3. What Insurance is?
Insurance is concerned with the protection of
economic value of an asset.
Advantages of Insurance:
Financial security for the family.
Facility of nomination and assignment on death.
Compulsory savings.
Tax benefits
Loans against policy.
4. Life Insurance Industry in India
The first Indian Insurance company was the
Bombay Mutual Assurance Society Ltd., formed
in 1870.
In 1956, Life Insurance business was
nationalized and LIC of India came into
existence.
Right now, there are 18 private sector and 1
public sector Life Insurance companies in India.
Life Insurance sector is growing at 10.48%
LIC of India has a dominating market share of
87% of total market covered.
The private sector companies has the growth of
153%
5. Objective 2:
What is the Environmental Scenario
of Insurance Business
6. Legal Scenario
Indian government Act in 1912
Insurance Act 1938
Insurance act 1950
IRDA Act 1999
Duties, Power and Function of IRDA
Tax Benefits from Life Insurance Policies
7. Economic Scenario
Increasing Mobilization through Public
Savings through Life Insurance Premium
Increasing Foreign Joint Venture in Life
Insurance Business
Increasing Regulation and Supervision
The move towards importance of safety
with good returns
8. Social Scenario
Life Insurance is a social security tool
Safety of investment in India
Increasing education of People about Life
Insurance
Ageing population
Special schemes for weaker section of the
society
9. Technological Scenario
Insurance companies have been in the
forefront to adopt the latest advances of
Technology
Internet and Intranet
Kiosks
Benefits to the customers and insurer
10. Industry Rivalry - High
Factors High Moderate Low
# of Firms
Market Growth
Fixed cost
Switching cost
Product Difference
Exit barriers
Industry Shakeout
11. Threat of Substitute – Moderate
Factors High Moderate Low
Switching cost
Product Difference
Substitutes
Access to Products
12. Bargaining Power of Buyer- High
Factors High Moderate Low
Switching cost
# of Customers
Awareness of Products
13. Bargaining Power of Supplier - High
Factors High Moderate Low
# of Suppliers
Suppliers Concentration
Collaborations
14. Barriers to Entry - High
Factors High Moderate Low
Legal Barriers
Investment Cost
Access to Distribution
16. Principles
Life Insurance Contracts
Utmost Good Faith
'A positive duty to disclose, accurately and fully, all
the facts material to the risk being proposed. whether
asked for or not'.
Insurable interest
Principle of indemnity
Insurance cannot be used as a means to make profit
out of it
Different risks
17. Premium
Definition
Premium is the amount, which is paid by the insured to the insurer
for an insurance contract. In other words, premium is the price
for a policy.
Basic elements of Premium
Mortality, Interest yield , Expenses , Contingency Factor
Tabular premiums
Risk Premium , Net/pure annual premium , Office premium ,
Tabular premium
18. Conti…
Factors affecting Premium to be paid
Type of policy
Age of insured person
Term of policy
Sum Assured
Mode of payment
State of health, occupation and hazards.
Additional benefit
Extra Premium – Rider Premium
19. Basic Products
Popular plans
Term Assurance Plans
Endowment Plans
Convertible Plans
With-profit & Without Profit Plans
Children's Plans
Industrial Assurance Plans
Salary Savings Scheme policies
Unit link plans
20. Documents
Proposal Form
Other important documents
Personal statement
Agent’s report
Medical report
Proof of age
First Premium Receipt
Renewal Premium Receipt
Policy bond
Endorsements
Bonus Notices
Prospectus issued by the Insurer
21. Policy Conditions
Age
Days Of Grace
Lapse And Non-Forfeiture
Paid-up Value
Nomination
Surrenders and Loans
22. Claims
Intimations
Claim Documents
Maturity claims
Death claims
The conditions applicable to accidental cases
Settlement procedure
Survival Benefits
Unusual situations
Life assured missing
Miscellaneous
23. Chairman
Training Actuarial Investment
IT Marketing Client services
RM corporate agent
SM
RM (east) RM (west) RM (south) RM (north)
SM SM SM
agents agents agents
24. Marketing Department
Marketing for Intangibles
Distribution Channel
Customers Relationship
Strengthening Relationships
Advertisements
Marketing Mix
Promotion Strategy
Product Strategy
Product Pricing
25. Functions of An Agent
Before sale
Contact prospects
Study their insurance
needs Completion of
formalities for proposal of
new insurance viz, Filling
of form
Arranging for Medical
Examination
Collection proofs of age
and income
Any other information
required by the
underwriters..
After sale
Ensure payment of renewal
premiums.
Assist policyholder for
nomination / or change
thereof.
Assist the policyholder in
case he wants to get loan
against the policy
assignment.
Assist the policyholder or
the claimant to comply
with the requirement for
getting timely settlement
of claims.
26. Underwriting
Classification Of Risks
Financial Underwriting
Non-Medical Underwriting
Underwriting By Agents
Recent Trends In Underwriting
28. Endowment Plan:
ICICI prudential has the advantage in the endowment
policy over other companies’ polices in terms of:
Extended maturity period of 5 years Loan against 3
years full premium Facility of cancellation of policy
within 15 days Premium paid will be refundable
Higher returns include policy value, sum assured and
the vested bonuses
The ICICI Prudential has the disadvantage against
OM Kotak and Birla Sunlife Insurance it terms that
both of these companies give benefit of Insurance
cover as well as investment opportunity in
government securities and AAA companies.
29. Money Back Plan:
Advantage of ICICI is that it gives survival benefit at
shorter interval which will be very much helpful in
planning of life cash flow to middle Class people.
ICICI Prudential is at the disadvantage position as
compared to others in terms of: Birla Sunlife
Insurance invests in government securities and
other financial instruments specified by IRDA, which
gives the higher returns to the customers at a
moderate risk Birla Sunlife Insurance and OM Kotak
Life Insurance are giving loans against the policy
The customer can know his repayment amount at
the pre-cancellation stage before maturity
30. Smart Kid Plan:
ICICI Prudential has the advantage against others in
terms of:
It covers the life insurance of the children during
the term
Risk starts at the commencement of the policy,
which is not the case with LIC
ICICI Prudential has the disadvantages also against
others in terms of:
Only concentrates on Educational Benefits
The Policy can be replaced by other persons like
relatives, friends, etc. in the policy of LIC
31. Unit Link Policy:
ICICI Prudential has the advantage of starting the death
benefit from the commencement of the policy. While in
LIC, the particular percentage of amount is to be paid to
the insurer.
In LIC on death after 1st year they are paying sum
assured along with along with the bid value of the fund
units while ICICI pays bid value or sum assured
whichever is higher.
The returns are secured at certain stage and unsecured
at more than that. The insurance companies invest the
money of the person in Equity and debt specified by
IRDA, which may give higher or lower returns to the
customers. But, still, the minimum sum assured is given
to the customers at the end of the maturity period.
34. Opportunities for Life Insurance Companies
High market growth
Increasing awareness
Technological Adoption
Economies of scale
Self regulation
Joint Ventures
35. Threats for Life Insurance Companies
Increasing Rivalry
Standardization of products
Higher commissions to the agents
Legal frameworks
Image of Private sectors companies
36. Strengths of ICICI Prudential
Competing products
Ability to serve multiple segments
High market share growth
Multiple product lines
Higher premium growth
Increasing network
37. Weaknesses of ICICI Prudential
Strong competing brands
Marketing and promotional efforts from
other players
Lower believability
Lower coverage
38. Seven ‘S’ Analysis
Strategy
Shared Value
Structure
Skill
Staff
System
Super ordinate
Goal
39. Findings
Insurance is concerned with the protection of
economic value of assets.
IRDA is to regulate, promote and ensure growth
of the Life Insurance business.
Foreign joint ventures are increasing in Life
Insurance Business.
Industry is growing at the rate of 10.48% in
terms of premiums collections.
Advance technology adoption
ICICI prudential is business oriented, customer
service oriented and support oriented.
41. Corporate Growth Strategy
Current Product New Product
Market Penetration
ICICI Prudential
Increase Market Share
Increase product usage
through New application
Product Development
ICICI Prudential
Product Improvements
Product line Extension
Market Development
ICICI Prudential
Expand Market by existing
Products by geographic
expansion and new target
markets
Diversification Strategy
Current
Market
New
Market
42. Market Growth Relative Share Matrix
High
Star
Life Insurance
Corporation
Question Mark
ICICI Prud.
Other Private Insurance
Companies
Cash Cow Dogs
High
Low
Relative Market share Low
Market
Growth
Rate