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INTRODUCTION:

The insurance sector in India governed by Insurance Act, 1938, the Life

insurance corporation Act, 1956 and General insurance Business Act, 1972, Insurance

Regulatory and Development Authority(IRDA) Act, 1999 and other related Acts.

With such a large population and the untapped market area of this population

Insurance happens to be a very big opportunity in India.

Economy Today it stands as a business growing at the rate of 15-20 percent

annually. Together with banking services, it adds about 7 per cent to the countrys

GDP. All this growth the statistics of the penetration of the insurance in the country is

very poor. Nearly 80% of Indian populations are without Life insurance cover and the

Health insurance. This is an indicator that growth potential Life insurance sector is

immense in India. It was due to this immense growth that the regulations were

introduced in the insurance sector and in continuation Malhotra Committee was

constituted by the government in 1993 to examine the various aspects of the industry.

The key element of the reform process was participation of overseas insurance

companies with 26% capital. Creating a more efficient and competitive financial

system suitable for the requirements of t he was the main idea behind this reform.

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Insurance Definition

A promise of compensation for specific potential future losses in

exchange for a periodic payment. Insurance is designed to protect the financial well-

being of an individual, company or other entity in the case of unexpected loss. Some

forms of insurance are required by law, while others are optional. Agreeing to the

terms of an insurance policy creates a contract between the insured and the insurer. In

exchange for payments from the insured (called premiums), the insurer agrees to pay

the policy holder a sum of money upon the occurrence of a specific event. In most

cases, the policy holder pays part of the loss (called the deductible), and the insurer

pays the rest. Examples include car insurance, health insurance, disability insurance,

life insurance, and business insurance.

Insurance Advantages

River Forest Yachting Centers have been recognized by several of the

large insurance companies and designated as pre-approved hurricane coded marine

facilities. The insurance companies' engineers and safety inspectors have concluded

that based on the inland locations, construction methods, and meticulous maintenance;

RFYC facilities are superior to other options making it an excellent insurance

risk.RFYC offers inside storage to protect your boat not only from the sun and wind,

but also from lightning which is a major cause of claims during the summer months.

RFYC also offers outside land storage with tie down cleats and straps your boat down

in the event of a wind storm to keep it safe and secure.

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RFYC has also developed a members only Hurricane Club to protect the

boats of local customers who choose to stay in Florida and need a refuge from the

storm.

As a result of storing with RFYC, qualified boat owners may receive up to a

20% credit off of their hull premium while maintaining full Florida coverage which

we have been informed is a highly unusual credit, never before provided in the State

of Florida. RFYC is happy to provide insurance referrals upon reque

Some Areas of Future Growth:

Life Insurance:

The traditional life insurance business for the LIC has been a little more than a

savings policy. Term life (where the insurance company pays a predetermined amount

if the policy holder dies within a given time but it pays nothing if the policy holder

does not die) has accounted for less than 2% of the insurance premium of the LIC

(Mitra and Nayak, 2001). For the new life insurance companies, term life policies

would be the main line of business

Life Insurance Plans

Life insurance products assure your family will receive financial support,

even in your absence. Put simply, when you buy insurance you provide your family

with a sum of money, should something happen to you. It thus permanently protects

your family from financial crises.

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In addition to serving as a protective cover, when you buy insurance you

create a flexible money-saving scheme, which empowers you to accumulate wealth to

buy a new car, get your children educational solutions, and even retire comfortably.

Today, there is no shortage of investment options for a person to choose from.

Given the plethora of choices, it becomes imperative to make the right choice when

investing your hard-earned money, and online insurance is an ideal choice in todays

technology driven world. Buying Life insurance online is a way to make a unique

investment that helps you to meet your dual needs - saving for life's important goals,

and protecting your assets.

`From an investor's point of view, an investment can play two roles - asset

appreciation or asset protection. While most financial instruments have the underlying

benefit of asset appreciation, buying life insurance online gets you the unique

reassurance of asset protection, along with a strong element of asset appreciation.

When you buy life insurance online the core benefit is that the financial

interests of ones family remain protected from circumstances such as loss of income

due to critical illness or death of the policyholder. Simultaneously, buying life

insurance online gives a strong inbuilt wealth creation proposition. The customer

therefore benefits on two counts and online insurance products occupy a unique space

in the landscape of investment options available to a customer.

As your life stage and therefore your financial goals change, the

instrument in which you invest should offer corresponding benefits pertinent to the

new life stage. Online insurance products are the only investment option that offer

specific products tailor-made for different life stages. You are thus ensured that the

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benefits offered to the customer reflect the needs of the customer at that particular life

stage, and hence ensures that the financial goals of that life stage are met.

On the basis of which life stage you are in and the corresponding

insurance needs, ICICI prudential plans can be categorized into the following three

types:

Education Insurance Plan

Wealth creation plan

Protection Plan

Health Insurance:

The Health insurance expenditure in India is roughly 6% of GDP,

much higher than most other countries with the same level of economic development.

Of that, 4.7% is private and the rest is public. What is even more staking is that 4.5%

are out of pocket expenditure there has been an almost total failure of the public

health care system in India. This creates an opportunity for the new insurance

companies.

Thus, private insurance companies will be able to sell health insurance to

a vast number of families who would like to have health care cover but do not have it.

Pension:

The pension system in India is in its infancy. These are generally three

forms of plans: provident funds, gratuities and pension funds. Most of the pension

schemes are confined to government employees (and some large companies). The vast

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majority of workers are in the informal sector. As a result, most workers do not have

any retirement benefits to fall back after retirement.

Total assets of all the pension plans in India amount to less than USD 40

billion.

Therefore, there is a huge scope for the development of pension funds in India.

The finance minister of India has repeatedly asserted that a Latin American style

reform of the privatized pension system in India would be welcome. Given all the

pros and cons, it is not clear whether such a wholesale privatization would really

benefit India or not.

CHANGES IN INSURANCE PRODUCTS AND PLANS IN 2010:

By the end of 2010, IRDA made far reaching changes in ULIP plans.

ULIP have become more stable and better as IRDA has capped the charges, extended

the minimum period, assured.

There is also discussion on giving banks more autonomy by

implementing an open architecture so that banks can act as an agent for insurance

products from different insurance providers. The decision has not been taken yet.

Cashless schemes got the beating from the insurance companies and they

refused to honor cashless hospitalization because of high charges. IRDA has refused

to intervene in this dispute.

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TRENDS IN 2011:

The changes made in 2010 and other discussions initiated will set the trend

of insurance industry in 2011 and beyond.

Life insurance:

The changes in ULIP structure will make it more popular in 2011.However,

there is concern that insurance providers will discourage selling ULIPs and they may

back to traditional plans.

There will be emphasis on traditional plans such as whole life insurance,

endowment plan, and money back plan. The term insurance may get cheaper as the

premium is inversely proportional to the life expectancy.

Additionally we will see banks increasing their focus on insurance related

business. Till now, banks have been allowed to sell insurance from one provider from

one provider only. The banking sector may open up and act as agent for multiple

insurance providers. Customers will have another channel to buy insurance from.

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NEED OF THE STUDY:

India with about 200 million middle class household shows a huge untapped

potential for players in the in the insurance industry. Saturation of markers in many

developed economies has made the Indian market even more attractive for global

insurance majors. The insurance sector in India has come to a position of very high

potential and competitiveness In the market. Indians, have always seen life insurance

as a tax saving device, are now suddenly turning to the private sector that are

providing them new products and variety for their choice.

Consumers remain the most important centre of the insurance sector. After the

entry of the foreign players the industry is seeing a lot of competition and thus

improvement of the foreign players the industry is seeing a lot of competition and thus

improvement of the customer service in the industry. Computerization of operations

and updating of technology has become imperative in the current scenario. Foreign

players are bringing in international best practices in service through use of latest

technologies.

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OBJECTIVES OF THE STUDY:

Marketing objectives:

Increase repeat customers.

Decrease customer acquisition costs.

Generate brand equity, quantified by an increase in unsolicited

service requests.

Financial Objectives:

Profitability by the end of year one.

Steady, sustainable growth.

Decrease training costs by 2% a quarter.

SCOPE OF THE STUDY:

The study is basically made to analyze the various schemes to

highlight the diversity of investment that mutual fund offer

Through the study one would understand how common man could

fruitfully convert pittance into great penny by wisely investing into the right scheme

according to his risk abilities.

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METHODOLOGY OF THE STUDY:

The data collection methods include both the primary and secondary collection

methods.

Primary collection method: This method includes the data

collection from the personal discussion with the authorized clerks and members of the

ICICI Prudential Life Insurance

Secondary collection method: The lectures of the superintend of the


department of market operations and so on., also the data collected from the news, magazines

of the Angel Broking and different books issue of this study.

LIMITATIONS OF THE STUDY:

This is a theoretical study only based on various sources such as news

papers websites, articles, college faculty an ICICI Prudential staff.

Study availability of secondary data.

The time constraint was one of the major problems.

The study is limited to selected insurance fund schemes.

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INDUSTRY PROFILE:

Life Insurance in its modern form came to India from England in the year

1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first

life insurance company on Indian Soil. All the insurance companies established

during that period were brought up with the purpose of looking after the needs of

European community and Indian natives were not being insured by these companies.

However, later with the efforts of eminent people like Babu Muttylal Seal, the

foreign life insurance companies started insuring Indian lives. But Indian lives were

being treated as sub-standard lives and heavy extra premiums were being charged on

them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life

insurance company in the year 1870, and covered Indian lives at normal rates.

Starting as Indian enterprise with highly patriotic motives, insurance companies

came into existence to carry the message of insurance and social security through

insurance to various sectors of society. Bharat Insurance Company (1896) was also

one of such companies inspired by nationalism. The Swadeshi movement of 1905-

1907 gave rise to more insurance companies.

The United India in Madras, National Indian and National Insurance in

Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907,

Hindustan Cooperative Insurance Company took its birth in one of the rooms of the

Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian

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Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of

the companies established during the same period. Prior to 1912 India had no

legislation to regulate insurance business. In the year 1912, the Life Insurance

Companies Act, and the Provident Fund Act were passed.

The Life Insurance Companies Act, 1912 made it necessary that the premium

rate tables and periodical valuations of companies should be certified by an actuary.

But the Act discriminated between foreign and Indian companies on many accounts,

putting the Indian companies at a disadvantage

The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to

176 companies with total business-in-force as Rs.298 crore in 1938. During the

mushrooming of insurance companies many financially unsound concerns were also

floated which failed miserably.

The Insurance Act 1938 was the first legislation governing not only life

insurance but also non-life insurance to provide strict state control over insurance

business. The demand for nationalization of life insurance industry was made

repeatedly in the past but it gathered momentum in 1944 when a bill to amend the

Life Insurance Act 1938 was introduced in the Legislative Assembly.

However, it was much later on the 19th of January 1956 that life insurance

in India was nationalized. About 154 Indian insurance companies, 16 non-Indian

companies and 75 provident were operating in India at the time of nationalization.

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Nationalization was accomplished in two stages; initially the management of

the companies was taken over by means of an Ordinance, and later, the ownership too

by means of a comprehensive bill. The Parliament of India passed the Life Insurance

Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of

India was created on 1st September, 1956, with the objective of spreading life

insurance much more widely and in particular to the rural areas with a view to reach

all insurable persons in the country, providing them adequate financial cover at a

reasonable cost.

Indian Insurance Industry:

The insurance business is growing at an annual rate of 21.9 per cent. Together

with banking services, it accounts for about 7.1 per cent to the countrys GDP.

However Insurance penetration tends to rise as income increases, particularly in life

insurance. India with about 200 million middle class households shows a potential for

insurance industry.

Saturation of markets in many developed economies has made in the Indian

market even more attractive for global insurance majors. The insurance sector was

opened up for private participation four years ago and the private players are active in

the liberalized environment. The insurance market have witnessed dynamic changes

which includes presence of a fair number of insurers both life and non-life segment.

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Most of the private insurance companies have formed joint venture partnering well

with recognized foreign players across the globe. The Indian insurance market

accounts only for 0.59 per cent of USD 2,627 billion global insurance market.

COMPANY PROFILE

ICICI PRUDENTIAL ASSET MANAGEMENT COMPANY

LIMITED

ICICI Prudential Mutual Fund is one of the largest mutual fund houses in

India. ICICI Prudential Mutual Fund is a joint venture between prudential plc, one of

UK's largest players in the insurance & fund management sectors and ICICI Bank, a

well-known and trusted name in financial services in India. ICICI and Prudential

came together in 1993 to provide mutual fund products in India and today are the

largest private sector mutual fund company in India. ICICI Prudential Asset

Management Company, in a span of just over eight years, has forged a position of

pre-eminence in the Indian Mutual Fund industry as one of the largest asset

management companies in the country with assets under management of Rs.50,742.07

crores (as on May 31, 2007). The Company manages a comprehensive range of

schemes to meet the varying investment needs of its investors spread across 68 cities

in the country.

PRUDENTIAL:

Established in London in 1848, Prudential plc, through its businesses in the

UK, US and Asia, provides retail financial services products and services to more

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than 21 million customers, policyholders and unit holders worldwide with over

US$400 (as of 31st December, 2005) billion in funds under management. Prudential

employs some 23,000 staff worldwide.

In Asia, Prudential has life insurance and funds management operationsacross

across twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea,

Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Prudential has

championed customer-centric products and services for over 80 years, supported by

an extensive network of over 145,000 staff and agents across the region.

Key Indicators:

At inception- May1998(as on may31,2007)

Asset Under Management Rs.160 crores Rs59,573.08crores

Number of Funds Managed 241

Statutory:

ICICI Prudential Mutual Fund (erstwhile Prudential ICICI Mutual Fund) (the

Fund) was set up as a Trust sponsored by Prudential plc (through its wholly owned

subsidiary namely Prudential Corporation Holdings Ltd) and ICICI Bank Ltd. ICICI

Prudential Trust Limited (erstwhile Prudential ICICI Trust Limited) (Trust company)

is the Trustee to the Fund and ICICI Prudential Asset Management Company Ltd.

(erstwhile Prudential ICICI Asset Management Company Limited) (AMC) is the

Investment Manager to the Fund.

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ICICI Bank Ltd (ICICI Bank) and Prudential Plc (acting through its

wholly owned subsidiary namely Prudential Corporation Holdings Ltd) are the

promoters of the AMC and the Trust Company. ICICI Bank currently holds 51%

stake in both the companies and the balance 49% stake in both the companies is held

by Prudential plc (acting through its wholly owned subsidiary namely Prudential

Holdings Corporation Ltd).

Prudential Plc (acting through its wholly owned subsidiary namely

Prudential Corporation Holdings Ltd) transferred 6% of its shareholding in both the

companies to ICICI Bank w.e.f August 26, 2005. Subsequently in accordance with the

approval granted by the Board of Directors and the shareholders of the AMC and the

Trust Company the name of the AMC has been changed to ICICI Prudential Asset

Management Company Limited and the name of the Trust Company has been

changed to ICICI Prudential Trust Limited. SEBI has vide its letter no

IMD/PM/84968/07 dated January 23, 2007 conveyed its no objection to the said

change of names of the AMC & the Trust company.

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The said change of names has also been approved by the Registrar of

Companies, NCT of Delhi & Haryana, Ministry of Company Affairs, Govt of India.

The Board of Directors of the Trust company have at their meeting held on 20th

February 2007 accorded approval for the change of name of the Mutual Fund to ICICI

Prudential Mutual Fund as well as of the various schemes /plans/options there under.

SEBI has vide its Letter Nos IMD/PM/90168/07 & IMD/PM/90170/07 dated April

02, 2007 accorded approval for the same.

Award:

ICICI Prudential Dynamic Plan has been ranked ICRA MFR 1 in the category

Diversified Equity Defensive for its 1 year performance till December 31, 2006.

There were 69 schemes in the category. The rank is an outcome of an objective and

comparative analysis against various parameters including: risk adjusted returns, fund

size, sector concentration, portfolio turnover, liquidity, company concentration and

average maturity. The ranking methodology did not take into account entry and exit

loads. Ranking Source and Publisher: ICRA Online.)

NEW PLANS OF ICICI PRUDENTIAL:

ICICI Prudential launched TOP UP THE SIP

ICICI was the first AMC which has launched TOP UP THE SIP, in this the

feature allows an investor to increase his periodic investment through an automated

route in multiples of Rs.500.Till now; investors could not increase their SIP amounts.

They had to go in for a fresh plan. Why TOP UP?

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A Systematic Investment Plan (SIP) allows an investor to achieve his financial

goal by saving for it regularly Nilesh Shah.Deputy Managing Director, ICICI

Prudential AMC says: An SIP with TOP-UP gives the investors the advantage of

power of compounding which will enable them to reach their financial goal faster.

Products of ICICI Prudential mutual Fund:

ICICI Prudential mutual Fund schemes consist of various categories like Debt

Funds, Equity Funds and Balanced Funds.

Equity Funds:

Equity funds seek to provide maximum growth of capital with secondary

emphasis on dividend or interest income. They invest in common stocks with a high

potential for rapid growth and capital appreciation. An equity fund gives an exposure

to the stock market. The fund would have long-term growth potential but provide low

current income. They are not suitable for investors who are risk averse and are

focused on maximizing current income or conserving principal.

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INVESTMENT PHILOSOPHY:

The overriding objective of the AMC in managing its investments is to

produce a consistently above average long-term performance.

The AMC believes in a bottom-up approach to stock picking. This means that

the focus is on the fundamental quality of companies as opposed to a focus on favored

sectors and market movements.

The AMC will follow a structured investment process in order to identify the

best stocks for inclusion in the portfolio. This would involve consistently examining

all stocks under an internally developed research framework. A stock would be

considered or inclusion in the portfolio when the valuation does not adequately

capture its underlying fundamental value in the AMC's opinion based on the above

factors.

The AMC's portfolio management style is conducive to a low portfolio

turnover rate. However, the AMC will take advantage of the opportunities that present

themselves from time to time because of inefficiencies of the securities markets.

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The AMC will endeavor to balance the increased cost on account of higher

portfolio turnover with the benefits derived there from.

The funds offered under this category are:

ICICI Growth Plan

ICICI Prudential Tax Plan

ICICI Prudential FMCG Plan

ICICI Prudential Technology Plan

ICICI Prudential Power

ICICI Prudential Index Fund

ICICI Prudential Dynamic Plan

ICICI Prudential Discovery Fund

ICICI Prudential Emerging STAR Fund

ICICI Prudential Infrastructure Fund

ICICI Prudential Service Industries Fund

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Balanced Funds:

Balanced funds are more evenly invested in equities and income securities.

Balanced and equity-income funds are suitable for conservative investors who want

high current yield with some growth. If you seek to generate long-term capital

appreciation and current income, an investment in the balanced fund would be ideal.

It gives you an exposure to the stock market without the entire risk of the stock

market

INVESTMENT PHILOSOPHY:

The AMC proposes to invest in a mix of equities and fixed income securities

with the aim of generating capital appreciation, while at the same time minimizing the

volatility inherent in pure equity schemes. With this aim, the AMC would allocate the

assets between equity and fixed income instruments within the limits laid down for

each scheme.

The funds offered under this category are:

ICICI Prudential Balanced Fund

ICICI Prudential Child Care Plan-Stud

Plan

ICICI Prudential Child Care Plan - Gift

Plan

ICICI Prudential Blended Plan

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Debt Funds:

The funds are suitable for investors who want to maximize current income and

who do not wish to assume a high degree of capital risk in order to do so. Since bond

prices fluctuate with changing interest rates, there is some principal risk involved

despite the fund's conservative nature.

INVESTMENT PHILOSOPHY:

The AMC aims to identify securities, which offer superior levels of yield at

lower levels of risks. With the aim of controlling risks, the investment team of the

AMC will carry out rigorous in-depth credit evaluation of the securities proposed to

be invested in. The credit evaluation includes a study of the operating environment of

the company, the past track record as well as the future prospects of the issuer, the

short as well as longer-term financial health of the issuer. Rated debt instruments in

which the Scheme invests will be of investment grade as rated by a credit rating

agency. In case a debt instrument is not rated, specific approval of the Board of the

AMC will be obtained for such an investment.

In addition, the investment team of the AMC studies the macro economic

conditions, including the politico-economic environment and factors affecting

liquidity and interest rates. The AMC would use this analysis to attempt to predict the

likely direction of interest rates and position the portfolio appropriately to take

advantage of the same.

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The funds offered under this category are

ICICI Prudential Liquid Plan

ICICI Prudential Liquid Plan- Dividend Option

ICICI Prudential Income Plan

ICICI Prudetial Gilt Fund Investment Plan

ICICI Prudetial Gilt Fund

ICICI Prudetial Monthly Income Fund

ICICI Prudetial Fixed Maturity Plan

ICICI Prudetial Short Term Plan

ICICI Prudetial Long Term Plan

ICICI Prudetial Flexible Income Plan

ICICI Prudential Sweep Plan

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Features of ICICI Prudential Mutual Fund schemes:

Each Fund scheme of ICICI Prudential is diversified based on its

objective

Each Fund Scheme has its own portfolio.

Each Fund scheme is managed by a specified Fund Manager

Almost every Fund Scheme has a feature of SIP (Systematic

Investment Plan).

For the SIP investors there is an additional advantage that they can

avail the facility of Auto Debit of the amount every month.

Most of the fund schemes are given plans like Growth, dividend and

Dividend reinvestment.

Trigger option is one of the additional features of ICICI Prudential

Fund schemes where the investors can direct AMC to withdraw their funds when the

NAV is down.

Every investor will be sent his/her Account information before the

third working days of the market.

The investor is also provided with the additional feature i.e. Switch

option. Therefore the customer can switch from one fund scheme to another.

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The investor is also having Dividend redemption as and when it is

declared. All the investors who opted for Dividend redemption will be sent cheques.

An investor can redeem the amount he invested any time he wants.

(Only if it is open ended scheme) Where as the investor will be charged a certain

percent as entry/exit load.

ICICI Prudential also provides an option to investors i.e. SWP

(Systematic withdrawal plan).

Every investor is been provided with the information of NAV (Net

Asset Value) as and when he wants. The investor can also get required information on

the website of www.icicipruamc.com

2010 AWARDS:

Ms Chanda Kochhar, Managing Director & CEO, conferred the

Outstanding Woman Business Leader of the Year award by CNBC TV18

ICICI Bank awarded the most Tech-friendly Bank award by

Business World

Ms Chanda Kochhar featured in Business Today's list of 30 most

powerful women leaders for the 8th consecutive year

Ms. Chanda Kochhar, Managing Director & CEO, ranked 92nd in

Forbes list of the Most Powerful Women in the world

Ms.Chanda Kochhar, Managing Director & CEO was ranked 10th

in the International Fortune list of 50 most powerful women in business

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ICICI Bank was voted as the Most Trusted Brand among private

sector banks in the 2010 Economic Times - Brand Equity Most Trusted Brands

Awards and ranked 7th in the list of Top 50 service brands

ICICI Bank received the 2010 World Finance UK award for:

Excellence in Remittance Business, Worldwide

Excellence in NRI Services, Worldwide

Excellence in Private Banking Business, APAC Region

ICICI Bank UK, HiSAVE has been awarded 'Best Online Savings

Account Provider 2010 ' by Your Money ,direct consumer awards,UK

ICICI Bank UK, HiSAVE has been commended for 'Best Internet

Account Provider 2010' and 'Best Fixed Rate Account Provider 2010' by Moneyfacts,

an independent consumer finance leading aggregator

Ms.Chanda Kochhar, MD & CEO was awarded the Financial

Express Best Banker Award

For the sixth time in a row, ICICI Bank has received the Most

Preferred Auto Loan Brand in the Financials Services category at the CNBC

Consumer Awards

ICICI Bank has won Gold in the Readers Digest Trusted Brands

2010 Consumer award in the Finance category for a) Best Bank and b) Best Credit

Card Issuing Bank

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ICICI Bank won the Best Trade Finance Bank and Best Foreign

Exchange Bank, India at the Finance Asia Country Awards for Achievement, Hong

Kong

ICICI Bank won the Best Local Bank by Trade and Forfaiting

Review, UK

2011 AWARDS:

ICICI Bank received the "Best Foreign Exchange Bank (India)", by Finance

Asia ICICI Bank won the "Vanilla hedging instruments and Structured

hedging instruments India Winner, 2011" for "Interest Rate and Currency

Products", by Asia Risk Corporate Rankings

ICICI Bank won the Best Lokal Bank- Gold by Trade and forfaiting

Awards,UK.

Mr. N. Vaghul, Former Chairman, ICICI Bank, received the "Lifetime

Achievement Award", by Businessworld

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Ms. Chanda Kochhar, Managing Director & CEO was ranked 10th in

the list of "Top 50 Women In World Business 2011", by Financial Times

Ms. Chanda Kochhar, Managing Director & CEO, featured in the Hall

Of Fame of Most Powerful Women in Indian business by Business Today

Ms. Chanda Kochhar, Managing Director & CEO, awarded the Skoch

Challenger Awards 2011, for Banking. The Skoch awards recognizes best practices in

people, projects and institutions for inclusive growth

Ms. Chanda Kochhar, Managing Director & CEO, in the list of 25

most powerful professional Association in the following categories:

o "Best Financial Inclusion Initiative" (first prize)

o "Best Online Bank" ( runner up)

o "Best use of Business Intelligence" ( runner up)

o "Technology Bank of the year" ( runner up)

2012 AWARDS:

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Insurance:

In financial sence: The financial definition focuses on an arrangement

that redistributes the cost of unexpected losses.That is the collectin of a small

premium pament from all exposed and distributed to those suffering loss.

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In legal sence: The legal definition focuses on a contractual arrangement

whereby one party agress to compensate another party for losses. The financial

definition provides for the losses whereas the legal definition for the legally

enforceble contract that spells out the legal rights, duties and obligations of all the

parties to the contract.

Costs and Benefits of Insurance

The purpose of insurance mode of risk transfer is to provide economic

against the losses that may be incurred but to chance events such as

Death

Disability

Economic losses

One party (the insure) for a set amount of money,(premium) agrees to pay the

other party (insured or beneficiary),a sum of money (benefit ) upon the occurrence of

an event which may or may not occur. Insurance provides economic protection

against losses that may be incurred due to chance events that may or may not occur

during the effective time of the contract called a policy. The insurance of business

organisations is essential in the sence that advertisements, if not guarded, may affect

the business itself the business owners personal property and may also threaten the

continued operation of the business and threaten the continued operation of the

business and threaten he owners financial well-being.

Insurance Device

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The fundamental characteristics of insurance are:

It involves transfer of risk from the individual to the group,and

There is sharing (pooling) of losses on some equitadle basis such that

fortuitous losses will be indemnified(paid).

More specifically, the cost and benefits of insurance are:

Benefits:

Reimbursement for losses

Reduction in tension and fear

Avenue for investment life insuarance investment officer attractive

return.

Prevention of losses

Credit multiplication

Costs of insurance to society

Cost of Business operations- social wastage of resources

Fraudulent and exaggerated claims- Malacious and undesirable transfer

of wealh

FINANCIAL SYSTEM

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Meaning of Financial System:

The economic development of any country depends upon the existence of a

well organized financial system. A financial system is a complex. Well-integrated set

if sub-system of financial institution, market, instruments and services which

facilitates the transfer and allocation of funds efficiently and effectively.

A financial system of financial sector functions as an intermediary and

facilitates the flow of funds from the areas of surplus to the areas of deficit. A

financial system is a composition of various institutions, markets, regulations and

laws, practices, money manager, analysts, transactions and claims and liabilities.

Features of financial system:

1. Financial system provides an ideal linkage between depositors and investors,

thus encouraging both savings and investments.

2. Financial system facilitates expansion of financial markets over space and

time.

3. Financial system promotes efficient allocation of financial resources for

socially desirable and economically productive purposes.

4. Financial system influences both the quality and the pace of economic

development.

33
FINANCIAL MARKETS:

The financial market plays a crucial role in the economic development of a

country by facilitating the allocation of scarce resources. By transferring resources

from the savers to the borrowers, it directs resources from the idle to the productive

sector, thus accelerating investment activities in the economy. The allocation function

of the financial market has been described succinctly by Stiglitz (1994): Financial

markets essentially involve the allocation of resources. This can be thought of as the

brain of the entire economic system, the locus of central decision-making; if they fail.

Not only will the sectors profit be lower than would otherwise have been, but the

performance of the entire economic system may be impaired.

The importance of financial development was amply acknowledged by

classical economists (Adam Smith and others), who believed that there is a close

relationship between capital accumulation and the process of economic development.

However, the importance of financial factors in the development process was largely

ignored and forced saving were considered the best means of financing development.

But the resultant financial repression is thought to be a major cause of low savings

rates and the underdevelopment of the financial sector.

Meaning of Financial Market:

A financial market is a mechanism that allows people to easily buy and sell

financial securities, commodities and other fungible items of value at low transaction

costs and at prices that reflect the efficient market hypothesis. Financial markets have

evolved significantly over several hundred years and are undergoing constant

innovation to improve liquidity

34
Insurance Trends in India:

With the de-regulation in Indian Insurance industry, the monopoly of public

sector companies in life insurance and general insurance has come to an end. This has
Insurance Regulatory &
augmented the innovative practices initiated by the private players. Growth in the
Development Authority
interactive technology such as internet has further created a wave of excitement in the

insurance market. Indian economy and Indian Insurance sector is committed to a

double digit growth. Heres a glimpse of Insurance Industry over 190 years.
LIC,GIC,private
Capital market
insurance
Background: intermediaries
companies &
reinsurance
Insurance is a Rs450 billion industry in India. The value of the market is

determined by gross premium incomes. The life insurance segment writes about
*Stock80%
exchange
of the overall market value. Indian Insurance market was at its all time high in 2003 bankers
*Merchant
with a growth of about 17.4% over the pervious year. Since 2001 Insurance is
*Underwriters
*Stockbrokers
growing at the rate of 15-20 % annually. The growth in the insurance industry is

*Retail
affected by volatility in real estate rates, GDP rates and long term interest investors
rates.

Fluctuations in exchange rates also affect the growth in this sector. *Flls
The gross

premium as a percentage of the GDP has gone up from 2.3 in the year 2000 to 4.8 in

2006. Together with banking services, it adds about 7% to the countrys GDP.

35
History of Indian Insurance:

The ancient origin of insurance is Emersion, whose brilliant and learned Traits

des Assurances, first published in 1783, is still read with respect and admiration.

The result shows that insurances were known to the ancients such as Romans,

Phoenicians Rhodians, although the business of underwriting commercial risks was

probably not highly developed. The histories of Livy and Suetonius shows that the

contractors who undertook to transport provisions and military stores to the troops in

Spain stipulated that the government should assume all risk of loss by reason of perils

of the sea or capture and this was probably the first time when insurance process was

known. There were friendly societies organized, for the purpose of extending aid to

their unfortunate members from a fund made up of contributions from all. These

societies undoubtedly existed in China and India in the earliest times. The earliest

traces of Insurance in the ancient Indian history was in the form of marine trade loans

or carriers contracts, which can be found in Kautilyas Arthashastra, Yajnyavalkyas

Dharmashastra and Manus Smriti. These works show that the system of credit and

the law of interest were well developed in India. They were based on clear

appreciation of hazard involved and the means of safeguarding against it.

36
British-India Period:

Insurance in India without any regulations started in the nineteenth century. It

was a typical story of a colonial era where a few British insurance companies

dominated the market serving mostly large urban centers. Company started by

Europeans in Calcutta was the first life insurance company on Indian Soil.

Bombay Mutual Life Assurance Society indicated the birth of first Indian life

insurance company in the year 1870, and covered Indian lives at normal rates. 1930s

was the last of the old-style crises in the Indian economy because it marked the

beginning of the end of the colonial state and an acceleration of the pace of

industrialization as entrepreneurs moved their capital out of the countryside.

Independent India reduced its vulnerability to external economic shocks by close

control of foreign exchange and by promoting a massive change in the export

schedule. Till the end of nineteenth century insurance business was almost entirely in

the hands of overseas companies.

Post Independence era of Indian Insurance:

The insurance business grew at a faster pace after independence. Indian

companies strengthened their hold on this business but despite the growth that was

witnessed, insurance remained an urban phenomenon. During Mrs. Gandhis tenure

(from 1966-1968), there was a split within the business community of protectionists

and those who wanted more open trade. But what maintained the momentum was the

commitment of Two Ministers, Ashok Mehta and Subramaniam towards liberalization

of the economy. This was seconded with high hope of getting increased foreign aid.

37
Deregulation actually helped the poorest in India as it would eventually create

more employment and faster growth. Yet the intense fears of liberalization in the

lower middle class and among working class employees of the state sector, pose

serious risks in freeing the economy. It might be preferable to introduce liberalization

during an economic upswing when the risk of switching jobs is less traumatic. The

three liberalization episodes in Indian economic policy have followed clear cyclical

patterns.

Economic policy has swung broadly between controls and greater openness,

with a tendency toward decontrolling larger and more important segments of the

economy.

Nationalization Phase of Indian Insurance:

1944: The Nationalization of insurance industry gathered momentum in 1944

when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative

Assembly.

1956: 154 Indian insurance companies, 16 non-Indian companies and 75

provident societies were taken over by the central government and nationalized. LIC

formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of

Rs.5 Crore from the Government of India.

1972: The General Insurance Business (Nationalization) Act, which

nationalized the general insurance business in India with effect from 1st January

1973. 107 insurers amalgamated and grouped into four companies viz. the National

38
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental

Insurance Company Ltd. and the United India Insurance Company Ltd.

Nationalization was accomplished in two stages; initially the management of

the companies was taken over by means of an Ordinance, and later, the ownership too

was taken by means of a comprehensive bill. However, it was only in 1956, LIC was

nationalised, with the objective of spreading life insurance much more widely and in

particular to the rural areas with a view to reach all insurable persons in the country,

providing them adequate financial cover at a reasonable cost.And as of 2007, LIC is

Indias leading Insurance company, with 2000 branches, which probably is the

highest number of branches across India insurance sector.

Liberalization of Indian Insurance:

1994: Insurance sector invited private participation to induce a spirit of

competition amongst the various insurers and to provide a choice to the consumers.

1997: Insurance regulator IRDA was set up as there felt the need:

a) To set up an independent regulatory body, that provides greater autonomy

to insurance companies in order to improve their performance,

b) To enable them to act as independent companies with economic motives.

c) To protect the interest of holders of insurance policies.

d) To Amend the Insurance Act, 1938, the Life Insurance Corporation Act,

1956 and the General insurance Business (Nationalization) Act, 1972

39
e) To end the monopoly of the Life Insurance Corporation of India and

General Insurance Corporation and its subsidiaries.

In the first year of insurance market liberalization (2001) as much as 16

private sector companies including joint ventures with leading foreign insurance

companies have entered the Indian insurance sector. Of this, 10 were under the life

insurance category and six under general insurance. Thus in all there are 25 players

(12-life insurance and 13-general insurance) in the Indian insurance industry till date.

Indian Insurance in 21st Century:

2000: IRDA starts giving licenses to private insurers: ICICI prudential and

HDFC Standard Life insurance first private insurers to sell a policy

2001: Royal Sundaram Alliance first non life insurer to sell a policy

2002: Banks allowed tosell insurance plans. As TPAs enter the scene,

insurers start setting non-life claims in the cashless mode

2007: First Online Insurance portal, www.insurancemall.in set up by an

Indian Insurance Broker, Bonsai Insurance Broking Pvt Ltd.

The Government of India liberalised the insurance sector in March 2000 with

the passage of the Insurance Regulatory and Development Authority (IRDA) Bill,

40
lifting all entry restrictions for private players and allowing foreign players to enter

the market with some limits on direct foreign ownership.

Minimum capital requirement for direct life and Non-life Insurance company

is INR1000 million and that for reinsurance company is INR 2000 million. In the

2004-05 budgets, the Government proposed for increasing the foreign equity stake to

49%, this is yet to be effected. Under the current guidelines, there is a 26 percent

equity cap for foreign partners in direct insurance and reinsurance Company. (World

Bank Economic Review-2000).

Online Insurance in India:

Internet access in India has doubled every year over the last five years and

forecasts predict this growth to quadruple every year over the next three years.

According to marketer report on India online, in 2007, about 33.2 million people in

India accessed internet and thats about 2.9% of Indian population. This figure is

going to be 71.6 million people, which will be about 6% of population by 2011.

Considering limited access of human-insurance agents in rural areas, there will more

demand of purchasing insurance online from these areas, followed by semi-urban

areas.

The insurance portals that are active in online distribution are

www.icicilombard.com,www.bajajallianz.co.in,www.insurancemall.in,www.bimaonli

41
ne.com,www.insurancepandit.com.Recently,Compare Choose Buy portals like

Bonsai Insurance Brokers www.insurancemall.in, have been developed for providing

comparison of different types of insurance policies, their premiums and their purchase

online. The policy details are stored digitally and all transactions are made over secure

channels. E-insurance offers a new gateway of incomes and provides additional

market penetration, which is a need of an hour for Indian Insurance Segment.

The First Movers in Distribution of Insurance goes to 3 companies in India :

1. ICICI Lombard General Insurance

2. Bajaj Allianz General Insurance

3. www.insurancemall.in (Created by Bonsai Insurance Broking.)

INVESTMENT OF ICICI PRUDENTIAL LIFE IN THE YEAR

1987: (In Crores)

42
PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-87
OF TOTAL
1. Central Govt. Sec. 4675 39.60
2. State Govt. & other Govt. 1683 14.26

Guaranteed Marketable Sec.


3. Electricity (SEBs) 2603 22.05
4. Housing 1872 15.86
5. Water Supply & Sewerage 718 6.08

(Mun + Z.P)
6. State Road Transport Corpn. 180 1.52
7. Loans to Industrial Est. 37 0.31
8. Loans to Sugar Co-op 37 0.31
9. Development Authority 1 0.01
10. Roadways, Port, Railways - -
11. Power Generation - -

(Pvt. Sector)
12. Municipal Cop. - -
Total :- 11806 100.00

ANALYSIS OF INVESTMENTS IN 1987:

43
1) Major portion of the investment of the ICICI PRULIFE were captured

by the state Govt. securities.

2) Life Insurance Corporation concentrated only in the ICICI PRULIFE

sector and the Private sector was completely neglected.

3) 53.86% (1+2) of ICICI PRULIFES Investments are invested in the

securities.

4) 45.52% (3+4+5+6+9) of ICICI PRULIFE Investments were invested

in the Development of Infrastructure of the Country.

5) 0.62% (7+8) was given as loans for the growth of Industries in India.

ICICI PRULIFE INVESTMENTS IN THE YEAR 1997(In Crores)

PERCENTAGE
TYPES OF INVESTMENT 31-3-97
OUT OF TOTAL
1. Central Govt. Sec. 37330 54.84
2. State Govt. & other Govt. 8906 13.08

Guaranteed Marketable Sec.


3. Electricity (SEBs) 8214 12.07
4. Housing 10967 16.10
5. Water Supply & Sewerage 2028 3.00

(Mun + Z.P)

44
6. State Road Transport Corpn. 540 0.79
7. Loans to Industrial Est. 45 0.06
8. Loans to Sugar Co-op 37 0.05
9. Development Authority 1 0.01
10. Roadways, Port, Railways - -
11. Power Generation - -

(Pvt. Sector)
12. Municipal Cop. - -
Total :- 68068 100.00

ANALYSIS OF INVESTMENTS IN 1997:

1) This year ICICI PRULIFES investment in central Govt. securities

increased drastically.

2) ICICI PRULIFES investments in central Govt. securities increased

from 39.6% - 54.84%.

45
3) But there was a decline in the investment in State Govt. and other

Govt. securities; it reduced from 14.26% - 13.08%.

4) How ever there was an increase in the net investment in securities, it

increased by 26.10% (when compared to 1987) and at the end was 67.92% of

the total investments.

5) Investment in the development of infrastructure was 31.97% of the

total when compared to 45.52% in the previous year that means there was a decline

of 29.77% when compared to 1987.

6) This year loans to industrial estate's and sugar co-op increased from

marginal 0.62% to 1.1% and showed an increase of 77.42%

7) On the whole the ICICI PRULIFE showed a very good growth rate in

their investments in 1987 their total investments were 11806 crores but in this year

it showed an increase of 476.55%

8) ICICI PRULIFE's investments increased by almost 5 times in 10 years

which showed a great increase of 50% per year on an average.

9) Looking at the speed growth of ICICI PRULIFE OF INDIA it was

quite clear for every one that ICICI PRULIFE OF INDIA was heading towards

becoming the worlds no 1 insurance company.

10) Looking at current year the expected performance of the corporation

was increasing at a rapid pace.

46
INVESTMENT OF ICICI PRULIFE IN THE YEAR 2004(In Crores)

PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-04
OF TOTAL
1. Central Govt. Sec. 45876 56.68
2. State Govt. & other Govt. 10471 12.94

Guaranteed Marketable Sec.


3. Electricity (SEBs) 9153 11.31
4. Housing 12242 15.12
5. Water Supply & Sewerage 2264 2.8

(Mun + Z.P)
6. State Road Transport Corpn. 551 0.68
7. Loans to Industrial Est. 45 0.05
8. Loans to Sugar Co-op 37 0.04
9. Development Authority 1 0.01
10. Roadways, Port, Railways 25 0.03
11. Power Generation 276 0.34

(Pvt. Sector)

47
12. Municipal Cop. 4 0.049
Total :- 80945 100.00

ANALYSIS OF INVESTMENTS IN 2004:

1) Like the previous year this year also the major portion of the

investments was captured by central government securities.

2) There was an increase in investment in central Govt. securities from

54.84% - 56.68, it showed an Increase of 3.35%

3) Following the trend of past 11 years this year also the net investment

in securities increased, it was 54.84 in the previous year and rose to 56.68 in this

year, showing an increase of 2.5%.

4) Investment in the development of infrastructure at the beginning was

45.52% and at the end was 29.92%, which showed a decline of 34.27% which

was quite considerable

48
5) Loans to industries was stable at 0.9% of the total investments.

6) There is an important point to be seen in this year as this is the first

time ICICI PRULIFE started to invest in power generation of private sector.

7) It is from this year ICICI PRULIFE started directly investing in the

private sector.

8) The investment in the power generation of private sector was 0.34%

of the total investment.

9) From this year ICICI PRULIFE started investing in developing

transport i.e., railways, ports, roadways. The percentage of investment in this was

0.03% which was quite marginal.

10) ICICI PRULIFE started to help the municipal councils and

corporations from this year and the percentage of investment stood at 0.004% and

the amount invested was 4 crores.

49
INVESTMENT OF ICICI PRULIFE IN THE YEAR 2005(In Crores)

PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-2005
OF TOTAL
1. Central Govt. Sec. 56185 57.33
2. State Govt. & other Govt. 12928 13.19

Guaranteed Marketable Sec.


3. Electricity (SEBs) 10591 10.81
4. Housing 14207 14.50
5. Water Supply & Sewerage 2508 2.56

(Mun + Z.P)
6. State Road Transport Corpn. 671 0.68
7. Loans to Industrial Est. 45 0.05
8. Loans to Sugar Co-op 37 0.03
9. Development Authority 1 0.001
10. Roadways, Port, Railways 25 0.03
11. Power Generation 801 0.82

(Pvt. Sector)
12. Municipal Cop. 4 0.004
Total :- 98003 100.00

50
ANALYSIS OF INVESTMENTS IN 2005:

1) Total net investment in securities was 56.68% which raised to 70.52%

showing a growth rate of 24.41%.

2) A total investment in development activity in this year was Rs.27978

crores which was 28.54%of the total investment, remaining almost stable who

compared to 29.92% in the previous year.

3) Percentage of investments granted as loan has declined by 27.3% and

stood at 0.08% of the total investment.

4) Direct investment in private sector has raised by 141.17% and was

0.82% of the total when compared to 0.34% in the previous year.

51
INVESTMENT OF ICICI PRULIFE IN THE YEAR 2006(In Crores)

PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-06
OF TOTAL
1. Central Govt. Sec. 70533 59.83
2. State Govt. & other Govt. 14156 12.01

Guaranteed Marketable Sec.


3. Electricity (SEBs) 11931 10.12
4. Housing 15885 13.22
5. Water Supply & Sewerage 2997 2.54

(Mun + Z.P)
6. State Road Transport Corpn. 736 0.62
7. Loans to Industrial Est. 45 0.04
8. Loans to Sugar Co-op 37 0.03
9. Development Authority 1 0.001
10. Roadways, Port, Railways 85 0.07
11. Power Generation 1478 1.25

(Pvt. Sector)
12. Municipal Cop. 4 0.003
Total :- 117888 100.00

52
ANALYSIS OF INVESTMENTS IN 2006:

1) Total net investment in securities was 70.52% which raised to 71.84%

showing a growth rate of 1.87%, but the growth rate declined by 92.3%.

2) Total investments in development activity in this year were Rs.31150

crores which was 26.42% of the total investment, remaining almost near when

compared to 28.54% in the previous year.

3) Percentage of investments granted as loan has declined by 12.5% and

stood at 0.07% of the total investment.

4) Direct investment in private sector has raised by 45% and was 1.25%

of the total when compared to 0.82% in the previous year.

53
INVESTMENT OF ICICI PRULIFE IN THE YEAR 2007(In Crores)

PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-07
OF TOTAL
1. Central Govt. Sec. 85181 60.88
2. State Govt. & other Govt. 17877 12.78

Guaranteed Marketable Sec.


3. Electricity (SEBs) 12402 8.86
4. Housing 17998 12.86
5. Water Supply & Sewerage 3657 2.61

(Mun + Z.P)
6. State Road Transport Corpn. 784 0.56
7. Loans to Industrial Est. 45 0.03
8. Loans to Sugar Co-op 37 0.03
9. Development Authority 1 0.001
10. Roadways, Port, Railways 325 0.23
11. Power Generation 1615 1.15

(Pvt. Sector)
12. Municipal Cop. 4 0.003
Total :- 139926 100.00

54
ANALYSIS OF INVESTMENTS IN 2007:

1) Total net investment in securities was 71.84% which raised to 73.65%

showing a growth rate of 2.52%, showing a good increase when compared to the

previous year.

2) Total investments in development activities in this year were Rs.34842

Crores which was 24.90% of the total investment, showing a decline of 6.95% when

compared to 26.76% in the previous year.

3) Percentage of investments granted as loan has declined by 14.3% and

stood at 0.06% of the total investment.

4) Direct investment in private sector has decreased by 8% and was

1.15% of the total when compared to 1.25% in the previous year.

55
INVESTMENT OF ICICI PRULIFE IN THE YEAR 2010(In Crores)

PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-10
OF TOTAL
1. Central Govt. Sec. 109938 63.41
2. State Govt. & other Govt. 21463 12.38

Guaranteed Marketable Sec.


3. Electricity (SEBs) 13447 7.76
4. Housing 19054 10.99
5. Water Supply & Sewerage 4000 2.31

(Mun + Z.P)
6. State Road Transport Corpn. 893 0.52
7. Loans to Industrial Est. 45 0.03
8. Loans to Sugar Co-op 37 0.02
9. Development Authority 1 0.001
10. Roadways, Port, Railways 681 0.39
11. Power Generation 3797 2.19

(Pvt. Sector)
12. Municipal Cop. 14 0.008
Total :- 173370 100.00

56
ANALYSIS OF INVESTMENTS IN 2010:

1) Even this year investment in the central Govt. securities

increased like the past trend, it increased by 4.15% and stood at 63.41%

out of the total investments.

2) The total net investments in securities stood at 75.79% i.e.,

more than percentage of the total investments, shoeing a growth of

2.89%.

3) Total investment in the development of infrastructure

Rs.37395 crores, which is 21.56% of the total investment.

4) Investment in the private sector was 2.19% of the total

investment in 2008, showing a growth rate of 90.43%.

5) There is an important point to be noted that from past 4

years ICICI PRULIFE of India was investing 4 crores in the Municipal

Corporation but from this year this amount increased to 14 rores.

57
investment in development authority remains constant for the whole

period.

NVESTMENT OF ICICI PRULIFE IN THE YEAR 2011(In Crores)

PERCENTAGE OUT
TYPES OF INVESTMENT 31-3-11
OF TOTAL
1. Central Govt. Sec. 137276 64.30
2. State Govt. & other Govt. 28988 13.58

Guaranteed Marketable Sec.


3. Electricity (SEBs) 14508 6.80
4. Housing 19944 9.34
5. Water Supply & Sewerage 4420 2.07

(Mun + Z.P)
6. State Road Transport Corpn. 1358 0.64
7. Loans to Industrial Est. 45 0.02
8. Loans to Sugar Co-op 37 0.02
9. Development Authority 1 0.0005
10. Roadways, Port, Railways 781 0.37
11. Power Generation 6105 2.90

(Pvt. Sector)
12. Municipal Cop. 14 0.01
Total :- 213477 100.00

58
ANALYSIS OF INVESTMENTS IN 2011:

1) Investment in central Govt. securities goes up even further

from 63.41% - 64.3%, showing growth rate of 1.4%

2) Net investment in securities increased 75.79% - 78.88%,

showing a net increase of 4.08%

3) Investment in the development of infrastructure was

21.56%, which reduced to 18.84%.

4) Loans granted reduced by 20% and stood at 0.04%.

5) Direct investment in Pvt. Sector was 2.19% in the

previous year and raised by 32.42% and stood at 2.9% of the total

investment.

59
GRAPH SHOWING NET INVESTMENTS YEARY

60
FINDINGS

1) ICICI PRUDENTIAL LIFE has invested Rs.4675 crores in the year

1987 which is 39.60% of its profits in the central govt. sector and the investment has

increased to 37330 crores in the next decade i.e. in the year 1997 which is 54.84% out

of profits.

2) It has drastically increased its investments in the central government.

3) There was a decline in the investment in state government. It has

reduced from 14.26% to 13.08%.

4) ICICI PRULIFE has decreased its investment in the year 1997 in

infrastructure from45.02% to 31.97%.

5) Looking at the speed growth of ICICI PRULIFE it is quite clear that

ICICI PRULIFE is heading towards becoming the worlds no 1 insurance company.

6) As the years passing on the investment of ICICIPRULIFE in central

government is increasing compared to other avenues of investment.

7) The net investment in the securities has been increased.

61
SUGGESTIONS

1) ICICI PRULIFE is also investing a certain part of its profits in the state

road transport corporation and power generation (Pvt. Sector) but there is a stable

growth in these investments.

2) In the year 2005 the total investment in securities has increased to

70.52%, which shows a tremendous growth rate of 24.42%.

3) ICICI PRULIFE has decreased giving loans, and the percentage

decrease by 27.3%.

4) The investments in the private sector also raised drastically from the

year 2004-2005, which is 141.17%.

62
CONCLUSIONS

1) ICICI PRUDENTIAL is suggested to expand its portfolio to other

sectors.

2) There is a need of increase it investments in Housing, Power

generation etc.

3) More Insurance policies need to be introduced that suit all

classifications of people.

4) Well qualified Investment analyst need to be appointed in order to

proper allocation of portfolio for companys growth.

5) More plans have to be introduced by ICICI PRULIFE in order to

compete with competitors.

6) ICICI Prulife has to introduce more tax benefits plans in order to

attract more policy holders in the market.

63
BIBLIOGRAPHY

Books

Securities Analysis and Portfolio Management by Prasanna

chandra. (Tata McGraw Hill production)

Securities Analysis and Portfolio Management by

V.A.Avadhani. (Himalaya Publishing House)

The Indian Financial System by Bharat V. Pathak.(Pearson

Education)

Financial Management by M.Y. Khan & P.K. Jain (Tata McGraw-Hill

Publishing Co. Ltd.)

Financial Management by Dr .S.N. Maheshwari.(Sultan Chand &

Sons)

Websites

www.iciciprulife.com

www.Irdaonline.org

www.moneycontrol.com

64
65