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1.1 Introduction The insurance sector was opened up in the year 1999 facilitating the entry of private players into the industry. With an annual growth rate of 24.31 percent and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of Government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. According to the CSO, the insurance and banking services contribution to the countrys GDP is 7.1 percent out of which the gross premium collection forms a significant part. Life insurance penetration in India was less than 1 percent till 1990-91. During the 90s, it was between 1 and 2 percent and from 2001 it was over 2 percent. In 2003-04 it was 2.4 percent. In 2007-08 it was 14percent. The impetus for increase is due to the active role played by IRDA in licensing private players and taking positive steps in increasing the insurance awareness among the people. Besides, the insurance companies in general and private insurance companies in particular, are reaching out to untapped potential in rural areas with aggressive campaigns. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Life insurance is viewed as a tax saving device. People are now turning to the private sector for providing them with new products and greater variety for their choice. The improvement in FDI flows reflected the impact of recent initiatives aimed at creating an enabling environment for FDI and for encouraging infusion of new technologies and 1

management practices. The Governments proposal to increase the FDI cap in the insurance sector from the present 26 percent to 49 percent has raised expectations among the international insurance companies.

Definition Insurance is a contract in which sum of money is paid to the assured in

consideration of insurers incurring risk of paying a large sum upon a given contingency. --- Justice Tindall Insurance is a contract by which one party for a compensation called in the premium assumes particular risks of the other party and promises to pay to him or his nominee a certain sum of money on a specified contingency. --- E.W.Fitterson Insurance may be described as social device whereby a large group of individuals, through a system of equitable contribution, may reduce certain measurable risk of economic loss common to all members of the group. --- Encyclopedia Britannica The above definitions clearly shows that insurance is a cooperative device to spread the loss caused by a particular risk over a member of persons who are exposed to it and who agree to insure themselves against risk. Insurance does not eliminate risk but only reduces the financial burden, which may be very heavy.

1.1.1 Evolution of Insurance In the days of yore insurance was in its crude form and was cooperative and voluntary in nature. When, where and how it originated is still a matter of research in one way or the other was prevalent in olden days. We can trace its history from the evolution society from hunting stage to the modern industrial age. A word YAGCHHEM occurs in the worlds most ancient Hindu Scripture Rig Veda. The word YAGCHHEM means insurance. It clearly indicated that about four thousand years ago insurance was prevalent in its crude form. It was cooperative and

voluntary in nature. People formed different groups of organizations to share the loss among themselves incase of a particular risk. Each member contributed some amount to a common fund to meet the unforeseen losses. Sometimes they also contributed equally to compensate person as and when he suffered a loss. Traces of insurance in the ancient world are also found in the form of marino trade loans or carriers contracts which included an element of insurance. Evidence is on records that arrangements embodying the idea of insurance were made in Babylonia and India at quite an early period. References were made to the concept of insurance in Manus code Manu Smrity. It was akin to Yagakshemo of Rigveda in which the well being and security of the community was aimed at. However, there is no evidence that insurance in its present farm was practiced prior to twelfth century.

Nature of Insurance The insurance has the following characteristics which are observed in cases of life, marine, fire and general insurance. 1. Sharing of risks: Insurance is a cooperative device to share the financial losses which might befall on an individual or his facility on the occurrence of specified event such as sudden death of the bread winner, marine perils in marine insurance, fire in the fire insurance and theft insurance etc. in the case of general insurance. 2. Cooperative device: A large number of persons agree to share the loss arising sue to a particular risk. Thus, insurance is a cooperative device. 3. Value of risk: The risk is evaluated before insuring to charge the amount of share called premium.

4. Payment made at contingency: The payment is made at a certain contingency insured. The Contingency may be death, fire, marine perils etc. 5. Amount of payment: The amount of payment depends upon policy insured.

1.1.2 Functions of Insurance A) Primary Functions1) Insurance provides certainty: Insurance provides certainty of payments at the uncertainty of losses. The element of uncertainty is reduced by better planning and administration. 2) Insurance provides protection: The risk will occur or not, when will occur and how much loss will be there. There are uncertainties of happening of time and amount of losses. The main function of the insurance is to provide protection against the losses. 3) Risk sharing: Risk is uncertain and therefore, the loss arising from the risk is also uncertain. All business concern faces the problem of the risk and if the concern is big enough the handling of risk becomes a specialized function. Insurance, as a device is the outcome of the existence of various risks in our day to day life. It spreads the whole losses over a large number of persons who are exposed by a particular risk.

B) Secondary Functions1) Prevention of loss: Prevention is always better than cure. Prevention is by far the best solution to the problem of risk. It is more effective and cheapest method to avoid the unfortunate consequence. But sometimes prevention is not always possible and Effective.

2) Provides capital: It provides the capital to the society. For plan development of country there is a great need for huge amount of capital. Now days, the insurance companies are rendering positive help in the development of trade, commerce and industry of the country.

3) Improves efficiency: Achievement of goals, it improves not only his efficiency of the masses is also advanced. The insurance eliminates worries and miseries of losses as death and destruction of property care free person can devote his energies for better.

4) Ensures the welfare of society: Insurance is a saga of service and security to thee society. Security of the life and property given by insurance bring peace of mind to the insured. The investment in LIC in welfare schemes like electricity, housing, water supply, agro industry estates are able to solve many problems in India.

5) Helps in economic progress: Insurance provides an initiative to work hard for the betterment of the masses. Life insurance involves the element of saving investment through small savings. And which has been growing in recent years at an annual rate of about Rs. 400 crs. Life insurance is not a mere business organization; it has nobler welfare responsibilities in the development of the economy.

Major Insurance Players Licenses have been issued for the following companies ICICI Prudential Life Insurance Limited ICICI Prudential Life Insurance Company Limited HDFC Standard Life Insurance Company Limited Birla Sun Life Insurance Company Limited TATA AIG Life Insurance Company Limited Max New York Life Insurance Company Limited SBI Cardiff Life Insurance Company Limited ING Vysya Life Insurance Company Limited HDFC LifeLife Insurance Company Limited MetLife Life Insurance Company Limited Aviva Life Insurance Company Limited AMP Sanmar Life Insurance Company Limited

Sahara India Life Insurance Limited Sri Ram Life Insurance Limited

1.2 Insurance Industry 1.2.1 Introduction With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs.450 billion (US$10 billion). According to government sources, the insurance and banking services contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other nonlife insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. 8

Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The life insurance industry in India grew by an impressive 36%, with premium income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. RNCOSs report, Indian Insurance Industry: New Avenues for Growth 2012, finds that the market share of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04.

Though the total volume of LIC's business increased in the last fiscal year (20042005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent.

There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share of the non-life insurance market.

Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies.


1.2.2 Report Highlights

Gains of liberalization in Indian insurance sector Indian insurance market segmentation by products Size of the market and market share of life insurers, in INR (crore) Market share of non-life insurers Forecast of life insurance growth up to 2012 Forecast of non-life insurance growth up to 2012 Market revenue of both public and private insurers Policies and measures taken by IRDA to develop the insurance market Research and development activities Regulation of insurance and reinsurance companies Major challenges that Indian insurance sector is facing Profiles of the major players

Life Insurance 1.3.1 Definition The life insurance contract embodies an agreement in which broadly stated, the insurer undertakes to pay a stipulated sum upon the death of the insurer to a designated beneficiary. --- J.H.MAGEE

Life insurance contract may be defined whereby the insurer, in consideration of premium paid either installment, undertakes to pay an annuity on the death of the insured of a certain number of years. --- R.S.SHARMA

A contract of life assurance is that in which one party agrees to pay a given sum on the happening of a particular event contingent upon the duration of human life in 11

consideration of immediate payment of a smaller sum by another. --- BUNYONS LAW 1.3.2 Advantages of life insurance 1. It is superior to an ordinary saving plan: this is so because unlike other saving plans, it offers full protection against risk of death. 2. Insurance encourages and enforces thrift : many people may not have the will power to continue a long term saving plan which they may formulate regular payments in face of money other uses to which their limited income could be put. 3. Easy installments and protections against creditors: the proceeds of a life insurance policy can be protected against the claims of the creditors of life assured by affection a valid assignment of the policies. 4. Tax relief: the income tax act exempts from tax that part of an individuals income which is devoted to payment of life insurance premium. 5. Estate duty: life insurance is the most practicable way to ensure definite payment on ones death without having resort to conversion of realizable asset at a loss. 6. Why Life Insurance Life Insurance has come a long way from the earlier days when it was originally conceived as a risk covering medium for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established, it was realized what a useful tool it was for a number of situations, including 1. Temporary needs / threats: The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc. 2. Regular Savings: Providing for one's family and oneself, as a medium to long term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence for their family.


3. Investment: Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike regular saving products, investment products are traditionally lump sum investments, where the individual makes a one off payment. 4. Retirement: Provision for later years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in one's old age.

Let us take an example to understand the need for insurance: Mr. Pranay is 45 years of age and self-employed. His wife Nandini, who is a

housewife, looks after their two children aged 3 and 7 years. They stay in a rented accommodation, where the rent is 15,000 rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakh. His monthly earnings on average are 40,000 rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the financial implications of his death on his family? There may be several financial implications on his family. Some of these are: a) The monthly income, previously provided by Mr. Atul would stop. b) His wife and children may have to seek financial assistance from other relatives. c) His wife may not have enough money to pay back the loan of Rs. 2 lakhs. d) The family may have to move into a cheaper accommodation. e) His widow may have to take up work to earn money. f) The education of his children may suffer. This simple example illustrates the impact premature death can have on a family, where the main earner has no life cover. Had Mr. Atul taken life cover, his family would not have faced such hardships in the event of his unfortunate death. A simple life insurance


policy could have provided Mr. Atul's family with a lump sum that could have been invested to provide an income equal to all or part of his income. In simple words, insurance protects against untimely losses. Insurance has been found useful in the lives of persons both in the short term and long term. Short term needs like sudden medical costs and long term needs like marriage expenses etc can be met with using life insurance.

1.4 Life Insurance in India With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 percent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance.

This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform.

Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of


LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.


The origin of insurance is very old .The time when we were not even born; man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. The insurance came to India from UK; with the establishment of the Oriental Life insurance Corporation in 1818. The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. In 1957 General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. In 1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.

It was after this that 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. 16

Present Scenario

The government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) bill. Policies come under the purview of the government appointed Tariff Agenty Committee. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also restructuring and revitalizing of the public sector companies. A host of private insurance companies operating in both life and non life segments have started selling their insurance policies since 2001. Non life insurance market, In December 2000, the GIC subsidiaries were restructured as independent insurance companies. At the same time, GIC was converted into national reinsurer. In July2002, Parliament passed a bill, delinking the four subsidiaries from GIC. Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still dominate the general insurance business, the private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of 2002, the private companies booked premium worth 6.34 billion. Most of the new entrants reported losses in first yr of their operation in 2001. Insurance costs constitute roughly around 1.2 2 % of the total project costs. Under the existing norms, insurance premium payments are treated as part of the fixed costs. Consequently they are treated as pass through costs for tariff calculations. For projects costing up to Rs.1 billion, the tariff Agent committee sets the premium rates, for projects between 1 billion and 15 billion, the rates are set in keeping with committees guidelines; and projects above 15 billion are subjected to reinsurance pricing. It is the last segment that has a number of additional products and competitive pricing. Insurance, like project finance, is


extended by a consortium. Normally one insurer takes the lead, shouldering about 40-50% of the risk and receiving proportionate percentage of the premium.






If ever there was a man with a mission it wasHasmukhbhai Parikh, Founder and ChairmanEmeritus of HDFC Group who left this earthly abode on November18, 1994. Born in a traditional banking family in Surat,Gujurat, Mr. Parikh started his financial career at Harkisandass Lukhmidass a leading stock broking firm. The firm closed down in the late seventies, but, long Before that, he went on to become a towering figure on the Indian financial scene. In 1956 he began his lifelong financial affair with the Economic world, as General Manager of the newly-formed Industrial Credit and Investment Corporation of India(ICICI). He rose to become Chairman and continued so till his retirement in 1972.At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more Illustrious than his first. His vision for mortgage finance for housing gave birth to the Housing Development Finance Corporation It was a trend-setter for housing finance in the Whole Asian continent. He was also a writer in his own right. There are over 200 published articles by him...? In 1992, the Government of India honored him with the Padma Bhushan Award. 20

London School of Economics & Political Science conferred on him an Honorary Fellowship.He was one of the Founder Members of the Centre for Advancement of Philanthropy, and its Chairman till 1993. He took active interest in the Bombay Community Public Trust, designed specifically to serve the needs of the citys underprivileged citizens. When Mr. Deepak Parikh took over as Chairman from Hasmukhbhai, he said: Taking over from H.T. Parikh is a formidable task; his vision brought about not Only an institution, but an entire concept which has proved itself to be of lasting Importance.

The Standard Life Assurance Company ("Standard Life") was established in 1825 and the first Standard Life Assurance Company Act was passed by Parliament in 1832. Standard Life was reincorporated as a mutual assurance company in 1925.

The Standard Life group originally operated only through branches or agencies of the mutual company in the United Kingdom and certain other countries.

Its Canadian branch was founded in 1833 and its Irish operations in 1838. This largely remained the structure of the group until 1996, when it opened a branch in Frankfurt, Germany with the aim of exporting its UK life assurance and pensions operating model to capitalise on the opportunities presented by EC Directive 92/96/EEC (the Third Life Directive) and offer a product range in that market with

In the 1990s, the group also sought to diversify its operations into areas which complemented its core life assurance and pensions business, with the intention of positioning itself as a broad range financial services provider. Banking and investment.


The group set up Standard Life Bank, its UK mortgage and retail savings banking subsidiary, in 1998 and Standard Life Investments, which had previously been the in-house investment management unit of the groups life assurance and pensions business, was separated into a distinct legal entity in the same year, with the aim of establishing it as an independent investment management business providing services to both the group and third party retail and institutional clients. The group acquired Prime Health Limited (subsequently renamed Standard Life Healthcare) in the United Kingdom in 2000. Standard Life Healthcare expanded in March 2006

with the acquisition of the PMI business of FirstAssist. Standard Life Asia Limited/Joint ventures The groups Hong Kong subsidiary, Standard Life Asia Limited (SL Asia), was incorporated in 1999 as a joint venture and became a wholly-owned subsidiary of Standard Life in 2002. The groups operations in Hong Kong were established to give the group a presence in the Far East from which it could expand into China. The groups joint ventures in India with Housing Development Finance Corporation Limited (HDFC) were incorporated in 2000 (in relation to the life assurance and pensions joint venture) and 2003 (in relation to the investment management joint venture). The groups joint venture in China with Tianjin Economic Development

Standard Life International Limited The group also incorporated Standard Life International Limited (SLIL) in 2005 for the purposes of providing the group with an offshore vehicle, based in Ireland, through which it could sell tax-efficient investment products into the United Kingdom. Sales of these products commenced in 2006.


Service company Following the groups strategic review in 2004, the group established a service company structure for the provision of central corporate services to the groups business units. Standard Life Employee Services Limited (SLESL) supplies a wide range of central services to the rest of the group, including IT, facilities, legal and human resources services, and employs staff working in the groups UK and Irish operations (other than SLI, SLB and SLH, which employ their staff directly). This service company structure was created to enable Standard Life to comply with regulatory restrictions on the provision of non-insurance services and to exploit group-wide synergies.


Company prospects


HDFC Standard Life Insurance Company Limited. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited), India's leading housing finance institution and a Group Company of the Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is held by Others.

Our Parentage HDFC Limited HDFC Limited, Indias premier housing finance institution has assisted more than 3.3 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 250 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India. As of December 2008, the total asset size has crossed more than Rs. 95,000 crores including the mortgage loan assets of more than Rs. 82,800 crores. The corporation has a deposit base of Rs. 17,551 crores, earning the trust of more than 9,00,000 depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing


countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies.

Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life Group has been looking after the financial needs of customers for over 180 years. It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs. Its investment manager currently administers 125 billion in assets. It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006.

Our Vision & Values Our Vision

'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'.

'The most obvious choice for all'. 25

Our Values

Values that we observe while we work:

Integrity Innovation Customer centric People Care One for all and all for one Team work Joy and Simplicity


Profile of the Board of Directors

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).

Sir 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. Sir Crombie is a fellow of the Faculty of Actuaries in Scotland.


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.

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.


Ms. Renu S. Karnad is the Executive director of HDFC Limited, is a graduate in law and holds a Master's degree in economics from Delhi University. She has been employed with HDFC Limited since 1978 and was appointed as the Executive Director in 2000. She is responsible for overseeing all aspects of lending operations of HDFC Limited.

Mr. Norman K. 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 for Economic and Investment Strategy research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005.


Mr. Gautam R. Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India. Mr. Divan was the Former Chairman and Managing Committee Member of Midsnell Group International, an International Association of Independent Accounting Firms and has authored several papers of professional interest. Mr. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investments to and from India.

Associate Companies






HDFC ERGO General Insurance

Other Companies

HDFC Trustee Company Ltd. GRUH Finance Ltd. HDFC Developers Ltd. HDFC Property Ventures Ltd. HDFC Ventures Trustee Company Ltd.


PROUCT RANGE & VARIETY At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need. We cater to both, individuals as well as to companies looking to provide benefits to their employees. This section gives you details of all our products. We have incorporated various downloadable forms and product details so that you can make an informed choice about buying a policy. For individuals, we have a range of protection, investment, pension and savings plans that assist and nurture dreams apart from providing protection. You can choose from a range of products to suit your life-stage and needs. For organizations we have a host of customized solutions that range from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company. We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, we have a varied range of Products that you can choose from to suit all your needs. These will help secure your future as well as the future of your family.

Type of products

(1) Protection A. Term assurance plan B. Loan cover term assurance plan

A) Term assurance plan:-

Under this plan, a sum assured is payable in case of death of the life assured during the term of the contract. One can choose the lump sum that would replace the income lost to ones family in the unfortunate event of ones death. Since this no-


participating plan is pure risk cover plan, no benefits are payable on the survival to the end of the term of the policy.

B) Loan cover term assurance plan:-

This plan provides a lump sum on the unfortunate death of the life assured during the term of the plan. The lump sum will be a decreasing percentage of the initial sum assured. As the outstanding loan decreases as per the loan schedule, the cover under the policy decreases as per the policy schedule. Since this is a non-participating, risk is there, no benefits are payable on survival to the end of the term of the policy.

(2) Investment Single premium whole of life

Single premium whole of life:-

Single Premium Whole of Life Plan is well suited to meet your long term needs. This participating (with profit) plan offers you the following benefits:


A sound investment: Your money will be invested in our with profit fund. The fund aims to provide secure and stable long term growth. Normally, we declare a compound reversionary bonus for your policy every year and add it to your policy on its anniversary. In addition, on death, surrender or on the guaranteed dates, a terminal bonus might be payable. You have to pay a single premium and the policy will pay you a lump sum amount.

Flexibility of term: Even after choosing your policy, you can decide on the policy term. For 4 weeks after any one of the 10th, 15th, 20th, and subsequent five-year anniversaries, you can choose to receive the sum assured plus any attaching bonuses, in full. Once the money has been received, your policy will cease.

(3) Pension plan 33

A. Personal pension plan B. Unit linked personal pension plan

A) Personal pension plan:-

This participating plan is basically a saving contract, which is designed to provide an income for life from retirement. It does this by providing a national lump sum on retirement, comprising of sum assured plus any attaching bonus. Subject to the prevailing regulations, part of this lump sum can be taken in form of cash and the rest converted to an annuity at the rate then offered by HDFC Standard Life. Alternately, if it is permitted by the prevailing regulation, the national lump sum can be used to buy an annuity with any other insurance company

B) Unit linked personal pension plan:-

The unit linked pension plan is basically an insurance contract, which is designed to provide a retirement income for life. Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On investing the vale of your units will be used to buy your retirement benefits. On earlier death, the beneficiary receives the value of your units plus a cash lump sum of Rs. 1,000.

(4) Saving

A. Unit linked endowment plan B. Money back C. Endowment plan D. Unit linked youngster plan

A) Unit linked endowment plan:-

The unit linked endowment plan is an insurance policy that is designed to pay a lump sum amount on the maturity or on earlier death. The unit linked endowment plan also gives the option of additional protection against common critical illness, as well as additional protection if death is as the result of an accident. 34

Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On maturity you receive the value of your units. On death (or critical illness, if chosen) you receive the value of your units and your selected basic sum assured.

B) Money back:It is a participating (with profits) insurance plan that offers the features listed below:


Payment of cash lump sum, each of which is a proportion of the basic sum assured, at 5-year intervals during the term of policy.


On survival up to maturity, a payment equal to the basic sum assured plus any bonus additions less the cash lump sums paid is provided.

In case of the unfortunate death of the life assuror within the term of the policy, the basic sum assured plus any bonus additions is provided. This is over and above the earlier payouts.

C) Endowment plan:-

It is a participating (with profits) insurance plan that offers the following features:

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

D) Unit linked youngster plan:-

HDFC Unit linked Young Star plan is designed to provide a lump sum to the child at maturity. It also provides financial security to the child in his future, even in case of the insured parents unfortunate death during the policy term. The Unit linked Young Star plan also gives the option of additional protection against the six common critical illnesses. Your premiums are invested in units of the investment funds of your choice, 35

based on the prevailing unit price. On maturity the value of the units will be paid. On death (or critical illness, if chosen) the selected basic sum assured is paid, and the policy continues until maturity. Following a valid death or critical illness claim, we will pay the future premiums (at the level originally chosen at inception) into your policy, as and when they would have fallen due.


1. Aviva Life Insurance 2. Bajaj Allianz 3. Birla Sun Life Insurance 4. ICICI Prudential Life Insurance 5. Kotak Mahindra Old Mutual Life Insurance Limited 6. Life Insurance Corporation of India (LIC) 7. Max New York Life Insurance 8. MetLife India Insurance 9. Reliance Life Insurance 10. SBI Life Insurance 11. ShriRam Life Insurance 12. TATA AIG Life Insurance 13. BHARTI AXA Head Office Edinburgh, Scotland (UK) Worldwide Operations and Presence


ACHIVEMENT OF THE COMPANY Awards and Recognition Year 2003 2002 2001 2000 1999 1996-99 1995 1992-94 1991 Award Company of the Year Company of the Year Best Personal Pension Provider Company of the Year Company of the Decade Company of the year 4 star service award Overall best company 3 star service award

Standard Life has been awarded the "Raising Standards" quality mark.

This shows that the Company:

uses clear language to describe their products on key documents, have appropriate products and Provide a quality service for the customers.

Money Marketing Awards

Company of the Year every year from 1999 to 2005 Best Pension Provider 2004 and 2005 Best Group Pension Provider every year from 1998 to 2003 Best Personal Pension Provider every year since 1998 to 2003 Best Life Investment Product Provider 2003 and 2004 Gold Award in the Poster Campaign Category (Advertising) 2004

Money facts Investment, Life & Pensions Awards


Best Pension Product 2003, 2004 and 2005 Best Pension Service 2003, 2004 and 2005

Bank hall Achievement Awards

Pension Provider of the Year 2003 and 2004

Financial Adviser Provider Awards

Overall Winner in 1999, 2000, 2001 and 2002 Pensions Provider of the Year 1999, 2000, 2001, 2002 and 2003 Pensions Company of the Year 2004 Individual Pensions Company of the Year 2004 Group Pensions Provider of the Year 2004 Health Insurance Company of the Year 2004

Financial Adviser Service Awards

Company of the Year every year from 1997 to 2001 5 Star Life and Pensions Provider every year from 1996 to 2004 5 Star Investment Provider every year from 1996 to 2002 and 2004

Pensions Management Administration and Service Awards

Overall Winner - Personal Pensions 2003 Overall Winner - Stakeholder Pensions 2002 and 2003 Overall Winner - Group Personal Pensions 2002 and 2004 Member Communications - Personal Pensions, Group Personal Pensions & Stakeholder Pensions 2003

Backup (branch office) - Personal Pensions 2003


Project Profile


Eligibility For Recruitment of an Insurance Agent

Every person who has cleared higher secondary examination can become an agent other than a minor or the person who is convicted in any court for crime or any legal proceedings. Men and women both can work as an Agent. A single person can be associated with other life insurance companies.

A training program is there to train a person who wants to become an Agent. There is 100 Hrs. training program which can be done either with the physical appearance in the class room or the interest basis. In the classroom training the trainee has to be physically present in the training session. There are difference sessions of training program. A trainee can attend any session according to his comfort. The training period is of 25 days approx. If the trainee does not have enough time to devote in the classroom training, then there is another option left that is training on Internet.

On the basis of Internet the trainee has provided a login number along with the password through which he operated his login and completed his training as convenient. Each and every hour pass on the net under his login head will be count on his account. The test for the training program is also on line. This is only procedure to be an Insurance Agent.


Scope of Insurance Agent


In the present scenario the living standard is becoming higher and higher every day. Every person who has a family to survive wants to provide his family each and every possible comfortable thing. He wants his children to be a well dressed, to be higher qualified in a well recognized school, colleges, institutes and wants his children to go abroad for higher education. He wants to live a luxury life full of pleasure.

To fulfill all of his needs he has to earn more and more. Any person can be on a job at a time or can be on a business cant fulfill his pleasure requirement. There is a source through which he can make money in a legal way that is insurance sector.

Becoming an insurance Agent provides him the legal source by which he can earn money with his current status. It is the business in which you deal with you personal contacts and can gain extra income. This business needs low investment and not of much effort. Its all depending on your social contacts and your skills to convince people by helping them to suggest the product which suited them the most.

As due to critical diseases, growing percentage of accident and fear of financial crisis everyone wants to secure his or her future. Insurance sector plays a vital role in assuring people about their future. As the scope of insurance enhancing, the need of an insurance Agent who can guide the potential customers is growing.

Being an insurance agent of HDFC LIFE Life Insurance provides a legal mean to earn money which protects a person from earning through an illegal source which is harmful for


society as well as him. For the youngsters it provides great platform to prove them. On the basis of their performance they can be recruited as unit mana


Board of Director

Chief Excutive Officer

Head Of Sales

Zonal Sales Manager

Reginal Manager

Divisional Manager

Branch Manager

Sales Manager

Insurance Consultant







Recruitment Process
The organization philosophy should be kept in mind while formulating the recruitment procedure.

The HR department would set the recruitment norms for the organization. However, the onus of effective implementation and compliance with the process rests with the heads of the respective functions and departments who are involved in the recruitment and selection process.

The process is aimed at defining the series of activities that needs to be performed by different persons involved in the process of recruitment, the checks and control measures to be adopted and information that has to be captured.

Recruitment and Selection is conducted by:

HR & Branch Manager

Functional Head


Recruitment planning on the basis of budget A. The manpower planning process for the year would commence with the companys budgeting activity. The respective Functional heads would submit the manpower requirements of their respective functions/ departments to the board of Directors as part of the annual business plan after detailed discussion with the head of human 44

Resource Function along with detailed notes in support of the projected numbers assumptions regarding the direct and indirect salary costs for each position.

B. A copy of the duly approved manpower plan would be forwarded by the HR department for their further actions during the course of the year. The annual budget would specify the manpower requirement of the entire organization, at different levels, in various functions/departments, at different geographical locations and the timing of the individual requirements. It would also specify the requirement budget, which is the cost allotted towards the recruitment of the budgeted staff and the replacement of the existing employees. The manpower plan would also clearly indicate the exact time at which the incumbent should be on board in such a way that the Regional HR has adequate notice for the time lapses involved in sourcing any other activities. C. The Regional HRs would undertake the planning activity and necessary preparations in advance of the anticipated requirements, as monthly and quarterly activities on the basis of the approved budget, estimated separations and replacements therefore.

D. The vacancies sought to be filled or being filled shall always be within the approved annual manpower budget and no recruitment process shall be initiated without the formal concurrence of the Head of the Regional HR under any circumstance. Head of the Regional HR shall also have the responsibility to monitor the appointments being considered at any point of time with specific respect to the duly approved manpower budgets.

Review of Manpower Plans and Additional Manpower


A. Review of manpower budgets shall take place on a quarterly basis. In the event of any new position or any deviations to the original plans, details of the positions maybe forwarded to the VP-HR along with the adequate supporting information. The recommendations would normally require a formal approval of the Managing Director. Alternately, VP-HR may record the summary of his discussion with the Managing Director and the MDs approval on the recommendations, to signify the final decision taken regarding the recommendations.


Selection of Sources

Regional HR would tap various sources/channels for getting the right candidate. Depending on the nature of the position/grade, volumes of recruitment and any other relevant factors, the Regional HR would use any one multiple sources such as:

Existing database (active application data bank);

Employee referral as per any company scheme that may be approved from time to time; Advertisement in the internet/newspapers/magazines/companys sites/job sites or any other media;

Placement Agencies (particularly for positions of Managers and above);

Headhunting firms particularly for senior positions, specialist positions and critical positions;

Direct recruitment from campuses/academic institutes;


Job websites and

Any other appropriate sources.

The norms for using any of the sources are not water tight. Number of positions, criticality of positions and the urgency of the positions, confidentiality requirements, relative efficacy and cost considerations would play a role in the choice of the appropriate sourcing mechanism.


All recruitment advertisements (in any form and any medium) shall always conform to the KLI compliance norms and would not be released by any department or branch without the approval of the VP-HR. depending on the specifics of each position for which recruitment advertisements are to be released, Regional HR may obtain assistance from the companys marketing department and/or any external advertising agencies for the preparation of the contents. Key features of the positions as notified by the Functional Heads would normally form a part of the advertisement text.

The media for releasing advertisement would depend on the level of the position being considered and the urgency of the requirements.

The advertisement mode that could be broadly specified as newspapers (local or mainline depending on requirements), internet sites and business magazines.

Placement Agencies/Headhunting Agencies

Depending upon the vacancies, fresher fitting different description listed above may be recruited from time to time, from academic institutes of appropriate


standards/reputation/grade, in the requisite numbers and at the compensation/stipend amounts to be formally approved of the VP-HR. Plans for such recruitment need specific special approval of VP-HR. norms regarding the identification of the appropriate institutes, constitution of the selection panels, timings of the recruitment, number of candidates to be recruited into different positions, choice of the appropriate selection process and the tools thereof shall be decided by the Head of the Regional HR in consultation with the VP-HR, depending on the specific features of the position.

Screening the candidates

First level screening

The Candidates would be screened by the HR Manager/Branch Manager for the respective locations. Screening would be on the basis of the profile of the candidate and the departmental requirements.

This assessment will be with respect to:

a. The general profile of the candidate, b. Personality fit of the candidate into the profile, c. Aptitude/attitude of the candidate, d. Motives of the person to join the company and whether focus is in the short term or is a long term player, e. Basic skill level on our set of requirements, say numerically ability, networking ability, etc 48

f. Establish the annual guaranteed cash compensation of the individual and check whether the person would fit into the system. g. Explain the role of Sales manager to the applicant and check the acceptance of the candidate for the same.

In case of need, the Regional HR may take a Tele interview of the candidate for further assessment process.

Second Level Screening

Aptitude Test

If the first assessment is positive, the candidates will give the aptitude test, once such test is selected approved by the company. The scoring, interpretation and the generation of interview probes from that test will also be done at this time. People who qualify the minimum criteria on this test will be put up on to the Functional Head (VPs in case of HO) for functional assessment and suitability into the role.

Tied Agency Sales Manager candidates short listed by the BM have will then take sales Aptitude test, once such a test is finalized. For the final selection, the regional Manager (Business Heads for HO) will meet the candidates short listed by the branch manager/VP. The chart specifying the Minimum approval level for each level of recruitment is specified below:



Branch Manager/Chief Manager

Area Manager/AVP/VP

Business Heads

Managing Director


Yes Yes Yes Yes

No Yes Yes Yes

No No Yes Yes

No No No Yes

General Norms regarding interview Process:

A. Interviews should consider the entire data provided by the candidate either through the formal CV or otherwise before coming to a conclusion about the candidate. They may insist on seeing the proof of the claims made by the candidate regarding qualifications, experience and other achievements. They may, at their discretion, decide to meet the candidate on more than one occasion or to refer the candidate to another panel.

B. Ratings on various attributes of the candidates shall be recorded in the interview evaluation sheet, soon after the interview is over. Along with these numerical ratings, qualitative observations about the candidate and overall decision regarding selection or otherwise (including a decision to defer the induction, referral to another panel, considering for another position) shall be forwarded to the associated Recruitment Manager/ Head of Regional HR. Individual panel members have the option of appending their additional remarks/observations. No selection will be treated as final


unless the IES form is filled comprehensively. Suitably appropriate IES formats may be created for specific positions. C. Any discrepancies noticed by the panel members regarding the authenticity of the data provided by the candidate should be specifically and formally recorded on the IES form and suitably high lightened.

D. Specific points to be probed during the reference check process, if any, must also be clearly recorded and high lightened on the IES forms.

Administrative Actions Regarding Interviews

A. Scheduling and the venue of the interviews would be handled by the recruitment team in consultation with the short listed candidate and the selection panel members, after taking mutual convenience into account. For field positions, respective branch/regional heads would undertake this co-ordination. B. After the final round, if the candidate is selected, the complete set of papers Personal Data Form, CV, job requisition no., Interview evaluation sheet ,reference check details, educational details, along with the interviewers recommendations and Reference check form should be forwarded by the recruitment managers to recruitment head. Fitment of the candidate into a grade and compensation fitment shall be on the assumption of authenticity of the information provided in the CV/application form. C. An appropriate formal communication shall be sent to the candidate whose candidature is not being taken forward, or details of the verbal/telephonic communications provided to the candidate shall be recorded on the candidates papers, by the recruitment team/associated line managers. In the case of interviews taking


place at the branch/regional levels, similar noting should be recorded on the individual candidates papers.

Negotiations of the terms and conditions and other pre-appointment formalities

A. In the case of sales-Tied Agency functions, the branch managers will be allowed to fix the salary and grade of the incoming sales manager, provided the compensation does not exceed 20% of the candidates current cash salary. Any fitment beyond this norms will need the approval of Head-HR. HR will forward a worksheet to support the BMs to evaluate the appropriate cash CTC of the incumbent. For all other functions, the compensation and grade would be fixed post a discussion between the Head of the Regional HR and the associated AVP/VP. Any candidate being offered a CTC of more than 4lacs will need the sign off from HEAD-HR. In appropriate cases, at the discretion of the VP-HR, a deviation may be referred to the Managing Director, for the MDs formal approval.

B. Responsibility for negotiations and finalization of the terms shall rest with the best Branch Manager/Associated Manager. They may seek the assistance of the recruitment managers, whenever required. Reference checks process should not normally be initiated unless the candidate has indicated his firm acceptance of the offer being made by us.

Reference checks

A. Normal, reference checks should be undertaken with at least one reference. A second reference check will be done if considered necessary. Responsible officials from the


former employers, academic institutes and/or any other eminent personalities can be considered as appropriate references. Close relatives and friends cannot be considered as references. Wherever feasible and considered appropriate, a reference should be made with a senior official of the candidates current employer. In case the candidate is currently un-employed, reference should be made with the latest employer. The format of reference check is to be used as a framework for conducting the process.

B. Where the minimum two reference checks are not possible (particularly with the current employer) or where there is a mixed response from different sources, the matter may be to the VP-HR for a final decision. Depending on the seniority and any other considerations about the positions, VP-HR would normally consult the functional head concerned, before coming to conclusions. Any candidate whose credentials are doubtful shall not be recruited.

C. In case of recruitment of Management trainees, fresher and life advisors as sales Managers no reference checks will be required.

Employment offer letter

A. When a recruitment Manager is fully satisfied about the selection of the right candidate and about completion of all the formalities connected with the appointment of candidate including requisite documentation, satisfactory reference check reports and medical fitness, he/she would forward the relevant papers listed below to the head of recruitment.

Personal Data form

Employee requisition form duly filled by the regional Head/Branch Manager


Interview evaluation sheet filled by the regional head/Branch manager/interviewer with his/her comments.

Latest and updated resume of the candidate

Photocopy of the appointment letter of the last employer or latest salary slip.

Employment details.

Two Professional references.

Language Proficiency.

B. Document check list for every grade is as follows:

Authorization Release Form.

Background check Form.

Highest Education certificate.

Highest Education marksheet.

1 Month Salary Slip of Current Employer.

1 Month Salary Slip of Last Employer.

Relieving Letter of last Employment.

Proof of Residence.

6 Passport Size Photograph.


C. Regional HR manager will take the signature of Head-HR on the employee requisition form and forward the papers to the employee service team for issuance of the offer letter.

D. Employee services team will issue offer letter, to be signed by the National Recruitment Manager or Chief Manager-HR, and send the same to the concerned Branch Manager/ HR Manager.

E. It would be the responsibility of the Branch Manager/HR Manager to ensure that the accepted copy of the offer letter is forwarded to the employee service team within a week of receipt of the offer letter. Till this letter is issued, the offer has not taken place in formal sense. A copy of the offer letter shall be duly signed and returned to the candidate. Candidate would be expected to fulfill various joining formalities, which are also formally communicated to him/her in the form of a checklist that is attached to the letter of offer. The Regional HR head shall have the overall responsibility and accountability to maintain the templates of the offer letters and also for drafting of suitable non-standard terms to any specific candidate.

F. The employee service team will follow up Branch Manager/Regional HR Manager for the joining of the candidate and will collect all relevant documents from the candidate including the joining report, before issuing the appointment letter. The employee service team may enlist the help of the Branch Manager to ensure that all necessary documents within ten days o the person joining. After the of all necessary documents, the employee service team will send the appointment letter to the new joinee.


G. Once the documentation is complete for the new joinee (including the accepted appointment letter), people who may have joined before 20th of the month but have not been included in the payroll for the month because of delay in receipt of papers will be given ad-hoc salary advance (up to maximum of 65% of the pro rated salary). This advance will be adjusted once the person gets included in the subsequent months payroll.

H. If the person does not submit the relieving letter from the previous organization, where required to be submitted as per the table given above, within three months of joining, the employee service manager can put their salary on hold till such time as the said documents are received.

Key tasks of Regional HR Head

Regional HR Head will have the authority and responsibility to administer/implement the recruitment and selection process as outlined. An illustrative list of the key deliverables of these incumbents is listed below.

Ensuring inductions as per quality, numbers, time and cost consideration of the company in accordance with the approved manpower budget.

Creation of appropriate sourcing mechanism along with tracking the performance of these mechanisms.

Creation of quarterly and monthly recruitment plans

Effective coordination with external parties such as candidates, placement agencies, consultants, academic/professional institutes and any other including the custody of the formal agreements , tracking timely payments and adjusted thereto 56

Creation of comprehensive and appropriate tools, linkages, documents, templates and any other mechanisms to ensure smooth execution of the process requirement, along with timely improvements thereto

Assistance to user department and line managers including in interviewing/selection support, scheduling etc.

Effective internal communication with user departments and line managers including making the standard recruitment formats and other templates easily available to such users and notifying the modifications to such formats and templates.

Creation and maintenance of qualitative information base regarding candidates, placement agencies, campuses, institutes, and any other employment-market information.

Creation and maintenance of appropriate and high-quality MIS for current and future needs of the organization, including publication/circulation of appropriate reports there from to the relevant users within the company.

Monitoring recruitment costs

Complete documentation for the entire recruitment and selection process for easy and quick retrieval in a readily auditable format

Timely and effective communication with all internal and external parties including the candidates

Tracking the progress of the selected candidates including resignation, extensions of probation periods/training period, etc for the purpose of improvement to recruitment and selection process.


Effective coordination with the post recruitment arm of the Human Resource function

Documentation and creating MIS regarding waiver, deviation, etc and identifying the key areas for improvement in the formal recruitment and selection process document.


Internal Sources 1. Transfer : - The employees are transferred from one department to another according to their efficiency and experience. 2. Promotions: -The employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience. 3. Others are Upgrading and Demotion of present employees according to their performance. 4. Retired and Retrenched employees may also be recruited once again in case of shortage of qualified personnel or increase in load of work. Recruitment such people save time and costs of the organizations as the people are already aware of the organizational culture and the policies and procedures. 58

5. The dependents and relatives of Deceased employees and Disabled employees are also done by many companies so that the members of the family do not become dependent on the mercy of others.

External Sources

1. Press Advertisements:- Advertisements of the vacancy in newspapers and journals are a widely used source of recruitment. The main advantage of this method is that it has a wide reach. 2. Educational Institutes:- Various management institutes, engineering colleges, medical Colleges etc. are a good source of recruiting well qualified executives, engineers, medical staff etc. They provide facilities for campus interviews and placements. This source is known as Campus Recruitment. 3. Placement Agencies:- Several private consultancy firms perform recruitment functions on behalf of client companies by charging a fee. These agencies are particularly suitable for recruitment of executives and specialists. It is also known as RPO (Recruitment Process Outsourcing) 4. Employment Exchange:- Government establishes public employment exchanges throughout the country. These exchanges provide job information to job seekers and help employers in identifying suitable candidates. 5. Labor Contractors:- Manual workers can be recruited through contractors who maintain close contacts with the sources of such workers. This source is used to recruit labor for construction jobs. 6. Unsolicited Applicants:- Many job seekers visit the office of well-known companies on their own. Such callers are considered nuisance to the daily


work routine of the enterprise. But can help in creating the talent pool or the database of the probable candidates for the organization. 7. Employee Referrals / Recommendations:- Many organizations have structured system where the current employees of the organization can refer their friends and relatives for some position in their organization. Also, the office bearers of trade unions are often aware of the suitability of candidates. Management can inquire these leaders for suitable jobs. In some organizations these are formal agreements to give priority in recruitment to the candidates recommended by the trade union. 8. Recruitment at Factory Gate:- Unskilled workers may be recruited at the factory gate these may be employed whenever a permanent worker is absent. More efficient among these may be recruited to fill permanent vacancies. 2.4.5 Factors Affecting Recruitment :The recruitment function of the organizations is affected and governed by a mix of various internal and external forces. The internal forces or factors are the factors that can be controlled by the organization. And the external factors are those factors which cannot be controlled by the organization. The internal and external forces affecting recruitment function of an organization are


Factors Affecting Recruitment


Internal Factors

The internal factors i.e. the factors which can be controlled by the organization are:

1. Recruitment Policy: The recruitment policy of an organization specifies the objectives of recruitment and provides a framework for implementation of recruitment program. It may involve organizational system to be developed for implementing recruitment programs and procedures by filling up vacancies with best qualified people.

Factors affecting recruitment policy 61

Organizational objectives Personnel policies of the organization and its competitors. Government policies on reservations. Preferred sources of recruitment. Need of the organization. Recruitment costs and financial implications.

2. Human Resource Planning:-

Effective human resource planning helps in

determining the gaps present in the existing manpower of the organization. It also helps in determining the number of employees to be recruited and what qualification they must possess.

3. Size of the Firm:- The size of the firm is an important factor in recruitment process. If the organization is planning to increase its operations and expand its business, it will think of hiring more personnel, which will handle its operations.

4. Cost:- Recruitment incur cost to the employer, therefore, organizations try to employ that source of recruitment which will bear a lower cost of recruitment to the organization for each candidate.

5. Growth and Expansion:- Organization will employ or think of employing more personnel if it is expanding its operations.

External Factors 62

The external forces are the forces which cannot be controlled by the organization. The major external forces are:

1. Supply and Demand:- The availability of manpower both within and outside the organization is an important determinant in the recruitment process. If the company has a demand for more professionals and there is limited supply in the market for the professionals demanded by the company, then the company will have to depend upon internal sources by providing them special training and development programs.

2. Labor Market:- Employment conditions in the community where the organization is located will influence the recruiting efforts of the organization. If there is surplus of manpower at the time of recruitment, even informal attempts at the time of recruiting like notice boards display of the requisition or announcement in the meeting etc will attract more than enough applicants.

3. Image / Goodwill:- Image of the employer can work as a potential constraint for recruitment. An organization with positive image and goodwill as an employer finds it easier to attract and retain employees than an organization with negative image. Image of a company is based on what organization does and affected by industry. For example finance was taken up by fresher MBAs when many finance companies were coming up.

4. Political-Social :- Legal Environment: Various government regulations prohibiting discrimination in hiring and employment have direct impact on recruitment practices.


For example, Government of India has introduced legislation for reservation in employment for scheduled castes, scheduled tribes, physically

handicapped etc.

Also, trade unions play important role in

recruitment. This restricts

management freedom to select those individuals who it believes would be the best performers. If the candidate cant meet criteria stipulated by the union but union regulations can restrict recruitment sources.

5. Unemployment Rate:- One of the factors that influence the availability of applicants is the growth of the economy (whether economy is growing or not and its rate). When the company is not creating new jobs, there is often oversupply of qualified labor which in turn leads to unemployment.

6. Competitors:- The recruitment policies of the competitors also affect the recruitment function of the organizations. To face the competition, many a times the organizations have to change their recruitment policies according to the policies being followed by the competitors.












BASIC Meaning

RECRUITMENT It is the process of searching candidates for vacant jobs & making them apply for the same.

SELECTION It is or selection of right types of candidates & offering them jobs.

Nature Aim

It is a positive process Its aim is to attract more candidates for the vacant jobs.

It is a negative process Picking up most suitable candidate for the job.


The firm notifies the vacancies through various sources & distributes application forms to candidates.

The firm asks the candidates to pass through a number of stages such as filling of forms ,employment tests etc. Selection follows recruitment & it leads to a contract of

Contract of service

No contractual relation is created.

Recruitment implies communication of vacancies

Service between the employer & the employee.



3.1 Title of the Study Recruitment Process in Insurance Company. The study is showing recruitment process of any candidate in insurance company. This research is done at Sikar. This study also shows why people join insurance sector.

3.2 Duration of the Project In June 2009, I have been assigned a project on recruiting process in insurance company with special reference to HDFC LIFE Life Insurance as a part of our course curriculum. The duration of the research is approx 30 days.

3.3 Objective of Study The objective of the recruitment process is to obtain the number and quality of employees that can be selected in order to help the organization to achieve its goals and objectives. Following are other objectives of recruitment process-

1. Support the organization ability to acquire, retain and develop the best talent and skills. 2. Increase the effectiveness of various recruiting techniques

3.4 Types of Research I used a descriptive type of research. It is one which includes surveys and fact finding, enquiries of different kinds. The major purpose of such research is description of the state of affairs, as it exists at present. 68

Methodology or process involving in the research followed during the course of summer training is as follows Collection of data: This is an important aspect in formulating the objective of research process where the data is collected via two process: (i) Primary Sources and (ii) Secondary sources i. Primary sources- Where the data is collected primarily by interviewing and personal observation and is original in nature and accurate to the considerable extent. ii. Secondary sources- Where the data is obtained from some published and printed sources such as newspaper, magazines, and websites and so on.

3.5 Sample Size and Method of Selecting Sample To ensure complete representation the researcher identified target responded through a stratified random sampling process stratified the population into number of strata and sampling respondent is selected from each stratum. The selection of respondent from each stratum was based on simple random sampling. I have covered 100 employees. 1. Insurance employees a) Unit Manager b) Team Leader c) Agents 2. Businessmen a) Retail shops b) Wholesaler c) Family business


3. Students a) Management students b) Law students 4. Other Professions a) Engineers b) Doctors c) Bankers

Sample size
Insurance employees Students Businessmen Other professions

Fig.3.1 Sample size

Sampling is a process of obtaining a number of individuals taken a base for the entire population since entire population cannot be asked about the necessary objective upon which a questionnaire is put forth needed for the responses to be derived for the purpose


of generation of facts and customer view point regarding their perception of particular product or services. There are two type of samplingi. Random sampling- Random sampling is a process of selecting the sample size randomly and no choice or preference to be made about the selection of respondents for the market survey and questionnaire to be put forth against him. Here, Random sampling being adopted by me. ii. Systematic sampling- It is a sampling where the limited number of selected respondents is figured out based on some criteria so that only those respondents can be asked for the purpose of filing questionnaire. iii.

3.6Scope of Study
Every research is conducted to fulfill certain objectives and this objective in turn fulfill some purpose and is of significance for one or more then one party. This research is significant for: 3.6.1 To the studentThis study provides the student a practical insight of various activities and functions of the company. The will also be able to develop in depth knowledge of Human Research sector. The study is also required for the partial fulfillment of the requirement for the degree of M.B.A. as per the curriculum.


To the company 71

The study would help HDFC LIFE to know the Employee`s attitude towards the company.

To know the latest trend of the company.



Limitation of Study
The research area was restricted only within the Meerut city. This may not reflect the exact position of the total market.

Sample size was also so less, limitation of time means and resource forced for small size.

Questionnaire includes 16 questions, which affects the mentality of respondents that is time consuming.




Market Survey

Category of life insurance:-


60 50 40 30 20 10 0 51 38 16

Protection of Tax benefit device human asset value against uncertainty CATEGORY
Fig.4.1 Category of life insurance



Essentiality of life insurance :-


78 80 70 60 50 40 30 20 10 0 Yes RESPONSES No



Fig.4.2 Essentiality of life insurance

Qualification for life insurance:-


10% 33%

Post graduate Graduate Senior secondary


Fig.4.3 Qualification for life insurance

Age qualification for life insurance :-

AGE QUALIFICAITON: 6% 20% 39% 18-25 age group 25 35 age group 35 45 age group Above 45 age group


Fig.4.4 Age qualification for life insurance


Causes of dissatisfaction :-

CAUSES OF DISSATISFACTION 10% 23% Low employment 16% Low earning / income Low status 17% 34% Huge capital investment All of the above

Fig.4.5 Causes of dissatisfaction

Career in life insurance :ABOUT CAREER IN LIFE INSURANCE 70 59 46


60 50 40 30 20 10 0




Fig.4.6 Career in life insurance


Life insurance is noble service or not? :-


Fig.4.7 Life insurance is noble service or not?





Life insurance as a career :-





40 30 20 10 0 Yes RESPONSES
Fig.4.8 Life insurance as a career



Growth of life insurance :-



80 60 40 20 0 Yes RESPONSES
Fig.4.9 Growth of life insurance



Life insurance: public or private :-


80 70 60 50 40 30 20 10 0







Fig.4.10 Life insurance: public or private



Analyzing of collected data- The data collected through market survey and published sources are then processed to obtained necessary inferences and findings for the purpose of achieving the objective as well as to derive necessary conclusion. A considerable skill and knowledge is involved in analyzing the data for the purpose of interpreting thereof.

Interpreting of data- It is the significant step where the data collected and analyzed is interpreted in the forms of graphs and figures is depicted in the report called project report.

Summarizing of data- Thereby necessary summary is prepared which is essential in the project report of the summer training being done under an organization.


Market Survey Report

Category of life insurance

Protection of human asset value against uncertainty Tax benefit device Both

51 38 16

From the survey it was drawn that life insurance is more a protection of human asset value against uncertainty (conferred by 51 respondents) where it is a tax saving option (being accepted by 38 respondents). 81

Life insurance is a service involving both these prerequisites as depicted by remaining 16 respondents.

Essentiality of life insurance

Yes No

78 27

It has been observed and applied as a Life insurance is an essential service and should be applicable to every one, as favored by considerable 78 respondents where it is not essential to an extent by 27 respondents from the summer training project survey by putting forth the set questionnaire.

Qualification for life insurance

Post graduate Graduate Senior secondary

35 59 11


When further enquired about the qualification of respondents, it was found that 57% of the respondents were graduates, 33% were post graduates and remaining 10% were of higher secondary out of total 105 respondents.

Age qualification for life insurance

18-25 age group 25 35 age group 35 45 age group Above 45 age group

41 37 21 6

Further, the age qualification for agency recruitment, it was found that 39% respondents were belonging to 18 25 age group, 35% were belonging to 25 35 age group where as 20% to 35 - 45 age group and remaining 6% to above 45 age group.

Causes of dissatisfaction Respondents had different views about the dissatisfaction from the present status of working or occupation. Dissatisfaction has been depicted in a table below and graphically aboveLow employment Low status 24 18 Low earning All of the above 36 10 Huge capital investment 17

Career in life insurance?


Yes No

59 46

When asked about whether they would like to know about a glorified career in life insurance agency where they can fulfill any and every desire of their life, 59 respondents agreed while 46 respondents said No and will see later sometime in future. It has been depicted that life insurance sector should be promoted at the wide extent as it contribute to the economy as a useful source beneficial for both nation as well as its citizens.

Life insurance is noble service or not?

Yes No

86 19

Indeed Life insurance is a noble business as it provides a needful financial support in the situation of fatal calamity where the family is deprived by the fact to live in future and sustains their living. When surveyed about life insurance as a noble service. 86 respondents agreed and believe that insurance is a bettering service to human life and society as a whole where as 19 respondents show disagreement.

Life insurance as a career?

Yes No 84

18 41

From the 59 respondents who agreed to know about the life insurance as a career, 18 of them agreed to join HDFC Standard life insurance for agency and come to the company fore more information whereas 41 still took time to think and postponed to some future date. People are highly dissatisfied from the earning, status and living standard they are sustaining at present and would definitely like to make some additional source of earning and for this agency for life insurance would prove a boon.

Is Life insurance industry growing?

Yes No

92 13

From all 105 respondents, 92 agreed that life insurance sector is a growing concern and will grow at a rapid pace in future where as 13 took as a mere stagnant industry. Financial services are growing at a tremendous pace as people are urging to make their investment in lucrative opportunities and therefore life insurance sector is playing a vital role in educating the people to make their investment which could secure their future, needs and living despite some fatal calamity that might or might not occur.

Agree with privatization of life insurance?

Yes No

74 31


Among 74 respondents from 105 respondents favored the privatization of the life insurance and perceive that the people of India will know be more aware and knowledgeable with respect to life insurance than that in the past 50 years with the working of LIC.


Policy Product Queries

1. What are the basic elements of Life Insurance? The two basic elements to all individuals are a. Risk coverage (i.e. Term Insurance) b. Savings for future (i.e. Pure Endowment)

2. What is Term Insurance? Term Insurance covers Risk and Risk means Death. Here a lump sum amount is payable only if death occurs during a selected period. If the insured survives till the end of the selected period, nothing becomes payable.

3. What is Endowment product? The insurer will receive a lump sum amount either at death during the term or at maturity of the term.

4. What is a Whole Life insurance product? Whole life insurance risk covers the death of the insured, whenever it may happen. It means that there is no fixed term under whole life insurance. Most policies provide a dividend to the policy holder which helps with retirement. There are two variations in the whole life insurance products :-


a. Pure Whole Life Insurance: - where premiums are payable continuously throughout the life of the insured till death. Risk coverage is for the entire duration of life and the life insured amount is paid on the happening of the death of the insured at any time. b. Limited Payment Whole life Insurance: - where premiums are paid for a limited and shorter period and the option of the insured or till death if earlier. Risk coverage is however throughout the life of the insured. 5. What is a Guaranteed Surrender Value? The policy can be surrendered for cash only after the premiums have been paid for at least three years. The minimum surrender value allowed is equal to a certain percentage of the total amount of premiums paid excluding the premiums for the first year and all extra premiums or additional premiums for accident benefits that may have been paid.




Strengths HDFC LIFE Life has a unique multi-distribution model encompassing

Bancassurance, Agency and Group Corporate. HDFC LIFE Life extensively leverages the State Bank Group as a platform for cross-selling insurance products. At present HDFC LIFE Life has over 400 branch offices in India. We take pride in our track record of growth, financial solidity, ethical practices, domain expertise and meritocratic culture. Join us for a rewarding and an enriching career.

About HDFC LIFE Life Insurance Bagged the most coveted personal financial services award Outlook Money NDTV Profit Best Life Insurer 2008. Ranks among Global Top Three at Million Dollar Round Table (MDRT). Has been assigned IAAA rating indicating highest claims paying ability, by ICRA, one of the Indias leading rating agencies. This rating reflects HDFC LIFE Lifes fundamentally strong position and the prospect of meeting its policyholders obligations as highest. Has been reaffirmed "AAA/Stable" rating, the highest financial rating by CRISIL, Indias leading rating agency. Last year HDFC LIFE Life became the first insurance company to get the highest rating of AAA/Stable" from CRISIL. This rating reflects highest financial strength to meet policyholder obligations. More than 40,000 insurance advisors work with HDFC LIFE Life Insurance in India. HDFC LIFE Life Insurance is known for qualities like trustworthiness, ambition, innovation, dynamism and excellence in its area of specialization. 88

The HDFC LIFE Group owns more than 14,500 branches located across the country of India.


Weakness 1. LIC is prevalent and sustains even today a major source of population. 2. Low number of offices and network and number of life insurance agents. 3. Lack of knowledge and expertise.


Opportunities 1. Life insurance has captured its mere15 20% growth therefore a wide open untapped market is open to the company to develop, grow and measure its success. 2. Still the numbers of companies are few and company has every capability to grow and forward its performance areas to the widest.


Threats 1. People are hesitant to invest and put their hard earned money to the private life insurance company with the fear of getting lost. 2. Belief towards LIC as it is a government corporation phobia is continue to surmount the people of India despite lots of flaws and development and liberalization of life insurance. 3. Alternative financial services such as mutual fund, banking services, share and securities also pose problems and threats to the working of the life insurance sector. 89

4. Illiteracy and unemployment also pose threat. 5. Rising real estate industry also pose threat as people are investing a bulk of their money over to that industry.


Summer training is a best example for a trainee to learn about the company working, corporate culture under which is operating the functions. HDFC LIFE life insurance

company under which I gained a significant knowledge with respect to life insurance, its importance and applicability as well as undertook the task to recruit capable life insurance advisors which is conducive for the company to grow with more prosperity. What I taught in the management institute utilized them fruitfully leading to the best advantage to the company and to the best experience for mine.

In all Public Service jurisdictions, new approaches to recruitment are being used. In many territories, the strategies are manual but, as automated methods become more pervasive, those mechanisms that support its use will assume greater popularity. Whatever the strategies selected for use, the objective is to recruit the most qualified, committed individuals into the organizations and ensure that the provision of government services to the public is timely and effective, that the goods are of consistent high quality and that the organizations achieve the objectives for which they have been established.

Life insurance is a noble service which is very important for every citizen to learn and realize its importance because this is the only source which can remain the status where one is with the family bread earner and ever when he is not. With the growing financial sector I would like to opt this industry for my future career advancement and as an opportunity to service this industry.



RecommendationsFollowing are suggestions made for the benefits and augmentation of the sound working of the company HDFC LIFE life insurance 1. Need to train and develop life insurance agents with more comprehensive knowledge and skills to counter every queries of the customer.

2. It is suggested that company should not left any stone unturned towards sound advertisement and promotional measures on every section whether it is printed, media or air via radio.

3. It is also suggested that skilled management graduates need to be places on sales and marketing of financial services that can render their best ideas for the accomplishment of the company goals and objectives to the best extent.

4. Also, care need to be taken that every customers grievance should be met with delight whether before purchase or after sales.

5. There should be an expansion measure for more offices and location of more centers for offices of the company is established sop that company may grow its network.


6. Life insurance Products should be made flexible so as to suit every section of society.


SuggestionsFollowing are suggestions made for the benefits and augmentation of the sound working of the company HDFC LIFE life insurance: 1. Need to train and develop life insurance agents with more comprehensive knowledge and skills to counter every queries of the customer. 2. It is suggested that company should not left any stone unturned towards sound advertisement and promotional measures on every section whether it is printed, media or air via radio. 3. The advisors should be made aware and educated so that they can extend their services not only in terms of collection of premium checks from the customer but also to educate them about the insurance and the latest nontraditional plans. 4. All the company should come out of a unit link product that should aid every selection of the society. 5. It is also suggested that skilled management graduates need to be places on sales and marketing of financial services who can render their best ideas for the accomplishment of the company goals and objectives to the best extent. 6. Also, care need to be taken that every customers grievance should be met with delight whether before purchase or after sales. 7. There should be an expansion measure for more offices and location of more centers for offices of the company be established sop that company may grow its network.


8. Life insurance Products should be made flexible so as to suit every section of society.



Q.1. What do you mean by life insurance? a) Protection of human asset value against uncertainty b) A sum received after death c) Both

Q.2. Do you think life insurance is essential for every one? a) Yes b) No

Q.3. What is your qualification? a) Post graduate b) Graduate c) Senior secondary

Q.4. Do you come under: a) 18-25 age group b) 25 35 age group c) 35 45 age group d) Above 45 age group


Q.5. Would you like to know about a career in life insurance advisor ship where you can fulfill every desire of your life? a) Yes b) No

Q.6. Do you perceive that life insurance business is a noble service oriented business? a) Yes b) No

Q.7. Would you like to become or opt for life insurance advisor under esteemed and prospering organization HDFC Life insurance? a) Yes b) No

Q.8. Do you agree that the life insurance business is a growing industry and will grow and rapid pace in future? a) Yes b) No

Q.9. Do you favor the privatization of life insurance by the Government where a significant number of companies now in the market for life insurance to the customers with the alliance of multinationals? a) Yes b) No


SUGGESTION: 1. 2. 3.

PERSONAL INFORMATION: Name: - Location: - Occupation: -



1. Application for insurance: This is the form on where you state information and answer questions from the insurance company about yourself and your history. This application along with information from a medical examination, if taken, from your physicians, any hospitals you may have visited and investigation are what's used by the insurance company to decide whether or not to offer you life insurance and at what rate. 2. Accident Benefit: A rider or an add-on with a life policy. It compensates a policyholder in the event of death or injury by accident. 3. Annuity: An investment option that makes a series of regular payments to an individual in exchange for a premium or a series of premier. 4. Appreciate: To grow in value 5. Asset: Everything owned or due to a person 6. Asset allocation: How your investments are spread across various asset classes 7. Beneficiary: The person(s) named in the policy to receive the life insurance proceeds upon the death of the insured. 8. Bond: It is like an IOU. By buying a bond you loan money to a company, a municipality, state or the Central Government. 9. Bonus: The amount paid as return in a with-profit policy. The bonus, expressed as a percentage of the sum assured, is generally declared every year. The amount is linked to the profits earned by the insurer. Depending on the time of withdrawal, there are two kinds of bonuses reversionary and cash. A reversionary bonus can be encashed only on maturity of the policy; a cash bonus can be withdrawn when declared. 10. Budget: It is a tool used to monitor and control expenditures and purchases.


List of Figures:

S. No. 1.

Title Recruitment process

Fig. No. Fig.2.1


Sample size



Category of life insurance



Essentiality of life insurance



Qualification for life insurance



Age qualification for life insurance



Causes of dissatisfaction



Career in life insurance



Life insurance is noble service or not?



Life insurance as a career



Growth of life insurance




Life insurance: public or private



Following are sources which helped me during my summer trainingBOOKS:


R EFERENCES: Websiteswww. NEWSPAPER: imes