Professional Documents
Culture Documents
ON
CUSTUMER EXPECTATION FROM INSURANCE POLICY
IN
HDFC STANDARD LIFE INSURANCE COMPANY LIMITED
SUBMITTED IN
PARTIAL
FULFILLMENT OF REQUIREMENT OF
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY:
Manoj kumar juyal
Roll No. 0934170017
MBA (3rd SEM)
Session: - 2009-2011
INSTITUTE
PREFACE
PREFACE
This report is a part of my six weeks summer training started from 16 Jun. 2010 till 31th
july 2010 at HDFC Standard Life Insurance Company Limited. I have been appointed
here as a management trainee to get the on job field experience about the marketing and
sales of the all plan of HDFC Standard Life Insurance Company Limited.
ACKNOWLEDGEMENT
ACKNOWLEDGEMENT
A successful project can never be prepared by the single effort of the person to whom
project is assigned, but it also demand the help and guardianship of some conversant
person who helped the undersigned actively or passively in the completion of successful
project. In this context as a student of INSTITUTE OF TECHNOLOGY AND
MANAGEMENT ALIGARH. I would first of all like to express my gratitude to Mr.
Deepak Srivastava (Sales Development Manager) for assigning me such a worthwhile
topic customer expectation from insurance policy
I am also like to thank to the professors of ITM for there invaluable guidance, keen
interest cooperation inspiration, and of course moral support through my project session.
EXECUTIVE
SUMMARY
EXECUTIVE SUMMARY
In todays corporate and competitive world, I find that insurance sector has the maximum
growth and potential as compared to the other sectors. Insurance has the maximum
growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This
growth potential attracts me to enter in this sector and HDFC Standard Life Insurance
Company Ltd has given me the opportunity to work and get experience in highly
competitive and enhancing sector.
The success story of good market share of different market organizations depends upon
the availability of the product and services near to the customer, which can be distributed
through a distribution channel. In Insurance sector, distribution channel includes only
TABLE OF CONTENTS
1. INTRODUCTION
1.1 ABOUT THE INDUSTRY
1.2 RANGE OF PRODUCT AND SERVICES
1.3 RULES AND REGULATIONS
1.4 COMPANY PROFILE
1.5 COMPETITION INFORMATION
2. RESEARCH METHODOLOGY
3. DATA ANALYSIS AND INTERPRETATION
PAGE NO.
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20
22
23
59
73
74
84
5.
SUGGESTION
86
6.
LIMITATION
88
7.
BIBLIOGRAPH
90
8. ANNEXURES
8.1 SAMPLE QUESTION
91
INTRODUCTION
INTRODUCTION
foreign life insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives inviting heavy premiums.
The era of change was ushered in by Bombay Mutual Life Assurance Society, the
first Indian life insurance company in the year 1870 that covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social security through
insurance to various sectors of society. Bharat Insurance Company (1896) was also one of
such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave
rise to more insurance companies. The United India in Madras, National Indian and
National Insurance in Calcutta and the Co-operative Assurance at Lahore were
established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth
in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in
Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay
Life) were some of the companies established during the same period.
In 1994, the committee submitted the report and some of the key recommendations
included:
Structure
o Government stake in the insurance Companies to be brought down to
50%
o Government should take over the holdings of GIC and its subsidiaries
so that these subsidiaries can act as independent corporations.
o All the insurance companies should be given greater freedom to
operate.
Competition
o Private Companies with a minimum paid up capital of Rs.1bn should
be allowed to enter the industry.
o No Company should deal in both Life and General Insurance through a
single entity.
o Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.
o Postal Life Insurance should be allowed to operate in the rural market.
9
provide the supporting systems to the insurance sector and in particular the life insurance
companies were the launch of the IRDAs online service for issue and renewal of licenses
to agents.
The approval of institutions for imparting training to agents has also ensured that
the insurance companies would have a trained workforce of insurance agents in place to
sell their products. Since being set up as an independent statutory body the IRDA has put
in a framework of globally compatible regulations.
Reforms have marked the entry of many of the global insurance majors into the
Indian market in the form of joint ventures with Indian companies. Some of the key
names are AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada and
Old Mutual. The entry of new players has rejuvenated the erstwhile monopoly player
LIC, which has responded to the competition in an admirable fashion by launching new
products and improving service standards. The following are the key winds of change
brought about by privatisation.
Market Expansion: There has been an overall expansion in the market. This has
been possible due to improved awareness levels thanks to the large number of advertising
campaigns launched by all the players. The scope for expansion is still unlimited as
virtually all the players are concentrating on large cities and towns - except by LIC to an
extent there was no significant attempt to tap the rural markets.
Customer Service: Not unexpectedly, this was one area that witnessed the most
significant change with the entry of new players. There is an attempt to bring in
international best practices in service and operational efficiency through use of latest
technologies. Advice and need based selling is emerging through much better trained
sales force and advisors. There is improvement in response and turnaround times in
specific areas such as delivery of first policy receipt, policy document, premium notice,
final maturity payment, settlement of claims etc. However, there is a long way to go and
various customer surveys indicate that the standards are still below customer expectation
levels.
Channels of Distribution: Till two years back, the only mode of distribution of life
insurance products was through Agents or Insurance Consultants, as we call them. While
11
This type of positioning is based on varieties in products and services rather than
customer segments. It is a sensible strategy for those companies who have distinctive
advantages or strengths in offering certain products and services. One such example is
Birla Sun life Insurance, which has been placing particular focus on investmentrelated products since its launch in India. Through its superior fund management
capabilities, the insurance company can deliver better returns on its investment-linked
products and thereby carve for itself a leadership position in this segment. Then there
is the entire category of pension products which is widely touted to have immense
growth potential in India due to imminent pension reforms. It is possible to achieve
profitable positioning by focusing and excelling in only pension products.
NEED-BASED POSITIONING:
The insurance needs of customers vary significantly for different groups of
customers. This is the most commonly understood positioning and is based on the
differing needs of different groups of consumers. This can be done successfully if a
company has unique strengths to service a group of customer needs better than others.
However, in India most of the life insurance companies have a wide variety of products
tailored for different customer needs and there is no company focusing on a particular
customer need.
An example would be a life insurance company that focuses only on High Networth Individuals (HNIs). The needs of HNIs would be quite different from those of a
general consumer and would require an entirely different marketing mix right from the
type of products offered and the way they are distributed, to the promotion methods
employed.
ACCESS-BASED POSITIONING:
Positioning of customers can also be done by the way they are accessible. That is
different groups of customers may be accessible in different ways even though they may
have similar needs. Access is typically a function of customer geography or customer
scale. There is excellent opportunity in the insurance industry to employ access-based
positioning by targeting the rural insurance sector. The rural market for life insurance is
very different from the urban market in terms of needs, income levels and distribution
13
(seasonality, for example), penetration of media and so on. So far except for LIC, no
other player has paid any attention or focus on the rural sector. Contrary to common
perception it is a big opportunity as emphasised repeatedly by such eminent strategists
like C.K. Prahlad. Rural market can be a highly profitable position if one is able to
carefully plan and tailor an entire set of low-cost activities of advertising, distribution,
and product design etc. to successfully exploit the potential.
FIVE LIFE INSURANCE MYTHS
People who choose life insurance policies based on myths about insurance could
end up making a costly decision. It is important to understand which kind of life
insurance is right for you or whether you need insurance at all. Life insurance policies use
legal language and have different names in different companies, which can scare you
from learning about them. So, here are five common life insurance myths to help you
from making the wrong choice.
Myth 1: I Am Alive, Therefore I Need Life Insurance
Life insurance protects dependents and guarantees a steady source of income after
their breadwinner's death. Single people without dependents or childless couples who
earn enough to lead a good life need not consider buying insurance. Purchase life
insurance for a child only if you depend on her income. As for retired people, unless you
are insecure that your partner would desert you or if you depend on a pension that would
disappear upon your partner's death then you should get life insurance
Myth 2: I Don't Work So I Don't Need Insurance
Even those without jobs need life insurance. A jobless parent with dependent
children need not buy life insurance, as there's no pay check to replace. However
childcare could cost $10,000 to $30,000 annually. So estimate the amount it would cost
for your family and use that number for your "salary" when calculating life insurance
needs.
Myth 3: Odds Are I Won't Need It, So Why Spend The Money?
Why skip life insurance to save money? The reason why life insurance is cheaper
for younger people to buy is because chances of death low for youths. But life is unsure
14
and the time of our death is not predetermined therefore do buy life insurance to provide
for your family in case the worst does happen. If right kind of insurance is bought you
could provide enough financial security to your dependents.
Myth 4: If It's More Expensive, It Must Be Worth It
Term insurance is cheaper, better choice for most of us since term life insurance is
"pure" insurance with no investment add-on and guarantees your coverage till the time
you pay your premium. Term insurance is specifically for those who want life insurance
for a stipulated duration of time. Level term insurance is probably the best option since
premiums don't increase while you have it. There are various types of Permanent
insurance such as whole life, universal and variable, and more but is seven to eight times
more expensive than term. A permanent insurance policy combines life insurance with an
investment that builds up cash value which you can exploit by borrowing or surrendering
(cashing in) the policy.
Myth 5: It's Such a Hassle to Get Insurance
If you need to change your life insurance, never cancel existing policies until your
new insurance is in place. You should not keep any gaps in your insurance coverage.
Most reputed companies provide online facility to download quotes and application
forms on the Internet. You can easily shop for the best possible rates online and then
consult a trusted agent to purchase the insurance. After contacting an agent or company
they themselves will arrange to collect the medical information they require.
ROLE OF LIFE INSURANCE
Role 1: Life insurance as Investment
Insurance is an attractive option for investment. While most people recognize the
risk hedging and tax saving potential of insurance, many are not aware of its advantages
as an investment option as well. Insurance products yield more compared to regular
investment options, and this is besides the added incentives offered by insurers.
INSURANCE is a unique investment avenue that delivers sound returns in addition to
protection.
Role 2: Life insurance as Risk cover
First and foremost, insurance is about risk cover and protection financial
protection, to be more precise to help outlast lifes unpredictable losses. Designed to
safeguard against losses suffered on account of any unforeseen event, insurance provides
15
you with that unique sense of security that no other form of investment provides. By
buying life insurance, you buy peace of mind and are prepared to face any financial
demand that would hit the family in case of an untimely demise.
Role 3: Life insurance as Tax planning
Insurance serves as an excellent tax saving mechanism too. The Government of India has
offered tax incentives to life insurance products in order to facilitate the flow of funds
into productive assets. Under Section 88 of Income Tax Act 1961, an individual is
entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life
of his/her children or adult children. The rebate is deductible from tax payable by the
individual or a Hindu Undivided Family. This rebate is can be availed up to a maximum
of Rs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs 60,000 a year,
you can buy anything upwards of Rs 10 lakh in sum assured. (Depending upon the age of
the insured and term of the policy) This means that you get an Rs 12,000 tax benefit. The
rebate is deductible from the tax payable by an individual or a Hindu Undivided Family
This product is well suited for the economically weaker sections of society and caters
specifically to their needs. It makes available life cover at affordable rates.
Protection Plans
Children's Plans
Retirement Plans
17
Health Plans
Group Plans
COMPANY PROFILE
FORMATION OF COMPANY
HDFC Standard Life Insurance Company Ltd. is one of Indias leading private
life insurance companies, which offers a range of individual and group insurance
solutions. It is a joint venture between HDFC Ltd., India's largest housing finance
institution and Standard Life Assurance Company, Europe's largest mutual life company.
It was the first life insurance company to be granted a certificate of registration by the
IRDA on the 23rd of October 2000.
HDFC
Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since
emerged as the largest residential mortgage finance institution in the country. The
corporation has had a series of share issues raising its capital to Rs. 119 crores. The net
worth of the corporation as on March 31, 2000 stood at Rs. 2,096 crores. HDFC operates
through 75 locations throughout the country with its Corporate Headquarters in Mumbai,
India. HDFC also has an international office in Dubai, U.A.E., with service associates in
Kuwait, Oman and Qatar.
19
STANDARD LIFE
Standard Life is Europe's largest mutual life assurance company. Standard Life,
which has been in the life insurance business for the past 175 years, is a modern company
surviving quite a few changes since selling its first policy in 1825. The company
expanded in the 19th century from its original Edinburgh premises, opening offices in
other towns and acquiring other similar businesses. Standard Life currently has assets
exceeding over 70 billion under its management and has the distinction of being
accorded "AAA" rating consequently for the past six years by Standard & Poor.
THE JOINT VENTURE
HDFC Standard Life Insurance Company Limited was one of the first companies to be
granted license by the IRDA to operate in life insurance sector. Each of the JV player is
highly rated and been conferred with many awards. HDFC is rated 'AAA' by both
CRISIL and ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and
Standard and Poors. These reflect the efficiency with which HDFC and Standard Life
manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively. HDFC
Standard Life Insurance Company Ltd was incorporated on 14th August 2000. HDFC is
the majority stakeholder in the insurance JV with 81.4 % stake and Standard Life has a
stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of the venture.
Brief Profile of the Board of Directors
21
22
Group
International,
an
International
Association
of
23
Mr. Ravi Narain is the Managing Director & CEO of National Stock
Exchange of India Limited. Mr. Ravi Narain was a member of the core
team to set-up the Securities & Exchange Board of India (SEBI) and is
also associated with various committees of SEBI and the Reserve Bank
of India (RBI).
25
practice
for
Asia
before
joining
Infosys
BPO
in
2005.
Mr. Chaudhry completed his Engineering in 1985 from Birla Institute of Technology and
Science, Pilani and MBA in 1987 from IIM, Ahmadabad.
27
Life.
A fellow of the Institute of Chartered Accountants of India, he has been associated with
the HDFC Group since 1984. During his 16-year tenure at HDFC Limited, he was
responsible, for driving and spearheading several key initiatives. As one of the founding
members of HDFC Standard life, Mr. Parasnis has been responsible for setting up
branches, driving sales and servicing strategy, leading recruitment, contributing to
product launches and performance management system, overseeing new business and
claims settlement, customer interactions etc.
28
29
Mr.Vikram Mehta
General Manager, Sales and Marketing
Mr.Vikram Mehta heads the Sales and Marketing function for HDFC Standard Life.
Mr. Mehta joined HDFC Standard Life in February 2009. Before joining HDFC Standard
Life, he was associated with Citibank for 16 years serving various responsibilities
including the Head for Direct Sales - Citibank Credit Cards division in Germany,
Regional Director East - Citibank NA, India, and Acquisitions Head Credit Cards,
Central and Eastern Europe cluster. Mr. Mehta started his career with Reckitt and Colman
(now Reckitt Benckiser) in 1988, and was associated with the company for 4 years. He
has been a part of FMCG and banking industry for over 20 year.
infrastructure sector which can look forward to long term funding being available. In an
under-insured economy, newer channels of distribution will have to be utilized to
intensify the reach of insurance both in urban and rural markets. This will create huge
employment opportunities not only within insurance companies but also as agents and
consultants of insurance companies.
Indian Bank enters into a strategic tie-up with HDFC Standard Life Insurance Company
Ltd.
INDIAN BANK with over 90 years of standing in the financial market with the
reputation for excellent customer service, has entered into a strategic tie-up with HDFC
Standard Life Insurance Company Ltd., the first in the private sector to receive the
Certificate of Registration for foray into Life Insurance business for distribution of
latters insurance products. A Memorandum of understanding has been signed by the
Bank with the Insurance Company on 8th February 2001 to this effect. The Bank has to
its strength 1377 branches spread across the country with ready built infrastructure and
the expertise in marketing financial products. Initially the insurance products will be
marketed through select branches in the South where the Bank has strong presence. The
insurance products from HDFC Standard Life, will be competitive and customer
friendly. The tie-up would benefit the Bank's customers, as they will have wider choice
of life insurance policies at competitive premium.
HDFC Chubb General Insurance Company Limited Starts Operations in India
To offer multiple non-life insurance products under Auto & Home, Accident &
Health and Commercial Insurance
Speed and quality of service to be industry benchmarks
Mumbai, October 17, 2002: HDFC Chubb General Insurance Company Limited, a joint
venture between HDFC, India's premier financial services company, and The Chubb
Corporation, leading global non-life insurer, formally launched its operations in Mumbai
today.
Deepak Parekh, Chairman, HDFC Chubb and Dean O'Hare Chairman and CEO, The
Chubb Corporation, accompanied by U.S. Ambassador to India, Robert D Blackwill,
presided over the launch ceremony. Offices in New Delhi, Bangalore and Hyderabad
have also been opened simultaneously.
31
HDFC Chubb plans to introduce over time three categories of non-life insurance products
in the Indian market:
Auto & Home (Personal Lines)
Accident & Health - comprising of three products: Group Accident Policy,
Hospital Cash (Accident only) and Business Travel Policy - Accident & Sickness
commercial classes of property and also Marine and Casualty classes of business
In the medium term, HDFC Chubb also plans to introduce its range of specialty products
in the Executive Protection and Financial Institution areas.
Today it announced the launch of its first product - Motor Insurance. The other products
will be rolled out in phases.
HDFC Chubb has been set up with a capital of Rs. 101 Crores, in which HDFC holds
74% and The Chubb Corporation 26%.
Problem Of The Organization
Here the main problem is to known the level of awareness about life insurance among
those who can afford to buy insurance especially now when a no. of private insurer has
entered the market. The researcher would also like to establish the main reasons being
buying a life insurance policy, to know what type of cover is most preferred by people.
After going through the literature review, the researcher has found out that people still
believe in government insurance policies i.e. LIC policies, even many of them dont
known about that ICICI is in insurance sector, with prudential which is no. 1 insurance
company of U.K. Also in todays world when privatization has been given the green
signal the people rely more on Govt. insurance companies than in private and this would
take time when the general awareness would change.
Competition Information
HDFC Standard Life Insurance Company Ltd.
Max New York Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Ltd.
Om Kotak Mahindra Life Insurance Co. Ltd.
Birla Sun Life Insurance Co. Ltd.
Tata Aig Life Insurance Co. Ltd.
SBI Life Insurance Co. Ltd.
ING Vysya Life Insurance Co. Pvt. Ltd.
Allianz Bajaj Life Insurance Co. Ltd.
Metlife India Insurance Co. Pvt. Ltd.
AMP SANMAR Assurance Co. Ltd.
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33
Given this situation is it not fair for HDFC Standard Life, as a new entrant, to charge a
lower rate by devising its own mortality table with the help of 175-years old Standard
Life Assurance?
Responding to that Mr. Nick Taket, actuary and general manager (finance) of HDFC
Standard Life remarks, "The premium and the policy returns- bonus on policies- are interlinked. Low premium will entail lower returns and vice versa. Hence we decided to take
the second route."
But HDFC Standard Life, according to Mr. Satwalekar, will be able to declare bonus to
its policyholders only after three years when they expect to have valuation surplus (the
difference between assets and liabilities excluding shareholders funds).
In order to overcome this jinx and capture new business, industry sources say that new
companies may declare bonus by transferring funds from shareholders account. And for
this purpose the promoters are expected to infuse additional funds during the initial years.
In fact one of the demands from the new entrants in life insurance is to tax exempt
moneys transferred from shareholders funds to valuation surplus account so that they can
declare bonus from the first year of operations.
"The essence of regulations is to protect the policyholders money. So there is nothing
wrong in transferring money from shareholders funds to valuation surplus account,"
justifies Mr. Taket.
Not all agree with this school of thought. "Declaring bonus out of shareholders funds is
akin offering premium rebate which is expressly prohibited by the Insurance Act", warns
Mr. R. Ramakrishnan, chairman, Reserve Bank of India's advisory group on insurance
and member, Malhotra Committee on Insurance Reforms.
A bonus declared out of shareholders funds would give a misleading impression to the
policyholders about the financial health of the life insurer. As per the Insurance Act,
bonus to policyholders should be declared only out of valuation surplus or free reserves
created out of surplus during the earlier years. All other moneys that are channelled to the
surplus account should be reflected in the revenue account, he asserts.
Be that as it may, HDFC Standard Life, which began with a paid up capital of Rs.163
crore, expects additional funds to the tune of Rs.200 - Rs. 300 crore from the promoters
over a period of three years.
"Life insurance is a strange business. The more business one underwrites the more money
one needs for provisioning and to meet the solvency norms," says Mr. Satwalekar. The
company will not be making any profits for the first five years, he adds.
34
Meanwhile come July, HDFC Standard Life will be launching its pension product/annuity
policy and unit linked insurance product. The company also plans to launch a mortgage
redemption policy that is similar to LIC Housing Finance and LIC scheme.
Under this scheme HDFC housing loan borrowers would be asked to take out a life
insurance policy. While the premium will take care of the debt, the borrower would have
to service only the interest component. The insurance company is expected to rake in
sizeable business as considering its parent companys loan disbursement of Rs. 4,492
crore (fiscal 2000).
This is set to increase further given that HDFC has taken over Hometrust Housing
Finance, besides taking a 28 per cent stake in Gruh Finance Ltd, a company floated with
cement major, Gujarat Ambuja Cement.
Through a network of 200 financial consultants, HDFC Standard Life has already sold
around 6,000 out of targeted 25,000 policies. In order to fulfil its licensing norms of
doing stipulated rural business the company is tying up with NGO's.
The other marketing channel that the company will be using is the banks and corporates.
The company has signed an agreement with Indian Bank and Srei International Finance
for the purpose.
According to Mr. Taket, the company hopes to earn around Rs. 13 crore during the first
year and also enrol around 2,500 agents, or financial consultants as the company would
like to term them.
The area where the company largely differs with that of LIC is in its target market
segment. According to Mr. Satwalekar, the company's target segment is the people in the
age group of 20-59 years whereas for LIC the segment is those who are between 15-59
years of age.
With three offices functioning now - Mumbai, Delhi and Chennai- HDFC Standard Life
according to Mr. Pankaj Seith, head - marketing, plans to open branches in 18 more
cities.
In the final count, the launch of Life Insurance Company fills the gap in the entire gamut
of financial services offered by HDFC group. What HDFC still lacks is a general
insurance outfit which, according to Mr. Parekh, chairman of HDFC, may happen by this
December since the financial institution is talking to some overseas general insurers for a
possible collaboration.
35
market. During the year, the company issued over 5,23,000 policies and has covered
more than8,77,000 lives. Distribution
OFFICES
In its drive to deepen and widen the penetration in the market, the company
opened an
Additional 107 offices during the year, taking the total to 276 across 28 regions. In
addition the company also adopted the Hub and Spoke model and opened 162 spokes
during the year. Through the network of these offices the Companys Financial
Consultants, Corporate Agents and Brokers are able to service Customers in almost 700
cities and towns across the country.
FINANCIAL CONSULTANTS
The Companys distribution strategy continues to lay strong emphasis on the
development of the agency channel. The number of licensed Financial Consultants
appointed by the company increased from over 33,000 in the previous year to over
74,000 in the current year, with a large part of the increase happening in the latter part of
the year. This positions us well to take advantage of a larger trained sales force in the
coming year. The company provides extensive and thorough training, to not only Comply
with the regulatory requirements, but also to equip the financial consultants to
Appropriately assess the customers insurance needs. The needs based analysis
approach Adopted by our sales force has resulted in a significant increase in the average
premium,
Even beyond the limits of tax benefits available
CORPORATE AGENTS
Simultaneously the company took advantage of the interest in distributing
insurance
Products that was evinced by banks and other corporate agents. This channel has yielded
good results and accounts for over 43% of all first year premia collected during the year.
37
INFRASTRUCTURE
During the year, the Company has invested in additional infrastructure capacity
and human
Capital, in terms of offices, technology, staff, financial consultants, in order to be well
Positioned to increase the growth momentum in the year ahead.
38
The company stepped up the recruitment programme in the latter part of the year in
preparation for the next year. Many of the newly recruited sales employees will become
fully productive over the coming year.
HUMAN RESOURCE
The company had 8,457 employees as of March 31, 2007 as compared to 3,043
Employees as of March 31, 2006. Under the provisions of Section 217 (2A) of the
Companies Act, 1956 and the rules framed there under, the names and other particulars of
employees are set out in the annexed to this Report.
TECHNOLOGY
The company has been investing in technology to ensure efficient processing of
business and to be in a position to offer value added services to customers. By
networking its branches across the country and setting up a second processing center in
Chennai, the company has taken effective steps towards ensuring Business Continuity.
Their investments in workflow and imaging technology through best of breed solutions
have helped it manage increasing volumes without affecting service standards. As a
result, the company, in the last year, has been awarded the Intelligent Enterprise Award
by the Express Computer Magazine Part of the Indian Express Group. The company
has also used the internet effectively to service both policyholders and its agency force.
39
TRAINING
Employee training is an integral part of our business strategy. The company
continues to
invest heavily into the development of its manpower resources. This is an ongoing
activity
with investments being made to reap benefits in the years to come. During the year, a
large scale training campaign was carried out covering the
EMPLOYEES
Sales and operations, Financial consultants and alternate channel Partners and
their associates on the Compliance necessitated by the Guidelines on Anti Money
Laundering mandated by the IRDA. Risk Management Policy The company has a Risk
Management policy. This involved risk identification, impact evaluation and mitigant
identification exercise. A review mechanism has also been put in place to track the
movement of various risks, both at the unit level and at the corporate level. Regular
updates in this regard will be placed before the Audit Committee of Directors and the
board of directors. Particulars Regarding Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Expenditure Since the company does not carry out
any manufacturing activity and has no dealings in foreign exchange, the particulars in the
Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,
1988 are not applicable. Dividend As the company has not earned profits, the directors do
not recommend any dividend.
bhalaai hai.
41
kare.
ki beti.
42
emotionally.
BOARD MEMBERS
Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive
Chairman of Housing Development Finance Corporation Limited (HDFC
Limited). He joined HDFC Limited in a senior management position in 1978. He
was inducted as a whole-time director of HDFC Limited in 1985 and was
appointed as its Executive Chairman in 1993. He is the Chief Executive Officer of
HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants
(England & Wales).
Mr. Keki M Mistry joined the Board of Directors of the Company in December,
2000. He is currently the Managing Director of HDFC Limited. He joined HDFC
Limited in 1981 and became an Executive Director in 1993. He was appointed as
its Managing Director in November, 2000. Mr. Mistry is a Fellow of the Institute
of Chartered Accountants of India and a member of the Michigan Association of
Certified Public Accountants.
Mr. Alexander M Crombie joined the Board of Directors of the Company in
April, 2002. He has been with the Standard Life Group for 34 years holding
various senior management positions. He was appointed as the Group Chief
Executive of the Standard Life Group in March 2004. Mr. Crombie is a fellow of
the Faculty of Actuaries in Scotland.
Ms. Marcia D Campbell is currently the Group Operations Director in the
Standard Life group and is responsible for Group Operations, Asia Pacific
Development, Strategy & Planning, Corporate Responsibility and Shared Services
Centre. Ms. Campbell joined the Board of Directors in November 2005.
Mr. Keith N Skeoch is currently the Chief Executive in Standard Life
Investments Limited and is responsible for overseeing Investment Process &
Chief Executive Officer Function. Prior to this, Mr. Skeoch was working with
M/s. James Capel & Co. holding the positions of UK Economist, Chief
Economist, Executive Director, Director of Controls and Strategy HSBS
Securities and Managing Director International Equities. He was also responsible
44
45
AREAS OF OPERATION
Helping Indians experience the joy of home ownership. The road to success is a tough
and challenging journey in the dark where only obstacles light the path. However, success
on a terrain like this is not without a solution. As we found out nearly three decades ago,
in 1977, the solution for success is customer satisfaction. All you need is the courage to
innovate, the skill to understand your clientele and the desire to give them your best.
Today, nearly three million satisfied customers whose dream we helped realise, stand
testimony to our success. Our objective, from the beginning, has been to enhance
residential housing stock and promote home ownership. Now, our offerings range from
hassle-free home loans and deposit products, to property related services and a training
facility. We also offer specialized financial services to our customer base through
partnerships with some of the best financial institutions worldwide.
The Housing Development Finance Corporation Limited (HDFC) was amongst the first
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector, as part of the RBI's liberalisation of the Indian Banking
Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations
as a Scheduled Commercial Bank in January 1995.
46
HDFC Mutual Fund has been one of the best performing mutual funds in the last few
years. HDFC Asset Management Company Limited (AMC) functions as an Asset
Management company for the HDFC mutual fund.
AMC is a joint venture between housing finance giant HDFC and British investment firm
Standard Life Investments Limited. It conducts the operations of the Mutual Fund and
manages assets of the schemes, including the schemes launched from time to time. As of
Aug
2006,
the
fund
has
assets
of
Rs.25,892
crores
under
management.
IN 2003, following a decision by the Zurich Insurance Company (ZIC), the Sponsor of
Zurich India Mutual Fund, to divest its asset management business in India, AMC had
entered into an agreement with ZIC to acquire the asset management business.
Consequently, all the schemes of Zurich Mutual Fund in India had been transferred to
HDFC
mutual
fund
and
renamed
as
HDFC
schemes.
Here is a list of mutual funds of HDFC which includes Equity Funds, Balanced Funds
and Debt Funds.
HDFC Securities, a trusted financial service provider promoted by HDFC Bank and JP
Morgan Partners and their associates, is a leading stock broking company in the country,
serving
diverse
customer
base
of
institutional
and
retail
investors.
HDFCsec.com provides investors a robust platform to trade in Equities in NSE and BSE ,
and derivatives in NSE. Our website will support you with the highest standards of
service,
convenience
and
hassle-free
trading
tools.
Our research team tracks the economy, industries and companies to provide you the latest
47
information and analysis. Our content offers financial information, analysis, investment
guidance, news & views, and is designed to meet the requirements of everyone from a
beginner to a savvy and well-informed trader.
MARKET SHARE
HDFC Limited.
HDFC is Indias leading housing finance institution and has helped build more
than 23,00,000 houses since its incorporation in 1977.
In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr.
48
As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The
depositor base now stands at around 1 million depositors.
Rated AAA by CRISIL and ICRA for the 10th consecutive year
Stable and experienced management
High service standards
Awarded The Economic Times Corporate Citizen of the year Award for its
long-standing commitment to community development.
Presented the Dream Home award for the best housing finance provider in 2004
at the third Annual Outlook Money Awards.
the Financial Adviser Service Awards for the last 10 years running .
accolade has also been awarded to Standard Life Investments for the
last 10 years,
Life Bank was
Magazine Awards in
2006
Why
Integrity is the bedrock on which the company and the expectations of the
What is it
Why
To exceed customer expectation and maximise customer retention.
To achieve competitive advantage.
To promote growth and upgrade standards in the industry.
To open a world of new possibilities
CUSTOMER CENTRIC
What is it
50
Why
Reinforce brand loyalty by complete transparency.
Customer is the source of revenue for the company.
Customer is the reason for our existence.
Ensure that customer chooses our company to do business with.
Customers goodwill alone can bring more business and more customers.
Will contribute to customer retention
PEOPLE CARE
What is it
Why
environment.
Job satisfaction
TEAM WORK
One for all and all for one
What is it
51
Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread
the message of life insurance in the country and mobilise peoples savings for nationbuilding activities. LIC with its central office in Mumbai and seven zonal offices at
Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100
divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active
agents spread over the country.
The Corporation also transacts business abroad and has offices in Fiji, Mauritius and
United Kingdom. LIC is associated with joint ventures abroad in the field of insurance,
namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance
Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C.
Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit
linked life insurance and pension policies in U.K.
In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while
GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income
grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in
the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).
LIC has even provided insurance cover to five million people living below the poverty
line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95
per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent.
Compounded annual growth rate for Life insurance business has been 19.22 per cent per
annum
General Insurance Corporation of India (GIC)
52
The general insurance industry in India was nationalized and a government company
known as General Insurance Corporation of India (GIC) was formed by the Central
Government in November 1972. With effect from 1 January 1973 the erstwhile 107
Indian and foreign insurers which were operating in the country prior to nationalization,
were grouped into four operating companies, namely, (i) National Insurance Company
Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company
Limited; and (iv) United India Insurance Company Limited. (However, with effect from
Dec'2000, these subsidiaries have been de-linked from the parent company and made as
independent insurance companies). All the above four subsidiaries of GIC operate all
over the country competing with one another and underwriting various classes of general
insurance business except for aviation insurance of national airlines and crop insurance
which is handled by the GIC.
Besides the domestic market, the industry is presently operating in 17 countries directly
through branches or agencies and in 14 countries through subsidiary and associate
companies.
LIFE INSURANCE COMPANIES
Max New York Life Insurance Co. Ltd.
Max New York Life Insurance Company Limited is a joint venture that brings together
two large forces - Max India Limited, a multi-business corporate, together with New York
Life International, a global expert in life insurance. With their various Products and
Riders, there are more than 400 product combinations to choose from. They have a
national presence with a network of 57 offices in 37 cities across India.
ICICI Prudential Life Insurance Company Ltd.
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse and prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA). The
company has a network of about 56,000 advisors; as well as 7 banc assurance and 150
corporate agent tie-ups.
53
54
Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of
Canada's oldest property and casualty insurers. ICICI Lombard General Insurance
Company received regulatory approvals to commence general insurance business in
August 2001.
4. Cholamandalam General Insurance Company Ltd.
Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture
of the Murugappa Group & Mitsui Sumitomo.
Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh
policies in its first calendar year of operations. The company has a pan-Indian presence
with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune,
Indore, Ahmadabad, Delhi, Chandigarh, Kolkata and Vizag.
5. TATA AIG General Insurance Company Ltd.
Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the
Tata Group and American International Group, Inc. (AIG). Tata AIG combines the
strength and integrity of the Tata Group with AIG's international expertise and financial
strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG
holds the balance 26 per cent stake.
Tata AIG General Insurance Company, which started its operations in India on January
22, 2001, offers the complete range of insurance for automobile, home, personal accident,
travel, energy, marine, property and casualty, as well as several specialized financial
lines.
6. Reliance General Insurance Company Limited.
7. IFFCO Tokyo General Insurance Co. Ltd
8. Export Credit Guarantee Corporation Ltd.
9. HDFC-Chubb General Insurance Co. Ltd.
55
HDFC Standard Life has been adjudged one of the Best Companies to Work for in India
in 2010. The company participated in the Great Places to Work study for the first time
and ranked first in the insurance category. It ranked 34th on the Top 50 Best Companies
to Work for, in India 2010 list. The company was also awarded for its unique employee
initiative - Mission in-Genius national quiz. The study has shown that HDFC Standard
Life conscientiously develops employee talent programmes to keep engaging and
motivating its employees. The company provides some unique platforms such as 'Mission
in Genius' national quiz. The management is accessible to all at all times and sincerely
seeks feedback from its employees through programmes such as 'Sparsh', the study said.
The Best Companies to Work in India is a study conducted by the Great Place to Work
Institute, India in partnership with The Economic Times. The 2010 edition is the seventh
study in India, which received overwhelming response from more than 400 companies,
making it the largest such study in India. And only 50 companies made it to the Best
Companies to Work list!
56
HDFC Standard Lifes Young Star Super has been voted Product of the Year 2010 in the
'Insurance' category by more than 30,000 consumers nationwide across 36 markets.
Young Star Super is an unit linked Children Plan with unique benefits such as bumper
additions, double and triple benefits, attractive allocations rates, and seven different
funds.
The consumer study on product innovation in India was conducted by A C Nielsen, the
leading global research firm. Entries were accepted from products that demonstrate
innovation in their product function, design, packaging or process or any other specified
form. Entries were then filtered by a jury of distinguished industry professionals to ensure
that the products meet the innovation criteria before they were passed on to the consumer
votes/survey round. Product of the Year is an Internationally Recognised Standard that
celebrates and rewards the best innovations in consumer products and services. The
Product of the Year is selected through an independent consumer survey across the
country in 26 countries for the past 20 years.
57
HDFC Standard Life has received the CIO The Ingenious 100 - 2009 Award, for
ATLAS (Agency Training Licensing and Servicing System). Additionally, the company
has received the CIO 100 Security Award 2009 for pioneering LANDesk Management
and Security Suite security implementation and taking its security to a higher level of
technological excellence.
HDFC Standard has received the CIO 100 Award for the third consecutive year. It had
received the 2008 CIO Bold Award for Consultant Corner and CIO Security Award for
our initiatives for a secure computing environment, including Sesame - Identity and
Access Management. In 2007, the company received CIO 100 award for Wonders and a
Special Award in Storage category.
CIO magazine has a long tradition of honoring leading companies for business and
technology leadership and innovations through its flagship award program CIO 100.
Its a celebration of 100 organizations (and the people within them) that are using IT in
innovative ways to deliver business value, whether by creating competitive advantage,
optimizing business processes, enabling growth or improving relationships with
customers.
58
HDFC Standard Life has received the Diamond EDGE Award 2009 for its mobile
workforce portal - Consultant Corner. EDGE - Enterprises Driving Growth and
Excellence (using IT) is an initiative by the ,Network Computing magazine to identify,
recognize, and honor end-user companies in India that have demonstrated the best use of
technology to solve a business problem, improve business competitiveness, and deliver
quantifiable ROI to stakeholders.
Network Computing magazine is part of CMP Technology, which brings more than 100
IT media brands to more than 18 million technology and business decision makers
worldwide
59
Sept, 2008
Received 2008 CIO Bold 100 and CIO Security Awards
HDFC Standard Life has received the 2008 CIO Bold 100 Award. This annual award
recognizes organizations that exemplify the highest level of operational and strategic
excellence in information technology. This year's award theme, The Bold 100,
recognized those executives and organizations that embraced great risk for the sake of
great reward.
HDFC Standard Life has also been one of the five recipients of the Special 2008 CIO
Security Award aimed at CIOs, whose pioneering implementations have taken their
enterprise security to the next level. This award category identifies innovative and
groundbreaking deployment of technologies aimed at creating a secure business
infrastructure.
60
The company received the 2008 CIO Bold Award for its mobile workforce portal and the
CIO Security Award for its initiatives for a secure computing environment, including
identity management.
May, 2008
Received PCQuest Best IT Implementation Award 2008
March, 2008 HDFC Standard Life received the PCQuest Best IT Implementation Award
2008 for Consultant Corner, the applications for its financial consultants, providing
centralized control over a vast geographical spread for key business units such as
inventory, training, licensing, etc. Read more about the Consultant Corner tool in the
HDFCSL's in News Section.
HDFC Standard Life has won the PCQuest Best IT Implementation Award for two years
consequently. Last year, the company received the award for Wonders, its path-breaking
implementation of an enterprise-wide workflow system.
advertisement was ranked 4th in terms of a combined score of ad awareness and brand
recall and 3rd in terms of ad diagnostic scores (likeability, enjoyment, believability, and
claim). The respondents were between 18 and 40 years. Mints exclusive report, New
voices in a makeover outlines the survey in detail.
February, 2008
Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007
Mr. Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life, received
the QIMPRO Gold Standard Award 2007 in the business category at the 18th annual
Qimpro Awards function. The award celebrates excellence in individual performance and highlights
the quality achievements of extraordinary individuals in an era of global competition and expectations.
January, 2008
Sar Utha Ke Jiyo Among Indias 60 Glorious Advertising Moments
HDFC Standard Lifes advertising slogan honoured as one of 60 Glorious Advertising &
Marketing Moments' over the last 60 years in India, by 4Ps Business and Marketing
magazine. The magazine said that HDFC Standard Life is one of the first private insurers
to break the ice using the idea of self respect (Sar Utha Ke Jiyo) instead of 'death' to
convey its brand proposition. This was then, followed by others including ICCI
Prudential, thus giving HDFC Standard Life the credit of bringing up one such glorious
advertising and marketing moment in the last 60 years.
62
Associate Companies
HDFC Limited
HDFC Bank
HDFC Sales
63
Other Companies
HDFC Securities
64
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY
RESEARCH OBJECTIVE:
To analyze various demand of customer who wants to invest in insurance.
To analyze the various ways to enhance the sale of insurances.
METHODOLOGY
. RESEARCH DESIGN:
65
66
DATA
INTERPRETATION
AND ANALYSIS
67
68
ANALYSIS: Most of the people are aware about HDFCSLIC and know about the HDFCSLIC.
69
76%
14%
10%
ANALYSIS: Advertisement by HDFCSLIC is attracting customer more than other things like word of
mouth.
Q.4: Do you have an idea about various facility provided by insurance sector?
(a) Yes 56%
(b) No
44%
70
ANALYSIS: More than half of respondent know about the facilities provided by the HDFCSLIC.
71
ANALYSIS: Life cover is the main reason for having insurance policy.
72
ANALYSIS:Good plans and its accessibility attract customer more to having insurance policy.
73
ANALYSIS:Most of the respondents want to invest in insurance; mutual fund is also an alternative of
investment.
Q.8: If you invest then, what are your expectations from company?
(a) Quick service- 40%
(b) More payment choices- 25%
(c) Minimum formalities- 33%
(d) Others- 2%
74
ANALYSIS:Quick services has 40% so mostly respondents wants quick services ,min. formalities is
also one of the primary choices of respondents.
CONCLUSION
AND
FINDINGS
CONCLUSIONS AND FINDINGS
This chapter deals with the concluded aspects of the study carried out on General
perception about Life Insurance. The basic objective is for the study is for which study
was carried out has been fulfilled in the earlier chapter, based on the objective interview
schedule was designed. Data collected based on schedule was analyzed and some
findings have emerged.
Major Findings of the Study
75
Based on the quantitative analysis the major findings of the study have been highlighted
below.
Most of the respondents have the insurance policies.
Most of the respondents focus mainly on life cover.
Most of the respondents are interested in investing more when opportunity
provided by the company.
Respondents are more interested to invest more in insurance then mutual fund .
Quick service is the prime expectation of respondents.
Advertisement is the best way to attract prospective customers.
SUGGESTIONS
76
SUGGESTION
Company should review its policy time to time so the company can change or
modify its plans so the changing needs of customers can be satisfied.
Company should do a regular research of the customers preferences so the
effective measurement can be done.
Company should appoint more customer relation managers to cover more
customers so the service can be effective and easily available to the customers.
Company should introduce some attractive insurance policies like more security
cover, more interest.
There should be less paper work because the paper work is very stressful for the
customer and there is lot of time consumed in the process.
77
LIMITATIONS
78
LIMITATIONS
79
BIBLIOGRAPHY
BIBLIOGRAPHY
80
QUESTIONNAIRE
QUESTIONNAIRE
4. Date Of Birth
5. Sex: - M/F
6. Marital status7. Education qualification: 8. Employment details_________________________
Q1: Do you have insurance policy?
(a)Yes
(b) No
Q.2: Do you know about HDFC SLIC?
(a) Yes
(b) No
82
83
84