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CHAPTER 1

INTRODUCTION


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THEORITICAL BACKGROUND OF THE STUDY

CONSUMER BEHAVOIUR

One official definition of consumer behavior is the study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products,

services, experiences, or ideas to satisfy needs and the impacts that these processes have

on the consumer and society. It brings up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g., friends

influence what kinds of clothes a person wears) or an organization (people on the job

make decisions as to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study of

how they are purchased. Products use is often of great interest to the marketer,

because this may influence how a product is best positioned or how we can encourageincreased consumption. Since many environmental problems result from product

disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or

garbage pilling up at landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible products.


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The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit, may

have serious repercussions for the national health and economy.

The most obvious application of consumer behavior is for making better marketing

campaigns. For example, by understanding that consumers are more receptive to food

advertising when they are hungry, we learn to schedule snack advertisements late in

the afternoon. By understanding that new products are usually initially adopted by a

few consumers and only spread later, and then only gradually, to the rest of the

population, we learn that

(1) companies that introduce new products must be well financed so that they can stayafloat until their products become a commercial success and

(2) it is important to please initial customers, since they will in turn influence may

subsequent customers brand choices.

Need to study consumer behavior:

The study of consumers helps firms and organizations improve their marketing

strategies by understanding issues such as how:

The psychology of how consumers think, feel, reason, and select between deferent

alternatives (e.g., brands, products)

The psychology of how the consumers is influenced by his or her environment

(e.g., culture, family, media)

The behavior of consumers while shopping or making other marketing decisions

Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome

How consumer motivation and decision strategies differ between products that

differ in their level of importance or inerest that they entail for the consumer

How marketers can adapt and improve their marketing campaigns and marketing

strategies to more effectively reach the consumer.


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Understanding these issues helps us adapt our strategies by taking the consumer into

considerations.

According to section 2 on the Consumer Protection Act, 1986 consumer means any

person who -

i. Buys any goods for a consideration which has been paid or promised or partly

paid and partly promise or under any system of differed payment and includes any

user of such goods other than the person who buys such good for consideration

paid or promised or partly paid or partly promised or under any system of

deferred payment when such use is made with the approval of such person but

does not includes a person who obtains such goods for resale or for any purposeor

ii. Hires or avails of any services for a consideration which has been paid or

promised or partly paid and partly promised or under any system of deferred

payment and includes any beneficiary of such services other than the person who

hires or avails of the services for consideration paid or promised or partly paid

and partly promised or under any system of deferred payments when such

services are availed of with the approval of the first-mentioned person.

Note: THE CONSUMER PROTECTION ACT, 1986

An Act to provide for the better protection of the interests of consumers and for

that purpose to make provisions for the establishment of consumers councils and other

authorities for the settlement of consumers disputes and for matter connected therewith.

A MODEL OF CONSUMER BEHAVIOR

At one time, marketers could understand consumers through the daily experience

of selling to them. But the growth of companies and markets has removed many

marketing managers form direct contact with customers. Increasingly, managers have had

to rely on the 7 Os framework for consumer research to answer the following key

questions about market:

Who constitutes the market? Occupants

What does the market buy? Objects

Why does the market buy? Objectives


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Who participates in the buying? Organizations

How does the market buy? Operations

When does the market buy? Occasions

Where does the markets buy? Outlets

The starting point for understanding buyer behaviour is stimulus-response model shown

below. Marketing and environmental stimuli enter the buyers consciousness. The

buyers characteristics and decision process lead to certain purchase decisions. The

markers task is to understand what in the buyers consciousness between the arrival ofoutside stimuli and the buyers purchase decisions. They must answer two questions:

How do the buyers characteristics-cultural, social, personal, and psychological-

influence buying behavior?

How does the buyer make purchasing decisions?

Marketing

stimuli

Other

stimuli

Buyers

characteristics

Buyers

decision

making

process

Buyers

decision

Product

Price

Place

Promotion

Economical

Technological

Political

Cultural

Cultural

Social

Personal

Psychological

Problem

recognition

Information

search

Evaluation

Decision

Post

purchase

behavior

Product

choice

Brand

choice

Dealer

choice

Purchase

Timing

Purchase


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amount

BUYER BEHAVIOUR

Buyer behavior is the process by which consumers and organizational buyers

make purchase decisions. Buyer behavior is a broad term that applies both to ultimate

consumers and to organizational buyer. Consumers behavior refers to the buyer behavior

of ultimate consumers.

In order to understand human behavior in purchase/non purchase situations, consumer

behavior researchers borrow theories from other relevant social science disciplines such

as psychology and sociology.

The Interpersonal Determinants of Consumer Behavior

1. Cultural influences

Culture can be defined as values, beliefs, preferences, and tastes that are handed down

from one generation to the next. Although cultural values are show to change, they dochange over time. Basic core values are slow to change. Cultural differences are

important for the international marketer who is involved in understanding the potential of

target markets and constructing effective marketing programs.

A culture includes numerous subgroups with their own distinguishing modes of behavior

called subcultures. Subcultures are based upon such factors are race, nationality, age,

rural vs. urban, sex, religion, and geographical distribution among others.

2. Social influences

All interactions with and influences resulting from both formal and informal group

memberships other than the families are included. From the group, individuals receive

norms, status, and roles. Norms are values, attitudes, and behaviors that a group deems

appropriate for its members. Status is a persons relative position in a group. From


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groups, individuals acquire roles. Roles refer to what members of the group expect of the

individual.

The Asch phenomenon refers to a research project that demonstrates the impact groups

and group norms have on an individuals behavior. Reference groups are those whose

value structures and standards influence a person behavior. A person need not be an

actual member of a particular reference group in order to be influenced by it. Strong

influence by a group on a members purchase requires two conditions: The purchased

product must be one that others can see and identify. The purchased product must be

conspicuous, a brand or product not everybody owns. Social class membership can affect

both lifestyle and purchasing behavior, though to what extent, researcher has notdetermined.

3. Family influence

Because of the close, continuing interactions among family members, the family

often represents the strongest source of group influence. Like other groups, the family has

set of norms, roles, and status.

Four roles have been utilized in research on family decision-making:

Each partner makes Autonomic an equal number of decisions.

Husband dominates.

Wife dominates.

Syncratic both partners jointly make most decisions.

The role of young children in purchasing decision-making is also changing. Children

influence their parents and santa claus to buy certain toys, clothing and cereals, and so

forth. Teenagers, in May cases have become the household-purchasing agent in their

family unit.

4. Psychological influences

Needs and motives


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A need is a lack of something useful. It is an imbalance between the customers

actual and desired state. A need must be sufficiently aroused before it can serve as a

motive to buy something.

Motives are inner states that direct a person towards the goal of satisfied a felt need. The

individual moved to take action to reduce a state of tension and to return to a condition of

equilibrium.

TYPES OF CONSUMER BUYING BEHAVIOUR

Consumer always wants to create an assortment of products which satisfies their

needs and wants in the present and also in the future. To realize this aim, the consumer

has to make a lot of decisions. These purchasing decisions can be classified into three

main categories of decisions:

1. Routine response behavior

This behavior happens when the consumer regularly buys cheap products that needs

very little search and also very little decision effort. In this care the consumer prefers a

special brand but he also knows other brands of the same product class to have an

alternative to buy if there is something wrong with his favorite brand.

2. Limited Decision Making

This is the case if the consumer buys a product occasionally or if there is a new brand,

he doesnt know about, in a familiar product category. For this type of decision-making,


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the consumer needs a moderate amount of time for gathering information and

deliberation.

3. Extensive Decision-making

This is the most complex decision making behavior. It happens when a purchase

includes unfamiliar, expensive or infrequently bought products; for e.g. cars, house etc.

the buyer uses a lot of time evaluating alternative brands or choices and also for seeking

information.

A big contrast to the extensive decision making process that were mentioned earlier is the

behavior of the impulse buyers. These people do not plan conscious to buy; they have a

persistent urge to buy something immediately if they like it. But often these people get in

emotional conflicts; they often feel guilty because of their limited finances or some thing

else.

CONSUMER DECISION MAKINGConsumer decision-making process

NEED

RECOGNITION

INFORMATION

SEARCH

EVALUATION OF

ALTERNATIVES

PURCHASEPOST PURCHASE

BEHAVIOUR


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This decision process can be divided into five stages:

1) Problem Recognition

This occurs when the buyer notices that there is a difference between the desired state

and the actual conditions. The consumer gets aware that he has to change some thing to

get satisfied. For example, if somebody needs a care to get to work and one day the car

stops working. In this situation the person recognizes that there is a difference between

the desired state (a working car) and the actual condition (a broken car).

2) Information search

After recognizing the problem, the buyer searches for information about a new

product, which can solve his problem and also is able to satisfy his needs.

Here we distinguish two aspects to an information search:

In the internal search, buyer check first if they have any information about

the needed product in their memory. If they cannot get enough information for their

memory for a decision, they are looking for more information in an external search. In

the external search the buyer may focus on communication with friends or relatives, to

here about their experience with special brands. He also can obtain information from

public sources like manufacturers, sales persons, or product test organizations.

3) Evaluation of Alternatives

To evaluate the products of which the buyer got information is looking for criteria to

compare the products. These criteria are for example characteristics or features that the

buyer wants (or does not want). The buyer also think about how important each criterion

is; because some features may carry more weight than others. This evaluation of the

consumer can be influenced by the marketer by framing the alternatives-that means the

manner how the marketer describes the products and its features.


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4) Purchase

In this stage the consumer chooses the product or brand, which he wants to buy. This

selection is based on the result of the previous evaluation stage. There is also a set of

criterions, which must be taken into account:

One of the most important criterions is the product availability, which may influence

which brand is purchased. If the favorite brand is not available at the moment the

consumer may choose the brand that is ranked second. Other criterions that also could be

important for the consumer are for example the price, delivery, guarantees, maintenance

agreements, and installation and credit agreements.

5) Post purchase evaluation

After the purchase the buyer begins to check the product with actual performance

meet the expected level. In this stage many of criteria used in the evaluating alternatives

stage are used again. The result is either satisfaction or dissatisfaction.

THE POST PURCHASE EVALUATION PROCESS

Increased knowledge

before purchase

Leads to more realistic expectations of

the product.

Yields higher levels of satisfaction.

Cognitive dissonance

State of inner tension felt when

consumers are aware of a lack of

consistency between their values or

opinions and their behavior.

Consumers reduce

cognitive dissonance

by:

Finding new information that re-

enforces positive ideas about the

purchase.

Avoiding information that contradicts

their decision


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Revoking the original decision by

returning the products.

CHAPTER 2

RESEARCH DESIGN


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STATEMENT OF THE PROBLEM

The title of the present research is A study on consumer behavior towards the

insurance products with special to ICICI PRUDENTIAL

ICICI (Industrial Credit and Investment Corporation of India), which was one of thelargest developmental banks, has ventured into many areas of finance-in fact it has

become a universal banking brand. Prudential one of the worlds leading insurance

company has joined hand with ICICI to offer insurance products. Though private

insurance companies are in the infancy stage, the impact on the insurance market is

tangible. The marketing strategies of these private operators have forced LIC to change

its gears.

Insurance products are marketed with unique STP strategies. The market is more aware

and realistic about investment and returns from insurance products. Insurance business is

more transparent as compared to the past. In this background this study tries to analyze

the investors behavior towards insurance products in general and ICICI in particular.

OBJECTIVE OF THE STUDY

1. To understand the attitudes and perception of respondents towards insurance

products.

2. To understand the purchase behavior towards insurance products.

3. To study the respondents awareness towards ICICI PRUDENTIAL

4. To know people perception towards investments available in the market and their

risk perception.

5. To analyze the investment strategies of respondents.

6. To know the present consumer trend prevailing in the market.


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7. To offer suggestion based upon the findings.

SCOPE OF THE STUDY

It is necessary to understand what make people to buy insurance products; who influence

the buying decision and the market attitude towards insurance products.

In this perspective, the present study has concentrated to analyze the behavior exhibited

by the consumers of ICICI Prudential. It necessities to understand the attitudes of

consumers towards products and services offered by ICICI Prudential.

The study about consumers helps the company to improve their marketing strategies by

understanding the consumers. For example, by understanding that a number of different

messages compete for our potential customers attention, company learns that to be

effective, advertisement must usually be repeated extensively. Company also learn that

consumers will some times be persuaded more by logical arguments, but at other times

will be persuaded more by emotional or symbolic appeals. By understanding the

consumer the company will be able to make a more informed decision as to which

strategy to employ.

Limitations of the study

1. An underlying assumption for the entire project is that the details and the

feedback received from the population is true.

2. It was difficult to find respondents as they were busy in their schedule, and

collection of data was very difficult. Therefore, the study had to be carried out

based on the availability of respondents.

3. Some of the respondents were not ready to fill the questionnaires and some of

them were not ready to come out openly

4. Due to Time constraints, the research study cannot be applied for a long time.


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REVIEW OF LITERATURE

PURPOSE

For the present dissertation also information where collected from both primary

and secondary sources. Primary source constitute questionnaires and personal interviews.

Most of the theoretical information needed is collected from different textbooks,

magazines and web sites. Those constitute a significant information source for the present

study. As the present dissertation was titled as consumer behavior towards the insurance

products, literature reference were concentrated mostly on marketing and insurance

related journals and magazines.

Sources of information

Insurance information:

Monthly insurance magazines like Asia Insurance Post, Insurance

chronicle and other business magazines like Business World, Business India etc. have

also provided good insight and valuable information during literature search.

Insurance sector plays a very vital role in the process of economic development of any

country it act as a mobilizer of savings, as a financial intermediary, as promoter of

investment activity a stabilizer of financial market and as a risk manager. Insurance

services lead to efficient and products allocation of capital resources, facilitate growth of

trade and commerce, substitute for governments social security programs and assessed

individuals and firm in efficient management of risk.

[The Chartered Accountant Journal of the Institute of Chartered Accountants

of India June 2003 - Insurance Industry]

The Indian life insurance industry vibrant activity, since it opened to private

sector participation in 2001. The number of private life insurers now numbers to 12. This


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has led to a significant increase in life insurance in penetration, which stood at 2.7% of

the GDP during 2001 02. all private insurers witnessed impressive growth, with a

campaigned growth of 33%. ICICI Pru continues to lead the private insurers with a new

business market share 37%. Birla Sunlife has seen a rapid growth with close to 90% of its

premium income arising out of unit-linked plan. The union budget 2003 04 proved to

be disappointing for life insurance industry. It restricted the tax benefit currently offered.

The budget proposes to restrict the tax rebate under Section 88 to 20% of the sum

assured.

[Asia Insurance Post May 2003 A firm leap by Richard Holloway,

managing consultant & Sumit Narayanan, Consultant of Watson Wyatt]

Life insurance is no longer being bought only as a savings tool but is increasing being sold

for protection. The competition in the insurance market is not in savings products such as

endowment and money back, but in the term insurance market. According to survey carried

out by FICCI, as many 88% of the respondents said that they insure for security while only

40% did not for saving.

% of market share in 2001-02

Company Name %

LIC 98%

ICICI PRUDENTIAL 0.8%

HDFC STANDARED LIFE 0.2%

OTHERS 1.0%


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Private players:

Company Name %

ICICI prudential 40%

Max New York 14%

Birla Sunlife 12%

HDFC Standard 12%

SBI life 6%

Allianze Bajaj 4%

Others 12%

[Business India Oct 28 Nov 10, 2002 precious life]

Marketing information

Businesses today face three major challenges and opportunities: globalization and

advance in technology and de-regulation. Marketing is typically seen as the task of

creating, promoting and delivering good and services to consumers and business. And

marketer are involved in marketing many type of entities: goods, service, information etc.

among these service marketing has an eminent role in this present century. Consumers

are in present days marketing. So it is important to a marketer to analyze and perceive the

consumer behavior.

In this perspective in order to get information about the above-related areas the

following books has given a valuable in-depth in-sight:

1. Marketing Management Philip Kotler (the millennium edition)

2. Service Marketing Valarie A. Zeithaml & Mary Jo Bitner

3. Consumer Behavior - Leon G. Shiftman & Loslie Lazar Kanok (6 th

edition)


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CONCLUSION

The different information or benefits derived from the in-depth study of the above

mentioned information sources are as follows:

History of the life insurance industry; it helped to know about where from

the life insurance company started their journey and how it has grown to the

present set-up. It was a surprising information about the contribution of

insurance industry to the growth of the country.

Existing regulations and legislations relating to the life insurance industry;

this gives me an insight into the rules and various restriction that IRDA has

passed and the effect of Union Budget 2003 04

Competition existing in the present insurance market; the private sector

also took participation in the insurance industry from 2001. It was clear from

the above-mentioned articles, still LIC is the market leader in the life insurance

industry with 98% market share.

All the marketing information sources has given a significant contribution

to the detailed theoretical perspective for the research i.e. about marketing in

general, about service marketing and about consumer behavior.

World wide web also worked as a highly important information source as

it provides updated information for the research relating to various areas.


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METHODOLOGY

Type of research

The study was conducted as an exploratory sampling survey method to collect primary

and secondary data.

Primary Source of Data

A well-structured questionnaire was personally administrated to the selected sample to

collect the primary data and personal interviews were conducted from insurance policy

holders of ICICI PRUDENTIAL.

Secondary Source of Data

Secondary data are those, which have already been collected by some other

persons for their purpose and published. Secondary data are usually in the shape of

finished products.

Two types of secondary data were collected for the preparation of the project work:

Internal Data was generated from companys brochures, manuals and annual reports.

External Data, on the other hand, was generated from magazines, research books and

internet (websites). Magazines devoted solely to insurance news, such as Asia Insurance

News, Insurance Chronicle-monthly insurance digest and other marketing magazines


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Sampling Techniques

A sample is a representative part of the population. In sampling technique,

information is collected only from a representative part of the universe and the

conclusions are drawn on that basis for the entire universe.

A random sampling technique was used to collect data from the respondents. A random

sample is a sample selected from a population in such a way that every member of the

population has a equal chance of being selected and the selection of any individual does

not influence the selection of any other. The selection is purely depends on chance. So

while conducting the survey, 90 respondents were selected at random.

Sample Size

Sample size denotes the number of elements selected for the study. For the

present study, 90 respondents were selected at random. All the 90 respondents were the

customers of one or another insurance company. Out of these 90 respondents 30 were

specifically ICICI Prudential customers.

Sample Description

The dissertation was focused on the consumer behaviour towards the insurance products

with special reference to ICICI Prudential. The respondents were personally contacted for

the purpose of the study.

Most of the respondents were in age group of 45-55; which was having a frequency of31, 23 respondents were in the age group of 35-45, 15 respondents were in the age group

of 25-35 and 21 respondents were more than 55 years.

According to gender wise, 78 were male respondents and only 12 were female

respondents.

Nearly half of the respondents were professionals and a big chunk of the rest was

business class. Retired officers and others like housewives were among the respondents.


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CHAPTER 3

COMPANY PROFILE


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ICICI PRUDENTIAL Life Insurance was established in2000 with a commitment

to expand and reshape the life insurance industry in India. The company was amongst the

first private sector insurance company to begin operations after receiving approval from

Insurance Regulatory Development Authority (IRDA), and in the time since, has taken

several steps towards realizing its goal.

THE COMPANY

ICICI PRUDENTIAL Life Insurance Company is a joint venture between ICICI,

a premier financial powerhouse and prudential plc; a leading international financial

services group headquarters in the United Kingdom. ICICI Prudential was amongst the

first private sector insurance company to begin operations in December 2000 after

receiving approval from Insurance Regulatory Development Authority (IRDA).

ICICI and Prudential come together in1993 to form prudential ICICI Asset Management

Company, which has today emerged as one of the leading mutual funds in India. The two

companies bring together two of the strongest financial service brands in Asia, known for

their professionalism, excellent quality of service and long term commitment to customers.

Riding on the success of this relationship, the two companies joined hands once more

in2000, to form ICICI PRUDENTIAL Life Insurance, with a commitment to provide

leading-edge life insurance solutions. ICICI Bank has 74% stake in the company, and

Prudential plc has 26%. COMPANY PROFILE

LIFE INSURANCE

Life insurance is a contract providing for a payment of a sum of money to the

person assured or failing him to the person entitled to receive the same on the happening

of certain event. Uncertainty of death is inherent in human life. It is this risk, which gives

rise to the necessity for some form of protection against the financial loss arising from

death. Insurance substitutes this uncertainty by certainty.


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The objective of insurance is normally to provide:

a. Family protection and

b. Provision for old age.

HISTORY AND PRESENT STATUS OF INSURANCE MARKET IN INDIA

The insurance sector in India has come a full circle from being an open

competitive market to nationalization and back to a liberalized market again. Tracing the

developments in the Indian insurance sector reviles the 360-degre turn witnessed over aperiod of almost two centuries.

A brief history of the insurance sector

The business of life insurance in India in its existing form started in India in the

1818 with the establishment of Oriental Life Insurance Company in Calcutta. Some of

the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.

1928: The Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non insurance business.

1938: earlier legislation consolidated and amended to by the Insurance Act with

the objective of protecting the interest of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by

the central government and nationalized. LIC found by an Act of Parliament, viz. LIC

Act 1956, with a capital contribution of rupees Five Crore from the Government of India.

Insurance sector reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI

Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and

recommend its future direction. The Malhotra committee setup with the objective of


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complimenting the reforms initiated in the financial sector. The reforms where aimed at

creating a more efficient and competitive financial system suitable for the requirements

of the economy keeping in mind the structural changes currently underway and

recognizing that insurance is an important part of the overall financial system where it

was necessary to address the need for similar reforms

In 1994, the Committee submitted the report and some of the key

recommendations included:

i. Structure

Government stake in the insurance companies to be brought down to 50%.

Government should take over the holdings of GIC and its subsidiaries so that

these subsidiaries can act as independent corporations.

All the insurance company should be given greater freedom to operate.

ii. Competition

Private companies with a minimum paid up capital of Rs. 1bn should be

allowed to enter the industry.

No company should dealing both the life and general insurance through a

single entity.

Foreign companies may be allowed to enter the industry in collaboration with

the domestic companies

Postal Life Insurance should be allowed to operate in the rural market.

Only one State Level Life Insurance Company should be allowed to operated

in each state

iii. Regulatory body

The Insurance Act should be changed.

An insurance regulatory body should be setup.

ICICI Bank


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ICICI Bank (NYSE:IBN) is Indias second largest bank with an asset base of Rs.

106812 Corer. ICICI bank provides a broad spectrum of financial services to individuals

and companies. This includes mortgages, car and personal loans, credit and debit cards

and corporate and agricultural finance. The bank services a growing customer base of

more than 7 mn customer accounts and five mn bondholders accounts through a multi-

channel access network. This includes about 450 branches and extension counters, 1675

ATMs, call centers and Internet banking. ICICI bank posted a net profit of Rs 1206 Crore

for the year ended March 31,2003. ICICI bank is the only Indian company to be rated

above the country rating by the international rating agency Moodys and only the only

Indian company to be awarded an investment grade international credit rating. The bankenjoys the highest AAA (or equivalent) rating from all Indian leading rating agencies.

PRUDENTIAL PLC

Established in 1848, Prudential plc is a leading international financial services

company in UK with around US $ 250 bn funds under management, and more than 16

mn customers worldwide. Prudential has brought to market an integrated range offinancial services products that now includes life assurance, pensions, mutual funds,

banking, investment management and general insurance. In Asia prudential is UKs

largest life insurance company with a vast network of 22 life and mutual fund operations

in 12 countries- china, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines,

Singapore, Taiwan, Thailand and Vietnam. Since 1923, prudential has championed

customer centric products and services, supported by over 60000 staff and agents across

the region.

DISTRIBUTION


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ICICI PRUDENTIAL has one of the largest distribution networks amongst

private life insurance in India, having commenced operations in 28 cities and towns in

India. These are: Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Gurgaon,

Hyderbad, Indore, Jaipur, Jalandhar, Kanpur, Cochin, Kolkotta, Kottaym, Lucknow,

Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpore, Nasic, Noida, New Delhi,

Pune, Thane, Vadodara and Vashi.

The company has a largest number of banc assurance tie-ups, having agreement with

ICICI Bank, Citi Bank, Allahabad Bank, Federal Bank, South Indian Bank, Bank of

India, Lord Krishna Bank, and Punjab&Maharashra Co-operative Bank, as well as some

corporate agents. It has also tied-up with organizations like Dahn for distribution ofSalaam Zindagi, a policy for the socially and economically under privilege sections of

society.

SERVICE

ICICI PRUDENTIAL has recruited and trained over 18000 insurance agents to

interface with and advice customers, and has the highest number amongst private life

insurers on the renowned Million Dollar Round Table (MDRT). Further, it leverages its

state-of-the-art IT infrastructure to provide superior quality of service to customers.

MILESTONES

ICICI PRUDENTIAL life insurance has crossed Rs 500 Crore premium income

mark on March 31, 2003 having issued nearly 350000 policies for a sum assured of

Rs.8700 Crore since its inception.


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The last fiscal had seen significant growth for ICICI PRUDENTIAL across all segments,

with 246827 policies issued in the period April 2002-March 2003, and Rs. 348 Crore

premium from new business in the same period, a 200 per cent growth over the previous

fiscal (April 2001-March 2002).

The company had also met all its rural and social sector obligations, said a press release.

The growth been driven by pensions and unit linked products. It has garnered 23% of

pensions premium amongst all players for the period April 2002-February 2003 and 34%

in Feb alone. Today the company has established itself the number one private life

insurer in the country.

OUR VISION

To make ICICI PRUDENTIAL the dominant pensions player build 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

value -- Integrity, Customer first, Boundary less, Ownership and Passion. Each of the

values describes what the company stands for 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 significant role in redefining and reshaping the sector. Give the quality of our

parentage and commitment of our team; there are no limits to our growth.


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PRODUCTS

Insurance Solutions for Individuals

ICICI PRUDENTIAL life insurance offers a range of innovative, customer centric

products that meet the needs of customer at every life stage. Its 13 products can be

enhanced with up to four riders, to create a customized solution for each policyholder.

Savings Solutions

ICICI PRUDENTIAL Save n Protect is a traditional endowment savings plan than offers

life protection along with adequate returns.

ICICI PRUDENTIAL CashBak is an anticipated endowment policy ideal for meeting

milestone expenses like a childs marriage, expenses for a childs higher education or

purchase of an asset.

Protection Solutions

ICICI PRUDENTIAL Life Guard is a protection plan, which offers life covers at

very low cost. It is available in three options level term assurance, level assurance with

return of premium and single premium.

Child Solutions

ICICI PRUDENTIAL Smart Kid provides guaranteed educational benefits to a

child along with life insurance cover for the parent who purchases the policy. The policy

is designed to provide money at important milestones in childs life.

Market linked Solutions


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ICICI PRUDENTIAL LifeLink is a single premium Market Linked Insurance

Plan, which combines life insurance cover with the opportunity to stay, invested in the

stock market.

ICICI PRUDENTIAL LifeTimeoffers customers the flexibility and control to customize

the policy to meet the changing needs at different life stages. It offers three investment

options Growth Plan, Income Plan and Balanced Plan.

Retirement Solutions

ICICI PRUDENTIAL ForeverLife is retirement product targeted at individuals in their

thirties.

ICICI PRUDENTIAL LifeTime Pension is a regular premium market linked pensionplan.

ICICI PRUDENTIAL LifeLink Pension is a single premium market linked pension plan.

Single Premium Solutions

ICICI PRUDENTIAL AssureInvestis a single premium savings product with life

cover for terms of 5, 7or 10 years.ICICI PRUDENTIAL ReAssure is a retirement product for senior citizens who are on the

verge of retirement or have just retired.

ICICI PRUDENTIAL also launched salaam zindagi, a social sector group insurance

policy targeted at the economically under privileged sections of the society.

Group Insurance Solutions

ICICI PRUDENTIAL also offers Group Insurance Solutions for companies

seeking to enhance benefits to their employees.

ICICI PRUDENTIAL Group Gratuity Plan: ICIC Prus Group Gratuity Plan helps

employers fund their statutory gratuity obligation in a scientific manner. The plan can

also be customized to structure schemes that can provide benefits beyond the statutory

obligations.


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ICICI PRUDENTIAL Group Superannuation Plan: ICICI Pru offers a flexible

defined contribution superannuation scheme to provide a retirement kitty for each

member of the group. Employees have the option of choosing from various annuity

options or opting for a partial commutation of the annuity at the time of retirement.

ICICI PRUDENTIAL Group Term Plan: ICICI Prus flexible group term solution

helps to provide affordable cover to members of a group. The cover could be uniform or

based designation or rank or a multiple of salary. The benefit the policy is paid to the

beneficiary nominated by the member on his/her death.

Flexible Rider Options

ICICI PRUDENTIAL life offers for flexible riders, which can be added to the basic

policy at a marginal cost, depending on the specific needs of the customer.

1. Accident & disability benefit: If death occurs as the result of an accident during

the term of the policy the beneficiary receives an additional amount equal to the

sum assured under the policy. If the death occurs while traveling in an authorizedmass transport vehicle, the beneficiary will be entitled to twice the sum assured

as additional benefit.

2. Level Term Cover: This rider provides the option to increase the risk cover. The

may be increased for an additional amount upto a maximum of the existing basics

sum assured on your policy.

3. Critical Illness Benefit: protects the insured against the financial loss in the

event of 9 specified critical illnesses. Benefits are payable to the insured for

medical expenses prior to death.

4. Major Surgical Assistance Benefit: provides financial support in the event of

medical emergencies, ensuring that benefits are payable to the life assured for

medical expenses incurred for surgical procedures. Cover is offered against 43

different surgical procedures.


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AWARENESS

According to Saugata Gupta Chief Marketing of ICIC Pru ICICI Pru lifes

communication strategies have been very success full in building the brand and driving

awareness of the company and the category. ORG-Margs Brand track survey undertaken

last year indicate that though awareness of LIC stands at 100%, ICICI Pru life stands not

far behind in second place at 70%. Further the awareness scores for ICICI Pru life double

between February 2001 and September 2001.

ORG Marg research also showed that the communication not only created saliency and

awareness, but also succeeded in influencing the buying decision. ICICI Pru life emerged

far ahead of other private players as far as share of wallet went, with 52% of the

respondents saying that they intended to buy policy from ICICI Pru life.

ADVERTISING EFFECTIVENESS

ICICI PrudentialAgency: Lowe

The making of Indias no: 1 Private life insurer

ICICI Pru is a case study in the role of marketing in reshaping an industry. It

highlights how an industry where sell and push were oft used words and consumer

was nothing more than a file number, has changed to one where consumer preference

and consumer pull rule the roost. Heres a look at how ICICI Pru changed the rules of

the games and emerged a leader in the process.

Background

When the insurance sector was liberalized in 2000, the private players contend

with a few issues. Ratio of premium to GDP was low;1.3% of GDP was invested in

insurance. Insurance penetration was at an abysmal 22% of insurable population. Besides


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the above the private players were faced with attitudinal barriers, perception of insurance

has a tax saving tool and lack of a consumer centric approach in service and product

offerings.

The marketing challenges facing ICICI Pru:

The challenge therefore was to change established category drivers (death

payment and tax saving) and to get the consumer to evaluated insurance on a more

emotional plat form (protection) rather than a mere rational decision (tax savings).

The campaign Objectives:

a. Reposition the category in the consumers mind. Influence the consumer to view

it as a protection instrument and not a tax saving product alone.

b. In the process, create differentiation for the ICICI Pru brand as a provider of

social security and family protection.c. Achieve leadership status in saliency, image and product parameters.

d. Build credibility and trust.

Creative strategy:

The essence of the creative strategy: To get the consumer to re look at insurance

as a means to lead a worry free life and not as a necessary evil. To this effect the core

brand insight highlighted was As head of the family, it is my responsibility to take care

of my loved ones and protect them from the uncertainties of life, summed up in the

advertising idea: we cover you at every step in life.


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Media Strategy

In a market likely to be cluttered, we used multiple touch points to reach the

consumer. The role for each medium was envisaged. The TV medium was used to

enhance the emotional link with the brand. Strategic use of 15 sec. edits facilitated high

frequency levels. In print, the cost per response rather than the cost per thousand as

responses were measured in form of call ins. Radio FM, Cinema, Internet were used to

create a media multiplier effect

The results of communication efforts

Being no: one in awareness and saliency. Awareness: ICICI Pru showed a

significant jump in awareness between Feb and Sept 2001. Image: highest score among

all insurance players including LIC, on image parameters like safety, modernity, service,

good returns, etc. Intention to invest: next only to LIC as per research (all source:

research by ORG Marg). No: of calls and e-mails: there were 70000 calls at the call

center and 6582 e-mails in the year 2001.


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CHAPTER 4

DATA ANALAYSIS AND

INTERPRETATION


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TABLE NO: 1

Table showing the monthly income of the respondents

PARTICULARS FREQUENCY PERCENTAGE

Less than 10000 11 12%

10000-20000 22 24%

20000-30000 24 27%

30000-40000 18 20%More than 40000 15 17%

Total 90 100%

Interpretation:

From the above table it can be inferred that the maximum respondents fall between

income of 20000 30000 i.e., 27% o and 24% of the respondents have a monthly

income of 10000 20000 and the respondents who have less income level are upto 12%.


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GRAPH 4.1

Graph showing the monthly income of the respondents

0

5

10

15

20

25

1112

24

18

15

Monthlyincomeoftherespondents

lessthan10000

10000 20000

20000 30000

30000 40000

morethan

40000

Inference

The above graph shows the monthly income level of the respondents.


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TABLE NO: 2

Table showing the monthly savings of respondents

PARTICULARS FREQUENCY PRECENTAGE

Lessthan2000 15 17%

2000-4000 22 24%

4000-6000 21 23%

6000-8000 19 21%

More than 8000 13 15%

TOTAL 90 100%

Interpretation:

From the above table it can be inferred that therespondents fall between

savings of 2000 4000 i.e., of 24% and 23% of the respondents have a monthly savings

of 4000 6000 and the respondents who have less income level are upto 15%.


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Graph 4.2

Table showing the monthly savings of respondents

0

5

10

15

20

25

15

2221

19

13

monthly savings of the respondents

less than 2000 2000 - 4000

4000 - 6000 6000 - 8000

more than 8000


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TABLE NO: 3

Table showing the purpose of savings of the respondents


Medical expenses 21 23%

To buy durables 06 07%

To buy jewelers 05 06%

To buy house or site 25 27%

Education 31 34%

Others 02 03%

TOTAL 90 100%

From the above table it can be inferred that:

23% of the 90 respondents make savings for the purpose of medical expenses,07%

of the respondents make savings for the purpose to buy durables,06% of the respondents

make savings for the purpose to buy jeweler, 27% of the respondents make savings for

the purpose to buy house or site,34% of the respondents make savings for the purpose of

education, 03% of the respondents make savings for some other purpose like marriage,

entrepreneurship etc.


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Graph 4.3

Graph showing the purpose of savings of the respondents

21

6 5

25

31

2

0

5

10

15

20

25

30

35

Purpose of savings

medical expences to buy durables to buy jewellers

to buy house or site education others


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TABLE NO: 4

Table showing the investment preference of the respondents


Bank deposit 22 24%

Insurance 18 20%

Shares 13 14%

Debentures 09 10%

Real estate 12 13%

Gold 04 05%

Mutual funds 07 08%Chit funds 05 06%

Others 00 00%

TOTAL 90 100%


24% of the 90 respondents preferred to make investments in bank deposits,20% of the

respondents preferred to make investments in insurance,14% of the respondents

preferred to make investments in shares,10% of the respondents preferred to make

investments in debentures,13% of the respondents preferred to make investments in

real estate,05% of the respondents preferred to make investments in gold,08% of the

respondents preferred to make investments in mutual funds,06% of the respondents

preferred to make investments in chit funds


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Graph 4.4

Graph showing the investment preference of the respondents

0

5

10

15

20

25 22

18

13

9

12

4

75

Investment preferences

bank deposit insurance shares

debenture real estate goldmutual funds chit funds


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TABLE NO: 5

Table showing the respondents who are actively planning their

investments taking care of tax implications


Yes 72 80%

No 18 20%

TOTAL 90 100%


80% of the 90 respondents actively plan their investments taking care of tax

implications, 20%of the respondents does not plan their investments taking care of

tax implications.


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Graph 4.5

Graph showing the respondents who are actively planning their

investments taking care of tax implications

80%

20%

Respondents who plan their investmentstaking care of tax implications

yes no


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TABLE NO: 6

\Table showing the respondents level of information regarding

insurance productsPARTICULARS FREQUENCY PRECENTAGE

Good 30 33%

Moderate 54 60%

Poor 06 07%

TOTAL 90 100%


33% of the 90 respondents have a good level of knowledge and information regarding

insurance products of the respondents have an average level of knowledge and

information regarding insurance products, 07% have a poor knowledge and

information regarding insurance products, 60%


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Graph 4.6

Graph showing the respondents level of information regarding

insurance products

good33%

moderate60%

poor7%

Level of information on insurance products


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TABLE NO: 7

Table showing the companies preferred for taking life insurance policies

by the respondents


LIC 40 45%ICICI 30 33%

ING-VYSYA 07 08%

Birla Sunlife 10 11%

Others 03 03%

TOTAL 90 100%


45% of the 90 respondents are the holders of life insurance policies of LIC , 33% of

the respondents are the holders of life insurance policies of ICICI, 08% of the

respondents are the holders of life insurance policies of ING VYSYA, 11% of the

respondents are the holders of life insurance policies of Birla sunlife, 3% of the

respondents hold the life insurance policies of other companies, which include Max

New York, Metlife etc.


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Graph 4.7

Graph showing the companies preferred for taking life insurance

policies by the respondents

45%

33%

8% 11%

3%

Companies preferred for life

insurance policies

LIC ICICI ING - VYSYA Birla sunlife others


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TABLE NO: 8

Table showing the policies preferred by the respondent


Annuity 35 39%

Money back 16 18%

Endowment 28 31%

Term 11 12%

TOTAL 90 100%


39% of the respondents prefer annuity policy, 18% of the respondents prefer money

back, 31% of the respondents prefer endowment, 12% of the respondents prefer term

polices


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Graph 4.8

Graph showing the policies preferred by the respondent

05

10

15

20

2530

35

annuity money back endowment term

35

16

28

11

Policy preferences


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TABLE NO: 9

Table showing how much insurance premium is paid monthly by the

respondents


Less than 1000 16 18%

1000 2000 22 24%

2000 3000 40 44%3000 4000 08 09%

More than 4000 04 05%

TOTAL 90 100%


18% of the 90 respondents used to pay a monthly premium of less than 1000, 24% of

the respondents pay a monthly premium of 1000 2000 , 44% of the respondents pay

a monthly premium of 2000 3000 , 09% of the respondents pay a monthly premium

of 3000 4000 , 05% of the respondents pay a monthly premium of more than 4000


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Graph 4.9

Graph showing how much insurance premium is paid monthly by the

respondents

0

5

10

15

20

25

30

35

40

16

22

40

8

4noofrespondents

Approximate monthly insurancepremium

less than 1000 1000 - 2000

2000 - 3000 3000 - 4000

more than 4000


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TABLE NO: 10

Table showing the purpose for which the respondents have taken the

policy


Tax purpose 39 43%

Future security 23 26%

Childrens education 20 22%

Marriage 00 00%Others 08 09%

TOTAL 90 100%


43% of the 90 respondents have taken the policy for the purpose of tax saving, 26%

of the respondents have taken the policy for the purpose of future security, 22% of the

respondents have taken the policy for the purpose of childrens education, 09% of the

respondents have taken the policy for some other purpose like accidents, natural

calamities etc.

None of the respondents have opted life insurance policies for marriage purpose


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Graph 4.10

Graph showing the purpose for which the respondents have taken the

policy


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0

5

10

15

20

25

30

35

4039

23

20

0

8noofrespond

ents

Purpose of the policy taken

tax purpose future security children's education marriage others


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TABLE NO: 11

Table showing the person who pays premium for the respondent


Self60 66%

Employer 15 17%Spouse 12 13%

Others 03 04%

TOTAL 90 100%


66% of the 90 respondents premium is paid by themselves, 17% of the respondents

premium is paid by their employees, 13% of the respondents premium is paid by

their spouse, 04% of the respondents premium is paid by persons other than the

above three .


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Graph 4.11

Graph showing the person the person who pays premium for the

respondent

60

15

123

Person who pays premium

self employer spouse others


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TABLE NO: 12

Table showing whose life is insured as per the policy taken by the

respondents


Self 41 46%

Spouse 28 31%

Children 11 12%

Parents 10 11%

TOTAL 90 100%


46% of the 90 respondents have insured their life itself as per the policy taken, 31%

of the respondents have insured their spouse life as per the policy taken, 12% of the

respondents have insured their childrens life as per the policy taken, 11% of the

respondents have insured their parents life as per the policy taken.


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Graph 4.12

Graph showing whose life is insured as per the policy taken by the

respondents

0

5

1015

20

25

30

35

40

45

1

41

28

11 10

Person whose life insured

self spouse children parents


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TABLE NO: 13

Table showing the level of information of the respondents regarding the

products of ICICI PRUDENTIAL


56% of the 90 respondents have a good level of information regarding the products of

ICICI PRUDENTIAL, 30% of the respondents have an average level of information

regarding the products of ICICI PRUDENTIAL, 14% of the respondents have only a

poor information regarding the products of ICICI PRUDENTIAL.


Good 50 56%

Moderate 27 30%

Poor 13 14%

TOTAL 90 100%


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Graph 4.13

Graph showing the level of information of the respondents regarding

the products of ICICI PRUDENTIAL

Level of information about products of

ICICI PRUDENTIAL

good moderate poor


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TABLE NO: 14

Table showing ICICI PRUDENTIAL advisors who have contacted the

respondents


Yes 39 43%

No 51 57%

TOTAL 90 100%


43% of the 90 respondents have contacted by the advisors of ICICI PRUDENTIAL,

57% of the respondents have not contacted by the advisors of ICICI PRUDENTIAL.


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Graph 4.14

Graph showing ICICI PRUDENTIAL advisors who have contacted the

respondents

0

10

20

30

40

50

60 39

51

ICICI PRUDENTIAL advisors who have contactedthe respndents

Yes

no


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TABLE NO: 15

Table showing the policies preferred by the respondents owning ICICI

PRUDENTIAL life insurance policy


Annuity 12 40%Money back 05 17%

Endowment 09 30%

Term 04 13%

TOTAL 30 100%


40% of 30 respondents who are owing icici prudential life insurance policy prefer

annuity policy, 17% of 05 the respondents of prefer money back policy, 30% of 9 ofthe respondents prefer endowment policy, 13% of the respondents term policy


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Graph 4.15

Graph showing the policies preferred ICICI PRUDENTIALS

customers

0

2

4

6

8

10

12

annuity money back endowment term

12

5

9

4

noof

respondents

Policies prefered by ICICI

PRUDENTIAL'S customers


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TABLE NO: 16

Table showing the rating of the service offered by ICICI PRUDENTIAL


Good 18 60%

Average 12 40%

Poor 00 00%

TOTAL 30 100%


60% of the 30 respondents have an opinion that service offered by ICICI

PRUDENTIAL is good, 40% of the respondents have rated its service as average.


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Graph 4.16

Graph showing service ratings of ICICI PRUDENTIAL

0

5

10

15

20

1

18

12

0noofres

pondents

Service ratings of ICICI PRUDENTIAL

good average poor


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TABLE NO: 17(a)

Table showing whether the respondents are satisfied with the service of

the company


Yes 25 83%

No 05 17%TOTAL 30 100%


83% of the 30 respondents are satisfied with the service of ICICI PRUDENTIAL,

17% of the respondents are not satisfied with its service.


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Graph 4.17

Graph showing level of satisfaction on service of ICICI PRUDENTIAL

83%

17%

Level of satifaction on service of ICICIPRUDENTIAL

yes no


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TABLE NO: 17(b)

Table showing whether the respondents are satisfied with the service ofICICI PRUDENTIAL advisors


Yes 17 57%

No 13 43%

TOTAL 30 100%


57% of the 30 respondents are satisfied with the service provided by ICICI

PRUDENTIAL advisors, 43% of 30 respondents are not satisfied with advisors

service.


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Level of satisfaction on the service of advisors

57%

43%

yes no


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TABLE NO: 18

Table showing how frequently respondents like to pay their premium


Monthly 13 43%Quarterly 08 27%

Half yearly 04 13%

Yearly 03 10%

One time single

premium02 07%

TOTAL 30 100%


43% of the 30 respondents like to pay their premium monthly , 27% of the

respondents like to pay their premium quarterly, 13% of the respondents like to pay

their premium half yearly, 10% of the respondents like to pay their premium yearly,

07% of the respondents like to pay their premium as one time single premium.


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Graph 4.18

Graph showing frequency of payment

Frequency of payment of premium

27%

10%7%

43%13%

monthly

quarterlyhalf yearlyyearlyone time single premium


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TABLE NO: 19

Table showing whether the ICICI PRUDENTIAL policyholders are

receiving premium notice in advance


Yes 25 83%

No 05 17%

TOTAL 30 100%


83% of the 30 respondents have agreed that they are receiving premium notice in

advance, 17% of the respondents have not agreed that they are receiving premium

notice in advance .


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Graph 4.19

Graph showing policy holders who receives premium notice in

advance

0

5

10

15

20

25

yes no

25

5

ICICI PRUDENTIAL policy holders who recievespremium notice in advance


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TABLE NO: 20

Table showing the respondents opinion regarding whether the ICICI

PRUDENTIAL website www.iciciprulife.com is informative and

suggestive


Yes 11 37%

No 19 63%

TOTAL 30 100%


37% of the 30 respondents has an opinion that ICICI PRUDENTIAL website is

informative and suggestive, 63% of the respondents has an opinion that ICICI

PRUDENTIAL website is not informative and suggestive.


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Graph 4.20

Graph showing comments on ICICI PRUDENTIAL web site

37%

63%

Comments on ICICI PRUDENTIAL web site

yes no


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TABLE NO: 21

Table showing the number of respondents who are interested to hold

more policies other than one they are using now

PARTICULARS FREQUENCY PRECENTAGEYes 21 70%

No 09 30%

TOTAL 30 100%


70% of the 30 respondents are interested to hold more policies, 30% of the

respondents are not interested to hold more than one policy.


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GRAPH 4.21

Graph showing respondents willingness to hold more policies

0

5

10

15

20

25

yes no

21

9

Respondents' willingness to hold more policies


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CHAPTER 5

SUMMARY OF FINDINGS AND

CONCLUSION


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FINDINGS

1. LIC is the clear market leader across all age groups and income levels. May be ICICI

PRUDENTIAL can excuse it self that people in the age of more than 55 years

category could not take its policies because ICIC PRUDENTIAL was not around

when these people made their life insurance choices. But what is disturbing is that the

young age group (25 35) also prefers the government run LIC.

2. Majority of the respondents i.e. 22 respondents have a monthly savings around 2000

4000, 21 respondents said that they have monthly savings around 4000 6000 and

only a few respondents have monthly savings of less than 2000, around 6000 - 8000

and more than 8000.

3. It is inferred from the study that, 31 respondents make the savings for the purpose of

education, 21 respondents make the savings for the purpose of medical expenses, 25

respondents make the savings to buy house or site and few respondents make savings

to buy durable, to buy jewelers and some other purpose also.

4. From the study it is found that majority of the respondents i.e. 22 respondents preferbank deposits for investment purpose, 18 prefer insurance, 13 prefer shares and 12

prefer real estate. So there is a more scope insurance sector as people feel it is secured

and profitable mode investment and this trend can capitalized upon by ICICI

PRUDENTIAL.

5. Most of the respondents give enough care to tax implication while planning their

investments, only a few i.e. 18 respondents does give any importance for tax

implication while planning their investments.

6. In an absurd contrast to the information and awareness of life insurance among the

younger earning generation respondents seems careless to take up insurance. ICICI

PRUDENTIAL can take up the initiative to create awareness of its insurance policies

right from the college level by conducting workshops there.

7. Birla Sunlife is ICICI PRUDENTIALs main competitor for the higher income group

and competitors include Max New York, HDFC Standard Life, and SBI Life etc.


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8. Most of the respondents prefer annuity policies; followed by endowment policies. 16

respondents like to invest in money back policies and only 11 respondents prefer

term.

9. Potential for ICICI PRUDENTIAL exists in the category of respondents aged 25

45 years old earning less than 10000 per month. As awareness of life insurance is

gaining ground here and tomorrow respondents from here will be growing upwardly

mobile and will invest larger amounts in life insurance.

10.Contrary to popular belief life insurance is not being bought for future security (even

though buying an insurance policy automatically implies future security) but for tax

exemption purpose under Sec. 88 of the Income Tax Act, 1961. This is quite risky forinsurance companies because if this tax exemption is withdrawn by the government

later then with this prevailing attitude towards insurance, not many people will be

attractive towards life insurance. Hence ICICI PRUDENTIAL must educate the

public towards the core benefit of life insurance through innovative promotional

campaigns.

11.Life policies have not at all been bought for marriage purpose.

12.From the study, it is clear that majority of the respondents has taken the policy for

themselves and 28 respondents have taken the policy for their spouse. The study also

shows that very less number of respondents have taken the policy for their children

and parents.

13.Most of the respondents are well informed about the products of ICICI

PRUDENTIAL, 27 respondents have an average knowledge and 13 respondents have

only a poor knowledge about it.

14.The ICICI PRUDENTIAL network of advisors should be increased and their

targeting tactics should be strengthened as out of 90 people surveyed only 39 were

contacted by ICICI PRUDENTIAL advisors previously.

One respondent said he would have taken ICICI PRUDENTIALs policy had not

Birla Sunlife approached him earlier. This shows adage the early bird catches the

worm is very true here.

15.Among 30 ICICI policyholders majority prefers annuity policies, 9 respondents prefer

to take endowment policies and a few give preference to money back and term.


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16.Majority of ICICI policyholders rates its service as good.

17.It is found that majority of the ICICI PRUDENTIAL policyholders are satisfied with

the service of both the company and advisors.

18.13 policy holders of ICICI PRUDENTIAL are likes to pay their premium monthly, 8

likes to pay quarterly, few likes to pay half-yearly and only 2 likes to pay as one time

single premium.

19.Majority of the customers of ICICI PRUDENTIAL has agreed that they are receiving

premium notice advance. 5 customers have said that they are not receiving the

premium notice frequently, which also a quite good number out of total 30

respondents. So the company should not ignore it.20.Only 37% of the respondents have logged into iciciprulife.com. The company

should understand that if adequate publicity is given to its website through print,

television, radio, mobile and even through Internet, people would browse through it.

This is important because among all the above media, Internet offered the advantage

of presenting the data in the greatest detail anywhere, any time with constrains of

time and space and the least expense. If matter is presented well the information

seeker can take positive decision.

21.With improving economic conditions people can afford to take up more policies,

which is slowly, but surely coming. Thus ICICI PRUDENTIAL can tap into the 25%

market held by LIC. It also point out that ICICI PRUDENTIAL has 85% of market

potential as many of the existing policy holders are grossly under insured and they

can take additional insurance policies as they progress in their career.


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CONCLUSION

Since the opening up of the insurance sector in 1994, 20 private insurers are in the

fray each one trying to garner more market share than the other. Among all the players

ICICI Prudential with the advantage of being the earliest to operate in the liberalized

insurance market has cornered 3,50,000 policies as on March 31, 2003.

Yet the survey has exposed how far behind LIC is ICICI Prudential. ICICI

Prudential must also be alert what with Birla Sunlife and ING-VYSYA breathing down

its neck.

I am sure the company will find my findings relevant and I sincerely hope it uses

my suggestions enlisted, which I hope will take them miles ahead of competition.

In short, I would like to say that the very act of the concerned management at

ICICI Prudential in giving me the job of critically examining consumer behavior towards

financial products of the company is a step in their continual mission of making all round

improvements as a means of progress.

I am sure the company has a very bright future to look forward to and will be a trailblazerin its own right.


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CHAPTER 6

RECOMMENDATIONS AND

SUGGESTIONS


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SUGGESTIONS

1. Affordable schemes must be launched for the 20 30 year olds drawing less than

5000 rupees per month. This category will rise in the future and ICICI Prudential

must concentrate on catching them young so that the company can generate more

income from the longer service lives of the younger potential policyholders. ICICI

Prudential must not limit itself to serve only the affluent, as it will be ignoring a large

chunk of aspirational Indians. It would be wise for the company to target young

people in the above category and grow along with them as they and the nation

prospers.

2. Many respondents in the 20 40 year old category are saving to buy a house / site.

ICICI Prudential can capitalize on this yearning by offering house loans with low

interest if customers take up its insurance policies.

3. Many respondents in their answer as to why they did not take ICICI Prudential

policies said that ICICI Prudential being a private insurer its reliability and long term

existence is a big question mark. This myth must be broken through an Ad-campaign

through radio, television, print internet that tells that ICICI is nothing but the

Industrial Credit and Investment Corporation of India which was set up as a

public limited company on January 5, 1955 by the government. Hence it has existed


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for 48 years close to half a century and has gone from strength to strength, so why not

even in the future? It can exist for an even longer time with its tremendous reserves

and valuable experience in the financial sector. Even the advisors must sell this fact

of the company to the discerning public.

4. Website Changes:

a) ICICI Prudential must advertise more about its website in the mass

media so people can gain first hand knowledge about its products at

their convenience in a more detailed manner.b) The website is good but instead of having a glossary as a separate

entity, link words which are difficult to understand for a first timer

(even if it is as simple as premium) must be marked up (underlined)

in the text, which upon clicking must open out to a window giving

details.

c) A page must be devoted on why life insurance must be taken plus real

life stories of how people without insurance protection suffered when

tragedies struck them. In contrast happy stories of those who were

smart must be given.

d) Links to other sites extolling the virtues of life insurance must be

given.

e) A page devoted to ICICIs beginning as a developmental bank started

in 1955 must be included in the website to assure potential customers

that this is one company that will stick around for a long time to

come.

f) Exciting contests can be launched for those who visit the website.

g) ICICI Prudential has tied up with Citibank, Allahabad Bank, Federal

Bank, Lord Krishna Bank, Bank of India hence it must advertise in

these websites also. It can also advertise in other financial sections of

websites like rediff.com and indiainfoline.com. Youth sites like

mtvindia.com can also be targeted.


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h) It should highlight in bold letters (not just a mention) that ICICI

Prudential is working for underprivileged sections of the society

(e.g. Dhan).

5. According to Abraham Maslows hierarchy of needs the 2nd step to self actualization

is the fulfillment of the safety needs. Though people feel the need for security a large

number live in an ivory tower oblivious to the uncertainties life could throw up in the

distant future. They procrastinate to take decisions regarding this aspect. It is this

dormant aspect that ICICI Prudential should awaken in people and bring about a

restlessness and unfulfilled feeling regarding their and their familys security. Thenext choice then would be insurance. This could be brought about by an innovative

campaign slogan saying, The decision is now.

6. ICICI Prudential must not target people only when they start earning but much before

that. To gain the early bird advantage they must organize sessions in schools and

colleges giving explanations on life insurance in general and ICICI Prudential in

particular. This will make the younger generation more responsible making them go

in for insurance in a big way at the earliest thus making ICICI Prudential the ultimate

beneficiary to enjoy the income from customers from the very beginning of their

service lives. It can also bring about a stronger brand commitment in this manner.

7. ICICI Prudential should consciously try to change the mindset of people from

investing in life insurance for the sake of tax exemption to that of worry exemption.

India will move into that mode in the future in its journey to being a developed

country as is exemplified by the fact that in developed countries insurance policies

are bought while in developing countries it is sold.

8. Nuclear families and increased life expectancy are two factors that have left the

elderly to fend for themselves. Hence pension is a necessity now than a luxury earlier.

Only 6% of the insurable populations are covered by some pension scheme hence


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ICICI Prudential should tap this existing market and bring about awareness and

innovative schemes.

9. Majority of the respondents in all age and income groups of this survey prefer to save

in banks over insurance citing the reason that banks give better returns. ICICI

Prudential should explode this myth among consumers with the following fact:

The consumers believe that investment in life insurance is not desirable as the

yield on the premia is very low. It is correct that yield on most of the insurance

products is in the range of 7 per cent to 8 per cent only. However, this traditional

concept of investment totally ignores the invisible yield on the death-risk

coverage. For example, a policyholder aged 30 years for an endowment assurance

of 25 years will pay a yearly premium of Rs 4,000 only for a sum assured of Rs 1

lakh. In case he dies after two years, his wife will get Rs 1 lakh in settlement of

death claims against Rs 8,000 premia paid for this policy. However, if the same

consumer makes investment in the recurring deposit of a bank of Rs 4,000 per

year, his wife gets only Rs 8000 plus interest after two years. Hence the insurance

claim amount is much higher than the bank deposits. This applies to other savingsas well. Hence investment in insurance has an edge over other savings in the

event of the death of the consumers.

10. Leverage information technology to service large numbers of customers efficiently

and bring down overheads. Technology can complement or supplement distribution

channels cost-effectively. It can also help improve customer service levels

considerably.

11. Use data warehousing, management and mining to gauge the profitability and

potential of variou

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