Company Profile
Content
INTRODUCTION:HDFC Standard Life, one of India‟s leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India‟s leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.
HDFC Standard Life‟s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment, and Health. Customers have the added advantage of customizing their Plans, by adding optional benefits called riders, at a nominal price. The company currently has 25 retail and 4 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers. HDFC Standard Life continues to have one of the widest reaches among new insurance companies through a network of 595 offices serving over 720 cities and towns across the country. The company has also increased its depth in existing markets with a strong base of more than 207,000 Financial Consultants. At HDFC Standard Life, we work towards helping our customers to live with pride and self-respect. Being customer centric is a value dear to our heart. "Raising the bar", "Soar for More" is our business mantra; in doing so, rigor of processes is also what we adhere to. Integrity is our way of life. Providing a challenging work environment to employees goes hand in hand with our motto of customer delight. 8 incredible years and still going strong, we have literally made our mark with footprints over 600 cities & towns in India. The growth engine is driven by more than 16,000 committed employees who take pride in working for HDFC Standard Life, a distribution channel with over 2,00,000 customer centric financial consultants and equally strong channel partners in private and public sector banking. While accelerating our growth, we foster a learning culture towards creating thought leadership in the industry.
Background of HDFC Standard Life:
HDFC Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.
The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.
In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai.
Incorporation of HDFC Standard Life Insurance Company Limited:
The company was incorporated on 14th August 2000 under the name of HDFC Standard life insurance company limited. Their ambition from the beginning was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this
ambition was realized when HDFC Standard Life was the first life company to be granted a certificate of registration.
HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured. Associate Companies:
Other Companies:
HDFC Trustee Company Ltd. GRUH Finance Ltd. HDFC Developers Ltd. HDFC Property Ventures Ltd.
HDFC Ventures Trustee Company Ltd.
Nature of the Business Carried:
HDFC STANDARD LIFE is into a business of insurance. It is one of the first private insurance companies. Its sell various insurance policy based on the needs of consumer. It has traditional insurance plan as well as modern ULIP plan in its portfolio.
Vision, Mission and Quality Policy:
Vision 'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. Mission We aim to be the top new life insurance company in the market, this does not just mean being the largest or most productive company in the market rather it is a combination of several thing like, Customer service of the highest order Value for money for customer Professionalism in carrying our business Innovative product to cater to different needs of different customer Use of technology to improve service standard Increasing market share.
Our Values
Values that we observe while we wo
Integrity
Innovation Customer centric People Care “One for all and all for one” Team work Joy and Simplicity.
Products/Services Profile: Protection Plans
HDFC Term Assurance Plan HDFC Loan Cover Term Assurance Plan HDFC Home Loan Protection Plan
Children's Plans
HDFC Children's Plan HDFC Unit Linked Young Star II HDFC Unit Linked Young Star Plus II HDFC Unit Linked Youngster Champion
Retirement Plans
HDFC Personal Pension Plan
HDFC Unit Linked Pension II HDFC Unit Linked Pension Maximise II HDFC Immediate Annuity
Rural Products
HDFC Garmin BimaMitraYojana HDFC BimaBachatYojana HDFC Development Insurance Plan
Savings & Investment Plans
HDFC Unit Linked Endowment Plus II HDFC Unit Linked Endowment II HDFC Unit Linked Enhanced Life Protection II HDFC Unit Linked Wealth Maximiser Plus HDFC Unit Linked Wealth Multiplier HDFC Unit Linked Endowment Winner HDFC Endowment Assurance Plan HDFC Money Back Plan HDFC Single Premium Whole of Life Insurance Plan HDFC Assurance Plan
HDFC Savings Assurance Plan
Health Plans
HDFC Critical Care Plan HDFC SurgiCare Plan
Group Plans
Group Term Insurance Plan Group Variable Term Insurance Plan Group Unit Linked Plan - Gratuity Group Unit Linked Plan – Superannuation Group Unit Linked Plan - Leave Encashment.
HDFC offers products as per the life stages of the customers and their respective needs.
Your insurance need will change as your life does, from starting to work to enjoying your golden years and all the stages in between. Each one of these stages may pose a different insurance need/cover for you. In this section, we have drawn up the basic life stages and help you analyze various insurance needs accordingly.
Areas Of Operations:
HDFC Standard Life continues to have one of the widest reaches among new insurance Companies. The company strengthened its number of offices from 103 to 572 across the country in less than 3 years. Through these offices, the company today services customer
needs in over 730 cities and towns. HDFCSLIC is head quartered at Mumbai and has established its presence in the states of:
Andhra Pradesh Bihar Delhi Gujarat Himachal Pradesh Karnataka Madhya Pradesh Meghalaya Punjab Tamil Nadu Uttaranchal
Assam Chhattisgarh Goa Haryana Jharkhand Kerala Maharashtra Orissa Rajasthan Uttar Pradesh West Bengal
Some of the cities in which HDFCSLIC has its branches are:
Ahmadabad, Chennai, Hyderabad, Jalandhar,
Bangalore, Chandigarh, Jaipur, Jodhpur,
Ludhiana, Kolkata, Mangalore, Mysore, Noida, Pune, Trivandrum,
Kanpur, Lucknow, Meerut New Delhi, Patna, Trichur, Vishakapatnam, etc
Ownership Pattern:
HDFC Standard Life Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life insurance sector. Reach of the JV player is highly rated and been conferred with many awards. HDFC is rated „AAA‟ by both CRISIL and ICRA. Similarly, Standard Life is rated „AAA‟ both by Moody‟s and Standard and Poor‟s.
HDFC Limited:
HDFC Limited, India's premier housing finance institution has assisted more than 3.4 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 271 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to own a home back in India. As of December 2009, the total asset size has crossed more than Rs. 104,560 corers including the mortgage loan assets of more than Rs.90,400 corers. The corporation has a deposit base of over Rs. 23,000 corers, earning the trust of nearly one million depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies .
Standard Life:Standard Life is one of the UK's leading long term savings and investments companies headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides life assurance and pensions, investment management and healthcare insurance products to over 6 million customers worldwide. The Group has around 10,000 employees across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. At the end of December 2010 the Group had total assets under administration of £170.1bn. Standard Life's diverse business includes one of the largest life and pensions businesses in the UK with more than 4 million customers; Standard Life Investments, which
currently manages assets of over £138.7bn globally and Standard Life Healthcare, a private medical insurance company which is one of the largest in the UK. On 10 July 2006, after 80 years as a mutual company, Standard Life Assurance Company demutualised and Standard Life plc was listed on the London Stock Exchange. Standard Life now has approximately 1.5 million individual shareholders in over 50 countries around the world.
Competitors Information:
Life Insurance Corporation of India (LIC) Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise people‟s savings for nation-building activities. LIC with its central office in Mumbai and seven zeal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lake active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, KenIndia Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum.
Max New York Life Insurance Co. Ltd.
Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India.
ICICI Prudential Life Insurance Company Ltd.
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.
Kotak Mahindra Life Insurance Co. Ltd.
Kotuku Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.
Birla Sun Life Insurance Company Ltd.
Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada.
Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. MetLife India Insurance Company Pvt. Ltd.
AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.
HDFC Standard Life’s Market Share
Insurance Company LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Life Birla Sun life Reliance Life Max New York OM Kotak AVIVA Tata AIG Market Share(in per cent) 48.1% 13.7 % 10.3% 6.2% 4.1% 3.4% 3.4% 2.4% 1.9% 1.8% 1.5%
Met Life
1.4%
Market Share(in per cent)
LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Life Birla Sunlife
Infrastructure Facilities:
The company opened 23 offices during the year, taking the total to 595 across the country and most of the offices have below given infrastructural facilities. Telephone Intranet and internet Conference room Seminar room Training room Laptop from IT department to senior manager Help line : product knowledge of HDFCSL Company e-mail
For each and every employee and advisors of the company will get their personal ID where in they can login from any part of the country and update things, Like perk, commission account, keep in track of product, target.
Achievements/ Awards:-
Year 2003 2002
Award Company of the Year Company of the Year
2001 2000 1999 1996-99 1995 1992-94 1991
Best Personal Pension Provider Company of the Year Company of the Decade Company of the year 4 star service award Overall best company 3 star service award
Standard Life has been awarded the "Raising Standards" quality mark. This shows that the Company: uses clear language to describe their products on key documents, have appropriate products and Provide a quality service for the customers.
Money Marketing Awards
Company of the Year every year from 1999 to 2005 Best Pension Provider 2004 and 2005 Best Group Pension Provider every year from 1998 to 2003 Best Personal Pension Provider every year since 1998 to 2003 Best Life Investment Product Provider 2003 and 2004 Gold Award in the Poster Campaign Category (Advertising) 2004
Money facts Investment, Life & Pensions Awards
Best Pension Product 2003, 2004 and 2005 Best Pension Service 2003, 2004 and 2005
Bank hall Achievement Awards
Pension Provider of the Year 2003 and 2004
Financial Adviser Provider Awards
Overall Winner in 1999, 2000, 2001 and 2002 Pensions Provider of the Year 1999, 2000, 2001, 2002 and 2003 Pensions Company of the Year 2004 Individual Pensions Company of the Year 2004 Group Pensions Provider of the Year 2004 Health Insurance Company of the Year 2004
Financial Adviser Service Awards
Company of the Year every year from 1997 to 2001 5 Star Life and Pensions Provider every year from 1996 to 2004 5 Star Investment Provider every year from 1996 to 2002 and 2004
Pensions Management Administration and Service Awards
Overall Winner - Personal Pensions 2003 Overall Winner - Stakeholder Pensions 2002 and 2003 Overall Winner - Group Personal Pensions 2002 and 2004 Member Communications - Personal Pensions, Group Personal Pensions & Stakeholder Pensions 2003
Backup (branch office) - Personal Pensions 2003.
SNAPSHOT-I
Incorporated in 1977 as the first specialized Mortgage Company in India. Almost 90% of initial shareholding in the hands of domestic institutes and retail investors. Current 77% of shares held by foreign institutional investors. Besides the core business of mortgage HDFC has evolved into a financial conglomerate with holdings In: HDFC Standard Life insurance Company- HDFC holds 78.07 %. HDFC Asset Management Company – HDFC holds 50.1% HDFC Bank- HDFC holds 22.25%. Intelenet Global (Business Process Outsourcing) – HDFC holds 50%. HDFC Chubb General Insurance Company – HDFC holds 74%.
SNAPSHOT-II
Loan Approvals (up to Dec 2007)
Rs. 805 billion. (US $ 18.30 bn.) Rs.669 billion (US $ 15.20 bn) 2.5 million.
Loan Disbursements (up to Dec. 2007)
Housing Units Financed Distribution Offices Outreach Programs
181 90
KEY PLAYERS:
Mr. Deepak S Parekhis the Chairman of the Company. He is also the Executive Chairman of Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited in a senior management position in 1978. He was inducted as a whole-time director of HDFC Limited in 1985 and was appointed as its Executive Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales).
Mr. Deepak M Satwalekaris the Managing Director and CEO of the Company since November, 2000. Prior to this, he was the Managing Director of HDFC Limited since 1993. Mr.Satwalekar obtained a Bachelors Degree in Technology from the Indian Institute of Technology, Bombay and a Masters Degree in Business Administration from The American University, Washington DC. GROUP COMPANIES: HDFC Bank: World Class Indian Bank- among the top private banks in India. HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager. Intelenet Global: BPO services for international customers. CIBIL: Credit Information Bureau India Limited. HDFC Chubb: Upcoming Private companies in the field of General Insurance. HDFC Mutual Fund HDFC reality.com: Helps to search properties in all major cities in India HDFC securities
Work Flow Model:
MANAGER
CHANNEL DEVELOPMENT MANAGER
FINANCIAL CONSULTANTS
CUSTOMERS
MANAGER
CORPORATES
CUSTOMERS
Future Growth and Prospects:
HDFC Standard Life Insurance has increased its capital by Rs. 50 corers. This was necessitated on account of the strong growth shown by the company in the current financial year in its life insurance and pension business. The two partners in the joint venture, HDFC and Standard Life Assurance Company of the U.K., have brought in the additional capital and the share capital of the company now stands at Rs. 218 corers. HDFC Standard Life Insurance was capitalised at Rs. 168 corers on day one, well above the minimum requirement of Rs. 100 corers stipulated by the Insurance Regulatory and Development Authority (IRDA). In order to fund the future growth in its business, the paid-up capital is now being increased by Rs. 50 corers. The company had seen a substantial increase in business over the two years and had declared two bonuses. The company is looking at introducing new products for individuals and companies in the coming months.
MCKENSY’S 7S FRAME WORK :
Structure:
The company was on 14th August 2000, and is based in Mumbai, India. HDFC Standard Life Insurance Company Limited operates as a subsidiary of Housing Development Finance Corporation Limited.
HDFC Standard Life Insurance is a new Indian life insurance company that operates out of 52 locations. HDFC Standard Life Insurance Company Ltd. is one of India‟s leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India‟s leading housing finance institution and one of the subsidiaries of Standard Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry – all important factors to consider when choosing your insurer. HDFC Standard Life Insurance is the first private life insurance company to be granted a license by IRDA.
Skill:
At HDFC Standard Life, we work towards helping our customers to live with pride and self respect. Being customer centric is a value dear to our heart. "Raising the bar", "Soar for More" is our business mantra; in doing so, rigor of processes is also what we adhere to .Integrity is our way of life. Providing a challenging work environment to employees goes hand in hand with our motto of customer delight. 8 incredible years and still going strong, we have literally made our mark with footprints over 600 cities & towns in India. The growth engine is driven by more than 16,000 committed employees who take pride in working for HDFC Standard Life, a distribution channel with over 2,00,000 customer centric financial consultants and equally strong channel partners in private and public sector banking. While accelerating our growth, we foster a learning culture towards creating thought leadership in the industry.
Strategy:
Lead a life of respect and dignity even after retirement HDFC Unit Linked Pension Maximize II Ideally, just how spending comes to you, so must saving and investing. You are able to finance your expenses and take care of your expenses in present times. However, to ensure that you are able to maintain the same standard of living post retirement, you need to make the right kind of investment today. HDFC Unit Linked Pension Maximize II is a unique
Single Premium unit linked plan, designed to provide a post-retirement income for life with the freedom to maximize your investment returns. This plan also gives Bumper Addition of 10% of initial single premium at vesting and on death. Features Please roll over your mouse over circles for explanation. Advantages This plan is designed to provide you a post retirement income for life – You can choose your initial single premium, the investment strategy and retirement date. At the end of the policy term, you will receive the accumulated value of your funds including Bumper Additions, which will be used to provide your pension income in your golden years
Strategies:Strategies Employed to achieve the target are as follows: Tele calling Contacting the person directly (interview) Collect references
Shared Values:
These are the core values of the company that are evidenced in the corporate culture & the general work ethic. The values followed by HDFC SLIC are: Integrity Innovation Customer centric People Care “One for all and all for one” Team work Joy and Simplicity
Style:
One element of manager is how he\she choose tom spend time, another aspect is symbolic behaviour. This suggests a second‟s attribute that is by no means confused to that of top. The style is reflected of culture, more than to change the organization or performance. The HDFC is basically is a democratic system. Before taking any decision meeting is conducted and a final decision is taken and decision is taken with the consent of all. Every employee gets chance to give his \her opinion. Every employee can participate in decision making processes of the organization .The HDFC is a unit union body hence it takes people into confidence. it does not take any decision unilaterally .Managers are evaluated based
on the quality of their decision making and opinion of fellow employee. Hence participative and democratic type of system is the best system for such a big organization like HDFC standard life ltd.
Staff:
Work Culture the company attributes its success to the contributions made by its employees. We believe that our strength is our people, so our endeavour is to surpass their expectations and give them the best possible work environment and benefits that match the best in the industry. Talent management initiatives in HDFC Standard Life are driven by a set of organizational core competencies (Mantra 10) as well as position-specific competencies. The competency set includes knowledge, skills, experience, and personal traits (demonstrated through defined behaviours) based on the bedrock of sharp vision and strong values of HDFC Standard Life. In this endeavour of shaping and nurturing our talent pool, HDFC Standard Life adopts a four-step model: Acquiring and Retaining Talent HDFC Standard Life believes in building capability for superior performance leading to a superior shareholder value. We have a bouquet of people processes like Assessments, Potential Review. The company had
14,506 employees as of March 31, 2009 as compared to 15,411 employees as of March 31, 2008. Under the provisions of Section 217 (2A) of the Companies Act, 1956 and the rules framed there under, the names and other particulars of employees are set out in the annexure to this Report.
Systems:
All the processes & information flows that links the organization together. Communications practice and system. Management reporting system. Approval process. Planning/budgeting system.
Privatization:
As part of the wide-ranging economic reform initiated in 1991, the structure of the Insurance sector was examined by a committee headed by Mr. R. N. Malhotra. The committee‟s recommendation to open up the sector to private sector participation was implemented by the Government in 2000. The key element in the reform process was the participation of overseas insurance companies, through restricted to 26% of the capital. With the Insurance Regulatory and Development Authority Act, 1999 (IRDA) formally coming into force, the insurance industry was opened up for private sector participation. The main objective of setting up the IRDA was to protect the interest of policy holders and to regulate, promote and ensured orderly development of the insurance industry.
Over four decades the industry has been a State monopoly. Till date the LIC has insured over 120 million individual and has a vast sales network of over 7 lakh insurance agents. The industry is witnessing an upsurge in consumer awareness, building immense and unavoidable pressure among the players. Within the short time since the opening up several insurance companies have been licensed by the IRDA. Indian is a market of mainly small policies. The average annual life premium is less than the equivalent of $ 100 Indian is also marketed by a very low insurance penetration rate. Although no authentic statistics is available, a rough estimate is that only 20% of the insurable population is insured.
Distribution Modes:
Most new entrants are targeting the Indian middle class segment estimate at over 250 million persons . High focus on direct selling-the preferred route is the agency network. The agency channel constitutes 90-95% of the market.
Alliance with banks: Insurance is using branch network s to sell insurance products. This enable insurance to leverage on low distribution costs by using existing network. Insurers are also targeting bank employees as per prospective customers and agent to market products.
Non-bank alliances: These are tie ups with non-governmental organizations (NGOs) mainly to tap the rural market. This would be enable insurers to ensure IRDA compliance with respect to rural coverage.
Retail financial service distribution: This involves the tie ups with NBFCs to act as corporate agent, and also enable insurers to cross sell with other financial services
With the entry of private insurers, the market is already seeing a wide array of products. Insurers today are not merely looking at offering the basic life insurance solution, but offering products with a combination of benefits (riders) which could be bundled/customized to suit an individual‟s need. Insurance is also being promoted as a sound long-terms investment options. In terms of returns insurance products today offer a competitive 7-9 percent. Besides return when really increases the appeal of insurance is the benefit of life protection from insurance products along with health cover benefits. The tax benefits are also attractive. While the plain individual insurance (whole life, term etc) will remain popular, sale of new products such as single premium, unit-linked, retirement products, money back and annuity are set to rise.
SWOT ANALYSIS
SWOT analysis is an acronym for the internal strengths and weaknesses of affirm and the external opportunities and threads facing that firm. SWOT analysis helps managers to have a quick overview of the firms strategic situation and assess whether there is a sound „fit‟ between internal resources, values, and external environment.
Strength:
Financial Expertise: As a joint venture of leading financial services groups. HDFC standard Life has the financial expertise required to manage your long-term investments safely and efficiently. Range of Solutions:
Have a range of individual and group solutions, which can be easily customized to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure. Strong Ethical Values: HDFC is an ethical and Cultural Organization. False selling or false commitment with the customers is Most respected Private Insurance Company: HDFC was awarded No-1 Private Insurance Company In 2004 by the World Class Magazine Business World. Integrity, Innovation and Customer Care.
Weakness:
The return given by the company on its ULIP plan is very much below the market leader which reflects poor investment strategy. Though company is positioned as first private company in the insurance sector in India its market share stand at 4% which is very much low. Dividend - As the company has not earned profits, the directors do not recommend any Dividend. Unable to exploit rural market as compare to LIC Low customer confidence on the private players Vertical hierarchical reporting structure with many designations and cadres Heavy management expenses and administrative costs. Poor retention percentage of tied up agents. Poor awareness for new products in consumers Poor Distribution network.
Very Huge Premium of policies compared to major rival LIC.
Opportunities
HDFC should tie up with business organization and private maternity hospital to expand business. Innovative products, smart marketing, and aggressive distribution have enabled insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative product. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. Insurable population –According to IRDA only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m People, with the potential to buy insurance, remain uninsured Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers, such as fire, export credit.
Threats
Changing government regulation. Huge competition in the market put pressure on the profit mar Provision for entry of foreign player Price War With Competitors Taxation On The Product And Service Competitors Have Superior Access To Channels Of Distribution Other private insurance companies also vying for the same uninsured population.
LEARNING EXPERIENCE
My project at HDFC STANDARD Life Insurance Company has been an extremely enriching one. My project was divided into two main parts. Part A is about “Corporate Exposure” and Part B is about “Study of Issue”. My experience At HDFC was a really great learning experience with a lot of new things learnt and as I also wish to specialize in FINANCE this experience is really a big bonus for me. The Learning I gained during my project are mentioned below: I gained a broader perspective about various investment opportunities and the risk involved in them. I came to know about the various technicalities about the Indian insurance industry. Through this research I enriched my knowledge on various competitive strategies adopted by different companies to survive in a highly competitive market. Learnt in a more detailed way about the nature of work existing in the insurance industry, the kind of deadlines they have to meet, the kind of pressure and levels of stress, which they work under, and the kind of recognitions given to them after they meet or exceed their targets.
HDFC Standard Life‟s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment, and Health. Customers have the added advantage of customizing their Plans, by adding optional benefits called riders, at a nominal price. The company currently has 25 retail and 4 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers. HDFC Standard Life continues to have one of the widest reaches among new insurance companies through a network of 595 offices serving over 720 cities and towns across the country. The company has also increased its depth in existing markets with a strong base of more than 207,000 Financial Consultants. At HDFC Standard Life, we work towards helping our customers to live with pride and self-respect. Being customer centric is a value dear to our heart. "Raising the bar", "Soar for More" is our business mantra; in doing so, rigor of processes is also what we adhere to. Integrity is our way of life. Providing a challenging work environment to employees goes hand in hand with our motto of customer delight. 8 incredible years and still going strong, we have literally made our mark with footprints over 600 cities & towns in India. The growth engine is driven by more than 16,000 committed employees who take pride in working for HDFC Standard Life, a distribution channel with over 2,00,000 customer centric financial consultants and equally strong channel partners in private and public sector banking. While accelerating our growth, we foster a learning culture towards creating thought leadership in the industry.
Background of HDFC Standard Life:
HDFC Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.
The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.
In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai.
Incorporation of HDFC Standard Life Insurance Company Limited:
The company was incorporated on 14th August 2000 under the name of HDFC Standard life insurance company limited. Their ambition from the beginning was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this
ambition was realized when HDFC Standard Life was the first life company to be granted a certificate of registration.
HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured. Associate Companies:
Other Companies:
HDFC Trustee Company Ltd. GRUH Finance Ltd. HDFC Developers Ltd. HDFC Property Ventures Ltd.
HDFC Ventures Trustee Company Ltd.
Nature of the Business Carried:
HDFC STANDARD LIFE is into a business of insurance. It is one of the first private insurance companies. Its sell various insurance policy based on the needs of consumer. It has traditional insurance plan as well as modern ULIP plan in its portfolio.
Vision, Mission and Quality Policy:
Vision 'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. Mission We aim to be the top new life insurance company in the market, this does not just mean being the largest or most productive company in the market rather it is a combination of several thing like, Customer service of the highest order Value for money for customer Professionalism in carrying our business Innovative product to cater to different needs of different customer Use of technology to improve service standard Increasing market share.
Our Values
Values that we observe while we wo
Integrity
Innovation Customer centric People Care “One for all and all for one” Team work Joy and Simplicity.
Products/Services Profile: Protection Plans
HDFC Term Assurance Plan HDFC Loan Cover Term Assurance Plan HDFC Home Loan Protection Plan
Children's Plans
HDFC Children's Plan HDFC Unit Linked Young Star II HDFC Unit Linked Young Star Plus II HDFC Unit Linked Youngster Champion
Retirement Plans
HDFC Personal Pension Plan
HDFC Unit Linked Pension II HDFC Unit Linked Pension Maximise II HDFC Immediate Annuity
Rural Products
HDFC Garmin BimaMitraYojana HDFC BimaBachatYojana HDFC Development Insurance Plan
Savings & Investment Plans
HDFC Unit Linked Endowment Plus II HDFC Unit Linked Endowment II HDFC Unit Linked Enhanced Life Protection II HDFC Unit Linked Wealth Maximiser Plus HDFC Unit Linked Wealth Multiplier HDFC Unit Linked Endowment Winner HDFC Endowment Assurance Plan HDFC Money Back Plan HDFC Single Premium Whole of Life Insurance Plan HDFC Assurance Plan
HDFC Savings Assurance Plan
Health Plans
HDFC Critical Care Plan HDFC SurgiCare Plan
Group Plans
Group Term Insurance Plan Group Variable Term Insurance Plan Group Unit Linked Plan - Gratuity Group Unit Linked Plan – Superannuation Group Unit Linked Plan - Leave Encashment.
HDFC offers products as per the life stages of the customers and their respective needs.
Your insurance need will change as your life does, from starting to work to enjoying your golden years and all the stages in between. Each one of these stages may pose a different insurance need/cover for you. In this section, we have drawn up the basic life stages and help you analyze various insurance needs accordingly.
Areas Of Operations:
HDFC Standard Life continues to have one of the widest reaches among new insurance Companies. The company strengthened its number of offices from 103 to 572 across the country in less than 3 years. Through these offices, the company today services customer
needs in over 730 cities and towns. HDFCSLIC is head quartered at Mumbai and has established its presence in the states of:
Andhra Pradesh Bihar Delhi Gujarat Himachal Pradesh Karnataka Madhya Pradesh Meghalaya Punjab Tamil Nadu Uttaranchal
Assam Chhattisgarh Goa Haryana Jharkhand Kerala Maharashtra Orissa Rajasthan Uttar Pradesh West Bengal
Some of the cities in which HDFCSLIC has its branches are:
Ahmadabad, Chennai, Hyderabad, Jalandhar,
Bangalore, Chandigarh, Jaipur, Jodhpur,
Ludhiana, Kolkata, Mangalore, Mysore, Noida, Pune, Trivandrum,
Kanpur, Lucknow, Meerut New Delhi, Patna, Trichur, Vishakapatnam, etc
Ownership Pattern:
HDFC Standard Life Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life insurance sector. Reach of the JV player is highly rated and been conferred with many awards. HDFC is rated „AAA‟ by both CRISIL and ICRA. Similarly, Standard Life is rated „AAA‟ both by Moody‟s and Standard and Poor‟s.
HDFC Limited:
HDFC Limited, India's premier housing finance institution has assisted more than 3.4 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 271 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to own a home back in India. As of December 2009, the total asset size has crossed more than Rs. 104,560 corers including the mortgage loan assets of more than Rs.90,400 corers. The corporation has a deposit base of over Rs. 23,000 corers, earning the trust of nearly one million depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies .
Standard Life:Standard Life is one of the UK's leading long term savings and investments companies headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides life assurance and pensions, investment management and healthcare insurance products to over 6 million customers worldwide. The Group has around 10,000 employees across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. At the end of December 2010 the Group had total assets under administration of £170.1bn. Standard Life's diverse business includes one of the largest life and pensions businesses in the UK with more than 4 million customers; Standard Life Investments, which
currently manages assets of over £138.7bn globally and Standard Life Healthcare, a private medical insurance company which is one of the largest in the UK. On 10 July 2006, after 80 years as a mutual company, Standard Life Assurance Company demutualised and Standard Life plc was listed on the London Stock Exchange. Standard Life now has approximately 1.5 million individual shareholders in over 50 countries around the world.
Competitors Information:
Life Insurance Corporation of India (LIC) Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise people‟s savings for nation-building activities. LIC with its central office in Mumbai and seven zeal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lake active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, KenIndia Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum.
Max New York Life Insurance Co. Ltd.
Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India.
ICICI Prudential Life Insurance Company Ltd.
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.
Kotak Mahindra Life Insurance Co. Ltd.
Kotuku Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.
Birla Sun Life Insurance Company Ltd.
Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada.
Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. MetLife India Insurance Company Pvt. Ltd.
AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.
HDFC Standard Life’s Market Share
Insurance Company LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Life Birla Sun life Reliance Life Max New York OM Kotak AVIVA Tata AIG Market Share(in per cent) 48.1% 13.7 % 10.3% 6.2% 4.1% 3.4% 3.4% 2.4% 1.9% 1.8% 1.5%
Met Life
1.4%
Market Share(in per cent)
LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Life Birla Sunlife
Infrastructure Facilities:
The company opened 23 offices during the year, taking the total to 595 across the country and most of the offices have below given infrastructural facilities. Telephone Intranet and internet Conference room Seminar room Training room Laptop from IT department to senior manager Help line : product knowledge of HDFCSL Company e-mail
For each and every employee and advisors of the company will get their personal ID where in they can login from any part of the country and update things, Like perk, commission account, keep in track of product, target.
Achievements/ Awards:-
Year 2003 2002
Award Company of the Year Company of the Year
2001 2000 1999 1996-99 1995 1992-94 1991
Best Personal Pension Provider Company of the Year Company of the Decade Company of the year 4 star service award Overall best company 3 star service award
Standard Life has been awarded the "Raising Standards" quality mark. This shows that the Company: uses clear language to describe their products on key documents, have appropriate products and Provide a quality service for the customers.
Money Marketing Awards
Company of the Year every year from 1999 to 2005 Best Pension Provider 2004 and 2005 Best Group Pension Provider every year from 1998 to 2003 Best Personal Pension Provider every year since 1998 to 2003 Best Life Investment Product Provider 2003 and 2004 Gold Award in the Poster Campaign Category (Advertising) 2004
Money facts Investment, Life & Pensions Awards
Best Pension Product 2003, 2004 and 2005 Best Pension Service 2003, 2004 and 2005
Bank hall Achievement Awards
Pension Provider of the Year 2003 and 2004
Financial Adviser Provider Awards
Overall Winner in 1999, 2000, 2001 and 2002 Pensions Provider of the Year 1999, 2000, 2001, 2002 and 2003 Pensions Company of the Year 2004 Individual Pensions Company of the Year 2004 Group Pensions Provider of the Year 2004 Health Insurance Company of the Year 2004
Financial Adviser Service Awards
Company of the Year every year from 1997 to 2001 5 Star Life and Pensions Provider every year from 1996 to 2004 5 Star Investment Provider every year from 1996 to 2002 and 2004
Pensions Management Administration and Service Awards
Overall Winner - Personal Pensions 2003 Overall Winner - Stakeholder Pensions 2002 and 2003 Overall Winner - Group Personal Pensions 2002 and 2004 Member Communications - Personal Pensions, Group Personal Pensions & Stakeholder Pensions 2003
Backup (branch office) - Personal Pensions 2003.
SNAPSHOT-I
Incorporated in 1977 as the first specialized Mortgage Company in India. Almost 90% of initial shareholding in the hands of domestic institutes and retail investors. Current 77% of shares held by foreign institutional investors. Besides the core business of mortgage HDFC has evolved into a financial conglomerate with holdings In: HDFC Standard Life insurance Company- HDFC holds 78.07 %. HDFC Asset Management Company – HDFC holds 50.1% HDFC Bank- HDFC holds 22.25%. Intelenet Global (Business Process Outsourcing) – HDFC holds 50%. HDFC Chubb General Insurance Company – HDFC holds 74%.
SNAPSHOT-II
Loan Approvals (up to Dec 2007)
Rs. 805 billion. (US $ 18.30 bn.) Rs.669 billion (US $ 15.20 bn) 2.5 million.
Loan Disbursements (up to Dec. 2007)
Housing Units Financed Distribution Offices Outreach Programs
181 90
KEY PLAYERS:
Mr. Deepak S Parekhis the Chairman of the Company. He is also the Executive Chairman of Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited in a senior management position in 1978. He was inducted as a whole-time director of HDFC Limited in 1985 and was appointed as its Executive Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales).
Mr. Deepak M Satwalekaris the Managing Director and CEO of the Company since November, 2000. Prior to this, he was the Managing Director of HDFC Limited since 1993. Mr.Satwalekar obtained a Bachelors Degree in Technology from the Indian Institute of Technology, Bombay and a Masters Degree in Business Administration from The American University, Washington DC. GROUP COMPANIES: HDFC Bank: World Class Indian Bank- among the top private banks in India. HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager. Intelenet Global: BPO services for international customers. CIBIL: Credit Information Bureau India Limited. HDFC Chubb: Upcoming Private companies in the field of General Insurance. HDFC Mutual Fund HDFC reality.com: Helps to search properties in all major cities in India HDFC securities
Work Flow Model:
MANAGER
CHANNEL DEVELOPMENT MANAGER
FINANCIAL CONSULTANTS
CUSTOMERS
MANAGER
CORPORATES
CUSTOMERS
Future Growth and Prospects:
HDFC Standard Life Insurance has increased its capital by Rs. 50 corers. This was necessitated on account of the strong growth shown by the company in the current financial year in its life insurance and pension business. The two partners in the joint venture, HDFC and Standard Life Assurance Company of the U.K., have brought in the additional capital and the share capital of the company now stands at Rs. 218 corers. HDFC Standard Life Insurance was capitalised at Rs. 168 corers on day one, well above the minimum requirement of Rs. 100 corers stipulated by the Insurance Regulatory and Development Authority (IRDA). In order to fund the future growth in its business, the paid-up capital is now being increased by Rs. 50 corers. The company had seen a substantial increase in business over the two years and had declared two bonuses. The company is looking at introducing new products for individuals and companies in the coming months.
MCKENSY’S 7S FRAME WORK :
Structure:
The company was on 14th August 2000, and is based in Mumbai, India. HDFC Standard Life Insurance Company Limited operates as a subsidiary of Housing Development Finance Corporation Limited.
HDFC Standard Life Insurance is a new Indian life insurance company that operates out of 52 locations. HDFC Standard Life Insurance Company Ltd. is one of India‟s leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India‟s leading housing finance institution and one of the subsidiaries of Standard Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry – all important factors to consider when choosing your insurer. HDFC Standard Life Insurance is the first private life insurance company to be granted a license by IRDA.
Skill:
At HDFC Standard Life, we work towards helping our customers to live with pride and self respect. Being customer centric is a value dear to our heart. "Raising the bar", "Soar for More" is our business mantra; in doing so, rigor of processes is also what we adhere to .Integrity is our way of life. Providing a challenging work environment to employees goes hand in hand with our motto of customer delight. 8 incredible years and still going strong, we have literally made our mark with footprints over 600 cities & towns in India. The growth engine is driven by more than 16,000 committed employees who take pride in working for HDFC Standard Life, a distribution channel with over 2,00,000 customer centric financial consultants and equally strong channel partners in private and public sector banking. While accelerating our growth, we foster a learning culture towards creating thought leadership in the industry.
Strategy:
Lead a life of respect and dignity even after retirement HDFC Unit Linked Pension Maximize II Ideally, just how spending comes to you, so must saving and investing. You are able to finance your expenses and take care of your expenses in present times. However, to ensure that you are able to maintain the same standard of living post retirement, you need to make the right kind of investment today. HDFC Unit Linked Pension Maximize II is a unique
Single Premium unit linked plan, designed to provide a post-retirement income for life with the freedom to maximize your investment returns. This plan also gives Bumper Addition of 10% of initial single premium at vesting and on death. Features Please roll over your mouse over circles for explanation. Advantages This plan is designed to provide you a post retirement income for life – You can choose your initial single premium, the investment strategy and retirement date. At the end of the policy term, you will receive the accumulated value of your funds including Bumper Additions, which will be used to provide your pension income in your golden years
Strategies:Strategies Employed to achieve the target are as follows: Tele calling Contacting the person directly (interview) Collect references
Shared Values:
These are the core values of the company that are evidenced in the corporate culture & the general work ethic. The values followed by HDFC SLIC are: Integrity Innovation Customer centric People Care “One for all and all for one” Team work Joy and Simplicity
Style:
One element of manager is how he\she choose tom spend time, another aspect is symbolic behaviour. This suggests a second‟s attribute that is by no means confused to that of top. The style is reflected of culture, more than to change the organization or performance. The HDFC is basically is a democratic system. Before taking any decision meeting is conducted and a final decision is taken and decision is taken with the consent of all. Every employee gets chance to give his \her opinion. Every employee can participate in decision making processes of the organization .The HDFC is a unit union body hence it takes people into confidence. it does not take any decision unilaterally .Managers are evaluated based
on the quality of their decision making and opinion of fellow employee. Hence participative and democratic type of system is the best system for such a big organization like HDFC standard life ltd.
Staff:
Work Culture the company attributes its success to the contributions made by its employees. We believe that our strength is our people, so our endeavour is to surpass their expectations and give them the best possible work environment and benefits that match the best in the industry. Talent management initiatives in HDFC Standard Life are driven by a set of organizational core competencies (Mantra 10) as well as position-specific competencies. The competency set includes knowledge, skills, experience, and personal traits (demonstrated through defined behaviours) based on the bedrock of sharp vision and strong values of HDFC Standard Life. In this endeavour of shaping and nurturing our talent pool, HDFC Standard Life adopts a four-step model: Acquiring and Retaining Talent HDFC Standard Life believes in building capability for superior performance leading to a superior shareholder value. We have a bouquet of people processes like Assessments, Potential Review. The company had
14,506 employees as of March 31, 2009 as compared to 15,411 employees as of March 31, 2008. Under the provisions of Section 217 (2A) of the Companies Act, 1956 and the rules framed there under, the names and other particulars of employees are set out in the annexure to this Report.
Systems:
All the processes & information flows that links the organization together. Communications practice and system. Management reporting system. Approval process. Planning/budgeting system.
Privatization:
As part of the wide-ranging economic reform initiated in 1991, the structure of the Insurance sector was examined by a committee headed by Mr. R. N. Malhotra. The committee‟s recommendation to open up the sector to private sector participation was implemented by the Government in 2000. The key element in the reform process was the participation of overseas insurance companies, through restricted to 26% of the capital. With the Insurance Regulatory and Development Authority Act, 1999 (IRDA) formally coming into force, the insurance industry was opened up for private sector participation. The main objective of setting up the IRDA was to protect the interest of policy holders and to regulate, promote and ensured orderly development of the insurance industry.
Over four decades the industry has been a State monopoly. Till date the LIC has insured over 120 million individual and has a vast sales network of over 7 lakh insurance agents. The industry is witnessing an upsurge in consumer awareness, building immense and unavoidable pressure among the players. Within the short time since the opening up several insurance companies have been licensed by the IRDA. Indian is a market of mainly small policies. The average annual life premium is less than the equivalent of $ 100 Indian is also marketed by a very low insurance penetration rate. Although no authentic statistics is available, a rough estimate is that only 20% of the insurable population is insured.
Distribution Modes:
Most new entrants are targeting the Indian middle class segment estimate at over 250 million persons . High focus on direct selling-the preferred route is the agency network. The agency channel constitutes 90-95% of the market.
Alliance with banks: Insurance is using branch network s to sell insurance products. This enable insurance to leverage on low distribution costs by using existing network. Insurers are also targeting bank employees as per prospective customers and agent to market products.
Non-bank alliances: These are tie ups with non-governmental organizations (NGOs) mainly to tap the rural market. This would be enable insurers to ensure IRDA compliance with respect to rural coverage.
Retail financial service distribution: This involves the tie ups with NBFCs to act as corporate agent, and also enable insurers to cross sell with other financial services
With the entry of private insurers, the market is already seeing a wide array of products. Insurers today are not merely looking at offering the basic life insurance solution, but offering products with a combination of benefits (riders) which could be bundled/customized to suit an individual‟s need. Insurance is also being promoted as a sound long-terms investment options. In terms of returns insurance products today offer a competitive 7-9 percent. Besides return when really increases the appeal of insurance is the benefit of life protection from insurance products along with health cover benefits. The tax benefits are also attractive. While the plain individual insurance (whole life, term etc) will remain popular, sale of new products such as single premium, unit-linked, retirement products, money back and annuity are set to rise.
SWOT ANALYSIS
SWOT analysis is an acronym for the internal strengths and weaknesses of affirm and the external opportunities and threads facing that firm. SWOT analysis helps managers to have a quick overview of the firms strategic situation and assess whether there is a sound „fit‟ between internal resources, values, and external environment.
Strength:
Financial Expertise: As a joint venture of leading financial services groups. HDFC standard Life has the financial expertise required to manage your long-term investments safely and efficiently. Range of Solutions:
Have a range of individual and group solutions, which can be easily customized to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure. Strong Ethical Values: HDFC is an ethical and Cultural Organization. False selling or false commitment with the customers is Most respected Private Insurance Company: HDFC was awarded No-1 Private Insurance Company In 2004 by the World Class Magazine Business World. Integrity, Innovation and Customer Care.
Weakness:
The return given by the company on its ULIP plan is very much below the market leader which reflects poor investment strategy. Though company is positioned as first private company in the insurance sector in India its market share stand at 4% which is very much low. Dividend - As the company has not earned profits, the directors do not recommend any Dividend. Unable to exploit rural market as compare to LIC Low customer confidence on the private players Vertical hierarchical reporting structure with many designations and cadres Heavy management expenses and administrative costs. Poor retention percentage of tied up agents. Poor awareness for new products in consumers Poor Distribution network.
Very Huge Premium of policies compared to major rival LIC.
Opportunities
HDFC should tie up with business organization and private maternity hospital to expand business. Innovative products, smart marketing, and aggressive distribution have enabled insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative product. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. Insurable population –According to IRDA only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m People, with the potential to buy insurance, remain uninsured Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers, such as fire, export credit.
Threats
Changing government regulation. Huge competition in the market put pressure on the profit mar Provision for entry of foreign player Price War With Competitors Taxation On The Product And Service Competitors Have Superior Access To Channels Of Distribution Other private insurance companies also vying for the same uninsured population.
LEARNING EXPERIENCE
My project at HDFC STANDARD Life Insurance Company has been an extremely enriching one. My project was divided into two main parts. Part A is about “Corporate Exposure” and Part B is about “Study of Issue”. My experience At HDFC was a really great learning experience with a lot of new things learnt and as I also wish to specialize in FINANCE this experience is really a big bonus for me. The Learning I gained during my project are mentioned below: I gained a broader perspective about various investment opportunities and the risk involved in them. I came to know about the various technicalities about the Indian insurance industry. Through this research I enriched my knowledge on various competitive strategies adopted by different companies to survive in a highly competitive market. Learnt in a more detailed way about the nature of work existing in the insurance industry, the kind of deadlines they have to meet, the kind of pressure and levels of stress, which they work under, and the kind of recognitions given to them after they meet or exceed their targets.
