A PROJECT REPORT ON “ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED” SUBMITTED BY KATAKDHOND GANESH RATAN T.Y.BBI SEM-VI (2018-2019) Project Submitted to “University of Mumbai” in Partial fulfillment for the Award of Bachelor’s Degree in B.Com (Banking & Insurance) UNDER THE GUIDANCE OF MR. AGARWAL NITIN
Affilited to University Of Mumbai GURUKUL COLLEGE OF COMMERCE GHATKOPAR (E), MUMBAI- 400077. MARCH 2019
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DECLARATION
I KATAKDHOND GANESH RATAN, student of T.Y.B.B.I (2018-2019) of Gurukul College of Commerce, Mumbai- 400077 do hereby declare that I have Completed the Project Work titled “ ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED” as a part of my academic fulfillment.
The Information contains in this project work is true and original to the best of my knowledge and belief.
Date:
Signature of the Student
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ACKNOWLEDGEMENT
I wish to express my sincere and heartfelt thanks to my guide MR. AGARWAL NITIN, for his supervision throughout the project work. I thank Mr. Nitin Agarwal, BBI Co-ordinator for encouragement and help to complete this project work. I take this opportunity to express my deep sense of gratitude to Dr. Nandita Roy Principal, Gurukul College of Commerce, Ghatkopar (E), for having taken the initiative to start the project work. I also thanks to Librarians for the support in finding reference books, journals and other material’s. Finally, I wish to express my heartfelt gratitude to my beloved parents and all my Friends for their encouragement and support in completing this project work Above all I thank Lord Almighty for abundant mercies and infinite grace which showed upon me to complete the project work.
__________________ Signature of Student
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CERTIFICATE
This is certify that KATAKDHOND GANESH RATAN student of Gurukul College of Commerce studying in TYBBI Roll no. 27 has successfully completed the project entitled “ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED” as part of assignment under my supervision during the academic year 2018-2019.
External Signature
Mr. AGARWAL NITIN (Guide)
Mr. Nitin Agarwal
Dr. Nandita Roy
(Co- ordinator)
(Principal)
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CONTENTS
Chapter No.
Chapter Name
Pg No.
1.
INTRODUCTION
12
2.
REVIEW OF LITERATURE
13-16
3.
METHODOLOGY
17-18
4.
DATA ANALYSIS
19-59
5.
CONCIUSION
60-64
6.
BIBLIOGRAPHY
65
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CHAPTER :1 INTRODUCTION 1.1 AN INTRODUCTION TO LIFE INSURANCE Many of you have asked for life insurance information, so Ray from Financial Highway offered to provide this guest post on the subject. This is new info for me, too.
Protecting your family from financial disasters is one of the fundamental components of financial planning. Life insurance should be a core part of that planning process. This article is a basic primer on life insurance, which should introduce you to the concept and give you an idea of how life insurance works. What is life insurance? Most people have a basic understanding of insurance. You receive financial compensation when an insured event occurs. Consider auto insurance, for example. If your car is in an accident or stolen, your insurance company provides compensation according to the terms outlined in your insurance policy. On the surface, life insurance is pretty straightforward. When the insured person dies, the policy pays a prearranged amount to the designated beneficiary. The following parties are generally involved in a life insurance policy: •
The Insured. The person on whose life the policy is based.
•
The Beneficiary. The person who receives the payment.
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•
The Owner. The person responsible for payment of premiums. It is typically the insured,
but it could be the beneficiary. •
The Insurer. The insurance company that issues the policy promising payment.
Traditionally, both spouses have life insurance policies in order to protect their family in case one of them dies. Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects your family from financial crises. In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably. Life insurance also triples up as an ideal tax-saving scheme. Why purchase life insurance? The main purpose of any life insurance policy is to protect your family and loved ones against the risk of financial uncertainty. Life insurance can provide for the welfare of your family in face of your death. If you have a spouse, three kids, a mortgage, car payments, and credit card bills, what would happen to them if you were suddenly to die? Would your family have enough money to keep the house, car, pay off credit card debt, and send your children to college? Life insurance can guard your family and loved ones from potential financial disaster. 1.2 TYPES OF LIFE INSURANCE While the idea of life insurance may be pretty basic, there are some complexities to consider. The most important point to remember is that there are several different types of life insurance products, which can make it difficult to select the right one for your family and your financial needs. There are two basic forms of life insurance — term life and permanent life, the latter of which comes in several flavors. Here’s a quick breakdown of the basic policy types:
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Term life is the simplest and (typically) cheapest form of life insurance. Term life is designed to provide coverage for a fixed period of time, such as 5, 10, or 20 years. The premium for the term policy is guaranteed for the duration of the term; if it is a renewable policy, the premium will increase with each renewal. The premiums for renewals are generally guaranteed when the original policy is issued. Because term life policy is for a specific period of time and the payout does not increase, the overall cost of term life insurance is usually very low. The other three common types of life insurance are permanent policies &mash they last for the entire life of the insured, not just for a fixed period of time. Whole life policies, for example, are designed to provide you and your loved one with coverage until your death. Unlike term life, there are no fixed periods for whole life coverage. Whole life is sometimes referred to as “cash value” insurance because it builds cash value over your lifetime. Whole life coverage contains both investment and insurance components. The investment portion invests your premiums, earns interest, and accumulates a cash value. On the other hand, the policy also has a stated insurance coverage amount that is paid upon the death of the insured. One of the most popular forms of permanent life insurance is variable life. Variable life policies allow you to invest your premiums in the stock market. While a variable policy may offer more significant returns, it’s also at the mercy of stock market performance. 3or performing market, the overall death benefit/cash value of the policy may decline — but never below a defined level. As a result, the policy may be more expensive because you may have to pay more to keep the policy active because less money is available to cover the policy’s premiums. Universal life is a popular option that acts like whole life. It is a renewable policy — the investment component, premiums, and death benefits can be renewed and changed based upon the policy owner’s needs. The policy owner has flexibility over the policy — money can be moved between the insurance and investment components of the policy. The premiums, unlike whole life policies, can be paid out of interest from the accumulated savings.
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Life insurance: A great tool ABecause of its many options and overall flexibility, life insurance can be a powerful tool in your financial planning arsenal. Consider that life insurance can be used to pay for funeral costs, college tuition, mortgage payments, debts, and more. It can also serve as income replacement — providing your spouse and family with a greater sense of financial certainty. Make sure you compare multiple quotes from different providers to make sure you’re getting a good rate, but also be careful to make sure you’re being priced for the same level of coverage (here’s a table where you can compare different life insurance companies). Remember, like all insurance policies, your coverage can lapse if you do not make timely payments. If you need help to cope with the complexities of life insurance, contact an insurance professional. You should also read the fine print closely (possibly with the help of your insurance professional) to understand if there are any limitations on the policy and what it covers.
1.3 Overview OF ICICI PREDENTIAL 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 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 Life's capital stands at Rs. 4,793 crores (as of March 31, 2013) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the financial year 2013, the company has garnered total premium of Rs 13,538 crores and has underwritten over 13 million policies since inception. The company has assets held over Rs. 74,000 crores as on March 31, 2013. For the past decade, ICICI Prudential Life Insurance has maintained its dominant position (on new business retail weighted basis) amongst private life insurers in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life
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1.4 Micro Insurance
ICICI Prudential foray in rural areas ICICI Prudential has an extensive coverage in 22 states in-coordination with 274 partners aimed to reach the remote rural areas in a sustainable manner. We have covered more than 1 million rural lives. The vast demographic coverage facilitated by innovative and robust model has enabled us in diversifying region specific, occupation- specific risks and reach a wider clientele.
Special initiatives ICICI Prudential is one of the first insurance company to make tailor made marketing collaterals, call centre support in five local languages, financial awareness through audiovisuals, simple application forms made available in 8 regional languages for easier and better understanding of the local population. 1.5 Macro insurance plan
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ICICI Prudential has introduced it’s first micro insurance policy Sarv Jana Suraksha to provide protection and security to rural population at a very affordable cost. This policy ensures that your loved ones are adequately provided for and their lives are not effected, even if you are not around.
1.6 ULIPs : An Introduction
Most importantly, what are ULIPs? Here, you will find all the information you need to set your mind at ease about how to invest in ULIPs, and which ULIP is right for you. ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you. Simply put, ULIPs are structured in such that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency. Working of ULIPs It is critical that you understand how your money gets invested once you purchase a ULIP: When you decide the amount of premium to be paid and the amount of life cover you want from theULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIPfund management charges are adjusted from NAV on a daily basis.
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Since the fund of your choice has an underlying investment – either in equity or debt or a combination of the two – your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity. The pie-chart below illustrates the split of your ULIP premium:
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CHAPTER 2
REVIEW OF LITERATURE
To-day, we cannot think about the success of a banking system without debit cards and debit cards. It has enlarged the role of banking sector in the economy. The financial transactions and payment can now be processed quickly and easily. The banks with the latest technology and techniques are more successful in the competitive financial market. They have been able to generate more and more business resulting in their greater profitability.
Various empirical and theoretical studies have been undertaken at the national and international level to analyze the impact of e-banking and information and communication technology (ICT) on banking sector, customers, service quality and payment system. The studies mainly focus upon e-banking impact on productivity and profitability primarily due to core banking system, electronic fund transfer, real time gross settlement system and electronic clearing services. From the customer angle the studies primarily focus upon; why customers choose e-banking products and increase in their level of satisfaction due to phone banking, mobile banking, internet banking, website services, ATMs, etc. These services have not only improved the satisfaction level of customers, but also helped in reduction of processing time and transaction time. The productivity of banks in terms of time saving and attending the customers at the branches has also improved. The review of following studies throws light upon different aspects of e-banking. To know the impact of e-banking on various aspects, the research studies undertaken for the review have been classified into four categories, i.e., studies related to banks, studies related to customers, studies related to service quality and studies related to technology. • In his paper, looked for such avenues where e-banking could play significant role in edemocracy. The author discussed two case studies on the implementation of e-banking in digital democracy. One was farmer service and other was e-seva. While applying ebanking in e-democracy, services become more secure, efficient, transparent and fast. It becomes a win-win situation for all, for banks its low cost, for government its better service, for business it’s fast and secure, and for citizens its transparent and efficient. The 13
author evaluated that e-banking could be used for successful e-banking for online bill payment, online brokerage, online account management, anywhere banking, etc. The author concluded that e-banking services provide one stop service and informational unit that provides great benefits to banks, customers, employers and government. - Aggarwal (2003),
• In their paper, focused on investigating the important factors of customers’ perceived quality in banks of developing economy like India. The researchers found that there seems to be a great variation in respect of services offered by three groups of banks. They used core services such as human element, systemization of services, tangibility of services and social responsibility as critical factors. They analyzed that three groups of banks in India seem to vary significantly in terms of service quality factors but from the customer perception of service quality, it could be acceptable only if customers’ need could be satisfied at the right time in a right manner -Suresh chander and Rajendran (2003) • Highlighted the advantages, risks, innovations and convenience involved in e-banking. ATM, telephone, internet and cluster banking helped banks to deliver the products more effectively. The author, in his paper, also described operational efficiency of e-banking. It included basic e-banking, simple transactional and advanced transactional e-banking. Each site offered a differential kind of services to customers. The author also commented upon some risks such as loss of secrecy of the customers, financial stability, fraud prone possibilities, eruption of legal claims, etc. So, the author suggested that banks should adopt such a strategy in which risks and innovation in banking products move parallel and simultaneously. -Krishnamurty (2006)
• Highlighted the e-payment system in India and its performance impact on Indian banking sector. The author described that competition in banking industry had forced the banks to rethink the way they operate their business. So, e-banking has made it possible to find alternate banking practices. In the paper, the author divided the payment system in India 14
into three parts, i.e., large value payment system, retail payment system, and retail electronic system. Each one includes different categories of e-payment. The study focused that having a huge opportunity of e payment system in India still 90 per cent of transactions were cash based. So, an effort should be made to increase the use of epayment, and RBI should make efforts to strengthen the legal framework of electronic banking system. - Manoharan (2007)
• An attempt to prove that technology had a definitive role in facilitating transactions in the banking sector; and the impact of technology had resulted into the introduction of new products and services by various banks in India. The author discussed various initiatives taken by the banks to manage transformation and these initiatives had brought customers the convenience of anywhere, anytime banking. The author concluded that technology was a facilitator for advancement in the core business of banking and not an end in itself. - ARORA (2003)
• Studied the impact of e-payment system on Indian banking sector. E-payment was required for handling large volume of business payment and remittances for hassle free, quicker and faster payment remittances at low cost, and paperless transactions. The researcher highlighted various steps taken by RBI for the epayment. It includes RTGS, deferred net settlement system such as electronic clearing services debit and credit, electronic fund transfer and NEFT. The researcher studied that these methods had increased the use of core banking solutions, data warehousing and data mining. E-payment had reduced the chances of fraud, improved customer service by cutting the delay in payment obligation. -Ramani (2007)
• Explained the concept of e-banking and highlighted all the concerns and challenges while implementing the same. The authors emphasized that e-banking was necessary not only for improving the quality of services rendered to the customers but also for better 15
marketing of products. The authors evaluated various e-banking modems for banking transactions like ATM, EFT, ECS, SPNS, PC banking, mobile banking and internet banking. But they mainly emphasized on virtual banking, smart cards, e-cheques and internet banking. They analyzed the websites of various banks for internet banking adoption in which private sector banks were providing maximum IB services followed by public sector banks, foreign banks and old private sector banks. The author suggested some measures which could contribute towards greater adoption of e-services. The customers should be taken into confidence that the transactions made by them are risk free, and there is no scope of any fraud. 61 Further, they should also be assured that hackers can do no harm to their interests. Furthermore, the system should be free from legal intricacies.
- Sarangapani and Mamatha (2008)
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CHAPTER : 3 METHODOLOGY
Life insurance in today’s world plays a very important role in day to day life of every person as well as an organization . In the study our efforts are made to examine in detail the life insurance services provided by icici prudential life insurance company. The objective with which this study is taken up and the methods by which secondary data is required to be collected are discussed in this chapter. 3.1 OBJECTIVES OF STUDY
To study about the life insurance services provided by icici prudential life insurance company to highlight the policies provided by the insurance company and in what manner it may benefit to the public.
To understand the terms and condition prescribed, the process, the documentation done by the company for insuring the holder of the policy.
PERIOD OF STUDY We have been doing research on the insurance policies provided by icici prudential life insurance company from last 3 months we have collected data manually by visiting the company also with the help of information provided by them on their site. The information furnished in this project is true to my extent of knowledge.
SIGNIFICANCE OF THE STUDY
The project helps us to understand the types of different policies provided by them and how easy it is to get a insured according to our needs. 17
It facilitates the understanding and need of the customer thoughts and perceptions about icici prudential life insurance.
This study will be beneficial to the local public as then come to know how they can get insured and which plan or policy would suit their pocket and protect them as per their needs.
Furthermore , the result of this study may allow them to know more about the facilities the policies ,insurance given, documents required etc.
3.2 METHOD OF STUDY Thought this study is fact finding facilities of life insurance policy , a lot of secondary data are required for getting the deep knowledge and understanding the pattern , the documents required , the process of getting a life insurance from icici prudential life insurance. PRIMARY DATA The research of this study is done by collecting primary data from the icici prudential life insurance . As we have collected the information of the customers who have taken insurance policies from the icici prudential life insurance company as our primary data. We have classified the data further as amount of policies taken, period for which insurance is taken, which caste of people took maximum amount of insurance, etc.
B. SECONDARY DATA The research of this study is purely relied on the secondary data. The secondary data which is required for the study could be obtained mostly from books, journals, official reports, reviews given by the government of India in addition to these, efforts would be made to collect as much information from the internet about the performance on icici prudential life insurance company. The information exhaustive and through going in every respect.
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CHAPTER : 4 LIFE INSURANCE POLICY PROVIDED BY ICICI PRUDENTIAL LIFE INSURANCE
4.1 Range of products
At icici prudential life, we understand that different individuals have different needs. The ideal insurance plan is one that addresses the exact insurance needs of the individual which depends on the age and life stage of the individual apart from a host of other factors. Icici prudential life offers plans under the following major need categories: Term plans Wealth plans Retirement plans Group plans Rural plans
The company provides the customers the policies which would insure them from all their risks and which would suit their pockets. They provide plans with less premium and great returns on claims. The main agenda of the company is serve the people with good policy and make their lives tension free.
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4.1.A ICICI PRU ICare
WHY TERM PLANS?
Term insurance is the simplest and most fundamental insurance product. Term insurance plans are designed to ensure that in the event of the policyholder's death, the family gets the sum assured(the cover amount).
What is term life insurance?
Term life insurance ensures that your family receives a large lump sum amount, called the sum assured, in the unfortunate event of death of the policyholder. By offering this benefit at extremely competitive rates, Term insurance plans provide an opportunity to get the protection of insurance cover at extremely affordable prices.
Why do I need term life insurance? •
Increasing liabilities: People today prefer to take loans to fulfilling their needs, instead of
waiting to save for the future. India's outstanding credit card debt had touched Rs 26,500 crore in May 2008, up by 87% from May 2007. Hence, in your absence, your family needs to take care of this loan. •
Nuclear family structure: Earlier, people could depend on their extended joint family
system to take care of their near and dear ones in case of their absence. However, the share of
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families with more than 5 members has come down from 64% in 1990 to 56% in 2005 and is expected to decrease further.** •
Increasing lifestyle diseases: The share of lifestyle diseases in India is increasing. Also,
people in senior management are more prone to lifestyle diseases, as per an ICRIER Study.
**Source : Household Assets and Liability, NSS Report No. 500, 59th Round (JanuaryDecember 2003).**Source: Euro monitor International
How much life cover do I need?
While most of us do have some sort of life insurance cover or the other, the important question to ask ourselves is "how much life insurance cover do I need"?
Human life value, commonly known as HLV, is an easy to use numeric way of arriving at an answer to the question above. An individual's HLV is typically expressed in terms of multiple of his or her annual income.
The approximate HLV tools are as follows:
The table below gives an approximate HLV multiple for different age bands. Age Band
HLV Factor* Age Band
18-24 6
45-49 10
25-29 8
50-54 8
30-34 10
55-64 6
35-44 12
65-75 4
HLV Factor*
Why should I start planning my life cover needs now? •
One should have adequate cover for dependents. It's better to be prepared and ensure that
the financial needs of your loved ones are taken care of, in the unfortunate event of death. •
With age, the premiums tend to increase and therefore buying term insurance becomes
more expensive. 21
•
Apart from the benefit of protection for your dependents, also enjoy tax benefits under
Sec 80C up to Rs. 1,00,000.
4.1.B ICICI PRU Savings Suraksha
WHY WEALTH PLANS?
As an individual who doesn't desire the best from life? You would undoubtedly want to plan your finances such that you can achieve all your goals - a car, a beautiful home and of course, the comfort and contentment of your family. All of these goals are long term in nature. Wealth insurance plans have been designed to ensure that you can save for these long term goals along with the benefit of life cover and provide protection to your family.
What is wealth insurance?
Wealth insurance ensures that you receive a lumpsum amount of money at the maturity of the Policy. In the unfortunate event of death during the term of the policy, your family receives lump sum amount, called the Sum Assured. Thus it combines the benefits of protection and saving in a single instrument
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Why do I need wealth insurance?
•
Regular savings: Insurance inculcates the habit of regular and disciplined savings, which
is the key to successful long term financial planning. Pay your premiums regularly and enjoy the uninterrupted benefits of wealth insurance. •
Protection:Wealth insurance provides the protective benefit of a life cover, which keeps
your family secure, always. •
Tax benefits:Apart from protection and savings, wealth insurance plans also offer tax
benefits as per prevailing tax laws.
How much savings do I need? Please consult a financial planner for the same. You can also visit our website www.iciciprulife.com and using the Savings Calculator to know the amount needed for saving. You can also send a request you ICICI Prudential to send a financial advisor to your place to help you understand wealth plans better.
Why should I start planning my wealth savings now? •
Savings need to be started at the earliest so that you can enjoy the benefits of long term
planning. •
Unfortunate events do not knock your door when they come. Hence, it is better to be
prepared and ensure that the financial needs of your loved ones are taken care of, in the unfortunate event of your death. •
The earlier you start planning with wealth insurance, the earlier the goals of your life can
be attained.
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4.1.C ICICI PRU Easy Retirement
AT A GLANCE HOW IT WORKS In your golden years worries about security and comfort become greater. Today, with rising prices increasing health care costs and higher life expectancy, you need concrete planning postretirement to help you deal with it. What you need is a plan that not only helps you plan for retirement, but also continues to pay you an income throughout your retired life. At ICICI Prudential Life Insurance Company Limited, we realize the importance of a prudent retirement planning. Presenting ICICI Pru Immediate Annuity - a plan that not only give you an income for life but also provide you options to match your needs. DETAILS Modes of Annuity PaymentYearly / Half yearly / Monthly / Quarterly Min. annuity payableRs.100 p.a Min. / Max. age at entry45 / 100 years Min. / age at entry (spouse)20 years Min. / Max. Policy TermNot applicable UIN of ICICI Pru Immediate Annuity: 105N009V06 24
What is retirement insurance? Retirement insurance ensures that you or your family members receive a regular pension amount post a retirement date. You have the flexibility to choose the retirement date and the manner in which you receive the pension.
WHY RETIREMENT PLANS? Our pension plans are designed to ensure that your retirement years truly become your golden years. They will provide you the financial security to pursue your unfulfilled dreams.
Why do I need retirement insurance?
Longer retirement years:Average life spans are increasing in India and hence, the retirement years are likely to be longer. With the rise in inflation you will need more money to live in comfort.
Financial independence post retirement:Earlier, people could depend on their children to take care of them post retirement. However, as a modern individual, would you not like to maintain your financial independence post retirement also?
Inflation:Inflation is an important factor. Post retirement, you need a regular income to ensure that your expenses can be met.
How much retirement plan do I need? Post retirement, you would like to maintain your life style and also need to take care of increased medical expenses also. You can arrive at the exact Human life Value HLV by logging on to our website www.iciciprulife.com and using the Retirement Calculator. Why should I start planning for my retirement now? The earlier you start planning for retirement, the larger will be the corpus for you at the time of your retirement. Neglecting your retirement needs can prove to be costly later in your life. Life Annuity with Return of Purchase Price: Unfortunate events do not knock your door when they come. Hence, it is better to be prepared and ensure that the financial needs of your loved 25
ones are taken care of, in the unfortunate event of your death. Apart from the benefit of a comfortable retirement, also enjoy tax benefits as per prevailing tax laws. 4.1.D ICICIPRU Group Term Insurance Plan
WHY GROUP SOLUTIONS? Employees are the greatest assets of any employer and they are constantly on the prowl for "better opportunities". How do you get them to focus on their jobs and retain them for long? Human resource experts agree that employees work with utmost dedication when they believe that their organization truly cares about their well being. It is of utmost importance for employers to provide employee benefits that demonstrate concern for employees well being. A small step is this direction is to offer employee benefit plans that meet the savings & financial security needs of the employees and their families. Your kind gesture to safeguard their family's future will undoubtedly serve as great encouragement for your employees, and they will gladly offer you their whole-hearted commitment. ICICI Prudential group solutions are designed to enable organizations to offer superior benefits to their employees and also meet the statutory obligations like gratuity of an employer. ICICI Prudential offers a comprehensive range of plans to employers, which address the major ambiguities faced by all of us “Risk of dying too soon” or “Risk of living too long” How do I stand to gain from these plans? Group solutions provide four important benefits to the employers: Serves as an important tool for employee retention Provides employers with tax breaks on the amounts set apart towards these employee benefits Meets the statutory obligations of an employer
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Helps with better corporate governance practice by segregating between employer and employees funds
How can ICICI Prudential life insurance help you? Group solution plans from ICICI Prudential enable you to effortlessly provide your employees with both savings and financial security. ICICI Prudential takes utmost pride in offering an end to end solution, right from setting up an appropriate employee benefit plan, administering the same and rendering appropriate payout post. What are the group solution plans offered by ICICI Prudential? ICICI Prudential understands the importance of employee benefit offerings and has a suite of Group solution plans that provide both you and your employees with a complete range of benefits: Group Retirement Plans ICICI Pru Group Superannuation plan Unit linked/Non linked helps you save, grow and accumulate funds towards employee’s retirement and thereby ensure financial stability of employee post retirement. ICICI Prudential offers flexible plans for both, defined benefit and defined contribution schemes.. click for more details. ICICI Pru Group Gratuity plan ULIP/Non ULIP enables you to effortlessly setup a gratuity fund and manage your statutory gratuity obligation towards your employees.. click for more details. ICICI Pru Group Leave Encashment plan ULIP/Non ULIP enables you to fund your Leave Encashment liability payable to your employees. These liabilities can be effectively met through the management of a dedicated fund for leave encashment. Group Protection Plans ICICI Pru Group Term Insurance plan is a pure term insurance benefit securing the financial need of the employee’s family in the event of his / her unfortunate death during employment. 27
This insurance plan provides cover to all your employees at an affordable cost.. click for more details. ICICI Pru Group Annuity plan offers a guaranteed periodic payment to your employee through his / her lifetime. This plan enables you to secure the financial future of your employees with a steady income all through their retired lives... Why invest with ICICI Prudential? Having won awards at a global level for service excellence; our prompt, efficient & customer friendly services awaits you at every step of your need. ICICI Prudential Life has underwritten over 13 million policies since inception and Funds Under Management to the tune of Rs. 70,771 crores as on June 30, 2012. End-to-end solution for retirement trust; legal and regulatory related process for scheme set up or transfers Multiple investment options under the group retirement solution plans with market-linked and traditional pattern depending on your financial objectives With hassle free and convenient in-house claims process, we aim to process timely and smooth claim processing.
How can I get in touch with ICICI Prudential for further details? We offer several options for you to contact us as per your convenience. Choose from one of the following: Meet our group sales representative Email your requirement at
[email protected]
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4.1.E ICICI PRU Sarv Jana Suraksha
RURAL PLANS Preamble on ICICI Pru Rural Business Initiative ICICI Prudential's rural business initiative has played a very important role in reaching the underserved segment through its rural insurance plans. ICICI Prudential has covered more than 2.5 million lives across as many as 16 states in India. Both our rural plans Sarva Jana Suraksha and Anmol Nivesh are tailored to meet the unique requirements of rural investors. The plans offer Life cover, low and affordable premiums and hassle free procedure.
WHY ULIPS? Unit linked insurance plans (ULIPs) are a category of goal-based financial solutions that combine the safety of life insurance protection along with long term wealth creation opportunities. In ULIPs, a part of the premium goes towards providing you life cover &the
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remaining portion is invested in fund(s) which in turn is invested in stocks or bonds. The value of investments alters with the performance of the underlying fund opted by you. Simply put, ULIPs are structured in such a way that the life protection element and the savings element are distinguishable, and hence can be managed according to your specific needs.
Why do I need ULIPs? Freedom to choose your life insurance cover: In a unit linked policy, you can choose the extent of life insurance cover that you can enjoy. In most ULIPs, the minimum life insurance cover that you get is 10 times the annual premium. The upper limit can be as much as 100 times of your annual premium or even higher, depending on the policies of the insurance companies. Freedom to choose your investment type: Depending on your investment preference, unit linked insurance plans allow you to invest in various asset classes like equity, debt or money market. Whats more, you can switch between these asset classes seamlessly with almost no charges. Flexibility of additional investment: In ULIPs, you can anytime invest an additional amount, called top-up, at a very nominal charge to enjoy the benefit of greater savings. Liquidity: ULIPs have a partial withdrawal option, so that you can withdraw your money in case of emergencies. These partial withdrawals are usually free of cost. Goal based planning: ULIPs are structured to help you secure your key goals such as Retirement planning or saving for your childs education. So, apart from the life insurance benefit and the advantage of investments, ULIPs also give you the added benefit of knowing that your premium is working towards securing your future goals. Tax benefits: Apart from protection and savings, unit linked plans also offer tax benefits. Not only you can claim the insurance premium paid towards reduction from your taxable income, the maturity benefits are also completely tax free, as per prevailing tax laws.
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4.2 ALL THAT YOU WANTED TO KNOW & MORE Overview 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 Life's capital stands at Rs. 4,793 crores (as of March 31, 2013) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the financial year 2013, the company has garnered total premium of Rs 13,538 crores and has underwritten over 13 million policies since inception. The company has assets held over Rs. 74,000 crores as on March 31, 2013. For the past decade, ICICI Prudential Life Insurance has maintained its dominant position (on new business retail weighted basis) amongst private life insurers in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
Vision & Values Our vision: To be the dominant Life, Health and Pensions player built on trust by world-class people and service. This we hope to achieve by: Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently
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Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings The success of the company will be founded in its unflinching commitment to 5 core values -Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.
Our values : Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Humility, and Passion. These values shine forth in all we do, and have become the keystones of our success.
PROMOTERS ICICI Bank (taken from the press release of ICICI Bank) ICICI Bank Limited (NYSE:IBN) is India's one of the leading private sector bank and the second largest bank in the country, with consolidated total assets of US$ 111 billion at June 30, 2012. ICICI Bank's subsidiaries include India's one of the leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank's presence currently spans 19 countries, including India. About Prudential Plc (taken from the press release of Prudential Plc) 32
Prudential plc is incorporated in England and Wales, and its affiliated companies constitute one of the world's leading financial services groups. It provides insurance and financial services through its subsidiaries and affiliates throughout the world. It has been in existence for over 160 years and has £363 billion in assets under management (as at 30 June 2012).
ICICI Prulife - promise of seamless online experience We are always dedicated to offer you to the best, and with our new website; we have taken our commitment to the next level to ensure that your online experience is better than ever. The new ICICI Prulife website, which has been awarded Gold in the best financial website category in the recently held Campaign India Digital Media Awards, promises to simply your online life insurance information, buying & servicing experience. The Promise The new ICICI Prulife website has been simplified to offer information, tools & features based on your requirements & level of interaction with us. We understand that every customer is unique & has different expectations from their interaction with us. The new website addresses these needs uniquely. What's new? Video Our Ads: These ads will help you understand the basic categories of life insurance & their significance ( click here ) Single click access to your policy needs: Just enter your login details & the site will directly open the required page. Be it E-switch, tracking your funds, managing your existing policies & more, you can now access all of it quicker then before. Buy Online: Buy life insurance plans online with a simple application process. Search: Now find exactly what you are looking for, right from the homepage. Just enter your search term and hit go; navigating through the website has never been simpler 33
Pay Online: You can pay your insurance premiums online; without logging in to your account. Just validate your details, select the policy you want to pay premium for and pay online using your credit card, debit card or net banking.
4.3 KEY PERSONS Mr. Sandeep Bakhshi Managing Director & Chief Executive Officer Mr. Puneet Nanda Executive Director (Chief Marketing Officer) Mr. Sandeep Batra Executive Director - Corporate Center Mr. Satyan Jambunathan Executive Vice President (Appointed Actuary) Mr. Manish Kumar Executive Vice President (Chief Investment Officer) Mr. Navin Sharma Vice President- Internal Audit (Chief Internal Audit) Mr. Binay Agarwala Executive Vice President (Chief Financial Officer) Mr. Deepak Kinger Executive Vice President- Compliance, Legal, Audit and Secretarial (Chief Compliance Officer) 34
4.4 RIGHTS AND DUTIES OF THE POLICYHOLDER Objective: The Objective of this document is to list the rights and duties of the policyholder through the policy life cycle. Rights of the Policyholder 1. Proposal for Insurance • The Company shall communicate the decision in writing within a period of 15 days from receipt of proposal. • The policy document shall be dispatched via post/courier within 30 days of the date of the receipt of the proposal/date of last document or communication received. • The delivery of the policy document shall depend upon the mode of dispatch. • For dispatch through Courier the expected time of delivery shall be 10 days from date of decision by the Company • For dispatch through post the expected time of delivery shall be 20 days from date of decision by the Company (Reference: IRDA Protection of Policyholders’ Interests Regulations, 2002, Reg. 4 (6)) 2. Contents of Policy document The Company shall send a physical policy document to the address registered by the policyholder under the ‘communication address’ column in the application form. The 35
policy document should contain the following documents. • Policy Certificate • Policy Highlights document: The Policy document carries a single page simplified version of product benefits apart from the terms and conditions document. • Signed copy of application form • Benefit Illustration (where applicable) • Unit statement (for ULIP plans) • Premium receipt • Policy terms & conditions In case of any discrepancy in the documents or missing documents, policyholder must contact the Company. The following are stated in the policy document: • Name of the plan governing the policy and its terms and conditions;• Benefits payable and the contingencies upon which these are payable and the other terms and conditions of the insurance contract; • Address of the Company to which all communications in respect of the policy shall be sent; • Date of commencement of risk and the date of maturity or date(s) on which the benefits would be payable; • Primary documents which are normally required to be submitted by a claimant in
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support of a claim under the policy; (Reference: IRDA Protection of Policyholders’ Interests Regulations, 2002, reg. 6(1)) 3. Freelook policy A policyholder has an option to opt for free look policy within 15 days of receipt of the policy document. Incase the policyholder opts for policy cancellation during the freelook period i.e. within 15 days of receipt of his policy document, the Company shall return the premium paid subject to the following deductions: • Insurance stamp duty on the Policy , if any, • Any expenses borne by the Company on the medicals Units will be repurchased and any fluctuations in the NAV will be on the policyholder’s account. (Reference: IRDA Protection of Policyholders’ Interests Regulations, 2002, 6(2)) 4. Policyholders’ Servicing The policyholder during the life cycle of the insurance policy may approach ICICI Prudential for change/ updation of following details on the policy; • Recording change of address and contact details; • Noting a new nomination or change of nomination under the policy; • Noting assignment on the policy; • Providing information on the current status of the policy indicating matters, such as, accrued bonus, surrender value and entitlement to a loan; 37
• Processing papers and disbursal of a loan on security of policy; • Issuance of duplicate policy; • Issuance of an endorsement under the policy; noting a change of interest or sum assured or perils insured, financial interest of a bank and other interests; • Providing receipt for the premium paid towards the policy and statement of account (unit statement for ULIP) ; • Any policy level changes like increase/decrease in sum assured/premium/rider sum assured. Etc; • Annuity servicing/registration (pension policies); • Renewal premium payment and policy reinstatement related; Time taken by the Company:• Policy servicing requests and Surrender requests will be actioned within 10 days from the time the Company receives the complete documentation. (Reference: IRDA Protection of Policyholders’ Interests Regulations, 2002, Reg. 10(1)) 5. Claims Procedure A life insurance Company, upon receiving a claim, is required to process the claim without delay. Incase the Company requests for any additional documents, the requirements are required to be raised all at once within a period of 15 days of the receipt of the claim. The claimant has to provide complete documentation while submitting a claim request to the Company. The details of the documents to be submitted at the time of submitting a
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claim are available on the Company website and in the policy document. The claimant can also approach any of the Company touch points to assist him in the claim procedure. The time taken by the Company for processing claim will be as follows; • Claim processing where investigation is not required will be settled or disputed within 30 days from the date of receipt of all relevant papers and clarifications. • Claim processing where investigation is required will be settled/ repudiation within 180 days from the date of receipt of all relevant papers and clarifications. • In case the claim is ready for payment but is not paid by the Company for identification of the payee, the Company shall hold the amount for benefit of the payee and shall pay interest at the savings bank interest rate. (effective from 30 days of submission of all relevant documents) • In case of delay in settling a claim (non compliance to the defined regulatory TAT) Company shall pay interest on the claim amount at a rate which is 2% above the bank rate prevalent at the beginning of the financial year. (Reference: IRDA Protection of Policyholders’ Interests Regulations, 2002, Reg. 8) 6. Grievance Redressal procedure/ mechanism The Company provides its customers easy access to information, products and services, as well as the means to get their grievances or queries redressed. There are multiple channels for the policyholders to register grievances, namely Branch, Call Centre, Email and through the Company’s website. 39
Incase there is a delay in processing the policyholders’ request or lapse in service promised to the policyholder, this can be highlighted to the Company. Procedure followed and Timelines: • An acknowledgment will be sent to the policyholder within 3 working days via email/ letter once the grievance is registered by the Company. • The final response will be sent to the policyholder within 15 days of registering grievance. • In the event of failure to comply with aforesaid timelines, the policyholder shall be informed of the reasons and the revised timeline for resolution. The Company has defined its Grievance Redressal Mechanism to provide alternate remedies to policyholders so that they can escalate the matter in case it is felt that their grievance is not addressed to their satisfaction. The policyholder can escalate the matter to the following levels • Grievance Redressal Officer (GRO): If the policyholder is dissatisfied with the resolution provided by the service channels, he/she can escalate the issue to the local Grievance Redressal Officer (GRO) located at every office. They can also register their complaint by writing to GRO (Vice President- Customer Services & Operations) through the Company website. • Senior Management Grievance Redressal Officer (SMGRO): If the policyholder’s issue remains unresolved, he/she can escalate to the designated Senior Management
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Grievance Redressal Officer. They can register their complaint by writing to SGRO (Executive Vice President – Compliance) through the Company website. • Grievance Redressal Committee (GRC): If the policyholder still remains dissatisfied with the resolution, he can further escalate the matter to the GRC. Grievance Redressal Committee is chaired by an independent member and comprises of executive level members from the Company. Customers can register their complaint by writing to GRC through the Company website. • Insurance Ombudsman: If the policyholder is still not satisfied with the response or resolution provided by the Company, he/she can write to Insurance Ombudsman. The detailed addresses and contact details of the Insurance Ombudsman, set up across various locations in the country, are provided to the policyholders in their policy document and are also made available on the website. Details of the grievance redressal procedure and mechanism are made available in the policy document. References: • IRDA Protection of Policyholders’ Interests Regulations, 2002, Reg.5 • Guidelines for Grievance Redressal, July 2010 (Reference: 3/CA/GRV/YPB/10-11)Duties of the policyholder At insurance proposal • The policyholder shall furnish all information that is sought from him by the Company
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and thereby enable right decision on proposal received after considering all the facts. This will also ensure smooth claim settlement. The same is also in reference to Section 45 of the Insurance Act 1938. • The policyholder must ascertain that the medicals and other formalities for proposal issuance, if any, are completed on time to ensure seamless policy issuance. • The policyholder should ensure that he/she review the terms and conditions mentioned in the policy document and update themselves on the policy features. On receipt of policy document • Incase the policyholder observes any issues pertaining to policy features explained/ benefits explained on the policy sourced, he/she must highlight the matter to the Company within freelook period (15 days from receipt of policy document). • The policyholder must verify that the nominee’s name is correct and incorporated in the policy document. In case the policyholder has not declared any nominee name, the policyholder should ensure that the nomination detail is shared with the Company at the earliest • The policyholder must inform the nominee about the policy opted for and other relevant policy details. • Any changes/rectification in the policy certificate to be brought to the notice of the Company well within the defined free-look period. Policy Servicing 42
• The policyholder should approach the Company incase he/she is not in receipt of policy document and request for a duplicate policy document not later than 3 months from the date of proposal application. • The policyholder must ensure that he/she keeps the Company updated with the latest information of his/her contact details. This will help the policyholder to receive the communications and payments (as applicable) sent by the Company on time. • The policyholder must track the premium due dates proactively and make sure premiums are paid on time to ensure the policy benefits are always active. Upon non payment of premium on the policy, the policy will ‘Lapse’ and the benefits shall cease. • The policyholder has an option to revive the policy subject to submission of overdue premiums and personal health declaration (case to case basis). The revival of the policy shall be basis the Company’s underwriting guidelines.• The policyholder must be aware that the policy will get foreclosed (as per Terms & Conditions) if the policy is not revived within this stipulated time period. • The policyholder should quote policy number on the premium / top-up Cheque/ DD and also during his interactions with the Company at all times to help company to process the request faster. • The policyholder must ensure that the premium payment in cash is made at Company authorized centers only. Receipt should be collected from the Company for any cash payment made.
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• The policyholder should educate himself/herself about the cutoff timings applicable for Net Asset Value (NAV). • Any fund transaction request received on the policy before 3pm, NAV of that day will be applicable. • If the request / instruction is received after the cut-off time, then NAV of the next date or the due date, whichever is later, shall be applicable. • For daily NAV details, policyholder may also visit the Company website. • The policyholder must approach the Company touchpoint namely Branch, Call centre or Email channel for any queries/grievance pertaining to policy. Alternatively, the policyholder may also approach the agent through whom the policy has been bought or may register his/her queries/grievance through Company website. • The policyholder should not to hand over the policy document to a third party. • The policyholder shall inform the Company if the policy document is lost or destroyed. On obtaining satisfactory evidence a duplicate copy will be issued by the Company. • Acknowledgment should be sought in case policy document or any service request is given by the policyholder to the Company. • The policyholder must ensure that a notice in writing along with the endorsed instrument or a copy of it is delivered to the Company in case of transfer or assignment of the policy. Maturity/ Annuity/ Claims 44
• Policyholder must keep himself/herself updated on the maturity/survival payment due dates. The details of the same is also available in the policy document • A pension policy becomes due for pension/annuity once the policy attains a vesting age. Policyholder should submit the annuity quotation sent by the Company before the vesting date of the policy to ensure smooth processing of the pension/annuity post policy attaining vesting age. Details of the documents to be submitted are shared by the Company in the annuity quotation.• The policyholder must be aware that a pension policy cannot be surrendered post the policy attains vesting age. The policy becomes eligible for annuity post maturity. • For faster claim processing, it is essential that the claimant submits complete documentation and co-operate for any investigation (if required) for processing of claims. 2012, ICICI Prudential Life Insurance Co. Ltd Registered Address: - ICICI Pru Life Towers, 089 Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Reg No: - 105 Insurance is the subject matter of the solicitation. Comp/doc/Mar/2012/1039
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How can I make a claim? At ICICI Prudential life every claim is a fulfillment of a promise that we have made to our policyholder and we do our best to process the claim in the most transparent and quick manner. In line with our philosophy of easing the financial burden on the policyholder and their nominees we have a simplified 4 step claim process
CLAIMS
4.5 TAX SAVING LIFE INSURANCE PLANS
THE IMPORTANCE OF TAX SAVING
What does one understand by the term, tax savings? The income that an individual earns every year is subject to the Income Tax laws governing that country. The Income Tax rates are not the same for all. The rates varies basis on different income levels.. So the total income tax an individual needs to pay depends upon the annual income he or she has earned in that given year. But,
there
are
many
ways
by
which
one
can
save
incometax.
So the question arises that how to save income tax? To extract maximum tax benefits, you need to invest your earnings wisely in different insurance plans. This is where your investments come into play, as a lot of investment plans come with several benefits. With the help of tax deduction, 46
a break granted by the government, one can save tax on premium paid. The maturity proceeds of life insurance product is tax free as well. You could look at long term objectives like investing in a pension plan for a life after retirement or a life cover to secure your family's future. There are a range of tax saving plans available for individuals to gain tax benefits under various sections. This is why it is very important to carry out an extensive research and know about the different products available.
TAX SAVING THROUGH LIFE INSURANCE PRODUCTS
To save tax, Life Insurance products play a important role. Under the Income Tax Act 1961, by investing in a life insurance plan, you are allowed to claim deduction on the premiums that you pay when calculating taxable income (subject to conditions of Income Tax Act, 1961). This means, the insurance premiums which you pay helps in reducing your tax outflow. Further subject to conditions, maturity proceed from Life Insurance comes under exempted incomes. This means, no tax to be payable on any benefits received on maturity or on death . Hence Life Insurance Scheme can help you avail dual tax benefits. Also, you are investing in a Life. You can also get Tax benefits on Health Insurance and production product. This helps in reducing the computable tax base, thus resulting in reducing the net tax liability.
TAX PLANNING FOR INDIVIDUALS Let's take a look at some of the benefits which an individual person can benefit from tax saving.An Individual/salaried can avail following tax benefits on premium paid by way of deductions from taxable income
Section 80C - Premium paid on Life Insurance policies : deduction upto Rs.1,00,000 Premium paid on pure term, endowment and Ulip product eligible for 80C benefit
Section 80CCC- Premium paid on pension policies :deduction upto Rs.1,00,000 deduction is within Rs.1,00,000 limit of Section 80C and 80CCD(1)
Section 80D- Premium paid on health insurance policies :deduction upto Rs. 35,000/Rs.15,000 deduction is allowed for self , spouse and dependent children: Additional Rs 15,000 for parents or Rs.20,000 for parents above 60 years of age.
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Maturity proceeds from Life Insurance policies are exempt u/s 10(10D) subject to specified conditions
So go ahead, secure your future by investing in a Life Insurance Policy that reaps in great benefits along with making sure that your hard earned money stays with you.
Sections
Descriptions
Product
Product UIN Category
Available Online Yes- Buy now - Get
ICICI Pru iCare 105N122V02 Term Plan
instant premium reciept online
ICICI Pru Elite Wealth II ICICI Pru Elite Life II
105L140V01 Wealth Plan
105L141V01 Wealth Plan
ICICI Pru Wealth Builder 80C (Tax savings on premium paid) 10 (10D) (Tax free Maturity/) (Non Linked)
105L139V01 Wealth Plan
II Deduction benefit
ICICI Pru
upto Rs. 1 Lac .80C Savings
105N135V01 Wealth Plan Yes- Buy now
Suraksha ICICI Pru Pure Protect ICICI Pru Cash Advantage
105N084V02 Term Plan
105N132V01 Wealth Plan
ICICI Pru Immediate
105N009V06
Annuity ICICI Pru Easy Retirement
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105L133V01
Retirement Plan Retirement Plan
Yes- Buy now
Yes- Buy now
Disclaimers: IN ULIPs, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICY HOLDER © 2012, ICICI Prudential Life Insurance Co. Ltd. Registered Address: - ICICI Pru Life Towers, 1089 Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Reg No: - 105 Insurance is the subject matter of the solicitation.For more details on the risk factors, term and conditions please read sales brochure carefully before concluding the sale.Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values and the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns. Investments are subject to market risk. Tax laws are subject to amendments from time to time. 4.6 OUTLOOK FOR JANUARY 2014 Fixed Income: In the mid-quarterly review of monetary policy on December 18, RBI kept key policy rates unchanged at 7.75%. Consensus expectations were for a repo rate hike of 0.25%. RBI maintained a hawkish tone on the forward guidance for the markets. RBI said that if the expected softening of food inflation does not materialise and translate into a significant reduction in headline inflation in the next round of data releases, RBI will act, including on off-policy dates if warranted, so that inflation expectations stabilise and an environment conducive to sustainable growth takes hold. WPI inflation for November accelerated to 7.5% as compared to 7% in October. The Indian Rupee continued to remain range bound against the dollar and closed at 61.80 against the dollar as on 31 December 2013.
Outlook: We remain neutral on bond markets. Concerns over huge bond supply in H2 FY14, upcoming central government elections and fiscal slippage weigh on the bond market. However, abysmally low expected GDP growth of 4.5-5% does not augur well for the economy and hence very high interest rates are not sustainable. We expect Indian rupee to remain range bound against the dollar.
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Equity Review: Nifty gained ~2% in the month of December (Q3 FY14 Nifty gained ~10%; CY13 Nifty gained 7%). FIIs remained buyers of Indian equities in tune of US$ 2.5 bn and DIIs remained net sellers in tune of US$ 1.2 bn. (CY13: FIIs were net buyers of equities worth US$ 20 bn and DIIs were net sellers of equities in tune of US$ 13 bn). The rally in Nifty post the state election results was capped due to: negative surprise on inflation and rise in uncertainty on union elections outcome due to rise of AAP. However, the market sentiments turned positive as RBI kept the repo rates unchanged at 7.75%. Fed initiated the tapering down of QE as a result of strong economic data from US. While EPC/ Capital Goods, Metals & Mining and Infrastructure & Real Estate sectors outperformed the index, sectors such as Consumer, Telecom and Pharma were laggards in Q3 FY14.
Outlook: Our short term outlook for the equity market remains neutral. We expect the domestic markets to remain volatile and range bound due to: Supply of paper, implications on global equities as Fed continues the tapering down of QE in CY14, anaemic domestic growth environment, concerns surrounding the outcome of general elections and the fear of higher than expected fiscal deficit. Sensex valuations at 14x, in line with historical average. However, we expect India's growth rate to reach its potential of high single digits in the next few years, thus resulting into double digit equity returns in the long run.
4.7 INVESTMENT PHILOSOPHY & STRATEGY As a life insurance company, we know that our customers trust their monies with us for the longterm, and hope to use these funds to protect and achieve the dreams and aspirations of their families. With this in mind, our investment focus is to ensure long term Safety, Stability and Profitability of our customer's funds. Our aim is to achieve superior returns for a given level of risk. In order to meet this objective, we have developed an investment framework that is based on a sound investment process coupled with a rigorous and sophisticated risk management strategy. Investment process Our investment management process relies on analytics & research to achieve positive riskadjusted returns in each product category, be it for child plans, retirement solutions or other 50
endowment-related funds. We clearly define an asset allocation strategy that matches the risk characteristics of the corresponding liability, or put simply, we ensure that the promise we have made to the customer will be met. The investment decision-making process has three tiers, each of which has varying degrees of discretion and considers detailed research in order to decide the best portfolio composition. The emphasis is to segregate the decision to buy a scrip from the process of actually buying it, and thereby institutionalize decision-making. Our investment management team that has a cumulative experience of more than 50 years in various aspects of market like research, trading, risk management etc. The top management teams at ICICI Bank and Prudential Corporation Asia ably guide the investment team in making the strategic asset allocation and continuously monitor the performance of the investment team. Investment decisions Debt investments target a mix of government and corporate bonds. The investment process is backed by intense research and analysis and comprises qualitative as well as quantitative measures. We make calls after carefully studying all the factors that influence interest rate direction, such as RBI policy and stance, inflation, growth of money supply, credit off-take, fiscal deficit, global interest rate scenario and market sentiment. Detailed research reports obtained from credit rating agencies form the primary basis for investment decisions. In addition, the team's assessment of economic cycle, industry health, its perception of management quality and demand and supply situation in stock of a particular entity influence the investment decision. The investments in equity are targeted at long-term capital appreciation. We are not bound by traditional pure value or growth driven strategy and continuously look where both co-exist. Portfolio diversification lies at the core of our investment strategy. We have a clearly articulated benchmark for each of our funds and have well-defined deviation limits vis-vis benchmark at both the sector and stock level. W e combine a top-down and bottom-up approach while choosing stocks for our investment, considering several factors like management quality, performance track record (in relation to the sector), dividend track record, transparency in disclosures, execution capabilities etc. Our equity portfolio has a large cap bias, as we believe that they offer higher risk adjusted returns. However we do invest in mid-caps provided they satisfy at least one of the criteria viz. presence in high growth industry, one of the industry segment leaders, niche player, offer a play on outsourcing opportunity or structural turnaround in performance. Thus the focus is on ensuring consistent, stable and better risk adjusted performance over long term for our policyholders. Benchmarks To ensure that we maintain a strict discipline in managing policyholder's funds, we have clearly articulated benchmarks for various unit-linked funds. In addition we also have strict deviation 51
limits vis-à-vis benchmarks that ensure that we do not take undue exposure in any particular sector or stock. It is our endeavor to give better returns than the benchmark to policyholders for all the funds that we manage. In summary, our investment process is a function of extensive research and is based on data and reasoning, backed by superior risk control measures. This, we believe, would enable us to deliver to our customers safety, stability and returns on their investments with us.
4.8 ICICI PRUDENTIAL INVESTMENTS TEAM Manish Kumar: EVP & Chief Investment Officer Manish is an engineer with a PGDM from IIM Calcutta. He has the overall responsibility for managing the entire investment portfolio of the company. He has 19 years of experience in the area of equity research, trading and fund management. Prior to ICICI Prudential, Manish has been with a leading Indian asset management company.
Fund Management & Research Team:
Lakshmikanth Reddy : EVP & Head - Equity Lakshmikanth is an engineer with a PGDM from IIM Ahmedabad. He has 15 years of experience in the area of equity analysis and fund management. Prior to joining ICICI Prudential, Lakshmikanth has worked with leading foreign financial institutions.
Jitendra Arora : SVP & Fund Manager – Fixed Income Jitendra is a management graduate and has a PGDM from IIM Bangalore. He has been with ICICI Prudential since 2001 in the areas of financial risk management, product development, actuarial and fund management.
Arun Srinivasan : SVP & Fund Manager - Fixed Income Arun has done Masters in Management Studies from MumbaiUniversity. He has 16 years of experience in the areas of treasury and trading. Prior to ICICI Prudential, Arun worked with a leading Indian fund house. 52
Shiladitya Dasgupta : VP & Fund Manager - Equity Shiladitya is an engineer with post graduation from IIITM Gwalior. He has 13 years of experience as a research analyst. Prior to ICICI Prudential, Shiladitya worked both in a leading foreign financial institutions and a domestic broking house.
Akalp Gupta : Chief Manager – Equity Dealing and Analysis Akalp is an engineer with a PGDM from IIM Kozhikode. He has 10 years of experience as an equity analyst and trader. Prior to ICICI Prudential, he has worked with both Indian and foreign financial institutions.
Fatema Pacha : Senior Manager & Fund Manager - Equity Fatema is an engineer with PGDM from SP Jain Institute (Mumbai). She has 7 years of experience as an equity analyst. Prior to ICICI Prudential, she has worked with a leading Indian asset management company.
Sumanta Khan : Senior Manager & Fund Manager - Equity Sumanta is an engineer with PGDM from IIM Indore. Sumanta has 7 years of experience as an equity analyst. Prior to ICICI Prudential, he has worked with a leading foreign financial institution.
Aditya Ahluwalia : Senior Manager & Equity Analyst Aditya is an engineer with an MBA from FMS, Delhi. He has successfully completed all levels of the CFA, FRM & CAIA programs. Aditya specializes in the field of equity research and analysis and has 5 years of work experience with ICICI Prudential beginning 2008.
Vidya Iyer : Senior Manager - Investments Vidya is an engineer with a PGDM from XLRI Jamshedpur. She is also a Financial Risk Manager certified by Global Association of Risk Professionals. She has an overall experience of
53
years in Financial Markets. Prior to ICICI Prudential, she has worked with a leading foreign bank.
Rajatdeep Singh Anand : Senior Manager & Equity Analyst Rajatdeep is an engineer with PGDM from IIM Calcutta. He is also Level III candidate of the CFA Program. Rajatdeep specializes in the field of equity research and analysis and has 4 years of work experience with ICICI Prudential beginning 2009.
Nandish Shah : Senior Manager –Equity Dealing and Analysis Nandish is a commerce graduate with PGDBA from Symbiosis, Pune. He has been with ICICI Prudential since 2007 in the field of Investment Operations and Investments.Prior to ICICI Prudential, he has worked with a leading Indian Asset Management company.
VineetChoraria : Senior Manager - Investments Vineet is a commerce graduate and a fellow member of the Institute of Chartered Accountants of India. He has been with ICICI Prudential since 2007 in the field of Investment Operations and Investments.
Vinay Rohit : Manager& Equity Analyst Vinay is a management graduate with PGDM from IIM Bangalore. He is also a Level III candidate of the CFA Program. Vinay specializes in the field of equity research
4.9 RUPEE COST AVERAGING Many of us have an aspiration to buy low and sell high. However, while implementing our investment ideas, most of us end up attaining the exact reverse i.e. buy high and sell low. The message is loud and clear - don't try to time the market. Given the almost efficient market we invest in, it is one of the most difficult things to do, particularly on a consistent basis. A better approach for the retail investor is Rupee Cost Averaging. With rupee costs averaging, investors don't have to worry about what would be the price of their share next day or next year or what would be the level of interest rates next quarter. 54
Rupee Cost Averaging is an effective market-timer mechanism that eliminates the need to time the markets. All one has to do is to invest a fixed, pre-decided amount of money on a regular basis over a long period of time. Since the amount invested per month is constant, one buys more units when the price is low and fewer units when the price is high. As a result the average unit cost will always be less than the average sale price per unit, irrespective of the market rising, falling or fluctuating. The table given below clearly illustrates the concept.
Lets take an example of Rahul, wherein he started investing Maximiser Fund of the LifeTime Super Plan.
4,000 every month in the
Period Invested Premium ( ) NAV of Maximiser Fund ( Per unit) Units allocated 7-Apr-03 4,000 11.34 352.73 Actu 7-May-03 4,000 11.01 363.31 al 9-Jun-03 4,000 12.05 331.95 Aver age 7-Jul-03 4,000 13.13 304.65 NAV 7-Aug-03 4,000 13.67 292.61 = 8-Sep-03 4,000 15.81 253.00 (11.3 4+ 7-Oct-03 4,000 16.78 238.38 11.01 7-Nov-03 4,000 18.28 218.82 + 8-Dec-03 4,000 18.71 213.79 12.05 + 7-Jan-04 4,000 21.48 186.22 13.13 9-Feb-04 4,000 21.49 186.13 + 8-Mar-04 4,000 21.98 181.98 13.67 + 48,000 Total 15.81 + 16.78 + 18.28 + 18.71 + 21.48 + 21.49 + 21.77) / 12 = 16.29. NAV for Rahul = (4,000 * 12) / (352.73 + 363.31 + 331.95 + 304.65 + 292.61 + 253.00 + 238.38 + 218.82 + 213.79 + 186.22 + 186.13 + 183.74) = 15.36
Based on the historical analysis for BSE Sensex for last ten years (1-Jan-1994 to 1-Jan-2004) we find that if an individual had invested 1000 ever year (SIP) he would have earned a return of 9% vis-Ã -vis 5% earned by an individual who had invested 1000 at the beginning of 10 year period. Similarly over a five year period (1-Jan-1994 to 1-Jan-1999) SIP investment return would 55
have been 16.52% compared to 14.09% for a one time investment at the beginning of the period. Thus Rupee Cost Averaging smoothens out the market ups and downs and reduces the risk of investing in volatile markets. However, rupee cost averaging does not guarantee a profit, as this depends on the performance of the market. Convenience: Systematic Investment Plan offers convenience to investor, as it can be set-up as direct periodic and automatic withdrawals from bank accounts. At the beginning of the plan, the investor makes the asset allocation decision based on the PFP. Once the investor has made the asset allocation decision and chosen the fund manager, the Systematic Investment Plan puts the investment process on the auto pilot mode and leaves the investor to live life in peace without worrying about security of his/her future.
4.10 ECONOMIC INDICATORS AND MARKET INDICES Economic Indicators GDP Growth 5 Year CAGR [2008-13] FY12 FY13 7.10% 6.21% 5.00% Inflation November 2013 October 2013 Monthly Inflation (WPI) 7.50% 7.00% Economic indicators 31-Dec-13 29-Nov-13 %Change Rs/$ 61.80 62.45 -1.04% Forex Reserves ($ bn)
295.516
286.264
3.23%
Oil Price ($/barrel)
98.42
92.72
6.15%
Gold (Rs. / 10 gm)
29,075
30,499
-4.67%
FII Fund flow (INR mn)
153,401
70,799
82,602
MF Fund flow (INR mn)
-5,718
-12,954
7,236
DII Fund flow (INR mn)
-75,860
-91,469
15,609
DII - MF fund flow
-70,142
-78,515
8,373
Market Indices Benchmark Returns 1 Y 3 Y 5 Y BSE 100 5.9 0.7 16.9 CRISIL
3.8 6.7 5.7
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Global Indices DOW JONES INDUSTRIALS HANG SENG FTSE 100 NIKKEI 225 STOCK AVERAGE
31-Dec-13 29-Nov-13 % Change 16,577 16,086 3.0 23,306
23,881
-2.4
6,749
6,651
1.5
16,291
15,662
4.0
Fixed income yields 31-Dec-2013 29-Nov-2013 %Change NSE Mibor 9.07% 7.72% 1.35% 5 year G-Sec
8.89%
8.67%
0.22%
5 year AAA
9.63%
9.63%
0.00%
10 year G-Sec
8.83%
8.74%
0.09%
10 year AAA
9.62%
9.55%
0.07%
Global Indices DOW JONES INDUSTRIALS HANG SENG FTSE 100 NIKKEI 225 STOCK AVERAGE
31-Dec-13 29-Nov-13 % Change 16,577 16,086 3.0 23,306
23,881
-2.4
6,749
6,651
1.5
16,291
15,662
4.0
4.11 ASSET ALLOCATION: THE KEY TO INVESTIN In the process of personal financial planning an individual must select assets that will generate adequate returns to meet the financial goals, and at the desired levels of risk. This is known as asset allocation. Go through our Risk Analyser to learn what your asset allocation strategy should be. Though "asset allocation" decisions are critical to one's financial plan, it is one that very few understand and consciously keep in mind when making an investment decision. There are two questions to be answered in every asset allocation decision: WHAT and HOW?
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WHAT? Asset allocation decision is about dividing the investments between asset classes such as equities, cash and money markets equivalents, bonds, insurance, real estate, derivatives. Commodities, antiques and art, international financial instruments. The principal reason for diversifying investments across different asset classes is to minimize the risk of a portfolio. It requires one to avoid investments whose returns tend to move too closely with each other. Given this, the common flaw with investing in "growth stocks", "value stocks", "small caps" and "mid caps" is that their returns are all highly correlated, making them all members of the same asset class, "domestic equities". Similarly, "RBI relief bonds" are just one type of all the fixed income securities that are available to an individual, akin to Government of India securities like treasury bills and bonds, corporate bonds, certificate of deposits etc. While all these are fixed income instruments, they can still be divided into three asset classes viz. cash and money market equivalents like commercial papers, treasury bills etc., inflation-indexed bonds (that provide protection against inflation) and investment grade bonds (GOI as well as corporate bonds). Another asset class that many do not consider is life insurance. It must be noted that life insurance should be considered as a unique asset class in itself, given that it creates an asset in case of an eventuality like death or disability of the individual. This ensures that the goals are met for the individual if he/she is present or for dependants in his/her absence HOW? Once an individual has identified these asset classes, he/she needs to know how to divide his/her investments in these asset classes. The key considerations in choosing the asset classes are the level of return and the risk. Liquidity, transaction costs and ease of investment are the other considerations. To keep it simple, some investors may prefer to look at it as balancing the downside (protection against capital loss) with upside (potential for high returns), which is not entirely correct but a useful way to look at investments. For instance, bank deposits may seem to provide a complete protection against capital loss. This is not true as in highly inflationary times, the deposits made at lower rates may not provide returns adequate to even beat inflation. This means that the capital value reduces in real terms even though in nominal terms that is not the case. Also, research has shown that in general, people are more sensitive to losses than they are to gains of the same magnitude. The factors that one should consider in choosing exposures to different asset classes are as follows:
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1. Risk Tolerance : The degree to which one can tolerate risk varies for different people, and depends on the following:
Stage in life: A younger person, having a safe livelihood and few dependents, has time on his/her side can take more risk while choosing a portfolio. Net-worth: If one owns lot of assets and have few liabilities i.e. have a high net worth one can afford to take more risk as one has a cushion of assets that can safeguard one from short-term losses occurring in due to market fluctuations. Experience with investments: If one has prior experience in investing in financial markets and one is comfortable with short-term fluctuations then one can take more risk and hence more exposure to equity/real estate. 2. Investment objective : This entails deciding the purpose for which the investments are being made. Different objectives would demand that one tailor their investment portfolio to meet these goals. Objectives could be:
A person nearing his/her retirement would want a regular stream of income from the investment, while preserving the capital value, and should hence choose a safer portfolio. If one is looking at growth along with preservation of capital, and is investing for a goal that is very important, such as saving for one's child's education, then one can take some more risk in pursuit of higher returns, but not at such a high risk that it might erode one's capital. If one is looking at high growth and investing for a goal that is not very important then one can afford to take more risk.
3. Time Horizon : The time for which one would like to hold an investment also impacts the level of risk that one can undertake. If the goal for which the investment is being made is occurring after a long time, then one can pursue higher returns by investing in a more risky portfolio as over the period of time the risk reduces. However if one needs the money in the near future then one must invest in a safer portfolio. For instance based on historic data for SENSEX, the chance that an individual would suffer capital loss over a 10-year period is 1.5%. Once an individual has decided on his/her asset allocation, the next step many ask is which securities within those asset classes one should select, and whether one should change the allocation from time to time based on market conditions.
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The simple, clear answer is -- No! Research studies conducted from time to time have shown that over a longer period of time (about ten years), one attains very little or nothing by market timing and security selection as far as portfolio management is concerned. An investor must maintain discipline while managing these investments. Once he/she has determined the asset allocation, he /she should implement it using funds rather that direct purchase in the markets as it may be inefficient even when an individual has the access and ability to do so. Thereafter he/she should not succumb to the temporary blips in performance of various asset classes, and should instead use the concept like Rupee Cost Averaging. CHAPTER : 5 FINDINGS, CONCLUSION AND SUGGESTION FINDINGS: STRENGTHS:1.Brand Name :The biggest strength is the tag of ICICI Prudential Life Insurance is going to be the largest group of MNC’s.
2.Compatible Price :Prices of different policies of ICICI Prudential Life Insurance are much more compatible than others.
3.Diversified Schemes: We have diversified schemes, which is an exception case of ICICI Prudential Life Insurance
4.Less Risk
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:Our debt schemes are 100% free form market risk. Even as our portfolio is that diversified so equities are also less risky than others.
5.Easy procedures for account opening too: We have an easy system for getting a policy as it includes investment gives a customer a feeling of securness.
WEAKNESS:1 Prone to Market Risk :Mutual Funds depend on overall macro economic condition andmarket scenario.
2 Tough Competitions :There is a very tough competition because of large number of AssetManagement Companies.
3 Incapability of Customers: Sum policies provided by the company does not suits the pocket of the customer as it’s a big drawback for the investor when they pay the premium for the whole year and does not get any claim in return if not any case of death or accident.
OPPORTUNITIES:1 Hoarding
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Many companies have black money which they can not put in any bank or show in any account so they use this money for making hoardings to public their policies and attract customers to take their policies.
2 Indian Capital Market is Growing :So more & more new investors are interested in investments.
3Tailor Made Products: We have tailor made products like sector specified schemes & evendiversified schemes.
4 Branch Expansion Large no. of branches are opening day by day and even we are traping thecountries having almost same type of socio-economic condition & even sameculture etc.
THREATS:1 Tough Competition :As there are so many insurance company having almost same kind of schemes, soit’s tough to compete with. 2 Unawareness: Majority of population is not aware of icici prudential life insurance policies brand name and even because of other insurance policies which are much cheaper then icici prudential life insurance services, so it’s hard to convince people.
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3 Changing Scenario :Our market scenario is changing day-by-day i.e. our market isfluctuating, so this makes investor hard to invest.
CONCLUSION: 1. Icici prudential life insurance company spread good satisfaction awareness among the customers about their services and product. The advertising campaign has successfully been able to increase the market share of Icici prudential life insurance company . 2. The modern day’s technology like online purchase of policies and process of documentation have become so easy and handy as the customers sitting in house can buy any policy according to their needs also they can pay their premium every month through net they not need to go to the insurance office for any process or payment. 3.
Insurance company is fast growing with the use of technology in the from of online policy buying ,online premium payment.etc also now a days the company provides the customer with a card of the name of the policy holder which helps them to claim their insurance whenever they need with reduced documentation process.
4. This growth has been strongly supported by the development of in the field of technology, without which this could not have been possible of course it will change our lifestyle in coming years.
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5. It can be distilled from data that icici prudential life insurance has policies which suit the customers pocket and does not burden them with the large amount of premium. 6. Review of literature shows that different researchers and experts in the fields of insurance companies
have discussed various aspects of the insurance policies like
general insurance, life insurance, term insurance.
SUGGESTIONS:
The documentation process while buying the policies should not be lengthy and should not be confusing as customers get confused which documents t submit and which not also the company should keep brokers who give right and furnished information so that there is no cheating to the customers.
The process of getting a policy when we choose icic prudential life insurance is to lengthy compare to other companies . The process of getting a policies whichever it is should be short and simplified and should be convenient for the customer.
The term and conditions of the policies should be clearly understood buy the customers they should not be given fake promises and should not face any fraud also the terms should be properly written in the form so that they can recollect it whenever they want
The process of getting a claim whichever it may be general insurance claim or mediclaim should be short and simplified as in such time the customer may not be in a good state of mind because of any accident or death so no arguments should be made with the customers while they ask for the claim.
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CHAPTER 6
Bibliography
Ward and Zurbruegg (2000) books of life insurance page 47 para 3 Philip Kotler (1995) my view about insurance page 123 para 5 Michael J. Etzel(2000) market review page 132 para1 Boone (1991)importance of insurance page12 para6 Jackson Mark, 11 Jan, 2013 times of Somalia page5 Roshan Sahasrauddhe Jan 2013 page 132 para 6 Nikhil Walavalkar (Jan 7, 2013) page 89 para 3 Shiply Sinha (april 12 2006) page 212 para 1 WEBSITES
www.iciciprudentiallifeinsurance.com www.moneycomptrol.com
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