MEANING OF INSURANCE

Insurance may be described as a social device to reduce or eliminate risk of Loss to life and
property. Insurance is a collective bearing of risk. Insurance Is a financial device to spread the
risks and losses of few people among a Large number of people, as people prefers small fixed
liability instead of big Uncertain and changing liability.

Insurance can be defined as a “legal contract between two parties whereby

One party called insurer undertakes to pay a fixed amount of money on the
Happening of a particular event, which may be certain or uncertain.” The
Other party called insured pays in exchange a fixed sum known as premium.
Insurance is desired to safeguard oneself and one’s family against possible Insurance is desired
to safeguard oneself and one’s family against possibl Losses on account of risks and perils. It
provides Financial compensation for the losses suffered due to the happening of any unforeseen
events.

INTRODUCTION
ICICI Prudential is a joint venture between ICICI Bank and Prudential plc engaged in the
business of life insurance in India based in Mumbai.[2] ICICI Prudential is the largest private
insurance company and second largest insurance in India after LIC. 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. 37.72 billion (as on March, 2008)
with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the year ended
March 31, 2008, the company garnered Retail New Business Weighted premium of Rs. 6,684
crores, registering a growth of 68% over the last year and has underwritten nearly 3 million retail
policies during the period. The company has assets held over Rs. 30,000 crore as on April 30,
2008.ICICI Prudential Life is also the only private life insurer in India to receive a National
Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the
highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to
customers at the time of maturity or claims.For the past seven years, ICICI Prudential Life has
retained its leadership position in the life insurance industry with a wide range of flexible
products that meet the needs of the Indian customer at every step in life.

Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has been one
of the earliest private players. Since the time, ICICI Pru Life has been the leader in terms of
market share as indicated by the IRDA (Insurance Regulatory and Development Authority, the
regulator for Indian Insurance Industry) at its website.
Arguably the most innovative Indian Life insurer in terms of customer services and products,
ICICI Prudential has one of the largest distribution and servicing network with over 2,000
proprietary offices & customer touch points across India. The 30,000 employee strong
organization has one of the largest agency distribution in the industry.

With a growing product range to match the complex needs of the demanding customers in a
growing economy, the organization also has a history of successful.

During 2007-08, the organization's focus on rural business has proved its complex project
execution capability and strong partnerships for customer servicing.

In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK
Healthcareto settle insurance claims of its users.[

ICICI Prudential Life is a 74:26 joint venture between ICICI and Prudential. It is a private sector
company. The company was registered on 24/11/2000. The market share for FY 2007-08 was
7.35%.

ICICI Prudential Life Insurance Company Limited is a joint venture between ICICI Bank Ltd.,
one of India's foremost financial services companies, and Prudential plc, a leading international
financial services group headquartered in the United Kingdom.

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
 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.
 
ICICI Bank
ICICI Bank Limited (NYSE:IBN) About ICICI Bank: ICICI Bank Ltd (NYSE:IBN) is India's
largest private sector bank and the second largest bank in the country with consolidated total
assets of over US$ 100 billion as of March 31, 2010. ICICI Bank’s subsidiaries include India’s
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.
 
 
Prudential Plc

Established in London in 1848, Prudential plc is an international retail financial services group
with significant operations in Asia, the US and the UK serving around 25 million customers,
policyholder and unit holders worldwide. The company has £290 billion of assets under
management and it is one of the best capitalised insurers in the world with an Insurance Groups
Directive (IGD) capital surplus estimated at £3.4 billion (at 31 December 2009). Prudential is a
leading life insurer in Asia with a presence in 12 markets and have the top three position in
seven key locations of Hong Kong, India, Indonesia, Malaysia, Singapore, the Philippines and
Vietnam.
OBJECTIVES OF STUDY

To promote the interests of mutual funds and unit holders.

To set ethical, commercial and professional standards in the industry.

To increase public awareness of the mutual fund industry.

To develop a cadre of well trained distributors

To get some good market exposure by dealing with the prospects

Face to face.

To improve our ability to sell a financial product like life

Insurance.

To know the perception of the consumer about life insurance.

To get a deep knowledge of the financial product like insurance.

To get some information about the market share of Reliance Life Insurance as compared to the
giants like LIC and to know the standing of the company in the market.

To find out the valid reason why the investors invest their money in the Insurance.

To find out the return of the investors.

To find out the risk factor in this kind of investment.

SCOPE OF STUDY

I found that most of person can join insurance company for saving
taxes, unlimited earning, life time earning with little effort, which will give
him back support as a HEAD of the family in the diverse situation.

This project will help to understand the current market scenario and
marketing in stiff competition. Being a student of management I can draw
the relevant conclusion from the market survey and give the appropriate
suggestion to the organization.

SCOPE OF INSURANCE

We all know that assets are insured, because they are likely to be destroyed
or made nonfunctional before the expected life time, through accident
occurrences. Such possible occurrences are called perils. Perils are the
events. Risks are the consequential losses or damages. The risk to an owner
of a building may be a few lakhs or a few crores of rupees, depending on the
cost of building, the contents in it and the extent of damage. The risk only
means that there is a possibility of loss or damage. Insurance is done against
the possibility that the damage may happen. There has to be an uncertainty
about the risk. The word “possibility” implies uncertainty. Insurance is
relevant only if there are uncertainties.

Insurance does not protect the asset. It does not prevent its loss due to
the peril. The peril cannot be avoided through insurance. The risk can
sometimes be avoided, through better safety and damage control measures.
It only tries to reduce the impact of the risk on the owner of the asset and
those who depend on that asset. They are the ones who benefit from the
asset and therefore, would lose, when the asset is damaged. Insurance
compensates for the losses- and that too, not fully.

In conclusion we can say that the scope of insurance is very broad

and specific because it reduces the losses and risk of owner of the assets due
to perils. It also gives supports to the person in the period of adverse
situation. It insured economic consequences. When a person saves, the
amount of funds available at any time is equal to the amount of money set
aside in past, plus interest. Insurance has no substitute and one more thing
about the insurance is that this is not similar to a hire purchase scheme.
ROLE OF LIFE INSURANCE.
The Life Insurance Industry has an enviable track record among public
sector units. It has a Consistent profit and dividend paying record accompanied by a steady
growth in its financial resources. Through
investments in the Government sector and socially- oriented sectors the
Industry has contributed immensely to the nation's development. The
industry is recognized as one of the largest financial Institutions in the
country. The ventures initiated by the industry in the areas of Mutual Fund,
Housing Finance has done exceedingly well in recent years. To protect the
country's foreign exchange reserves, the reinsurance arrangement are so
Organized that maximum retention is made possible within the country while at the same time
protecting interests of the policy holders.

Insurance constitutes one of the major segments of the financial market.

Insurance services play predominant role in the process of financial
Intermediary. Today insurance industry is one of the most growing sectors in
India. There is lot of potential in the Indian Insurance Industry.
There are many issues, which require study. The scope of the study of
Insurance industry of India would be very great as there are ongoing
Developments in the industry after the opening of the sector.
The major issue right now is the hike in FDI (Foreign Direct Investment)
Limit from 26% to 49% in the insurance sector. Government may in near
Future allows 49% FDI in Insurance. This would lead to more capital inflow
By foreign partners.

Another major issue is the effects on LIC after the entry of private players in
The market. Though market share of LIC has been affected, it has improved
In terms of efficiency.

There are number of other hot topics like penetration of Health Insurance,
Rural marketing of insurance, new distribution channels, new product
ranges, insurance brokers’ regulation, incentive scheme of development
officers of LIC etc. So it offers lot of scope for studying the insurance
Industry.

Right now the insurance industry has great opportunities in a country like
India or China which huge population. Also the penetration of insurance in
India is very low in both life and non-life segment so there is lot potential to
be tapped. Before starting the discussion on insurance industry and related issues, we
Have to start with the basics of insurance. So first we understand what is
Insurance? How the word ‘insurance’ is different from the word
‘Assurance’? Etc.

ICICI Bank 3QFY2010 performance highlights and results update

 
ICICI Bank’s net profit declined by 13.4% yoy, which was in line with our estimates. The key
positives from the results are the 270bp qoq improvement in CASA to 39.6% and a decline in
operating expenses by 21.4% yoy and 4.4% qoq, despite the bank adding 106 branches during
the quarter, taking the total branch network to 1,626. Along with the large planned branch
network of 2,000 branches by FY2011E and a capital adequacy of 19.4%, we believe that the
Bank is very well-positioned to leverage to improve its return ratios. At the current levels, we
believe that the stock is trading at attractive valuations. Hence, we maintain a Buy on the stock.

Strategic Transformation continues: The Bank’s Balance Sheet contraction continued in

3QFY2010, as an outcome of the ongoing strategy over the past few quarters to favorably realign
the mix of assets and liabilities. The total deposits of the Bank remained flat sequentially
(declined by 5.5% yoy) to Rs1,97,653cr during 3QFY2010; however, the advances declined
sharply by 6.1% sequentially (declined by 15.6% yoy) to Rs1,79,269cr. The highlight of the
quarter was the improvement in the Bank’s CASA ratio to 39.6% (from 36.9% in 2QFY2010 and
27.6% in 3QFY2009). As a result of the improved deposit mix, although the overall balance
sheet de-grew by about 1.1% qoq, Net Interest Income increased by 1.1%, as NIMs improved by
a further 10bp sequentially to 2.6%. Non-interest income was down by 8.3% qoq and 33.5% yoy
to Rs1,673cr. The sequential decline was attributable to the absence of Treasury gains, and the
bank recorded a treasury loss of Rs26cr during 3QFY2010 (Profit of Rs297cr in 2QFY2010 and
Rs976cr in 3QFY2009). The asset quality of the bank showed signs of stabilising, with gross
slippages at Rs750cr (against a quarterly run-rate of about Rs1,000cr for the bank). The absolute
amount of Gross NPAs decreased by 3.0% sequentially to Rs8,925cr. The Gross NPA ratio was
up at 4.8% (as against 4.7% in 2QFY2010 and 4.1% in 3QFY2009) mainly on account of the
ongoing contraction in the loan book.

Outlook and Valuation: At the CMP, the Bank’s Core Banking business (after adjusting Rs307
per share towards the value of the subsidiaries) is trading at 1.7x FY2012E ABV of Rs511.8.
Including subsidiaries, the stock is trading at 1.7x FY2010E ABV of Rs461. We value the
Bank’s subsidiaries at Rs307 per share of ICICI Bank and the core Bank at Rs848 (2.25x
FY2012E ABV). We maintain a Buy on the stock, with a 15-month Target Price of Rs1,155,
implying an annualised return of 27.4%.

 
 

 
 

Strategic transformation continues

 The Bank’s Balance Sheet contraction continued in 3QFY2010, as an outcome of the ongoing
strategy over the past few quarters to favorably realign the mix of assets and liabilities. The total
deposits of the bank remained flat sequentially (declined by 5.5% yoy) to Rs1,97,653cr during
3QFY2010; however, the advances declined sharply by 6.1% sequentially (15.6% yoy) to
Rs1,79,269cr. The sharp drop in the advances book was attributable to the repayments from
retail, and the overseas advances portfolio.

 
 

 
 

The proportion of Retail loans in the overall loan mix came down from 54% in 3QFY2009 to
45%, driven by a reduction of 37%, 48% and 40% yoy in the vehicle loan, personal loan and
credit card segments, respectively, due to ongoing repayments and negligible new disbursements.
In the retail segment, the Bank has indicated that, going forward, the focus will mainly be on
Home loans (which are largely being booked in the Home Loan subsidiary) as well as on Car
loans. Reflective of the external demand as well as the Bank’s conscious efforts to realign its risk
exposures, this reduction in the proportion of the relatively riskier, retail loan segment was mainly offset by a doubling
in the proportion of large corporate loans from 12% of total loans in 3QFY2009 to 18%.

Strong CASA; NIMs improve

The highlight of the quarter was the improvement in the Bank’s CASA ratio to 39.6% (from
36.9% in 2QFY2010 and 27.6% in 3QFY2009). During 3QFY2010, the bank registered a further
reduction in term deposits by about Rs5,500cr sequentially (degrowth of 21.2% yoy). At the
same time, the bank was able to garner substantial CASA deposits of Rs5,317cr (35.8% yoy and
7.3% qoq growth). As a result of the improved deposit mix, although the overall Balance Sheet
de-grew by about 1.1% qoq, Net Interest Income increased by 1.1%, as NIMs improved by a
further 10bp sequentially to 2.6%.

As compared to the adverse liquidity situation less than a year back, the current environment of
abundant wholesale liquidity (cheaper than Retail deposits) is aiding the Bank from both the
growth and margin points-of-view, with NIMs showing a 30bp improvement yoy to 3.1%. The
growth in Net Interest Income of 75% yoy was in line with our expectations.

 
 

Costs remain in check

The Bank has been building a strong pipeline for CASA growth through aggressive branch
expansion (106 branches added in 3QFY2010, 210 in the last 12 months). At the same time,
operating expenses have remained firmly in check, with the management consistently delivering
on its articulated objective of cost savings without sacrificing on branch expansion. During
3QFY2010, operating expenses declined by 4.4% qoq and 21.4% yoy to Rs1,362cr, driven by a
decrease in both staff expenses (5.0% qoq, 15.1% yoy), as well as other operating expenses
(4.1% qoq, 24.0% yoy).

 
 

Non-interest Income declines due to high base

Non-interest income was down by 8.3% qoq and 33.5% yoy to Rs1,673cr, which was below our
expectations. The sequential decline was attributable to the absence of Treasury gains – the bank
recorded a treasury loss of Rs26cr during 3QFY2010 (Profit of Rs297cr in 2QFY2010 and
Rs976cr in 3QFY2009). Moreover, the bank recorded Rs277cr of Other income, comprising
Rs203cr related to the profit from transfer of merchant acquiring operations to a new entity (81%
owned by First Data). Although the Fee income remained flattish sequentially, due to a lack of
loan growth and lower Capital-markets related activity, it grew by 5.6% yoy to Rs1,422cr.

 
 

Asset-quality stable

The asset quality of the bank showed signs of stabilising, with gross slippages at Rs750cr
(against a quarterly run-rate of about Rs1,000cr for the bank). The absolute amount of Gross
NPAs decreased by 3.0% sequentially to Rs8,925cr. The Gross NPA ratio of the bank was up at
4.8% (as against 4.7% in 2QFY2010 and 4.1% in 3QFY2009), mainly on account of the ongoing
contraction in the loan book. The Provision coverage ratio of the bank was stable sequentially at
51.2% in 3QFY2010, this ratio can improve up to the 62% level, after the implementation of the
revised methodology of the calculation of provision coverage, which takes into account technical
write-offs. However, ICICI Bank is still awaiting a nod from the RBI on this issue. The Bank has
restructured loans of Rs5,338cr on a cumulative basis (3.0% of total loans, 10.2% of the
networth). Going forward, while we have conservatively factored in NPA slippages to remain at
similar levels in FY2011E as in FY2010E, before showing a declining trend in FY2012E, there
could be potential upsides to our earnings estimates for FY2011E, on account of a better-than
expected-performance on the asset-quality front.

Strong Capital Adequacy

Driven by the large Networth, Capital adequacy continued to be strong at 19.4%, comprising a
substantial Tier-1 component of 14.2%. We believe this positions the bank well for the imminent
improvement in Credit growth, as the GDP outlook continues to improve.

Overview of the Overseas banking subsidiaries

ICICI Bank Canada’s profit after tax for 3QFY2010 was CAD4.8mn, with a strong capital
adequacy ratio of 23.5% and total assets of CAD5.8bn. ICICI Bank UK’s profit after tax for
3QFY2010 was US $7.3mn, with a similarly strong capital adequacy ratio of 17.0% in
3QFY2010 and total assets of US $7.5bn.

Overview of the Insurance subsidiaries

ICICI Life’s new business annualised premium equivalent (APE) increased by 49% to Rs1,495cr
in 3QFY2010, from Rs1,002cr in 3QFY2009. The renewal premium in 3QFY2010 increased by
20% over 3QFY2009, reflecting the long-term sustainability of the business. ICICI Life’s
unaudited New Business Profit (NBP) increased by 48% to Rs282cr in 3QFY2010, from
Rs190cr in 3QFY2009. Assets held increased by 89% to Rs53,619cr in 3QFY2010, from
Rs28,445cr in 3QFY2009.

Overview of the Securities and AMC Business

ICICI Prudential AMC registered a net profit of Rs40cr in 3QFY2010, down sequentially from
Rs48cr in 2QFY2010; however, this was a significant improvement as compared to the loss of
Rs14cr in 3QFY2009. ICICI Securities’ net profit was flat sequentially at Rs38cr.

Outlook and Valuation 

We have a positive view on ICICI Bank, given its market-leading businesses across the financial
services spectrum. Moreover, we believe that the Bank is decisively executing a credible strategy
of consolidation that should result in an improved deposit and loan mix, and consequently
improved operating metrics over the medium term.

The bank’s strategy involves maintaining strong capital adequacy in the current environment,
while building the necessary base for strong CASA mobilisation going forward. This is to be
achieved through substantial branch expansion, without diluting the current focus on stringent
cost control measures. We believe that on account of this, the bank will be well-positioned by
FY2010E to capitalise on the imminent revival in overall GDP growth, resulting in a materially
improved balance sheet and earnings over the next two years. Having a total of 955 branches at
the end of 3QFY2008, the Bank has added more than 671 branches since then, and an additional
370 additions are planned in FY2011E. The Bank’s Capital Adequacy is also among the highest
at 19.4%, with a substantial 14.2% Tier 1 capital.

We believe that the Bank’s substantial branch expansion and large Capital Adequacy, especially
on Tier 1, are a precursor to market share gains, which will contribute to substantial Core
business growth as the macro-environment continues to improve. Meanwhile, the Bank has
largely exited all its businesses outside its core competency, including small-ticket personal
loans in the Domestic Segment and most non-India related exposures in its International
business, focusing again on replacing wholesale funds with retail deposits in the international
subsidiaries as well. In the short term, while

At the CMP, the Bank’s Core Banking business (after adjusting Rs307 per share towards the
value of the subsidiaries) is trading at 1.7x FY2012E ABV of Rs511.8. Including subsidiaries,
the stock is trading at 1.7x FY2010E ABV of Rs461. We value the Bank’s subsidiaries at Rs307
per share of ICICI Bank and the core Bank at Rs848 (2.25x FY2012E ABV). We maintain a
Buy on the stock, with a 15-month Target Price of Rs1,155, implying an annualised return
of 27.4%.

 
FINDING
RESULTS & DISCUSSION

According to my analysis consumers beliefs are that investment & insurance is very popular in

Indian markets. In every home somebody have their insurance and the also wants to make an

investment of his fund. So, my view is that the private insurance companies are generally not

made for mass. They want to serve the class but for that they have to launch some insurance

plans where amount of premium should be less.

The preferences of customer for insurance company

Priv Private
ate National
35%
Nati
onal
65%

Customer choices for investing in nationalized & private insurance companies.

Position of ICICI PRUDENCIAL life among other private companies in India

According to 100 questionnaires, which was collected. The market share of RLI 30%,
ICICI 35%, Kotak Mahindra 15%, Birla 8%, Max 6% & others 6%.

RLI
ICICI
KOTAK
BIRLA
MAXO
OTHER

This chart shows that ICICI PRUDENCIAL life insurance acquires a good market share
and the largest share holder amongst all insurance companies.

 CONCLUSION
As insurance very much important for every people, all people are taking interest in
Insurance because now days everybody wants security and flexibility. Affordability is also
bigger concern when a customer takes a insurance policy.

It is a great issue to hold the ICICI PRUDENCIAL LIFE products specially insurance
plans which contains various services like, a customer can access from any of the branch of
the company. Today customers want, not to block their amounts for a long time. Most of
the people want to utilize their money as possible as they can. According to my research I
realized that people want that type of insurance policy which, gives value addition to their
life as well as which require less amount to take a plan.

Companies are extensively using strategic alliances in the present day business context. This is
done to achieve competitive superiority and to retain the gained competitive advantageous
position in their respective industries. Life insurance industry in India is now growing at a fast
pace in the last decade or so after being opened up. Of the 22 players in the industry, 18 players
have taken the path of strategic alliance. There are a number ways in which strategic alliances
create value for partners involved in the alliances. This study analyses the need and the
importance of strategic alliances in the Indian life insurance industry for the different alliance
partners. In this context, strategic alliances generally involve an Indian and a Western
counterpart. The authors in this study attempted to find out and reflect on the strategic logic for
getting into the alliance.