Introduction

1.1 Introduction Of The Insurance Industry

Overview

The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is largely
a development of the recent past, particularly after the industrial era – past few
centuries – yet its beginnings date back almost 6000 years.

The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose
to 176 companies with total business-in-force as Rs.298 crore in 1938. The
Insurance Act 1938 was the first legislation governing not only life insurance but
also non-life insurance to provide strict state control over insurance business.  

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance
company started its business. 

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 Insurance Act with
the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized. 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.

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 1st January 1973.

With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. It’s a business growing at the rate of
15-20 per cent annually and presently is of the order of Rs 450 billion. Together
with banking services, it adds about 7 per cent to the country’s GDP. Gross
premium collection is nearly 2 per cent of GDP and funds available with LIC for
investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while
health insurance and non-life insurance continues to be below international
standards. And this part of the population is also subject to weak social security
and pension systems with hardly any old age income security. This itself is an
indicator that growth potential for the insurance sector is immense.

A well-developed and evolved insurance sector is needed for economic

development as it provides long term funds for infrastructure development and at
the same time strengthens the risk taking ability. It is estimated that over the next
ten years India would require investments of the order of one trillion US dollar.
The Insurance sector, to some extent, can enable investments in infrastructure
development to sustain economic growth of the country.
India has come a full circle from being an open competitive market to
nationalization and back to a liberalized market again. Tracing the developments in
the Indian insurance sector reveals the 360 degree turn witnessed over a period of
almost two centuries.

Present Scenario

The Government of India liberalized the insurance sector 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.

The opening up of the sector is likely to lead to greater spread and deepening of
insurance in India and this may also include restructuring and revitalizing of the
public sector companies. In the private sector 14 life insurance and 8 general
insurance companies have been registered. A host of private Insurance companies
operating in both life and non-life segments have started selling their insurance
policies..

Life Insurance Market

The Life Insurance market in India is an underdeveloped market that was only
tapped by the state owned LIC till the entry of private insurers. The penetration of
life insurance products was 19 percent of the total 400 million of the insurable
population. The state owned LIC sold insurance as a tax instrument, not as a
product giving protection. Most customers were under- insured with no flexibility
or transparency in the products. With the entry of the private insurers the rules of
the game have changed.

The 12 private insurers in the life insurance market have already grabbed nearly 9
percent of the market in terms of premium income. The new business premiums of
the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year.
Innovative products, smart marketing and aggressive distribution. That's the triple
whammy combination that has enabled fledgling private insurance companies to
sign up Indian customers faster than anyone ever expected. Indians, who have
always seen life insurance as a tax saving device, are now suddenly turning to the
private sector and snapping up the new innovative products on offer.

The private insurers also seem to be scoring big in other ways- they are persuading
people to take out bigger policies. Buoyed by their quicker than expected success,
nearly all private insurers are fast- forwarding the second phase of their expansion
plans.

1.2Major Insurance Players

Licenses have been issued for the following companies

Ø      ICICI Prudential  Life Insurance Limited

Ø      ICICI Prudential Life Insurance Company Limited

Ø      HDFC Standard Life Insurance Company Limited

Ø      Birla Sun Life Insurance Company Limited

Ø      TATA AIG Life Insurance Company Limited

Ø      Max New York Life Insurance Company Limited

Ø      SBI – Cardiff Life Insurance Company Limited

Ø      ING Vysya Life Insurance Company Limited

Ø      Bajaj Allianz Life Insurance Company Limited

Ø      MetLife Life Insurance Company Limited

Ø      Aviva Life Insurance Company Limited

Ø      AMP Sanmar Life Insurance Company Limited

Ø      Sahara India Life Insurance Limited

 Ø      Sri Ram Life Insurance Limited

Protection of the interests of policyholders:

IRDA has the responsibility of protecting the interest of insurance policyholders.
Towards achieving this objective, the Authority has taken the following steps:

v     IRDA has notified Protection of Policyholders Interest Regulations 2001

to provide for: policy proposal documents in easily understandable
language; claims procedure in both life and non-life; setting up of
grievance redressal machinery; speedy settlement of claims; and
policyholders' servicing. The Regulation also provides for payment of
interest by insurers for the delay in settlement of claim.

v     The insurers are required to maintain solvency margins so that they are
in a position to meet their obligations towards policyholders with regard
to payment of claims.

v     It is obligatory on the part of the insurance companies to disclose clearly

the benefits, terms and conditions under the policy. The advertisements
issued by the insurers should not mislead the insuring public.

v     All insurers are required to set up proper grievance redress machinery in
their head office and at their other offices.

The Authority takes up with the insurers any complaint received from the
policyholders in connection with services provided by them under the
insurance contract.
 1.2.1 COMPANY PROFILE

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse and Prudential plc, a leading international financial
services group headquartered in the United Kingdom.

ICICI was established in 1955 to lend money for industrial development. Today, it
has diversified into retail banking and is the largest private bank in the country.
Prudential plc was established in 1848 and is presently the largest life insurance
company in UK.

ICICI Prudential is currently the No. 1 private life insurer in the country. For the
financial year ended March 31, 2005, the company garnered Rs 1584 crore of new
business premium for a total sum assured of Rs 13,780 crore and wrote nearly
615,000 policies.

The Company recognizes that the driving force for gaining sustainable competitive
advantage in this business is superior customer experience and investment behind
the brand. The Company aims to achieve this by striving to provide world class
service levels through constant innovation in products, distribution channels and
technology based delivery. The Company has already taken significant steps to
achieve this goal.

India's Number One private life insurer, 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. 23.72
billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

ICICI Prudential was 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.
FACT SHEET

THE COMPANY

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse, and Prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was
amongst the first private sector insurance companies to begin operations in
December 2000 after receiving approval from Insurance Regulatory Development
Authority (IRDA).

ICICI Prudential's capital stands at Rs. 23.72 billion with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. For the first quarter ended
June 30, 2007, the company garnered Rs. 987 crore of weighted retail + group new
business premiums and wrote over 450,000 retail policies in the period. The
company has assets held to the tune of over Rs. 18,400 crore.

ICICI Prudential is also the only private life insurer in India to receive a National
Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind)
rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to
meet its obligations to customers at the time of maturity or claims.

For the past six years, ICICI Prudential has retained its position as the No. 1
private life insurer in the country, with a wide range of flexible products that meet
the needs of the Indian customer at every step in life.

1.2.2 Distribution

ICICI Prudential has one of the largest distribution networks amongst private life
insurers in India. It has a strong presence across India with over 680 branches and
over 235,000 advisors.

The company has over 23 bancassurnace partners, having tie-ups with ICICI Bank,
Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, Idukki
District Co-operative Bank, Jalgaon Peoples Co-operative Bank, Shamrao Vithal
Co-op Bank, Ernakulam Bank, 9 Bank of India sponsored Regional Rural Banks
(RRBs), Sangli Urban Co-operative Bank, Baramati Co-operative Bank, Ballia
Kshetriya Gramin Bank, The Haryana State Co-operative Bank and Imphal Urban
Cooperative Bank Limited.
1.2.3Products Insurance Solutions For Individuals
ICICI Prudential Life Insurance offers a range of innovative, customer-centric
products that meet the needs of customers at every life stage. Its products can be
enhanced with up to 4 riders, to create a customized solution for each policy
holder.

Savings Solutions

 Save’n’Protect is a traditional endowment savings plan that offers life

protection along with adequate returns.
 CashBak is an anticipated endowment policy ideal for meeting
milestone expenses like a child’s marriage, expenses for a child’s
higher education or purchase of an asset.
 LifeTimeSuper  offer customers the flexibility and control to
customize the policy to meet the changing needs at different life
stages. Each offer 4 fund options — Preserver, Protector, Balancer
and Maximiser.
 LifeLink Super is a single premium Unit Linked Insurance Plan which
combines life insurance cover with the opportunity to stay invested in
the stock market.
 Premier Life Gold is a limited premium paying plan that offers
customers life insurance cover till the age of 75.
 InvestShield Life New is a unit linked plan that provides premium
guarantee on the invested premiums and ensures that the customer
receives only the benefits of fund appreciation without any of the risks
of depreciation.

·        InvestShield Cashbak is a unit linked plan that provides premium

guarantee on the invested premiums along with flexible liquidity
options.

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.
 HomeAssure is a mortgage reducing term assurance plan designed
specifically to help customers cover their home loans in a simple and
cost-effective manner.
Child Plans

·         SmartKid education 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 plans are also available in
unit-linked form – both single premium and regular premium.

Education Insurance Plans

·         Education insurance under the SmartKid brand provides

guaranteed educational benefits      to a child along with life insurance
cover for the parent who purchases the policy. The policy is designed
to provide money at important milestones in the child’s life. SmartKid
plans are also available in unit-linked form – both single premium and
regular premium
Retirement Solutions

 ForeverLife is a retirement product targeted at individuals in their

thirties.
 Market-linked retirement products
 LifeTime Super Pension  is a regular premium market-linked pension
plan.
 Golden Years: is a limited premium paying retirement solution that
offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both
the accumulation and payout stages.

Health Solution

 Health Assure and Health Assure Plus:  Health Assure is a regular

premium plan which provides long term cover against 6 critical
illnesses by providing policyholder with financial assistance,
irrespective of the actual medical expenses. Health Assure Plus offers
the added advantage of an equivalent life insurance cover

·        Cancer Care: is a regular premium plan that pays cash benefit on
the diagnosis as well as at different stages in the treatment of various
cancer conditions.
 ·        Diabetes Care and Diabetes Care Plus*: 1st ever critical illness
insurance cover for diabetics.

·        Hospital Care*: Hospital Care offers a Cashless hospitalization

facility in more then 3000 network hospitals

·        Crisis Cover : is a 360-degree product that will provide long-term

coverage against 35 critical illnesses, total and permanent disability,
and death

Note (*) products Re-launched on 1st July 2006

Group Insurance Solutions

ICICI Prudential also offers Group Insurance Solutions for companies seeking to
enhance benefits to their employees.

ICICI Pru 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.

ICICI Pru 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.

ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution helps
provide affordable cover to members of a group. The 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 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 rider 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 & Disability Benefit: This rider option pays 10% the sum
assured under the rider every year till next 10 years on Accidental
Permanent Disability of 2 Organs.

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.      Income Benefit: This rider pays the 10% of the sum assured to the nominee
every year, till maturity, in the event of the death of the life assured. It is available
on SmarKid, SecurePlus and CashPlus

5.      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.

Choice of Six Investment Options :-

ICICI prudential offers you the opportunity of selecting between investment

options to match your investment priorities.

1) Protector:-

            An Investment Option with investment indebt and money market

instruments.

2)         Maximiser :-

            An investment option with investment in equity and equity related

instruments.

3)         Balancer :-

An investment option with investment in a mix of equity and debt

oriented instruments.

4)         Preserver :-
                An investment option with investment in low-risk instruments like cash
and call

money markets.

5)         Flexi Growth:-

New Fund (NFO) launched in March 2007, Long term returns from an
equity portfolio lare,mid and small cap companies.

6)         Flexi balanced:-

Balance of capital appreciation and stable returns from an equity

(large,mid & small cap companies) & debt portfolio.

1.2.4 Vision and Mission 

Their vision is to make ICICI Prudential Life Insurance Company the dominant
new insurer in the life insurance industry. This they hope to achieve through their
commitment to excellence, focus on service, speed and innovation, and leveraging
our technological expertise.

The success of the organisation will be founded on its strong focus on values and
clarity of purpose. These include:

·         Understanding the needs of customers and offering them superior

products and service
·         Building long lasting relationships with their partners
·         Providing an enabling environment to foster growth and learning
for their employees

And above all building transparency in all our dealings.

They believe that they can play a significant role in redefining and reshaping the
sector. Given the quality of their parentage and the commitment of their team, they
feel that tere will be no limits to their growth.

DISTRIBUTION
ICICI Prudential has one of the largest distribution networks amongst private life
insurers in India, having commenced operations in 150 cities and towns in India,
stretching from Bhuj in the west to Guwahati in the east, and Jammu in the north to
Trivandrum in the south.

The company has 9 bank partnerships for distribution, having agreements with
ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Lord Krishna Bank,
and some co-operative banks,  as well as over 300 corporate agents and brokers. It
has also tied up with NGOs, MFIs and corporates for the distribution of rural
policies.

ICICI Prudential has recruited and trained more than 1, 90,000 insurance advisors
to interface with and advise customers. Further, it leverages its state-of-the-art IT
infrastructure to provide superior quality of service to customers

RegisteredOffice :

ICICI Towers 9thfloor, Bandra-Kurla Complex

Mumbai - 400 051.
Tel: 494 3232

Regional Office :
8th floor EROS Coorporate Tower,Nehru place,

New Delhi-110011.Tel:46554405

Delhi office :

3rd floor
Videocon Towers
E-1, Rani Jhansi Road
New Delhi - 110055. Tel: 601 3232

ICICI Prudential Life Insurance opens office in Dubai

In a move to consolidate its position in the Gulf region, ICICI Prudential Life
Insurance (ICICI Prudential), India's No. 1 private life insurance company, today
opened its representative office in Dubai, becoming the first private life insurer
from India to open an office in the Emirate.

                        
 At ICICI Prudential we offer pragmatic, world-class solutions. Put simply,
solutions with a lot of common sense. Solutions that take care of your four basic
financial needs - Earning, Saving, Investing and Spending. So you live your life to
the fullest, sans worries

1.2.5 ACHIEVEMENTS

ICICI Prudential Life Insurance crosses one million-policies milestonenews

ICICI Prudential Life Insurance (IPLI), a joint venture between ICICI Bank
and Prudential plc, has become the first private life insurer to cross the one million
policies milestone. The corresponding sum assured stands at about Rs22,500 crore
and the new business premium income is Rs1,700 crore.

The life insurance sector has seen tremendous growth in the last few years,
fuelled by product and service innovation. It has also created several opportunities
for employment and generated long-term savings to fund development of the
economy in the future. We see pensions as a high-growth segment for the industry.
We are pleased with the progress made by ICICI Prudential thus far, and remain
committed to the sector

The company's CAGR has been 148 per cent over the past three financial years. To
commemorate the one million-policy milestone, ICICI Prudential has launched a
programme called 'dil se', under which the company gifted 10 LifeLink insurance
policies to underprivileged children, each with a value of Rs20,000. The company
will altogether gift 50 such policies, totaling a symbolic Rs1 million, to
underprivileged children in Mumbai, Delhi, Kolkata, Chennai and Bangalore.

According to Shikha Sharma, managing director and CEO, ICICI Prudential Life,
said, "Our complete focus on the customer right from day one has enabled us to
touch this landmark in less than four years of operations. It was a leap of faith that
our early customers took when they decided to place their trust in ICICI Prudential
in early 2001. I am happy to say that today; we have over a million such
customers, each of them a testament to the progress made by not only the
company, but life insurance as a whole."

2.SWOT Analysis of ICICI Prudential Life Insurance’s Recruitment

Process
Strengths

 Brand equity of Kotak Mahindra Bank.

 Rigorous Pre-Hiring assessment tests to understand aptitude and personality
of candidates.
 Proper reference checks to ensure that only bonafide candidates are
appointed.
 Adequate number of channel partners to generate footfalls for each location.
 Footfall MIS being maintained at each branch locally by Admin.

    Weaknesses

 Pre assessment tests are costly.

 Conversion of footfalls is low.
 Lengthy pre-offer formalities.
 Huge employee turnover.
 Opportunities

  Campus recruitments have huge potential for fulfilling manpower

requirements cost effectively.
  Tie up with recruitment agencies on supplying fixed number of footfalls
week on week.
  Develop exclusive contract with channel partners to meet the manpower
requirements.
  Make blue form brief and to the point.
  Reduce turn around time of making an offer.

Threats

 Increasing number of private players in insurance sector creates ample

choices, frequent and easy mobility for employees.
 Same channel partners are handling all insurance companies. This leads to
same pool of candidates being circulated to all partners.
 Increasing spill over as a candidate has more than one offer at the time of
making a job shift.
 As the insurance industry is small, senior level candidates hesitate to meet
HR of other companies for the fear of grapevine.