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CONSUMER AWERENESS, PREFERANCES & ESTIMATION OF MARKET SHARE OF LIFE INSURANCE COMPANIES AT NOIDA (UP)
FOR THE AWARD OF PARTIAL COMPLETION OF THE COURSE MASTER OF BUSINESS ADMINISTRATION (MBA)
U P Technical University, Lucknow
Under Supervision of Under Guidance of
Mr. Bhupesh Chandra Mahadani (Sales Development Manager) HDFC SL CO. LTD. Noida(UP)
Mrs. Rati Shukla (Faculty – MBA Department) IPEM, Ghaziabad
Submitted by Rajesh Kumar MBA (2004-2006)
Institute of Professional Excellence & Management
A-13/1, S.S. G.T. Road Industrial Area, NH-24, Ghaziabad-201001
AKO LD E ET C N WE G MN
In order to accomplish a task, facts, situations and persons integrate together to form a background. “Greatness lies in being grateful and not in being great.” This research report is a result of contribution of distinct personalities whose guidance here made my effort a producing one as “no task is a single man’s effort”. First of all, I would like to thank the management of HDFC SL Co Ltd., Noida For giving me an opportunity to work with them. I am heavily Indebt full to Mr. Bhupesh Chandra Mahadani(SDM) For assigning me a project which Involved using and applying my knowledge acquired during the first two semesters of the MBA & and especially for providing me with a cordial and co-operative atmosphere to work in. I express my deep gratitude and Indebtedness to Mrs. Rati Shukla (faculty member, IPEM), under whose kind & constant guidance I had the opportunity to expand my horizons and view the various problems from different prospective. I am also thanking her for sparing her valuable time to listen my problems and difficulties faced by me during the completion of this project report. I would also like to extend my sincere thanks to Mrs. Ruchika Jaiswal (Coordinater MBA, IPEM, Ghaziabad), Mrs. Nidhi mathur & Mrs. Reena Pandey (faculty members, IPEM) under their kind guidance, I have learned the basic lessons of management, which made me able to understand different aspect of this training Last but not least, it was the blessing of my parents & friends (especially Mr. Saurabh Dixit, Mr.Arun srivastava & Shubham) for keeping me motivated throughout the training period their close attitude and expressions of love and patience have been nothing short of incredible. (RAJESH KUMAR)
P EA E RF C
As a part of course requirement of the course “Master of Business Administration” , we are asked to undergo a project training in an organization so as to give us exposure to practical management and to get familiarize with various activities taking place out in the market. The customer is king: finally 15 years after the liberalization of India's economy its marketplace has, suddenly become frighteningly competitive. New players including a host of powerful translation, stormed into the country, now more brands available then ever in every segment of market. Befittingly, for the time in above 50 years since Independence, delivering the final verdict will be the customer who is already finicky about what will buy, in future, only that which meets her every desire. This demands more intimate understanding of the customer by the smart companies'. I got an opportunity to undergo my summer training in HDFC SL Co. Ltd., Noida branch. I got my practical work on-“Consumer awareness, Preferences & estimation of market share” at Noida (UP). I am hereby presenting the essence of market study done by me during this summer training. I have divided this project report in several topics which contains different aspects of my study. I have done my best efforts to fulfill the need and requirements of the company are carried out, so it can be fruitful to the company.
I, Rajesh Kumar hereby declare that in this summer training project report entitled“Consumer awareness, Preferences & estimation of market share” of Different life insurance companies at Noida (UP), has been completed based on actual Survey carried out by me. I am presenting an authentic record of my own work carried out under the supervision of Mr. Bhupesh Mahadani (SDM), HDFC SL, Noida, which is required in the partial fulfillment for the Degree of “Master of Business Administration” affiliated to U.P. TECH. University, Lucknow. The dissertation is original and the information, data & facts furnished therein are factual, based on the survey carried out. I haven’t submitted the matter embodied in this project report for the award of any other degree or diploma in the best of my knowledge. (RAJESH KUMAR)
TABLE OF CONTENTS
INTRODUCTION EXECUTIVE SUMMARY INDUSTRY REVIEW COMPANY PROFILE SWOT ANALYSIS OBJECTIVE OF THIS STUDY RESEARCH METHODOLOGY SAMPLING PLAN DATA ANALYSIS FINDINGS CONCLUSION RECOMMENDAIONS & SUGGESTIONS LIMITATIONS ANNEXURE BIBLIOGRAPHY
Insurance is a social device where uncertain risks of individuals may be combined in a group and thus made more certain small periodic contribution by the individuals provide a fund out of which those who suffer losses may be reimbursed. In addition to being a means to protect oneself, the Insurance Industry is an effective conduit for the savings of people to be channeled towards economic growth. In India, the Insurance Industry is more than 150 years old. Today, it is monopolsed by two PSU's in their respective fields of Life and General Insurance. Insurance plays a very important role in the day-to-day activities of the common man, business houses, industries, agriculturists and other service providers. Insurance not only provides protection for individual and industry through risk coverage; it also mobilizes funds for economic activity, and encourages savings. The insurance industry is a key sector in the economy of any country.
The liberalization of the financial sector was started in 1991 and carried forward by successive governments. These reforms were carried out in a phased manner and affected the entire financial sector. Till now, however, the insurance sector had been left out of this reform process. With the passage of the IRDA bill in December, 2004, the way has been paved for the entry of private
players into this long neglected aspect of the Indian economy. However, the opening up of this sector does not mean that its character will undergo a sea change. The public sector behemoths will continue to enjoy a huge market share. It is up to the new players to device innovative strategies to both grab business from the existing companies a as well as expand the size of the pie itself. The main benefits of this new competitive environment will be to the consumer, who till now, has had to put up. With shoddy products and even shoddier service. The new entrants will look for new channels of distribution for their products, and banks will play a very important part as the likely interfaces between the insurance companies and their prospective customers.
The report gives a brief background of the sector and proceeds to highlight the shortcomings of the existing setup and players. The benefits of a liberalized sector are enumerated. The report also tried to identify the market potential for insurance products and the strategies that can be employed to exploit the same.
INSURANCE MARKET SCENARIO IN INDIA
India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very high potential and competitiveness in the market. Innovative products and aggressive distribution have become the say of the day. Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice. Life insurance industry is waiting for a big growth as many Indian and foreign companies are waiting in the line for the green signal to start their operations. The Indian consumer should be ready now because the market is going to give them an array of products, different in price, features and
benefits. How the customer is going to make his choice will determine the future of the industry.
Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry.
Computerization of operations and updating of technology has become imperative in the current scenario. Foreign players are bringing international best practices in service through use of latest technologies. The one monopoly of the LIC and its agents are now going through a through revision and training programmes to catch up with the other private players. Though lot is being done for the increased customer service and adding technology to it but there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels.
Till date insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of other sources is imperative. It therefore makes sense to look at well- balanced, alternative channels of distribution. LIC has already well established and have an extensive distribution channel and presence. New players may find it expensive and time consuming to bring up a distribution network to such standards. Therefore they are looking
to the diverse areas of distribution channel to have an advantage. At present the distribution channels that are available in the market are: Direct selling Corporate agents Group selling Brokers and cooperative societies
To make all these channels a success the companies have to be very alert and skillful to know how to use these channels in a proper way. Bancassurance is on of the most upcoming channels of distribution and therefore is being discussed in details.
India has an extensive bank network established over the years. What Insurance companies have to do is to just take advantage of the customers' long-standing trust and relationships with banks. This is a mutually beneficial situation as banks can also expand their range of products on offer to customers, while the insurance company will also earn profits from the exposure. Another advantage is that banks, with their network in rural areas, help to fulfill rural and social obligations stipulated by the Insurance Regulatory and Development Authority (IRDA) recently. Insurance companies should see bancassurance as a tool for increasing their market penetration in India.
It is also good for the one who sees bancassurance in terms of reduced price, high quality product and delivery at doorsteps. Everybody is a winner here. The creation of bancassurance operations has made an important impact on the financial services industry at large. This is though a new concept but it has gained a lot of importance in the industry at present and has a great future.
There has been a plethora of new and innovative products offered by the new players. Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional money-back policies, which is not considered very appropriate for long-term protection and savings. There is lots of saving and investment plans in the market. However, there are still some key new products yet to be introduced - e.g. health products.
INFORMATION TECHNOLOGY AND INSURANCE
In the insurance industry today, there is a clear trend away from selling a broad range of products to a large volume of customers in a one –size-fits-all
manners. Instead of focusing on their different products lines as silos (i.e., life, property and casualty etc) insurers are looking for ways to offer highly targeted insurance products that are tailored to the individuals customers with the highest propensity to buy them. There is an evolutionary change in the technology that has revolutionized the entire insurance sector. Insurance industry is a data-rich industry, and thus, there is dire need to use the data for trend analysis and personalization. With increased competition among Insurers, service have become a key issue. Moreover, customers are getting increasingly sophisticated and tech-savvy. People today don’t want to accept the current value propositions, they want personalized interactions and they look for more and more features and add ones and better service. The insurance companies today must meet the need of the hour for more and more personalized approach for handling the customer. Today managing the customer intelligently is very critical for the insurer especially in the very competitive environment. Companies need to apply different set of rules and treatment strategies to different customer segments. However, to personalize interactions, insurers are required to capture customer information in an integrated system. With the explosion of Website and greater access to direct product or policy information, there is a need to developing better techniques to give customers a truly personalized experience. Personalization helps organizations to reach their customers with more impact and to generate new revenue through cross selling and up selling activities.
To ensure that the customers are receiving personalized information, many organizations are incorporating knowledge database-repositories of content that typically include a search engine and let the customers locate the all document and information related to their queries of request for services. Customers can hereby use the knowledge database to mange their products or the company information and invoices, claim records, and histories of the service inquiry.
These products also may be able to learn from the customer’s previous knowledge database and to use their information when determining the relevance to the customers search request. The insurance sector remains a very competitive market and those companies that are able to best utilize their data and provide their customer with the most personalized options will have the distinct competitive advantage. The insurers that come up to the top will be those who leverage the appropriate technology solutions effectively in order to foster customer loyalty attract new customers and improve operational efficiency by providing common information across their lines of business.
MERGERS AND AQUISITIONS
This is an era of mergers and acquisitions. Private companies including MNC’s are amalgamating the world over to get more competitive edge. Currently, the general insurance industry has been opened up. The question here is that for over two years, eight private companies have operated and
has the size of the cake expanded. We here find that this is not true. The insurers are doing enough to raise the level of risk awareness or are they merely content to compete in the markets organized and established. However sooner or later the private sector players will have to put in place strategies aimed not at winning the existing accounts of the public players but at diversifying markets penetration as a whole. The private players in the future would have to turn their attention to working in the unorganized and under served markets.
What is likely to happen is that the private players would continue to skim the profitable segments of the already organized business in the urban areas? The time has already come for the government of India to evaluate the performance of private companies’ vis-à-vis their declared objective of opening up the industry. However it is high time for the government to realize that importance of merging the public sector general insurance companies into single entity. The resent scenario calls for a better performance from part of each of the public sector insurance companies against each other; or in other words a competition to be the best. The result what we see is the undercutting of premium to retain or wrest business and quoting an uneconomical rate of premium. While this allows one of the Public Sectors Company to win a business form another in this manner. The others suffer a loss and the resultant effect is a cannibalization with a fall in the average premium of the public sector itself. This at many times
brings advantage to the private players who grab the business because of the unethical competition among the public players. The purpose of having four companies all subsidiaries of General Insurance Corporation of India (GIC)– National Insurance Company, New India Assurance Company, Oriental Insurance Company, And The United India Insurance Company; at the time of nationalization was to have competition among themselves –in service and products at the same price. The service
provided by them was also equally good or bad depending on the experience of the customers. Now with real competition coming in with most of the global insurance players setting footprints here, it is felt that the time for merger has come and to enjoy the benefits if the size. It is to be sated that size does matter in insurance business. All over the world’s mergers and acquisitions in the risk-underwriting sector is common. The benefits if the four insurance companies merge will be enormous. The merged entity will enjoy higher underwriting and risk retention capacity; increase in reinsurance premium, reduction in reinsurance outflow, healthy solvency margins, setting right the asset –liability mismatch and reduction in cost. The insurance market thus becomes a gambling place. Had the public sector companies made into a single entity, perhaps the total premium of the four public sector companies in the year 2003-04 would have gone up but 25 percent. But the public sector alone is forced to underwrite the loss making motor third party liability (TPL) insurance.
The public insurance companies insured a loss of Rs 1943 crore on this portfolio on just one year (03-04). The cumulative loss under this portfolio is astronomical. The loss of profitable business in view of undeserved competition among the public sector companies is hampering the subsidization of social insurance including the motor TPL. It is thus clear that it is good for the public sector companies to merge immediately when they are still strong, lest a merger becomes inevitable later after the independent public sector companies fail one after another.
This does not bid well for the public sector, nor fort he insuring public and not for the economic development either. For a progress me require merger of strong public sector companies. Else it would render public sector companies weak and destroy them.
IMPACT OF BUDGET IN INSURANCE
The 2005-06 Budget has dampened the spirit of insurance companies. Hardly any changes have been made in the general insurance sector. The change in the tax structure may have some impact on the life insurers. With the removal of the Section 88 relief there is not much for the insurance players to cheer for.
FDI HIKE IN INSURANCE SECTOR
The Finance Minister commended on the growth in the insurance sector, there was no mention of the steps being taken for increasing FDI in insurance sector. There is a dire need to attract more foreign capital in the
sector. However it seems that the Union Finance Ministry is looking at proposals to delink the FDI limit from the Insurance Act, when it is amended. This move would empower any future government to increase the FDI limit through an executive order without taking the issue to the Parliament. Removal of Sec 88 tax relief: With the removal of the Section 88 tax relief on life insurance products there would be a sever blow on the life insurance companies.
Removal of tax relief will have an adverse impact on the flow of investments into life insurance products. Continuation of Sec 10(10) (d): The continuations of this section create sever blow for the insurance players. Here by the life insurance companies for availing the optimum benefit under this section need to change their strategy. Till now, life insurers were selling life insurance products mostly on tax-benefit grounds. However, now they will have to sell products with an investment pitch. The investment limit in pension plans is unaltered at Rs 10,000 so these plans may not enjoy the luxury of the expanded limit of Rs 1 lakh allowed for investments/expenditures that could be claimed as a deduction from income. This is likely to have an adverse impact on the overall growth of the sector. Pension plans are the only Investment Avenue where specific limits continue to apply.
The size of the market has grown and the size of the insurable population in India is indeed vast and the existing player has managed to cover about onefourth of it. The opportunities before the players are therefore a plenty in terms of target audience. The falling interest rates, the collapse of many small-time financial institutions, the scope for entering related areas like
banking and pensions in a bid for synergy and the promise of e-commerce are some of the other opportunities knocking at the doors of the insurance majors. There is a probability of a spurt in employment opportunities. A number of web-sites are coming up on insurance, a few financial magazines exclusively devoted to insurance and also a few training institutes being set up hurriedly. Many of the universities and management institutes have already started or are contemplating new courses in insurance. Health insurance, which is still in its infancy, is also likely to get a major boost, ultimately leading to improvement in the quality of medical treatment and facilities in the country. Life insurance has today become a mainstay of any market economy since it offers plenty of scope for garnering large sums of money for long periods of time. A well-regulated life insurance industry which moves with the times by offering its customers tailor-made products to satisfy their financial needs is, therefore, essential if we desire to progress towards a worry-free future.
HDFC Standard Life Insurance Company Limited is a joint venture of HDFC Ltd. & Standard life Ltd. It was incorporated on 14th August 2000. Now it is one of the biggest market players of Indian life insurance market. It was awarded as “Most respected life insurance company” by Businessworld. HDFC Standard Life Insurance has crossed Rs. 10,000 crore in Sum Assured. HDFC Standard Life Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life Insurance sector. Both the JV player is highly rated and been conferred with many awards. HDFC is rated 'AAA' by both CRISIL and ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and Standard and Poors. These reflect the efficiency with which HDFC and Standard Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively.
Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 119 crores. The net worth of the corporation as on March 31, 2000 stood at Rs. 2,096 crores. HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai, India. HDFC also has an international office in Dubai, V.A.E., with service associates in Kuwait, Oman and Qatar. Now it has become a market giant in financial sector of India.
SUBSIDIARY COMPANIES OF HDFC LTD.
HDFC Mutual Fund
HDFC Standard Life Insurance
HDFC Home loan HDFC Chubb General Insurance Company Ltd. Intel net Global Services Ltd. Credit Information Bureau (India) Limited Other Companies Co-Promoted by HDFC
HDFC Trustee Company Ltd. GRUH Finance Ltd. HDFC Developers Ltd. HDFC Ventures Trustee Company Ltd. HDFC Venture Capital Ltd. HDFC Investments Ltd. HDFC Holdings Ltd. Home Loan Services India Pvt. Ltd.
Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 175 years, is a modern company surviving quite a few changes since selling its first policy in 1825. Standard Life has been looking after its customers for over 180 years, and currently over 7 million people rely on us for their financial needs. We have assets under management which are worth more than the combined market value of Shell, Reuters, Tesco, Cadbury Schweppes and Marks & Spencer. Standard Life places a great deal of importance on getting investor’s money to work hard for them; that's why its customer has believed confidence in the company. The company expanded in the 19th century from its original Edinburgh premises, opening offices in other towns and acquiring
other similar businesses. Standard Life currently has assets exceeding over £70 billion under its management and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor. THE JOINT VENTURE: HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship. The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture. In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC).
Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.
INCORPORATION OF HDFC SL CO. LTD.
The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited. Our ambition from as far back as October 1995 was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was Realized when HDFC Standard Life was the only life insurance company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance company's in India are measured. HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and Standard Life has a stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of the venture. HDFC Standard Life.
MISSION OF THE COMPANY:
We aim to be the top new life insurance company in the market. This doe’s not just mean being the largest or the most productive company in the market; rather it is 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 Their mission is to be the best new life insurance company in India and these are the values that will guide us in this.
VALUES OF THE COMPANY
SECURITY: Providing long term financial security to the policy holders will be our constant endeavor. We are doing this by offering life insurance and pension products. TRUST: We appreciate the trust placed by our policy holders in us. Hence, we will aim to manage their investments very carefully and live up to this trust. INNOVATION: Recognizing the different needs of our customers, we will be offering a range of innovative products to meet these needs.
M S R G A S M A A L E R T L A T O E E R L A U EF SI N I LA PM A CS AC N LO C O E P &E EU S N L LR E I TS I N G T D & C E UN L O ENS GT AS L & H S R E C R E T A R I
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INVESTMENT MANAGEMENT STRUCTRE:
Investment decisions taken by the HDFC SL Investment Committee which is advised by HDFC AMC. Members of HDFC SL Investment Committee comprising:
Mr. Deepak Parekh
– Chairman, HDFC Ltd.
Mr. Deepak Satwalekar
- MD & CEO, HDFC SL
Mr. Keki Mistry
- MD, HDFC Ltd.
Dr. Nick Taket
- Appointed Actuary & GM (Finance), HDFC Ltd.
Leading fund house in the country. Assets under management of US $ 3.3 billions Common reach & dealing Investment advisory input from the team Investment philosophy aimed at attractive returns with reasonable risk Dedicated investment administration
The year 2004-05 saw HDFC making renewed efforts in fulfilling its social commitment by way of several ongoing as well as new initiatives. The latter included innovative financing of slum upgradation and low-income housing projects, dialoguing with key stakeholders on policy issues, responding to the tsunami tidal wave disaster and staff volunteering and participation in varied
community development activities. HDFC also gained special recognition for its corporate social responsibility (CSR) function in
the form of winning The Economic Times Corporate Citizen Award for 2003-04.
Shelter Assistance Reserve
During the year, the Shelter Assistance Reserve continued to play its role of participating in and supporting various meaningful development initiatives by extending grant funding to over 135 NGOs, philanthropic and voluntary agencies, local bodies and
others. The overall utilization effected out of the Reserve for the year 2004-05 stood at Rs. 497.36 lacs and its segment-wise breakup is highlighted in the chart below:
HDFC Standard Life results for 1st quarter of FY 2005-06
Recording a quarter-on-quarter growth of 167 percent for April-June 2005, HDFC Standard Life saw its new business premium income increase from Rs.53.11 crores to Rs. 142.02 crores. The growth achieved by the company was way above the private sector industry average of 73 percent for the first quarter. In terms of effective premium income (EPI), which gives a 10% value to a Single Premium policy and is an internationally accepted indicator of an insurance company's performance, HDFC Standard Life’s premium income grew 248% from Rs. 38.77 crores to Rs. 134.91 crores. Voted the most respected amongst the private life insurance companies, HDFC Standard Life’s growth in terms of annualized premiums was 211 percent – from Rs. 53 crores in Apr-Jun 2004 to Rs. 165.08 crores in AprJun 2005. A complete product portfolio offering by HDFC Standard Life on the group business front also led to a robust growth of premium from Rs. 1.18 crores to Rs. 8.91 crores in effective premium income terms and from Rs. 2.68 crores to Rs. 16.94 crores in terms of first year premiums – a 532 percent growth.
Commenting on the high growth rate achieved on the back of a robust growth in 2004-05, Mr. Deepak Satwalekar, MD and CEO, HDFC Standard Life said, “this growth is a clear vindication of the strategy adopted by the company of eschewing rapid growth in favor of establishing a firm
foundation in the early years. The decision to establish a geographically dispersed branch network supported by a sales force which has undergone an intensely focused sales training programme to imbibe and practice HDFC Standard Life’s customer-centric approach has helped reach out to more customers, helping them find the most suitable insurance solutions.” Leveraging the parent brand and the wide distribution network, HDFC Standard Life launched a cross media advertising campaign, which has seen brand recognition almost double to one of the highest amongst all life insurers. For the individual business, volume, measured by the number of policies sold, witnessed a 91 percent quarter-on-quarter growth from 26,752 in 2004 to 51,066 in 2005. Average effective premium on the other hand more than doubled from Rs. 12,000 to Rs. 25,000. Contribution to the individual business premium income by the different channels of distribution also changed significantly compared to the first quarter last year. “The strategy to concentrate on activating a limited number of bancassurance partners rather than going in for signing up a large number of banks also paid off.” While the alternate channels of distribution including banks, brokers and other corporate agents accounted for 20
percent of the business last year, their share increased to 36 percent in Apr-Jun 2005. HDFC Standard Life added 33 new offices, enhancing its national footprint and taking the number of offices to 137 by the end of the first
quarter as compared to 53 locations at the end of the first quarter last year. “ Our decision almost 18 months ago, to spread to B and C class towns has paid off with the non-metro locations already accounting for 53 percent of the individual business”. Ongoing training for conventional products and specialized training for unit linked products for around 25,000 financial consultants representing HDFC Standard life has also helped its customers choose the products best suited for their need for protection, savings, investments and pensions. HDFC Standard life had 18,700 financial consultants in the same period last year.
A quick look at the Premium figures: Parameters Total received premium I. New Business ii. Renewal Effective Premium Income Annualized Premium Q1 2004-05 (Rs. Cr.) 75.35 53.11 22.24 38.77 53.00 Q1 2005-06 (Rs. Cr.) 187.45 142.02 45.43 134.91 165.08 % Growth (Q1 05-06 over Q1 04-05) 149 167 104 248 211
Group Business Premium Unit Prices
HDFC Unit Linked Endowment Plan &
HDFC Unit Linked Young Star Plan Unit Prices as at 7/10/2005 Unit Linked Fund Liquid Fund Secure Managed Fund Defensive Managed Fund Balanced Managed Fund 27.2488 27.2488 23.6338 23.6338 20.4583 20.4583 Offer Price (Rs) 21.6105 Bid Price (Rs) 21.6105
OF HDFC STANDARD
INSURANCE COMPANY LTD.
HDFC SL has products which are suited to all the people. It has customized & flexible products. Each of us leads a unique life and so has unique needs.
HDFC Standard Life offers a range of products and invites you to choose the one that suits you best.
Plan Savings Plans Endowment Assurance Plan Unit Linked Endowment Plan Children’s Plan Unit Linked Young Star Plan Money Back Plan Investment Plans Single Premium Whole Of Life Plan Protection Plans Term Assurance Plan Loan Cover Term Assurance Plan Retirement Plans Personal Pension Plan Unit Linked Pension Plan Savings for retirement Retirement Savings with a choice of investment funds Life Insurance at an affordable price Life Insurance customized for home loans Investment with Life Insurance Life Insurance with Savings Life Insurance & Savings with choice of investment funds Financial Security for your child Financial security for your child with choice of investment funds Life Insurance with Savings Benefits
Multi-channel distribution and one of the largest distribution networks in India. Implementing Six-Sigma process. Customer centric products and services.
Superior investment and risk management
1 Million Policies sold within 3 and half years. Company has maximum number of MDRT as well as good number of HNI advisors.
Training process of the company is very strong .
Different plan for different peoples According to the change in surrounding environment like changes in customer requirement.
COMPANY does not penetrate on the rural market at a time. There is no plan for the low income group. Fees for the advisor is high than the other company.
Insurance market is very big, where company can expand its horizon in insurance industry. Though good investment and insurance it is easy to top Indian customers.
The huge insurance market (77%) is left so company
has opportunity to expand our products. To associate with the more number of HNI.
‘OLD HABITS DIE HARD’: Its still difficult task to win the confidence of public towards private company. The company is facing major threats from LIC -which is an only government company. Plans for all income groups are not available which can create adverse effect later on the market share of the company.
The objectives of this summer training project are as follows:1. To study the awareness of consumers about life insurance 2. To get the feedback of the consumers about life insurance product of HDFC SL 3. Estimate the market share of Different life insurance life insurance company in Noida 4. To study the market potential of HDFC standard life insurance company ltd 5. To determine the prospective market for life insurance product of HDFC SL 6. To determine the consumer preferences of purchasing life insurance products.
In order to produce superior value and satisfaction for consumers, companies need information at almost every turn. Companies also need an abundance of information on competitors, resellers and other factors and forces in the market-place. Now-a-days, marketers are viewing information not only as an input for making better decisions but also as an important strategic asset and marketing tool. In today’s more rapidly changing environment, managers need up-todate information to make timely high-quality decisions. It is said that running an organization without adequate marketing information reduces business to guess work. In such cases, managers running an organization fails to obtain right information, in the right form, at the right time, which hampers in the decision making process. Managers can obtain the needed information in a number of ways, viz., internal data, marketing intelligence, marketing research, etc. In addition to information about competitor and environmental happenings, marketers sometimes need formal studies of specific situations, managers need to go for marketing research.
Defining the market research
Marketing research may be defined as:“The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.” In 1987, the American Management Association defined marketing research as:“Marketing research is the function which links the customer and public to the marketer through information that is used to identify and define marketing opportunities and problems, refine and revaluate marketing actions; monitor marketing performance and improve understanding of marketing as a process.” The following steps are followed in marketing research:-
Defining the problem and research objectivesThe starting point of any market project is to define the problem and agree on research objectives. Objectives are a statement of why the research is being carried out and links to what information is being sought.
A plan of how this objective is to be met and how the information is to be obtained is then required. The main elements of an effective research plans are as follows-
1. Research objectives 2. Information coverage 3. Accuracy levels 4. Research methods 5. Resources 6. Time table
It is a vital part of the whole process. When data is gathered, collected, and presented in some understandable form to people such as table or graph, it becomes information. To meet the manager’s information needs, the researcher gathers secondary data, primary data or both. Collection of primary data (raw data)It involves primary or field research i.e., when data is directly collected from people through research questions or observations. Collection of secondary dataIt involves desk research which is obtaining data or information that has already been collected by others for their own purpose. Conducting market research survey-
When we undertake research to extract and evaluate quantitative and qualitative information regarding a sample of people as representative of the total market, we refer the study as survey.
There are four popular methods of obtaining data from respondents to questions that form a part of market research surveys, namely: 1. Telephonic interviews 2. Personal interviews 3. Observations 4. Questionnaire
Market research field-work is faced on sampling. Once a questionnaire is designed, the next step is to take sample of people to be interviewed to ensure that they are the representatives of the total people we wish to reach. Sample may be selected in two ways1.Randomly 2.Non-randomly Sampling can be practically planned in three steps: 1.Defining the population to be sampled. 2.Defining the sample size and structure. 3.Choosing the method of selecting the sample.
Data analysis and interpretation
The end result of field-work is the complete questionnaire or similar records. Individual questionnaire are of a little value and interest. What is required is aggregated data for the whole sample, as far sub-samples. Data analysis is the process of producing this aggregated data from the individual response as raw data.
Reporting the findings
After analysis of the field-work data, the results of the research project need reporting. The reporting stage is therefore concerned with effective communication of the result to those who are going to take some action on the basis of what they learn the research results. During the completion of this research project, the researcher covered a portion of the Noida city. The area covered is as follows:-
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 -
a) Temporary needs / threats:
The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc.
b) 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.
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.
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.
Insurance is not necessarily an investment from which one expects to get one's money back. Nor is it gambling. A gambler takes risks, while insurance offers protection against risks that already exist. Insurance is a way to share risk with others. Since ancient times, communities have pooled some of their resources to help individuals who suffer loss. About 3,500 years ago, Moses instructed the nation of Israel to contribute a portion
of their produce periodically for "the alien resident and the fatherless boy and the widow." Insurance is defined as a cooperative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to ensure themselves against that risk. Risk is uncertainty of a financial loss. The insurance is also defined as a social device to accumulate funds to meet the uncertain losses arising through a certain risk to a person injured against the risk.
LIFE INSURANCE IN INDIA
The Indian Insurance market has a grand
development of insurance dates back of the 19
the Europeans started the Oriental Life Insurance Company, Calcutta in 1888. The first Indian Insurance Company Bombay
Mutual Life Insurance came into existence in 1870 to cover Indian lives at normal rates. The year 1870 is also important in the sense at British Government for the first time act that year. Four years later Firoz Shah Mehta one of the doyen of Indian Financial Sector, Oriental Government established the Oriental Government Security Life Assurance Company and after that, many Insurance companies in surfaced on Indian soil. However, the first Indian Insurance act was passed on 1912, again in 1938 and an amendment in 1950, when it was nationalized however the sector was once again thrown open to the private sector in December 1999 followed by the and establishment Development of I.R.D.A. in (Insurance April 2000.
The Indian Insurance Industry was dominated by two states Insures i.e. The Life Insurance Corporation in Life Insurance and the General Insurance Corporation
in general insurance before 2000 which were created after the nationalization of the Life and non Life sector in 1956 and 1972
respectively. In Dec’99, the IRDA Act was passed which limited foreign investors to a 26% cap on equity participation, and
minimum capital requirement of $20 Million. At present, more than 12 private players are in the market and some are in the pipeline. The advent of the new kids poses to LIC to somewhat extent, for which LIC will have to change its current policies regarding marketing and product management.
LIFE INSURANCE SCENARIO IN INDIA
Since 1956, with the nationalization if Insurance Industry, the states run Life Insurance Corporation of India (LIC) has held the monopoly in country’s life insurance sector. General Insurance Corporation of India (GIC), with its four subsidiaries, was its counterpart in the casualty sector. Over the time, taking advantages of its monopoly and virtual prerogative in
establishing the premiums, LIC has evolved into a monolith.
With around 60,000 agents in every nook and corner of the vast country, it has created an enviable brand name, particularly among the rural population of the country. It has around $40 billion as its financial sector. However, on the qualitative side, it
has every little pride in, and there lies the potential for players to challenge this behemoth. As typical with monopolies, the premiums rates charged LIC are among the highest in the world, and its track record in customer service can at best be called shabby. With a huge unionized, rigid workforce mostly in clerical category. LIC run the risk of high fixed cost, which will be the deciding factor productivity in the competitive scenario. While boasting fullscale automations of its operation, the truth is that its technology outdated. The new p[layers, with the state- of-the- art technology under the belt, will be in advantageous position. 80% of LIC’s business is procured by 20% of its ill-trained agent force. The foreign player, with the domestic partner’s string brand value, can test the unconventional distribution channels like brokers, the
Internet, the banking distribution system etc., although foreign players may be tempted to keep their operations in big cities for the ‘cream layer’ of the society, the real market lies in rural India, which accounts for the lions share of LIC’s present business. The foreign players must adapt to Indian realities, the well published failures of the world famous consumer goods
companies like Electrolux, Whirlpool, Reebok, Nike etc. to gauge the Indian psyche and sentiments demonstrate the concept. They failed in the area of realistic pricing, product promotion
and reaching to the consumer. The foreign companies know the “ground realities” to the details.
REVIEW OF INSURANCE SECTOR
India is having population of 1 Billion with a middle class population estimated up to 300 million. It being the 5
economy in the world in terms of Purchasing Power Parity (PPP) has a GDP growth rate of over 6% per year on an average for the last decade. The saving rate is estimated to be about 26% of the GDP. In the total population, the insured the population is estimated to be about 70 million.
PRIVATIZATION OF INSURANCE
The Indian Insurance Sector has finally opened up and it is with much anticipation that new players are awaiting their share of market. License have been issued to both Indian and Foreign Players- Reliance, HDFC Standard-Life, Max India-New York, Royal Sundaram Alliance, ICICI Prudential, IFFCO-Tokyo
Marine, Bajaj Allianz, Birla Sun life, Tata AIG, AVIVA Life Insurance, SBI Life, Om Kotak Mahindra are some of the
entrants into the newly liberalized Indian Insurance market.ICICI Prudential and HDFC- Standard Life have issued their life policies from the private sector after 45 years.
The first move for the liberalization came with the Malhotra Committee Report in 1993 which recommended the privatization of insurance, setting of insurance regulatory authority and restructuring the government monopoly LIC and GIC and its subsidiaries IRDA Act passed in November 1999 had set ball rolling for the entry of Private Players in domestic sector.
LIBERALIZATION OF INSURANCE SECTOR
Liberalization commitment of the country to help in disciplining future economic policies will include the insurance reforms. When world over insurance market has been opened up. India cannot remain in isolation. History has shown that it is very difficult to proper in isolation.
Globalization is the new economic reality, which is here to stay, heralding a new era of Insurance in India. With the opening of the insurance industry, Indian stands to gain with the following major advantages.
• Globalization consumer for
reasonable and affordable pricing. • The customer will get quicker service • It will enhance the saving rate.
• Long-term funds for infrastructure development will be available to the country. • It will secure for India larger inflow of foreign capital need to sustain our GDP growth
ADVANTAGES OF LIBERLIZATION
• The opening up will enable the country to save more and invest more for the development in infrastructure.
distribution channels the market is bound to develop by leaps and bounds • In the next few years it is established that the Indian insurance sector will develop a better understanding of consumer requirement leading to more satisfaction of consumers. • Lead to increase in employment.
• Social and rural obligations will also be served as IRDA has come out with clear regulation in this regard, which makes the development in this area mandatory. • Global competition will help in building expertise with their global practice.
Unlike west, in India, insurance is sold as the instrument of saving. About 18% of the policies are sold as death risk consideration. Impression about LIC is that they are not meant for the market requirements. They are only intended to find
customers. Insurance awareness is therefore low. Unit linked insurance products are not available. Insurance covers are expensive and returns are low. Turn over the agent is high. The
choice available to the insuring public is inadequate in terms of services, products and prices. These are the areas of weakness, which may act as opportunities for new players who may work to offer policies to the customer with the value additions at a competitive premium with much improved servicing.
The IRDA governs the critical aspect of Insurance Sector Including: • The number and role of Private Sector operates including-Roman area intermediaries. • Regulate covering investment, solvency norms • Product Range • Accounting Practices • Consumer Protection Norms • Ensuring developed • Fixing of License fee the Rural and Health Insurance are
Perhaps all the most critical regulation is the 26% equity Capital for Foreign Insurers. This regulation bring in issues regarding management control and one of the reasons for joint venture
breaking up Cubb-Kotak, Liberty-Dabur, AllState-Dabur, Manu Life-UTI are some of the broken up alliances.
(Insurance Regulatory and Development Authority) The regulatory body for insurance IRDA has been established with the following mission: "To protect the interests of the policy holders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto."
Private Players in Indian Life Insurance
The major players in Indian life insurance sector include: * Allianz Bajaj Life Insurance Company Ltd., * Aviva Life Insurance Co. India Pvt. Ltd., * AMP SANMAR Assurance Company Ltd., * Birla Sun Life Insurance Company Ltd., * HDFC Standard Life Insurance Company Ltd., * ICICI Prudential Life Insurance Company Ltd., * ING Vysya Life Insurance Company Private Ltd., * Life Insurance Corporation of India * Max New York Life Insurance Co. Ltd., * MetLife India Insurance Company Pvt. Ltd., * Om Kotak Mahindra Life Insurance Co. Ltd., * SBI Life Insurance Company Ltd., * Sahara India Insurance Company Ltd.,
* Tata AIG Life Insurance Company Ltd.,
The market share for LIC is 90 percent and other players share only the remaining 10 percent. The insurance sector has been opened up in India, as there was an urgent need. The international experience indicates those country with a liberalized insurance sector have witnessed a rapid growth in premium volumes enhancing the domestic saving rate. This happened in China, Malaysia and Singapore where a competitive market has led to improvement in Services and quicker settlement of claims. It is also important to note that competition will bring about advancement in information, communication and technology. And rightly therefore a decision was taken by the Government of India to open up Insurance sector. The establishment of IRDA in the month of April 2000 has been important development in this direction, making the end of monopoly in the insurance sector.
W hat if I already have Life Insurance?
As an individual, for the extent of financial protection you need is different from that as a married man which in turn is different from that as a parent. At each life stage, it is necessary to reevaluate the amount of protection and provision you require and adjust for the same. Below are some of the events in your life for which you should re-evaluate and plan your life insurance needs.
Marriage Birth of a child Schooling of child College education of child Marriage of child Retirement
Let us take an example to understand the need for Insurance:
Mr. Amit is 45 and self-employed. His wife Nandini, who is a housewife, looks after their two children aged 3 and 7 years. They stayed in a rented accommodation, where the rent is
Rs.15000/- per month. Mr. Amit has taken a loan of Rs. 2 Lakh. His monthly earnings on average are Rs.40,000/-. Mr. Amit
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:
• The monthly income, previously provided would stop. • His wife and children may have to seek financial assistance from other relatives. • His wife may not have enough money to pay back the loan of Rs.2 lakhs. • The families have to move into a cheaper
accommodation. • The widow may have to take up work to earn money.
• The education of their 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. Amit taken a 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. Amit’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.
How much insurance do I need?
The main purpose of life insurance is to provide a financial cushion to your loved ones in the event that something unfortunate should happen to you. One must provide enough, so as to generate a future income stream that will take care of the financial needs of their dependants.
How much insurance you need depends on your annual income, your expenses and your existing assets.
WHY INSURANCE IN INDIA
• Only 22% of the insurance population has been extended cover. Market penetration is low and the potential to exploit is high. • Insurance premium per capita is very low.
• Lack of comprehensive social system benefit and welfare means that demand for pension products is high. • Huge middle class of approximately 300 Million. • Existing insurance company score low on customer service front.
The insurance market registered growth in the Asian region even though India’s share in global insurance is less than 0.5% (1988) as compared to USA (24.2%) and Japan (21%). Studies have reveled that in an emerging market, as disposable income rises, Insurance premiums as a ratio of GDP shoots up. The
confederation of Indian Industry projected a growth of Life Insurance premiums from Rs. 350 Billion at present to Rs.140 Billion. The growth of non-life insurance premium is expected to increase from 75 billion to 375 billion. Out of which, only 10% is tapped by the existing insurer. Insurance even more than banking is a volume game. A very exclusive approach in view is unlikely to provide
meaningful numbers. Currently, insurance is bought for the purpose of tax-benefits. A higher percentage of business is in the rural market. The share of rural new business insurance total new business is 55% in terms of policies and 47% in terms of sum assured. However, this needs to be viewed in the light of some recent issues that have been raised regarding as to what constitutes the rural market. Therefore, private insurers will be
best served by middle market approach, targeting the customer segments that are presently unexploited. How many Indians are aware that LIC has more than 60Products and GIC has more than 180Products? Not only there is a reduction in the premiums of Life Insurance products have long overdue since Indian morality rate has decreased three folds in the last 50years. There is also scope to increase the yield on life insurance policies (presently 6%) with proper risk
management in place. It is been debated that insurance business does not produce profit in the first five years cross subsidization is a feature of Indian market. Even the first portfolio vote that is considered profitable, cross subsidizes other departments. Tariffs reduction is likely to reduce profits; further insurers have to institute proper claims management progress in order to extract efficiencies. At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The government is soon to present a new model of taxing life insurance companies at international rates. New entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that
alliance related to distribution rather than to produce or technology will prove most valuable in the long run. Banks and financial companies will emerge, as attractive distribution
channel for this insurance trend will be led by two factors, which already apply in other world market. First Banking food insurance, fund management and other financial services
companies are being to increase their profitability and provide maximum value to their customers.
Therefore, they are themselves looking for a range of products to distribute. In other market notably Europe; this has resulted in bank assurance. Bank entering into the insurance business in India to bank hope to maximize expensive existing network by selling a range of products more of a loss alliance between insurance and bank than a formal ownership. Some Indian entrants like ICICI, HDFC and Reliance hope to ride their existing network and customer bases.
NEED OF BRAND NAME IN INSURANCE
Branding is the new key challenge in the financial services industry. Life in the 21 century will be longer with more choice in more field of activity. The financial consequence of the increased life span is particularly likely to be tough. Inevitably, this will lead to more complexity, which in turn necessities greater clarity and appeal from the service providers.
Branding is more important in the financial services market which not only faces the problem of securing and retaining customers in an increasing competitive market place but also experience the need for heightened relevance of the brand positioning in a world where brand has been termed as new religion.
Life Insurance Company LIC ICICI Prudential HDFC StandardLife Birla Sunlife Premiums 0.32 0.67 5.97 14099.66 Sum Assured 5.52 30.15 100 2,03,085.28
Focus and strategies are essential for development of brand in any sector but the less tangible world of financial products historically has escaped the branding issues that have governed development and culture in other industries.
If there was an industry, which is least, considered as an essentiality it would be the insurance industry. It was always felt as abstract services or a fall back, more likely a safety net. But it is more of shifting through competitive products to select most
appropriate one, but with liberalization of the industry, players have to realize the need for branding in a competitive
environment. Insurance companies need to strive for a greater customer focus regardless the customer is the end or the intermediary.
Market Share Among Private Companies
Market Share Among Private Competitors
6% 6% 6% 9%
1% 4% 4% 1% 38%
ICICI Prudendial MAX. NYL. Ing Vyasa
Birla Sunlife TATA Aig Metlife
HDFC Standard OM Kotak AMP Sammar
Bajaj Allianz AVIVA Life
M ARKET P OTENTIAL C OMPANIES
P RIVATE L IFE I NSURANCE
It has been found out that:
percent of the Indians prefer LIC than any other
'Prevention of Loss', 'Assured Returns' and 'Long term Investment' are the important factors
influencing Indians in opting for Life Insurance
Only few of the Indians are aware of private life insurance companies.
Most of the Indians are of the opinion that private insurance companies would be able to perform well in the long run.
Most of the Indians are interested in 'Money back' policies than others
Most of them are interested in insuring for an amount of Rs. 1- 2 lakhs
There is significant relationship existing between monthly household income and amount insured
Based on the monthly household income, Indians prefer to their investment needs like bank deposit,
Post office schemes, real estate, insurance, gold, chit funds, shares etc.
Agents are mostly responsible for selling insurance products in India
Total number of Respondents approached Respondents Responded Response Rate Number of male respondent Number of female respondent (1) What do you understand by insurance? 1400 1000 71.42% 680(68%) 320(32%)
Pvt. Govt. Business Self Unemployed Comments Employees Employees Man employed Risk 95 50 45 45 30 minimization Investment 125 40 60 35 30 Tax saving 120 70 45 15 70 Cant say 45 20 15 25 20
Number of respondents
140 120 100 80 60 40 20 0 Pvt. Employees Govt. Employees Business Man Self employed Unemployed
Risk minimization Investment Tax saving Cant say
LEARNING EXPERIENCE DURING THE TRAINING
My, project entitled -“Consumer awareness, Preferences & estimation of
market share” at Noida (UP). It has been a great experience, while during a training
in Noida city. In, my life it was my first experience to get people knows of different categories through interviewing and getting fill up questionnaires from them. After doing my survey, I learnt that at each and every level there is a competition. GAINS
1. The first and main thing I gained is I removed my hesitations 2. About the consumer behavior towards Insurance. 3. About the current situation of market condition. 4. About handling the work force. 5. How to get people convince for buying the product. 6. How to increase the sales force. 7. Consumer preferences towards insurance. LOSS 1. During the training some if the sample respondents does not give their full information and also hesitate to fill up the Questionnaires. 2. The sample selected by the research was of 1000 consumers so due to a small sample out of a big universe, the results may not be completely correct. 3. It was too hot, outside, and places were far from each other.
The consumer awareness for insurance is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. The private and foreign insurance companies have to immediate steps in
appointing more number of agents and/or advisors in addition to the employees as it has been found out that agents are the best channel to reach the general public regarding selling of insurance products. The private and foreign insurance companies have to concentrate on the factors like 'Prevention of Loss', 'Assured Returns' and 'Long term Investment'. They can also focus on an insurance amount of Rs. 1 – 2 lakhs with 'money back policies'. Hence, the market has potential. The private and foreign insurance companies that are taking immediate
Dear Sir, / Madam I, Rajesh Kumar a MBA Student from “Institute of Professional Excellence & Management” (UP Tech. University, Lucknow) A-13/1, S.S. G.T. Road Industrial Area NH-24, Ghaziabad-201001 (U.P.) is conducting a market survey to study the consumer “Consumer awareness, Preferences & estimation of market share” of Different life insurance companies at Noida (UP). Which is a part of my summer training in the HDFC SL CO. Noida. I will be highly obliged if you could spare some of your valuable time in filling up this questionnaire. 1: -. Users Identification • • • • • • • • Date…………………
Respondents Name……………………………………. Address………………………………………………… Age…………………………………………………….. Sex……………………………………………………… Marital Status…………………………………………… Contact No…………………………………………….. Educational Qualification……………………………… Occupation/Profession: -
A. Pvt. Employee C. Businessman E. Unemployed
B. Govt. Employee D. Self employed
_______________________________________________________________________ _ (1)What do you understand by insurance?
A. It is a mean of minimizing risk. C. It is a mean of tax saving.
B. It is a mean of investment D. All of these.
(2) Is insurance necessary for you? A. Yes B. No
(3)According to you; whether insurance policies are in the direction of public welfare? A. Yes. B. No
(3) Do you have any life insurance policy? A. Yes. B. No
(4) From which company you have purchased it? A. LIC C. HDFC SL If, others please mention it. ……………………………………… (5) Which type of policy do you have? A. Money back C. Retirement Plan. B.Unit linked D.Children Plan. B. ICICI Pru. D. Others.
(6) Why you have purchased it from that company? A. It has good financial base. C. Its service Quality is good. B.It is experienced in its fields D.My friend/relative is working with that company.
(7) How you came to know about that company? A. By advertisement B. By friends/Relatives
C. By agent
(8) Are you planning for purchasing any life insurance policy? A. Yes B. No
(9) From which company you are planning to purchase it? A. LIC C. HDFC SL B. ICICI Pru. D. Others.
If, others please mention it. …………………………………………….. (10) Which type of policy you are planning for? A. Money back C. Retirement Plan. B.Unit linked D.Children Plan.
(11) What matters you in a life insurance company? A. Low premium rates C. High rate of returns B. Better Quality of service. D. Strong financial base.
(12) By which mean of insurance advertisement you appealed more regarding insurance? A. By television advertisement C. By radio B.By print media C. By cold callings
Brochures / Information Booklets
Product List L.I.C. L.I.C. Annual Report, 2004 ICICI Annual Report, 2004 HDFC Annual Report, 2004
Malhotra Committee Report on Reforms in the Insurance Sector, 1993. The Insurance Regulatory and Development Authority Bill, 1999.
Newspapers / Magazines
• The Economic Times • The Insurance Times
• Insurance Post
Books • Business Statistics by Addition 2002, New Delhi, Dr. S.P. Gupta, Dr. M.P. Gupta, Websites • • • • www.licoflndia.com www.lrdaindia.org.com www.indiainfoline.com www.icici.com • www.hdfc.com • www.google.co.in