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A

Summer Training Report
On

“ANALYSIS OF VARIOUS POLICIES OF
HDFC”
of
Submitted in Partial Fulfillment of award of Bachelor of
Business Administration, Degree
(Affilated by CCS University Meerut)

Submitted To:
Mr. Saurabh Mittal
(HOD )

Submitted By:
Chandra Kant
Roll No:8553542
SESSION 2011-12

Shri Ram Group Of Colleges,
Muzaffarnagar

PREFACE
There are number forces that make marketing an endlessly changing
activity. The constantly activity sociological, psychological and political
environment may represent the uncontrollable marketing factors. To
understanding these factors in better way marketing research is of
utmost importance.
This Summer trainingReport has been completed in Partial fulfillment of
my

Management

ADMINISTRATION

Program,
(BBA)

in

BACHELOR
the

company

OF

BUSINESS

STANDARD

LIFE

INSURANCE. The objective of my project was “Analysis of various
policies of HDFC”,
HDFC STANDARD LIFE INSURANCE is the name which is working as
one of the best private insurance company in insurance sector.
With such large population and the untapped market of populations
insurance happens to be very big opportunity in India. Today it stands as
a business growing at the rate of 15-20 percent annually. Together with
banking services, it adds about 7 percent to the country’s GDP. In spite
of all this growth the statistics of the penetration of the insurance in the
country is very poor. Nearly 80% of Indian populations are without Life
Insurance cover and the Health Insurance. This is an indicator that
growth potential for the insurance sector is immense in India.

ii

At first. I owe my debt of thanks to HDFC STANDARD LIFE INSURANCELife. I wish to extend my deep and sincere gratitude to Mr.Nitin Rastogi (SDM) and Mr.Saurabh Mittal Department of business Administration and all staff members for providing me with this learning opportunity.Amit Singhal (Trainer) who provided me with their guidance from day one and also helped me whole heartedly to achieve the ultimate goal of the project. I am also indebted to Mr. Chandra Kant iii . which gave me an opportunity to do this project work.ACKNOWLEDGEMENT On the successful completion of this project I would like to express my gratitude to all the people who have helped me throughout the project.

Chandra Kant i. in “HDFC STANDARD LIFE INSURANCE” is the original work done by me. .DECLARATION The summer project on “Analysis of various policies of HDFC”. This is the property of the institute and use of this report without prior permission of the institute will be considered illegal and actionable.

DECLARATION i PERFACE ii ACKNOWLEDGEMENT iii 1. PROJECT OBJECTIVE 2 3 .RESEARCH METHODOLOGY (3-4) a) Type of Research 3 b) Data Collection 3 c) Sampling Unit & Size 3 d) Limitations 4 4 Section 1 : INDUSTRY PROFILE (5-32) 1) Overview & Historical Perspective 6- 7 2) Insurance Sector Reforms 8-10 3) Nature of Industry 11-14 4) Indian Insurance Industry  Regulatory Body : IRDA 5) Importance of Liberalization  15 16-20 Market share of various players 6) Current Scenario 21-29 7) SWOT Analysis of Industry 30-32 .no Topics Page No.CONTENTS S. EXECUTIVE SUMMARY 1 2.

: 1) Introduction 34-38 2) Subsidiary & Associate Companies 38-39 HDFC STANDARD LIFE INSURANCELIFE 40-55 1) Introduction 40-42 2) Key Personnel 43-44 3) Knowledge Management 45-47 4) Product Mix 48-51 5) Current Sales 52-54 6) Future Plans 55 Life Stages  6. APPENDICES (88-99) 1) Questionnaire 89-92 .5. Section 2 : COMPANY’S PROFILE (33-55) HDFC STANDARD LIFE INSURANCELtd. Section 7 : RECOMMENDATIONS (84-87) 11.Section 6 : CONCLUSIONS (81-83) 10. Section 3 : MAIN SECTION (56-66) 1) Financial Planning 57 2) 360º Financial Planning 58-61 3) Consumption Pattern 62 4) Objective & Sales Procedure 63-66 7.Section 4 : DATA ANALYSIS (67-78) 8 .Section 5 : FINDINGS (79-80) 9 .

Later. I was given complete classroom training about the various unit linked as well as the traditional plans and solutions which the company offers. Different companies will take different approaches and it would be myriad of solutions that will be found to delight the Indian customer. Market Research was done through various activities and telecalling which are discussed further in the report. . During the first part. building trust and being innovative are key areas in which any company will have to excel in order to do well in the long road ahead. the life insurance and pension sector is set for rapid changes and growth in the years ahead. It was great experience because selling an insurance product demands a great deal of confidence and product knowledge. Finally. interesting conclusions were drawn out of the data collected regarding the Awareness of Financial Planning among the people in today’s environment. Activities led to practical exposure and taught me the aspects of customer dealing. Delivering service.2) Glossary 93-98 3) Bibliography 99 EXECUTIVE SUMMARY Overall.

(1) PROJECT OBJECTIVES  “To Analysis of various policies of HDFC”. • Customer’s perception of improvements brought in by entry of Private Insurance Companies. . • Quality of service provided by agents and clients satisfaction level. • Preference in choosing channel for buying life insurance. • Brand awareness of various private insurance companies.  To generate leads for Unit Linked Insurance and the Unit Linked Pension Plans. • Preference among different investment tools. by interacting with walking and existing customers of the company..  To study the importance of Insurance in today’s scenario. • Purpose of buying insurance.

. Type of research : Exploratory : Type of research carried out was EXPLORATORY in nature. Sample unit: The research process was done by interacting with number of customers during the activities performed. etc.(2) RESEARCH MEHODOLOGY “Analysis of vanious policies of HDFC”. and particularly the insurance sector covers data collection through observation. markets. canopies. Sample Design consists of Random Sampling. Data Collection:  Primary data  Secondary data Data used for the research work was primary in nature. questionnaire and interview of consumers. the objective of such research is to determine the approximate area where the drawback of the company lies and also to identify the course of action to solve it. For this purpose the information proved useful for giving right suggestion to the company. which included. cold calling.

2. market research was undertaken. Personal interviews through self administered survey was done to collect the data. . 3. • Giving instructions as to what is wanted. Limitations: The following were the limitations that were there during the course of the study:4 1. Limited time period.100 people (3) Method of collection: Field procedure for gathering primary data included observation and interview schedule in which the questionnaires were filed by the interviewer. • Inducing the respondents to co-operate. that was accomplished by performing various activities designed. Research Instrument: • Questionnaire The questionnaire was formulated by keep in mind the following Points: • Giving the respondents clear comprehension of the question. Less number of respondents. • Identifying the needs to be known.Sample size: . Biasness of the respondents.

(4) SECTION 1 .

Insurance happens to be a mega opportunity in India. with the establishment of the Oriental Life insurance Corporation in 1818. Nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. It’s a business growing at the rate of 15-20 per cent annually. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. it adds about 7 percent to the country’s GDP . This it-self is an indicator that growth potential for the insurance sector is immense.The Indian life insurance company act 1912 was the first statutory body that started to regulate .(5) INDUSTRY PROFILE Overview With largest number of life insurance policies in force in the world. Together with banking services.In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Historical Perspective The insurance came to India from UK.

the life insurance business in India. 16 foreign and 75 provident firms were been established in India. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. Then the central government took over these companies and as a result the LIC was formed. By 1956 about 154 Indian. (6) .

LIC Act 1956. 1972: The general insurance business in India nationalized through The General Insurance Business (Nationalization) Act. frames a code of conduct for ensuring fair conduct and sound business practices. 1972 with effect from 1st January 1973. 1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and nationalized. LIC formed by an Act of Parliament. from the Government of India. 107 insurers amalgamated and grouped into four companies.5 cr. a wing of the Insurance Association of India. and the United India Insurance Company Ltd.with a capital contribution of Rs. 1957: General Insurance Council. the Oriental Insurance Company Ltd. the New India Assurance Company Limited. (7) .the first company to transact all classes of general insurance business.the National Insurance Company Limited.Important milestones in the life insurance business in India: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. GIC incorporated as a company. Important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up.

No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. In 1993. In 1994. (8) . Malhotra Committee.was formed to evaluate the Indian insurance industry and recommend its future direction. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms.headed by former Finance Secretary and RBI Governor R. Life insurance was monopoly of LIC. Competition Private Companies with a minimum paid up capital of Rs.1 billion should be allowed to enter the sector. the committee submitted the report and some of the key recommendations included: Structure Government stake in the insurance Companies to be brought down to 50%. Malhotra.Insurance Sector Reforms Prior to liberalization of Insurance industry. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.N.

a part of the Finance Ministryshould be made independent Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology is to be carried out in the insurance industry. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time) Customer Service LIC should pay interest on delays in payments beyond 30 days.Regulatory Body The Insurance Act should be changed. (9) . An Insurance Regulatory body should be set up. Controller of Insurance.

STATISTICS (INDIAN & GLOBAL) This section gives the users important and detailed statistics of the Indian as well as the Global insurance industry. • India takes the 23rd position with US $9. • Indian insurance market is set to touch $25 billion by 2010.4 billion. • The income derived by GIC and its subsidiary companies through investment was Rs.2491. These statistics would give important insights of where the respective markets are headed for.77 per cent.2843 crore in 1999-2000. only 35 million people are covered by insurance. • India's life insurance premium as a percentage of GDP is just 1.2 billion while the non-life insurance market is placed at $922. • Out of one billion people in India. (10) .933 billion annual premium collections and a meager 0.6 billion global insurance market and Japan stands next with a 20. • The global life insurance market stands at $1.521.76 crore and the investable fund generated was Rs.41% share.62% share. on the assumption of a 7 per cent real annual growth in GDP. • The United States itself accounts for about one-third of the $2443.

and how much will be awarded. Insurance companies assume the risk associated with annuities and insurance policies and assign premiums to be paid for the policies. and loss of income due to disability or death. By purchasing insurance policies. In the policy. exactly which losses it will provide compensation for.NATURE OF INDUSTRY The insurance industry provides protection against financial losses resulting from a variety of perils. individuals and businesses can receive reimbursement for losses due to car accidents. medical expenses. and fire and storm damage. as well as the likelihood that the insurance carrier will actually have to pay. insurance companies invest the money they receive in premiums. the companies states the length and conditions of the agreement. In order to be able to compensate policyholders for their losses. Insurance agencies and brokerages sell insurance policies for the carriers. (11) . insurance carriers are large companies that provide insurance and assume the risks covered by the policy. The insurance industry consists mainly of insurance carriers (or insurers) and insurance agencies and brokerages. building up a portfolio of financial assets and income-producing real estate which can then be used to pay off any future claims that may be brought. In general. theft of property. The premium charged for the policy is based primarily on the amount to be awarded in case of loss.

An Annuity (a contract or a group of contracts that furnishes a periodic income at regular intervals for a specified period) provides a steady income during retirement for the remainder of one’s life. theft. while Reinsurance carriers assume all or part of the risk associated with the existing insurance policies originally underwritten by other insurance carriers.There are two basic types of insurance carriers: Direct and Reinsurance. Life insurance provides financial protection to beneficiaries—usually spouses and dependent children—upon the death of the insured. Disability insurance supplies a preset income to an insured person who is unable to work due to injury or illness Health insurance pays the expenses resulting from accidents and illness. Property-casualty insurance protects against loss or damage to property resulting from hazards such as fire. combine both propertycasualty and liability coverage. Direct carriers are responsible for the initial underwriting of insurance policies and annuities. Liability insurance shields policyholders from financial responsibility for injuries to others or for damage to other people’s property. and natural disasters. Companies that underwrite this kind of insurance are called property-casualty carriers. such as automobile and homeowner’s insurance. (12) . Most policies. Direct insurance carriers offer a variety of insurance policies.

(13) . An Endowment Assurance product provided a fixed amount of money either on death during the period of contract or at the expiry of contract if life assured is alive. A Money Back Assurance product provides not only fixed amounts which are payable on specified dates during the period of contract. There are a number of life insurance products which offer protection and also coupled with savings. An Annuity product provides a series of monthly payments on stipulated dates provided that the life assured is alive on the stipulated dates. When human life is lost or a person is disabled permanently or temporarily. A Whole Life insurance product provides a fixed amount of money on death. there is a loss of income to the household. A Term insurance product provides a fixed amount of money on death during the period of contract.What is Life Insurance? Human life is subject to risks of death and disability due to natural and accidental causes. The family is put to hardship. Risks are unpredictable. Death/disability may occur when one least expects it. but also the full amount of money assured on death during the period of contract.

A Linked product provides not only a fixed amount of money on death
but also sums of money which are linked with the underlying value of
assets on the desired dates.
There are a variety of life insurance products to suit to the needs of
various categories of people—children, youth, women, middle-aged
persons, old people; and also rural people, film actors and unorganized
laborers.
Life insurance products could be purchased from registered life insurers
notified by the IRDA. Insurers appoint insurance agents to sell their
products.
As per regulations, insurers have to give the various features of the
products at the point of sale. The insured should also go through the
various terms and conditions of the products and understand what they
have bought and met their insurance needs. They ought to understand
the claim procedures so that they know what to do in the event of a loss.

(14)

INDIAN INSURANCE SECTOR
REGULATORY BODY
Insurance is a federal subject in India. The primary legislation that deals
with insurance business in India is: Insurance Act, 1938, and Insurance
Regulatory & Development Authority Act, 1999.
The Insurance Regulatory and Development
Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the
IRDA Bill in Parliament in December 1999. The IRDA since its
incorporation as a statutory body in April 2000 has fastidiously stuck to
its schedule of framing regulations and registering the private sector
insurance companies.
The other decision taken simultaneously to provide the supporting
systems to the insurance sector and in particular the life insurance
companies was the launch of the IrDA’s online service for issue and
renewal of licenses to agents. Since being set up as an independent
statutory body the IRDA has put in a framework of globally compatible
regulations.
MISSION-IRDA
“To protect the interests of the policyholders, to regulate, promote
and ensure orderly growth of the insurance industry and for
matters connected therewith or incidental thereto.”
(15)

IMPACT OF LIBERALISATION
The introduction of private players in the industry has added to the colors
in the dull industry. The initiatives taken by the private players are very
competitive and have given immense competition to the on time
monopoly of the market LIC. Since the advent of the private players in
the market the industry has seen new and innovative steps taken by the
players in this sector.
The new players have improved the service quality of the insurance. As
a result LIC down the years have seen the declining phase in its career.
The market share was distributed among the private players. Though
LIC still holds the 79% of the insurance sector but the upcoming natures
of these private players are enough to give more competition to LIC in
the near future. LIC market share has decreased from 95% (2002-03) to
81 %( 2004-05).
LIC has the current market share of 79%.
Among the private players ICICI Prudential has the maximum of appx.
5.60%
Followed by HDFC STANDARD LIFE INSURANCE(3.27 %) and HDFC
STANDARD LIFE INSURANCELife of about 3.11%.
Below is the table that shows the market share of various players of the
industry.

(16)

32 1. improved customer service.66 0.24 0.The following companies have the rest of the market share of the insurance industry.05 The liberalization of the Indian insurance sector has opened new doors to private competition and the new and improved insurance sector today promises several new job opportunities.27 3. most importantly.54 0. and.11 INSURANCELIFE BIRLA SUNLIFE TATA AIG SBI LIFE MAX NEWYORK AVIVA LIFE ING VYSYA OM KOTAK LIFE AMP SANMAR METLIFE RELIANCE LIFE 2. (17) greater employment .30 5.63 3. COMPANY NAME LIC ICICI PRUDENTIAL BAJAJ ALLIANZ HDFC STANDARD LIFE MARKET SHARE 79.33 0.90 0.82 0.38 0. With private players now in the field. there will be innovative products. better packaging.45 1. opportunities.

342 13. Met LIFE Shriram Life Sahara Life Bharti Axa Life 302. 5.00 227. 6.83 752.88 406. 9.29 32. ICICI Prudential Bajaj Allianz BAJAJ Allianz SBI Life Max New York Reliance Life Aviva 3925.143. OM Kotak 499. 3.905.889.065 544.636 5.767 363. 14.21 3027.85 1198.91 1. 8.Business Performance As On 31-03-07 s. 4.101 12.322 480.no.684 293.891 2.220 (18) .988 76.382 10.75 116. 15.55 1220. 16.70 7.265 11.198 35. LIC 23899.84 687. Tata AIG 518.67 87. Company Premium (Cr) NOP 1.835 1.26 19. ING Vysya 418.121 432.86 656.34 159.

Whereas. • In the life insurance business. but also revises both products and prices. an underwriter is expected to filter the "bad or substandard lives".There are a number of options to choose from for a career in Insurance. Ideally an insurance company will have openings in the following fields: • Actuaries • Underwriter • Surveyor • Investment • Marketing & Distribution Actuaries • Evaluates the risk for companies to be used for strategic management decisions. They calculate costs to assume risk Underwriters • Insurance underwriters review insurance applications and decide whether they should be accepted or rejected based on the degree of risks involved in insuring the people or objects of concern. • An actuary not only fixes the premium rates for new products. statistical and economic models. • Actuaries use their analytical skills to predict the risk of writing insurance policies through the use of mathematical. (19) . in the general insurance segment. he takes care of risk management.

financial planning services.Agents/Brokers: • Insurance agents may work for one insurance company or as independent agents selling for several companies. • Their job is to assess the actual loss and avoid false claims. (20) . sell mutual funds. Surveyor/Loss Assessor: • Surveyors are professionals who assess the loss or damage and serve as a link between the insurer and the insured. for e. They would be required in a large number in order to promote the number of products that will be launched by numerous companies in the insurance sector. • Insurance agents and brokers can find openings in the health insurance sector. Sales/Marketing: And who can forget the guys who make and break a brand. • They usually function only in non life business. annuities etc. retirement planning counseling or even provide other services.g.

How the customer is going to make his choice will determine the future of the industry. Foreign players are bringing in international best practices in service through use of latest technologies. The insurance sector in India has come to a position of very high potential and competitiveness in the market. are now suddenly turning to the private sector that are providing them new products and variety for their choice.CURRENT SCENARIO OF THE INDUSTRY INSURANCE MARKET IN INDIA India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. The one time monopoly of the LIC and its agents are now (21) . Indians. Innovative products and aggressive distribution have become the say of the day. features and benefits. The Indian consumer should be ready now because the market is going to give them an array of products. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry. different in price. have always seen life insurance as a tax saving device. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. Life insurance industry is waiting for a big growth as many Indian and foreign companies are waiting in the line for the green signal to start their operations. Computerization of operations and updating of technology has become imperative in the current scenario. CUSTOMER SERVICE Consumers remain the most important centre of the insurance sector.

alternative channels of distribution. LIC has already well established and have an extensive distribution channel and presence.balanced. Though lot is being done for the increased customer service and adding technology to it but there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels. Therefore they are looking to the diverse areas of distribution channel to have an advantage. The concept is very well established in the country like India but still the increasing use of other sources is imperative. New players may find it expensive and time consuming to bring up a distribution network to such standards.going through a through revision and training programs to catch up with the other private players. DISTRIBUTION CHANNELS Till date insurance agents still remain the main source through which insurance products are sold. This is the main distribution channel due to the complexity of most (22) . It therefore makes sense to look at well. At present the distribution channels that are available in the market are: • Direct selling/Retail • Corporate agents • Group selling • Brokers and cooperative societies • Bancassurance DIRECT SELLING/RETAIL Direct selling or retail business is carried out by Agents of the company.

tries to exploit synergies between both the insurance companies and banks. BANCASSURANCE Bancassurance is the distribution of insurance products through the bank's distribution channel. To put it simply. • By providing customers with both the services under one roof. However. Advantages to banks • Productivity of the employees increases. Unit Linked). This tends to be the focus of most companies due to its past success as well as its ability to deliver the right advice. . An agent is the public face of an Insurance company.insurance products (Endowment. Hence it is important that this face is always smiling and presentable and the facts and figures at his/ her command are updated and correct. • Increase in return on assets by building fee income through the sale of Insurance products. this channel can be expensive and it is a time consuming sales process. they can Improve overall customer satisfaction resulting in higher customer retention Levels. Bancassurance. An agent should be a pleasing personality with complete knowledge about the various plans and solutions which the company has to offer and must also understand the customer’s psychology well to deal in an efficient manner. Whole of Life. It is a phenomenon wherein insurance products are offered through the distribution channels of the banking services along with a complete range of banking and investment products and services.

e. mutual funds. • Customer database like customers' financial standing. The penetration of banks' branches into the rural areas can be utilized to sell products in those areas. • (23) • Banks can cross sell insurance products e.g.: Term insurance products with loans. • Innovative and better product ranges . Further service aspect can also be tackled easily. Advantages to insurers • Insurers can exploit the banks' wide network of branches for distribution of products. conversion ratio of leads to sales is likely to be high. Advantages to consumers • Comprehensive financial advisory services under one roof. personal loans etc.. insurance services along with other financial services such as banking. • Since banks have already established relationship with customers. • Enhanced convenience on the part of the insured • Easy accesses for claims. spending habits. as banks are a regular go. investment and purchase capability can be used to customize products and sell accordingly. i.Can leverage on face-to-face contacts and awareness about the financial Conditions of customers to sell insurance products.

The money proffered by life insurance helps buy time to adjust to the change of circumstances. the reason being that life insurance proceeds are paid to the insured's beneficiaries in case of death. The contractual guarantee is the promise to pay. For some. it is a premium to be paid on time. . whether or not the individual may live to see it. 1) Insurance Buys Time and Money People like to refer to life insurance as time insurance. He or she knows that the decision made by him will provide sound benefits in the future. it denotes a constantly growing capital account and numerous other benefits. Insurance provides large amounts of cash that will keep the lifestyle for the survivors the way it was before the insured's death. backed by one of the oldest and most stably regulated financial industry operating in the Indian sub-continent today.(24) WHAT DOES LIFE INSURANCE HAVE TO OFFER? Life insurance is many different things to many different people. it offers absolute and complete peace of mind. For others it offers liquidity since cash can be borrowed when needed. 2) Insurance Offers Peace of Mind For the person who buys an insurance policy. For the investment-minded.

Life insurance offers complete financial security. 4) Enduring Elasticity Since life insurance is flexible enough to serve several needs. The cash value of the policy can be allocated towards augmenting the monthly income during the retirement years. No one knows how long (25) he or she will live. The investment benefit is paid to the insured's beneficiaries after his death or it can be used during the life as well. Life insurance policy owners can turn to the cash value of the policy in case of a financial emergency when all avenues are either blocked or denied.3) Multiple Applications The future is uncertain for each and every one. The purchase of life insurance demonstrates concern for a family's future financial well being. 5) Financial Security The insurance policy offers contractual guarantees to people looking for peace of mind when they buy life insurance. Leisure years should be turned into pleasure years. the insured can keep several long-term goals in mind once he or she invests in the insurance plan. 6) Regard for Family The purchase of life insurance clearly displays care and concern for the people the policy owner loves. Permanent life insurance is designed on the concepts of long-term flexibility. 7) Insurance is Safer .

No financial institution can do what life insurance does. It creates an air of uncertainty in all the decision making process. Insurance has always been used as a Tax saving tool. • An open and transparent environment created under the IRDA. Insurance as a sector requires players who . no less. No industry can back its products with reserves and surplus as sound as those of the insurance industry. No more. These are not exactly what any player. looks for. be it Indian or foreign. life insurance has been acclaimed as the very benchmark of security against which the other industries are measured. For generation after generation. The reason for this being on the top of our understanding is that when ever we have seen any sector open up in India there are always grey areas and unsure policies. the following is what I feel will determine the success of the company in particular and the industry in general: • A change in the attitude of the population Indians have always been wary of employing their hard-earned money in a venture that will pay them on their death. (26) The proof of strength and safety that insurance companies have ensured even under the most adverse of conditions is a matter of pride for the entire insurance industry. OPPORTUNITIES FOR INSURANCE COMPANIES In the now open sector on insurance. It is upon the insurers to educate the people to secure/insure their future against any unknown calamity and make a shield around their families and businesses.

are strong financially and are willing to wait for returns. Their confidence
can be bolstered only if there is an open and a transparent policy
guidelines. This will also help the consumers feel safe that the regulatory
is an active one and cares to do everything possible to keep things
under control and help the insurance environment grow maturely.
(27)

A well-established distribution network.

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

Trained professionals to build and sell the product.

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

Encouragement of new and better products and letting the
hackneyed ones die out.

This will itself ensure the market grows. And that every class/society
gets a product that best suits them.
SPECIAL PROVISIONS
The Income Tax Act and Life Insurance policies

Under Section 10(10D), any sum received under a Life Insurance

policy (not being a Key Man policy) is also exempt from taxation. But
it is wise to remember that Pensions received from Annuity plans are
not exempted from Income Tax.

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

individual assesses for any amount paid as a premium.

(28)

a grievance redressal system to address the complaints of policyholders. (29) .POLICYHOLDERS GRIEVANCES Policyholders may have complaints against insurers either in respect of their policies or their claims. The IRDA however does not adjudicate on complaints. 2002. The IRDA has a Grievance Redressal Cell which plays a facilitative role by taking up complaints against insurers with the respective companies for speedy resolution. As per Regulations for Protection of policyholders’ interests. every insurer should have in place.

e. 2. 80 percent of Indian population is still under insured. 3. only 22. Good option for new investors into the market as all the money is invested by best fund managers so with less knowledge also they can earn good Returns. (30) . Less Promotional Campaigns. 2. 4.SWOT ANALYSIS OF INSURANCE INDUSTRY STRENGTH 1. 3. Misleading facts given by life advisors about the returns of ULIPs. HDFC STANDARD LIFE INSURANCESLIC could not able to match LIC in remote areas services. Best returns with the added advantage of 100% life insurance coverage.5%. So there is a big opportunity for insurance companies. OPPORTUNITY 1. . WEAKNESS 1. Hidden charges taken by the companies. Best commission charges paid to the agents which vary from 12% to 35% which is much higher as compared to mutual funds i.

Govt. 2. THREAT 1.2. Increasing consumer awareness about Insurance and its use. Cannibalism within the industry by providing misleading figures to the investors.’s instability has a long term repercussions affecting company’s policies and its growth. 4. Unit-linked products are exempted from tax and they provide life insurance. 3. (31) . As the stock market can be under the mark any time so it can bring loss to the investors but as in ULIPs there is proper mixture of debt securities and equity so the loss is incurred during dark trading days also.

Nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. And also the changing attitude and increasing awareness level of the population is an indicator that growth potential for the insurance sector is immense.CONCLUSION With largest number of life insurance policies in force in the world. which is growing at the rate of 15-20 per cent annually. (32) . Insurance happens to be a mega opportunity in India.

SECTION 2 (33) .

The corporation has had a series of share issues raising its capital to Rs. OBJECTIVES AND BACKGROUND Background HDFC STANDARD LIFE INSURANCEwas incorporated in 1977 with the primary objective of meeting a social need – that of promoting home ownership by providing long-term finance to households for their housing needs. 10 crores. HDFC STANDARD LIFE INSURANCEwas promoted with an initial share capital of Rs. Another objective (34) . HDFC STANDARD LIFE INSURANCEoperates through 75 locations throughout the country with its Corporate Headquarters in Mumbai.COMPANY’S PROFILE INTRODUCTION Helping Indians experience the joy of home ownership. and to promote home ownership. India. HDFC STANDARD LIFE INSURANCEhas since emerged as the largest residential mortgage finance institution in the country. 119 crores. Incorporated in 1977 with a share capital of Rs. 100 million. Business Objectives The primary objective of HDFC STANDARD LIFE INSURANCEis to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner.

. FOUNDER – Mr. He is also the Executive Chairman of Housing Development Finance Corporation Limited (HDFC STANDARD LIFE INSURANCELimited). Mr. Hasmukhbhai Parekh Brief profile of the Board of Directors Mr. Mr. He is currently the Managing Director of HDFC STANDARD LIFE INSURANCELimited.is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets. The board primarily focuses on strategy formulation. Deepak S Parekh is the Chairman of the Company. 2000. Mr. construction and urban policy & development. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales). policy and control. 2000. Keki M Mistry joined the Board of Directors of the Company in December. designed to deliver increasing value to shareholders. He was appointed as its Managing Director in November. He is the Chief Executive Officer of HDFC STANDARD LIFE INSURANCELimited. taxation. ORGANIZATION AND MANAGEMENT HDFC STANDARD LIFE INSURANCEis a professionally managed organization with a board of directors consisting of eminent persons who represent various fields including finance. He was inducted as a whole-time director of HDFC STANDARD LIFE INSURANCELimited in 1985 and was appointed as its Executive Chairman in 1993. Mistry is a Fellow of the Institute of Chartered (35) Accountants of India and a member of the Michigan Association of . He joined HDFC STANDARD LIFE INSURANCELimited in a senior management position in 1978. He joined HDFC STANDARD LIFE INSURANCELimited in 1981 and became an Executive Director in 1993.

Crombie is a fellow of the Faculty of Actuaries in Scotland. Mr. James Capel & Co. Prior to this. Asia Pacific Development. Corporate Responsibility and Shared Services Centre.Certified Public Accountants. Ms. Strategy & Planning. Mr. Keith N Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. 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. Ms. Campbell joined the Board of Directors in November 2005. Mr. 2002. Mr. Mr. Chief Economist. He has been with the Standard Life Group for 34 years holding various senior management positions. Marcia D Campbell is currently the Group Operations Director in the Standard Life group and is responsible for Group Operations. Skeoch joined the Board of Directors in November 2005. Skeoch was working with M/s. He was appointed as the Group Chief Executive of the Standard Life Group in March 2004. (36) Mr. Alexander M Crombie joined the Board of Directors of the Company in April. Executive Director. holding the positions of UK Economist. Gautam R Divan is a practicing Chartered Accountant and is a .

Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management. Ravi Narain is the Managing Director & CEO of National Stock Exchange of India Limited. an International Association of Independent Accounting Firms and has authored several papers of professional interest. Mr. Mr. he was the Managing Director of HDFC STANDARD LIFE INSURANCELimited since 1993. Pant. until 2002 was a Partner & Vice-President at Bain & Company. 2000. Mr. Corporate Business Development at General Electric headquarters in Fairfield. where he led the worldwide Utility Practice. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks. Mr. (37) Mr. He was also Director. Pant has an MBA from The Wharton School and BE (Honours) from Birla Institute of Technology and Sciences.. Mr. USA. Ravi Narain was a member of the core team to set-up the Securities & Exchange Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI). Mr. Mr. Mr. Divan was the Former Chairman and Managing Committee Member of Midsnell Group International. Satwalekar obtained a Bachelors Degree in Technology from the .Fellow he Institute of Chartered Accountants of India. Prior to this. financial and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investments to and from India. Boston. Deepak M Satwalekar is the Managing Director and CEO of the Company since November. Inc.

Bombay and a Masters Degree in Business Administration from The American University. is a graduate in law and holds a Master’s degree in economics from Delhi University. Karnad is the Executive director of HDFC STANDARD LIFE INSURANCELimited. She has been employed with HDFC STANDARD LIFE INSURANCELimited since 1978 and was appointed as the Executive Director in 2000. She is responsible for overseeing all aspects of lending operations of HDFC STANDARD LIFE INSURANCELimited. . accountancy. HDFC STANDARD LIFE INSURANCEhas a staff strength of 1029. law. Washington DC. SUBSIDIARY & ASSOCIATE COMPANIES HDFC STANDARD LIFE INSURANCEBank • HDFC STANDARD LIFE INSURANCEMutual Fund • HDFC STANDARD LIFE INSURANCELife ++ (38) • Intelenet Global Services Ltd.Indian Institute of Technology. which includes professionals from the fields of finance. engineering and marketing. Renu S. Ms.

• HDFC STANDARD LIFE INSURANCEChubb General Insurance Company Ltd.  HDFC STANDARD LIFE INSURANCEDevelopers Ltd.  HDFC STANDARD LIFE INSURANCEHoldings Ltd.  HDFC STANDARD LIFE INSURANCEVentures Trustee Company Ltd. • HDFC STANDARD LIFE INSURANCEReality • Other Companies Co-Promoted by HDFC STANDARD LIFE INSURANCE  HDFC STANDARD LIFE INSURANCETrustee Company Ltd. Ltd.  HDFC STANDARD LIFE INSURANCEVenture Capital Ltd.  HDFC STANDARD LIFE INSURANCEInvestments Ltd.  Credit Information Bureau (India) Ltd .  Home Loan Services India Pvt.

(39) .

Deepak Satwalekar is the MD and CEO of the venture. HDFC STANDARD LIFE INSURANCELife Insurance Company Ltd was incorporated on 14th August 2000.HDFC STANDARD LIFE INSURANCELIFE INSURANCE INTRODUCTION : HDFC STANDARD LIFE INSURANCELife Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life insurance sector.000 Cr respectively. Standard Life is rated 'AAA' both by Moody's and Standard and Poors.000 Cr and Rs. Similarly. 15. (40) .6%. These reflect the efficiency with which HDFC STANDARD LIFE INSURANCEand Standard Life manage their asset base of Rs. HDFC STANDARD LIFE INSURANCEis rated 'AAA' by both CRISIL and ICRA. Mr.4 % stake and Standard Life has a stake of 18. HDFC STANDARD LIFE INSURANCEis the majority stakeholder in the insurance JV with 81. 600. Each of the JV player is highly rated and been conferred with many awards.

Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. Therefore. further strengthening the relationship. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. Towards the end of 1999. In October 1998. to enter the Life Insurance market. Around this time Standard Life purchased a further 5% stake in HDFC STANDARD LIFE INSURANCEand a 5% stake in HDFC STANDARD LIFE INSURANCEBank. based in Mumbai. in January 1995. the joint venture agreement was renewed and additional resource made available. (41) . Around this time Standard Life purchased a 5% stake in BAJAJ ALLIANZ. the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. (IDFC). in January 2000 an expert team from the UK joined a hand picked team from HDFC STANDARD LIFE INSURANCEto form the core project team. In October 1995 the companies signed a 3 year joint venture agreement.THE PARTNERSHIP : HDFC STANDARD LIFE INSURANCEand Standard Life first came together for a possible joint venture. Standard Life also started to use the services of the HDFC STANDARD LIFE INSURANCETreasury department to advise them upon their investments in India.

COMPANY’S MISSION: To be the top life insurance company in the market. company will be offering a range of innovative products to meet these needs. but a combination of several things like• Customer service of the highest order • Value for money for customers • Professionalism in carrying out business • Innovative products to cater to different needs of different customers • Use of technology to improve service standards • Increasing market share COMPANY’S VALUES: • SECURITY: Providing long term financial security to our policy holders will be our constant endeavor. (42) . This is done by offering life insurance and pension products. company will aim to manage their investments very carefully and live up to this trust. This not only means being the largest or the most productive company in the market. • INNOVATION: Recognizing the different needs of our customers. Company’s mission is to be the best new life insurance company in India and these are the values that will guide us in this. Hence. • TRUST: Company appreciates the trust placed by our policy holders in us.

K. Divan Mr. Karnad Mr. Campbell Mr. Bajpai Mr. Marcia D. Parekh Board of Directors Mr. Satwalekar AUDIT COMMITTEE Haribhakti & Company Chartered Accountants B. G. M. D. Khare & Co. Deepak S. G.KEY MANAGEMENT PERSONNEL Chairman Mr. Crombie Ms. Chartered Accountants (43) . A. Norman Keith Skeoch Mr. Renu S. N. K. M. M. Ranjan Pant Mr. R. Mistry Ms. Ravi Narain Managing Director & CEO Mr.

Federal Bank (44) . Union Bank of India Indian Bank The Saraswat Co-operative Bank Ltd.Bankers HDFC STANDARD LIFE INSURANCEBank Ltd.

from starting to work to enjoying your golden years and all the stages in between. (45) .KNOWLEDGE MANAGEMENT When Should One Go For Insurance? Your insurance need will change as your life does. Each one of these stages may pose a different insurance need/cover for you. In this section. we have drawn up the basic life stages and help you analyze various insurance needs accordingly.

Just Married Marriage brings about a significant change.Stage 1: Young and Single This is an important stage where one lays down the foundation of a successful life ahead. it is equally important to ensure that eventualities don’t come in the way of shaping your dreams. New dreams and new opportunities also bring in additional responsibilities. so start saving early. Your needs: o Planning for home / securing your home loan Liability o Save for vacation o Save for your first child (46) . Take advantage of the time and power of compounding to ensure that you build up your dreams. Your needs: oSave for a home and wedding oTax Planning oSave for Golden years Stage 2 . While both of you look forward to a happy and secure life.

Your needs: o Provide for children’s education o Safeguarding family against loan liabilities o Savings for post-retirement Stage 4 . You will want life to go on for your loved ones. it is important for you to take time and plan for your life after retirement. your need for life insurance is even more. independent and comfortable Life style after retirement (47) . Having an early start for retirement planning can make a significant difference to your savings. Your needs: o Provide for regular income post retirement o Immediate Tax benefits o Lead a secure.Proud Parents Once you have children. Ensure your protection umbrella takes into account the future cost of securing your child’s dream. You need to protect your family from an untoward incident. Think about your golden years even before you have reached them.Planning for Retirement While you are busy climbing the ladder of success today.Stage 3 . The key is to think ahead and plan well using your time and money. and having enough life insurance is a way to help ensure that.

Gratuity. Plans: Term Assurance Plan Loan Cover Term Assurance Plan.PRODUCT MIX At HDFC STANDARD LIFE INSURANCELife. These plans offer valuable peace of mind at a small price. they have a range of protection. individuals as well as to companies looking to provide benefits to their employees. there is a bouquet of insurance solutions to meet every need. For individuals. One can choose from a range of products to suit one’s lifestage and needs. PRODUCTS FOR INDIVIDUALS PROTECTION . disability or sickness.You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise. They cater to both. Leave Encashment and Superannuation Products. We provide you with attractive long term returns through regular bonuses. Plan: Single Premium Whole Of Life (48) . pension and savings plans that assist and nurture dreams apart from providing protection. For organizations they have customized solutions that range from Group Term Insurance. investment. INVESTMENT .This includes a plan that is well suited to meet your long term investment needs.

Unit Linked Endowment. Unit Linked Endowment Plus. (49) .PENSION . Children’s Plan. Unit Linked Young star Plus.Our Pension Plans help you secure your financial independence even after retirement and live a relaxed retired life. Plans: Endowment Assurance Plan. Plans: Personal Pension Plan Unit Linked Pension Unit Linked Pension Plus SAVING . Money Back Plan. Unit Linked Young star.Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream home or fulfilling your children’s immediate and future needs.

According to research findings. Super Bachat Yojana (50) HDFC STANDARD LIFE .GROUP PLANS HDFC STANDARD LIFE INSURANCELife has the most comprehensive list of products for progressive employers who wish to provide the best and most innovative employee benefit solutions to their employees. Plans: Group Term Insurance with Riders Group Term Insurance with Profit-Share Group Unit-Linked Plan For Gratuity For Defined Benefit Superannuation For Defined Contribution Superannuation Group Leave Encashment Plan RURAL CUSTOMER . Keeping this in view. They offer different products for different needs of employers ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment. there is keenness among rural customers to invest in savings cum protection plan with a term of five years. if the premium amount is low and affordable. especially. INSURANCESTD> LIFE has plans like: Plans: Bima Bachat Yojana.

During the year.000 in the previous year to over 33.DISTRIBUTION OFFICES In addition to the corporate office at Mumbai.000 in the current year. your Company had 169 offices in over 135 cities/towns in the country. It has a widespread network of Financial Consultants. Corporate Agents and Brokers servicing customers in these cities and towns. the Company continued its (51) . FINANCIAL CONSULTANTS The number of licensed Financial Consultants appointed by your Company increased from over 23.

in comparison to the same period 2005-06. the EPI grew by 103% to Rs.80.500 in 2006-07 from Rs 17.000 in 2005-06. HDFC STANDARD LIFE INSURANCELife's growth in new business is a manifestation of the number of lives insured as well as an increase in the average premium. which gives a 10% value to a Single Premium policy and is an internationally-accepted indicator of an insurance company's performance.HDFC STANDARD LIFE INSURANCELife “HDFC STANDARD LIFE INSURANCELIFE PACING AHEAD” The Financial Express 15th May 2007 “HDFC STANDARD LIFE INSURANCELife has recorded a strong year-on-year growth of 112% for the period April-March 2006-07.029 crore. For the individual business.CURRENT SALES. with a new business first year premium of Rs. 436 crore.000 policies and has covered more than 5. The average premium also grew by 62% to Rs 27. 887 crore from Rs. In terms of effective premium income (EPI). 1.97.000 lives” . volume measured by the number of lives insured witnessed a 32% growth. During the year the company issued over 3.

14 436. Renewal 182. New Business 486. Cr) (Rs.25 503.40 135.94 111.15 173.21 129.47 49.30 103. Cr) (%) 668.40 1532.58 Total received premium Effective Premium Income (Total) Group Business Premium (EPI) (53) .65 ii.(52) Table Showcasing Financial Results: April-March Parameters April-March 2005-06 2006-07 Growth (Rs.23 i.08 887.27 176.15 1028.

6666 22.6157 28.7568 23.1349 34.Unit Prices as on 29/08/2007 Offer Prices (Rs) 24.2603 36.1340 32.4273 Defensive Managed Fund Balanced Managed Fund (54) .5190 29.2857 Secure Managed Fund 24.0512 59.5661 Bid Price (Rs) 24.2655 59.0512 Fund Name Liquid Fund Balanced Managed Fund Equity Managed Fund Growth Fund Fund Name Offer Prices (Rs) Bid Price (Rs) UNIT PRICE AS ON 30/08/2007 Liquid Fund 24.6666 Defensive Managed Fund 27.5661 Secure Managed Fund 22.2655 46.2603 46.3346 27.5113 23.3346 36.

to take into account changes in the volatile external environment. Each institution is being fine-tuned for a specific market. and it hopes to capitalize on this loyal and satisfied client base for future growth. HDFC STANDARD LIFE INSURANCEhas developed a vast client base of borrowers. Over the years. (55) . for providing specialized financial services. depositors. shareholders and agents. This renders it more than capable to meet the new challenges that have emerged. facilities and service. Internal systems have been developed to be robust and agile. HDFC STANDARD LIFE INSURANCEhas developed a network of institutions through partnerships with some of the best institutions in the world.FUTURE PLANS HDFC STANDARD LIFE INSURANCEhas always been market-oriented and dynamic with respect to resource mobilization as well as its lending program. while offering the entire HDFC STANDARD LIFE INSURANCEcustomer base the highest standards of quality in product design.

SECTION 3 (56) .

• Planning a grand wedding for your children • Having a great time after your retirement But in today's world of skyrocketing costs and increasing inflation. tax. housing and children's education / marriage or other needs. estate planning. asset protection and investment advice. For example. • Buying a dream house. (57) . how many of these dreams can you hope to turn into reality? By planning well. Inflation and outflows due to loans are considering in building the financial plan. Why do you need Financial Planning? You may have many dreams. legal issues.  Building cash flows correlating all expenses and income. needs and desires. Financial Planning takes into account:  Desired asset allocation. risk profile and return expectations. you could be dreaming of: • Owning a new car. family law.FINANCIAL PLANNING A comprehensive financial advisory service involving financial strategies. you can utilize your limited resources to the fullest.  Future goals like retirement. asset allocation. • Providing your children with the best education. corporate/trust structures.

360° Financial Planning comprises:       Investment Planning Cash Flow Planning Tax Planning Insurance Planning Children’ Future Planning Retirement Planning (58) INVESTMENT PLANNING: To make your wealth grow . Times change. How will 360° Financial Planning help? Instead manner.. Tomorrow. of investing in an ad-hoc 360° Financial Planning helps you take a holistic. People change. So does life. if there is an eventuality? Perhaps it's time for you to change the way you plan your investments. you hope to fulfill all your dreams and aspirations.EXPERIENCE THE POWER 360º FINANCIAL PLANNING The only thing permanent in life is change. Briefly. But what happens if things take an untoward turn? Or.. all-round view. You expect life to be much better tomorrow than it is today.

1961. cash flow refers to the inflow and outflow of money. According to the Income Tax Act. Once you have saved enough to take care of emergencies. TAX PLANNING: To save on taxes and increase your income Proper tax planning is a basic duty of every person which should be carried out religiously. It is a record of your income and expenses. Cash flow planning refers to the process of identifying the major expenditures in future (both short-term and long-term) and making planned investments so that the required amount is accumulated within the required time frame.Everyone needs to save for a rainy day. you should start thinking about investing and to make your money grow. (59) . one will be eligible for Tax Benefits under Section 80C and Section 10(10D) of the act. Investment Planning Service includes: • • • • Risk Profiling Asset Allocation and Portfolio Construction Creation and Accumulation of Wealth through Investment Plans (SIP) Regular review of progress and Portfolio Rebalancing Systematic CASH FLOW PLANNING: To provide for assets and meet the periodic cash requirements In simple terms.

decide upon a right mix of investments. so that his family's quality of life does not undergo any drastic change in case of an unfortunate eventuality. tax slabs and personal preferences. It is extremely important that every person. Soon." goes a popular saying that explains the importance of Insurance Planning. in case of any eventuality. especially the breadwinner. your family and your Assets. and to provide for an adequate security cover during their growing years. social liabilities. (60) . which shall reduce your tax liability to zero or the minimum possible.One has to compare the advantages of several tax saving schemes and depending upon your age. Insurance Planning is concerned with ensuring adequate coverage against insurable risks. INSURANCE PLANNING: To protect yourself. and it will be time to provide for his or her higher education and wedding. it for those who survive. "Insurance is not for the person who passes away. covers the risks to his life. CHILDREN'S FUTURE PLANNING: To give your children a financially secure future Like every parent. The purpose of Children's Future Planning is to create a corpus for foreseeable expenditures such as those on higher education and wedding. your little bundle of joy will grow up. All parents want to give the best possible upbringing to their children. This includes good education and security. you too must be overjoyed to watch your child grow.

(61) . But retirement is a reality for every working person. it is important to plan for your post-retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer earning. Some don’t. unlike developed nations. However.RETIREMENT PLANNING: Because retirement is a time to relax. This is extremely important. because. Most young people today think of retirement as a distant reality. India does not have a social security net. not to get worried Some like it.

80% 2.30% 40. where do they actually invest their money and in what proportion do they spend in various areas.10% 10.90% Movies & Theater 6.60% 4.90% 8.10% Entertainment Accessories Books & Music *Source-Business world magazine 2nd week April 2006 The consumption pattern is determined by the income so more would be the income more would be the consumption.60% Saving & Investment 2.60% 6. (62) .9% of their savings into savings and investments.e. The consumption though can differ in terms of areas where the money is actually spent.10% Home Textiles Personal Care 7.CONSUMPTION PATTERN Food & Grocery 1.80% Clothing Consumer Durable Vacation Eating out Footwear 3. The above representation tells us the consumption pattern of the consumer in India i.60% 0. The chart shows that people are spending 6.80% 4.

OBJECTIVE: To generate leads for various Unit Linked Plans offered by the company. SALES PROCEDURE: FIRST CONVERSATION Foll ow APPOINTMENT Up Foll ow FILLING THE Up PROPOSAL FORM COLLECT THE REQUIRED DOCUMENTS AND THE FIRST PREMIUM (63) . by interacting with walking and existing customers and to know the awareness level of Financial Planning among them.

we interacted with the shopkeepers as well as the walking people regarding their views about the industry.e. 3) CANOPY AT MEERUT: This activity was designed to target the people working in BPOs and other IT companies. 5) CORPORATE PRESENTATION: A presentation was arranged for the employees of VED RAM AND SONS (Paras). when you interact with a person and try to get the information from him about the industry or the company and understand the customer’s insight i. to make them aware about the importance of Financial Planning in today’s unpredictable environment. The objective was to know the awareness about Financial Planning among the customers and this was done by getting a questionnaire filled by the people. The various activities performed were: 1) KRISHNA PLAZA: Here we interacted with the commuters & collected the data. 4) TELE-CALLING: This was random calling from the data base provided by the company and the aim was to collect information from them. .STEP 1: FIRST CONVERSATION WITH A KNOWN OR AN UNKNOWN CUSTOMER This is the first time. what actually does a customer expects from the companies. 2) MARKETS: (GOAL MARKET & BHAGAT SINGH MARKET) during this activity.

quarterly mode. 3) Choose the amount of protection i.e. annual mode. 4) With Maturity Benefit. The customer is informed about the procedure and the options he can opt for like: 1) Choose the premium he wish to invest 2) Select the Premium Payment Option i. half yearly mode. about the various plans offered by the company. or monthly mode. The various funds available are: • Liquid Fund • Secure Managed Fund . The motive is to explain the customer in detail. choose the additional benefits like: a) Life option  Death Benefit b) Life & Health option  Death Benefit + Accidental Death c) Benefit Extra Life & Health option  Death Benefit + Critical Illness Benefit + Accidental Death Benefit 5) Choose the Investment funds or funds one desires. he desires.e.(64) STEP 2: APPOINTMENT All the potential and interested customers of all the activities performed are then followed up and an appointment is fixed for further details. the sum assured.

b) DOB certificate etc. . STEP 3: FILLING THE PROPOSAL FORM After the second step. the interested customers are required to fill the proposal form which requires the following information: b) Personal details of the policy holder.• Defensive Managed Fund • Balanced Managed Fund • Equity Managed Fund • Growth Fund (65) 6) Other information like: a) Tax Benefit b) Various Charges c) Switching option d) Surrendering e) Terms & Conditions etc. c) Personal details of Beneficiary or Nominee d) The Premium amount selected e) The Term of the policy f) The Fund choice for investment STEP 4 : COLLECTING THE DOCUMENTS Once the form is filled all the necessary documents are collected like: a) Address proof.

the policy documents reach the customers place. Within 15 days.And also the first premium amount in form of cheque or cash is collected. (66) SECTION 4 DATA ANALYSIS SAMPLE SIZE: 100 Sample was collected on Random Basis . and the customer is required to read the documents carefully.

 35% respondents are of age below 30 yrs. small percentage of which is unemployed. .45 Above 45 41%  Highest number of Respondents (41%) from Age group 31 to 45 yrs.) Below 30 24% 35% 31 .(67) AGE DISTRIBUTION AGE DISTRIBUTION(yrs.

(68) MARITAL STATUS MARITAL STATUS SINGLE MARRIED 100% 90% 80% 70% 16 60% 37 50% 24 40% 30% 20% 19 10% 4 0% Below 30 31 .45 AGE(yrs)  Total number of single respondents – 23  Total number of married respondents – 77 Above 45 .

(69) .

which are in age group of above 45 years.45 6 0 Above 45  Highest.) INCOME > 5 lacs 1 3 .INCOME DISTRIBUTION INCOME DISTRIBUTION(Annual in Rs.5 lacs 10 6 5 1. which mainly comprises of age group below 30 years. 16 respondents in income bracket below 1. (70) .5 lacs Below 30 12 12 13 12 16 7 31 .appx.  Respondents of the age group 31-45 yrs.  Minimum.5 .3 lacs <1. 6 respondents in income bracket of above 5 lacs.5 lacs. lie in all the income slabs.

(71) .ARE YOU AWARE ABOUT FINANCIAL PLANNING ? DO YOU KNOW WHAT IS FINANCIAL PLANNING ? YES NO OF PEOPLE 100 90 80 98% NO 70 60 50 40 30 2% 20 10 0  98% of the respondents were aware about Financial Planning.

96%  92% HDFC STANDARD LIFE INSURANCElife has Brand Recall of .e. ICICI Prudential has the highest Brand Recall i.BRAND RECALL BRAND RECALL LIC 60 51 100 ICICI Prudential HDFC Std Life 71 96 TATA AIG BIRLA SUN LIFE KOTAK MAHINDRA 75 92 64 SBI LIFE AVIVA MAX NEW YORK 72 82 86 METLIFE INGVYSYA  100 % respondents mentioned first name to be LIC  Among private players.

 Govt. which itself includes various protection.  Property as an investment option is most lucrative choice. saving and pension plans. However it is important to mention that majority of respondents are in age group of above 30 years and people with high income bracket prefers to invest in Real Estate. as they provide higher returns than banking investment tools.  Respondents of age group below 30 years prefer Mutual Funds. .(72) INVESTMENT PREFERENCE INVESTMENT PREFERENCE Banks & Post office 9% Share Market 21% 21% Insurance 18% 11% 20% Bonds Mutual Funds Real Estate  21% respondents prefer banks and post office schemes as an investment tool preference. Bonds & securities are mostly preferred by people of higher age group rather than young generation.  Insurance ranks 2nd as an investment tool choice.

(73) INSURED PERCENTAGE ARE YOU INSURED? 13% YES NO 87%  87 % of respondents were insured on own life and on life of their family members. .  So we had 13 % of potential customers to approach.

Companies policies sold sums up to 45%. COs  55% of respondents have insurance cover provided by LIC only  15% of respondents have insurance cover provided by Private Cos.  Total number of LIC policies sums up to 85% and total number of Pvt.(74) COMPANY PREFERENCE COMPANY PREFERENCE(in %) 30% 55% 1 0 20 ONLY LIC 40 60 BOTH 15% 80 100 120 ONLY PVT. only  Whereas 30% have got insurance from both LIC and Private Companies. .  Data provides that though LIC is still got a maximum market share but Private Companies are making a fast move in the market.

(75) .

TYPE OF PLAN BOUGHT TYPE OF PLAN MONEY BACK 17.  ULIPs are fast gaining popularity as they provide investment benefit with Insurance. 20% 26. 23%  Money back Policies have been most popular and also the endowment plans. (76) . 28% ULIPs 20.  As people today are more aware about financial planning. so people of the age 30 years have planned for their Retirement now. 29% ENDOWMENT PENSION PLAN 24.

PURPOSE OF BUYING INSURANCE PURPOSE OF BUYING INSURANCE Retirement Planning 14% 23% Tax Benefit 11% Investment 52% Risk Cover 0 10 20 30 40 50 60  Risk cover remains the most important purpose for buying insurance followed by option as Tax saving tools.  Retirement Planning in a early period is also gaining the market share.  ULIPs are responsible for increasing popularity of insurance as an investment tool .

 Bancassurance is emerging as a popular option for buying life Insurance.  Buying insurance from a unknown person or getting a phone call is still not preferred by most of the people .(77) DISTRIBUTION CHANNEL PREFERENCE CHANNEL PREFERENCE 56 1 0 20 17 40 60 Known/Current Advisor Group Insurance Telesales/unknown Advisor 14 80 9 4 100 120 Friends & Relatives Banccassurance  According to the data. known/current Advisors remains the 1st choice for buying Insurance.  In retail also known Advisors are preferred over referrals.  Group insurance is a channel which customers expect but it is not so popular because only few employers have taken the initiative.

(78) .

SECTION 5 FINDINGS (79) .

THE BARRIERS FACED DURING THE PROCESS: The Attitudinal Barriers To Purchasing …. • Death .a taboo topic for discussion “It’s quite ashubh talking about death” • The belief in karma … destiny “Jo kismet me likha hai wohi hoga. • Unsure about Pvt. the charges there are very less” The Other Barriers…. Companies • Low rate of return “Better to put my money in PPF. hum kya kar sakte hai” The Product/ Service Barriers …… • Liquidity “What if I need my money urgently for some medical illness?” • Service quality of the Agent “He disappears after he takes the first premium” • Sanctity of the contract “What if my dependents do not get the money once I die?” • Charges “Its better to invest in Mutual Funds. at least I get fixed returns” • Money gets tied up • High premiums ..

(80) SECTION 6 CONCLUSION .

in order to face the competition is coming up with new strategies. 2. Public sector lic most popular in insurance sector There has been a tremendous change in the insurance industry. . 5. 4. we also conclude that though the awareness and people opting for LIC plans are more as compared to other private players’ but the latter are gaining momentum in the market day by day. Money back policies as a source of tax source & financial planning was most popular. And with it there has been continuous growth in this sector both in Indian as well as world context. While the LIC. Middle income group was found most interested in insurance. The opening up of the insurance sector has changed the whole look of the industry. 3. There is slight variation in the age wise distribution of insurance policies. New private players are leading the sector due to their strategic management and tailored made projects. From the research.(81) CONCLUSION 1. Majority of respondents insured & preference for lic.

and hence are an excellent addition to your portfolio. So lets conduct this business with utmost economy with the spirit of trusteeship. Clients should also receive price differentials for using different channels. . All financial products have a certain amount of risk and charges. training and sales tools and technology enablers. property.(82) Possible investment options range from bank deposits and government small saving schemes to mutual funds. The success of marketing insurance depends on understanding the social and cultural needs of the target population. stocks and property. though the charges are considerably lower than that of a traditional product. The intermediaries need to be empowered with the right learning. All intermediaries can’t sell all lines of business profitably in all markets. In fact. this will help the insurers to survive and flourish in this competitive market scenario. thereby making insurance widely popular. It would be unrealistic to assume that the features and benefits of a ULIP come at no cost. and matching the market segment with the suitable intermediary segment. There should be clear demarcation in the marketing strategies of the company from this perspective. or even a bank deposit. be it a mutual fund. with savings. the very reason the product is transparent is because the customer knows the charges and risks. Certainly ULIPs successfully combine the first and most important need of protection. Coupled with the right product mix. There is no right or wrong in this.

(83) SECTION 7 RECOMMENDATION .

death could be addressed through ‘sensitive’ communication • Fears relating to claims: Need to promote “trust”. • Lack of understanding: Training of Channels  To provide quality advice on products best suited • Lack of Knowledge: Ease of Process. • Low returns: Reposition insurance as a risk cover. ailments.(84) RECOMMENDATION • Positioning insurance as a means to fulfilling one’s duties during one’s lifetime. • Fears relating to thefts. security instrument rather than a financial investment. simplifying the product and the procedure • Need to promote the quality of awareness  The benefits: Leverage on Risk Protection or Returns oriented or both  • The product: catering to life stages Need for Branding in Insurance: Branding is more relevant in the Insurance market which not only faces the problem of securing and . Demonstrating claim testimonials. positioning as “worry free”.

In the insurance industry too. Below-mentioned positioning alternatives can be worth considering. The brand must not only be believed but lived by management and employees. • Focus on different segments to survive and thrive in a competitive environment. • In rural India. not only for success but also survival. But in the wake of competition insurance companies have to do a considerable brand building exercise at least in urban India. NEEDS-BASED POSITIONING This is the most commonly understood positioning and is based on the differing needs of different groups of consumers. investment and longer-term management of the brand are essential. It is a sensible strategy for those companies who have distinctive advantages or strengths in offering certain products and services. VARIETY-BASED POSITIONING This type of positioning is based on varieties in products and services rather than customer segments. it is possible to achieve a unique position by focusing on certain category of products. This can be done . the LIC is especially synonymous with insurance. Each company has to choose its own unique positioning based on its unique strengths. (85) Adequate time. All brands need to be built around well-differentiated and credible positioning that springs from the organization’s history.retaining customers in an increasingly competitive marketplace but also experiences the need for heightened relevance of the brand proposition in a world where brand has been termed the new religion.

The insurance needs of customers vary significantly for different groups of customers. for example). in India most of the life insurance companies have a wide variety of products tailored for different customer needs and there is no company focusing on a particular customer need.successfully if a company has unique strengths to service a group of customer needs better than others. Access is typically a function of customer geography or customer scale. penetration of media and so on. . ACCESS-BASED POSITIONING Positioning of customers can also be done by the way they are accessible. The rural market for life insurance is very different from the urban market in terms of needs. to successfully exploit the potential. Rural market can be a highly profitable position if one is able to carefully plan and tailor an entire set of low-cost activities of advertising. and product design etc. However. income levels and distribution (seasonality. There is excellent opportunity in the insurance industry to employ access-based positioning by targeting the rural insurance sector. distribution. That is different groups of customers may be accessible in different ways even though they may have similar needs. The insurance needs of young family with small children will be quite different from that of a family in which the incomeearner is close (86) to retirement.

(87)     Questionnaire Glossary List of Preference Bibliography .

QUESTIONNAIRE “Awareness of Financial Planning and Consumer’s Perception about Insurance Industry” (88) .

) Upto 1.Questionnaire Name: ________________________ Age: ______ Gender: M F Marital Status: Married Single Occupation: ___________________ Contact No: __________________ Annual Income (appx. in Rs.50 lacs 3 lacs-5 lacs 1.50 lacs-3 lacs above 5 lacs Q1) Are you aware about ‘what is financial planning’? YES NO Q2) Mention the names of Life insurance companies you have heard of: 1) ________________ 4) ________________ 2) ________________ 5) ________________ 3) ________________ 6) ________________ Q3) How much do you save approximately of your annual income? ____________________________________________________ .

TATA AIG MAX NEW YORK LIFE AVIVA RELIANCE KOTAK MAHINDRA MET LIFE OTHER ____________ (specify) (90) LIFE . 1 being most preferable) Banks Share Market Insurance Bonds & Securities Mutual Funds Real Estate/Property Q5) Have you taken any life insurance policy on your own life or on life of any of your family member? YES NO Q6) which company(s) policy(s) you have? LIC ICICI PRUDENTIAL BIRLA SUNLIFE ING VYSYA HDFC STANDARD LIFE INSURANCE SBI LIFE HDFC STANDARD LIFE INSURANCESTD.(89) Q4) where do you invest/would like to invest your savings? (Rank in order of preference.

Q7) which type of plan did you buy? Money Back Plan Endowment Plan Pension Plan ULIP Q8) What was your purpose/will be your likely purpose of taking insurance? RANK THEM (1 being most ideal) PROTECTION OF FAMILY TAX BENEFIT INVESTMENT RETIREMENT PLANNING Q9) Have you ever been approached for Life insurance by any of the following (please √). also Rank according to your preference from whom you are most likely to buy insurance? .

(91) .

(√ Here) (Rank) 1) Known/Current Advisor 2) Advisors referred by friends/family 3) Telesales and subsequent visit by unknown Advisor 4) Schemes offered by your bank (Banc assurance) 5) Group Insurance Policies offered by your employer Q10) Do you feel opening up of the sector has created more insurance awareness among the public? YES NO Q11) How many dependents do you have? <2 2-4 4-6 >6 Q12) Do you really think insurance cover in today’s scenario is not Essential? _____________________________________________________ _____________________________________________________ THANKS YOU FOR YOUR CONTRIBUTION (92) .

mutual fund units and real estate. is generally declared every year. Asset allocation How your investments are spread across various asset classes Bonus The amount paid as return in a ‘with-profit’ policy. there are two kinds of bonuses – reversionary and cash. A reversionary bonus can be encashed only on maturity of the policy. The bonus. expressed as a percentage of the sum assured. Depending on the time of withdrawal. (93) . Long-term capital gains arise from assets owned for more than a year while short-term capital gains are made from assets owned for less than a year.GLOSSARY Accident Benefit An add-on with a life policy. The amount is linked to the profits earned by the insurer. a cash bonus can be withdrawn when declared Capital gains Profit earned from the sale of stocks. It compensates a policyholder in the event of death or injury by accident Annuity An investment option that makes a series of regular payments to an individual in exchange for a premium or a series of premium.

(94) . it also refers to the amount of insurance. If already invested. Critical illness rider A rider that provides a policyholder financial protection in the event of a critical illness Death benefit The amount payable to the nominee on death of the policyholder.Corpus The amount of money available with a scheme for investing. Endowment plans An insurance plan that provides a policyholder risk cover and some return on investment. Cover Another word for insurance. the corpus is the current value of the scheme’s portfolio. Usually suitable for the risk-averse ELSS (equity-linked savings schemes) Diversified equity funds that additionally offer a tax deduction under Section 80C on investments up to Rs. The amount paid is the sum assured plus benefits applicable (if any) less outstanding loans.1 lakh. Financial planning It covers the essential elements of a person’s financial affairs and is aimed at achieving a person’s financial goals.

Group Insurance An insurance policy taken out by employers to provide life cover to their employees. loss in value. post office savings. bonds and stocks that are acquired for the purpose of earning a return Liquidity The quality of assets that can be easily and quickly converted into cash without any. Insured The policyholder: The person who buys an insurance policy Insurer The insurance company Investments Assets like fixed deposits. (95) . Usually the cheapest form of insurance. Lock-in period The period of time for which investments made in an investment option cannot be withdrawn. Maturity date The date on which a policy term or fixed-income investment like fixed deposit or bond comes to an end. or significant.

rather than in a lump sum at the end. the accumulation is paid out through regular pay-out options. A scheme’s NAV is its net assets (the market value of the financial securities it owns minus whatever it owes) divided by the number of units it has issued. Net asset value (NAV) The simplest measure of how a scheme is performing. Pension Plan Investment products offered by insurance companies and mutual funds that required the investor to make defined contributions over regular periods. Nominee The person(s) nominated by the policyholder to receive the policy benefits in the event of his death. mostly every year. Policy The legal document issued by an insurance company to a policyholder that states the terms and conditions of an insurance contract. At retirement. The contributions are invested according to a pre-decided investment plan. Policy term The period for which an insurance policy provides cover (96) . it tells how much each unit of it is worth at any point in time.Money-back plans A variant of endowment plans in which survival benefits are disbursed through the policy term.

Surrender value The amount payable by the insurer to the owner of an investment-based plan in case he opts to terminate the policy after three years (the mandatory lock-in period) but before its maturity date. it is the minimum amount that will be paid on death of the policyholder during the policy term. Term plans A plan that provides life cover for a specified period of time. for a cost Sum assured The amount of cover taken under a life insurance policy. Government backing makes these instruments like Public Provident Fund (PPF).Post office schemes Also known as Small Savings schemes. The surrender value will be the premium paid till date minus surrender charges and any outstanding loans due. National Savings Certificate (NSC). Kisan Vikas Patra (KVP) and Post Office Monthly Income Scheme (POMIS) risk-free Premium The amount paid by the insured to the insurer to buy cover Riders Additional covers that can be added to a life policy. they are offered at post offices and carry the highest returns among fixed income instruments. but no return on the premium paid (97) .

disability or injury. In children’s plans. it is the date from which the policyholder starts receiving pension. Waiver of premium rider A rider that waives the premium payable on the base policy and other riders in certain circumstances mostly related to death. it is the date from which a child becomes the owner of a policy taken out in his name (generally. Whole-life plans Class of life insurance policies that provide cover through your lifetime. Will A document that designates the assets of a person-both financial and physical.Vesting date In pension plans.to various family members and other heirs. An important feature especially for investment products such as children’s policies. (98) . around his 18th birthday).

com www.banknetindia.google.V.in www.M.BIBLIOGRAPHY BOOKS Marketing Management .com www.businessworldonline.Panday Economics Times Websites www.BAJAJ Allianzinsurance.org.By Philip kotaler Marketing of Service By Dr.L Gupta and V.rbi.org www. Ratna Finanaial Management By I. S.irdaindia.com www.com (search engine) Other References: Brochures of various plans (99) .