A SUMER INTERNSHIP REPORT ON RECRUITMENT OF ADVISORS IN ICICI PRUDENTIAL LIFE INSURANCE For the partial fulfillment of the requirement for the Award of the degree of BACHOLAR OF BUSINESS ADMINISTRATION Roll no- 8423548 Submitted By: JYOTI RANI JAIPURIYA INSTITUTE OF MANAGEMENT GAZIABAD, UP ACKNOWLEDGEMENT This project has been prepared after lots of analysis and efforts. I gratefully acknowledge with due courtesy the sources consulted in the preparation of this project. I express my sincere gratitude to Mr. Padam Singh (Sr. Agency Manager) ICICI Prudential for giving me an opportunity to work in the HR department. I am thankful to his valuable guidance, advice, critical reviews, acknowledgment and association throughout the preparation of this report. No work is complete in itself without credits being given to the persons who help in achieving a desired task. I feel privileged to thank all those people who have directly or indirectly contributed to the completion of this project. JYOTI RANI CONTENT S.No. Topic Page No. 1. Executive Summary 1 2. Meaning of Insurance 2 3. Insurance Industry 6 4. Global Insurance Industry 7 5. Insurance Market in India 12 6. Facts of Life Insurance Industry 16 7. Life Insurance Market in India 19 8. Company profile - About ICICI Prudential 25 9. Nature of Job as a Trainee 43 10. Objectives of the Study 54 11. Research Methodology 55 Limitations of The Study 57 12. Analysis and Findings 58 Questionnaire Analysis 64 SWOT Analysis 68 Conclusion 69 13. Recommendations 71 Bibliography 72 14. Appendix – Questionnaire 73 EXECUTIVE SUMMARY The objective of this project was to assist ICICI Prudential Life Insurance in expanding their channel by recruiting Tied Agents/ Advisors for the company. For the company to successfully continue its operations, it needs to undergo change to get new business and to get new ideas. Moreover insurance is such a growing sector that it has full potential to have new customers. So it is very essential to have new people in the system, which can add new customers to the company. This was achieved through a five-pronged effort. The first objective of the study was to look for different segments of the people. The second objective of the project was to analyze the person to find whether he is fit for doing insurance. The third objective of the project was to finally introduce some people in the system by recruiting them as advisors of the company. The research methodology consisted of secondary data, which was collected from different colleges, Tata Press Yellow Pages etc and personal interview with people in Delhi. 1 MEANING OF INSURANCE Insurance or assurance is device for indemnifying or guaranteeing an individual against loss. Reimbursement is made from a fund to which many individuals exposed to the same risk have contributed certain specified amounts, called premiums. Payment for an individual loss, divided among many, does not fall heavily upon the actual loser. The essence of the contract of insurance, called a policy, is mutuality. The entity that is transferring the risk — which may be an individual or association of any type, including a government or government agency — is called the "insured". The entity accepting the risk is called the "insurer". The agreement between the two by which the risk is transferred is called the "policy": this is a legal contract that sets out exactly the terms and conditions of the coverage. The fee paid by the insured to the insurer for assuming the risk is called the "premium". This is usually determined by the insurer to fund estimated future claims paid, administrative costs, and profit. For example, let us assume that a couple buys a home costing $100,000. Knowing that the loss of their home would bring them financial ruin, they acquire insurance coverage in the form of a homeowner's policy. That policy will pay them the cost of replacing or repairing their home in the event of a catastrophe. The insurance company charges them a premium of $1,000 a year. Risk of loss has been transferred from the homeowners to the insurance company. The major operations of an insurance company are underwriting, the determination of which risks the insurer can take on; and rate making, the decisions regarding necessary prices for such risks. The underwriter is responsible for guarding against adverse selection, wherein there is 2 excessive coverage of high risk candidates in proportion to the coverage of low risk candidates. In preventing adverse selection, the underwriter must consider physical, psychological, and moral hazards in relation to applicants. Physical hazards include those dangers which surround the individual or property, jeopardizing the well-being of the insured. The amount of the premium is determined by the operation of the law of averages as calculated by actuaries. By investing premium payments in a wide range of revenue-producing projects, insurance companies have become major suppliers of capital, and they rank among the nation's largest institutional investors. COMMON TYPES OF INSURANCE Life insurance, originally conceived to protect a man's family when his death left them without income, has developed into a variety of policy plans. • In a “whole life” policy, fixed premiums are paid throughout the insured's lifetime; this accumulated amount, augmented by compound interest, is paid to a beneficiary in a lump sum upon the insured's death; the benefit is paid even if the insured had terminated the policy. • Under “universal life,” the insured can vary the amount and timing of the premiums; the funds compound to create the death benefit. • With “variable life,” the fixed premiums are invested in a portfolio (with earning reinvested), and the death benefit is based on the performance of the investment. • In “term life,” coverage is for a specified time period (e.g., 5–10 years); such plans do not build up value during the term. Annuity policies, which pay the insured a yearly income after a certain 3 age, have also been developed. In the 1990s, life insurance companies began to allow early payouts to terminally ill patients. Fire insurance usually includes damage from lightning; other insurance against the elements includes hail, tornado, flood, and drought. Automobile insurance includes not only insurance against fire and theft but also compensation for damage to the car and for personal injury to the victim of an accident (liability insurance); many car owners, however, carry only partial insurance. In many states liability insurance is compulsory, and a number of states have instituted so-called no-fault insurance plans, whereby automobile accident victims receive compensation without having to initiate a liability lawsuit, except in special cases. Bonding, or fidelity insurance, is designed to protect an employer against dishonesty or default on the part of an employee. Title insurance is aimed at protecting purchasers of real estate from loss by reason of defective title. Credit insurance safeguards businesses against loss from the failure of customers to meet their obligations. Marine insurance protects shipping companies against the loss of a ship or its cargo, as well as many other items, and so-called inland marine insurance covers a vast miscellany of items, including tourist baggage, express and parcel-post packages, truck cargoes, goods in transit, and even bridges and tunnels. In recent years, the insurance industry has broadened to guard against almost any conceivable risk; companies like Lloyd's will insure a dancer's legs, a pianist's fingers, or an outdoor event against loss from rain on a specified day. 4 Insurance in brief: • Insurance is a method of spreading & transfer of risk. • Losses of unfortunate few are shared by and spread over to many exposed to same risk. • Assets created by the owner in expectation of future needs or benefits have value. • Loss of assets for any reasons deprives the owner of the expected benefits. • Insurance in this context is a mechanism that helps to reduce the adverse consequences due to loss of assets. 5 THE INSURANCE INDUSTRY The insurance industry forms an integral part of the global financial market, with insurance companies being significant institutional investors. In recent decades, the insurance sector, like other financial services, has grown in economic importance. This is through direct contributions to gross domestic product (GDP) via increased levels of employment within the sector; and indirectly through higher levels of risk transfer and financial intermediation. Expanding further on this issue, it must be remembered that the insurance industry’s primary function is to supply individuals and businesses with coverage against specified contingencies. Insurance companies, therefore, engage in underwriting, managing, and financing risks. According to Sigma (2001) the largest insurance sectors are to be found in the U.S. and Japan, which together generates more than fifty percent of global premium income; followed by the UK, Germany, France and Italy. Furthermore, during the last four decades the global insurance sector has on average outpaced global economic growth. Between 1984 and 2001, the global insurance industry grew at an overall rate of 483.6 percent (roughly comprising of 664.8 percent from the life insurance sector, and 334.3 percent from the non-life sector. The life insurance sector, has continued to grow at a fast rate. 6 THE GLOBAL INSURANCE INDUSTRY The insurance industry forms an integral part of the global financial market, with insurance companies being significant institutional investors. In recent decades, the insurance sector, like other financial services, has grown in economic importance. This is through direct contributions to gross domestic product (GDP) via increased levels of employment within the sector; and indirectly through higher levels of risk transfer and financial intermediation. Expanding further on this issue, it must be remembered that the insurance industry’s primary function is to supply individuals and businesses with coverage against specified contingencies.