Annual Report

Introduction

ICICI PRUDENTIAL LIFE INSURANCE

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p r o d u c t r a n g e a n d c u s t o m e r b a s e , w e c o n 2

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Our vision: t h e q u a l i t y o f o u r p a r e n t a g e a n d t h e

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Company Profile: About ICICI Prudential: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 equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In 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 has a network of about 56,000 advisors; as well as 7 Bancassurance and 150 corporate agent tie-ups. For the past four 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. VISION:To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. 5

This is what company hopes to achieve: • Understanding the needs of customers and offering them superior products and service • Leveraging technology to service customers quickly, efficiently and conveniently. • Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to Company’s policyholders • Providing an enabling environment to foster growth and learning for Companies employees • And above all, Company’s dealings.

building

transparency

in

all

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of people and the way they work. Company believes that it is on the threshold of an exciting new opportunity, where it can play a significant role in redefining and reshaping the sector. Given the quality of parentage and the commitment of its team, there are no limits to its growth. PROMOTERS:ICICI Bank:-

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ICICI was founded by the World Bank, Government of India and representatives of the private sector in 1955 to encourage and assist industrial development and investment in India. ICICI Bank is India’s second-largest bank with total assets of about Rs.112, 024 Crore and a network of about 450 branches and offices and about 1750 ATMs. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital, asset management and information technology. ICICI Bank posted a net profit of Rs.1637 Crore for the year ended March 31, 2004. ICICI Bank’s equity shares are listed in India on stock exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).The Various segment of ICICI are.

Prudential plc:Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 16 million customers, policy holder and unit holders worldwide. As of June 30, 2004, the company had over US$300 billion in funds under management. Prudential has brought to market an integrated range of 7

financial services products assurance, pensions,

that

now

includes

life

Mutual funds, banking, investment management and general insurance. In Asia, Prudential is the leading European life insurance company with a vast network of 24 life and mutual fund operations in twelve countries China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. The company has six Banc assurance tie-ups, having agreements with ICICI Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank and some cooperative banks, as well as over 150 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporate for the distribution of rural policies and 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 about 2,14,000 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.

Project Objective:Financial market is one of the markets where there is lots of option for the Company, because this market is at the starting point or at the initial stage. ICICI prudential is 8

a part of these financial markets who is selling the insurance as well as the mutual fund. The financial market mainly depend upon the investor who have the power of money to invest into the market in the form of insurance or mutual funds, and our objective was to find out investor who can be the future client of the company, our project “Synergy of High Net- Worth Individuals (HNI) With their Distribution Channel” ,which mainly focus on finding out the investment behaviors of the HNI clients, their mode of investment , and the people who can change their financial decision, because most of the HNI client usually take the Advice of the people who are close to them ,and has the knowledge about the financial market.

Theory and Concept Financial market is one of the market, which had started to grow a few years ago, and with boom in this sector many private company came into existence, and ICICI prudential is one of them. The Financial market is mainly depend on the people who had enough money to invest, to get a good return out of it and our project aim was to find out those prospect who can invest heavily on the financial market and the source through which we can reach them, such as:•

Bankers.

•

Chartered Accountant.

•

Investment Consultant 9

It is general known that most of the heavy investor usually consults their bankers, chartered accountant or their Investment Consultant before taking any decision while investing, because they are the people who are generally close to them and know them very well, so our project was to find out, who are the people who can change their decision to ICICI Prudential favour .Most of HNI are usually depend upon their CA, because he is the person who control the financial detail of his client and his decision are generally consider as one of the most valuable decision . So our main aim of the project was to find out the various details such as:•

Chartered Accountants name

•

Chartered Accountant, Detail.

•

Clients Advisor

•

Bank Name

Research Methodology:Research is one of the most important parts in the survey to collect information and knowledge. Marketing research is defined as the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. 10

Problem and Research Objective:Our main objective was to find out the top HNIs (High net worth income) group and their various mode of investment. The main problem was how to find out the top twenty HNI clients from the bunch of people without knowing them in detail. To get all this information a thorough planning had to be done, so I first started with designing the questionnaire for the clients whom I was going to target and to know about their investment pattern. The main things to be known from the clients were: 1.

There Annual turnover

2.

Who are there bankers?

3.

There chartered accountant

4.

Who influence there investment decision

5.

What is there annual investment?

Research planThe research process depends upon developing the most efficient plan for gathering the needed information. Designing a research plan calls for decisions on the data sources, research approaches, research instruments, sampling plan, and contact methods.

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Our objective was to find the “Synergy of HNIs with there Distribution Channel”. This objective had made our project too narrow because from now onward our task was to find the top industries and person who can invest above 1 crores and more then that. So from now onwards I started to target only to a special segment of the people. TYPE OF RESEARCH DESCRIPTIVE RESEARCH I have used this descriptive type of research because it is essentially a fact finding approach to study the existing state of affairs. The aims of the descriptive research are to portray accurately the characteristics of particular individual situation or group and to determine the frequency of occurrence of such events. This type of study can properly present the statistical information and facts. The tools like correlation coefficient and trend analysis are usually adopted. When the researcher can present the results on the basis of actual happening which can not be manipulated at all, such descriptive research is called Export factor research USEFULNESS INSURANCE

OF

IT

IN

ICICI

PRUDENTIAL

LIFE

 They have much to contribute to the development of a young science, as descriptive information can focus directly on a theoretical point.

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It may be useful in verifying local concepts through empirical observation.  Descriptive information can highlight important methodological of data collection and interpretation. The collection of factual data increases our awareness of the relative accuracy or Our measuring devices. Thus, our ability to accumulate further knowledge is significantly broadened.  Descriptive information obtained in a research may be useful for prediction about areas of social life outside the boundaries of the research. Descriptive studies are valuable in providing facts needed for planning social action programmers’

Data source:For this project both primary and secondary data were the most valuable source of information.

Secondary data:Secondary data provide a starting point for research and offer the valuable source of information. The secondary data was the most important source for my project because my first aim was to find out the top five person or industries from every segment of the industries so for this reason I started collecting the various directories which can help me in finding out the desired information about the industries and people. The various directories are as follows:13

•

Telephone Directory.

•

Income Tax office.

•

City directory.

•

Chartered Accountant Directory.

•

Carpet Industries Directory.

•

Hotel Industries Directory.

•

HDFC Banks.

•

Indian medical association directory.

•

Transporter directory.

•

Exporter Directory.

•

Lawyers Directory.

•

Builders & Constructors Directories

•

CNF

Primary data:Primary data are data freshly gathered for a specific purpose. The various sources of primary data for my project are as follows. •

Banks.

•

Local residents.

•

People from industries

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Research Approaches:From the two data source which I have mention above secondary data are the easiest way to gather and the cost of collecting this data is very low and easily available from the respective association. And I started by collecting this directory from the various sources, because at the starting point of the survey this information play a important part for me and this help me to short out the people which, I can meet with them to collected more information about them or who are my target people. After collecting the secondary data or information from the secondary sources then I started collecting from primary sources to narrow down my research. There are basically five ways to collect data. • Survey Research: - This method was the most appropriate way to collect data. And I have used this method in my project to find out the company need by identifying the suitable prospect in the city who can become the ICICI pru client. • Observational Research:- This method was not used by me in my project ,because this survey have no use for me 15

• Focus-group Research: - This method is also not used by me in my survey. • Behavioral data:-This method was also not used by me in my survey.

Research Instruments:There is various way of research instrument of collecting primary data, the various methods are:1.

Questionnaires.

2.

Psychological tools.

3.

Mechanical Devices.

4.

Qualitative Measures.

From the above mentioned research instruments I had used only Questionnaires technique to find out the various information about the clients such as their turnover, chartered accountant, investment behaviors, who is their financial consultant etc. And this was the technique which I felt the best way to extract information about the client

Sampling Plans:After collecting entire data and deciding on the research approach and instruments, now I had to decide on the sampling plan which was one of the important 16

task, because from the bunch of people I had to select only those people ,whom I can target from now onward .There are three way of sorting the data. • Sampling Unit: - who is to be surveyed? And now my task was to define the target population, which will be sampled from the number of people. • Sample Size: - large sample give more reliable result than small sample, so for this reason I had taken around 40 people to whom I should focus upon, because my target was only 20 clients.

Contact Methods:Once the client had been decided now my task was how to contact them, and for me there only two ways of contacting them . 1. Personal Interview: - this method was the most appropriate way of survey, because by personal interview I came to know their feeling about the ICICI and Their personal behavior and many more things. 2. Telephone: - This method is also used by me for once, because the client had no time for me, and there was no other option for me. Bibliography Internet Websites: •

www.iciciprulife.com www.icicibank.com

•

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•

www.google.com

•

www.bima.com

Directories: •Telephone Directory. office. • City directory.

•Income Tax

•Chartered Accountant Directory. Industries Directory.

•Carpet

•Hotel Industries Directory. Banks. .Indian medical association directory. •Transporter directory. Directory. •Lawyers Directory. •Builders & Constructors Directories Materials: •Marketing Management by Philip Kotler (Level 1) •Product Brochures.

•HDFC •Exporter

•CNF Other •Fin sight

Questionnaire PART-I PERSONAL DETAILS:1.

Name of the Organization

2.

Name of Director/ Partner:

3. Address: Corporate:

a. registered

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b.

4. Phone No. Board Line:

a. Direct Line:

b.

c. Mobile No.:

d.

Email Id: 5.

Turnover of Organization:

6. Chartered Accountant

a.Name: C.

7.

Area of Operation:

8.

Who are your bankers?

b. Address:

Phone No

a.

Major Business: b.

Minor-1

c.Minor-2: 9.

Who do you consult before Investing?

a. Banker (Name of Bank): Accountant:

b.

Chartered c.Investment

Consultant (Name): 10. What do you think about ICICI Bank? requirement

a. Will Suit my b. Will no

suit my requirement

PART –II

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1. Do you invest in any instrument available in the market? a.

Yes

b.

No

2.

If yes, then where do you invest?

a.

Bank FD

b.

RBI Bond

c.

Mutual Fund

d.

Trading Market

e.

Unit Linked Plan

f.

Any other (please specify)

3. If 2(a) then which bank FD you invested and what tenure?

4.

If 2(b) then tentatively how much money invested?

5. If 2(c) then which mutual funds you have invested into a. HDFC

Franklin Templeton

b.

d.

Prudential ICICI

f.

Any other (please specify) 20

e.

Reliance Mutual IPO

c.

6.

If (5) then what is the return you are looking at: a.

Less than 10%

c.

15% - 20%

b.

10% - 15%

d. More than 20%

7. If you trade directly into market then through which broker 8. Do you Insurance? a.

have

invested

Yes

into

Unit

Linked

Plan/

b. No

9. If yes then which company and what investment plan you have invested in 10. How much do you invest annually? a. Less than 1 Crore c.5 to 10 Crore

b. 1

to

5

Crore

c. above 10 crore 11. What services your investment manager provides yo 12. What additional benefits you would like to have

SWOT Analysis STRENGTH:21

• Brand Name of ICICI:-The name of the ICICI is known in all over the country as number one bank in the private sector and this is the name which people have trusted for many years, which is mainly due to the ICICI Bank. So ICICI Prudential, do not have the crises of the brand name • STRONG FINANCIAL BACKING: - the ICICI prudential had a strong financial backing from their promoter, (ICICI BANK and Prudential), which help the company to build trust on the mind of the people. • STRONG SALES FORCE: - The Company has a very strong force of good marketing brain, which gives an edge over the other competitor especially nationalized insurance company like LIC. And secondly it has a very good distribution channel which helps the company to get more clients from these reliable sources. These channel include Allied Banks like • ICICI Bank Bank

• Federal Bank • South

• Bank of India • co-operative banks

Lord Krishna Bank

•

• Bajaj Capita• India Info line • Way •Advanced Financial Services (Karvy)

2

Indian Some

Corporate Agents

• Blue Chip • Marketing Pvt. Ltd.

AHS

• APS

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• Strategic

Wealth

•

S M Insurance•

Investment Managers

WEAKNESS:•

Lack of Information about the product:-

Most of the products of the ICICI Prudential are known by the people, this is because of lack of information about the product and bad marketing strategies by the company mainly in small cities •

FOCUSING MAINLY ON THE URBAN SECTOR:-

ICICI prudential mainly focus on the urban sector of the country, where the competition is very tuft and are not concentrating on the other sector of the country mainly in the rural sector where there. •

Most of the Plans are too complicated:-

ICICI Prudential insurance plan are too complex to understand for a layout person, and this makes most of the people to avoid this plan because they feel difficulties to understand. The same is in the case of Mutual Funds. OPPORTUNITIES:• A large Part of cities are uncovered: - A large part of the cities are uncovered by ICICI Prudential life insurance where they do not have any branches. • Some Top Nationalized banks should be made Allies: - There are large parts of the cities were Nationalized banks have large number of clients in compare to private banks, this is mainly because they are operating for such 23

a long time and there is a good opportunities to converted those customer into ICICI prudential customer, By making them allies. • There is a good opportunities to increase the Advisors base: - when we compare the ratio of Advisors with LIC, then we will find that there is a large gap between them, so there is an opportunities to increase the advisor base by breaking the agents of LIC.

Threats:• LIC: - LIC is the greatest threat to ICICI prudential in the area of insurance sector, because it is one of the oldest insurance company in the country, and have a large size of the customer abase. • Threat with some private banks: - there are some banks which are providing these services to their customer. And slowly taking away a good market share

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RESEARCH REPORT • Most of the HNI client prefers the nationalized bank in comparison to private banks. The most common reason is that the public banks are operating for many years and they have developed a good relationship with their client and this is the reason why the HNI are not eager to move to the private banks. Secondly, most of the clients want a special attention to them while their visit and this is very well done by the public banks (especially by the union banks of India,) because most of the employee in the public banks are local residents and they have their personal contact with them. • Telephone Calling by the ICICI bank and ICICI prudential Advisors are disturbing the clientsThere is excess calling by the employee of the ICICI banks and by the Advisors of ICICI Prudential, and this is one of the reasons why they are not interested in the bank nor in ICICI prudential, and the other reason is that most of the time Advisors try to meet the HNI clients without prior notice, this create a bad impression about the company. • Most of the HNI clients, Money are kept ideal in the banks –

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This is a very good opportunities for the ICICI prudential to cash most of the HNI client in Varanasi, because there is not much option for them for investment and most of the client prefer to keep a good amount of cash with them for uncertainty and for other reasons. • In the insurance sector LIC is the number one company prefer by the peopleLIC is the most prefer insurance company in the country, this is because of the brand name and LIC is also the first mover in the insurance sector and this is a great advantage for them. There are lots of things which favors them are. •

The company image in the mind of the people

•

The life long service of the company

•

A very good channel of people (agents)

•

Very good relationship with their clients

• Lack of information or knowledge about the private Insurance Company.

• A large Part of Market is Uncovered in case of Mutual Fund:Large parts of the people do not know about the mutual funds investment or in other word they are unaware of the mutual funds scheme but they have the power of

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Money. These clients should be cash in by the ICICI prudential.

CONCLUSION Recommendation and Suggestions

• Lack of information about the service provided By the ICICI prudential life insurance: - Most of the client whom I meet during my survey told me that they were unaware of the service and scheme, which the company is providing to the people. This is mainly because of the lack marketing their product by the company. So I suggest that the company should market its brand in more aggressive manner. • Start Making Link with the Nationalized Banks to get more Business:-When we look at the Small city like Varanasi, most of the HNI client prefer and have their account in Nationalized banks, because this banks are giving good service for many years and If ICICI prudential 27

can make tie-up with the employees of this banks then they can be able to get more business from this contact. • Service of the ICICI bank should be improved: - What I hear in Varanasi is that most of the HNI do not want to do business with the ICICI banks, and this is mainly because of their service and the banks do not give preference to them and there are many restrictions in their operations. So I suggested that some staff should be made to look after them, because they are the customers who mainly give us the business. • Access Telephone Calling should be stopped: -Most of the time, clients get disturb because of telephone call made by the advisors of ICICI prudential and bank. I accept that this is the most successful mode of contacting the people, but access calling create a wrong impression in the mind of the customer. • Image of the ICICI should be improved in the City: Most of the time people do not want to do business with the ICICI, because of the Hidden cost which they come across while dealing with the bank. • More focus is given to the industrial class then the service class: - ICICI prudential are concentrating more on the industrial class then the service class. It is generally known that more insurance are made by the service class to get reduction from the Tax, so we should also focus on the service class because they are the people who wants to secure their life by investing in the insurances sector and in the mutual funds. So I suggest that concentration 28

should be given to this class also because the ratio of the service class is much high in the country. • More Local Employee should be hired by the company: -the local employees will have their contact in the city and this can be use by the company to get more business from their contact and this will add additional benefit to the company.

Thank you

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