Professional Documents
Culture Documents
On
Prepared by:
Hitesh j.vachhani (MBA-III)
Project Guide:
Prof.Vishva Kasundra
Saubmited to:
Saurashtra University – Rajkot
In this project report I had tried to analyze the needs of the customers
and suggest them the most suitable insurance solution. As well as I also
analyzed the brand awareness among the people.
I was able to prepare this training report with the co-operation of various
people.
our professor Miss Vishva Kasundra who has given me an opportunity and
she has helped me very much in preparing the report by her guidance
Thanking you
(Hitesh J. vachhani)
(MBA-III)
Date:
Place: Rajkot
Hitesh J. vachhani
• Prudential Plc 34
• Management 36
9 Finance Department 44
10 Marketing Department 58
11 Operation Department 62
13 Research Methodology 78
14 Questionnaire 89
15 Conclusion 93
16 SWOT Analysis 95
17 Bibliography 97
When investors are confronted with an astounding range of products, from traditional bank
deposits to downright shady money-multiplier schemes, it has to be judged on the yardsticks
of return, liquidity, safety, convenience and tax efficiency.
There are two kinds of insurance available viz. Life Insurance and
General Insurance.
GENERAL DEFINITION
The general definitions are given by the social scientists & they
consider insurance as a device to protection against risks, or a
provision against inevitable contingencies or a co-operative device
of spreading risks. Some of such definitions are given below:
In the words of John Magee , “Insurance is a plan by which
large number of people associate themselves & transfer to the
shoulder of all, risks that attach to individuals.”
In the words of Sir William Bevridges , “The collective bearing
of risks is insurance.”
In the words of Boone & Kurtz , “Insurance is a substitution for
a small known loss (the insurance premium) for a large
unknown loss, which may or may not occur.”
In the words of Thomas , “Insurance is a provision, which a
prudent man makes against for the loss or inevitable
contingencies, loss or misfortune.”
In the words of Allen Z. Mayerson , “Insurance is a device for
the transfer to an insurer of certain risks of economic loss that
would otherwise come by the insured.”
In the words of Ghosh & Agarwal , “Insurance is a co-operative
form of distributing a certain risk over a group of persons who
are exposed to it.”
Co-operative Device
Insurance is a co-operative form of distributing a certain risk over
a group of persons who are exposed to it (Ghosh & Agarwal). A
large number of persons share the losses arising from a particular
risk.
Evaluation of Risk
For the purpose of ascertaining the insurance premium, the volume
of risk is evaluated, which forms the basis of insurance contract.
Spreading of risk
Insurance is a plan, which spread the risks & losses of few people
among a large number of people. John Magee writes, “Insurance
is a plan by which large number of people associates themselves &
transfer to the shoulders of all, risks attached to individuals.”
Transfer of risk
Insurance is a plan in which the insured transfers his risk on the
insurer. This may be the reason that Mayerson observes, that
insurance is a device to transfer some economic losses to the
insurer, and otherwise such losses would have been borne by the
insured themselves.
Ascertaining of losses
By taking a life insurance policy, one can ascertain his future
losses in terms of money. This is done by the insurer to
determining the rate of premium, which is calculated on the basis
of maximum risks.
A contract
Insurance is a legal contract between the insurer & insured under
which the insurer promises to compensate the insured financially
within the scope of insurance policy, & the insured promises to pay
a fixed rate of premium to the insurer.
Nationalization
But after the introduction of Insurance Act 1938, the demand for
nationalization of Life Insurance Industry was raised, there were so
many reasons in order to nationalize the insurance sector.
They are:
Above are few but strong reasons, which have contributed towards
nationalization of insurance sector, and then after in the year 1956,
all insurance companies were merged in to one and Life Insurance
Corporation of India came into existence.
Chart 1 shows that. Among private players, the ICICI prudential has
captured the 28% of the market share up to December 2005, followed by
Allianz Bajaj with 23% and HDFC Standard Life with 11% TATA Aig life and
Birla Sunlife with 7% each and remaining other players have captured less than
5% of market share.
Chart 2 shows that the annual growth rate of the private life insurance
players from November 2004-05. it is interesting to note that Allianz Bajaj has
achived 264.09% annual growth rate in terms of premium collection and the
fastest growing insurance players, followed by HDFC Standard with 143.1%
and Metlife with 136.45%, and remaining other players have doubled their
premium in a span of one year, whereas Birla Sunlife and SBI life have failed
to collect the premium consistently and registered negative growth rates 7.93%
and 2.48% respectively. Surprisingly, ICICI Prudential Co. has not been
retrained in their leading position in 2005.
The market share of the LIC has been declining since 2000, after
opening up of the sector to private companies, LIC’s higher market share in the
number of policies sold compared with premium income, so it is to be inferred
that the private players are cornering a larger share of high premium policies.
Further all policymakers are expected that, insurance business will take wings
under bancassurance but despite the belief SBI Life was registered negative
2.48% annual growth rate in corresponding period. It is need to be viewed
serious by the RBI and IRDA authorities.
300 264.09
200 164.31 136.48
rate
Birlasunli
-100 TATA
Standard
SBI Life
Metlife
AVIVA
AIG
HDFC
Insu.
Life
Life
fe
Insurers
Prudential P.L.C.
Established in 1848, today prudential plc is a leading international
financial services company with some 16 million customers, policyholders and
unit holders and some 20,000 employees worldwide. In the UK Prudential is a
leading life and pensions provider with around seven million customers. M&G
was acquired by Prudential in 1999 and is the Group’s UK and European fund
manager, responsible for managing over of 111 billion of funds (as at December
2003). Launched by Prudential in 1998, Egg is an innovative financial services
company, with over three million customers, with nearly six per cent of UK
credit card balances. In Asia, Prudential is the leading European life insurer
with 23 life and fund management operations in 12 countries serving some five
million customers. In the US, Prudential owns Jackson National Life, a leading
life insurance company, and has more than 1.5 millions policies and contracts in
force.
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
ICICI Prudential’ s equity base stands at Rs.6.75 billion with ICICI Bank
and Prudential plc holding 74% and 26% stake respectively. In the year ended
March 31,2004 the company had issued over 430,000 policies, for a total sum
assured of over Rs 8,000 crore and premium income in excess of Rs.980 crore.
The company has a network of about 30,000 advisors; as well as 12 banc
assurance tie-ups. Today the company is the number one private life insurer in
the country.
K. V. Kamath
Managing Director and Chief Executive Officer
Savings Solutions…..
Secure Plus is a transparent and feature-packed savings plan that offers 3
levels of protection. Cash Plus 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. Cash Back 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 coupons – level term assurance, level term assurance with
return or premium and single premium.
Market-linked Solutions
Retirement Solutions……
ICICI Pru”s group gratuity plan helps employers fund their statutory
gratuity obligation in a scientific manner. The plan can also customize to
structure schemes that can provide benefits beyond the statutory obligations.
ICICI Pru”s flexible group term solution helps provides affordable cover
to members of 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.
ICICI Pru Life offers flexible riders, which can be added to the basic
policy at marginal cost, depending on the specific of the customer.
Accident benefit: This rider option pays the sum assured the rider on death due
to accidents.
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
prior to death.
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 SmartKid, SecurePlus and Cashplus.
Leverage Analysis:
A firm can make use of different sources of financing whose costs are different.
These sources may be, for purposes of exposition, classified into those that
carry a fixed rate of return and those on which the returns vary. The fixed
returns on some sources of finance have implications for those who are entitled
to a variable return. Thus, since debt involves the payment of a stated rte of
interest, the return to the ordinary shareholders is affected by the magnitude of
debt in the capital structure of a firm.
The employment of an asset or source of funds for which the firm has to pay a
fixed cost or fixed return may be termed as leverage. Consequently, the
earnings available to the shareholders as also the risk are affected. If earnings
les the variable costs exceed the fixed cost, or earnings before interest and taxes
R.K.College of Business Management 46
exceed the fixed return requirement, the leverage is called favorable. When they
do not, the result is unfavorable leverage.
Capital Budgeting:
Dividend policy:
Dividend refers to that portion of a firm’s net earnings
which are paid out to the shareholders. Since dividends are
distributed out of profits, the alternative to the payment of
dividends is the retention of earnings/profits. The retained
earnings constitute an easily accessible important source of
financing the investment requirements of firms. There is, thus,
a type of inverse relationship between retained earnings and
cash dividends. Larger the retention, lesser dividends; and
smaller retentions, larger dividends. Thus, the alternative uses
of the net earnings-dividends and retained earnings-are
competitive and conflicting.
Mutual Fund Name AUM Equity & Debt & Equity Debt
Balance MIP % %
ABN AMRO Mutual Fund 1580.36 464.589. 1115.92 29.39 70.61
Alliance Capital Mutual Fund 1431.46 589.48 841.98 41.18 58.82
Birla Sun Life Mutual Fund 10049.66 1668.77 8380.89 16.61 83.39
Canbank Mutual Fund 1565.19 224.35 1340.84 14.33 85.67
Chola Mutual Fund 1004.62 232.63 771.99 23.16 76.84
Deutsche Mutual Fund 2366.72 96.57 2270.15 4.08 95.92
DSP Merrill Lynch Mutual Fund 6472.80 1462.33 5010.47 22.59 77.41
Fidelity Mutual Fund 1628.06 1628.06 0.00 100.00 0.00
Franklin Templeton Mutual Fund 16704.74 6965.36 9739.38 41.70 58.30
HDFC Mutual Fund 15707.82 6126.04 9581.78 39.00 61.00
HSBC Mutual Fund 7250.63 1987.93 5262.70 27.42 72.58
ING Vysya Mutual Fund 2072.86 337.25 1735.62 16.27 83.73
JM Financial Mutual Fund 3780.83 85.52 3694.51 2.26 97.74
RATIO ANALYSIS
Growth Fund
Ratio Formula 2006 2005
Current
Current
asset/current 2438.37/1818.15=1.34 1275.46/1066.90=1.19
ratio
liability
Total
14126.20/9981.01=1.4
EPS profit/unit 23311.45/7700.63=3.02
1
capital
Div payout
Div. paid/unit 941.81/7700.63=0.12(12%)Div. 621.86/9981.01=0.62(6
to unit
capital paid/unit capital .2%)
holders
Div. Div. paid/net 621.86/14126.20=0.04(
941.81/23311.45=0.04(4%)
payout profit 4%)
Div. to
Dividend/total 717.53/14882.68=0.48(
total 428.45/18041.54=0.24(2.4%)
income 4.8%)
income
Profit on Profit/sales 13834.17/18041.54=0.77(77%) 12074.52/14882.68=0.
sales redemption 81(81%)
redemption
to total
Today the definition of marketing has been changed. The marketing activity of an
organization before the product is produced and continues even after the product is
sold. In the buyer market of recent times the sharpest weapon that a company can
develop is globalize marketing place in the value creation and delivery. The proud and
demanding customer of today brings before corporate a critical fact, when the
customer is jury. It is the value generation for the customer that will separate the victor
from vanquished. The value of customer service cascades all over the company. The
aim of customer focus is not just satisfaction but delight satisfaction.
Till the year 1999 the life insurance business was exclusively conducted by the Life
Insurance Corporation (LIC) while the general insurance business in India, was
exclusive by General Insurance Corporation and its four subsidiaries. The insurance
sector is opened for private participation since November, 2000.
Before 1999 there was no marketing done by LIC due to its monopoly but now after 5
years the picture has changed. Now there are private players in market. With the
effective marketing techniques the private players has changed the whole scenario of
the insurance sector. They are slowly and gradually driving the business out of the
hands of the LIC. Before 1999 customer had no option other then LIC, but now they
have got many options.
It is five times more expensive to acquire a new customer than to retain an old one.
Relationship marketing is one of the hottest tread in the present marketing scenario.
Satisfied customers not only stay with a company but they are also walking talking
advertisement for the company’s product.
ICICI Prudential has recruited and trained over 32000 insurance advisors to
interface with and advice customers. Further, it leverages is State-of the art IT
infrastructure to provide superior quality of service to customer.
The essence of this definition is that people who work together require a
defined system or structure through which they relate to each other and through
which their efforts can be coordinated. Every organization has goals or
objectives for its existence. In the case of Personnel Management, it is to
optimize “the effectiveness of human resources”. These goals can be achieved
more suitably if the behavior of the workers and the composition of the
organization can be predicted and integrated cooperatively. The formal
organization structure attempts to give order and unity to the actions and efforts
of those who work together.
Board of Directors
Human Resource Planning is the process by which an organization ensures that it has the right
number and kind of people, at the right place, at the right time, capable of effectively and efficiently
competing those tasks that will help the organization achieve its overall objectives. Human Resource
Planning translates the organization’s objectives and plans into the number of workers meet those
objectives. Without a clear-cut planning, estimation of an organization’s human resource need is
reduced to mere guesswork.
ICICI PRUDENTIAL Asset Management Company considers several factor in HRP are strategy of
company, organization planning about new schemes, environment uncertainties, time horizons, and
nature of jobs being filled. By considering these entire factors it helps to ICICI PRUDENTIAL to
coping with change, creates highly talented personnel, and helps to determine futures needs.
Manpower planning is needed with respect to persons who can work as sub-broker for the companies.
Companies focused on Insurance Advisor and post office agent, Tax consultants and CAs for making
sub-broker. ICICI PRUDENTIAL AMC Forecast HR Demand – it estimates the future quantity and
quality of people required. It uses forecasting technique that is Management Judgment that involves
“bottom-up” or “top-down” approach. After forecasting company forecast about HR supply that may
be from Existing human resource, internal sources or External sources.
The upper level members like zonal managers, regional managers, branch managers and senior
executives are recruited. The regional manager has authority to select lower level employee like peon,
marketing executives, financial accountant etc. by approval of zonal manager.
SELECTION
Selection is a process to select a fixed number of personnel from a large number of applicant received
by employees, seeking the job and selecting those who suitable for the given job selection includes a
number of steps. The purpose of selection is to pick up the right person for every job.
A scientific procedures of selection, requires 2 things:
1. Knowledge regarding the qualities which a person should posses in order to do the given job
properly
2. The evaluation of qualities possessed by a candidate for the job.
Prudential ICICI has adopted the following steps for selection procedure:
PRELIMINARY INTERVIEW
The main purpose of preliminary interview is to screen out those who are unsuitable. Those
interviews are quite short. If candidates are found suitable then an application blank may be given to
him to fill up and return.
In ICICI PRUDENTIAL AMC regional manager first interviews candidates, and if selected than he is
interviewed by zonal manager & if he is found suitable than an application blank is given to them.
Here the applicants are asked to complete a blank that provides space for him to record data relating
to the name of candidates, experience etc. The application blank must not be too lengthy. In Pru ICICI
AMC this application blank is forwarded to Mumbai branch to hr department.
INTERVIEW
After the application blank reaches to the HR Department Mumbai, a telephonic interview is
conducted by HR Manager to see that the regional manager & zonal manager has made the right
choice or not.
MEDICAL CHECK UP
If the candidates clears all the above stages, company checks his medical report the basic purpose of
medical check-up is to determine the job for which candidate is fit or not.
REFRENCES
Checking of references is an important part of selection process. The company prefers to select the
candidate within the group or if the candidate gives the name of reputed person as his references.
FINAL SELECTION
If the candidate passes successfully from the above stages he is finally selected for the post. The final
selection lies with the regional manager.
PLACEMENT
The last stage in selection process is the placement of candidate. After the final selection is done, the
selected candidate is finally placed on the job.
TRAINING
“It is the systematic evaluation of the individual with respect to his or her performance on the
job and his or her potential for development.”
Objective of Performance appraisal if for Developmental uses for agents and Financial Consultants,
for wages, transfer, promotion, for documentation and for organizational purpose like Human
Resource Planning, Job analysis and for training and development.
ICICI PRUDENTIAL first set the objective of performance appraisal then in establish job expectation
and then decide whose performance should be rated and who the raters are. Basically raters are
immediate supervisor, subordinates, peers, clients. For Performance Appraisal modern method is used
like MBO (Management By Objectives) and 360” appraisal. But there is some limitation like Hello
effect, Bias, Perception factor, Spill over etc
Selection Methods:
The selection procedure is concerned with securing relevant information
about an applicant. This information is secured in a number of steps or stages.
The objective of selection process is to determine whether an applicant meets
the qualifications for a specific job and to choose the applicant who is most
likely to perform well in that job.
Data Source:
The data would be collected from both primary as well as secondary source.
Consumers would be asked to fill questionnaires to arrive at the information.
Various secondary sources of data as magazines, journal, Internet etc. would
also be explored.
Sampling Area:
The sampling areas of this research are Ahmedabad.
Sampling method:
The convenient sampling method was used for this research and the
respondents were those who have already taken life insurance policy.
Sample Size:
The size of this research is 50 respondents.
Research Instrument:
The research instruments, which was used, for collecting the data is
questionnaire.
Method of contact:
The method of contact would be personal and direct as this would help
to qualify the customer’s issues while filling up the questionnaire and also helps
them if they do not have the knowledge about any insurance plan of the
company.
As our sample is those people who have insurance so all the respondents are
falling under the “Yes” criteria.
LIC 50
Birla Sunlife 2
SBI 3
ICICI Pru. Life 10
Kotak Mahindra 3
Post Office 15
HDFC 3
60
50
No. of 40
30
Respondents 20
10
0
LIC
SBI
HDFC
Mahindra
Kotak
As from the above chart it is very clear the all of the respondents have an
insurance of the LIC while some of them have an insurance of the other
companies like post Office, ICICI Prudential Life insurance Co., HDFC Co.
Etc.
The reason behind this is that the LIC competitor since more than four
decades and the Indian Govt. allowed the Introduction of private player in
Insurance in the year 2000.
The analysis of the above available data is merely to find out the percentage of
income that one is willing to invest in insurance.
Priorities of Respondents
No. of Respondents
60 Death Benefit
50
40 Children’s Future
30
20
Retirement
10
Planning
0
Tax Planning
l
ta
1
5
o
T
Financial
Rank
Planning
From the table and chart it can be say that most of the people rank death benefit
first for the decision to make investment in Insurance. Their second priority is
tax planning because the premium, which is paid by the people towards
Insurance, is deductible up to certain limit from the income and also the
maturity amount is also tax free. The third and fourth priorities are children’s
future and retirement planning.
Q.6 If “Yes” do you have any knowledge about unit linked insurance
plans?
The question number 5 and 6 are designed to know the awareness of people
who have knowledge of share market or deals in shares also have the
knowledge of the new modern insurance product i.e. Unit Linked Insurance
Plan. From the available data it can be say that those who deal in shares are also
aware of the ULIP.
22% 0%
Only Unit Linked
Only Traditional
Both
78%
From the Q. No. 7 we can say that even though the modern products available
in the market since more than two years and which are having the more
flexibility and also giving the higher return than traditional one most of the
R.K.College of Business Management 82
people do not have or may be not aware of it which shows the lack of brand
awareness and it requires an aggressive promotional efforts on the part of
company.
There is a lot of scope available for the company to attract more customers by
giving or introducing most suitable ULIP products and at the same time increase
the customer base.
Q.8 If given a choice, where would you like to invest your money?
(Please Rank Your Choice)
Choice/Rank 1 2 3 4 5 6 7 8 Total
Mutual Fund 0 1 5 1 25 12 5 1 50
Insurance 4 12 14 4 8 3 0 0 45
Gold 4 8 1 2 2 5 13 13 48
Equities 17 3 0 5 2 6 1 0 34
Post Office 22 12 12 2 2 0 0 0 50
Debenture 0 2 4 10 1 14 2 0 33
Bank Deposit 0 6 12 19 1 0 3 1 42
Other 10 5 0 2 1 0 0 2 20
Investment Priorities
No. of Respondents
60
50 Mutual Fund
40 Insurance
30 Gold
20 Equities
10 Post Office
0
Debenture
Total
1
2
3
4
5
6
7
8
Bank Deposit
Other
Rank
This question is mainly designed to know the investment priorities of the people
of Ahmedabad town. The objective behind this Q. is that after the Charotar
Nagrik Co-oprerative Bank and other Credit Societies, which are giving higher
R.K.College of Business Management 83
interest on deposits, the whole scenario of city is changed. Most of the people
prefer to invest in post office saving schemes and where their money is safe
even though the return is very less. So there is a great need to divert the efforts
of the company towards the safety and security as ICICI Prulife is a private
insurance Company.
Q.9 According to you what are the factors that would affect you decision
while purchasing an insurance policy?
Criteria/Rank 1 2 3 4 5 50
Premium 12 15 15 6 2 50
Return 21 17 8 2 2 50
Safety 20 14 15 1 0 50
Liquidity 1 1 9 18 21 50
Market 1 2 0 16 21 40
Condition
60 Criteria/Rank
40
No. of
Premium
20 Return
0 Safety
1 2 3 4 5 6 Liquidity
Rank Market Condition
The question No. 9 is designed to know which the factors are affecting
the most to the prospect while making decision to invest in insurance. As far as
investment in insurance is concerned most of the people want that it should be
safe and at the same time giving the compatible returns because insurance is not
only for death benefit it is also a saving tool for future. So the mix response of
respondents is welcomed. Available data is such that there is a bit ambiguity.
R.K.College of Business Management 84
But we can say that the most affecting factors to the prospect are return and
safety. As per the finance theory risk and return goes in hand in hand but as far
as insurance is concerned it is all about the compatible and safe returns over
others.
This question is taken to collect the information of those respondents who are
going to plan to purchase insurance within near future that is used by the
company for making personal contact for sale.
20% 0% 10%
High Premim
Low Return
Poor Services
Others
70%
The question No.11 and 12 are designed to know the percentage of people who
are not satisfied with the current investment in insurance and also to know the
reasons behind it. So that the company can focus on those areas where the
competitors fail. Because now a days the competition is very stiff in the
insurance industry. All companies are trying to attract more customers by
anyhow. So it will be useful for designing the promotional schemes of the
company.
From the above table and chart it can be seen that the respondents who
are dissatisfied give the main reason behind it are poor services. There are many
others reasons like more time taken by the company for claim settlement, non-
dispatchment of cheques and other important vouchers, etc. So the company can
improve upon these and increase its market share by offering quality service to
the customers.
Q. 12 Do you know anything ICICI Prudential Life Insurance?
Q. 13 If “Yes”, from where did you come to know about the company?
Sales
Representative
47% Others source
Amount
Death Benefit
Children’s Education
Retirements Benefit
Tax Planning
Financial Planning
Q.9 According to you what are the factors that would affect you decision
while purchasing an insurance policy?
(Please Rank Your Choice)
Premium
Return
Safety
Liquidity
Market Condition
__________________________________________________________
__________________________________________________________
_______________________________
Magazines
India Today
ICFAI Journal
Outlook Express
Materials
LIC literature and brochures
ICICI Prudential literature and brochures