Hdfc Study of Slic

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TRAINING REPORT IN

STUDY OF STANDARD LIFE INSURANCE AT HDFC

SUBMITTED IN PARTIAL FULLFILLMENT OF THE REQUIREMENT OF BACHELAR OF BUSINESS ADMINISTRATION (BBA) YMCA, NEW DELHI

TRAINING SUPERVISOR MR. SUBHAS VERMA (BRANCH MANAGER)

SUBMITTED BY NIKHIL BARUA

SESSION 2008-2011 YMCA

NEW DELHI

Date: 10th July, 2011

To Whom So Ever it May Concern

This is to certify that Mr. NIKHIL BARUA student of YMCA, New Delhi, has successfully completed his training under my supervision. His performance during the training was excellent. Duration of training was 5 weeks which started from 06th Dec 2010- 07th Jan, 2010. He is blessed with a cheerful disposition and excellent interaction and work skills. We would like to appreciate his sincerity and hard work. We wish him best of luck for his future. Yours sincerely,
For HDFC STANDARD LIFE INSURNACE

SUBHAS VERMA Branch Manager

Corporate Office:

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ACKNOWLEDGEMENT
The present work is an effort to throw some light on “STUDY OF HDFC SLIC”. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledged the encouragement and guidance received by my organizational guide Mr. Subhas Verma (Branch Manager of HDFC) and other faculty members. I convey my heartful affection to all those people who helped and supported me during the course, for completion of my Project Report.

NIKHIL BARUA

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EXECUTIVE SUMMARY
During this project I fully realized this and come to know about the present real world of insurance. Since it include all the activities involved in selling insurance products directly to financial customers. I am pleased to know about the customers’ wants and various activities in the real world of insurance product. The Subject of my study is A STUDY OF HDFC SLIC. I have done this by applying various tools like Tele calling, and through direct interaction with customers. The report contains first of all brief introduction about HDFC SLC. Then it throws some light on the insurance policies and plans provided by HDFC SLIC.

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CHAPTER 1 INTRODUCTION

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1.1 INTRODUCTION TO INSURANCE

ORIGIN OF LIFE INSURANCE
Life Assurance was born in England when the first policy providing temporary cover for a period of 12 months was issued as easy as 1583 A.D. The Amicable Society started granting fluctuating sum on death since 1705 and a fix sum since 1757, with the development of mortality tables, the life Assurance acquired a scientific character. The Equitable Society founded in 1762 was the first Society established on scientific basis.

ORIGIN OF LIFE INSURANCE IN INDIA In India, after failure of to British companies, the European and the Albert in 1870, which attempted writing business on Indian lives, first Indian Life Assurance Society was formed in the same year called Bombay Mutual Assurance Society Limited. The Oriental Life Assurance Company Limited in 1874, Bharat in 1896 and Empire of India in 1897 followed it. The idea of insurance was born out of a desire of the people to share loss of an individual by many. Originally it restricted to forms other than life assurance. It started with Marine Insurance, where the losses on account of perils of sea forms of insurance, is found in the codes of Hammurabi, Manu (Manav Dharma Shastra). The word ‘Yogakshema’ is used in the Rig Veda suggesting that some form of community insurance was practiced by the Aryans in India over 3000 years ago. In India during Buddhist period burial societies existed which were mutual in their character and used to help a family by building a house, protecting the widow, marrying the girls. The Swadeshi Movement of 1905 provided impetus to the formation of several companies such as the “Hindustan Cooperative’, the ‘United India’, the ‘Bombay 6

Life’, the ‘National’. Further in the wake of freedom movement number of companies such as the ‘New India’, the Jupiter the ‘Lakshmi’ emerged. The government began to exercise a certain measure of control on Insurance business by passing the ‘Insurance Act’ in 1912. For controlling investment of funds, expenditure and management, a comprehensive Act was passed know as the insurance Act 1938’. For controlling the affairs, the office of Controller of Insurance was established. The act was extensively amended in 1950. In the year 1955, approximately 170 Insurance offices and 80 Provident Fond Societies had been registered for transacting Life Assurance business in India. The concept of trusteeship was lacking. Many insurance companies went into liquidation. There were malpractices in insurance business. For achieving the following purposes it was felt necessary to nationalize the insurance business in India. ⇒ To provide security to the policy holders ⇒ To utilize the funds for nation-building activities. ⇒ To avoid cut throat competition ⇒ To abolish mal-practices ⇒ To spread the insurance message to the rural areas. The first in this direction was taken by the Government of India by issuing the life Insurance (the Emergency provisions) Ordinance, 1956 on 19th January, 1956. The then Finance Minister, Shri C.D. Deshmukh mentioned the purpose of nationalization as reaching the goal of socialistic pattern of society, rendering genuine service to the people in the rural areas.

Insurance activity in India is going on for more than 150 years. In India, life insurance in its modern form was brought for the first time by the Britishers. The Oriental Life 7

Insurance Company started in 1818 in Calcutta was the first to be founded in India by Europeans to help the widows of their community. The general insurance business in India, on the other hand, can trace its roots to him Triton Insurance Company Ltd, the first general insurance company established in the year 1850 in Kolkata by the British. The year 1870, saw the birth of first Indian Insurance Company namely, Bombay Mutual Life Assurance Society. The basic aim of this company was to insure Indian lives at normal rates since in the earlier period. Indian lives were treated as subnormal and loaded with an extra premium of fifteen to twenty per cent. However, right up to the end of 19th century, the foreign insurance companies in India had an upper hand in matters of Insurance business. Insuring Indian lives with 10 percent of extra premium was a common practice prevalent in those times. The Indian Life Assurance Companies were the first to regulate the life insurance business in 1912. In 1928, the Indian Insurance companies act enabled the government to collect statistical information about both life and non life insurance business. Later, the insurance Act of 1938 was passed and department of insurance under authority of superintendent of insurance was established for the administration of the Act. Up to 1939, 199 companies were working in India. However, the period 1939-55 was marked by: • • • World War II resulting in hasty premium adjustments by Indian companies. Series of amendments to the insurance Act, 1938. Appointment of a committee under the Chairmanship of Sir Cowasji Jehanger to enquire into and to recommend measures to check certain trends and undesirable features in the management of insurance companies. • The findings of the sub committee on insurance under the National Planning Commission headed by Pt. Jawaharlal Nehru. • • • Partition of India. De-valuation of rupee on September 18, 1949. The insurance Amendment Act. 8



Interest yield sagging to the lowest lend of three percent and remaining at that level over 1947-1949.

• •

The rate war and cut throat competition between insurance companies. The recommendation of the ruling political party, the Indian National Congress, to the government that the life sector insurance be nationalized, and



The founding of the Jiwanlal Chimanlal Setawad Memorial--The Federation of Insurance Institutes.

Source: Chartered Financial Analyst, (October 2004).

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NEED FOR LIFE INSURANCE

Risks and uncertainties are part of life's great adventure -- accident, illness, theft, natural disaster - they're all built into the workings of the Universe, waiting to happen. Insurance then is man's answer to the vagaries of life. If you cannot beat man-made and natural calamities, well, at least be prepared for them and their aftermath. Insurance is a contract between two parties - the insurer (the insurance company) and the insured (the person or entity seeking the cover) - wherein the insurer agrees to pay the insured for financial losses arising out of any unforeseen events in return for a regular payment of "premium". These unforeseen events are defined as "risk" and that is why insurance is called a risk cover. Hence, insurance is essentially the means to financially compensate for losses that life throws at people - corporate and otherwise. The principle of insurance works on the concept of a large number of people exposed to a similar risk making a contribution to a common fund. Those who suffer losses due to the occurrence of these events are compensated for them from this fund.

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ROLE OF LIFE INSURANCE

LIFE INSURANCE AS AN INVESTMENT: Insurance is an attractive option for investment. While most people Recognize the risk hedging and taxes saving potential of insurance, many are not aware of its advantages as an investment option as well. Insurance products yield more compared to regular investment options, and this is besides the added incentives offered by insurers.

You cannot compare an insurance product with other investment schemes for the simple reason that it offers financial protection from risks, something that is missing in non-insurance products. In fact, the premium you pay for an insurance policy is an investment against risk. Thus, before comparing with other schemes, you must accept that a part of the total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings.

In life insurance, unlike non-life products, you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive the term, the amount invested as premium in the policy will come back to you with added returns. In the unfortunate event of death within the tenure of the policy, the family of the deceased will receive the sum assured.

Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF, your money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to your funds will be limited. One can withdraw 50 per cent of the initial deposit only after 4 years.

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The same amount of Rs 10,000 can give you an insurance cover of up to approximately Rs 5-12 lakh (depending upon the plan, age and medical condition of the life insured, etc) and this amount can become immediately available to the nominee of the policyholder on death. Thus insurance is a unique investment avenue that delivers sound returns in addition to protection.

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INSURANCE SECTOR REFORMS
The government in a bid to complement the reforms initiated in the financial sector established a committee headed by former finance secretary and Reserve Bank of India (RBI) governor, Mr R.N. Malhotra to evaluate the insurance industry and to recommend its future direction. This committee suggested the following changes: • • Government stake in insurance companies be brought down to 50 percent. The take over of the holding of GIC and its subsidiaries in order to facilitate their functioning as independent corporations. • Allowing private enterprise in the sector with companies with a paid up capital of a minimum of Rs 100 crore. • • • • • No single entity to function in both Life and General insurance segments. Foreign companies to be allowed only in combination with an Indian partner. Changed to be made to the insurance Act. An independent insurance regulatory authority to be set up. Reduction in the mandatory investments of LIC Life Fund in government securities to be brought down from 75 percent to 50 percent. • • • • • • GIC and its subsidiaries are not to hold more than 5 percent in any company. Popularization of pension schemes in rural areas. Allowing PLI (Postal life insurance) in rural areas. Rapid computerization of branches. Payment of interest on delayed claims. Use of revised mortality tables by LIC and revision of premiums after every 10 years. • Issue of long term unit linked insurance plans. 13

• •

Transfer of LALGI and IRDP schemes to concerned government authorities. The insurance sector began its reform process with the passage of the IRDA (the Insurance Regulatory and development authority) bill in Parliament in December 1999. However with the setting up of IRDA, the government has once again deregulated the sector opening it for the private players. The entry of private players has enabled the industry to look at alternative distribution channels. To get the maximum pie of the premium, every insurance company is adopting new distribution and marketing strategies. In the last two years alone, the economy has witnessed some fundamental changes in the Indian insurance industry. The total foreign direct investment in India in the insurance sector today stands at Rs 95,250 crore. The total premium income of the Indian insurance industry both life and non life for the year ending March 31, 2007 stands at Rs 91,376,11 crore, out of this, the share of life insurance premium is 78 percent, i.e. Rs 7155416 crore and general insurance premium is 22 percent, i.e. Rs 15,638 crore. The share of private sector in life insurance cake has increased from 0.02 to 1.99 percent in the last two years. While the share of private sector in general insurance cake has increased from 0.07 to 9.50 percent. The transition of the insurance industry from a public monopoly to a competitive environment new presents very interesting challenges both to the new players and to the customer. Not only the new players have an opportunity to test out their various hypotheses and apply learning’s from overseas markets, the customer will have a greater choice when it comes to choosing a provider or a solution for their needs.

Source: Roy, Dilip, ‘Some Aspects of Insurance in the Context of Risk Management Vision’. The Journal of Business Perspective, (January-June, 2007).

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PRESENT STATUS OF INSURANCE INDUSTRY

Insurance is a Rs.400 billion business in India, and together with banking services adds about 7% to India’s GDP. Gross premium collection is about 2% of GDP and has been growing by 15-20% per annum. India also has the highest number of life insurance policies in force in the world, and total investible funds with the LIC are almost 8% of GDP. Yet more than three-fourths of India’s insurable population has no life insurance or pension cover. Health insurance of any kind is negligible and other forms of non-life insurance are much below international standards. Some few years ago the entry of private players was banned in India but its only after first stage of economic reforms the situation has become better with the entry of private sector .As of now the govt insurance companies like Life Insurance corporation of India, GIC etc. It holds the majority of market share whereas the private players are slowly catching up the race. As of now the private players have concentrated on urban markets more and less on the rural markets and their lies a huge untapped potential at rural markets. Even in urban markets the penetration levels in India in terms of life insurance is very less and thus there is a huge market potential for the companies to grow. The problem is how the companies can untapped the unawake Ned demand among the target market. Also the awareness levels among the consumers about insurance product is very low and the advertisement campaigns launched by the private players like ICICI, KOTAK MAHINDRA has increased the level of awareness among the consumers and have arisen the need for insurance. The consumer now thinks that insurance is important these days as the life has become much more unstable and thus there is less level of surety.

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PRIVATE PLAYERS IN THE MARKET
The new insurance companies used all channels of advertising from newspapers and the television to insurance agents and direct mailers. The new companies focused their campaigns primarily on building an image of trustworthiness and reliability for themselves. Their advertisement focused on insurance as an investment option and not a mere tax saving tool. Most of these advertisements carried messages like the family’s happiness. It has been more than 5 years since private insurance companies’ lunched operations in India, which is depicted in the Table given below.

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Company Birla Sunlife Om Kotak

Indian partner Aditya Birla Group Kotak Mahindra

Foreign insurer Sunlife, Canada Old Mutual, South Africa Standard Life UK Roya Sun, UK Prudential, UK New York Life USA AIG USA ING Insurance, Netherlands CGU life, UK Metlife, USA Allianz AMP, Australia Cardiff, France

Area Life Life Life Life & Non life Life Life Life & non Life Life Life Life Life & non Life Life Life

Finance HDFC-Standard Life HDFC Royal Sundaram Sundaram Finance ICICI-Prudential ICICI Max New York Life Max India Tata-AIG Tata group ING Vysya Vysya Bank Aviva Metlife India Bajaj Allianz AMP Sanmar SBI Life Insurance Dabur Jammu & Kashmir Bank Bajaj Auto Sanmar Group SBI

TABLE 1: PRIVATE PLAYERS IN THE INDIAN INSURANCE MARKET SOURCE: www.knowledgedigest.com.

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In the first quarter of the year 2006, insurance companies spent 70 percent of what was spent in the year 2005, on advertising ad publicity. Across the world, insurance as a category was one of the largest spenders on advertising. In India too substantial expenditure was being incurred due to advertising depicted in the Table given below: Company LIC Allianz Bajaj Om Kotak Mahindra ICICI Prudential Expenditure 1000 200 150 146

TABLE 2: Advertisement Expenditure by Insurance Companies (Rs. Million) Source: ICMR. • LIC’s business increased mainly because of the increased public awareness about insurance. During the first year of the entry of new players, while LIC reported a growth of over 250 percent, private insurers managed to garner only about 0.5 percent market share in spite of spending hefty amounts on advertising and promotion. According to a sample survey conducted by ORG-marg on the popular life insurance brands in 2007, awareness of LIC policies was a phenomenal 100 per cent while the private insurers lagged behind. But now private players firmly etched in the minds of tap insurance market.

Life insurance

No. of policies sold as Value of business on June 30, 2007 18 (Rs Crore)

ICICI Prudential Max New York Life Tata AIG HDFC standard Birla Sunlife SBI Cardit Non-Life Insurance : Tata AIG Royal Sundaram Reliance Genins IFFCO-Tokio Bajaj Allianz

12,757 6996 1688 1629 1048 169 6178 1227 372 174 10

14.60 2.75 1021 2.09 7.60 1.63 18.69 7.55 8.51 16.30 1.26

TABLE 3: SLICING THE INSURANCE PIE SOURCE: IRDA.

Company

Premium U/w (in Rs Lakh)

% of premium

No. of policies/ schemes

% of No. of policies

No. of lives covered under group scheme

% of lives covered under group scheme

1. Bajaj Allianz Individual single premium Individual non single premium Group single premium Group non single premium

10,675.20 3559.45 7,020.22

1.93

53.427 4247 49,155

0.89

49,066

2.73

95.52 19

25

49,066

2. ING VYSYA Individual single premium Individual non single premium Group single premium Group non single premium

1921.48 32.44 1778.20 95.26 15.57

0.35

26,803 4771 22,026 1 5

0.45

5898

0.33

255 5643

(TABLE CONTD.)

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TABLE: CONTD. Company Premium U/w (in Rs Lakh) % of premium No. of policies/ schemes % of No. of policies No. of lives covered under group scheme % of lives covered under group scheme

3. AMP Sanmar Individual single premium Individual non single premium Group single premium Group non single premium 4. SBI Life Individual single premium Individual non single premium Group single premium Group non single premium 5. TATA AIG Individual single premium Individual non single premium Group single premium Group non single premium

1302.03 529.92 673.57 20.85 77.69 8460.42 1986.43 1573.69 3257.56 1642.74 7551.74 5704.18 198.62 1648.94

0.24

9616 1153 8438 1 24

0.16

17,956

1.00

190 17,766 0.44 17,0035 9.47

1.53

26,515 1144 24759 2 610

40,165 1,29,870 1.08 11,730 29,094 84,636 6.33

1.37

64,420 64,344 76

TABLE 4: Top five Life Insurance Companies (in terms of premium, till July 2007) SOURCE: IRDA Journal, September 2006.

1.2 INTRODUCTION TO THE COMPANY
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HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC Ltd., India's largest housing finance institution and Standard Life Assurance Company, Europe's largest mutual life company. It was the first life insurance company to be granted a certificate of registration by the IRDA on the 23rd of October 2007. Standard Life, UK was founded in 1825 and has experience of over 180 years. Companies. The company is rated as "very strong" by Standard & Poor's (AA) and "excellent" by Moody's (Aa2). HDFC Standard Life's cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 Crores for the financial year, Apr-Nov 2006. So far the company has covered over 11, 00,000 individuals and has declared 5th consecutive bonus in as many years for its 'with profit' policyholders. The most successful and admired life insurance company, which mean 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. “The most obvious choice for all”. 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 The Standard Life Assurance Company, a leading provider of financial services from 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. We attribute the success of our company to our people, who are our most important asset. We believe they are a key fact of the company and it is their contribution that has enabled us to achieve our current status. Since they deserve the best, our efforts have been to provide them with the best environment, culture and development opportunities possible. 22

HDFC WORK CULTURE
HDFC Standard Life Insurance is known for its stimulating environment with high levels of motivation, empowerment and recognition. We encourage an open and informal culture that values integrity, commitment, teamwork and excellence in customer service. We adopt a policy of strong learning and development initiatives, which promotes day-to-day learning as well as decision-making. We believe our strength is our people, so we endeavor to surpass their expectations and give them the best possible work environment and benefits that match the best in the industry.

HDFC CORE VALUES
• • • • • •

Integrity Innovation Customer centric People Care Teamwork “One for all and all for one” Joy and Simplicity

MISSION
• • • • • Customer service of highest order Value for money for customers Professionalism in carrying out business Innovative products to cater different needs of different customers Use of technology to improve service standards

1.3 INTRODUCTION TO IRDA
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THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2007 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered. The study of insurance companies of that time clearly reveal that concept of trustship which should be cornerstone of life business seemed entirely lacking and most of the managements had no appreciation of the clear and vital distinction that exists between trust monies and those that belong to joint stock companies owned by shareholders. So the nationalization of life insurance business became necessary with a view to -• • • • • provide cent percent security to policy holder, ensure the use of life insurance funds for nation building activities, avoid wasteful efforts in competition, save the dividends paid to shareholder of insurance companies, avoid certain undesirable practices adopted by some of the insurance companies management, and 24



Spread the gospel of life insurance into the neglected rural areas.

245 Indian and foreign insurance and provident societies taken over by the central Government and nationalized. In 1956, the Government of India nationalized the life insurance business. Since then the entire life insurance business is being transacted by the Life insurance Corporation of India for more than four decades, the LIC has been enjoying monopoly status enjoying supernormal profits at the expense of consumers in life business in the country. The LIC by this time has grown manifold. At present it has a network of 7 zones, 100 divisions and over 2007 branches. The annual premium income was US $21 million in 1956. Current business investment in LIC is over US $29 billion. Life insurance funds constitute approximately 11 percent of gross household saving in financial assets in India, and a little over 1 percent of gross domestic product. Life insurance Corporation of India, despite its best efforts, has not penetrated more than 15 percent of the insurance population, which itself is more than 300 million. Insurance penetration as a measure of percentage of GDP is very low for India and countries like South Korea are much higher than India. With approximately $7 billion of premium collected annually, India is the 23rd largest market in the world. The General insurance business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from January 1, 1973. 107 insures amalgamated and grouped into four companies, viz the national insurance company Ltd., the New India Assurance Company Ltd., the Oriental Fire and general insurance company Ltd., and the United India insurance company Le., General insurance company (GIC) was incorporated as a company. The four constituents of the GIC were to operate on a competitive basis and be governed by the guidelines structured by the Government of India. Recognizing the need for reforms in the financial and insurance sector, the government appointed the Malhotra Committee to seek and identify the measures required for the reform process in the insurance sector. Source: Reddy, K. Rama Krishna, and Reddy, Raghunatha, ‘Life Insurance Corporation of India, Need for New Lessons’, PIMR, 4, October, 2006.

1.4 SWOT ANALYSIS OF HDFC

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Business firms undertake SWOT analysis to understand the external and internal environment. SWOT, which is the acronym for Strength, Weakness, Opportunities and Threats, is also known as WOT-UP Analysis. Through such an analysis strength and weakness existing within an organization can be matched with the opportunities and threats operating the environment so that an effective strategy can be formulated. An effective organization strategy, therefore, is one that is capitalized on the opportunities and through the use of strengths and neutralizes the threats maximizing the impact of weakness.

STRENGTH:
⇒ Has sold 3 lakh policies. ⇒ Brand power. ⇒ Strong assets and infrastructure. ⇒ Market share of 22.5%.

WEAKNESS:
⇒ Industry in nascent stage. ⇒ Awareness about private life insurance companies is very less. ⇒ Still not very popular in rural market. ⇒ Very few branches in the country. ⇒ Lack of operational activities.

OPPORTUNITY:
⇒ Liberalization of Indian economy. ⇒ Life Insurance sector opening up. ⇒ Very small percentage of population insured in India One of best products in the market. ⇒ Global market opportunity.

THREAT:
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⇒ Lack of proper technical knowledge among the mass. ⇒ Apprehension towards HDFC Prudential being a private life insurance company. ⇒ LIC: very big player. ⇒ Change in government policy may affect the growth and expansion of the Insurance sector and the company

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CHAPTER 2 RESEARCH METHODOLOGY

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2.1 OBJECTIVE OF THE STUDY
The objective of the study is to study the insurance policies and activities in HDFC SLC with special emphasis on products of the company. In this era of cutthroat competition, any organization needs to select and retain the best talent. People selected should have positive attitude, ability to inspire others and must be dynamic. This project involved the study of:  Working of Insurance Plans  SWOT analysis of the product sold  Comparative study with the competitors

2.2 STRUCTURE OF QUESTIONNAIRE
The questionnaire is a structured technique for data collection consisting of a series of question, written or verbal, to which a respondent replies, is interpreted as questionnaire.

2.3 MODE OF DATA COLLECTION
The data has been collected through filling up of the questionnaire from different company’s managers and financial consultants and interviewing them about their various options of investments. Primary data collected from these managers and financial consultants only. This is first hand data. This is gauged by personally conducting interviews, observation and by means of questionnaire. Secondary data was collected from  Internet,  Company documents, 29

 Newspaper and  Magazines.

CHAPTER 3 COMPANY PROFLE

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3.1 THE HDFC GROUP

HDFC commenced operations as a mortgage bank; it raised large wholesale resources (domestic and international) and lent primarily to individual households. In mid 1991, HDFC entered the retail deposit market by offering savings and investment opportunities to households. Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs worth of the corporation is Rs. 28,000 crores. s 120 crores. The net

SUBSIDIARY COMPANIES
HDFC Standard Life Insurance:HDFC Standard Life Insurance Company is a joint venture between India’s largest housing finance provider, HDFC, and the Europe’s largest mutual life assurance Company, the Standard Life Assurance Company (U.K).
HDFC Developers Limited

HDFC promoted a wholly owned subsidiary company; HDFC Developers Limited, to undertake housing projects on a selected basis in various regions of the country. HDFC Developers Limited has also undertaken a number of projects for the office premises of the corporation. It is also being engages as a consultant to a number of residential and commercial projects.
HDFC Investments Limited

HDFC promoted a wholly owned subsidiary company; HDFC Investments Limited (HIL), to undertake investments in stocks, shares, debentures, and other securities. The Reserve Bank of India under the category of investment Company has registered

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HIL as a Non- Banking Insurance Company (NBFC). HIL was set-up with an intention of being the investment arm of HDFC. • • • • • HDFC Realty Limited HDFC Holding Limited HDFC Asset Management Company Limited HDFC Trustee Company Limited HDFC Finance Limited

ASSOCIATE COMPANIES

HDFC has broadened its service range by entering into strategic associations with some of the best organizations, both Indian and international, which include: HDFC Bank Limited: Initially promoted in strategic alliance with NatWest Group, U.K. With NatWest diversting it’s holding. HDFC Bank has signed a MoU for strategic business collaboration with The Chase Manhattan Bank. Chase HDFC Bank. The Housing Development Finance Corporation and HDFC BANK have promoted HDFC SECURITIES LIMITED. HDFC Securities has already acquired BSE and NSE membership. Infrastructure Leasing and Financial Services Limited: Co – promoted jointly with the Unit Trust of India and Central Bank of India. Maruti Countrywide Auto Financial Services Limited: IN alliance with Maruti Udyog Limited and GE Capital India Limited. Colliers Jardine India Property Services Limited: Co – promoted jointly with infrastructure Leasing and Financial Services Limited and Colliers Jardine Asia Pacific Limited. GRUH Finance Limited: Established with support from the international Finance Corporation, the Aga khan Fund for Economic Development and Government of Gujarat. 32 Capital Partners through their various investment funds in India have acquired 15% stake in

SBI Home Finance Limited: Co – promoted jointly with SBI Capital Markets Limited: Can Fin Homes Limited: Co – promoted jointly with Canara Bank and Asian development Bank. GIC Housing Finance Limited: Co – promoted jointly with the General Insurance Corporation.

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3.2 HDFC STANDARD LIFE INSURANCE HOUSING
DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)

Founded in 1977, HDFC is today the market leader in housing finance in India and has extended financial assistance to more than 15 lakh homes. HDFC has more than 110 offices in India presently. It also one international office in Dubai and 3 Service Associates in Kuwait, Qatar, and the Sultanate of Oman. HDFC’s asset base amounts to over Rs 28,000 cores. Its financial strength is reflected in highest safety ratings of ‘FAAA’ and ‘MAAAA’ awa4rrded by CRISIL and ICRA – two of India’s leading credit rating agencies- respectively, for the last 6 years consequently. It has a depositor base of over 1 lakh customers and a deposit agent’s force of over 46,000. Of the total deposits, 73% are sourced from individual and trust depositors. Which demonstrates the tremendous confidence that retail investors have in the company. Being an institution that is strongly committed to the highest standards of quality and excellence, HDFC has won several accolades in the past few years such as “Ramakrishana Bajaj National Quality Award” for the year 1999. This award was instituted to award recognition to Indian companies for business excellence and quality achievement. HDFC is the only company so far to receive this award.

STANDARD LIFE ASSURANCE COMPANY
Founded in 1825, Standard life has been at the forefront of the UK insurance industry for 176 years by combining sound financial judgement with integrity and reliability. The largest Mutual life Company in Europe, it has operations in the United Kingdom, Ireland, Spain, Germany, Austria and Canada with representative offices in Hong Kong and China. One of its most recent successes was the launch of Standard Life Bank on 1st January, 1998. The introduction of its innovative mortgage product in January 1999 has an immediate impact on the UK market, accounting for 1% of all new lending within the first operational year. The current loans understanding amount to Rs. 43,000 crore. 34

Standard Life has total assets of Rs. 5,95,000 crore and new premium income last year of Rs. 30,000 crore. Its UK investment portfolio accounts for approx. 2% of all shares listed in the London Stock Exchange. It is one of the few insurance companies in the world to receive AAA rating from two of the leading international credit rating agencies. Moody’s and Standard & Poor’s. The later described Standard Life’s ability to meet its claims obligations as ‘overwhelming under a variety of economic conditions. Standard life is rated as one of the strongest companies of the world, in financial terms. The company’s reputation in the UK market remains unrivalled. Besides, being voted ‘ company of the Year for overall service, for the third consecutive year, Standard Life was recently voted ‘Company of the Decade’ by independent brokers.
Incorporation of HDFC Standard life Insurance Company Limited

The company was incorporated on 14th August 2000 under the name of the HDFC Standard Life Insurance Company Limited. On the 23rd of October 2000, HDFC Standard Life was the only Life Company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life’s existing investment in the HDFC Group, this is the maximum investment allowed under current regulations
The Retails Sales Hierarchy of HDFC Standard Life Insurance

General Manage

Head Retail Sales

Regional Branch Manager

Business Development Mangers

Certified Financial Consultants 35

3.3 PAST PERFORMANCE & FUTURE PROSPECTS

Analysis of performance of HDFC Standard life in financial year 20062007
The company has achieved a total sum of Rs 1,266 crore on its individual insurance, individual pensions and group insurance business nationally and has covered 44.311 lives. The total sum assured in the first quarter of the current financial year is Rs 800 cr. HDFC Standard life is also the first new life insurance company to declare a bonus on its with profits policies. The company has declared a lower interim bonus of 7 % on single premium policies and 3.75% on regular premium policies. HDFC Standard life has declared a non-recurring founder’s bonus. The company has earned Rs 789 crore from its individual life insurance and pension business, of which 20% has come from the HDFC personal pension plan, which was introduced in February 2006. Of the individual policies, endowments from 52%, while single premium policies brought in business worth Rs 10crores

PARTICULARS Total premium Insurance coverage New business premium Growth rate Number of offices in India Number of FC Group business insurance coverage Lives insured in groups business 36

FY 2004-05 Rs 298 crores Rs 5000crores Rs 132 crores 260% 44 10500(approx) 2000 crores 22,000 lives

FY 2006-07 Rs 687 crores Rs30000 crores Rs 486 crores 132% 104 23000 10,000 crores 200,000 lives

STRATEGY ADOPTED IN FY 2006-2007
• • • • Structured sales processes Better understanding of customer needs and their assessment. Training was one of the biggest initiatives they undertook last year. Offered a wide range of employee benefit solutions to its corporate clients.

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3.4 PRODUCTS OFFERED
HDFC Standard Life Insurance offers you a range of innovative life insurance plans. Through an appropriate combination of the basic plan and optional benefits, we can create the right insurance solution for you.

DIFFERENT PLANS AND THEIR BENEFITS
Benefits Endowment Assurance Money Back Life Insurance + Savings + upto 4 optional benefits Life Insurance + Savings + upto 4 optional benefits

Single Premium Whole Of Life Investment + Life Insurance Term assurance optional Life Insurance at an affordable price + upto 2 Benefits Loan Cover Term Assurance optional Life Insurance for loan cover protection + 1 benefit Personal Pension Plan Savings + Retirement Planning

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HDFC Standard Life Insurance is presently operational in  Ban galore,  Bhopal,  Chandigarh,  Chennai,  Delhi,  Hyderabad,  Indore,  Jaipur,  Kolkata,  Kanpur,  Lucknow,  Ludhiana,  Mumbai,  Pune ,  Rajkot,  Surat,  Thane and  Vadodara ,  Panjim ,  Nasik and many more places.

3.5 INDIVIDUAL PRODUCTS
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HDFC Standard Life offers a range of products and invites you to choose the one that suits you best.

WITH PROFITS MONEY BACK:
This policy provides a combination of savings, regular cash payments and life insurance. Over the course of the contract, a proportion of the sum assured will be paid at regular intervals. The sum assured plus any bonuses will be payable on death before the end of the contract. On survival to maturity, you will get the sum assured plus any bonuses less the regular payments already made. Your commitment is to pay a level premium regularly throughout the life of the policy. The Money Back can also be customized to meet your needs by adding any combination of up to 4 rider benefits.

SINGLE PREMIUM WHOLE OF LIFE

TERM ASSURANCE PLAN:
Under the Term Assurance plan, a sum assured is payable in case of death of the life assured during the term of the contract. One can choose the lump sum that would replace the income lost to one's family in the unfortunate event of one's death. The Term Assurance Plan comes to you at a minimal cost and is well suited for the valueconscious customer. The Term Assurance Plan can also be customized to suit your needs by adding optional rider benefits.

LOAN COVER TERM ASSURANCE:
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The Loan Cover Term Assurance plan provides a lump sum on death of the life assured during the term of the plan. The lump sum will be a decreasing percentage of the initial sum assured. It is an affordable plan that has been designed to help your family repay the outstanding loan in case of your unfortunate death.

PERSONAL PENSION PLAN
The Personal Pension Plan is basically a savings contract, which is designed to provide an income for life from retirement, with an option to take the lump sum elsewhere to buy the annuity, provided it is permitted by the prevailing regulations. Your commitment is to pay a single premium or level premiums with installments due every quarter, half-year or year throughout the deferment period of the policy, after which you will start receiving your pension.

CHILDREN'S PLAN
The future of your child is most important to you. You need to plan today to ensure a bright future for your child, whether it is education, marriage or establishing a professional career. To help you save for your child, we at HDFC Standard Life, present the Children's Plan. The plan is affordable, customized to your needs, and above all, enables you to realize your dreams for your child. This plan is well suited for the value-conscious customer, and above all, for every loving parent. This plan can also be chosen by grandparents, other relatives or any adult for the benefit of a child.

ENDOWMENT ASSURANCE (EA) PLAN
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What is an Endowment Assurance Plan? It is a participating (with profits) insurance plan that offers the following features:


Provides financial support to the family by way of a lump sum payment in case of the unfortunate death of the life assured within the term of the policy. Provides a lump sum payment to the life assured on survival up to maturity. The lump sum mentioned is the basic sum assured plus any bonus additions.



Why should you buy this product? This plan is with profits saving plan and is well suited for saving money for your long term financial goals. This plan also helps provide for the needs of your family in your absence by paying out a lump sum in the event of your unfortunate death during the term of the policy. What optional benefits are available With this plan? You can add the following optional benefits to customize your policy to suit your needs: Critical Illness (CI) Benefit provides an additional amount equal to the basic sum assured on diagnosis of any one of the 6 common critical illnesses *. The sum assured is payable if you survive for 30 days after the date of the claim. Once such a claim has been met, no further Critical Illness Benefit is payable. However, your basic policy continues even after we pay a claim on this benefit. Double Sum Assured (DSA) Benefit provides an additional amount equivalent to the basic sum assured in case of your unfortunate death. Accidental Death Benefit (ADB) provides an additional amount equal to the basic sum assured in case you die:

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- Due to an accident, and - Within 90 days of the accident. Waiver Of Premium (WOP) Benefit waives the premium for you in case you become totally disabled. The waiver is applicable during the period of total disability. * (a)Cancer, (b)Coronary artery bypass graft surgery, (c) Heart attack, (d) Kidney / Renal failure, (e)Major organ transplant (as recipient) and (f)Stroke. Endowment Assurance Plan offers you Tax Benefits? Tax benefits described in Section 88, Section 80D** and Section 10 (10D) of the Income Tax Act are applicable. Applicable to premiums paid for CI and WOP. **Applicable to premiums paid for CI and WOP.

ELIGIBILITY
This plan can be taken on a single life basis or a joint life (first claim) basis. The eligibility ages are as follows: Basic Policy Basic Policy with optional benefits CI DSA Min. age at entry Max. age at entry Max. age at expiry ADB 12 60 75 WOP 18 18 55 60 70 75

18 55 65

18 50 60

Min. term: 10 years; Max. Term: 30 years

JOINT LIFE INSURANCE POLICY, INDIA
Joint life insurance policies are similar to endowment policies as they too offer maturity benefits to the policyholders, apart form covering risks like all life insurance policies. 43

But joint life policies are categorized separately as they cover two lives simultaneously, thus offering a unique advantage in some cases, notably, for a married couple or for partners in a business firm Under a joint life policy the sum assured is payable on the first death and again on the death of the survivor during the term of the policy. Vested bonuses would also be paid besides the sum assured after the death of the survivor. If one or both the lives survive to the maturity date, the sum assured as well as the vested bonuses are payable on the maturity date. The premiums payable cease on the first death or on the expiry of the selected term, whichever is earlier.

GROUP INSURANCE, INDIA
Group insurance offers life insurance protection under group policies to various groups such as employers-employees, professionals, co-operatives, weaker sections of society, etc. It also provides insurance coverage for people in certain approved occupations at the lowest possible premium cost. Such plans are particularly beneficial to those for whom other regular policies are a costlier proposition. Group insurance plans extend cover to large segments of the population including those who cannot afford individual insurance. A number of group insurance schemes have been designed for various groups. These include employer-employee groups, associations of professionals (such as doctors, lawyers, chartered accountants etc.), and members of cooperative banks, welfare funds, credit societies and weaker sections of society.

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UNIT LINKED INSURANCE PLANS (ULIP)
Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. ULIP provides multiple benefits to the consumer. The benefits include:
• • • • • • • • • •

Life protection Investment and Savings Flexibility Adjustable Life Cover Investment Options Transparency Options to take additional cover against Death due to accident Disability Critical Illness

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MONEY BACK PLAN
To sum a wise man had said that the time to mend the roof is when the sun is shining. This is applicable to life insurance too. Today as the breadwinner you are able to maintain a decent standard of living for yourself and your family. If you want enough bread for the family even after the death of the breadwinner, you should look at the Single Premium Bond. In other cases, life insurance is an absolute necessity. Have a look at other products. Money Back Plan Total Policy Term 10 15 20 25 30 Age Years 5 40% 30% 25% 20% 15% Basic Policy Premium (Rs.) CI 20 30 40 50 4771 4835 5098 5813 304 442 925 1890 DSA 322 388 641 1357 ADB 136 144 156 WOP 236 300 475 30% 25% 20% 15% 25% 20% 15% 20% 15% 15% Number of years from policy date 10 15 20 25

Endowment Assurance Plan Additional Premium For Optional benefits (Rs.)

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BENEFIT AREA CUSTOMER
SEGMENT Individuals Protection term Assurance Investment Single Savings premium Pensions bonds

Endowment / Money Back Pensions plans, annuities Corporate Group term InsuranceGratuity Superannuation

MARKET SEGMENTS
The life insurance and pension business has two distinct customers segments individuals and corporate. In case of the retail business for individuals, the 4 subsegments are - protection, investment, savings and pension. Apart from the existing leader LIC, new companies such as HDFC Standard Life, TATA AIG, ICICI Prudential and more will seek to be present across all the segments of the market. Among the retail products for individuals, pure risk protection products have been introduced by some of the new life insurance companies in the market. As these products have no savings component to it, the premiums are very low compared to other products. Investment products provide long term investment growth and insurance cover. This segment is growing rapidly. Savings products like Endowments and Money-Backs provide a combination of protection and investment benefits. The last segment of pension includes products that are aimed at offering customers an income during their retirement years. In case of the group business, there are three sub-segments - protection, statutory savings and pension. Group insurance products are taken to provide low cost life insurance cover to a group of people. Group insurance can be taken to provide low cost life insurance cover as part of employee benefit packages to motivate employees or to cover the housing or vehicle loan given by employer to employee. It can also be used as a substitute for the statutory EDLI subject to approval by the Regional Provident Fund Commissioner. The statutory savings segment essentially comprises of the gratuity products for companies. The pension segment will include products like group superannuation, which will enable a company to benefit from the actuarial, investment and operational expertise of a specialist company to manage its superannuation funds. 47

FINANCIAL RESULTS

HDFC Standard Life declares results for FY 2006-07, premium from new business more than three and a half times over last FY Insurance coverage crosses Rs. 5000 crore mark.

HDFC Standard Life participating policyholders to benefit from third successive bonus declaration

On 8th May 2007, HDFC Standard Life Insurance Company Limited, the first private sector life insurance company to start operations, declared its annual results for the financial year ending March 31st, 2007. The company generated premium from new business of Rs. 132 crore in 2006-07, as compared to Rs. 36 crore in the previous financial period, registering a year-on-year growth of over 260%.

Another significant achievement for HDFC Standard Life was that the cumulative insurance coverage, i.e. the sum assured for the policyholders, crossed the Rs. 5000 crore mark during the year. During this period, HDFC Standard Life extended life insurance coverage to over 1, 50,000 lives.

According to Mr. Deepak Satwalekar, Managing Director and CEO, HDFC Standard Life, the exceptional growth in business in the past twelve months had been driven by the rising expectations of the consumer. This in turn had resulted in HDFC Standard Life introducing new insurance solutions, establishing an increased presence across locations, increasing its sales force of trained financial consultants and adding corporate agents to its distribution mix, he added.

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The Directors of HDFC Standard Life at their Board meeting on 29th April, 2007, also declared the company’s third bonus for participating policyholders. Commenting on the bonus declaration Mr. Deepak Parekh, Chairman, HDFC Standard Life, said “We have declared reversionary bonus rates this year equal to the interim bonus rates we declared last year. Long term interest rates have fallen by over 1% since we declared our bonus last year, and this has had an impact on the rates of interest that all financial institutions can pay their customers. In recognition of this fall in long term interest rates we have reduced our interim bonus rates this year, and unless there is a recovery in long term interest rates, reversionary bonus rates will also have to be reduced in future years.”

Details of the bonuses declared are given in the Annexure attached along with this release.

HDFC Standard Life’s current product portfolio caters to all the needs of the individual – protection, investment, savings and pension. Mr. Satwalekar said, “Our products are in fact integrated financial solutions that can offer them stability of returns along with total protection. We would, going forward, continue to add to our “insurance solutions portfolio to offer increased flexibility in structuring individualized insurance solutions.”

A new addition to HDFC Standard Life’s product portfolio was the HDFC Children’s Plan in February 2007. This customized solution has found wide acceptance amongst policyholders towards ensuring a bright future for their children, whether it is education, marriage or establishing a professional career. Besides the Children’s Plan, the HDFC Personal Pension Plan also continued to gain in popularity during the year. Amongst private insurers, HDFC Standard Life currently has a 25 percent market share in the pension segment.

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With offices in 49 locations, HDFC Standard Life has nearly doubled its physical presence across the country in the last twelve months. Ajmer in Rajasthan was the latest in the company’s list of cities that it operates from. Also contributing to the growth in business were more than 10,500 financial consultants trained to understand the needs of the consumer, provide the right advice and maintain high service standards.

CONCLUSION OF THE FINANCIAL RESULTS
The current state of insurance distribution in India is still in flux. On one hand, insurers are awaiting regulations to be approved for brokerages and banc assurance to be truly launched. On the other hand they are trying the corporate model of intermediaries in addition to the traditional models in the market.

There is no right and wrong in all this. The success of marketing insurance depends on understanding the social and cultural needs of the target population, and matching the market segment with the suitable intermediary segment.

In addition a major segment of the Indian population has low disposable income, meaning that every penny won will be obtained after a lot of persuasion and the expected value for money is high.

All intermediaries can't sell all lines of business profitably in all markets. There should be clear demarcation in the marketing strategies of the company from this perspective. Clients should also receive price differentials for using different channels. This is not a new concept, as the Public sector Property Casualty companies are giving discounts in lieu of agency commission. The channel composition should not be homogeneous but should reflect the larger society.

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EXAMPLES:
• • Agents from different economic, social strata and different age and gender. Banc assurers ranging from multinational banks to micro credit lending agencies. • Brokers stretching from corporate to NGOs to milk co-operatives

These intermediaries need to be empowered with the right learning, training and sales tools and technology enablers. Coupled with the right product mix, this will help the insurers to survive and flourish in this competitive market. Let us conclude with a story of a retired postal clerk who became a success story for selling postal savings and insurance in his village in Punjab in Northern India. The person is the father of our colleague, who is a retired postal employee and took up agency for postal savings and insurance to supplement his meager retirement earnings.

Today -- 10 years later -- he is one of the top agents selling postal savings and insurance in his village, assisted by his illiterate wife and grandson (a seven year old computer literate) doing all the administrative work from home on a small Personal computer using a package (developed by our friend who is a programmer) to handle his client portfolio!

The entire village population trusts him with the investment advices that he doles out and has no qualms in handing over small amounts of cash to him for depositing in the post office. He is their trusted customer care or financial consultant. This we feel is the essence of distribution of financial products in India

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CHAPTER 4 DATA ANALYSIS

52

DATA ANALYSIS
Comparisons of the distribution of occupation of the respondents.

HDFC Standard Life Insurance

Self - employed 14%

others. 6%

Emp. (Pubic.sector) 18%

Emp. (Pvt.sector) 62%

It belonged to the employee in the private sector, 62 belong to the employee in the private sector, 18 are self employed and 14 are in the other category. All these 3 respondents are retired from there jobs.

53

HDFC Standard Life Insurance

35 30 25 20 15 10 5 0 advertisements. (I) & (ii) All Three HDFC Standard Life Insurance

The average score received was calculated by adding the score given by each respondent divided by the total number of respondent. Also it was noted that in case of LIC there were total of 13 respondents who give rating of 5 or less than 5 but the same in case of HDFC Standard Life Insurance were only 3.

INTERPRETATION –
It is inferred that though the difference between the averages score obtained on the satisfaction of financial needs is not much, the customers of HDFC Standard Life Insurance seemed to be satisfied

54

COMPARISON OF THE EFFECTIVENESS OF MEANS OF COMMUNICATION
40 35 30 25 20 15 10 5 0 HDFC Standard Life Insurance

Advt.

Frends

DSAs

ANALYSIS
In the above figure all the respondents marked more than one option given in the questionnaire advertisements in print media, television, radio etc, and 11 responses went in favor of word of mouth communication through friends and relatives. Of the total respondents of HDFC Standard Life Insurance, 34 responses went in favor of advertisements, 26 went in favor of DSAs, and only 4 went in favor of friends and relatives.

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INTERPRETATION
Any specific inference cannot be drawn from this information, but still word of mouth communication plays a great role in case of life insurance policies and HDFC Standard Life Insurance life insurance is quite lagging behind in this area.

COMPARISONS OF INCENTIVE SCHEMES

30 25 20 15 10 5 0 High satisfied Satisfied

LIC

HDFC Standard Life Insurance

Moderate

Unsatisfied

Highly unsatisfied

ANALYSIS –
Of the total respondents of LIC (as shown in figure 4.10), 28 responded that they are very much satisfied with the incentive schemes associated with their policies, 7 were only satisfied with the incentive scheme, 9 were moderate with regards to the incentive scheme and 6 people were either unsatisfied or 56

highly unsatisfied with the incentive schemes. However, of the total respondents of the HDFC Standard Life Insurance, 24 were highly satisfied with the incentive scheme associated with their life policy while only 6 people were highly unsatisfied with regards to the same .

INTERPRETATION –
The customers of both the organizations hold positive perception towards the incentive provided by them. This is very well visible from the total numbers of “highly satisfied” and “satisfied” category, wherein close to 70% of the customer interviewed for both the organizations have responded in these categories.

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DATA ANALYSIS AND INTERPRETATION

1). Are you interested in products offered by the HDFC SLC?

Yes No Will think

61% 22% 17%

17%

Yes
22% 61%

No Will think

INTERPRETATION
The good thing is that at least the corporate were quite eager to find out what HDFC SLC has to offer whereas the major 39 % of the corporate were not even interested in the products as they are quite satisfied by the LIC and they are not in breaking their long relationship with them. The private players will have to play a long battle in order to ensure that they are serious player in the market.

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2). Are you satisfied with your present insurer?

YES No

95% 5%

95%

5% 5%

Yes No

INTERPRETATION
Here is where the challenge is. Inevitably most of the players are very satisfied with their present insurer which makes it more tough for the private players to attract the corporate. The remaining 5 % are also not very dissatisfied by the services but they are just open to new avenues and are looking forward that private companies come with good offers so that they may shift to them. Thus private players will have to be very proactive and in this regard since LIC is the leader and HDFC SLC is lagging behind its competitors in terms of competition.

3). Where would you like to insure if given chance?
59

LIC ICICI BAJAJ ALLIANZ HDFC SBI KOTAK MAHINDRA

-

60 10 5 15 8 2

60 50 40 30 20 10 0

60 15

8

10

5

2

3-D C olum 1 n
L IC HF DC B JA A J

INTERPRETATION
Thus we see that the companies are comfortable in having business with govt. owned companies as they feel it’s safe & secure to have business with them which is followed by SBI as it is the biggest bank and then followed by

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4). what is people’s main concern while taking a insurance policy?

A) Security B) Returns C) Tax rebate

70% 10% 20%

SECURITY TAX REBATE 10% 20%

SAVINGS 70%

INTERPRETATION:
People invest in insurance mainly because of security concern.

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Q.5 Are you satisfied with the for premiums paid for the different policy?

Very Low 9% Low 10% Very High 40% Moderate 11%

High 30%

INTERPRETATION:
⇒ Here we found that ⇒ 40%people are very highly satisfied, ⇒ 30% of people are highly satisfied, ⇒ 11% are moderate, ⇒ 10% of people are low satisfied, ⇒ 9% are very low satisfied . 62

6). Are you satisfied with the incentives associated with your policy?

40% 40% 35% 30% 30% 25% 20% 15% 15% 10% 10% 5% 5% 0% Highly Unsatisfied satisfied

Highly satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied

INTERPRETATION:
⇒ 30% people are highly satisfied, ⇒ 40% satisfied, ⇒ 15%are moderate, ⇒ 5% are unsatisfied ⇒ 10%are highly unsatisfied.

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7). What other plans or flexibility you expect fromInsurance companies?

More returns 30% Complementary gifts 50% 20% Investment Pattern

INTERPRETATION:
⇒ 50%people are satisfied with investment pattern, ⇒ 30% are satisfied with more returns and ⇒ Only 20% people expect complimentary gifts.

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CHAPTER 5 CONCLUSION

65

CONCLUSION

1. LIC enjoys credibility over other private players in the industry 2. People look for security over returns in market insurance plans 3. Lifetime is the most popular product among the people who are aware about HDFC SLC products. 4. People are now showing more interest in ULIP as compared to some of the traditional plans. 5. HDFC SLC has to counter the distribution network of LIC

6. The product profile of HDFC SLC is not very comprehensive

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CHAPTER 7 RECOMMENDATIONS

67

RECOMMENDATIONS

More emphasis should be on promotional activities. ⇒ Plenty of advertisement should be done through T.V, Newspaper and Radio as these media’s are having maximum recall value. ⇒ Total financial planning and advice should be given to every customer. ⇒ More business opportunity seminars should be conducted to make people aware of the offer given. ⇒ The company should quite frequently send their agent to the customer so that they should be aware of the latest offer. ⇒ The company should attempt to open more and more of its branches in the country so as to promote their product publicity.

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CHAPTER 8 LIMITATIONS

69

LIMITATION

The geographical area was very much limited to residential area & so the results are not particularly reflection of the current behavior. ⇒ Biases and non-cooperation of the respondents. ⇒ Due to limited time period and constrained working hours for most of the respondents, the answers at times were vague enough to be ignored. ⇒ Most of the people in India take their policies in the period preceding March(for tax saving purposes) & so the response to initial contacts were not all encouraging and that has been the primary reason in the inability to quantify the results large enough so as to deduce any relevant outcomes. ⇒ People are not interested in giving personal opinion.

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