A SUMMER TRAINNING PROJECT REPORT ON FINANCIAL INSTRUMENTS A report submitted to U.P.Tech ic!". U i#ersit$ %or the p!rti!

" Fu"%i""me t o% M&A 'e(ree )*+*,+)

Submitted to: Prof. Hari Prakash SHARMA Director MBA !reater "oida I#stitute of $ech#o%o&y

Submitted by: ABHISHEK MBA IIIrd. Sem. Ro%% "o. '()*)*((()

!reater "oida I#stitute of $ech#o%o&y +Ma#a&eme#t I#stitute, -ode: )*) *. K#o/%ed&e Park II. !reater "oida +0.P,

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CERTIFICATE

$his is to certify that the

S0MMER $RAI""I"! Pro1ect Re2ort e#tit%ed

34I"A"-IA5 I"S$R0ME"$6 bei#& submitted by 77777777777777777 fu%fi%%me#t of the re8uireme#t of 0.P.$ech#ica%. 0#i9ersity is a record of a# i#de2e#de#t /ork do#e by his u#der my &uida#ce a#d su2er9isio#.

Prof. Hari Prakash Director MBA !reater "oida I#stitute of $ech#o%o&y +Ma#a&eme#t I#stitute, -ode: )*) -o#cer#ed 4acu%ty !uide !"I$. !reater "oida.

'ECLARATION

I.

to dec%are that the 2ro1ect re2ort e#tit%ed 34I"A"-IA5

I"S$R0ME"$6 bei#& submitted to the 0.P.$E-H"I-A5 0"I;ERSI$< for the 2artia% fu%fi%%me#t of the re8uireme#t for the de&ree of Master of Busi#ess Admi#istratio# is my o/# e#dea9ours a#d it has #ot bee# submitted ear%ier to a#y i#stitutio#=u#i9ersity for a#y de&ree.

P"!ce'!teABHISHEK SHARMA R>55 ">.'()*)*((()

AC.NO/LE'GEMENT

I /ou%d %ike to take the o22ortu#ity. es2ecia%%y to e@2ress my 2rofou#d &ratitude to Mr. 0i1!s J!i 2C'M3 4'FC SLIC. for his co#sta#t assista#ce a#d &uida#ce i# the com2%etio# of my 2ro1ect. I a%so deem it to be my 2ri9i%e&e to ack#o/%ed&e the e#coura&eme#t a#d faci%ities 2ro9ided to me by HD4- S$A"DARD 5ife I#sura#ce P9t. 5td. -o. to make this 2ro1ect a fruitfu% o#e. I am a%so tha#kfu% to a%% those 2eo2%e of HD4- Sta#dard 5ife I#sura#ce P9t. 5td. -o. /hom I came across for their e@te#ded su22ort duri#& the 2ro1ect 2eriod. I e@2ress my dee2 &ratitude to 3HD4- Sta#dard 5ife I#sura#ce -om2a#y6 for &i9i#& me the cha#ce to 2ursue my summer i#ter#shi2.

ABHISHEK SHARMA !"I$ +MBA I"S$I$0$E, )*)

PREFACE
$he i#sura#ce sector i# I#dia has see# #e/ hi&hs i# the rece#t 2ast. A%most e9ery i#sura#ce com2a#y has 2osted record &ro/ths a#d &reat 2rofit fi&ures. It /as see# that the 2rofits i# the i#sura#ce sector /ere dri9e# by the &ood 2erforma#ces i# the 2ub%ic sector i#sura#ce com2a#ies.

$he 2ub%ic sector i#sura#ce com2a#ies i# the cou#try ha9e sho/# &ood resu%ts a#d &ood future. $he fi#a#cia% 2erforma#ces su&&est that e9e# after the e#try of #umerous 2ri9ate sector i#sura#ce com2a#ies. the 2ub%ic sti%% has faith i# the 2ub%ic sector com2a#ies.

HD4- Sta#dard %ife is o#e of the %ar&est 2ri9ate sector com2a#ies i# I#dia a#d the 9o%ume of c%ie#ts /hich they ma#a&e is a%so 9ery hi&h. $hus i# s2ite of such %ar&e 9o%umes. they 2erform it 9ery efficie#t%y.

$he I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +IRDA, has 2%ayed a 2roacti9e ro%e as a re&u%ator a#d a faci%itator i# the sectorBs de9e%o2me#t.

$he siCe of the market 2rese#ts imme#se o22ortu#ities to #e/ 2%ayers /ith o#%y )( 2er ce#t of the cou#tryBs i#surab%e 2o2u%atio# curre#t%y i#sured. $his 2ro1ect /i%% take you throu&h a ma1or 2%ayer i.e. HD4- Sta#dard 5ife I#sura#ce. $his 2ro1ect basica%%y i#c%udes /hat a%% 2roducts are 2ro9ided by Sta#dard 5ife.

O&JECTI0ES
The Prim!r$ ob5ecti#e -hecki#& the a/are#ess %e9e% of I#sura#ce a#d their #eed to/ards it. Study of i#f%ue#ci#& factors affecti#& the 2urchase decisio#. A#a%yCi#& the 2referred mode of sa9i#&s -hecki#& the satisfactio# %e9e% of customers to/ards i#sura#ce

The seco d!r$ ob5ecti#e $o make c%ie#ts a#d %et them k#o/ about the differe#t ser9ices offered by the HD4- Sta#dard 5ife I#sura#ce -om2a#y. $o u#dersta#d the 2rob%em faced by customers a#d fi#di#& /ay to so%9e the 8ueries.

).6 Scope o% the stud$ $he data /as e#ou&h to fu%fi%% the ob1ectio# of the study. $he study 2ro9ides the k#o/%ed&e of HD4- Sta#dard 5ife a 2art of HD4- P9t. 5td. $he study he%2 to %ear# the /ork cu%ture i# a#d arou#d the or&a#isatio#. $he study a %ot to k#o/ about co#sumer beha9ior /hi%e 2urchasi#& the 2roduct. $he study 2ro9ides first ha#d i#formatio# re&ardi#& the re8uired ser9ices.

TA&LE OF CONTENTS

I troductio 777777777777777777777777777..+*

I sur! ce i I di!7777777777777777777777777 ++ i. I sur! ce I I di! ii. A &rie% 4istor$ O% The I sur! ce Sector iii. I sur! ce Sector Re%orms i#. I di! I sur! ce I dustr$ #. I sur! ce &usi ess #i. E tr$ O% Forei( P"!$ers

#ii. Guide"i es For E tr$ O% I sur! ce I sur! ce Re(u"!tor$ 8 'e#e"opme t Authorit$777777777777.69 i. Go#er me t Re(u"!tio ii. 'uties: Po;ers A d Fu ctio s O% IR'A iii. IR'A Noti%ic!tio

The Comp! $777777777777777777777777777<< i. ii. iii. i#. I dustr$ pro%i"e Comp! $ pro%i"e Or(! i=!tio !" structure M!r1et positio

Products7777777777777777777777777777.... >> 'istributio 777777777777777777777777777...9? Ob5ecti#e ! d Methodo"o($777777777777777777777 @+ Competitor Pro%i"i ( 77777777777777777777777...A? A !"$sis77777777777777777777777777777. A@ Recomme d!tio s7777777777777777777777777 +*A Co c"usio 7777777777777777777777777777 ++* &ib"io(r!ph$777777777777777777777777777. ++6 Appe diB,+777777777777777777777777777... ++< Appe diB,)777777777777777777777777777... ++@

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I troductio

I#sura#ce is system of 2rotectio# a&ai#st fi#a#cia% %oss of a# asset i# /hich a #umber of 2eo2%e a&ree to 2ay certai# sums of mo#ey ca%%ed premiums to create a commo# 2oo% of fu#ds. $he 2oo% &uara#tees com2e#satio# to the i#di9idua% /ho suffers a# accide#ta% %oss of his or her asset. E9ery asset has a %ife. A# asset mi&ht #ot com2%ete its %ife cyc%e due to accide#ta% occurre#ces. Accide#ta% %osses ca# de2ri9e the o/#er of the e@2ected eco#omic be#efits of the asset. I#sura#ce is re%ated o#%y /ith com2e#satio# for the %osses caused by accide#ta% occurre#ces. 4or e.&.. cars ca##ot be i#sured a&ai#st becomi#& obso%ete but ca# be i#sured a&ai#st road accide#ts a#d thefts. I#sura#ce is a co tr!ct bet/ee# the i#surer a#d the i#sured that 2ro9ides com2e#satio# for s2ecific %osses i# e@cha#&e for a 2eriodic 2ayme#t. A# i#di9idua% co#tract is k#o/# as a# i#sura#ce 2o%icy a#d the 2eriodic 2ayme#t is k#o/# as the i#sura#ce 2remium. I#sura#ce 2ro9ides a mecha#ism for shifti#& risk from a 2erso#. busi#ess. or or&a#iCatio# to a# i#sura#ce com2a#y i# e@cha#&e for the 2ayme#t of the i#sura#ce 2remium.

I sur! ceC is b!sic!""$ ! sh!ri ( de#ice.

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INSURANCE IN IN'IA

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I sur! ce D 'e%i itio I#sura#ce ca# be defi#ed both i# fi#a#cia% as /e%% as i# %e&a% terms for it dabb%es i# both these fie%ds.

Fi ! ci!" 'e%i itio - 3$ra#sfer or shifti#& risk from o#e i#di9idua% to a &rou2 a#d shari#& %osses o# a# e8uitab%e basis by a%% members of the &rou2.6

Le(!" 'e%i itio : I# %e&a% terms. i#sura#ce is a co#tractua% a&reeme#t /hereby o#e 2arty a&rees. for a co#sideratio# ca%%ed 2remium. to com2e#sate a#other 2arty for %osses. Each of such tra#sactio# i#9o%9es fo%%o/i#&: I surer $he 2arty a&reei#& to 2ay for the %osses of the i#sured. I sured $he 2arty /ho i#sures his risks /ith the i#surer. Premium $he 2ayme#t the i#surer recei9es from the i#sured for i#dem#ifyi#& %osses. Po"ic$ Po%icy is the co#tract bet/ee# the i#surer a#d i#sured that sets the

co#tractua% ob%i&atio#s bet/ee# the t/o. EBposure to "oss e@2osure to %oss. $he i#suredBs 2ossibi%ity of %oss is ca%%ed the i#suredBs

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I sur! ce Sector
I#sura#ce sector is broad%y di9ided i#to t/o 2arts: 5ife I#sura#ce "o# 5ife=!e#era% I#sura#ce

$he reform i# the i#sura#ce sector %eadi#& fi#a%%y to the o2e#i#& of the i#sura#ce sector for 2ri9ate 2artici2atio# has brou&ht i# its /ake ma1or cha#&es #ot o#%y i# the desi&# of the 2roducts a9ai%ab%e i# the market but a%so the ma##er i# /hich they are marketed. Ge ha9e today a host of 2roducts cou2%ed /ith a %ar&e #umber of i#termediaries /ho market them.

-om2a#ies es2ecia%%y %ife i#sura#ce com2a#ies are ado2ti#& differe#t ty2es of distributio# cha##e%s to &rab customers. Mu%ti cha##e% distributio# mode% is such a #e/ co#ce2t that is 2rese#t%y seemed to be a%%uri#& to I#dia# %ife i#surers. I# a mu%ti2%e distributio# mode%. a si#&%e i#sura#ce com2a#y uses more tha# o#e distributio# cha##e% to market its 2roducts.

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'istributio ch!

e"s o% Li%e I sur! ce i I di! M!r1et

$he distributio# sce#ario of %ife i#sura#ce has 9aried a %ot /ith 2ost %ibera%iCatio# Po%icies i# I#dia# market. By a#y yardstick. I#dia. /ith about )(( mi%%io# midd%e c%ass househo%ds. 2rese#ts a hu&e u#ta22ed 2ote#tia% for 2%ayers i# the i#sura#ce i#dustry. Saturatio# of markets i# ma#y de9e%o2ed eco#omies has made the I#dia# market e9e# more attracti9e for &%oba% i#sura#ce ma1ors. 4i#a#cia% co#su%ta#t +a&e#t, is o#e of the most im2orta#t modes of distributio# of %ife i#sura#ce 2roducts. 4i#a#cia% co#su%ta#t +A&e#ts, co#ti#ues to be the 2redomi#a#t distributio# cha##e%. today a #umber of i##o9ati9e a%ter#ati9e cha##e%s are bei#& offered to co#sumers. Some of them are ba#c assura#ce. brokers. the i#ter#et a#d direct marketi#&.

$he distributio# system for %ife i#sura#ce 2roducts 2ost %ibera%iCatio# i#9o%9es 9arious i#termediaries bet/ee# i#surer a#d i#sured. 4o%%o/i#& are the differe#t ki#d of distributio# cha##e%s:

+. A(e tsA&e#ts ha9e fu#ctio# of direct se%%i#& to the customerH they are mai# i#termediary bet/ee# the com2a#y a#d the c%ie#t. $here are t/o ty2es of a&e#ts. !e#era% a#d -areer a&e#ts. $he !e#era% a&e#ts /ork for differe#t i#surers at the same time but career a&e#tBs /ork for o#%y o#e i#surer. Prior to %ibera%iCatio# #o mi#imum 8ua%ificatio# /as %aid do/# for the 2eo2%e /ho /a#ted to become i#sura#ce a&e#ts. $hey &e#era%%y acted as %ife brokers a#d cared more for their commissio# tha# the #eeds of the customer. As the resu%t they did#Bt make the re8uired efforts to educate the customers about i#sura#ce 'A

2roducts bei#& offered. But /ith the e#try of the #e/ 2%ayers i# the I#dia# market the i#sura#ce market has cha#&ed drastica%%y. Pri9ate i#surers focused more o# the tech#ica% e@2ertise a#d ser9ice e@ce%%e#ce so they &i9e 2ro2er trai#i#& to the a&e#ts a#d teach them 2ro2er%y about the i#sura#ce 2roducts /hich they are su22ose to se%%.

). &ro1ersI#sura#ce brokers are the or&a#iCatio#s /ho assess the com2%ete i#sura#ce #eeds of the customers a#d the# /ork out /ith i#surers to &i9e a com2%ete so%utio# to customers. BrokerBs attributes: ', Brokers must ha9e abi%ity to de9e%o2 a more com2rehe#si9e u#dersta#di#& of a c%ie#tBs busi#ess a#d broad s2ectrum of risks. ), $hey are #ot tied /ith 2articu%ar i#surer a#d are e@2ected to &i9e the best ser9ice to the customer accordi#& to the #eed of the customer.

&ro1er #ersus A(e t

', A broker may se%% the 2roducts of a #umber of i#surers /hereas a# i#sura#ce a&e#t has the I#surer as his 2ri#ci2a% a#d /orks i# the i#terest of the I#surer a#d #ot the I#sured. ), A# i#sura#ce broker differs from a# i#sura#ce a&e#t i# that a broker is co#sidered a# a&e#t of the I#sured e9e# thou&h he or she may recei9e a commissio# from the i#sura#ce com2a#y

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?. &! c!ssur! ce$his refers to the distributio# of the i#sura#ce 2roducts throu&h ba#ks. Products are distributed throu&h a ba#kBs bra#ches a#d a%so throu&h #e/ distributio# systems such as e%ectro#ic ba#ki#&. Ba#k assura#ce is be%ie9ed to be the best because ba#ks are fami%iar /ith the tar&et customers #eeds a#d ha9e a stro#& de%i9ery mecha#ism. $he reaso#s /hy ba#ks ha9e 2ushed the %ife i#sura#ce 2roducts are:

', Mature a#d hi&h%y com2etiti9e ba#ki#& markets ), Broade#i#& of the 2roduct base a, >#e sto2 sho22i#& b, -om2%eme#tary Products :, 5e9era&e ba#kBs com2etiti9e ed&e o# the marketi#& side a, 4re8ue#cy of co#tacts b, -ustomer k#o/%ed&e c, Ima&e=Bra#d #ame

Some of the disad9a#ta&es of the ba#cassura#ce are i#itia% i#9estme#t a#d trai#i#& of 2eo2%e a#d %ack of a/are#ess about this #e/ co#ce2t.

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6. Corpor!te A(e ts-or2orate a&e#ts fu#ctio# the same /ay as brokers do. barri#& the fact that they ca# se%% o#%y o#e i#sura#ce com2a#yBs 2roducts. Some cor2orate a&e#ts. ho/e9er. ha9e tried to circum9e#t this re&u%atio# by setti#& u2 t/o or three sister firms so that they ca# offer a basket of 2roducts to their c%ie#ts. $his term refers to the cor2orate that acts as a&e#ts to the i#sura#ce com2a#ies. $he i#sura#ce com2a#y chooses a third 2arty /hich is fi#a#cia%%y sou#d a#d assi&#s it the res2o#sibi%ity of co9eri#& a &i9e# %ocatio#. $his third 2arty is ca%%ed cor2orate a&e#t.

/i ds o% Ch! (eReforms ha9e marked the e#try of ma#y of the &%oba% i#sura#ce ma1ors i#to the I#dia# market i# the form of 1oi#t 9e#tures /ith I#dia# com2a#ies. Some of the key #ames are AI!. "e/ <ork. A%%ia#C. Prude#tia%. Sta#dard 5ife. >%d Mutua%. $he e#try of #e/ 2%ayers has re1u9e#ated the erst/hi%e mo#o2o%y 2%ayer 5I-. /hich has res2o#ded to the com2etitio# i# a# admirab%e fashio# by %au#chi#& #e/ 2roducts a#d im2ro9i#& ser9ice sta#dards.

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P"!$ers i Li%e I sur! ce i dustr$ i I di! 5IHD4- S$A"DARD I-I-I PR0DE"$IA5 A55IA"I BAJAJ I"! ;<ASA BIR5A S0"5I4E MAK "EG<>RK5I4E ME$5I4E >M K>$AK MAHI"DRA A;I;A SBI 5ife $A$A AI! AMP SA"MAR +"o/ A Re%ia#ce !rou2 -om2a#y, SRIRAM 5I4E I"S0RA"-E ->MPA"<+ A "e/ E#tra#t, BHAR$I AKA + A "e/ E#tra#t,

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Types of insurance
A#y risk that ca# be 8ua#tified ca# 2ote#tia%%y be i#sured. S2ecific ki#ds of risk that may &i9e rise to c%aims are k#o/# as L2eri%sL. A# i#sura#ce 2o%icy /i%% set out i# detai% /hich 2eri%s are co9ered by the 2o%icy a#d /hich are #ot. Be%o/ is a +#o# e@hausti9e, %ist of the ma#y differe#t ty2es of i#sura#ce that e@ist. A si#&%e 2o%icy may co9er risks i# o#e or more of the cate&ories set forth be%o/. 4or e@am2%e. auto i#sura#ce /ou%d ty2ica%%y co9er both 2ro2erty risk +co9eri#& the risk of theft or dama&e to the car, a#d %iabi%ity risk +co9eri#& %e&a% c%aims from causi#& a# accide#t,. A homeo/#erMs i#sura#ce 2o%icy i# the 0.S. ty2ica%%y i#c%udes 2ro2erty i#sura#ce co9eri#& dama&e to the home a#d the o/#erMs be%o#&i#&s. %iabi%ity i#sura#ce co9eri#& certai# %e&a% c%aims a&ai#st the o/#er. a#d e9e# a sma%% amou#t of hea%th i#sura#ce for medica% e@2e#ses of &uests /ho are i#1ured o# the o/#erMs 2ro2erty.

Automobi"e i sur! ce. k#o/# i# the 0K as motor i#sura#ce. is 2robab%y the most commo# form of i#sura#ce a#d may co9er both %e&a% %iabi%ity c%aims a&ai#st the dri9er a#d %oss of or dama&e to the i#suredMs 9ehic%e itse%f. $hrou&hout most of the 0#ited States a# auto i#sura#ce 2o%icy is re8uired to %e&a%%y o2erate a motor 9ehic%e o# 2ub%ic roads. I# some 1urisdictio#s. bodi%y i#1ury com2e#satio# for automobi%e accide#t 9ictims has bee# cha#&ed to a #o fau%t system. /hich reduces or e%imi#ates the abi%ity to sue for com2e#satio# but 2ro9ides automatic e%i&ibi%ity for be#efits.

A#i!tio i sur! ce i#sures a&ai#st hu%%. s2ares. deductib%e. hu%% /ar a#d %iabi%ity risks. )(

&oi"er i sur! ce +a%so k#o/# as boi%er a#d machi#ery i#sura#ce or e8ui2me#t breakdo/# i#sura#ce, i#sures a&ai#st accide#ta% 2hysica% dama&e to e8ui2me#t or machi#ery.

&ui"derEs ris1 i sur! ce i#sures a&ai#st the risk of 2hysica% %oss or dama&e to 2ro2erty duri#& co#structio#. Bui%derMs risk i#sura#ce is ty2ica%%y /ritte# o# a# La%% riskL basis co9eri#& dama&e due to a#y cause +i#c%udi#& the #e&%i&e#ce of the i#sured, #ot other/ise e@2ress%y e@c%uded.

&usi ess i sur! ce ca# be a#y ki#d of i#sura#ce that 2rotects busi#esses a&ai#st risks. Some 2ri#ci2a% subty2es of busi#ess i#sura#ce are +a, the 9arious ki#ds of 2rofessio#a% %iabi%ity i#sura#ce. a%so ca%%ed 2rofessio#a% i#dem#ity i#sura#ce. /hich are discussed be%o/ u#der that #ameH a#d +b, the busi#ess o/#ers 2o%icy +B>P,. /hich bu#d%es i#to o#e 2o%icy ma#y of the ki#ds of co9era&e that a busi#ess o/#er #eeds. i# a /ay a#a%o&ous to ho/ home o/#ers i#sura#ce bu#d%es the co9era&es that a home o/#er #eeds.

C!su!"t$ i sur! ce i#sures a&ai#st accide#ts. #ot #ecessari%y tied to a#y s2ecific 2ro2erty.

Credit i sur! ce re2ays some or a%% of a %oa# back /he# certai# thi#&s ha22e# to the borro/er such as u#em2%oyme#t. disabi%ity. or death. Mort&a&e i#sura#ce +see be%o/, is a form of credit i#sura#ce. a%thou&h the #ame credit insurance more ofte# is used to refer to 2o%icies that co9er other ki#ds of debt.

Crime i sur! ce i#sures the 2o%icyho%der a&ai#st %osses arisi#& from the crimi#a% acts of third 2arties. 4or e@am2%e. a com2a#y ca# obtai# crime i#sura#ce to co9er %osses arisi#& from theft or embeCC%eme#t.

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Crop i sur! ce L4armers use cro2 i#sura#ce to reduce or ma#a&e 9arious risks associated /ith &ro/i#& cro2s. Such risks i#c%ude cro2 %oss or dama&e caused by /eather. hai%. drou&ht. frost dama&e. i#sects. or disease. for i#sta#ce.LN?O

'e%e se &!se Act /or1ersE compe s!tio

or '&A I sur! ce i#sura#ce

2ro9ides co9era&e for ci9i%ia# /orkers hired by the &o9er#me#t to 2erform co#tracts outside the 0S a#d -a#ada. DBA is re8uired for a%% 0S citiCe#s. 0S reside#ts. 0S !ree# -ard ho%ders. a#d a%% em2%oyees or subco#tractors hired o# o9erseas &o9er#me#t co#tracts. De2e#di#& o# the cou#try. 4orei&# "atio#a%s must a%so be co9ered u#der DBA. $his co9era&e ty2ica%%y i#c%udes e@2e#ses re%ated to medica% treatme#t a#d %oss of /a&es. as /e%% as disabi%ity a#d death be#efits.

'irectors ! d o%%icers "i!bi"it$ i sur! ce 2rotects a# or&a#iCatio# +usua%%y a cor2oratio#, from costs associated /ith %iti&atio# resu%ti#& from mistakes i#curred by directors a#d officers for /hich they are %iab%e. I# the i#dustry. it is usua%%y ca%%ed LDP>L for short.

'is!bi"it$ i sur! ce 2o%icies 2ro9ide fi#a#cia% su22ort i# the e9e#t the 2o%icyho%der is u#ab%e to /ork because of disab%i#& i%%#ess or i#1ury. It 2ro9ides mo#th%y su22ort to he%2 2ay such ob%i&atio#s as mort&a&es a#d credit cards.
o

Tot!" perm! e t dis!bi"it$ i sur! ce i#sura#ce 2ro9ides be#efits /he# a 2erso# is 2erma#e#t%y disab%ed a#d ca# #o %o#&er /ork i# their 2rofessio#. ofte# take# as a# ad1u#ct to %ife i#sura#ce.

Errors a#d omissio#s i#sura#ce: See LProfessio#a% %iabi%ity i#sura#ceL u#der L5iabi%ity i#sura#ceL.

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EBp!tri!te i sur! ce 2ro9ides i#di9idua%s a#d or&a#iCatio#s o2erati#& outside of their home cou#try /ith 2rotectio# for automobi%es. 2ro2erty. hea%th. %iabi%ity a#d busi#ess 2ursuits.

Fi ! ci!" "oss i sur! ce 2rotects i#di9idua%s a#d com2a#ies a&ai#st 9arious fi#a#cia% risks. 4or e@am2%e. a busi#ess mi&ht 2urchase co9er to 2rotect it from %oss of sa%es if a fire i# a factory 2re9e#ted it from carryi#& out its busi#ess for a time. I#sura#ce mi&ht a%so co9er the fai%ure of a creditor to 2ay mo#ey it o/es to the i#sured. $his ty2e of i#sura#ce is fre8ue#t%y referred to as Lbusi#ess i#terru2tio# i#sura#ce.L 4ide%ity bo#ds a#d surety bo#ds are i#c%uded i# this cate&ory. a%thou&h these 2roducts 2ro9ide a be#efit to a third 2arty +the Lob%i&eeL, i# the e9e#t the i#sured 2arty +usua%%y referred to as the Lob%i&orL, fai%s to 2erform its ob%i&atio#s u#der a co#tract /ith the ob%i&ee.

4ire i#sura#ce: See LPro2erty i#sura#ceL. HaCard i#sura#ce: See LPro2erty i#sura#ceL. 4e!"th i sur! ce 2o%icies /i%% ofte# co9er the cost of 2ri9ate medica% treatme#ts if the "atio#a% Hea%th Ser9ice i# the 0K +"HS, or other 2ub%ic%y fu#ded hea%th 2ro&rams do #ot 2ay for them. It /i%% ofte# resu%t i# 8uicker hea%th care /here better faci%ities are a9ai%ab%e.

Home i#sura#ce or homeo/#ers i#sura#ce: See LPro2erty i#sura#ceL. Li!bi"it$ i sur! ce is a 9ery broad su2erset that co9ers %e&a% c%aims a&ai#st the i#sured. Ma#y ty2es of i#sura#ce i#c%ude a# as2ect of %iabi%ity co9era&e. 4or e@am2%e. a homeo/#erMs i#sura#ce 2o%icy /i%% #orma%%y i#c%ude %iabi%ity co9era&e /hich 2rotects the i#sured i# the e9e#t of a c%aim brou&ht by someo#e /ho s%i2s a#d fa%%s o# the 2ro2ertyH automobi%e i#sura#ce a%so i#c%udes a# as2ect of %iabi%ity ):

i#sura#ce that i#dem#ifies a&ai#st the harm that a crashi#& car ca# cause to othersM %i9es. hea%th. or 2ro2erty. $he 2rotectio# offered by a %iabi%ity i#sura#ce 2o%icy is t/ofo%d: a %e&a% defe#se i# the e9e#t of a %a/suit comme#ced a&ai#st the 2o%icyho%der a#d i#dem#ificatio# +2ayme#t o# beha%f of the i#sured, /ith res2ect to a sett%eme#t or court 9erdict. 5iabi%ity 2o%icies ty2ica%%y co9er o#%y the #e&%i&e#ce of the i#sured. a#d /i%% #ot a22%y to resu%ts of /i%%fu% or i#te#tio#a% acts by the i#sured.
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E #iro me t!" "i!bi"it$ i sur! ce 2rotects the i#sured from bodi%y i#1ury. 2ro2erty dama&e a#d c%ea#u2 costs as a resu%t of the dis2ersa%. re%ease or esca2e of 2o%%uta#ts.

Pro%essio !" "i!bi"it$ i sur! ce. a%so ca%%ed 2rofessio#a% i#dem#ity i#sura#ce. 2rotects 2rofessio#a% 2ractitio#ers such as architects. %a/yers. doctors. a#d accou#ta#ts a&ai#st 2ote#tia% #e&%i&e#ce c%aims made by their 2atie#ts=c%ie#ts. Professio#a% %iabi%ity i#sura#ce may take o# differe#t #ames de2e#di#& o# the 2rofessio#. 4or e@am2%e. 2rofessio#a% %iabi%ity i#sura#ce i# refere#ce to the medica% 2rofessio# may be ca%%ed ma%2ractice i#sura#ce. "otaries 2ub%ic may take out errors and omissio#s i#sura#ce +EP>,. >ther 2ote#tia% EP> 2o%icyho%ders i#c%ude. for e@am2%e. rea% estate brokers. home i#s2ectors. a22raisers. a#d /ebsite de9e%o2ers.

Li%e i sur! ce 2ro9ides a mo#etary be#efit to a decede#tMs fami%y or other desi&#ated be#eficiary. a#d may s2ecifica%%y 2ro9ide for buria%. fu#era% a#d other fi#a% e@2e#ses. 5ife i#sura#ce 2o%icies ofte# a%%o/ the o2tio# of ha9i#& the 2roceeds 2aid to the be#eficiary either i# a %um2 sum cash 2ayme#t or a# a##uity.

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uities 2ro9ide a stream of 2ayme#ts a#d are &e#era%%y c%assified as

i#sura#ce because they are issued by i#sura#ce com2a#ies a#d re&u%ated as i#sura#ce a#d re8uire the same ki#ds of actuaria% a#d i#9estme#t ma#a&eme#t e@2ertise that %ife i#sura#ce re8uires. A##uities a#d 2e#sio#s that 2ay a be#efit for %ife are sometimes re&arded as i#sura#ce a&ai#st the 2ossibi%ity that a retiree /i%% out%i9e his or her fi#a#cia% resources. I# that se#se. they are the com2%eme#t of %ife i#sura#ce a#d. from a# u#der/riti#& 2ers2ecti9e. are the mirror ima&e of %ife i#sura#ce.

Loc1ed %u ds i sur! ce is a %itt%e k#o/# hybrid i#sura#ce 2o%icy 1oi#t%y issued by &o9er#me#ts a#d ba#ks. It is used to 2rotect 2ub%ic fu#ds from tam2er by u#authorised 2arties. I# s2ecia% cases. a &o9er#me#t may authorise its use i# 2rotecti#& semi 2ri9ate fu#ds /hich are %iab%e to tam2er. $he terms of this ty2e of i#sura#ce are usua%%y 9ery strict. $herefore it is used o#%y i# e@treme cases /here ma@imum security of fu#ds is re8uired.

M!ri e i sur! ce a#d mari#e car&o i#sura#ce co9er the %oss or dama&e of shi2s at sea or o# i#%a#d /ater/ays. a#d of the car&o that may be o# them. Ghe# the o/#er of the car&o a#d the carrier are se2arate cor2oratio#s. mari#e car&o i#sura#ce ty2ica%%y com2e#sates the o/#er of car&o for %osses sustai#ed from fire. shi2/reck. etc.. but e@c%udes %osses that ca# be reco9ered from the carrier or the carrierMs i#sura#ce. Ma#y mari#e i#sura#ce u#der/riters /i%% i#c%ude Ltime e%eme#tL co9era&e i# such 2o%icies. /hich e@te#ds the i#dem#ity to co9er %oss of 2rofit a#d other busi#ess e@2e#ses attributab%e to the de%ay caused by a co9ered %oss.

Mort(!(e i sur! ce i#sures the %e#der a&ai#st defau%t by the borro/er. )A

N!tio !" I sur! ce is the 0KMs 9ersio# of socia% i#sura#ce +/hich see be%o/,. No,%!u"t i sur! ce is a ty2e of i#sura#ce 2o%icy +ty2ica%%y automobi%e i#sura#ce, /here i#sureds are i#dem#ified by their o/# i#surer re&ard%ess of fau%t i# the i#cide#t.

"uc%ear i#cide#t i#sura#ce co9ers dama&es resu%ti#& from a# i#cide#t i#9o%9i#& radioacti9e materia%s a#d is &e#era%%y arra#&ed at the #atio#a% %e9e%. +4or the 0#ited States. see the Price,A derso Nuc"e!r I dustries I dem it$ Act.,

Pet i sur! ce i#sures 2ets a&ai#st accide#ts a#d i%%#esses co9er routi#e=/e%%#ess care a#d buria%. as /e%%.

some com2a#ies

Po"itic!" ris1 i sur! ce ca# be take# out by busi#esses /ith o2eratio#s i# cou#tries i# /hich there is a risk that re9o%utio# or other 2o%itica% co#ditio#s /i%% resu%t i# a %oss.

Po""utio

I sur! ce. A first 2arty co9era&e for co#tami#atio# of i#sured

2ro2erty either by e@ter#a% or o# site sources. -o9era&e for %iabi%ity to third 2arties arisi#& from co#tami#atio# of air. /ater. or %a#d due to the sudde# a#d accide#ta% re%ease of haCardous materia%s from the i#sured site. $he 2o%icy usua%%y co9ers the costs of c%ea#u2 a#d may i#c%ude co9era&e for re%eases from u#der&rou#d stora&e ta#ks. I#te#tio#a% acts are s2ecifica%%y e@c%uded

Propert$ i sur! ce 2ro9ides 2rotectio# a&ai#st risks to 2ro2erty. such as fire. theft or /eather dama&e. $his i#c%udes s2ecia%iCed forms of i#sura#ce such as fire i#sura#ce. f%ood i#sura#ce. earth8uake i#sura#ce. home i#sura#ce. i#%a#d mari#e i#sura#ce or boi%er i#sura#ce.

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Purch!se i sur! ce is aimed at 2ro9idi#& 2rotectio# o# the 2roducts 2eo2%e 2urchase. Purchase i#sura#ce ca# co9er i#di9idua% 2urchase 2rotectio#. /arra#ties. &uara#tees. care 2%a#s a#d e9e# mobi%e 2ho#e i#sura#ce. Such i#sura#ce is #orma%%y 9ery %imited i# the sco2e of 2rob%ems that are co9ered by the 2o%icy.

Retrospecti#e"$ R!ted I sur! ce is a method of estab%ishi#& a 2remium o# %ar&e commercia% accou#ts. $he fi#a% 2remium is based o# the i#suredMs actua% %oss e@2erie#ce duri#& the 2o%icy term. sometimes sub1ect to a mi#imum a#d ma@imum 2remium. /ith the fi#a% 2remium determi#ed by a formu%a. 0#der this 2%a#. the curre#t yearMs 2remium is based 2artia%%y +or /ho%%y, o# the curre#t yearMs %osses. a%thou&h the 2remium ad1ustme#ts may take mo#ths or years beyo#d the curre#t yearMs e@2iratio# date. $he rati#& formu%a is &uara#teed i# the i#sura#ce co#tract. 4ormu%a: retros2ecti9e 2remium Q co#9erted %oss R basic 2remium S ta@ mu%ti2%ier. "umerous 9ariatio#s of this formu%a ha9e bee# de9e%o2ed a#d are i# use.

Soci!" i sur! ce ca# be ma#y thi#&s to ma#y 2eo2%e i# ma#y cou#tries. But a summary of its esse#ce is that it is a co%%ectio# of i#sura#ce co9era&es +i#c%udi#& com2o#e#ts of %ife i#sura#ce. disabi%ity i#come i#sura#ce. u#em2%oyme#t i#sura#ce. hea%th i#sura#ce. a#d others,. 2%us retireme#t sa9i#&s. that ma#dates 2artici2atio# by a%% citiCe#s. By forci#& e9eryo#e i# society to be a 2o%icyho%der a#d 2ay 2remiums. it e#sures that e9eryo#e ca# become a c%aima#t /he# or if he=she #eeds to.

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A%o#& the /ay this i#e9itab%y becomes re%ated to other co#ce2ts such as the 1ustice system a#d the /e%fare state. $his is a %ar&e. com2%icated to2ic that e#&e#ders treme#dous debate. /hich ca# be further studied i# the fo%%o/i#& artic%es +a#d others,:
o o o o o o

Socia% /e%fare 2ro9isio# Socia% security Socia% safety #et "atio#a% I#sura#ce Socia% Security +0#ited States, Socia% Security debate +0#ited States,

Terrorism i sur! ce 2ro9ides 2rotectio# a&ai#st a#y %oss or dama&e caused by terrorist acti9ities.

Tit"e i sur! ce 2ro9ides a &uara#tee that tit%e to rea% 2ro2erty is 9ested i# the 2urchaser a#d=or mort&a&ee. free a#d c%ear of %ie#s or e#cumbra#ces. It is usua%%y issued i# co#1u#ctio# /ith a search of the 2ub%ic records 2erformed at the time of a rea% estate tra#sactio#.

Tr!#e" i sur! ce is a# i#sura#ce co9er take# by those /ho tra9e% abroad. /hich co9ers certai# %osses such as medica% e@2e#ses. %ost of 2erso#a% be%o#&i#&s. tra9e% de%ay. 2erso#a% %iabi%ities. etc.

/or1ersE compe s!tio i#sura#ce re2%aces a%% or 2art of a /orkerMs /a&es %ost a#d accom2a#yi#& medica% e@2e#se i#curred because of a 1ob re%ated i#1ury.

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Types of insurance companies

I#sura#ce com2a#ies may be c%assified as

5ife i#sura#ce com2a#ies. /hich se%% %ife i#sura#ce. a##uities a#d 2e#sio#s 2roducts.

"o# %ife or &e#era% i#sura#ce com2a#ies. /hich se%% other ty2es of i#sura#ce.

!e#era% i#sura#ce com2a#ies ca# be further di9ided i#to these sub cate&ories.

Sta#dard 5i#es E@cess 5i#es

I# most cou#tries. %ife a#d #o# %ife i#surers are sub1ect to differe#t re&u%atory re&imes a#d differe#t ta@ a#d accou#ti#& ru%es. $he mai# reaso# for the disti#ctio# bet/ee# the t/o ty2es of com2a#y is that %ife. a##uity. a#d 2e#sio# busi#ess is 9ery %o#& term i# #ature T co9era&e for %ife assura#ce or a 2e#sio# ca# co9er risks o9er ma#y decades. By co#trast. #o# %ife i#sura#ce co9er usua%%y co9ers a shorter 2eriod. such as o#e year. I# the 0#ited States. sta#dard %i#e i#sura#ce com2a#ies are your Lmai# streamL i#surers. $hese are the com2a#ies that ty2ica%%y i#sure your auto. home or busi#ess. $hey use 2atter# or Lcookie cutterL 2o%icies /ithout 9ariatio# from o#e 2erso# to the #e@t. $hey usua%%y ha9e %o/er 2remiums tha# e@cess %i#es a#d ca# se%% direct%y to i#di9idua%s. $hey are re&u%ated by state %a/s that ca# restrict the amou#t they ca# char&e for i#sura#ce 2o%icies.

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E@cess %i#e i#sura#ce com2a#ies +aka E@cess a#d Sur2%us, ty2ica%%y i#sure risks #ot co9ered by the sta#dard %i#es market. $hey are broad%y referred as bei#& a%% i#sura#ce 2%aced /ith #o# admitted i#surers. "o# admitted i#surers are #ot %ice#ced i# the states /here the risks are %ocated. $hese com2a#ies ha9e more f%e@ibi%ity a#d ca# react faster tha# sta#dard i#sura#ce com2a#ies because they do#Mt ha9e the same re&u%atio#s as sta#dard i#sura#ce com2a#ies. State %a/s &e#era%%y re8uire i#sura#ce 2%aced /ith sur2%us %i#e a&e#ts a#d brokers to #ot be a9ai%ab%e throu&h sta#dard %ice#sed i#surers. I#sura#ce com2a#ies are &e#era%%y c%assified as either mutua% or stock com2a#ies. $his is more of a traditio#a% disti#ctio# as true mutua% com2a#ies are becomi#& rare. Mutua% com2a#ies are o/#ed by the 2o%icyho%ders. /hi%e stockho%ders +/ho may or may #ot o/# 2o%icies, o/# stock i#sura#ce com2a#ies. >ther 2ossib%e forms for a# i#sura#ce com2a#y i#c%ude reci2roca%s. i# /hich 2o%icyho%ders Mreci2rocateM i# shari#& risks. a#d %%oyds or&a#iCatio#s. I#sura#ce com2a#ies are rated by 9arious a&e#cies such as A.M. Best. $he rati#&s i#c%ude the com2a#yMs fi#a#cia% stre#&th. /hich measures its abi%ity to 2ay c%aims. It a%so rates fi#a#cia% i#strume#ts issued by the i#sura#ce com2a#y. such as bo#ds. #otes. a#d securitiCatio# 2roducts. Rei sur! ce com2a#ies are i#sura#ce com2a#ies that se%% 2o%icies to other i#sura#ce com2a#ies. a%%o/i#& them to reduce their risks a#d 2rotect themse%9es from 9ery %ar&e %osses. $he rei#sura#ce market is domi#ated by a fe/ 9ery %ar&e com2a#ies. /ith hu&e reser9es. A rei#surer may a%so be a direct /riter of i#sura#ce risks as /e%%.

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C!pti#e i sur! ce com2a#ies may be defi#ed as %imited 2ur2ose i#sura#ce com2a#ies estab%ished /ith the s2ecific ob1ecti9e of fi#a#ci#& risks ema#ati#& from their 2are#t &rou2 or &rou2s. $his defi#itio# ca# sometimes be e@te#ded to i#c%ude some of the risks of the 2are#t com2a#yMs customers. I# short. it is a# i# house se%f i#sura#ce 9ehic%e. -a2ti9es may take the form of a L2ureL e#tity +/hich is a '((U subsidiary of the se%f i#sured 2are#t com2a#y,H of a Lmutua%L ca2ti9e +/hich i#sures the co%%ecti9e risks of members of a# i#dustry,H a#d of a# Lassociatio#L ca2ti9e +/hich se%f i#sures i#di9idua% risks of the members of a 2rofessio#a%. commercia% or i#dustria% associatio#,. -a2ti9es re2rese#t commercia%. eco#omic a#d ta@ ad9a#ta&es to their s2o#sors because of the reductio#s i# costs they he%2 create a#d for the ease of i#sura#ce risk ma#a&eme#t a#d the f%e@ibi%ity for cash f%o/s they &e#erate. Additio#a%%y. they may 2ro9ide co9era&e of risks /hich is #either a9ai%ab%e #or offered i# the traditio#a% i#sura#ce market at reaso#ab%e 2rices. $he ty2es of risk that a ca2ti9e ca# u#der/rite for their 2are#ts i#c%ude 2ro2erty dama&e. 2ub%ic a#d 2roducts %iabi%ity. 2rofessio#a% i#dem#ity. em2%oyee be#efits. em2%oyers %iabi%ity. motor a#d medica% aid e@2e#ses. $he ca2ti9eMs e@2osure to such risks may be %imited by the use of rei#sura#ce. -a2ti9es are becomi#& a# i#creasi#&%y im2orta#t com2o#e#t of the risk ma#a&eme#t a#d risk fi#a#ci#& strate&y of their 2are#t.

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$his ca# be u#derstood a&ai#st the fo%%o/i#& back&rou#d:

Hea9y a#d i#creasi#& 2remium costs i# a%most e9ery %i#e of co9era&eH Difficu%ties i# i#suri#& certai# ty2es of fortuitous riskH Differe#tia% co9era&e sta#dards i# 9arious 2arts of the /or%dH Rati#& structures /hich ref%ect market tre#ds rather tha# i#di9idua% %oss e@2erie#ceH

I#sufficie#t credit for deductib%es a#d=or %oss co#tro% efforts.

$here are a%so com2a#ies k#o/# as Mi#sura#ce co#su%ta#tsM. 5ike a mort&a&e broker. these com2a#ies are 2aid a fee by the customer to sho2 arou#d for the best i#sura#ce 2o%icy amo#&st ma#y com2a#ies . Simi%ar to a# i#sura#ce co#su%ta#t. a# Mi#sura#ce brokerM a%so sho2s arou#d for the best i#sura#ce 2o%icy amo#&st ma#y com2a#ies. Ho/e9er. /ith i#sura#ce brokers. the fee is usua%%y 2aid i# the form of commissio# from the i#surer that is se%ected rather tha# direct%y from the c%ie#t. "either i#sura#ce co#su%ta#ts #or i#sura#ce brokers are i#sura#ce com2a#ies a#d #o risks are tra#sferred to them i# i#sura#ce tra#sactio#s. $hird 2arty admi#istrators are com2a#ies that 2erform u#der/riti#& a#d sometimes c%aims ha#d%i#& ser9ices for i#sura#ce com2a#ies. $hese com2a#ies ofte# ha9e s2ecia% e@2ertise that the i#sura#ce com2a#ies do #ot ha9e.

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Life insurance and saving

-ertai# %ife i#sura#ce co#tracts accumu%ate cash 9a%ues. /hich may be take# by the i#sured if the 2o%icy is surre#dered or /hich may be borro/ed a&ai#st. Some 2o%icies. such as a##uities a#d endowment policies. are fi#a#cia% i#strume#ts to accumu%ate or liquidate wealth /he# it is #eeded. I# ma#y cou#tries. such as the 0.S. a#d the 0K. the tax law 2ro9ides that the i#terest o# this cash 9a%ue is #ot ta@ab%e u#der certai# circumsta#ces. $his %eads to /ides2read use of %ife i#sura#ce as a ta@ efficie#t method of saving as /e%% as 2rotectio# i# the e9e#t of ear%y death. I# 0.S.. the ta@ o# i#terest i#come o# %ife i#sura#ce 2o%icies a#d a##uities is &e#era%%y deferred. Ho/e9er. i# some cases the be#efit deri9ed from ta@ deferra% may be offset by a %o/ retur#. $his de2e#ds u2o# the i#suri#& com2a#y. the ty2e of 2o%icy a#d other 9ariab%es +morta%ity. market retur#. etc.,. Moreo9er. other i#come ta@ sa9i#& 9ehic%es +e.&.. IRAs. ?('+k, 2%a#s. Roth IRAs, may be better a%ter#ati9es for 9a%ue accumu%atio#. A combi#atio# of %o/ cost term %ife i#sura#ce a#d a hi&her retur# ta@ efficie#t retireme#t accou#t may achie9e better i#9estme#t retur#. !%oba% i#sura#ce 2remiums &re/ by F.*U i# )((? to reach V:.: tri%%io#. $his fo%%o/s ''.*U &ro/th i# the 2re9ious year. 5ife i#sura#ce 2remiums &re/ by F.EU duri#& the year. tha#ks to risi#& dema#d for a##uity a#d 2e#sio# 2roducts. "o# %ife i#sura#ce 2remiums &re/ by F.?U. as 2remium rates i#creased. >9er the 2ast decade. &%oba% i#sura#ce 2remiums rose by more tha# a ha%f as a##ua% &ro/th f%uctuated bet/ee# )U a#d '(U. ::

Ad9a#ced eco#omies accou#t for the bu%k of &%oba% i#sura#ce. Gith 2remium i#come of V'.)'* bi%%io# i# )((?. "orth America /as the most im2orta#t re&io#. fo%%o/ed by the E0 +at V'.'FE bi%%io#, a#d Ja2a# +at V?F) bi%%io#,. $he to2 four cou#tries accou#ted for #ear%y t/o thirds of 2remiums i# )((?. $he 0#ited States a#d Ja2a# a%o#e accou#ted for a ha%f of /or%d i#sura#ce 2remiums. much hi&her tha# their *U share of the &%oba% 2o2u%atio#. Emer&i#& markets accou#ted for o9er EAU of the /or%dBs 2o2u%atio# but &e#erated o#%y '(U of 2remiums. $he 9o%ume of 0K i#sura#ce busi#ess tota%ed V)FA bi%%io# i# )((? or F.'U of &%oba% 2remiums.

Financial viability of insurance companies

4i#a#cia% stabi%ity a#d stre#&th of a# i#sura#ce com2a#y shou%d be a ma1or co#sideratio# /he# 2urchasi#& a# i#sura#ce co#tract. A# i#sura#ce 2remium 2aid curre#t%y 2ro9ides co9era&e for %osses that mi&ht arise ma#y years i# the future. 4or that reaso#. the 9iabi%ity of the i#sura#ce carrier is 9ery im2orta#t. I# rece#t years. a #umber of i#sura#ce com2a#ies ha9e become i#so%9e#t. %ea9i#& their 2o%icyho%ders /ith #o co9era&e +or co9era&e o#%y from a &o9er#me#t backed i#sura#ce 2oo% or other arra#&eme#t /ith %ess attracti9e 2ayouts for %osses,. A #umber of i#de2e#de#t rati#& a&e#cies. such as BestMs. 4itch. Sta#dard P PoorMs. a#d MoodyMs I#9estors Ser9ice. 2ro9ide i#formatio# a#d rate the fi#a#cia% 9iabi%ity of i#sura#ce com2a#ies.

:?

Controversies
I sur! ce i su"!tes too much By creati#& a Lsecurity b%a#ketL for its i#sureds. a# i#sura#ce com2a#y may i#ad9erte#t%y fi#d that its i#sureds may #ot be as risk a9erse as they mi&ht other/ise be +si#ce. by defi#itio#. the i#sured has tra#sferred the risk to the i#surer,. $his 2rob%em is k#o/# to the i#sura#ce i#dustry as mora% haCard. $o reduce their o/# fi#a#cia% e@2osure. i#sura#ce com2a#ies ha9e co#tractua% c%auses that miti&ate their ob%i&atio# to 2ro9ide co9era&e if the i#sured e#&a&es i# beha9ior that &ross%y ma&#ifies their risk of %oss or %iabi%ity. 4or e@am2%e. %ife i#sura#ce com2a#ies may re8uire hi&her 2remiums or de#y co9era&e a%to&ether to 2eo2%e /ho /ork i# haCardous occu2atio#s or e#&a&e i# da#&erous s2orts. 5iabi%ity i#sura#ce 2ro9iders do #ot 2ro9ide co9era&e for %iabi%ity arisi#& from i#te#tio#a% torts committed by the i#sured. E9e# if a 2ro9ider /ere so irratio#a% as to desire to 2ro9ide such co9era&e. it is a&ai#st the 2ub%ic 2o%icy of most cou#tries to a%%o/ such i#sura#ce to e@ist. a#d thus it is usua%%y i%%e&a%.

C"osed commu it$ se"%,i sur! ce

Some commu#ities 2refer to create 9irtua% i#sura#ce amo#&st themse%9es by other mea#s tha# co#tractua% risk tra#sfer. /hich assi&#s e@2%icit #umerica% 9a%ues to risk. A #umber of re%i&ious &rou2s. i#c%udi#& the Amish a#d some Mus%im &rou2s. de2e#d o# su22ort 2ro9ided by their commu#ities /he# disasters strike.

:A

$he risk 2rese#ted by a#y &i9e# 2erso# is assumed co%%ecti9e%y by the commu#ity /ho a%% bear the cost of rebui%di#& %ost 2ro2erty a#d su22orti#& 2eo2%e /hose #eeds are sudde#%y &reater after a %oss of some ki#d. I# su22orti9e commu#ities /here others ca# be trusted to fo%%o/ commu#ity %eaders. this tacit form of i#sura#ce ca# /ork. I# this ma##er the commu#ity ca# e9e# out the e@treme differe#ces i# i#surabi%ity that e@ist amo#& its members. Some further 1ustificatio# is a%so 2ro9ided by i#9oki#& the mora% haCard of e@2%icit i#sura#ce co#tracts.

Comp"eBit$ o% i sur! ce po"ic$ co tr!cts

I#sura#ce 2o%icies ca# be com2%e@ a#d some 2o%icyho%ders may #ot u#dersta#d a%% the fees a#d co9era&es i#c%uded i# a 2o%icy. As a resu%t. 2eo2%e may buy 2o%icies o# u#fa9orab%e terms. I# res2o#se to these issues. ma#y cou#tries ha9e e#acted detai%ed statutory a#d re&u%atory re&imes &o9er#i#& e9ery as2ect of the i#sura#ce busi#ess. i#c%udi#& mi#imum sta#dards for 2o%icies a#d the /ays i# /hich they may be ad9ertised a#d so%d. Ma#y i#stitutio#a% i#sura#ce 2urchasers buy i#sura#ce throu&h a# i#sura#ce broker. Brokers re2rese#t the buyer +#ot the i#sura#ce com2a#y,. a#d ty2ica%%y cou#se% the buyer o# a22ro2riate co9era&es. 2o%icy %imitatio#s. A broker &e#era%%y ho%ds co#tracts /ith ma#y i#surers. thereby a%%o/i#& the broker to Lsho2L the market for the best rates a#d co9era&e 2ossib%e.

:D

I#sura#ce may a%so be 2urchased throu&h a# a&e#t. 0#%ike a broker. /ho re2rese#ts the 2o%icyho%der. a# a&e#t re2rese#ts the i#sura#ce com2a#y from /hom the 2o%icyho%der buys. A# a&e#t ca# re2rese#t more tha# o#e com2a#y.

IN'IAN INSURANCE IN'USTRF I surers

I#sura#ce i#dustry. as o# '.?.)(((. com2rised mai#%y t/o 2%ayers: the state i#surers:

Li%e I surers

5ife I#sura#ce -or2oratio# of I#dia +5I-,

Ge er!" I surers

!e#era% I#sura#ce -or2oratio# of I#dia +!I-, +/ith effect from DecM)(((. a "atio#a% Rei#surer,

!I- had four subsidiary com2a#ies. #ame%y +/ith effect from DecM)(((. these subsidiaries ha9e bee# de %i#ked from the 2are#t com2a#y a#d made as i#de2e#de#t i#sura#ce com2a#ies,:

'. $he >rie#ta% I#sura#ce -om2a#y 5imited ). $he "e/ I#dia Assura#ce -om2a#y 5imited. :. "atio#a% I#sura#ce -om2a#y 5imited ?. 0#ited I#dia I#sura#ce -om2a#y 5imited

:*

<r: )((( )((': +From 2nd April '2000 to 31st December'2001, I#sura#ce I#dustry i# the year )((( )((' had 'D #e/ e#tra#ts. #ame%y:

Li%e I surersS.No. Re(istr!t '!te o% io Number ' '(' ):.'(.)( HD4- Sta#dard 5ife I#sura#ce -om2a#y 5td. (( ) '(? 'A.''.)( Ma@ "e/ <ork 5ife I#sura#ce -o. 5td. (( : '(A )?.''.)( I-I-I Prude#tia% 5ife I#sura#ce -om2a#y 5td. (( ? '(* '(.('.)( Kotak Mahi#dra >%d Mutua% 5ife I#sura#ce 5imited (' A '(F :'.('.)( Bir%a Su# 5ife I#sura#ce -om2a#y 5td. (' D ''( ').().)( $ata AI! 5ife I#sura#ce -om2a#y 5td. ('
:E

N!me o% the Comp! $

Re(.

'''

:(.(:.)( SBI 5ife I#sura#ce -om2a#y 5imited . ('

''?

().(E.)( I"! ;ysya 5ife I#sura#ce -om2a#y Pri9ate 5imited ('

''D

(:.(E.)( Ba1a1 A%%ia#C 5ife I#sura#ce -om2a#y 5imited ('

'(

''*

(D.(E.)( Met%ife I#dia I#sura#ce -om2a#y P9t. 5td. ('

:F

Ge er!" I surers :
S.No. Re(istr!tio Number ' ) '() '(: '!te o% Re(istr!tio ):.'(.)((( ):.'(.)(((
Roya% Su#daram A%%ia#ce I#sura#ce -om2a#y 5imited Re%ia#ce !e#era% I#sura#ce -om2a#y 5imited.

N!me o% the Comp! $

: ? A D

'(D '(E '': ''A

(?.').)((( )).('.)((' ().(A.)((' (:.(E.)(('

I44-> $okio !e#era% I#sura#ce -o. 5td $A$A AI! !e#era% I#sura#ce -om2a#y 5td. Ba1a1 A%%ia#C !e#era% I#sura#ce -om2a#y 5imited I-I-I 5ombard !e#era% I#sura#ce -om2a#y 5imited.

?(

Fr- )**+,)**): +4rom 'st Ja# )((' to Dec. )((), I#sura#ce I#dustry i# this year. so far has A#e/ e#tra#tsH #ame%y

Li%e I surersS.No. Re(istr!tio Number ' ) : ?. A. ')' ')) '): ')? ')A (:.('.)(() '?.(A.)(() 'A.(*.)(() )*.(E.)(() )*.(E.)(()
AMP Sa#mar 5ife I#sura#ce -om2a#y 5imited. A9i9a 5ife I#sura#ce -o. I#dia P9t. 5td. -ho%ama#da%am !e#era% I#sura#ce -om2a#y 5td. E@2ort -redit !uara#tee -or2oratio# 5td. HD4- -hubb !e#era% I#sura#ce -o. 5td.

'!te o% Re(. N!me o% the Comp! $

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Fr- )**?,)**6- 2From +st J! )**? ti"" d!te3 I sur! ce I dustr$ i this $e!r: so %!r h!s + e; e tr! tsG !me"$

Li%e I surersS.No. Re(istr!tio Number ' ')* '!te o% Re(. (D.().)((? Sahara I#dia I#sura#ce -om2a#y 5td. N!me o% the Comp! $

?)

INSURANCE &USINEES
I#sura#ce busi#ess is di9ided i#to %our c%asses : ', 5ife I#sura#ce ), 4ire I#sura#ce :, Mari#e I#sura#ce a#d ?, Misce%%a#eous I#sura#ce. 5ife I#surers tra#sact %ife i#sura#ce busi#essH !e#era% I#surers tra#sact the rest. "o com2osites are 2ermitted as 2er %a/. LEGISLATION +as o# '.?.)(((,: I#sura#ce is a federa% sub1ect i# I#dia. $he 2rimary %e&is%atio# that dea%s /ith i#sura#ce busi#ess i# I#dia is: I#sura#ce Act. 'F:E a#d I#sura#ce Re&u%atory P De9e%o2me#t Authority Act. 'FFF. INSURANCE PRO'UCTS +as o# '.?.)(((, +for %atest i#formatio# &et i# touch /ith the curre#t i#surers /ebsite i#formatio# of i#surers is 2ro9ided at the /eb 2a&e for i#surers,:

?:

Li%e I sur! cePo2u%ar Products: E#do/me#t Assura#ce +Partici2ati#&,. a#d Mo#ey Back

+Partici2ati#&,. More tha# E(U of the %ife i#sura#ce busi#ess is from these 2roducts.

Ge er!" I sur! ce4ire a#d Misce%%a#eous i#sura#ce busi#esses are 2redomi#a#t. Motor ;ehic%e i#sura#ce is com2u%sory. $ariff Ad9isory -ommittee +$A-, %ays do/# tariff rates for some of the &e#era% i#sura#ce 2roducts +2%ease 9isit /ebsite of !I- for detai%s,

)**+
"e/ 2roducts ha9e bee# %au#ched by %ife i#surers. $hese i#c%ude %i#ked 2roducts. 4or detai%s. 2%ease 9isit the /ebsites of %ife i#surers.

INFORMATION
About the i#sura#ce i#dustry. the fo%%o/i#& docume#ts may be he%2fu%: Ma%hotra -ommittee Re2ort +$he Re2ort of the -ommittee o# Reforms i# the I#sura#ce Sector,H IRDAMs 4irst A##ua% Re2ort )(('

??

ENTRF OF FOREIGN PLAFERS

As a fe/ of these 2%ayers are a%so i# differe#t areas of fi#a#cia% ser9ices. the re9e#ue fi&ures do #ot re%ate o#%y to i#sura#ce re%ated i#come. Ho/e9er. most of the &%oba% i#sura#ce ma1ors /ish to 2artici2ate i# the o2e#i#& u2 of the i#dustry i# I#dia. P%ayers %ike I"! !rou2. Prude#tia% of the 0.K.. Sta#dard 5ife. Su# 5ife of -a#ada a#d Iurich 4i#a#cia% Ser9ices ha9e a%ready made a# e#try i#to the asset ma#a&eme#t busi#ess i# I#dia. 4urther. a fe/ such as AI!. A%%ia#C a#d Iurich 4i#a#cia% Ser9ices ha9e started offeri#& risk ma#a&eme#t ser9ices to I#dia# cor2orate. $he e#tra#ts i#to the i#sura#ce busi#ess i# I#dia ca# be di9ided i#to the fo%%o/i#& cate&ories: +i, +ii, Ma1or i#ter#atio#a% i#sura#ce &rou2s. 5ar&e 2ri9ate &rou2s such as the $ataMs. Bir%aMs a#d Re%ia#ce.

/ho ca# e#ter the i#sura#ce i#dustry o# their o/# stre#&th i# terms of fu#ds. but /ho re8uire tech#ica%= ma#a&eria% su22ort from forei&# 2artici2a#tsH the #umber of I#dia# &rou2s be%o#&i#& to this cate&ory is %imited as i#sura#ce dema#ds substa#tia% i#9estme#t i# 9e#tures /ith %o#& &estatio# 2eriods. Such &rou2s may i#9o%9e forei&# i#sura#ce com2a#ies as they fee% that this /ou%d be the best /ay to 2roceed. +iii, I#dia# &rou2s=com2a#ies /hich are #ot fi#a#cia%%y 9ery stro#& but /ou%d sti%% %ike

to e#ter this #e/ fie%d o2e#i#& u2. $hey ca#. ho/e9er. e#ter the busi#ess o#%y i# 1oi#t 9e#tures /ith forei&# i#sura#ce ma1ors. $he forei&# ma1ors /ou%d 2ro9ide tech#ica%. ma#a&eria% a#d e8uity su22ort. Ho/e9er. the amou#t of e8uity that /ou%d be re8uired o9er the years is substa#tia% a#d &i9e# the fact that i#sura#ce 2ro1ects ha9e %o#& &estatio#. such &rou2s may ha9e difficu%ty i# meeti#& fu#d re8uireme#ts o# their o/# at a %ater dateH

?A

+i9, a#d I-I-I.

Ba#ks a#d fi#a#cia% i#stitutio#s such as State Ba#k of I#dia

GUI'ELINES FOR ENTRF OF INSURANCE

-ommercia% ba#ks i# I#dia ha9e a hu&e distributio# #et/ork that ca##ot be matched by other fi#a#cia% ser9ice or&a#iCatio#s. He#ce commercia% ba#ks ha9e bee# eyei#& ba#c assura#ce as a %o&ica% di9ersificatio#. $he Reser9e Ba#k of I#dia +RBI, has come out /ith detai%ed &uide%i#es o# the e#try #orms of commercia% ba#ks i#to i#sura#ce. Basica%%y for ba#ks /a#ti#& to e#ter the i#sura#ce fie%d. there are three o2tio#s. Stro#& ba#ks. sub1ect to e%i&ibi%ity #orms. /i%% be 2ermitted to set u2 1oi#t 9e#tures for u#dertaki#& i#sura#ce busi#ess /ith risk 2artici2atio#. $he ma@imum e8uity co#tributio# such a ba#k /ou%d ho%d i# the 1oi#t 9e#ture /ou%d #orma%%y be A( 2er ce#t of the 2aid u2 ca2ita% of the i#sura#ce com2a#y. Ho/e9er. a hi&her %e9e% of e8uity co#tributio# may be 2ermitted. sub1ect to di9estme#t of e8uity /ithi# the 2rescribed 2eriod. Ba#ks /hich are #ot e%i&ib%e as 1oi#t 9e#ture 2artici2a#ts ca# make i#9estme#ts u2 to te# 2er ce#t of the #et /orth of the ba#k or Rs. A( crores. /hiche9er is %o/er. i# the i#sura#ce com2a#y for 2ro9idi#& i#frastructure a#d ser9ices su22ort. Such 2artici2atio# sha%% be treated as a# i#9estme#t a#d shou%d be /ithout a#y co#ti#&e#t %iabi%ity for the ba#k. 4i#a%%y. a#y schedu%ed commercia% ba#k /ou%d be 2ermitted to u#dertake i#sura#ce busi#ess as a&e#t of i#sura#ce com2a#ies o# fee basis. /ithout a#y risk 2artici2atio#. Subsidiaries of ba#ks /i%% a%so be a%%o/ed to u#dertake distributio# of i#sura#ce 2roducts o# a&e#cy basis. Ho/e9er. it may be added here that marketi#&=

?D

se%%i#& of i#sura#ce 2roducts is differe#t from ba#ki#& 2roducts. he#ce the se%%i#& tech#i8ues /i%% be differe#t.

?*

Norms %or N&FCEs

I# the case of #o# ba#ki#& fi#a#ce com2a#ies +"B4-s, a%so. the RBI has come out /ith detai%ed &uide%i#es for di9ersificatio# i#to the i#sura#ce area. A%% "B4-s re&istered /ith the RBI a#d satisfy the e%i&ibi%ity criteria /i%% be 2ermitted to set u2 a 1oi#t 9e#ture com2a#y for u#dertaki#& i#sura#ce busi#ess /ith risk 2artici2atio#. I# fact there are 9ery fe/ "B4-s /hich meet the stri#&e#t #orms %aid do/# by the RBI. Ho/e9er. a#y "B4re&istered /ith the RBI ha9i#& #et o/#ed fu#d of Rs. ) crores /ou%d be 2ermitted to u#dertake i#sura#ce busi#ess as a&e#t of i#sura#ce com2a#ies o# fee basis. /ithout a#y risk 2artici2atio#.

?E

I sur! ce Re(u"!tor$ 8 'e#e"opme t Authorit$ 2IR'A3

GO0ERNMENT REGULATION
?F

INSURANCE REGULATORF 'E0ELOPMENT ACT 2IR'A3># the recomme#datio# of the Ma%hotra -ommittee I#dia# Par%iame#t 2assed I#sura#ce Re&u%atory De9e%o2me#t Act. +IRDA, i# the year 'FFF. !o9er#me#t of I#dia has set u2 o# i#terim I#sura#ce Re&u%atory Authority +IRA, for 2ro2er mo#itori#& a#d co#tro% of the i#sura#ce i#dustry. $he IRA is headed by a chairma# /ho a%so co#tro%%er of i#sura#ce a#d -hairma# of IB-. IRDA. for the time bei#& 2rohibits '((U forei&# e8uity i# i#sura#ce. It re8uires the I#dia# 2romoters to i#9est either /ho%%y i# a# i#sura#ce 9e#ture or team u2 /ith a forei&# i#surer /ith a ca2 of )DU of e8uity for a forei&# 2art#er. $he I#dia# 2romoter is 2ermitted to di9est o#%y after '( years to the I#dia# 2ub%ic. throu&h a 2ub%ic offeri#& of shares. at /hich tu#e the e8uity structure /i%% 2ro9ide for e8ua% 2artici2atio# bet/ee# the I#dia# a#d forei&# 2art#er /ith a share of )DU each i# the share ca2ita%. IRA is a so%e authority res2o#sib%e for a/ardi#& of %ice#ses. $here is #o restrictio# o# the #umber of %ice#ses a#d #o com2osite %ice#se for %ife P #o# %ife busi#ess. -om2ositio# of Authority u#der IRDA Act. 'FFF As 2er the sectio# ? of IRDA ActM 'FFF. I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +IRDA. /hich /as co#stituted by a# act of 2ar%iame#t, s2ecify the com2ositio# of Authority .$he Authority is a te# member authority co#sists of: '. A chairma#. ). A /ho%e time members. :. ? 2art time members.

IR'A propos!"s %or e; "ice se !reA(

"e/ 2%ayers shou%d comme#ce busi#ess /ithi# 'A 'E mo#ths. $rafficki#& of %ice#ses #ot to be 2ermitted a#d shares are #ot $ra#sferab%e /ithout a22ro9a%. Re2ort 'FFF Re2ort )((( REP>R$ )(((:

+!e#era% I#sura#ce Rei#sura#ce, Re&u%atio#s. )((( I# e@ercise of the 2o/ers co#ferred by Sectio#s ''?A of the I#sura#ce Act. 'F:E+? of 'F:E,. the Authority i# co#su%tatio# /ith the I#sura#ce Ad9isory -ommittee hereby makes the fo%%o/i#& re&u%atio#s. #ame%y:

PRELIMINARF +. Short tit"e ! d comme ceme t

$hese re&u%atio#s may be ca%%ed the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +Rei#sura#ce, Re&u%atio#s. )((( a#d are issued i# 2ursua#ce of Sectio# ''? of the Act. $hey sha%% come i#to force from the date of its 2ub%icatio# i# the >fficia% !aCette. $hese re&u%atio#s a22%y to a%% &e#era% i#surers tra#sacti#& direct i#sura#ce busi#ess.

A'

The Ge er!" I sur! ce Comp! $

$he busi#ess of &e#era% i#sura#ce is the mo#o2o%y of !e#era% I#sura#ce -or2oratio# of I#dia +!I-,. o/#ed by the !o9er#me#t of I#dia. $his e#tity is a si#&%e or&a#iCatio# /ith four subsidiaries. !I- /as i#cor2orated as a ho%di#& com2a#y i# 'FF) u#der the !e#era% I#sura#ce Act. 'F*). $he i#sura#ce busi#ess is sub1ect to re&u%atio#s u#der the I#sura#ce Act. 'F:E a#d !e#era% I#sura#ce Act. 'F*). Bei#& a fu%%y o/#ed subsidiary of !>I. the 2aid u2 ca2ita% of the !I- is fu%%y subscribed by the &o9t. a#d !I-. i# tur# o/#s fu%%y. the 2aid u2 ca2ita% of its four subsidiaries. Before #atio#a%iCatio# i# "o9ember. 'F*). a #umber of I#dia# a#d ma#y forei&# com2a#ies did &e#era% i#sura#ce busi#ess i# I#dia a#d this busi#ess /as %i#ked /ith their bra#ches abroad. I# additio#. this 2roduct /as a%so offered by 5I-. some mutua% com2a#ies a#d coo2erati9e societies I# fact. o# the e9e of #atio#a%iCatio#. DE I#dia# +i#c%udi#& 5I-, a#d ?A #o# I#dia# e#tities carried out i#sura#ce busi#ess i# I#dia. "atio#a%iCatio# sa/ the busi#ess of a%% '. "atio#a% I#sura#ce -o. 5td. ). "e/ I#dia Assura#ce -o. 5td. :. >rie#ta% 4ire a#d !e#era% I#sura#ce -o. 5td. ?. 0#ited I#dia I#sura#ce -o. 5td. $hese or&a#iCatio#s absorbed by the !e#era% I#sura#ce -om2a#y +!I-, /ith its four subsidiaries 9iC. $hese subsidiaries carry out the e#tire &e#era% i#sura#ce busi#ess i# the cou#try a#d cede )(U of it to !I- throu&h the ob%i&atory rei#sura#ce 2remium o# a 8uota share basis. !I-Ms direct busi#ess is o#%y i# the form of a9iatio# i#sura#ce.

A)

$he &e#era% i#sura#ce busi#ess is mai#%y of three ty2es: Mari#e. 4ire a#d. Misce%%a#eous. As of #o/. fire i#sura#ce co#tributes the %ar&est share i# the busi#ess. a%thou&h its share has bee# &oi#& do/#. Misce%%a#eous busi#ess has bee# the &ro/th area /ith hea%th i#sura#ce assumi#& i#creasi#& im2orta#ce i# terms of 2ote#tia%. Mari#e i#sura#ce is re%ati9e%y %ess im2orta#t i# I#dia. Ack#o/%ed&i#& the tre#d of &ro/th i# misce%%a#eous busi#ess. !I- has rece#t%y come out /ith a host of #e/ 2o%icies=2%a#s=schemes. Perso#a% Accide#t Po%icy for ;isitors i# Ba#k Premises. Medic%aim. Househo%dersM -om2rehe#si9e I#sura#ce Po%icy. Professio#a% I#dem#ity I#sura#ce. i#sura#ce a&ai#st %iabi%ity a#d co#ti#&e#cy for members of stock e@cha#&es a#d 1oi#t stock com2a#ies. Re1ectio# I#sura#ce o# mari#e 2roducts. "uc%ear I#sura#ce Poo% for i#sura#ce of #uc%ear 2o/er 2%a#ts a#d other #uc%ear re%ated risks. hut i#sura#ce. a#d Perso#a% Accide#t I#sura#ce Socia% Security Scheme are e@am2%es of such 2o%icies. !I- has a%so become acti9e i# mutua% fu#ds a#d housi#& as !I- Mutua% 4u#d. !I- !riha ;itta 5td. 4%oati#& of 5oss Pre9e#tio# Associatio# of I#dia 5td.. a#d the "atio#a% I#sura#ce Academy are some of the other %o#& term customer frie#d%y acti9ities.

A:

'uties: Po;ers ! d Fu ctio s o% IR'A

Sectio +6 o% IR'A Act: +AAA %ays do/# the duties. 2o/ers a#d fu#ctio#s of IRDA.. Sub1ect to the 2ro9isio#s of this Act a#d a#y other %a/ for the time bei#& i# force. the Authority sha%% ha9e the duty to re&u%ate. 2romote a#d e#sure order%y &ro/th of the i#sura#ce busi#ess a#d re i#sura#ce busi#ess. Githout 2re1udice to the &e#era%ity of the 2ro9isio#s co#tai#ed i# sub sectio#'. the 2o/ers a#d fu#ctio#s of the Authority sha%% i#c%ude. Issue to the a22%ica#t a certificate of re&istratio#. re#e/. modify. /ithdra/. sus2e#d or ca#ce% such re&istratio#H Protectio# of the i#terests of the 2o%icy ho%ders i# matters co#cer#i#& Assi&#i#& of 2o%icy. #omi#atio# by 2o%icy ho%ders. i#surab%e i#terest. Sett%eme#t of i#sura#ce c%aim. surre#der 9a%ue of 2o%icy a#d other $erms a#d co#ditio#s of co#tracts of i#sura#ceH S2ecifyi#& re8uisite 8ua%ificatio#s. code of co#duct a#d 2ractica% trai#i#& for i#termediary or i#sura#ce i#termediaries a#d a&e#tsH S2ecifyi#& the code of co#duct for sur9eyors a#d %oss assessorsH Promoti#& efficie#cy i# the co#duct of i#sura#ce busi#essH Promoti#& a#d re&u%ati#& 2rofessio#a% or&a#iCatio#s co##ected /ith the i#sura#ce a#d re i#sura#ce busi#essH 5e9yi#& fees a#d other char&es for carryi#& out the 2ur2oses of this ActH -a%%i#& for i#formatio# from. u#dertaki#& i#s2ectio# of. co#ducti#& E#8uiries a#d i#9esti&atio#s i#c%udi#& audit of the i#surers.

A?

IR'A NOTIFICATION

INSURANCE

REGULATORF

AN'

'E0ELOPMENT

AUT4ORITF

2LICENSING OF INSURANCE AGENTS3 )**) F.No. IR'AHRe(.H +*H)**)-,

2AMEN'MENT3 REGULATIONS:

I# e@ercise of the 2o/ers co#ferred by sectio# ?) a#d sectio# ''?A of the I#sura#ce Act. 'F:E +? of 'F:E,. the Authority. i# co#su%tatio# /ith the I#sura#ce Ad9isory -ommittee. hereby makes the fo%%o/i#& re&u%atio#s to ame#d the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +5ice#si#& #ame%y: of I#sura#ce A&e#ts, Re&u%atio#s. )(((.

'+',. $hese re&u%atio#s may be ca%%ed the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +5ice#si#& of I#sura#ce A&e#ts, +Ame#dme#t, Re&u%atio#s. )((). '+),. $hey sha%% come i#to force o# the date of their 2ub%icatio# i# the >fficia% !aCette.

). I# the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +5ice#si#& of I#sura#ce A&e#ts, Re&u%atio#s. )(((. after sub re&u%atio# :+),. the fo%%o/i#& sub re&u%atio#s :+:, a#d :+?, sha%% be added: +', $he desi&#ated 2erso# sha%% &ra#t or re#e/ the %ice#se /ithi# a 2eriod of : mo#ths from the date of a22%icatio#. +), $he desi&#ated 2erso# sha%%. if the co#sideratio# of the a22%icatio# is %ike%y to &et de%ayed /ithi# D( days of the recei2t of the a22%icatio#. i#form the a22%ica#t the reaso#s for such a de%ay. a#d the %ike%y time it /ou%d take to do so.6 AA

:. I# the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +5ice#si#& of I#sura#ce A&e#ts, Re&u%atio#s. )((( after re&u%atio# ''. the fo%%o/i#& re&u%atio# sha%% be added:

3'). 4rom the date of comi#& i#to force of the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +5ice#si#& of -or2orate A&e#ts, Re&u%atio#s. )((). the I#sura#ce Re&u%atory a#d De9e%o2me#t Authority +5ice#si#& of I#sura#ce A&e#ts, Re&u%atio#s. )((( or a#y 2art thereof a22%yi#& to cor2orate a&e#ts sha%% cease to ha9e a#y effect. e@ce2t as res2ects thi#&s do#e or omitted to be do#e there u#der.6

AD

T4E COMPANF

4'FC St! d!rd Li%e I sur! ce

A*

IN'USTRF PROFILE

I#cor2orated i# 'F** as a 2ub%ic %imited com2a#y $o s2ecia%iCe i# 2ro9isio# of housi#& fi#a#ce to i#di9idua%s. co o2erati9e societies P the cor2orate sector

4irst 2ri9ate sector retai% housi#& fi#a#ce com2a#y HD4- is %isted o# both BSE a#d "SE Market ca2ita%iCatio# +Ju#e )((), Rs. *F bi%%io# +0S V '.D b#,

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Profiles

AF

COMPANF PROFILE

COMPAN NAM!"

HDFC ST ! D "D L#F$ INSURANCE CO.

#ND#AN PA$%N!$" FO$#&N PA$%N!$% EW0I$< RA$I>: ->MME"-EMENT 'ATE4IE5D >4 >PERA$I>": -E> >4 $HE ->MPA"<:

HDFC &AN. ST !D "D L#F$ &'() * 96-)> J! u!r$ +AA< LIFE INSURANCE Mr. Amit!bh Ch!udhr$ M! !(i ( 'irector ! d Chie% EBecuti#e O%%icer

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About the comp! $

4'FC St! d!rd Li%e I sur! ce Limited is a 1oi#t 9e#ture bet/ee# HD4- of I#dia P Sta#dard 5ife of 0K /herei# HD4- has a stake of *).:*U a#d Sta#dard 5ife a stake of )DU P rest for others. The comp! $ curre t"$ h!s )@ ret!i" ! d A (roup products i its port%o"io: !"o ( ;ith te optio !" rider be e%its c!teri ( to the s!#i (s: i #estme t: protectio ! d retireme t eeds o% customers. 4'FC is a AAA rated first 2ri9ate sector retai% housi#& fi#a#ce com2a#y. St! d!rd Li%e U. is the %ar&est mutua% %ife i#sura#ce com2a#y i# Euro2e /ith assets o9er Rs. A. E'.((( crores +X E:.) b#, Achie#eme ts HD4- Sta#dard 5ife I#sura#ce is the first 2ri9ate %ife i#surer to re e#ter the %ife i#sura#ce market i# I#dia. HD4-S5 /as the first %ife i#surer to be &ra#ted a certificate of re&istratio# i#cor2orated o# '?th Au&ust )(((. Ra#ked as I#diaBs most res2ected 2ri9ate i#sura#ce com2a#y i# )((?. HD4-S5 seeks to mirror the success of its 2are#t com2a#y a#d be a yardstick by /hich a%% other i#sura#ce com2a#ies are measured. Duri#& the year )((: (?. the com2a#y crossed Rs. ':.A(( -rore i# Sum Assured co9eri#& ?A(.((( %i9es a#d re&istered a *DU &ro/th i# #e/ busi#ess 2remium. Gro;th Str!te($ $he future &ro/th strate&y of HD4-S5 is to reach out to more a#d more customers. -om2a#y is stre#&the#i#& their 2rese#ce i# the e@isti#& markets a#d a%so it is tar&eti#&

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#e/ market. focusi#& o# offeri#& customiCed so%utio#s a#d mai#tai#i#& e@ce%%e#t ser9ice sta#dards.

&AN. ASSOCIATE PARTNERS

D)

Fi ! ci!" Co ("omer!te

HDFC CHUBB GENERAL INSURANCE CO. LTD.

SECURITISATION

DISTRIBUTION

D:

Bancassurance Par ners

4'FC &! 1

S!r!s;!t &! 1

I di! &! 1

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ORGANIIATIONAL STRUCTURE

Organization Structure HDFCSL

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"#

DA

MAR.ET POSITION
4'FC St! d!rd Li%e I sur! ce Comp! $ Ltd. I# the tota% market share. 5I- has reduced its share from F'U to *(U. $his mea#s that 2ri9ate i#sura#ce 2%ayers ha9e &ot more mar&i#s i# their ha#ds /hich ha9e i#creased from FU to :(U i# %ast )years o#%y. I# the 2ri9ate market share. HD4- S5I- %eads /ith :FU of the market share i# its ha#d fo%%o/ed by Ba1a1 A%%ia#C /ith 'EU shares a#d the# comes Bir%a Su# 5ife /ith 'AU market shares. HD4- S5I- has bee# mai#tai#i#& its "> )#d 2ositio# si#ce %ast A years because of its 2ro%ific 2roduct ra#&e a#d comma#di#& bra#d e8uity. It has a hi&hest ca2ita% base of Rs. F)A crores a#d a team of more tha# AD.:(( /e%% trai#ed ad9isors. It e#1oys a bra#d reca%% rate of F)U a#d &i9es credit of its success to the A core 9a%ues I#te&rity -ustomer Bou#dary 5ess >/#ershi2 Passio#

Private share in the market

Ba1a1 A%%ia#C 'EU Bir%a Su# 5ife 'AU Ma@ "e/ HD4- Std <ork 5ife 4'FC STAN'AR' LIFE 5ife EU '?U I-I-I Prude#tia%
39% ICICI Prudential Tata AIG HDFC Std Life Max New or! Life "irla Sun Life "a#a# Allianz

$ata AI! DU

DD

HD4- Sta#dard 5ife I#sura#ce -om2a#y is a 1oi#t 9e#ture bet/ee# I#diaMs %ar&est housi#& fi#a#ce 2ro9ider. HD4- a#d Euro2eMs %ar&est mutua% %ife assura#ce com2a#y

The St! d!rd Li%e Assur! ce Comp! $ 2U. .3. St! d!rd Li%e: U.: fou#ded i# 'E)A. has bee# at the forefro#t of the 0K i#sura#ce i#dustry for '*A years by combi#i#& sou#d fi#a#cia% 1ud&me#t /ith i#te&rity a#d re%iabi%ity. It is the L!r(est Mutu!" Li%e comp! $ i Europe a#d has tota% assets of Rs. A. A(.((( crore.

Tr!i i ( !cti#ities %or !(e tsH!d#isors As 2er IRDA &uide%i#es. '((hrs trai#i#& is com2u%sory. Both o#%i#e P c%assroom trai#i#& are a9ai%ab%e. $rai#i#& is com2u%sory /ith both 2art time P fu%% time >2tio#s. A c%ear e@am is co#ducted by IRDA. the mi#imum 8ua%ificatio# re8uired is ')th 2ass for urba# areas '(th 2ass for rura% areas.

Commissio StructureDe2e#ds o# the 2roduct. %ike o# sa9i#&s )( ?(U 'st year 2remium. ># i#9estme#t )U ># 2e#sio# *.AU D*

DE

Modes 8 ;!$s throu(h ;hich the comp! $ recruits !(e ts Direct co#tacts. "e/s2a2er adds. -o#su%ta#ts. Member of the com2a#y ca# i#troduce a #e/ member.

Curre t !(e t %orceArou#d A(( *(( i# De%hi.

Top < USPCs 2U iJue Se""i ( Propositio 3 O% 4'FC Std. Li%e Best i#surer accordi#& to >ut%ook. Ge%% su22orted by forei&# 'st 2ri9ate sector %ife i#sura#ce -om2a#y to be &ra#ted a %ice#se. Dec%ared bo#us e9ery year from the day of i#cor2oratio# +o#%y com2a#y,

Pro9ides fast ser9ice to the customers i# terms of c%aim

DF

PRO'UCTS

*(

4'FC St! d!rd Li%e Products 5ife I#sura#ce Products are basica%%y c%assified i#to ? sub se&me#ts: I. II. III. I;. Protectio# 5o/ Premium cost. Hi&h Risk -o9er I#9estme#t Aim for %o#& term rea% &ro/th a#d steady accumu%atio# of fu#ds Pe#sio# Pro9ide for retireme#t e@2e#ses a#d i#come at o%d a&e. Sa9i#&s He%2s to sa9e for a 2articu%ar e9e#t i# future

Pro ec ion

In$es &en

Ter$ A%%urance Plan Loan Co&er Ter$ A%%urance

Plan

Single Pre$iu$
'(ole of Life Plan

E#do/me#t Assura#ce P%a# 0#it 5i#ked E#do/me#t P%a# -hi%dre#Bs P%a# 0#it 5i#ked <ou#& Star P%a#
Sa$in%

Perso#a% Pe#sio# P%a# 0#it 5i#ked Pe#sio# P%a#

Pension

*'

LIFE TIME POLICIES

4'FC St! d!rd Li%e I sur! ce

5I4E $IME P5A" Po%icy that meets your cha#&i#& #eed o9er a %ifetime Premium 2art is ad1usted to/ards mora%ity a#d admi#istrati9e char&es a#d rest is i#9ested i# 2%a# of your choice.

EN'O/MENT POLICIES

*)

4'FC St! d!rd Li%e I sur! ce 4'FC STAN'AR' LIFE INSURANCE HD4- S$A"DARD 5I4E I"S0RA"-E SA;E " PR>$E-$ HD4- S$A"DARD 5I4E I"S0RA"-E -ASH BA-K A# HD4-S5I- idea% 2%a# for those /ho /a#t to accumu%ate fu#ds o# a re&u%ar A# idea% 2%a# for e9ery mi%esto#e of %ife. It combi#es %ife basis /ith %ife co9er co9erR%i8uidityRsa9i#&s. It 2ro9ides sur9i9a% be#efit after e9ery : or ? yrs a#d add o# be#efit for a It is a fi@ed term 2o%icy that combi#es sa9i#& /ith %ife co9er. $he 2remium is 2aid #omi#a% e@tra 2remium. re&u%ar%y duri#& the term

># death u2 to a&e: basic 2remium retur#ed /ithout i#terest ># death after a&e *: a#d the# 9ested bo#us. sum assured Y:.AU com2ou#ded i#terest for first ? yrs

MONEF &AC. POLICIES

C4IL'REN POLICIES

*:

*?

SINGLE PREMIUM POLICIES

4'FC STAN'AR' LIFE INSURANCE

HD4- S$A"DARD 5I4E I"S0RA"-E REASS0RE A safe a#d com2rehe#si9e 2%a# for those about to retire or has retired. It combi#es best of i#sura#ce a#d i#9estme#t 5i8uidity /ith assured a#d steady a##ua% retur#s. 5ife co9er u2 to ''(U of 2remium

2aid. 4'FC STAN'AR' LIFE INSURANCE HD4- S$A"DARD 5I4E I"S0RA"-E ASS0RE I";ES$ A# i#9estme#t /ith hea%thy retur#s a#d added be#efit of i#sura#ce. SMAR$ KID P%a# desi&#ed for critica% educatio#a% $his 2o%icy has a fi@ed term of * or'( yrs. mi%esto#e i#c%ude s2ecia%ised course i# the cou#try a#d abroad HD4- S$A"DARD 5I4E I"S0RA"-E 5I4E 5I"K $he sum assured is 2aid immediate%y from '((.((( to :((.((( A# idea% market %i#ked i#sura#ce 2%a# that e#ab%es you to e#1oy the u2side of market retur#s. A%% future 2ayme#ts are /ai9ed off Most you im2orta#t%y the -hi%dBs /i%%your co#ti#ue to recei9e the bet/ee# 2o%icy be#efits. It &i9es f%e@ibi%ity of choosi#& i#9estme#t o2tio# &ro/th. i#come or ba%a#ced 2%a#.

*A

TERM INSURANCE PLANS

4'FC STAN'AR' LIFE INSURANCE

HD4- S$A"DARD 5I4E I"S0RA"-E 5I4E !0ARD A# idea% %o/ cost 2o%icy that co9ers your %ife /ith u#certai#ties It comes /ith a choice of t/o co#9e#ie#t 2remium 2ayme#t modes o#e time a#d re&u%ar It &i9es the f%e@ibi%ity of accide#t a#d disabi%ity co9er for a e@tra 2remium Mi#imum 2remium 2ayab%e )?(( 2er a##um. It has #o maturity be#efits

Protectio P"! s Protectio# ra#&e i#c%udes our $erm Assura#ce P%a# P 5oa# -o9er $erm Assura#ce P%a#. I #estme t P"! s Si#&%e Premium Gho%e >f 5ife 2%a# is /e%% suited to meet your %o#& term i#9estme#t #eeds Pe sio P"! s Pe#sio# ra#&e i#c%udes our Perso#a% Pe#sio# P%a#. 0#it 5i#ked Pe#sio#. 0#it 5i#ked Pe#sio# P%us S!#i (s P"! s *D

Sa9i#&s ra#&e i#c%udes E#do/me#t Assura#ce P%a#. 0#it 5i#ked E#do/me#t. 0#it 5i#ked E#do/me#t P%us. Mo#ey Back P%a#. -hi%dre#Bs P%a#.

A/AR'S 8 ACCOLA'E
M<ou#&Star Su2erM ;oted MProduct of the <ear )*+*M

Best -om2a#ies to Gork for i# I#dia i# )*+*, r! 1ed ?6 !mo ( <*. 'eep!1 M S!t;!"e1!r A/arded WIMPR> !o%d Sta#dard A/ard )((* i# busi#ess cate&ory )**@ Rated as the Best "o# Ba#ki#& 4i#a#cia% -om2a#y i# Asia by I#stitutio#a% I#9estor Research !rou2 )**) Euromo#ey ide#tified HD4- as o#e of AsiaBs to2 '( best ma#a&ed com2a#ies i# the fi#a#ce sector )**+ Asiamo#ey dec%ared HD4- as the seco#d best ma#a&ed com2a#y i# I#dia )**+ IM- Ramakrish#a Ba1a1 "atio#a% Wua%ity A/ard i# the ser9ice cate&ory +AAA

E@ce%%e#ce i# ser9ice i#dustry by the I#dia# I#stitute of Marketi#& Ma#a&eme#t P $o2 Ma#a&eme#t -%ub +Pu#e, +AA@ Rated as o#e of the best com2a#ies i# I#dia for strate&y P ma#a&eme#t a#d i#9estor re%atio#s by Asiamo#ey +AA@ Best 2rese#ted accou#ts 'FF? FA a#d 'FFD F* +:rd 2%ace, i# the SAAR- re&io# by the South Asia# 4ederatio# of Accou#ts i# the fi#a#cia% sector cate&ory Most com2etiti9e I#dia# com2a#y by Euromo#ey +AA9 I#diaBs best ma#a&ed com2a#y by Asia mo#ey ma&aCi#e +AA< a#d +AA> **

 0#ited "atio#s Scro%% of Ho#our +AA+ Shie%d for the best 2rese#ted accou#ts for ba#ks a#d fi#a#cia% i#stitutio#s o9er '' times +E years i# a ro/,

'ISTRI&UTION

*E

EKECUTI0E C4ANNEL 'ISTRI&UTION

HD4- Sta#dard

5ife 2io#eered the mu%ti cha##e% distributio# mode%. /hich

e#com2asses ba#k tie u2s. cor2orate a&e#ts. brokers as /e%% as ad9isors. $he com2a#y started /ith a base of D) ad9isors a#d the# s%o/%y e@2a#ded its distributio# cha##e%s throu&h ba#cassura#ce. direct marketi#&. a#d other measures. HD4- S5I- a%so 9e#tured i#to the rura% se&me#t throu&h 9arious state %e9e% a#d #o# &o9er#me#t or&a#iCatio#s. $oday the com2a#y has o#e of the /idest distributio# #et/orks /ith 'A: bra#ches i# ''( %ocatio#s s2read across the cou#try. ># ser9ice. the focus is to create a 9ariety of touch 2oi#ts i# order to e#ab%e customers to i#teract easi%y /ith the com2a#y. $here are basica%%y three cha##e%s of distributio# u#der HD4- Sta#dard 5ife I#sura#ce. Ba#k assura#ce Direct marketi#& $ied a&e#cy = -or2orate A&e#ts= 4i#a#cia% Ad9isors

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&ANCASSURANCE
Ba#cassura#ce symbo%iCes the co#9er&e#ce of ba#ki#& a#d i#sura#ce. $he term has its ori&i#s i# 4ra#ce a#d i#9o%9es distributio# of i#sura#ce 2roducts throu&h a ba#kMs bra#ch #et/ork. Ba#ks a#d 5ife i#surers bui%d a mutua%%y be#eficia% re%atio#shi2 a#d offer their customers a &reat dea% of 9a%ue add i# the 2rocess. Ba#ks &i9e %ife i#sura#ce com2a#ies a# o22ortu#ity to i#crease their distributio# 2rese#ce. a#d they a%so ear# a fee i#come from the arra#&eme#t. -urre#t%y HD4- Sta#dard 5ife I#sura#ce ha9e se9e# 2art#ers HD4- Ba#k. HD4Security. HD4- Home 5oa#. HD4- Mutua% 4u#d. HD4- Rea%ity.com. HD4- De2osit.

A'0ANTAGES OF &ANCASSURANCE
Ad#! t!(es to b! 1s

Producti9ity of the em2%oyees i#creases. By 2ro9idi#& customers /ith both the ser9ices u#der o#e roof. they ca# im2ro9e o9era%% customer satisfactio# resu%ti#& i# hi&her customer rete#tio# %e9e%s.

I#crease i# retur# o# assets by bui%di#& fee i#come throu&h the sa%e of i#sura#ce 2roducts.

-a# %e9era&e o# face to face co#tacts a#d a/are#ess about the fi#a#cia% co#ditio#s of customers to se%% i#sura#ce 2roducts.

Ba#ks ca# cross se%% i#sura#ce 2roducts E.&. $erm i#sura#ce 2roducts /ith %oa#s.

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Ad#! t!(es to i surers

I#surers ca# e@2%oit the ba#ksM /ide #et/ork of bra#ches for distributio# of 2roducts. $he 2e#etratio# of ba#ksM bra#ches i#to the rura% areas ca# be uti%iCed to se%% 2roducts i# those areas.

-ustomer database %ike customersM fi#a#cia% sta#di#&. s2e#di#& habits. i#9estme#t a#d 2urchase ca2abi%ity ca# be used to customiCe 2roducts a#d se%% accordi#&%y.

Si#ce ba#ks ha9e a%ready estab%ished re%atio#shi2 /ith customers. co#9ersio# ratio of %eads to sa%es is %ike%y to be hi&h. 4urther ser9ice as2ect ca# a%so be tack%ed easi%y.

Ad#! t!(es to co sumers

-om2rehe#si9e fi#a#cia% ad9isory ser9ices u#der o#e roof. i.e.. i#sura#ce ser9ices a%o#& /ith other fi#a#cia% ser9ices such as ba#ki#&. mutua% fu#ds. 2erso#a% %oa#s etc.

E#ha#ced co#9e#ie#ce o# the 2art of the i#sured Easy accesses for c%aims. as ba#ks are a re&u%ar &o. I##o9ati9e a#d better 2roduct ra#&es

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HD4- S5I- /as a 2io#eer i# offeri#& %ife i#sura#ce so%utio#s throu&h ba#ks. Githi# a short s2a# of t/o years. a#d /ith #ear%y a %ar&e #umber of 2art#ers. Ba#k has emer&ed as a 9ita% com2o#e#t of the com2a#yMs sa%es a#d distributio# strate&y. co#tributi#& to a22ro@imate%y o#e third of com2a#yMs tota% busi#ess.

$he busi#ess 2hi%oso2hy at Ba#k is to %e9era&e distributio# sy#er&ies /ith our 2art#ers a#d add 9a%ue to its customers as /e%% as the 2art#ers. 4%e@ibi%ity. ada2tatio# a#d e@2erime#ti#& /ith #e/ ideas are the ha%%marks of this cha##e%.

'IRECT MAR.ETING
Direct marketi#& 2ro&ram of HD4- Sta#dard %ife i#sura#ce is a 2o/erfu% /ay to

commu#icate /ith best 2ros2ects a#d customersTtar&eted direct marketi#& efforts are #ecessary for ac8uiri#& more a#d more customers for the com2a#y. HD4- Sta#dard 5ife I#sura#ce -om2a#yBs directi#& marketi#& distributio# cha##e% &i9es the o22ortu#ity to:

-reate a# effecti9e direct marketi#& 2%a# Ac8uire #e/ customers !ai# i#si&ht i#to your direct marketi#& customer base 5e9era&e re%atio#shi2s /ith your e@isti#& customers Im2ro9e customer rete#tio# a#d decrease chur# $ar&et #e/ direct marketi#& o22ortu#ities Assist /ith #e/ 2roduct de9e%o2me#t E)

$he Direct Marketi#& fu#ctio# at HD4- Sta#dard 5ife I#sura#ce co9ers a# array of acti9ities bra#d a#d media ma#a&eme#t. cha##e% su22ort. direct marketi#& a#d

cor2orate commu#icatio#s. $he Bra#d a#d -ommu#icatio#s team is i# char&e of ad9ertisi#&. co#sumer research. media 2%a##i#& P buyi#& a#d Pub%ic Re%atio#sH that he%2s de9e%o2 a#d #urture HD4- Sta#dard cor2orate ide#tity /hi%e effecti9e%y commu#icati#& its 9aried 2roduct offeri#&s to the customer. -ha##e% marketi#& 2ro9ides su22ort to the sa%es force by stream%i#i#& the desi&# a#d de9e%o2me#t of co%%atera%s a#d sa%es too%s across distributio# cha##e%s. $he Direct marketi#& team /as set u2 to &e#erate hi&h 8ua%ity %eads for 2rofitab%e busi#ess. $he team achie9es this throu&h tar&et database ac8uisitio# a#d commu#icati#& customiCed 2roduct i#formatio# throu&h e mai%ers. te%emarketi#& a#d i##o9ati9e direct mai%ers. HD4- Sta#dard 5ife has bee# ad9ertisi#& i# outdoor. $; a#d 2ress. $he com2a#y %au#ched a cor2orate te%e9isio# cam2ai&# Saat Phere /hich took the emotio#s a#d thou&hts of i#itia% Si#door cor2orate fi%m a fe/ ste2s $he com2a#y has a%so u#dertake# 2ress a#d i#ter#et cam2ai&#s to i#form customers about be#efits of some of its 2roducts. 2articu%ar%y retireme#t so%utio#s. HD4- Sta#dard 5ife I#sura#ce a%so i#troduced some i##o9atio#s i# the cate&ory. such as: ha9i#& a ta@ 2%a##er by the #ame of -hi#tama#i o# radio. /ho /ou%d a#s/er co#sumerBs 8ueries about the ro%e of i#sura#ce i# fi#a#cia% 2%a##i#&.

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>ther i#itiati9es i#c%uded tie u2 /ith the Dabba/a%%a >r&a#iCatio# i# Mumbai for a direct marketi#& e@ercise. to ta%k to the customer throu&h a #o# c%uttered route. a#d thereby ha9e a hi&her im2act. $he direct mai%er /as about HD4- S5I- retireme#t so%utio#s a#d the ta@ be#efits that o#e ca# a9ai% of buy i#9esti#& i# a#y of these. About '((.((( direct mai%ers /ere attached to the ZdabbasB. i# areas such as -hurch&ate. Ba#dra a#d A#dheri /here there are most%y office &oers.

I# additio# to ad9ertisi#&. the com2a#y has a%so i#itiated se9era% acti9ities to raise co#sumer a/are#ess about %ife i#sura#ce a#d HD4- Sta#dard 5ife. It i#c%udes semi#ars HD4- S5I- re&u%ar%y ho%ds co#sumer a/are#ess meets o# Zthe #eed for retireme#t 2%a##i#&B i# differe#t cities such as Pu#e. Aura#&abad. -oimbatore. "a&2ur. Ba#&a%ore a#d Ma#&a%ore. $hese are 9ery /e%% atte#ded a#d ha9e co#tributed si&#ifica#t%y to/ards i#creasi#& a/are#ess about the cate&ory a#d the com2a#y. A2art from this. $hey ha9e a%so e#tered i#to a%%ia#ces /ith te%ecom com2a#ies. as /e%% as com2a#ies %ike BP-5 a#d Domi#os.

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TIE',AGENCF H CORPORATE AGENTSH FINANCIAL A'0ISORS

$ied a&e#cy com2risi#& a %ar&e ad9isor force that tar&ets 9arious customer se&me#ts. A# ad9isor is a re2rese#tati9e of a# i#sura#ce com2a#y authoriCed to se%% i#sura#ce 2o%icies. /ho has com2%eted the re&u%atory re8uireme#ts for bei#& a# ad9isor as 2rescribed by the i#sura#ce re&u%atory a#d de9e%o2me#t authority ho%ds a curre#t a#d 9a%id %ice#se issued by IRDA to act as a %ife i#sura#ce a&e#t a#d is re&istered as a# ad9isor /ith the I#sura#ce -om2a#y. $he a&e#t dra/s commissio#s from the i#surer irres2ecti9e of the 8ua%ity of ser9ice he 2ro9ides to the 2o%icyho%der a#d. as %o#& as the 2o%icy is i# force a#d 2remiums are bei#& 2aid. $he IRDA has 2rescribed a code of co#duct for a&e#ts a#d may ca#ce% the a&e#tBs %ice#se i# case of &ross misco#duct a#d fraud. $oday i# %ife i#sura#ce com2a#iesB ad9isors are k#o/# to be the backbo#e of the /ho%e system. Ad9isors=a&e#ts do #ot /ork o# mo#th%y 2ayro%% basisH they recei9e a certai# commissio# o# the 2o%icies they se%% to the c%ie#ts. $ied A&e#cy is the %ar&est distributio# cha##e% of HD4- Sta#dard 5ife. $he stre#&th of tied a&e#cy %ies i# a# a&&ressi9e strate&y of e@2a#di#& a#d 2rocuri#& 8ua%ity busi#ess. Gith focus o# sa%es P 2eo2%e de9e%o2me#t. tied a&e#cy has emer&ed as a robust. 2redictab%e a#d sustai#ab%e busi#ess mode%.

EA

O&JECTI0E 8 MET4O'OLOGF

ED

Si( i%ic! ce
$he si&#ifica#ce of the 2ro1ect is to make c%ie#ts a#d %et them k#o/ about the differe#t ser9ices offered by the HD4- Sta#dard 5ife. a%so to co#9i#ce them about ho/
HD4- Sta#dard 5ife ser9ices out score there ri9a%s. A#d ho/ i# future they /i%% be

be#efited from the ser9ices offered by HD4- Sta#dard 5ife. $his 2ro1ect /i%% accom2%ish to u#dersta#d the 2rob%em faced by the e@isti#& c%ie#t a#d fi#d /ays to so%9e there 8ueries at your %e9e% other/ise %et the abo9e %e9e% k#o/ about there 2rob%em. It is #ecessary to be i# re&u%ar co#tacts /ith the c%ie#ts so that /e come to k#o/ about the 2rob%em they are faci#&. $his a%so he%2s us to mu%ti2%y our c%ie#ts by &etti#& the further refere#ces. By this /e are ab%e to make a chai# of the customers. /hich e@2a#ds as /e satisfy there #eeds.

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M! !(eri!" ! d use%u" ess o% the Stud$

$he study re9ea%s ma#y facts that ha9e come u2 duri#& my a#d these facts ca# either be used as o22ortu#ities i# e@2%ori#& a#d e@2a#di#& the busi#ess as /e%% as ca# be used as safe&uards a&ai#st treat by the com2etitors. $o 2re2are a# effecti9e marketi#& strate&y. a com2a#y must study its com2etitors as /e%% as its actua% a#d 2ote#tia% customers. A com2a#y shou%d mai#tai# &ood re%atio# /ith distributor a#d retai%ers. A com2a#yBs c%osest com2etitors are seeki#& to satisfy the same customers a#d #eeds a#d maki#& simi%ar offers. As im2orta#t as a com2etiti9e orie#tatio# is i# com2a#ies shou%d ma#a&e a &ood ba%a#ce of co#sumer. Dea%er a#d com2etitor mo#itori#&.

$he i#formatio# /i%% 2ro9e be#eficia% i# taki#& 2roacti9e actio# or combati#& com2etitio#. $he sta#di#& of the com2a#y a#d its com2etitors i# the mi#ds of the customers is a 9ita% factor i# decidi#& the success of busi#ess. $he study a%so aims at fi#di#& out the ra#ki#& of the com2a#y a#d its com2etitors i# terms of certai# 2arameters. as ad1ud&ed by co#sumers. $his i#formatio# is a &ood &uide to ma#a&eme#t as it bri#&s out the stre#&ths of the com2etitors a#d the areas /here the com2a#y #eeds to im2ro9e. $hus the study is basica%%y aimed at 2ro9idi#& the ma#a&eme#t desired 9ita% i#formatio# about the market situatio#.

EE

).? Ob5ecti#es $he Primary ob1ecti9e is: -hecki#& the a/are#ess %e9e% of I#sura#ce a#d their #eed to/ards it. Study of i#f%ue#ci#& factors affecti#& the 2urchase decisio#. A#a%yCi#& the 2referred mode of sa9i#&s -hecki#& the satisfactio# %e9e% of customers to/ards i#sura#ce

Seco d!r$ ob5ecti#e $o make c%ie#ts a#d %et them k#o/ about the differe#t ser9ices offered by the
HD4- Sta#dard 5ife.

$o u#dersta#d the 2rob%em faced by customers a#d fi#di#& /ay to so%9e the 8ueries.

).6 Scope o% the stud$

$he data /as e#ou&h to fu%fi%% the ob1ectio# of the study. $he study 2ro9ides the k#o/%ed&e of HD4- Sta#dard 5ife a 2art of HD4- P9t. 5td.

$he study he%2 to %ear# the /ork cu%ture i# a#d arou#d the or&a#iCatio#. $he study a %ot to k#o/ about co#sumer beha9ior /hi%e 2urchasi#& the 2roduct. $he study 2ro9ides first ha#d i#formatio# re&ardi#& the re8uired ser9ices.

EF

).< Methodo"o($

Rese!rch 'esi(

Research desi&# is the co#ce2tua% structure /ithi# /hich the research /ou%d take 2%ace. $he 2rese#tatio# of such a desi&# faci%itates research to be as efficie#t as 2ossib%e yie%di#& ma@imum i#formatio#. '. Decidi#& the >b1ecti9e of the Study. ). :. ?. A. Wuestio##aire. Sam2%e Se%ectio#. 4eedback -o%%ectio#. A#a%ysis.

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T$pes o% rese!rch
I used a descri2ti9e ty2e of research. It is o#e /hich i#c%udes sur9eys a#d fact fi#di#&. E#8uiries of differe#t ki#ds. $he ma1or 2ur2ose of such research is descri2tio# of the state of affairs. as it e@ists at 2rese#t.

'!t! Sources
$here are ) ty2es of data. $hey are: '. Primary data ). Seco#dary data Prim!r$ '!t! are those. /hich are co%%ected afresh a#d for the first time a#d thus ha22e# to be ori&i#a% i# character. Primary data /i%% #ot o#%y be re%e9a#t for research 2ro1ect but it is a%so re%iab%e. accurate a#d de2e#dab%e.

Seco d!r$ '!t! are those /hich ha9e a%ready bee# co%%ected by someo#e e%se a#d /hich ha9e a%ready bee# 2assed throu&h the statistica% 2rocess. 4or my research data has bee# 2rocured from both 2rimary a#d seco#dary sources. Dea%ers. customers a#d or&a#iCatio# co#stituted the 2rimary source. "e/s2a2ers. ma&aCi#es a#d /ebsites co#stituted the Seco#dary data. Rese!rch !ppro!ch- , $here are ) basic ty2es of a22roaches to research. $hey are. +. Lu! tit!ti#e Appro!ch ). Lu!"it!ti#e Appro!ch F'

Lu! tit!ti#e Appro!ch i#9o%9es the &e#eratio# of data. /hich ca# be sub1ected to ri&orous 8ua#titati9e a#a%ysis i# a forma% a#d ri&id fashio#. $his a22roach ca# be further sub c%assified i#to i#fere#tia%. e@2erime#ta% a#d simu%atio# a22roaches to research. $he 2ur2ose of i#fere#tia% a22roach to research is to form a database to i#fer characteristics or re%atio#shi2s of 2o2u%atio#. Lu!"it!ti#e Appro!ch to research is co#cer#ed /ith sub1ecti9e assessme#t of attitudes. o2i#io#s a#d beha9iorH research i# such a situatio# is a fu#ctio# of researcherBs i#si&ht a#d im2ressio#s. I# this research a 8ua#titati9e as /e%% as Wua%itati9e a22roach /as used.

Rese!rch I strume ts$he 9arious research i#strume#ts at the ha#ds of the researcher are as fo%%o/s: +3 Obser#!tio s- 0#der this the i#formatio# is sou&ht by /ay of i#9esti&ators. o/# direct obser9atio# /ithout aski#& the res2o#de#ts. )3 I ter#ie;- It i#9o%9es 2rese#tatio#. ora% 9erba%. stimu%i a#d re2%y i# terms of ora% 9erba% res2o#ses. $his method ca# be used throu&h 2erso#a% i#ter9ie/s a#d if 2ossib%e. throu&h te%e2ho#e i#ter9ie/s. ?3 Luestio !ires- It co#sists of #umber of 8uestio#s 2ri#ted or ty2ed i# a defi#ite

order o# a form or a set of formsH the res2o#de#ts ha9e to a#s/er the 8uestio#s themse%9es.

4or my sur9ey I used the e#tire three I#strume#ts.

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T$pes o% Juestio

!ires-,

Wuestio##aires ca# be of ) ty2es. Structured- It is o#e i# /hich a%% 8uestio#s a#d a#s/ers are s2ecified a#d comme#ts i# the res2o#de#tBs o/# /ords are he%d to the mi#imum. U structured- It is o#e i# /hich the a#s/ers to the 8uestio#s ca# be framed i# the res2o#de#ts o/# /ords. My 8uestio##aire /as a structured o#e.

T$pes o% Juestio s- , >2e# E#ded a#d -%osed E#ded

S!mp"e P"! A sam2%e 2%a# is a defi#ite 2%a# for obtai#i#& a sam2%e from a &i9e# 2o2u%atio#. It refers to the tech#i8ue or the 2rocedure the researcher /ou%d ado2t i# se%ecti#& items for the sam2%e. It i#c%udes the fo%%o/i#&S!mp"e si=e-, $his refers to the #umber of items to be se%ected from the u#i9erse to co#stitute a sam2%e. 4or my research the sam2%e siCe '(( customers sur9eyed.

S!mp"i ( procedure $here are ) mai# sam2%i#& 2rocedures. +. Prob!bi"it$ S!mp"i ( ). No ,Prob!bi"it$ S!mp"i (

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No ,Prob!bi"it$ s!mp"i ( is that sam2%i#& 2rocedure /hich does #ot afford a#y basis for estimati#& the 2robabi%ity that each item i# the 2o2u%atio# has of bei#& i#c%uded i# the sam2%e. Prob!bi"it$ s!mp"i ( is o#e i# /hich e9ery item of the u#i9erse has a# e8ua% cha#ce of i#c%usio# i# the sam2%e. It is further di9ided i#to r! dom s!mp"i ( a#d o ,r! dom s!mp"i (. R! dom S!mp"i ( form a fi#ite 2o2u%atio# refers to that method of sam2%e sectio#. /hich &i9es each 2ossib%e sam2%e combi#atio# a# e8ua% 2robabi%ity of bei#& 2icked u2 a#d each item i# the e#tire 2o2u%atio# to ha9e a# e8ua% cha#ce of bei#& i#c%uded i# the sam2%e. $he sam2%i#& 2rocedure fo%%o/ed /as ra#dom sam2%i#& i# case of customers. '. A 8uestio##aire /as 2re2ared com2risi#& of a%% the data re8uired to achie9e the ob1ecti9es. ). $he data /ere co%%ected i# ra#dom /ay from the 9arious hi&h 2erformi#& 2ar%ors i# differe#t areas of De%hi a#d "-R. :. $he 8uestio#s asked to dea%ers /ere of o2e# as /e%% as c%osed e#ded ty2e. ?. $he sam2%e co%%ected from the 2ar%ors com2rised of '(( i# tota%. A. $he 8uestio#s /ere asked mai#%y o# * differe#t as2ects #ame%y a/are#ess. i#9estme#t 2atter#. associatio# /ith broki#& House. satisfactio# %e9e%. i#f%ue#ce. sectors co#sidered for i#9estme#t a#d factors co#sidered for i#9estme#t /hich is affordab%e to the customers. $he 8uestio#s formu%ated i# each 8uestio##aire /ere such as to mai#tai# u#iform re2%ies from the customers.

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Too"s used
I# de2th i#ter9ie/s %asti#& bet/ee# ' hour to '.A hours I#forma% discussio#s based o# 8uestio##aire format +Refer $o A##e@ure ',

S!mp"e Si=e
'(( res2o#de#ts.

LIMITATIONS OF T4E RESEARC4,

5ack of a/are#ess of Stock market. 5ack of $ech#o Sa99y 2eo2%e a#d 2oor I#ter#et 2e#etratio#. Mis%eadi#& co#ce2ts Sam2%e /as #ot 2ure. $ime /as #ot sufficie#t to carry out the study 2ro2er%y. $he customer sur9ey /as do#e o#%y i# A&ra a#d o#%y for the customers of the ba#k duri#& the mo#ths of May a#d Ju#e. As the sam2%e siCe is sma%% a#d restricted. &e#era%iCatio#s may #ot be accurate. It /as difficu%t to co#tact the customers a#d &etti#& the 8uestio##aires fi%%ed te%e2ho#ica%%y.

FA

'!t! 'istributio

$he fo%%o/i#& t/o 2ie chart sho/s the %ead &e#erated by

/ay of 2rimary research a#d seco#dary research.

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'ATA ANALFSIS TOOLS !ra2hica% re2rese#tatio# Statistica% Data Pie -harts Histo&rams

FACTH .EF FIN'INGS Peo2%e are i&#ora#t about the I#sura#ce Sector. 5I- domi#ated I#dia# I#sura#ce Sector as it is A( year o%d com2a#y. HD4- S5I- )#d to22ed amo#&st 2ri9ate 2%ayers. I#sura#ce Sector 2ro9ides *U of cou#tryBs !DP.

"e/ busi#ess 2remium Rs. ):).A crores !ro/th *DU

-or2orate a&e#cy cha##e%. i#c%udi#& its ba#k assura#ce busi#ess &re/ by 'A(U to Rs.A(cr 0#it %i#ked Products )*U -om2a#y /ith %ar&est distributio# #et/ork amo#& 2ri9ate i#surers

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COMPETITOR PROFILING

FE

LIFE INSURANCE CORPORATION OF IN'IA 2LIC3 $he 5ife I#sura#ce -or2oratio# +5I-, /as estab%ished about A) years a&o /ith a 9ie/ to 2ro9ide a# i#sura#ce co9er a&ai#st 9arious risks i# %ife. A mo#o%ith the#. the cor2oratio#. e#1oyed a mo#o2o%y status a#d became sy#o#ymous /ith %ife i#sura#ce. Its mai# asset is its staff stre#&th of '.)? %akh em2%oyees a#d ).(?E bra#ches a#d o9er si@ %akh a&e#cy force. At the i#dustry %e9e%. a%o#& /ith the !o9er#me#t a#d the !I-. it has he%2ed estab%ish the "atio#a% I#sura#ce Academy. It 2rese#t%y tra#sacts i#di9idua% %ife i#sura#ce busi#esses. &rou2 i#sura#ce busi#esses. socia% security schemes a#d 2e#sio#s. &ra#ts housi#& %oa#s throu&h its subsidiaryH a#d markets sa9i#&s a#d i#9estme#t 2roducts throu&h its mutua% fu#d. It 2ays off about Rs D.((( crores a##ua%%y to A.D mi%%io# 2o%icyho%ders.

Tr!i i ( !cti#ities %or !(e tsH!d#isors As 2er IRDA. A(hrs trai#i#& is com2u%sory for F days. >#%y c%assroom trai#i#& is a9ai%ab%e. >#%y fu%% time trai#i#& is &i9e#. 2ICICI Prude ti!" !d#! t!(e- , P!rt time optio !#!i"!b"e.3

FF

Commissio StructureDe2e#ds o# the 2%a# or the 2roduct = 2o%icy /hich the ad9isor se%%s to the customer.

E9ery 2o%icy has a commissio# amou#t fi@ed o# it as 2er s2ecificatio#s of IRDA.

Modes 8 ;!$s throu(h ;hich the comp! $ recruits !(e ts$hrou&h de9e%o2me#t officers. $hrou&h cor2orate a&e#cies +Ba#kers a#d Brokers,. -arrier a&e#t bra#ch +i, rura% carrier a&e#t +ii, 0rba# carrier a&e#t.

Curre t !(e t %orce Arou#d :(((( :A((( a&e#ts i# De%hi

Top < USPCs 2U iJue Se""i ( Propositio 3 O% LIC $R0S$ +si#ce 'FAD,. >R! marks sur9ey has rated 5I- most trusted bra#ch i# %ife i#sura#ce Ha9i#& a 9ast #et/ork of )(A( bra#ches a#d #ear%y '( %akh a&e#ts. Best c%aim 2erforma#ce i# the /or%d by De2th a#d Maturity c%aim. A &o9er#me#t u#dertake# com2a#y e#suri#& safe a#d corru2tio# free i#sura#ce. ;ariety of 2%a#s a9ai%ab%e to match the customerBs #eeds.

'((

MAK NE/ FOR. LIFE

M!B I di! Ma@ I#dia 5imited is a mu%ti busi#ess cor2oratio# that has busi#ess i#terests i# te%ecom ser9ices. bu%k 2harmaceutica%s. e%ectro#ic com2o#e#ts a#d s2ecia%ty 2roducts. It is a%so the ser9ice orie#ted busi#esses of hea%thcare. %ife i#sura#ce a#d i#formatio# tech#o%o&y.

Ne; For1 Li%e "e/ <ork 5ife has &ro/# to be a 4ortu#e '(( com2a#y a#d a# e@2ert i# %ife i#sura#ce. It /as the first i#sura#ce com2a#y to offer cash di9ide#ds to 2o%icy o/#ers.

I# 'EF?. "e/ <ork 5ife 2io#eered the the# u#heard of co#ce2t of i#suri#& /ome# at the same rate as me#. $hereafter. it co#ti#ued to i#troduce a series of firsts a disabi%ity be#efit c%ause i# 'F)(. u#em2%oyme#t i#sura#ce i# 'FF). a#d com2%ete customer care o# the Geb i# 'FFE.

$oday "e/ <ork 5ife has o9er 0S bi%%io# i# assets u#der ma#a&eme#t a#d o9er :(.((( a&e#ts a#d em2%oyees /or%d/ide. $he >ctober )((( 4ortu#e Sur9ey #amed "e/ <ork 5ife amo#&st the to2 three most admired %ife a#d hea%th i#sura#ce com2a#ies /or%d/ide.

'('

Tr!i i ( !cti#ities %or !(e tsH!d#isors As 2er IRDA. '((hrs trai#i#& is com2u%sory. >#%y c%assroom trai#i#& is a9ai%ab%e. >#%y fu%%time trai#i#& is &i9e#.

24'FC St! d!rd Li%e !d#! t!(e- , P!rt time optio !#!i"!b"e.3

Commissio Structure Mi#imum )U

Ma@imum ?(U.

;aries from 2roduct to 2roduct ).AU. *.AU. '(U P 'AU. Modes 8 ;!$s throu(h ;hich the comp! $ recruits !(e ts Refere#ce +o#%y, Ma@ "e/ <ork %ife recruits a&e#ts o#%y o# basis of refere#ce. Current agent force% Arou#d )((( :((( i# De%hi.

Top < USPCs 2U iJue Se""i ( Propositio 3 O% M!B Ne; For1 $rai#i#&. /hich is com2u%sory for e9ery a&e#t=ad9isor so that they /ork accordi#& to the com2a#yBs /orki#& sty%e. Em2hasiCes o# /ho%e %ife 2roducts. 4%e@ibi%ity of the 2roduct to ada2t to customers cha#&i#& #eeds i# future. Be%ie9es i# hea%thy com2etitio# /ith other %ife i#sura#ce com2a#ies. '()

A&e#t is the 2o/er.

ANALFSIS
'.Are you i#terested i# &etti#& i#sured yourse%f a, <es b, "o

$hese stats sho/ that most of the I#dia# 2o2u%atio# is 9ery o2e# mi#ded a#d are 9ery much a/are about their duties a#d their res2o#sibi%ities. $hus E:U of the 2o2u%atio# is 9ery much ready to i#sure themse%9es a#d thus this is a &ood si&# for the i#sura#ce firms.

'(:

). Do you &et irritated /he# you &et a te%e2ho#ic ca%% for &etti#& i#sured from i#sura#ce com2a#y[ a, <es b, "o

Do ;ou get irritated w(en ;ou get a tele<(onic call for getting in%ured fro$ in%urance co$<an;=

8>. e% No >,.

$he fi&ures sho/ that D?U of the res2o#de#ts do #ot %ike the te%e2ho#ic mode of ad9ertiseme#ts ado2ted by the i#sura#ce firms. $he i#sura#ce com2a#ies shou%d a9oid usi#& this mode. i# order to kee2 a &ood 2ub%ic ima&e.

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:. Ghat mea#s /ou%d you 2refer for educati#& about the i#sura#ce[ a, Perso#a% meeti#& c, ;isit to the com2a#y b, Pam2h%ets d, Ad9ertiseme#ts

'(at $ean% would ;ou <refer for educating a?out t(e in%urance= ,* 8) 8* -) -* /) /* ) * Per%onal $eeting Pa$<(let% @i%it to t(e Co$<an; Ad&erti%e$ent% Tele<(onic call%

$he res2o#de#ts ha9e 2ortrayed a commo# huma# 2sycho%o&y of 2erso#a% atte#tio#. /hich mea#s e9ery 2erso# %ikes to &et a 2erso#a% cou#se%i#& sessio#s to &et educated about the differe#t schemes a#d 2%a#s. $hus the com2a#ies shou%d take it as a cha#ce a#d make more of 2erso#a% sessio#s rather tha# te%e2ho#ic sessio#s.

'(A

?. Gou%d you %ike to &et i#sured from[ a, Pub%ic sector com2a#y b, Pri9ate sector com2a#y

It /as see# that DAU of the 2eo2%e sti%% ha9e faith more to/ards the 2ub%ic sector i#sura#ce com2a#ies. $hus the e#try of the 2ri9ate sector e#ter2rises may be ham2ered as the 2eo2%e are #ot /i%%i#& to take cha#ces /ith them. So this ham2ers the &ro/th of 2ri9ate sector i#sura#ce com2a#ies a#d creates a# e#try barrier for #e/ com2a#ies

'(D

A. >ther tha# %ife. /hat other thi#& /ou%d you %ike to &et i#sured[ a, Automobi%e c, 5a#d bui%di#& b, E%ectro#ic &oods d, 1e/e%%ery

$aki#& i# co#sideratio# other tha# %ife i#sura#ce 2eo2%e 2refer to ha9e their %a#d a#d bui%di#& i#sured more to/ards a#y other as it is most im2orta#t 2art for e9ery o#e as itBs the %ar&est i#9estme#t for e9eryo#e so /e ca# say that 2eo2%e are i#suri#& thi#&s /ith res2ect to the 9a%ue

'(*

D. Are you comfortab%e /ith the i#sura#ce 2%a#s a#d the subse8ue#t 2remium 2ayme#t 9o%umes that the com2a#y 2ro9ides[

a, <es

b, "o

. $his is sho/s that most of the res2o#de#ts are comfortab%e /ith the 2remium 2ayme#t a#d the 2ri#ci2a% 2ayme#t of the com2a#ies.

'(E

'(F

*. I#sura#ce accordi#& to you is: a, Sa9i#& c, Burde# b, "ecessity d, ca#Bt say

$he I#dia# society. refers to i#sura#ce as a #ecessity. thus it 1ustifies the abo9e stateme#ts that I#dia# 2o2u%atio# is sti%% #ot a/are about the additio#a% im2orta#ce of i#sura#ces.

''(

E. Ghe# do you thi#k a 2erso# shou%d &et himse%f i#sured[ a, 'A )A yrs c, :D ?A b, )D :A d, ?A o#/ards.

>> 0* >* )* ,* 8* -* /* * >3 How $an; $e$?er% of ;our fa$il; ;ou would li!e to get in%ured3 1 // /) / to - to 8 All De<ending u<on age

DDU of the res2o#de#ts /ou%d %ike to &et i#sured accordi#& to the a&e. a#d thus /e ca# see that the I#dia# society co#siders i#sura#ce as a fi&hti#& /ea2o# duri#& the times of ad9ersities. So /e ca# say that the I#dia# i#sura#ce sector is yet to attai# fu%% maturity.

'''

MARRIE' 0HS UNMARRIE'

Married 2eo2%e &et res2o#sib%e so they are readi%y i#suri#& themse%9es a#d their s2ouse so they ca# be the tar&et for the com2a#ies

'')

EARNING MAN 0HS 4OUSE/I0ES

As me# are the treasury of mo#ey so they ca# be the o#e /ho are more to/ards the i#suri#& the fami%y rather tha# house /i9es thou&h they are the o#e /ho re8uest the same.

'':

EARNING MEN 0HS EARNING /OMAN

$his sho/s that /ome# are more i#terested to/ards i#sura#ce a#d they i#sure more tha# a# ear#i#& me# /he# the ratio is com2ared ear#i#& are hi&h as they are more to/ards 2rotectio# a#d sa9i#&

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RECOMMEN'ATIONS
'. It must a%so ta2 the rura% sector /here 2e#etratio# is 2oor. it ca# be made 2ossib%e by better offer /ith its 2roduct i.e. mar&i# %e9e%. %oa# o# %o/ 2erce#ta&e.

). It must a%so im2ro9e its bra#d a/are#ess throu&h she%%i#& out more e@2e#diture o# ad9ertiseme#t a#d other 2romotio#a% too%s.

:. Bra#d %oya%ty a%so #eeds to be stre#&the#ed by customer re%atio#shi2 mode%. kee2i#& a /ide #et/ork of fi#a#cia% co#su%ta#t a#d 2ro9idi#& them /ith ade8uate trai#i#& a#d su22ort so that the customers ca# be satisfied to the fu%%est a#d thereby maki#& #e/ customers a#d 2ushi#& the e@isti#& o#es for re2urchase.

?. Im2ro9eme#t i# distributio# system it may be do#e by i#9o%9i#& more midd%eme# /ith a defi#ed territory so that a systematic 2rocedure a#d fo%%o/ u2 ca# be do#e.

''A

CONCLUSION
T4E CUSTOMER IS T4E PROFIT E0ERFT4ING ELSE O0ER4EA'MM At a#y or&a#iCatio# /here customer is the ki#&. the Ja2a#ese /ord da#totsu stri9i#& to be the ca2ture the 9ery esse#ce of the com2a#yBs commitme#t to/ards them. Gith cha#&i#& customer Pmarket dema#d. a #eed is fe%t to radica%%y reorie#t the customer 2rocesses of order &e#eratio# P fu%fi%%me#t as /e%% as market de9e%o2me#t. Busi#ess 2rocess shou%d be redesi&#ed /ith a 9ie/ to im2ro9e customer satisfactio# %e9e%. e#ha#ci#& com2%ia#ce to customer order s2ecificatio# P reduci#& the order to cash cyc%e time.

># the thresho%d of the #e/ mi%%e##ium HD4- Sta#dard 5ife i#sura#ce com2a#y shou%d embark u2o# a com2ressi9e 2ro&ram to the customer better. $he com2a#yBs strate&ies shou%d aim to im2ro9e customer better co#scious#ess a#d em2hasiCe customer orie#tatio#. As 2art of this 2ro&ram. the sa%es or&a#iCatio# structure is bei#& a%i&#ed to the order &e#eratio# a#d fu%fi%%me#t 2rocess. /hich fo%%o/s throu&h from sa%es 2%a##i#& a#d order &e#eratio# to co%%ectio# a#d com2%ai#t sett%eme#t. 4iftee# market de9e%o2me#t 2rocesses shou%d be restructured i#c%udi#& se&me#tatio#. marketi#& strate&y. a#d customer accou#t ma#a&eme#t a#d customer ac8uisitio#.

''D

A%so. the marketi#& a#d sa%es or&a#iCatio# structure is bei#& I$ e#ab%e throu&h im2%eme#tatio# of e#ter2rise resource 2%a##i#& system. -ou2%ed /ith these. the 2rocess of determi#i#& e@act customer re8uireme#ts by 9arious 2roducts a#d ser9ices features resu%t i# e#ha#ci#& customer satisfactio#. reductio# of com2%ai#ts a#d i# share of s2e#d.

-ustomer satisfactio# is both affordab%e a#d 2rofitab%e. Affordab%e. because a satisfied customer is the best a#d most eco#omica% ad9ertiser that a#y busi#ess ca# ha9e 2rofitab%e. because a satisfied customer is the re2eat customer ."o amou#t of ad9ertisi#& %eaf%ets. ba##ers. hoardi#&s. /a%% 2ai#ti#&. te%e9isio#. a#d fi%ms ha9e the credibi%ity. /hich a satisfied customer has. Each customer shou%d be treated /ith &reat care. as 2art of the com2a#yBs 2o%icy of fosteri#& frie#dshi2 /ith him is a mea#s to this e#d.

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CONTENT

EKECUTI0E SUMMARF

I#sura#ce i#dustry is &ro/i#& ra2id%y day by day. I#dia itse%f has a 2o2u%atio# of '.)bi%%io# out of /hich rou&h%y AU of the midd%e c%ass 2eo2%e are i#sured. $his c%ear%y demo#strates that citiCe#s are #ot i#sured mere%y because they do#Bt k#o/ much about I#sura#ce sector a#d its be#efits. !e#era%%y I#sura#ce is co#sidered as $a@ Sa9i#& de9ice i#stead of other im2%ied %o#& term fi#a#cia% be#efits.

I# order to study the e#9iro#me#t for the abo9e me#tio#ed status. I did a market research c%assifyi#& di9erse co#tour of the 2ub%ic a#d &i9i#& them a Busi#ess >22ortu#ity to 1oi# HD4- Sta#dard 5ife as a# ad9isor=a&e#t.

A market2%ace a#a%ysis /as do#e o# %ife i#sura#ce com2a#ies. Sam2%e 8uestio##aire /as formu%ated re%ated to the I#sura#ce Sector.

$he 9ici#ity co9ered u2 i# this a#a%ysis /as De%hi a#d its suburbs. $he A#a%ysis i#cu%cates i#formatio# of 2ub%ic res2o#se /ith res2ect to the I#sura#ce Sector a#d its u2comi#& &ro/th stratum.

''E

+ ) ? 6 < > 9 @ A +* ++ +) +? +6 +<

EBecuti#e Summ!r$ I dustr$ Pro%i"e Comp! $ Pro%i"e Or(! i=!tio !" Structure Rese!rch Methodo"o($ M!r1et Positio Competitor Pro%i"i ( EBecuti#e Ch! e" 'istributio Customer AcJuisitio ! d Rete tio Str!te($ S!mp"e Luestio !ire '!t! A !"$sis ! d I terpret!tio S!mp"e Luestio !ire '!t! I terpret!tio Recomme d!tio s ! d Su((estio s &ib"io(r!ph$

''F

&I&LIOGRAP4F
'A' Secrets of I#sura#ce Direct Marketi#& Practices Re9ea%ed by Do#a%d R. Jackso#. Po;er Positio Four A(e c$ by $roy Kors&ade#. I#sura#ce -hro#ic%e. I-4AI Press. 5ife I#sura#ce re9ised additio#. I#sura#ce I#stitute of I#dia. ;;;.hd%ci sur! ce.co.i ;;;.(oo("e.co.i ;;;.hd%cb! 1.com >fficia% 1our#a%s of HD4- Sta#dard 5ife I#sura#ce -o. ;;;.bim!o "i e.com Study materia% 2ro9ided by the com2a#y.

')(

APPEN'IK,+
CONSTRAINTS Ghi%e co%%ecti#& data. doi#& a#a%ysis a#d 2re2ari#& this re2ort there /ere certai# co#strai#s. A#d thus the re2ort shou%d be re9ie/ed taki#& i#to co#sideratio# the fo%%o/i#& co#strai#s:

INFORMATION RELATE' $he data re&ardi#& c%ie#ts. their 2ayme#t 2atter#. their mo#th%y i#9oici#& a#d the mo#th%y recei2ts of the com2a#y are co#fide#tia% data to the com2a#y. $hus. o#%y the detai%s 2ro9ided by the com2a#y /ere used for a#a%ysis. $he data 2ur2osefu%%y e@c%ude the se#siti9e detai%s %ike #ame of the c%ie#ts.

Due to the restrictio# o# i#formatio# a9ai%abi%ity a#d its usa&e. certai# fi&ures cou%d be o9erstated or u#derstated. But the data used is authe#tic a#d accurate /ith re&ards to the o#e 2ro9ided a#d a%% 2ossib%e efforts /ere made to a9oid a#y &rossi#& u2 of the i#formatio#.

$he fi&ures of debtors. re9e#ue etc. cou%d #ot be made 2ub%ic before statutory audit. So fi&ures of 2re9ious years are used.

')'

SAMPLE AN' ANALFSIS RELATE'

As a#a%yCi#& the com2%ete %ist of c%ie#ts /ou%d be cumbersome a#d i#feasib%e. o#%y a sam2%e of )A c%ie#ts has bee# a#a%yCed.

Ghi%e se%ecti#& the sam2%e #o disti#ctio# /as made bet/ee# the c%ie#ts o# the basis of their dis2ute o9er outsta#di#& /ith the com2a#y because such a data is e@treme%y se#siti9e a#d ca# #ot be shared. More o9er a%% the c%ie#ts /ith the amou#t due for more tha# : to ? mo#th or so #eed some e@2%a#atio# for the amou#t due.

Some c%ie#ts ha9e more tha# o#e 2ayer I D but the 2ayme#t is made by o#e si#&%e e#tity. Such 2ayer ids are treated as differe#t c%ie#ts due to %ack of com2%ete i#formatio#.

ASSUMPTIONS I# case the amou#t /hich is sti%% outsta#di#& from a 2articu%ar c%ie#t as o# ' st A2ri% )((E. it has bee# assumed that it /ou%d be co%%ected by ' st May )((E. $his is do#e for the 2ur2ose of a#a%ysis as the com2a#y is maki#& &e#ui#e efforts to co%%ect a% 2ast dues from c%ie#ts.

'))

Ghi%e /orki#& /ith the system it /as obser9ed that i# case %ease re#ta% for a mo#th /as recei9ed 9ery %ate a#d ad1usted a&ai#st #e@t mo#thBs %ease re#ta% the error is se%dom corrected a#d the forthcomi#& 2ayme#t is k#ocked off a&ai#st 2e#di#& mo#thBs i#9oices. 4or e@am2%e. if the 2ayme#t for MarchBs %ease re#ta% is recei9ed o# )*th march a#d is ad1usted a&ai#st the bi%%s of A2ri% due to %ack of detai%s. the k#ockoff is #ot corrected a#d the forthcomi#& check is ad1usted /ith 2e#di#& i#9oices. Due co#sideratio# has bee# &i9e# to this /hi%e ca%cu%ati#& the days the 2ayme#t /as de%ayed.

ERRORS AN' OMISSIONS Sometime c%ie#t 2ay the %ease re#ta% of t/o mo#ths to&ether. but /hi%e k#ocki#& off of these recei2ts #o me#tio# is made of the other mo#th i# the remarks. It /as im2ossib%e for me to detect such cases or a#y other f%a/ if caused due to /ro#& remarks recorded i# MIS. Simi%ar%y there mi&ht be some recei2ts remai#i#& u#a22%ied /ithout 2ro2er remarks for i#9oices I ha9e used for a#a%ysis. I# such case. the system does#Bt ad1ust them a&ai#st the amou#t outsta#di#& #or ha9e I.

'):

APPEN'IK
LUESTIONNAIRE

PERS>"A5 DE$AI5S:

"ame: 77777777777777777777777777777777777777777

A&e777777777

5ocatio#777777777777777777777777

!e#der:

\Ma%e

\4ema%e

>ccu2atio#:

\!o9t. Ser9ice \Busi#essma#

\Pri9ate Ser9ice \Professio#a% +Doctor. $eacher etc,

Mo#th%y I#come: \Be%o/ :(.((( \?A.((( D(.((( \:(.((( ?A.((( abo9e D(.(((

-o#tact #o.777777777777777777777777

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+Dear res2o#de#t this i#formatio# is o#%y for study a#d it /i%% co#fide#tia%.,

'. Are you i#terested i# &etti#& i#sured yourse%f a, <es b, "o

). Do you &et irritated /he# you &et a te%e2ho#ic ca%% for &etti#& i#sured from i#sura#ce com2a#y[ a, <es b, "o

:. Ghat mea#s /ou%d you 2refer for educati#& about the i#sura#ce[ a, Perso#a% meeti#& c, ;isit to the com2a#y b, Pam2h%ets d, Ad9ertiseme#ts

?. Gou%d you %ike to &et i#sured from[ a, Pub%ic sector com2a#y b, Pri9ate sector com2a#y

A. Are you comfortab%e /ith the i#sura#ce 2%a#s a#d the subse8ue#t 2remium 2ayme#t 9o%umes that the com2a#y 2ro9ides[ a, <es b, "o

D. Ho/ ma#y members of your fami%y you /ou%d %ike to &et i#sured[ a, ' ) c, A%% b, ) : d, De2e#di#& u2o# a&e

')A

*. Ghe# do you thi#k a 2erso# shou%d &et himse%f i#sured[

a, 'A )A yrs c, :D ?A

b, )D :A d, ?A o#/ards.

E. I#sura#ce accordi#& to you is: a, Sa9i#& c, Burde# b, "ecessity d, ca#Bt say

F. >ther tha# %ife. /hat other thi#& /ou%d you %ike to &et i#sured[

a, Automobi%e c, 5a#d bui%di#&

b, E%ectro#ic &oods d, 1e/e%%ery

'(. $he idea% i#sura#ce com2a#y is]]]]]]]]]]]...............

T4AN. FOU 0ERF MUC4 FOR TIME AN' COOPERATIONM

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