A

Marketing Research Report

“A STUDY OF PRODUCT PROFILE OF

HDFC STANDARD LIFE INSURANCE &
SALES PROMOTION THROUGH ENHANCE
MENT OF DISTRIBUTION
CHANNEL LIST & RECRUITMENT
OF FINANCIAL CONSULTANT”

SUBMITTED TO: SUBMITTED BY:

Mr. Rajeev gupta Jitendra Kumar Gupta
PGDM 3td sem
Roll no.-PGDM/09/029

IIMT COLLEGE OF MANAGEMENT

KNOWLEDGE PARK – III
PLOT NO.-20
 PREFACE
There are number forces that make marketing an endlessly changing activity. The
constantly activity sociological, psychological and political environment may
represent the uncontrollable marketing factors. To understanding these factors in
better way marketing research is of utmost importance.

This Research Report has been completed in fulfillment of my Management Program

Master of Business Administration (in the company HDFC STANDARD LIFE
INSURANCE. The objective of my Research was “TO KNOW THE PUBLIC
AWARENESS OF FINANCIAL PLANNING IN EMERGING INDIAN MARKET.”

HDFC STANDARD LIFE is the name which is working as one of the best private
insurance company in insurance sector.

With such large population and the untapped market of populations insurance
happens to be very big opportunity in India. Today it stands as a business growing
at the rate of 15-20 percent annually. Together with banking services, It adds
about 7 percent to the country’s GDP. In spite of all this growth the statistics of the
penetration of the insurance in the country is very poor. Nearly 80% of Indian
populations are without Life Insurance cover and the Health Insurance. This is an
indicator that growth potential for the insurance sector is immense in India.
 CONTENTS

ACKNOWLEDGEMENT

EXECUTIVE SUMMARY

RESEARCH OBJECTIVE

RESEARCH METHODOLOGY

a) Type of Research
b) Data Collection
c) Sampling Unit & Size
d) Limitations

Section 1 : INDUSTRY PROFILE

1) Overview & Historical Perspective
2) Insurance Sector Reforms
3) Nature of Industry
4) Indian Insurance Industry
 Regulatory Body : IRDA
5) Importance of Liberalization
 Market share of various players
6) Current Scenario
7) SWOT Analysis of Industry
Section 2 : COMPANY’S PROFILE
HDFC Ltd. : 1) Introduction
2) Subsidiary & Associate Companies

HDFC STANDARD LIFE

1) Introduction
2) Key Personnel
3) Knowledge Management
 Life Stages
4) Product Mix
5) Current Sales
6) Future Plans
Section 3 : MAIN SECTION
1) Financial Planning
2) 360º Financial Planning
3) Consumption Pattern
4) Objective & Sales Procedure

Section 4 : DATA ANALYSIS AND FINDINGS

Section 5 : CONCLUSIONS & RECOMMENDATIONS

APPENDICES
1) Questionnaire

2) Tables
3) Glossary
4)Bibliographie
 ACKNOWLEDGMENT
I would like to express my deep sense of gratitude to Mr.Anant Jyoti providing me

great opportunity be a constant source of inspiration providing unstained support at all

stages of the Research work.

Acknowledgement must be given to honorable Dean Mr. Girish Kathuria who provided

me proper guidance to do the project and attain the standard.

DATE - __/__/____ Jitendra Kumar Gupta

PGDM _3td sem

Roll no.PGo9/029

DECLARATION
The Research Report on “AWARENESS OF FINANCIAL PLANNING IN
EMERGING INDIAN MARKET” in “HDFC Standard Life Insurance” is the

original work done by me under worthy and esteemed guidance of Mr.Anant

Jyoti.

DATE - __/__/____ Jitendra Kumar Gupta

PGDM 3td sem

Roll no.-PGDM/09/029

EXECUTIVE SUMMARY
Overall, the life insurance and pension sector is set for rapid changes and growth in
the years ahead. Delivering service, building trust and being innovative are key
areas in which any company will have to excel in order to do well in the long road
ahead. Different companies will take different approaches and it would be myriad of
solutions that will be found to delight the Indian customer.

Market Research was done through various activities and tele-calling which are
discussed further in the report. Activities led to practical exposure and taught me
the aspects of customer dealing.

Finally, interesting conclusions were drawn out of the data collected regarding the
Awareness of Financial Planning among the people in today’s environment.

It was great experience because selling an insurance product demands a

great deal of confidence and product knowledge.
 RESEARCH OBJECTIVES

 To study the awareness of Financial Planning among the people.

 To study the importance of Insurance in today’s scenario.

 Brand awareness of various private insurance companies.

 Preference among different investment tools.
 Purpose of buying insurance.
 Preference in choosing channel for buying life insurance.
 Quality of service provided by agents and clients satisfaction
level.
 Customer’s perception of improvements brought in by entry of
Private Insurance Companies.

 To generate leads for Unit Linked Insurance and the Unit Linked
Pension Plans, by interacting with walking and existing customers of
the company.
 RESEARCH MEHODOLOGY
The study of awareness about Financial Planning among the people and particularly
the insurance sector covers data collection through observation, questionnaire and
interview of consumers.

Type of research:
EXPLORATORY:
Type of research carried out was EXPLORATORY in nature; the objective of such
research is to determine the approximate area where the drawback of the company
lies and also to identify the course of action to solve it. For this purpose the
information proved useful for giving right suggestion to the company.

Data Collection:

 Primary data
 Secondary data

Data used for the research work was primary in nature.

Sample unit: -
The research process was done by interacting with number of customers during the
activities performed, which included, markets, cold calling, canopies, etc. Sample
Design consists of Random Sampling.

Sample size: - 100

Method of collection: -

Field procedure for gathering primary data included observation and interview
schedule in which the questionnaires were filed by the interviewer.
Personal interviews through self administered survey was done to collect the data,
market research was undertaken, that was accomplished by performing various
activities designed.

Research Instrument:
Questionnaire

The questionnaire was formulated by keep in mind the following Points: -

 Giving the respondents clear comprehension of the question.

 Inducing the respondents to co-operate.
 Giving instructions as to what is wanted.
 Identifying the needs to be known.

Limitations:

The following were the limitations that were there during the course of the study:
1. Limited time period.
2. Less number of respondents.
3. Biasness of the respondents.
SECTION 1
 INDUSTRY PROFILE
Overview

With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. It’s a business growing at the rate of
15-20 per cent annually.

Together with banking services, it adds about 7 percent to the country’s GDP .In
spite of all this growth the statistics of the penetration of the insurance in the
country is very poor. Nearly 80 per cent of Indian population is without life
insurance cover while health insurance and non-life insurance continues to be below
international standards. And this part of the population is also subject to weak
social security and pension systems with hardly any old age income security. This
it-self is an indicator that growth potential for the insurance sector is immense.

Historical Perspective
The insurance came to India from UK; with the establishment of the Oriental Life
insurance Corporation in 1818.The Indian life insurance company act 1912 was the
first statutory body that started to regulate the life insurance business in India. By
1956 about 154 Indian, 16 foreign and 75 provident firms were been established in
India. Then the central government took over these companies and as a result the
LIC was formed. Since then LIC has worked towards spreading life insurance and
building a wide network across the length and the breath of the country.

Important milestones in the life insurance business in India:

1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.

1956: 245 Indian and foreign insurers and provident societies were taken over by
the central government and nationalized. LIC formed by an Act of Parliament- LIC
Act 1956- with a capital contribution of Rs.5 cr. from the Government of India.

Important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up- the first company to transact
all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business practices.

1972: The general insurance business in India nationalized through The General
Insurance Business (Nationalization) Act, 1972 with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies- the National
Insurance Company Limited, the New India Assurance Company Limited, the
Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
incorporated as a company.

Insurance Sector Reforms

Prior to liberalization of Insurance industry, Life insurance was monopoly
of LIC.
In 1993, Malhotra Committee- headed by former Finance Secretary and RBI
Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and
recommend its future direction. The Malhotra committee was set up with the
objective of complementing the reforms initiated in the financial sector. The reforms
were aimed at creating a more efficient and competitive financial system suitable
for the requirements of the economy keeping in mind the structural changes
currently underway and recognizing that insurance is an important part of the
overall financial system where it was necessary to address the need for similar
reforms. In 1994, the committee submitted the report and some of the key
recommendations included:

Structure
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.

Competition
Private Companies with a minimum paid up capital of Rs.1 billion should be
allowed to enter the sector. No Company should deal in both Life and
General Insurance through a single entity. Foreign companies may be
allowed to enter the industry in collaboration with the domestic companies.

Regulatory Body

The Insurance Act should be changed. An Insurance Regulatory body should be set
up. Controller of Insurance- a part of the Finance Ministry- should be made
independent
Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced
from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any
company (there current holdings to be brought down to this level over a period of
time)

Customer Service
LIC should pay interest on delays in payments beyond 30 days. Insurance
companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology is to be carried out in the
insurance industry.

STATISTICS (INDIAN & GLOBAL)

This section gives the users important and detailed statistics of the Indian as well
as the Global insurance industry. These statistics would give important insights of
where the respective markets are headed for.

 The global life insurance market stands at $1,521.2 billion while the non-life
insurance market is placed at $922.4 billion.

 The United States itself accounts for about one-third of the $2443.6 billion
global insurance market and Japan stands next with a 20.62% share.

 India takes the 23rd position with US $9.933 billion annual premium
collections and a meager 0.41% share.

 Out of one billion people in India, only 35 million people are covered by
insurance.

 India's life insurance premium as a percentage of GDP is just 1.77 per cent.

 The income derived by GIC and its subsidiary companies through investment
was Rs.2491.76 crore and the investable fund generated was Rs.2843 crore
in 1999-2000.

 Indian insurance market is set to touch $25 billion by 2010, on the

assumption of a 7 per cent real annual growth in GDP.

NATURE OF INDUSTRY

The insurance industry provides protection against financial losses resulting from a
variety of perils. By purchasing insurance policies, individuals and businesses can
receive reimbursement for losses due to car accidents, theft of property, and fire
and storm damage; medical expenses; and loss of income due to disability or
death.

The insurance industry consists mainly of insurance carriers (or insurers) and
insurance agencies and brokerages. In general, insurance carriers are large
companies that provide insurance and assume the risks covered by the policy.
Insurance agencies and brokerages sell insurance policies for the carriers.

Insurance companies assume the risk associated with annuities and insurance
policies and assign premiums to be paid for the policies. In the policy, the
companies states the length and conditions of the agreement, exactly which losses
it will provide compensation for, and how much will be awarded.

The premium charged for the policy is based primarily on the amount to be
awarded in case of loss, as well as the likelihood that the insurance carrier will
actually have to pay. In order to be able to compensate policyholders for their
losses, insurance companies invest the money they receive in premiums, building
up a portfolio of financial assets and income-producing real estate which can then
be used to pay off any future claims that may be brought.

There are two basic types of insurance carriers: Direct and Reinsurance.

Direct carriers are responsible for the initial underwriting of insurance policies and
annuities, while Reinsurance carriers assume all or part of the risk associated
with the existing insurance policies originally underwritten by other insurance
carriers.

Direct insurance carriers offer a variety of insurance policies.

Life insurance provides financial protection to beneficiaries—usually spouses and
dependent children—upon the death of the insured.

Disability insurance supplies a preset income to an insured person who is unable

to work due to injury or illness

Health insurance pays the expenses resulting from accidents and illness.

An Annuity (a contract or a group of contracts that furnishes a periodic income at

regular intervals for a specified period) provides a steady income during retirement
for the remainder of one’s life.

Property-casualty insurance protects against loss or damage to property

resulting from hazards such as fire, theft, and natural disasters.

Liability insurance shields policyholders from financial responsibility for injuries to

others or for damage to other people’s property. Most policies, such as automobile
and homeowner’s insurance, combine both property-casualty and liability coverage.
Companies that underwrite this kind of insurance are called property-casualty
carriers.

What is Life Insurance?

Human life is subject to risks of death and disability due to natural and accidental
causes. When human life is lost or a person is disabled permanently or temporarily,
there is a loss of income to the household. The family is put to hardship. Risks are
unpredictable. Death/disability may occur when one least expects it. There are a
number of life insurance products which offer protection and also coupled with
savings.

A Term insurance product provides a fixed amount of money on death during the
period of contract.

A Whole Life insurance product provides a fixed amount of money on death.

An Endowment Assurance product provided a fixed amount of money either on

death during the period of contract or at the expiry of contract if life assured is
alive.

A Money Back Assurance product provides not only fixed amounts which are
payable on specified dates during the period of contract, but also the full amount of
money assured on death during the period of contract.

An Annuity product provides a series of monthly payments on stipulated dates

provided that the life assured is alive on the stipulated dates.

A Linked product provides not only a fixed amount of money on death but also
sums of money which are linked with the underlying value of assets on the desired
dates.

There are a variety of life insurance products to suit to the needs of various
categories of people—children, youth, women, middle-aged persons, old people;
and also rural people, film actors and unorganized laborers.

Life insurance products could be purchased from registered life insurers notified by
the IRDA. Insurers appoint insurance agents to sell their products.

As per regulations, insurers have to give the various features of the products at the
point of sale. The insured should also go through the various terms and conditions
of the products and understand what they have bought and met their insurance
needs. They ought to understand the claim procedures so that they know what to
do in the event of a loss.
 INDIAN INSURANCE SECTOR

REGULATORY BODY

Insurance is a federal subject in India. The primary legislation that deals with
insurance business in India is: Insurance Act, 1938, and Insurance Regulatory &
Development Authority Act, 1999.

The Insurance Regulatory and Development

Authority (IRDA)
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 2000 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. Since being
set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations.

MISSION-IRDA

“To protect the interests of the policyholders, to regulate, promote and

ensure orderly growth of the insurance industry and for matters connected
therewith or incidental thereto.”

IMPACT OF LIBERALISATION

The introduction of private players in the industry has added to the colors in the
dull industry. The initiatives taken by the private players are very competitive and
have given immense competition to the on time monopoly of the market LIC. Since
the advent of the private players in the market the industry has seen new and
innovative steps taken by the players in this sector.

The new players have improved the service quality of the insurance. As a result LIC
down the years have seen the declining phase in its career. The market share was
distributed among the private players. Though LIC still holds the 79% of the
insurance sector but the upcoming natures of these private players are enough to
give more competition to LIC in the near future. LIC market share has decreased
from 95% (2002-03) to 81 %( 2004-05).

LIC has the current market share of 79%.

Among the private players ICICI Prudential has the maximum of appx 5.60%

Followed by Bajaj Allianz (3.27 %) and HDFC Standard Life of about 3.11%.

Below is the table that shows the market share of various players of the industry.

The following companies have the rest of the market share of the insurance
industry.

COMPANY NAME MARKET SHARE

LIC 79.30
ICICI PRUDENTIAL 5.63
BAJAJ ALLIANZ 3.27
HDFC STANDARD LIFE 3.11
BIRLA SUNLIFE 2.32
TATA AIG 1.45
SBI LIFE 1.24
MAX NEWYORK 0.90
AVIVA LIFE 0.82
ING VYSYA 0.66
OM KOTAK LIFE 0.54
AMP SANMAR 0.38
METLIFE 0.33
 RELIANCE LIFE 0.05

The liberalization of the Indian insurance sector has opened new doors to private
competition and the new and improved insurance sector today promises several
new job opportunities. With private players now in the field, there will be
innovative products, better packaging, improved customer service, and, most
importantly, greater employment opportunities.

There are a number of options to choose from for a career in Insurance. Ideally an
insurance company will have openings in the following fields:

 Actuaries
 Underwriter
 Surveyor
 Investment
 Marketing & Distribution

Actuaries

 Evaluates the risk for companies to be used for strategic management

decisions.
 Actuaries use their analytical skills to predict the risk of writing insurance
policies through the use of mathematical, statistical and economic models.
  An actuary not only fixes the premium rates for new products, but also
revises both products and prices. They calculate costs to assume risk

Underwriters

 Insurance underwriters review insurance applications and decide whether

they should be accepted or rejected based on the degree of risks involved in
insuring the people or objects of concern.
 In the life insurance business, an underwriter is expected to filter the "bad or
substandard lives". Whereas, in the general insurance segment, he takes
care of risk management.

Agents/Brokers:

 Insurance agents may work for one insurance company or as independent

agents selling for several companies.
 Insurance agents and brokers can find openings in the health insurance
sector, financial planning services, retirement planning counseling or even
provide other services, for e.g. sell mutual funds, annuities etc.

Surveyor/Loss Assessor:

 Surveyors are professionals who assess the loss or damage and serve as a
link between the insurer and the insured.
 They usually function only in non life business.
 Their job is to assess the actual loss and avoid false claims.

Sales/Marketing:

And who can forget the guys who make and break a brand. They would be
required in a large number in order to promote the number of products that will
be launched by numerous companies in the insurance sector.
CURRENT SCENARIO OF THE INDUSTRY
INSURANCE MARKET IN INDIA

India with about 200 million middle class household shows a huge untapped
potential for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive for global
insurance majors. The insurance sector in India has come to a position of very high
potential and competitiveness in the market.

Innovative products and aggressive distribution have become the say of the day.
Indians, have always seen life insurance as a tax saving device, are now suddenly
turning to the private sector that are providing them new products and variety for
their choice. Life insurance industry is waiting for a big growth as many Indian and
foreign companies are waiting in the line for the green signal to start their
operations. The Indian consumer should be ready now because the market is going
to give them an array of products, different in price, features and benefits. How the
customer is going to make his choice will determine the future of the industry.

CUSTOMER SERVICE
Consumers remain the most important centre of the insurance sector. After the
entry of the foreign players the industry is seeing a lot of competition and thus
improvement of the customer service in the industry. Computerization of operations
and updating of technology has become imperative in the current scenario. Foreign
players are bringing in international best practices in service through use of latest
technologies. The one time monopoly of the LIC and its agents are now going
through a through revision and training programs to catch up with the other private
players. Though lot is being done for the increased customer service and adding
technology to it but there is a long way to go and various customer surveys indicate
that the standards are still below customer expectation levels.

DISTRIBUTION CHANNELS
Till date insurance agents still remain the main source through which insurance
products are sold. The concept is very well established in the country like India but
still the increasing use of other sources is imperative. It therefore makes sense to
look at well- balanced, alternative channels of distribution.

LIC has already well established and have an extensive distribution channel and
presence. New players may find it expensive and time consuming to bring up a
distribution network to such standards. Therefore they are looking to the diverse
areas of distribution channel to have an advantage. At present the distribution
channels that are available in the market are:

• Direct selling/Retail
• Corporate agents
• Group selling
• Brokers and cooperative societies
• Bancassurance

DIRECT SELLING/RETAIL
Direct selling or retail business is carried out by Agents of the company. This is
the main distribution channel due to the complexity of most insurance
products (Endowment, Whole of Life, Unit Linked). This tends to be the focus of
most companies due to its past success as well as its ability to deliver the right
advice. However, this channel can be expensive and it is a time consuming sales
process. An agent is the public face of an Insurance company. Hence it is important
that this face is always smiling and presentable and the facts and figures at his/ her
command are updated and correct.

An agent should be a pleasing personality with complete knowledge about the

various plans and solutions which the company has to offer and must also
understand the customer’s psychology well to deal in an efficient manner.

BANCASSURANCE
Bancassurance is the distribution of insurance products through the bank's
distribution channel. It is a phenomenon wherein insurance products are offered
through the distribution channels of the banking services along with a complete
range of banking and investment products and services. To put it simply,
Bancassurance, tries to exploit synergies between both the insurance companies
and banks.

Advantages to banks
 Productivity of the employees increases.
 By providing customers with both the services under one roof, they can
improve overall customer satisfaction resulting in higher customer retention
levels.
 Increase in return on assets by building fee income through the sale of
insurance products.
 Can leverage on face-to-face contacts and awareness about the financial
conditions of customers to sell insurance products.
 Banks can cross sell insurance products e.g.: Term insurance products with
loans.

Advantages to insurers
  Insurers can exploit the banks' wide network of branches for distribution of
products. The penetration of banks' branches into the rural areas can be
utilized to sell products in those areas.
 Customer database like customers' financial standing, spending habits,
investment and purchase capability can be used to customize products and
sell accordingly.
 Since banks have already established relationship with customers, conversion
ratio of leads to sales is likely to be high. Further service aspect can also be
tackled easily.

Advantages to consumers
 Comprehensive financial advisory services under one roof. i.e., insurance
services along with other financial services such as banking, mutual funds,
personal loans etc.
 Enhanced convenience on the part of the insured
 Easy accesses for claims, as banks are a regular go.
 Innovative and better product ranges
WHAT DOES LIFE INSURANCE HAVE TO OFFER?
Life insurance is many different things to many different people. For some, it is a
premium to be paid on time. For others it offers liquidity since cash can be
borrowed when needed. For the investment-minded, it denotes a constantly
growing capital account and numerous other benefits. 

The contractual guarantee is the promise to pay, backed by one of the oldest and
most stably regulated financial industry operating in the Indian sub-continent
today.

1) Insurance Buys Time and Money

People like to refer to life insurance as time insurance, the reason being that life
insurance proceeds are paid to the insured's beneficiaries in case of death. The
money proffered by life insurance helps buy time to adjust to the change of
circumstances. Insurance provides large amounts of cash that will keep the lifestyle
for the survivors the way it was before the insured's death.

2) Insurance Offers Peace of Mind

For the person who buys an insurance policy, it offers absolute and complete peace
of mind. He or she knows that the decision made by him will provide sound benefits
in the future, whether or not the individual may live to see it.
3) Multiple Applications

The future is uncertain for each and every one. No one knows how long he or she
will live. The investment benefit is paid to the insured's beneficiaries after his death
or it can be used during the life as well. Life insurance policy owners can turn to the
cash value of the policy in case of a financial emergency when all avenues are
either blocked or denied.

4) Enduring Elasticity

Since life insurance is flexible enough to serve several needs, the insured can keep
several long-term goals in mind once he or she invests in the insurance plan. The
cash value of the policy can be allocated towards augmenting the monthly income
during the retirement years. Leisure years should be turned into pleasure years.
Permanent life insurance is designed on the concepts of long-term flexibility.

5) Financial Security

The insurance policy offers contractual guarantees to people looking for peace of
mind when they buy life insurance. Life insurance offers complete financial security.
The purchase of life insurance demonstrates concern for a family's future financial
well being.

6) Regard for Family

The purchase of life insurance clearly displays care and concern for the people the
policy owner loves.

7) Insurance is Safer

No financial institution can do what life insurance does. No industry can back its
products with reserves and surplus as sound as those of the insurance industry.
The proof of strength and safety that insurance companies have ensured even
under the most adverse of conditions is a matter of pride for the entire insurance
industry. For generation after generation, life insurance has been acclaimed as the
very benchmark of security against which the other industries are measured.

OPPORTUNITIES FOR INSURANCE COMPANIES

In the now open sector on insurance, the following is what I feel will determine the
success of the company in particular and the industry in general:

 A change in the attitude of the population

Indians have always been wary of employing their hard-earned money in a venture
that will pay them on their death. Insurance has always been used as a Tax saving
tool. No more, no less. It is upon the insurers to educate the people to
secure/insure their future against any unknown calamity and make a shield around
their families and businesses.  

 An open and transparent environment created under the IRDA.

The reason for this being on the top of our understanding is that when ever we
have seen any sector open up in India there are always grey areas and unsure
policies. These are not exactly what any player, be it Indian or foreign, looks for. It
creates an air of uncertainty in all the decision making process. Insurance as a
sector requires players who are strong financially and are willing to wait for returns.
Their confidence can be bolstered only if there is an open and a transparent policy
guidelines. This will also help the consumers feel safe that the regulatory is an
active one and cares to do everything possible to keep things under control and
help the insurance environment grow maturely.  

 A well-established distribution network.

To cater to the largest democracy in the world is by no means a cakewalk.
Insurance profits are directly related to number of insured and this is in turn related
to the reach.

 Trained professionals to build and sell the product.

It is said that the insurance agent is the best salesman in the world. He makes you
pay, regularly, an amount promising to pay back only on your death. Thus the
players will require an excellent sales team to sell their products in the now
competitive environment. 

 Encouragement of new and better products and letting the

hackneyed ones die out.
This will itself ensure the market grows. And that every class/society gets a product
that best suits them.
 
SPECIAL PROVISIONS

The Income Tax Act and Life Insurance policies

 Under Section 10(10D), any sum received under a Life Insurance policy (not
being a Key Man policy) is also exempt from taxation. But it is wise to
remember that Pensions received from Annuity plans are not exempted from
Income Tax.

 Section 80C provides a deduction up to Rs.1,00,000/-  to an individual assessee

for any amount paid as a premium. 

POLICYHOLDERS GRIEVANCES

Policyholders may have complaints against insurers either in respect of their

policies or their claims. As per Regulations for Protection of policyholders’ interests,
2002, every insurer should have in place, a grievance redressal system to address
the complaints of policyholders. The IRDA has a Grievance Redressal Cell which
plays a facilitative role by taking up complaints against insurers with the respective
companies for speedy resolution. The IRDA however does not adjudicate on
complaints.
 SWOT ANALYSIS OF INSURANCE INDUSTRY

STRENGTH

1. Best returns with the added advantage of 100% life insurance coverage.
2. Good option for new investors into the market as all the money is invested
by best fund managers so with less knowledge also they can earn good
returns.
3. Best commission charges paid to the agents which vary from 12% to 35%
which is much higher as compared to mutual funds i.e. , only 2-2.5%.

WEAKNESS

1. HDFC SLIC could not able to match LIC in remote areas services.
2. Misleading facts given by life advisors about the returns of ULIPs.
3. Hidden charges taken by the companies.
4. Less Promotional Campaigns.

OPPORTUNITY

1. 80 percent of Indian population is still under insured. So there is

a big opportunity for insurance companies.
2. As the stock market can be under the mark any time so it can bring loss to
the investors but as in ULIPs there is proper mixture of debt securities and
equity so the loss is incurred during dark trading days also.
3. Unit-linked products are exempted from tax and they provide life insurance.
4. Increasing consumer awareness about Insurance and its use.

THREAT

1. Cannibalism within the industry by providing misleading figures to the

investors.
2. Govt.’s instability has a long term repercussions affecting company’s policies
and its growth.
 CONCLUSION

With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India, which is growing at the rate of 15-20
per cent annually.

Nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And
this part of the population is also subject to weak social security and pension
systems with hardly any old age income security.

And also the changing attitude and increasing awareness level of the population is
an indicator that growth potential for the insurance sector is immense.
SECTION 2
 COMPANY’S PROFILE
INTRODUCTION
Helping Indians experience the joy of home ownership.

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. 119 crores.
HDFC operates through 75 locations throughout the country with its Corporate
Headquarters in Mumbai, India.

OBJECTIVES AND BACKGROUND

Background

HDFC was incorporated in 1977 with the primary objective of meeting a social need
– that of promoting home ownership by providing long-term finance to households
for their housing needs. HDFC was promoted with an initial share capital of Rs. 100
million.

Business Objectives

The primary objective of HDFC is to enhance residential housing stock in the

country through the provision of housing finance in a systematic and professional
manner, and to promote home ownership. Another objective is to increase the flow
of resources to the housing sector by integrating the housing finance sector with
the overall domestic financial markets..
ORGANIZATION AND MANAGEMENT
HDFC is a professionally managed organization with a board of directors consisting
of eminent persons who represent various fields including finance, taxation,
construction and urban policy & development. The board primarily focuses on
strategy formulation, policy and control, designed to deliver increasing value to
shareholders.

FOUNDER – Mr. Hasmukhbhai Parekh

BOARD OF DIRECTORS

Mr. D S Parekh – Chairman

Mr. Keshub Mahindra – Vice Chairman
Ms. Rene S. Karnad – Executive Director
Mr. K M Mistry – Managing Director
Mr. Shirish B. Patel
Mr. B S Mehta
Mr. D M Sukthankar
Mr. D N Ghosh
Dr. S A Dave
Mr. S Venketaraman
Dr. Ram S. Tarneja
Mr. N M Munjee
Mr. D M Satwalekar

HDFC has a staff strength of 1029, which includes professionals from the fields of
finance, law, accountancy, engineering and marketing.
SUBSIDIARY & ASSOCIATE COMPANIES

 HDFC Bank

 HDFC Mutual Fund

 HDFC Standard Life

 Intelenet Global Services Ltd.

 HDFC Chubb General Insurance Company Ltd.

 HDFC Reality

 Other Companies Co-Promoted by HDFC

 HDFC Trustee Company Ltd.

 HDFC Developers Ltd.
 HDFC Venture Capital Ltd.
 HDFC Ventures Trustee Company Ltd.
 HDFC Investments Ltd.
 HDFC Holdings Ltd.
 Home Loan Services India Pvt. Ltd.
 Credit Information Bureau (India) Ltd

HDFC STANDARD LIFE INSURANCE

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. Each 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 Poors. These reflect the efficiency with which HDFC and Standard Life
manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively.

HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.
HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and
Standard Life has a stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of
the venture.

THE PARTNERSHIP :
HDFC and 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.

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.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5%
stake in HDFC Bank.

COMPANY’S MISSION:

To be the top life insurance company in the market.

This not only means being the largest or the most productive company in the
market, but a combination of several things like-

 Customer service of the highest order

 Value for money for customers
 Professionalism in carrying out business
 Innovative products to cater to different needs of different customers
 Use of technology to improve service standards
 Increasing market share

COMPANY’S VALUES:

 SECURITY: Providing long term financial security to our policy holders will
be our constant endeavor. This is done by offering life insurance and pension
products.
 TRUST: Company appreciates the trust placed by our policy holders in us.
Hence, company will aim to manage their investments very carefully and live
up to this trust.
 INNOVATION: Recognizing the different needs of our customers, company
will be offering a range of innovative products to meet these needs.

Company’s mission is to be the best new life insurance company in India and these
are the values that will guide us in this.

KEY MANAGEMENT PERSONNEL

Chairman
Mr. Deepak S. Parekh

Board Of Directors

Mr. K. M. Mistry
Ms. Renu S. Karnad
Mr. A. M. Crombie
Ms. Marcia D. Campbell
Mr. Norman Keith Skeoch
Mr. G. R. Divan
Mr. G. N. Bajpai
Mr. Ranjan Pant
Mr. Ravi Narain

Managing Director & CEO

Mr. D. M. Satwalekar

AUDIT COMMITTEE
Haribhakti & Company
Chartered Accountants
B.K. Khare & Co.
Chartered Accountants

Bankers

HDFC Bank Ltd.

Union Bank of India
Indian Bank
The Saraswat Co-operative Bank Ltd.
Federal Bank

KNOWLEDGE MANAGEMENT

When Should One Go For Insurance?

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.

Stage 1 : Young and Single

This is an important stage where one lays down the foundation of a successful life
ahead. Take advantage of the time and power of compounding to ensure that you
build up your dreams, so start saving early.

Your needs:
 o Save for a home and wedding
o Tax Planning
o Save for Golden years

Stage 2 - Just Married

Marriage brings about a significant change. New dreams and new opportunities also
bring in additional responsibilities. While both of you look forward to a happy and
secure life , it is equally important to ensure that eventualities don’t come in the
way of shaping your dreams.

Your needs:

o Planning for home / securing your home loan

liability
o Save for vacation
o Save for your first child

Stage 3 - Proud Parents

Once you have children, your need for life insurance is even more. You need to
protect your family from an untoward incident. Ensure your protection umbrella
takes into account the future cost of securing your child’s dream. You will want life
to go on for your loved ones, and having enough life insurance is a way to help
ensure that.
Your needs:

o Provide for children’s education

o Safeguarding family against loan liabilities
o Savings for post-retirement

Stage 4 - Planning for Retirement

While you are busy climbing the ladder of success today, it is important for you to
take time and plan for your life after retirement. Having an early start for
retirement planning can make a significant difference to your savings. Think about
your golden years even before you have reached them. The key is to think ahead
and plan well using your time and money.

Your needs:

o Provide for regular income post retirement

o Immediate Tax benefits
o Lead a secure, independent and comfortable
life style after retirement

PRODUCT MIX

At HDFC Standard Life, there is a bouquet of insurance solutions to meet every

need. They cater to both, individuals as well as to companies looking to provide
benefits to their employees.
For individuals, they have a range of protection, investment, pension and savings
plans that assist and nurture dreams apart from providing protection. One can
choose from a range of products to suit one’s life-stage and needs.

For organizations they have customized solutions that range from Group Term
Insurance, Gratuity, Leave Encashment and Superannuation Products.

PRODUCTS FOR INDIVIDUALS

PROTECTION - You can protect your family against the loss of your income or the
burden of a loan in the event of your unfortunate demise, disability or sickness.
These plans offer valuable peace of mind at a small price.

Plans : Term Assurance Plan

Loan Cover Term Assurance Plan.

INVESTMENT - This includes a plan that is well suited to meet your long term
investment needs. We provide you with attractive long term returns through
regular bonuses.

Plan : Single Premium Whole Of Life

PENSION - Our Pension Plans help you secure your financial independence even
after retirement and live a relaxed retired life.

Plans : Personal Pension Plan

 Unit Linked Pension

Unit Linked Pension Plus

SAVING - Our Savings Plans offer you flexible options to build savings for your
future needs such as buying a dream home or fulfilling your children’s immediate
and future needs.

Plans : Endowment Assurance Plan,

Unit Linked Endowment,

Unit Linked Endowment Plus,

Money Back Plan,

Children’s Plan,

Unit Linked Youngstar,

Unit Linked Youngstar Plus .

GROUP PLANS

HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit
solutions to their employees. They offer different products for different needs of
employers ranging from term insurance plans for pure protection to voluntary plans
such as superannuation and leave encashment.

Plans: Group Term Insurance with Riders

Group Term Insurance with Profit-Share
Group Unit-Linked Plan
For Gratuity
For Defined Benefit Superannuation
For Defined Contribution Superannuation
Group Leave Encashment Plan

RURAL CUSTOMER - According to research findings, there is keenness among

rural customers to invest in savings cum protection plan with a term of five years,
especially, if the premium amount is low and affordable. Keeping this in view, HDFC
STD> LIFE has plans like:

Plans : Bima Bachat Yojana.

Super Bachat Yojana

DISTRIBUTION OFFICES

In addition to the corporate office at Mumbai, your Company had 169 offices in over
135 cities/towns in the country. It has a widespread network of Financial
Consultants, Corporate Agents and Brokers servicing customers in these cities and
towns.

FINANCIAL CONSULTANTS

The number of licensed Financial Consultants appointed by your Company increased

from over 23,000 in the previous year to over 33,000 in the current year. During
the year, the Company continued its
 CURRENT SALES- HDFC Standard Life

“HDFC STANDARD LIFE PACING AHEAD”

The Financial Express 15th May 2006

“HDFC Standard Life has recorded a strong year-on-year growth of 112% for the
period April-March 2005-06, in comparison to the same period 2004-05, with a new
business first year premium of Rs 1,029 crore.

In terms of effective premium income (EPI), which gives a 10% value to a Single
Premium policy and is an internationally-accepted indicator of an insurance
company's performance, the EPI grew by 103% to Rs 887 cr from Rs 436 crore.

HDFC Standard Life's growth in new business is a manifestation of the number of

lives insured as well as an increase in the average premium. For the individual
business, volume measured by the number of lives insured witnessed a 32%
growth.

The average premium also grew by 62% to Rs 27,500 in 2005-06 from Rs 17,000
in 2004-05.

During the year the company issued over 3,97,000 policies and has covered more
than 5,80,000 lives”

Table Showcasing Financial Results:

April-March April-March
Parameters 2004-05 2005-06 Growth
(Rs. Cr) (Rs. Cr) (%)
 Total received premium 668.40 1532.21 129.23

    i.  New Business 486.15 1028.94 111.65

    ii. Renewal 182.25 503.27 176.14

Effective Premium
Income (Total) 436.08 887.30 103.47

Group Business Premium

(EPI) 49.40 135.15 173.58

FUTURE PLANS

HDFC has always been market-oriented and dynamic with respect to resource
mobilization as well as its lending program. This renders it more than capable to
meet the new challenges that have emerged. Over the years, HDFC has developed
a vast client base of borrowers, depositors, shareholders and agents, and it hopes
to capitalize on this loyal and satisfied client base for future growth. Internal
systems have been developed to be robust and agile, to take into account changes
in the volatile external environment.

HDFC has developed a network of institutions through partnerships with some of

the best institutions in the world, for providing specialized financial services. Each
institution is being fine-tuned for a specific market, while offering the entire HDFC
customer base the highest standards of quality in product design, facilities and
service.

SECTION 3
 FINANCIAL PLANNING
A comprehensive financial advisory service involving financial strategies, tax,
corporate/trust structures, estate planning, legal issues, family law, asset
allocation, asset protection and investment advice.
Financial Planning takes into account:

 Desired asset allocation, risk profile and return expectations.

 Building cash flows correlating all expenses and income. Inflation and outflows
due to loans are considering in building the financial plan.
 Future goals like retirement, housing and children's education / marriage or
other needs.

Why do you need Financial Planning?

You may have many dreams, needs and desires. For example, you could be
dreaming of:

 Owning a new car,

 Buying a dream house,
 Providing your children with the best education,
 Planning a grand wedding for your children
 Having a great time after your retirement

But in today's world of skyrocketing costs and increasing inflation, how many of
these dreams can you hope to turn into reality? By planning well, you can utilize
your limited resources to the fullest.

EXPERIENCE THE POWER 360º FINANCIAL PLANNING

The only thing permanent in life is change. Times change. People change. So does
life. You expect life to be much better tomorrow than it is today. Tomorrow, you
hope to fulfill all your dreams and aspirations. But what happens if things take an
untoward turn? Or, if there is an eventuality? Perhaps it's time for you to change
the way you plan your investments...

                            
                            
                                                                     

How will 360° Financial Planning help?

Instead of investing in an ad-hoc

manner, 360° Financial Planning helps you
take a holistic, all-round view. Briefly, 360°
Financial Planning comprises:

 Investment Planning
 Cash Flow Planning
 Tax Planning
 Insurance Planning
 Children’ Future Planning
 Retirement Planning

INVESTMENT PLANNING: To make your wealth grow

Everyone needs to save for a rainy day. Once you have saved enough to take care
of emergencies, you should start thinking about investing and to make your money
grow.

Investment Planning Service includes:

 Risk Profiling
 Asset Allocation and Portfolio Construction
  Creation and Accumulation of Wealth through Systematic Investment Plans
(SIP)
 Regular review of progress and Portfolio Rebalancing

CASH FLOW PLANNING: To provide for assets and meet the periodic cash
requirements

In simple terms, cash flow refers to the inflow and outflow of money. It is a record
of your income and expenses.

Cash flow planning refers to the process of identifying the major expenditures in
future (both short-term and long-term) and making planned investments so that
the required amount is accumulated within the required time frame.

TAX PLANNING: To save on taxes and increase your income

Proper tax planning is a basic duty of every person which should be carried
out religiously.

According to the Income Tax Act, 1961, One will be eligible for Tax Benefits under
Section 80C and Section 10(10D) of the act.

One has to compare the advantages of several tax saving schemes and depending
upon your age, social liabilities, tax slabs and personal preferences, decide upon a
right mix of investments, which shall reduce your tax liability to zero or the
minimum possible.

INSURANCE PLANNING: To protect yourself, your family and your Assets.

"Insurance is not for the person who passes away, it for those who
survive," goes a popular saying that explains the importance of Insurance
Planning.

It is extremely important that every person, especially the breadwinner, covers the
risks to his life, so that his family's quality of life does not undergo any drastic
change in case of an unfortunate eventuality. Insurance Planning is concerned with
ensuring adequate coverage against insurable risks.

CHILDREN'S FUTURE PLANNING: To give your children a financially secure

future

Like every parent, you too must be overjoyed to watch your child grow. All parents
want to give the best possible upbringing to their children. This includes good
education and security, in case of any eventuality. Soon, your little bundle of joy
will grow up, and it will be time to provide for his or her higher education and
wedding.

The purpose of Children's Future Planning is to create a corpus for foreseeable

expenditures such as those on higher education and wedding, and to provide for an
adequate security cover during their growing years.

RETIREMENT PLANNING: Because retirement is a time to relax, not to get

worried

Some like it. Some don’t. But retirement is a reality for every working person. Most
young people today think of retirement as a distant reality.

However, it is important to plan for your post-retirement life if you wish to retain
your financial independence and maintain a comfortable standard of living even
when you are no longer earning. This is extremely important, because, unlike
developed nations, India does not have a social security net.
CONSUMPTION PATTERN
 Food & Grocery
1.60%
0.80% 4.60% Home Textiles
2.10%
Personal Care
7.60%
Saving & Investment
2.30% Clothing
40.10%
Consumer Durable
10.80% Vacation
Eating out
3.90% Footwear
Movies & Theater
6.60% Entertainment
4.10%
8.80% Accessories
6.90% Books & Music

*Source-Business world magazine 2nd week April 2008

The consumption pattern is determined by the income so more would be the

income more would be the consumption. The consumption though can differ in
terms of areas where the money is actually spent. The above representation tells us
the consumption pattern of the consumer in India i.e. where do they actually invest
their money and in what proportion do they spend in various areas. The chart
shows that people are spending 6.9% of their savings into savings and
investments.

OBJECTIVE: To generate leads for various Unit Linked Plans offered

by the company, by interacting with walking and existing

customers and to know the awareness level of Financial
 Planning among them.

SALES PROCEDURE :

FIRST
CONVERSATION

Follow Up

APPOINTMENT

Follow Up

FILLING THE PROPOSAL FORM

COLLECT THE
REQUIRED DOCUMENTS AND
THE FIRST
PREMIUM

STEP 1: FIRST CONVERSATION WITH A KNOWN OR

AN UNKNOWN CUSTOMER
This is the first time, when you interact with a person and try to get the information
from him about the industry or the company and understand the customer’s insight
i.e. what actually does a customer expects from the companies.

The objective was to know the awareness about Financial Planning among the
customers and this was done by getting a questionnaire filled by the people. The
various activities performed were:

1) DELHI METRO : Here we interacted with the commuters &

collected the data.

2) MARKETS : (Cannaught Place & Karol Bagh) During this

activity, we interacted with the shopkeepers as well as the walking
people regarding their views about the industry.

3) CANOPY AT NOIDA : This activity was designed to target the people

working in BPOs and other IT companies.

4) TELE-CALLING: This was random calling from the data base provided
by the company and the aim was to collect
information from them.

5) CORPORATE PRESENTATION: A presentation was arranged for the

employees of VED RAM AND SONS (Paras), to make them aware about the
importance of Financial Planning in today’s unpredictable environment.

STEP 2: APPOINTMENT

All the potential and interested customers of all the activities performed are then
followed up and an appointment is fixed for further details.
The motive is to explain the customer in detail, about the various plans offered by
the company. The customer is informed about the procedure and the options he can
opt for like:
1) Choose the premium he wish to invest
2) Select the Premium Payment Option i.e. annual mode, half yearly
mode, quarterly mode, or monthly mode.
3) Choose the amount of protection i.e. the sum assured, he desires.
4) With Maturity Benefit, choose the additional benefits like:

a) Life option  Death Benefit

b) Life & Health option  Death Benefit + Accidental Death

Benefit
c) Extra Life & Health option  Death Benefit + Critical Illness
Benefit + Accidental Death Benefit

5) Choose the Investment funds or funds one desires.

The various funds available are:
 Liquid Fund
 Secure Managed Fund
 Defensive Managed Fund
 Balanced Managed Fund
 Equity Managed Fund
 Growth Fund

6) Other information like:

a) Tax Benefit
b) Various Charges
c) Switching option
d) Surrendering
 e) Terms & Conditions etc.

STEP 3: FILLING THE PROPOSAL FORM

After the second step, the interested customers are required to fill the proposal
form which requires the following information:
b) Personal details of the policy holder,
c) Personal details of Beneficiary or Nominee
d) The Premium amount selected
e) The Term of the policy
f) The Fund choice for investment

SECTION 4
STEP 4 : COLLECTING THE DOCUMENTS

Once the form is filled all the necessary documents are collected like :
a) Address proof,
b) DOB certificate etc.
And also the first premium amount in form of cheque or cash is collected.

Within 15 days, the policy documents reach the customers place, and the customer
is required to read the documents carefully.

SAMPLE SIZE: 100

Sample was collected on Random Basis

AGE DISTRIBUTION
 AGE DISTRIBUTION(yrs.)

Below 30
24%
35%
31 - 45

Above 45
41%

 Highest number of Respondents (41%) from Age group 31 to 45 yrs.

 35% respondents are of age below 30 yrs, small percentage of which
is unemployed.

MARITAL STATUS
 MARITAL STATUS SINGLE MARRIED

100%

90%

16
80%

70%

60%
37
50%
24
40%

19
30%

20%

10%

0%
4
Below 30 31 - 45 Above 45
AGE(yrs)

 Total number of single respondents – 23

 Total number of married respondents – 77

INCOME DISTRIBUTION
 INCOME DISTRIBUTION(Annual in Rs.appx.)

> 5 lacs 1 10 6
INCOME

3 - 5 lacs 5 12 12

1.5 - 3 lacs 13 12 6

<1.5 lacs 16 7 0

Below 30 31 - 45 Above 45

 Highest, 16 respondents in income bracket below 1.5 lacs, which

mainly comprises of age group below 30 years.
 Respondents of the age group 31-45 yrs, lie in all the income slabs.
 Minimum, 6 respondents in income bracket of above 5 lacs, which are
in age group of above 45 years.

ARE YOU AWARE ABOUT FINANCIAL PLANNING ?

 DO YOU KNOW WHAT IS
FINANCIAL PLANNING ?

100 YES
NO OF PEOPLE

90
98%
80

70
NO
60

50

40

30
2%
20

10

 98% of the respondents were aware about Financial Planning.

BRAND RECALL
 BRAND RECALL

LIC
51 100 ICICI Prudential
60
HDFC Std Life
71 96 TATA AIG
BIRLA SUN LIFE
KOTAK MAHINDRA
75
SBI LIFE
92
AVIVA
64 MAX NEW YORK
82 METLIFE
72
86 INGVYSYA

 100 % respondents mentioned first name to be LIC

 Among private players, ICICI Prudential has the highest
Brand Recall i.e. 96%
 HDFC Standard life has Brand Recall of 92%

INVESTMENT PREFERENCE
 INVESTMENT PREFERENCE
Banks & Post
office
9% Share Market
21%
21% Insurance

Bonds
18%
11%
Mutual Funds
20%
Real Estate

 21% respondents prefer banks and post office schemes as an

investment tool preference.
 Respondents of age group below 30 years prefer Mutual Funds, as they
provide higher returns than banking investment tools.
 Insurance ranks 2nd as an investment tool choice, which itself includes
various protection, saving and pension plans.
 Govt. Bonds & securities are mostly preferred by people of higher age
group rather than young generation.

 Property as an investment option is most lucrative choice. However it is

important to mention that majority of respondents are in age group of
above 30 years and people with high income bracket prefers to invest in

Real Estate.

INSURED PERCENTAGE
 ARE YOU INSURED?

13%

YES

NO

87%

 87 % of respondents were insured on own life and on life of their family

members.
 So we had 13 % of potential customers to approach.

COMPANY PREFERENCE
 COMPANY PREFERENCE(in %)

1
55% 30% 15%

0 20 40 60 80 100 120

ONLY LIC BOTH ONLY PVT. COs

 55% of respondents have insurance cover provided by LIC only

 15% of respondents have insurance cover provided by Private Cos. only
 Whereas 30% have got insurance from both LIC and Private Companies.
 Total number of LIC policies sums up to 85% and total number of Pvt.
Companies policies sold sums up to 45%.
 Data provides that though LIC is still got a maximum market share but
Private Companies are making a fast move in the market.

TYPE OF PLAN BOUGHT

 TYPE OF PLAN

17, 20% MONEY BACK

26, 29%
ENDOWMENT

PENSION PLAN
24, 28%
ULIPs
20, 23%

 Money back Policies have been most popular and also the endowment
plans.
 As people today are more aware about financial planning, so people of
the age 30 years have planned for their Retirement now.
 ULIPs are fast gaining popularity as they provide investment
benefit with Insurance.

PURPOSE OF BUYING INSURANCE

 PURPOSE OF BUYING INSURANCE

Retirement
Planning
14%

Tax Benefit 23%

Investment 11%

Risk Cover 52%

0 10 20 30 40 50 60

 Risk cover remains the most important purpose for buying insurance
followed by option as Tax saving tools.
 Retirement Planning in a early period is also gaining the market share.
 ULIPs are responsible for increasing popularity of insurance as an
investment tool

DISTRIBUTION CHANNEL PREFERENCE

 CHANNEL PREFERENCE

1
56 17 14 9 4

0 20 40 60 80 100 120

Known/Current Advisor Friends & Relatives

Group Insurance Banccassurance
Telesales/unknown Advisor

 According to the data, known/current Advisors remains the 1 st choice

for buying Insurance.
 In retail also known Advisors are preferred over referrals.
 Bancassurance is emerging as a popular option for buying life
Insurance.
 Group insurance is a channel which customers expect but it is not so
popular because only few employers have taken the initiative.
 Buying insurance from a unknown person or getting a phone call is still
not preferred by most of the people

THE BARRIERS FACED DURING THE PROCESS:

The Attitudinal Barriers To Purchasing …..
• Death - a taboo topic for discussion
“It’s quite ashubh talking about death”
• The belief in karma … destiny
“Jo kismet me likha hai wohi hoga, hum kya kar sakte hai”

The Product/ Service Barriers ……

• Liquidity
“What if I need my money urgently for some medical illness?”
• Service quality of the Agent
“He disappears after he takes the first premium”
• Sanctity of the contract

 Charges
SECTION 5
“What if my dependents do not get the money once I die?”

“Its better to invest in Mutual Funds, the charges there are very less”

The Other Barriers….

 Unsure about Pvt. Companies
 Low rate of return
“Better to put my money in PPF, at least I get fixed returns”
 Money gets tied up
 High premiums
CONCLUSION
The various conclusions drawn from the project are:

There has been a tremendous change in the insurance industry. And with it there
has been continuous growth in this sector both in Indian as well as world context.
The opening up of the insurance sector has changed the whole look of the industry.
While the LIC, in order to face the competition is coming up with new strategies.
New private players are leading the sector due to their strategic management and
tailored made projects.
From the research, we also conclude that though the awareness and people opting
for LIC plans are more as compared to other private players’ but the latter are
gaining momentum in the market day by day.
The demand for insurance is likely to increase with rising per-capita income, rising
literacy rates, and growth of service sector. In-fact opening up of the insurance
sector is an integral part of the liberalization process being persued by many
developing countries.
Life insurance as a form of protection is the single-most important financial product
any earning member of a family must have. Having said this, a well-diversified
portfolio is one of the first rules of financial planning, and as such one should
consider different instruments as the ability to save increases.
Possible investment options range from bank deposits and government small saving
schemes to mutual funds, stocks and property.

Certainly ULIPs successfully combine the first and most important need of
protection, with savings, and hence are an excellent addition to your portfolio.

All financial products have a certain amount of risk and charges, be it a mutual
fund, property, or even a bank deposit. It would be unrealistic to assume that the
features and benefits of a ULIP come at no cost, though the charges are
considerably lower than that of a traditional product.
In fact, the very reason the product is transparent is because the customer knows
the charges and risks.
There is no right or wrong in 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.

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.
The 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 scenario.
So lets conduct this business with utmost economy with the spirit of
trusteeship; thereby making insurance widely popular.

RECOMMENDATION
 Positioning insurance as a means to fulfilling one’s duties during one’s lifetime.
 Fears relating to thefts, ailments, death could be addressed through ‘sensitive’
communication
 Fears relating to claims: Need to promote “trust”. Demonstrating claim
testimonials, positioning as “worry free”.
 Low returns: Reposition insurance as a risk cover, security instrument rather
than a financial investment.
 Lack of understanding: Training of Channels
 To provide quality advice on products best suited
 Lack of Knowledge: Ease of Process, simplifying the product and the
procedure
 Need to promote the quality of awareness
 The benefits: Leverage on Risk Protection or Returns oriented or both
 The product: catering to life stages
 Need for Branding in Insurance: Branding is more relevant in the Insurance
market which not only faces the problem of securing and retaining customers in
an increasingly competitive marketplace but also experiences the need for
heightened relevance of the brand proposition in a world where brand has been
termed the new religion.
In rural India, the LIC is especially synonymous with insurance. But in the
wake of competition insurance companies have to do a considerable brand
building exercise at least in urban India. Adequate time, investment and
longer-term management of the brand are essential, not only for success but
also survival. All brands need to be built around well-differentiated and
credible positioning that springs from the organization’s history. The brand
must not only be believed but lived by management and employees.

 Focus on different segments to survive and thrive in a competitive

environment. Each company has to choose its own unique positioning based on
its unique strengths. Below-mentioned positioning alternatives can be worth
considering.

VARIETY-BASED POSITIONING
This type of positioning is based on varieties in products and services rather
than customer segments. It is a sensible strategy for those companies who have
distinctive advantages or strengths in offering certain products and services. In
the insurance industry too, it is possible to achieve a unique position by focusing
on certain category of products.

NEEDS-BASED POSITIONING
This is the most commonly understood positioning and is based on the differing
needs of different groups of consumers. This can be done successfully if a
company has unique strengths to service a group of customer needs better than
others.
The insurance needs of customers vary significantly for different groups of
customers. The insurance needs of young family with small children will be quite
different from that of a family in which the income-earner is close

to retirement. However, in India most of the life insurance companies have a

wide variety of products tailored for different customer needs and there is no
company focusing on a particular customer need.

ACCESS-BASED POSITIONING
Positioning of customers can also be done by the way they are accessible. That
is different groups of customers may be accessible in different ways even though
they may have similar needs. Access is typically a function of customer
geography or customer scale. There is excellent opportunity in the insurance
industry to employ access-based positioning by targeting the rural insurance
sector.

The rural market for life insurance is very different from the urban market in
terms of needs, income levels and distribution (seasonality, for example),
penetration of media and so on. Rural market can be a highly profitable position
if one is able to carefully plan and tailor an entire set of low-cost activities of
advertising, distribution, and product design etc. to successfully exploit the
potential.
 Questionnaire
 Glossary
 Bibliography
 QUESTIONNAIRE

“Awareness of Financial Planning and Consumer’s Perception about

Insurance Industry”

Name:________________________
Age:______

Gender: M F F

Marital Status: Married Single

Occupation : ___________________

Contact No : __________________

Annual Income (appx. in Rs.)

Upto 1.50 lacs 1.50 lacs-3 lacs
3 lacs-5 lacs Above 5 lacs

Q1) Are you aware about ‘what is financial planning’?

YES NO

Q2) Mention the names of Life insurance companies you have heard of:

1) ________________ 4) ________________
2) ________________ 5) ________________
3) ________________ 6) ________________

Q3) How much do you save approximately of your annual income?

Q4) Where do you invest/would like to invest your savings?

(Rank in order of preference, 1 being most preferable)

Banks Share Market

Insurance Bonds & Securities

Mutual Funds Real Estate/Property

Q5) Have you taken any life insurance policy on your own life or on life of any
of your family member?
 YES NO

(If no, switch to Q 9 )

Q6) Which company(s) policy(s) you have?

LIC ICICI PRUDENTIAL

BIRLA SUNLIFE ING VYSYA

BAJAJ ALLIANZ SBI LIFE

HDFC STD. LIFE TATA AIG

MAX NEW YORK LIFE AVIVA

RELIANCE KOTAK MAHINDRA

MET LIFE OTHER ____________ (specify)

Q7) Which type of plan did you buy?

Money Back Plan

Endowment Plan

Pension Plan

ULIP

Q8) What was your purpose/will be your likely purpose of taking insurance?
RANK THEM (1 being most ideal)

a) PROTECTION
OF FAMILY

b) TAX BENEFIT

c) INVESTMENT

d) RETIREMENT
 PLANNING

Q9) Have you ever been approached for Life insurance by any of the following
(please √ ), also Rank according to your preference from whom you are most
likely to buy insurance?
(√ here) (Rank)
1) Known/Current Advisor

2) Advisors referred by friends/family

3) Telesales and subsequent visit by unknown Advisor

4) Schemes offered by your bank (Bancassurance)

5) Group Insurance Policies offered by your employer

Q10) Do you feel opening up of the sector has created more insurance awareness
among the public?

YES NO

Q11) How many dependents do you have?

<2 2-4 4-6 >6

Q12) Do you really think insurance cover in todays scenario is not

essential?

_____________________________________________________

_____________________________________________________

THANK YOU FOR YOUR CONTRIBUTION

GLOSSARY

Accident Benefit
An add-on with a life policy. It compensates a policyholder in the event of death or
injury by accident

Annuity
An investment option that makes a series of regular payments to an individual in
exchange for a premium or a series of premium.
 
Asset allocation
How your investments are spread across various asset classes
 
Bonus
The amount paid as return in a ‘with-profit’ policy. The bonus, expressed as a
percentage of the sum assured, is generally declared every year. The amount is
linked to the profits earned by the insurer. Depending on the time of withdrawal,
there are two kinds of bonuses – reversionary and cash. A reversionary bonus can
be encashed only on maturity of the policy; a cash bonus can be withdrawn when
declared
 
Capital gains
Profit earned from the sale of stocks, mutual fund units and real estate. Long-term
capital gains arise from assets owned for more than a year while short-term capital
gains are made from assets owned for less than a year.
 
Corpus
The amount of money available with a scheme for investing. If already invested,
the corpus is the current value of the scheme’s portfolio.
 

Cover
Another word for insurance; it also refers to the amount of insurance.
 
Critical illness rider
A rider that provides a policyholder financial protection in the event of a critical
illness

Death benefit
The amount payable to the nominee on death of the policyholder. The amount paid
is the sum assured plus benefits applicable (if any) less outstanding loans.
 
Endowment plans
An insurance plan that provides a policyholder risk cover and some return on
investment. Usually suitable for the risk-averse
 
ELSS (equity-linked savings schemes)
Diversified equity funds that additionally offer a tax deduction under Section 80C on
investments up to Rs.1 lakh.

Financial planning
It covers the essential elements of a person’s financial affairs and is aimed at
achieving a person’s financial goals.
 
Group Insurance
An insurance policy taken out by employers to provide life cover to their employees.
Usually the cheapest form of insurance.
 
Insured
The policyholder: The person who buys an insurance policy
 

Insurer
The insurance company
 
Investments
Assets like fixed deposits, post office savings, bonds and stocks that are acquired
for the purpose of earning a return
 
Liquidity
The quality of assets that can be easily and quickly converted into cash without
any, or significant, loss in value.
 
Lock-in period
The period of time for which investments made in an investment option cannot be
withdrawn.
 
Maturity date
The date on which a policy term or fixed-income investment like fixed deposit or
bond comes to an end.
 

Money-back plans
A variant of endowment plans in which survival benefits are disbursed through the
policy term, rather than in a lump sum at the end.
 
Net asset value (NAV)
The simplest measure of how a scheme is performing, it tells how much each unit
of it is worth at any point in time. A scheme’s NAV is its net assets (the market
value of the financial securities it owns minus whatever it owes) divided by the
number of units it has issued.
Nominee
The person(s) nominated by the policyholder to receive the policy benefits in the
event of his death.

Pension Plan
Investment products offered by insurance companies and mutual funds that
required the investor to make defined contributions over regular periods, mostly
every year. The contributions are invested according to a pre-decided investment
plan. At retirement, the accumulation is paid out through regular pay-out options.
 
Policy
The legal document issued by an insurance company to a policyholder that states
the terms and conditions of an insurance contract.
 
Policy term
The period for which an insurance policy provides cover
 
Post office schemes
Also known as Small Savings schemes, they are offered at post offices and carry
the highest returns among fixed income instruments. Government backing makes
these instruments like Public Provident Fund (PPF), National Savings Certificate
(NSC), Kisan Vikas Patra (KVP) and Post Office Monthly Income Scheme (POMIS)
risk-free
 
Premium
The amount paid by the insured to the insurer to buy cover
 
Riders
Additional covers that can be added to a life policy, for a cost

Sum assured
The amount of cover taken under a life insurance policy, it is the minimum amount
that will be paid on death of the policyholder during the policy term.
 
Surrender value
The amount payable by the insurer to the owner of an investment-based plan in
case he opts to terminate the policy after three years (the mandatory lock-in
period) but before its maturity date. The surrender value will be the premia paid till
date minus surrender charges and any outstanding loans due.
 
Term plans
A plan that provides life cover for a specified period of time, but no return on the
premium paid
 
Vesting date
In pension plans, it is the date from which the policyholder starts receiving pension.
In children’s plans, it is the date from which a child becomes the owner of a policy
taken out in his name (generally, around his 18th birthday).
  
Waiver of premium rider
A rider that waives the premia payable on the base policy and other riders in
certain circumstances mostly related to death, disability or injury. An important
feature especially for investment products such as children’s policies.
  
Will
A document that designates the assets of a person-both financial and physical- to
various family members and other heirs.
 
Whole-life plans
Class of life insurance policies that provide cover through your lifetime.

BIBLIOGRAPHY
Websites

www.rbi.org.in
www.irdaindia.org
www.banknetindia.com
www.hdfcinsurance.com
www.businessworldonline.com
www.google.com (search engine)
Other References:
Brochures of various plans
Business week
REFERENCE PERSON-
Mr. VARUN
9910699747