customer base of
more than 7 million customer accounts and 5 million
bondholders’ accounts through a multi-channel access
network. This includes about 450 branches and extension
counters, 1675 ATMs, call centres and Internet
banking (www.icicibank.com). ICICI Bank posted a net
profit of Rs.1, 206 Crore for the year ended March 31, 2003.
ICICI Bank is the only Indian company to be rated above the
country rating by the international rating agency Moody’s
and the only Indian company to be awarded an investment
grade international credit rating. The Bank enjoys the
35
highest AAA (or equivalent) rating from all leading Indian
rating agencies.
Established in 1848, Prudential is a leading international
financial services company in the UK, with some US$250
billion funds under management and more than 16
million customers worldwide. Prudential has brought to
market an integrated range of financial services products
that now includes life assurance, pensions, mutual funds,
banking, investment management and general insurance. In
Asia, Prudential is UK’s largest life insurance company with
a vast network of 23 life and mutual fund operations in
twelve countries - China, Hong Kong, India, Indonesia,
Japan, Korea, Malaysia, Philippines, Singapore, Taiwan,
Thailand and Vietnam.
Objectives of the studyMain Objective –
Recruitment of Tied Agents for the company.
Sub Objective –
36
To Look for all segments of people so that they can be introduced in the system.
To make Suggestions about A.improvements in recruitment methods.
B.Making convenient recruitment both for the company and the recruiter.
Characteristics of a good insurance sales
person
He should be speedy, needy and Greedy
He should be presentable.
37
He should have good Communication Skills.
He should be ready to serve with a smiling face.
38
RESEARCH
METHODOLOG
Y
39
Research Methodology
Research methodology is a way to systematically solve the
research problem. It may be understood as a science of
studying how research is done scientifically. In it we study
the various steps, the research process that are generally
adopted to study the research problem and basic logics
behind them. The basic steps in this research are shown in
the chart below
The Research Process
40
Define the research problem and its objectives
Review concepts and theories
Collection of data survey
Research design including sample design
Analysis of data
Interpretation and report writing
The research consisted of two stages. In the first stage, a
survey was conducted to collect the data about the people.
The second stage involved analysis of the data collected in
the first stage.
Data Collection
`Data has been collected both from primary as well as
secondary sources as described below.
Sample size
The sample size for the survey was 186. It consisted of 52
Businessmen, 54 Professionals, 44 HNI and 35 Students. In
addition, data about ICICI’s services was collected through
discussions with the ICICI employees.
Primary sources
The primary source of data was Questionnaire filled by
people at different places of Chandigarh,Panchakula
and Mohali. After the collection of data it was
arranged and the people who were found suitable and
interested were interviewed which consisted of 53
people.
Field work
41
Since the task was to recruit some people for the
company.so the first thing was to look for the people in the
field and various offices.Various CA,Lawyers and other
professionals were interviewed for the recruitment purpose.
Secondary sources
The secondary sources of data were the various websites
and insurance manuals. This mainly provided information
about the insurance sector and the company’s profile. These
helped in gaining knowledge about the industry. These
sources are listed in References.
Research design
The methodology consisted of Descriptive research.The
problem was solved by recruiting people into the
system.The information was collected through
Questionnaire is as follows-
General Information
Time that can be devoted for this profession
To know the awareness about ICICI PRUDENTIAL.
To know about their interest in becoming advisors.
To fix an interview if interested.
42
FINDINGS
&
43
DATA
ANALYSIS
AGE COMPOSITION: In this market survey most of the
people are between the age group of 26-55yrs which
indicates that this report has most of the emphasis (84%) on
those people who are well established in their related field
i.e. business, profession, job, etc..
AGE COMPOSITION NO. OF PEOPLELESS THAN 25YRS 626YRS TO 35YRS 25
44
36YRS TO 45YRS 4046YRS TO 55YRS 19MORE THAN 55YRS 10TOTAL 100
6
25
40
19
10
0
5
10
15
20
25
30
35
40
NO
. OF
PE
OP
LE
LESS THAN25YRS
26YRS TO35YRS
36YRS TO45YRS
46YRS TO55YRS
MORE THAN55YRS
AGE GROUPS
AGE COMPOSITION
Do you have any side business
Along with your occupation?
Yes 28
No 158
45
The above graph shows that there is good number of
people can be looking for some kind of extra business.
Would you be interested in earning 8000-
10000 Rs. Per Month through a side
business?
Yes 112
No 74
46
Above graph shows that more than half of people are
willing to earn some money in case they are provided
with some work.
How much time can you devote to
this?
0-1 hour 1-2 hour 2-3 hour
more than 3
47
40 20 14
8
Above graph indicates that a good number of people
are ready to spend at least an hour from their
schedule.
Have you heard of ICICI Prudential ;if yes, through
which source?
48
Newspaper 60
Television 32
Business magazine 46
Friends/Relatives 24
Others 0
It shows that a good number of people has the
information about ICICI Prudential.
----------
49
S TRENGTH S
W EAKNES SES
O PPORTUNITI ES
50
T HREAT S
ANALYSIS
SWOT ANALYSIS
51
ICICI Prudential is one of the most powerful, world class
Life Insurance Co., gaining appreciation for their strong
work ethics, excellent performance, professionalism and
team work which led them to progress in today’s
challenging environment. Though with its excellence
performance and every efforts has been made to present
the most authentic and truly representative findings, but
some uncontrollable factors do affect the performance and
thus bring about some deviations and hurdles in progress.
So, with its strengths and good quality, the company is
having some weaknesses, and threats and opportunities. Its
SWOT analysis is as below:
Strengths
ICICI Prudential is the largest private player in the
insurance industry in India.
Excellent services.
Customization of Products as per customer’s needs.
Brand Image.
Business Experience.
Strong Financial Base.
Innovative products, Technology, organization culture
and climate.
The company has a large network of branches which
is helpful to customer for the payment.
52
Weaknesses
Lot of competitors are in the market offer same
product by the title difference in the premium and
offerings.
Target only higher income group whereas other
companies are trying to catch middle-lower level
people.
Higher premiums as compared to the other companies
Clients face problems to get insured due to large
number of formalities.
High targets for financial advisors and for the sales
department.
Opportunities
Huge market is literally untapped. Out of estimated
320 million insurable markets only 20% of the
population is insured.
In a conservative society of India where people are
more inclined towards risk free investments such as
Bank FD’s and savings rather than equity and high risk
investments insurance offers the best of both worlds –
53
The security with high returns. So there exists high
potential for insurance company like ICICI prulife
In the pension field where people want good life after
their retirement.
Indian people are more emotional towards their
children that’s why children plans are selling like hot
cakes.
Health insurance and pension Schemes, an estimated
market potential of approximately $15 billion.
Threats
Weak perception of private players in the minds of
Indian people due to frequent financial scams
Large number of insurance players
Existing wrong business practices of companies like –
LIC First premium is paid by their agents where – as
IRDA suggests that even forms to be filled by the
clients themselves
Players like Allianz Bajaj and Birla sun life with low
premium for the similar plans
Entry of many other private companies with equally
strong experience and financial strength of foreign
partners making the competition difficult and
saturating the urban markets.
54
LIC has woken up from sleep and is following
competitive strategies. Its huge surplus in Life Fund
gives a capability to lodge Price war.
Current Government policies do not encourage Gross
Domestic Savings. If the Tax Liability of the service
class rises, the customer will have little money to
invest.
For the Insurance sector Government set the authority
that is IRDA (Insurance Regulatory and Development
Authority) which is undertaken to track record of all
the companies and change rules day by day more rigid
which is very difficult for the companies.
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Recommendations
There should Be a weekend batch of training for the people who can
not take there full six days from there busy schedule.
There should be some fixed salary with some fixed targets as other
companies are doing.
Advertising should be given in the newspapers so that more number
of people can come for the interview.
Various MBA institutes should be targeted to get people with good
marketing as well as interpersonal skills.
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Presentation about advisor as a career opportunity should be given in
the various seminars an get togethers.
The Indian economy has demonstrated its resilience with
the GDP growing by 4.3% in the last year, which compares
quite favorably with most countries round the world. This
was despite poor monsoons, global economic slowdown and
heightened geo-political uncertainty due to Iraq war, high
oil prices and border tensions. Inflation which arouse to
round about 6.5%, has come of o a most stable 5%. This
bodes well for the Indian economy which is expected to post
GDP growth in excess of 5.5% in financial year 2004.
Growth is likely to be boosted by large infrastructural
projects and high retail credit along with positive trends in
various macro variable trends like appreciating Rupee,
strong forex reserves, benign inflation and stable interest
rates.
The equity outlook is positive with the Indian corporate
sector looking fundamentally strong on account of
operational efficiency improvements achieved in recent
years. Companies are expected to build on recent gains as
economic recovery picks up steam especially with a good
start to monsoons. However, it would also be prudent to
recognize the inherent risks if there is a second consecutive
monsoons failure in an agriculture dependant economy like
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India. Also, with elections looming large we could see some
slackening in the pace of reforms which is another
downside risk.
The fixed income outlook is stable. A lot income outlook is
stable. A lot depends on the inflation and monsoon trends
going forward. While economic recovery and credit
overtake could gap the upside, liquidity in the system is
likely to protect the downside resulting in fairly flat market
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REFERENCES
1.www.iciciprulife.com
2.www.financialexpress.com
3.www.insuranceguide.com
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