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 To study of Financial Planning In insurance sector.  To study the importance of Insurance in today’s scenario. • Brand awareness of various private insurance companies. • Preference among different investment tools. • Purpose of buying insurance. • Preference in choosing channel for buying life insurance. • Quality of service provided by agents and clients satisfaction Level. • Customer’s perception of improvements brought in by entry of Private Insurance Companies.  To generate leads for Unit Linked Insurance and the Unit Linked Pension Plans, by interacting with walking and existing customers of the company.


2. Methodology
The study of Financial Planning in insurance sector and particularly the insurance sector covers data collection through observation, questionnaire and interview of consumers. 2.1 Type of research: EXPLORATORY: Type of research carried out was EXPLORATORY in nature; 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. 2.2 Data Collection:   Primary data Secondary data

Data used for the research work was primary in nature.

Method of collection: Field procedure for gathering primary data included observation and interview schedule in which the questionnaires were filed by the interviewer. Personal interviews through self administered survey was done to collect the data, market research was undertaken, 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. • Inducing the respondents to co-operate. • Giving instructions as to what is wanted. • Identifying the needs to be known. 2.3 Limitations: The following were the limitations that were there during the course of the study: 1. Limited time period. 2. Less number of respondents. 3. Biasness of the respondents.


3. Industry Profile
3.1 Overview With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent 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 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. This it-self is an indicator that growth potential for the insurance sector is immense. Historical Perspective The insurance came to India from UK; with the establishment of the Oriental Life insurance Corporation in 1818.The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country.


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

Competition Private Companies with a minimum paid up capital of Rs. Malhotra.1 billion should be allowed to enter the sector. 6 .3. Malhotra Committee.headed by former Finance Secretary and RBI Governor R. No Company should deal in both Life and General Insurance through a single entity. In 1993. 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.2 Insurance Sector Reforms Prior to liberalization of Insurance industry. In 1994.was formed to evaluate the Indian insurance industry and recommend its future direction. 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%. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Life insurance was monopoly of LIC. 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.N.

Insurance companies must be encouraged to set up unit linked pension plans. STATISTICS (INDIAN & GLOBAL) This section gives the users important and detailed statistics of the Indian as well as the Global insurance industry. Computerization of operations and updating of technology is to be carried out in the insurance industry.Regulatory Body The Insurance Act should be changed. 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.521.a part of the Finance Ministry.should be made independent Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. 7 . Controller of Insurance.2 billion while the nonlife insurance market is placed at $922. These statistics would give important insights of where the respective markets are headed for. An Insurance Regulatory body should be set up.4 billion. • The global life insurance market stands at $1.

Insurance companies assume the risk associated with annuities and insurance 8 . By purchasing insurance policies.76 crore and the investable fund generated was Rs.6 billion global insurance market and Japan stands next with a 20.2491. • Indian insurance market is set to touch $25 billion by 2010. insurance carriers are large companies that provide insurance and assume the risks covered by the policy. and fire and storm damage.41% share.62% share. on the assumption of a 7 per cent real annual growth in GDP.2843 crore in 1999-2000. 3. • • India's life insurance premium as a percentage of GDP is just 1. individuals and businesses can receive reimbursement for losses due to car accidents. The insurance industry consists mainly of insurance carriers (or insurers) and insurance agencies and brokerages.• The United States itself accounts for about one-third of the $2443. • Out of one billion people in India. and loss of income due to disability or death. medical expenses. • India takes the 23rd position with US $9.933 billion annual premium collections and a meager 0.77 per cent. Insurance agencies and brokerages sell insurance policies for the carriers. The income derived by GIC and its subsidiary companies through investment was Rs. theft of property. In general.3 NATURE OF INDUSTRY The insurance industry provides protection against financial losses resulting from a variety of perils. only 35 million people are covered by insurance.

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. 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. 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. and how much will be awarded. as well as the likelihood that the insurance carrier will actually have to pay. 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. the companies states the length and conditions of the agreement. The premium charged for the policy is based primarily on the amount to be awarded in case of loss. Direct carriers are responsible for the initial underwriting of insurance policies and annuities. Direct insurance carriers offer a variety of insurance policies. exactly which losses it will provide compensation for.policies and assign premiums to be paid for the policies. while Reinsurance carriers assume all or part of the risk associated with the existing insurance policies originally underwritten by other insurance carriers. In the policy. 9 . In order to be able to compensate policyholders for their losses. insurance companies invest the money they receive in premiums.

The family is put to hardship. Death/disability may occur when one least expects it. • What is Life Insurance? Human life is subject to risks of death and disability due to natural and accidental causes. Risks are unpredictable.Property-casualty insurance protects against loss or damage to property resulting from hazards such as fire. 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. Liability insurance shields policyholders from financial responsibility for injuries to others or for damage to other people’s property. combine both property-casualty and liability coverage. A Whole Life insurance product provides a fixed amount of money on death. When human life is lost or a person is disabled permanently or temporarily. 10 . Most policies. A Term insurance product provides a fixed amount of money on death during the period of contract. There are a number of life insurance products which offer protection and also coupled with savings. there is a loss of income to the household. such as automobile and homeowner’s insurance. and natural disasters. Companies that underwrite this kind of insurance are called property-casualty carriers. theft.

women. but also the full amount of money assured on death during the period of contract. film actors and unorganized laborers. middle-aged persons. 3. insurers have to give the various features of the products at the point of sale. As per regulations. An Annuity product provides a series of monthly payments on stipulated dates provided that the life assured is alive on the stipulated dates. youth. 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. and also rural people.4 INDIAN INSURANCE SECTOR 3.A Money Back Assurance product provides not only fixed amounts which are payable on specified dates during the period of contract. Insurers appoint insurance agents to sell their products. There are a variety of life insurance products to suit to the needs of various categories of people—children. 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. Life insurance products could be purchased from registered life insurers notified by the IRDA. old people. They ought to understand the claim procedures so that they know what to do in the event of a loss.5 REGULATORY BODY 11 .

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. 1999. 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. The primary legislation that deals with insurance business in India is: Insurance Act. 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.Insurance is a federal subject in India. 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 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. 1938. and Insurance Regulatory & Development Authority Act. promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.” 3.5 IMPACT OF LIBERALISATION The introduction of private players in the industry has added to the colors in the dull industry. 12 . to regulate.

60% Followed by Bajaj Allianz (3. LIC market share has decreased from 95% (2002-03) to 81 %( 2004-05). 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 has the current market share of 79%. The market share was distributed among the private players. As a result LIC down the years have seen the declining phase in its career. Among the private players ICICI Prudential has the maximum of appx 5. Below is the table that shows the market share of various players of the industry.11%. The new players have improved the service quality of the insurance. 13 .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.27 %) and HDFC Standard Life of about 3.

and.1 COMPANY NAME LIC ICICI PRUDENTIAL BAJAJ ALLIANZ HDFC STANDARD LIFE BIRLA SUNLIFE TATA AIG SBI LIFE MAX NEWYORK AVIVA LIFE ING VYSYA OM KOTAK LIFE AMP SANMAR METLIFE RELIANCE LIFE MARKET SHARE 79.38 0.3.63 3. There are a number of options to choose from for a career in Insurance. better packaging.32 1.54 0.27 3.82 0.30 5. there will be innovative products. Ideally an insurance company will have openings in the following fields: 14 .24 0. 1.1 Market share of various Players The following companies have the rest of the market share of the insurance industry.33 0.90 0.05 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. improved customer service.11 2. most importantly.6.66 0.45 1. With private players now in the field. greater employment opportunities.

but also revises both products and prices. • In the life insurance business. Whereas. An actuary not only fixes the premium rates for new products. he takes care of risk management. in the general insurance segment.• • • • • Actuaries Underwriter Surveyor Investment Marketing & Distribution Actuaries • Evaluates the risk for companies to be used for strategic management decisions. Agents/Brokers: 15 . 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 underwriter is expected to filter the "bad or substandard lives". Actuaries use their analytical skills to predict the risk of writing insurance policies through the use of mathematical. statistical and economic models.

g. Insurance agents and brokers can find openings in the health insurance sector. sell mutual funds. retirement planning counseling or even provide other services. for e.7 CURRENT SCENARIO INSURANCE MARKET IN INDIA India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. annuities etc. 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. Their job is to assess the actual loss and avoid false claims. • • Sales/Marketing: And who can forget the guys who make and break a brand. 16 . The insurance sector in India has come to a position of very high potential and competitiveness in the market. They usually function only in non life business. • Surveyor/Loss Assessor: • Surveyors are professionals who assess the loss or damage and serve as a link between the insurer and the insured. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. 3. financial planning services.• Insurance agents may work for one insurance company or as independent agents selling for several companies.

Indians. CUSTOMER SERVICE Consumers remain the most important centre of the insurance sector. different in price. The Indian consumer should be ready now because the market is going to give them an array of products. 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. Foreign players are bringing in international best practices in service through use of latest technologies. have always seen life insurance as a tax saving device. It therefore makes sense 17 . 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. 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. The one time monopoly of the LIC and its agents are now going through a through revision and training programs to catch up with the other private players. The concept is very well established in the country like India but still the increasing use of other sources is imperative.Innovative products and aggressive distribution have become the say of the day. How the customer is going to make his choice will determine the future of the industry. DISTRIBUTION CHANNELS Till date insurance agents still remain the main source through which insurance products are sold. features and benefits. are now suddenly turning to the private sector that are providing them new products and variety for their choice.

However. this channel can be expensive and it is a time consuming sales process. Unit Linked). This is the main distribution channel due to the complexity of most insurance products (Endowment. Therefore they are looking to the diverse areas of distribution channel to have an advantage. 18 . 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.LIC has already well established and have an extensive distribution channel and presence. This tends to be the focus of most companies due to its past success as well as its ability to deliver the right advice. New players may find it expensive and time consuming to bring up a distribution network to such standards. 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. An agent is the public face of an Insurance company. 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. alternative channels of distribution. Whole of look at well.balanced.

: Term insurance products with Insurance products.g. they can Improve overall customer satisfaction resulting in higher customer retention Levels. • Loans. By providing customers with both the services under one roof. Advantages to banks • • Productivity of the employees increases. Bancassurance. Advantages to insurers • Insurers can exploit the banks' wide network of branches for distribution of products. The penetration of banks' branches into the rural areas can be utilized to sell products in those areas. • Increase in return on assets by building fee income through the sale of Can leverage on face-to-face contacts and awareness about the financial Banks can cross sell insurance products e. tries to exploit synergies between both the insurance companies and banks. • Conditions of customers to sell insurance products. 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.BANCASSURANCE Bancassurance is the distribution of insurance products through the bank's distribution channel. 19 . To put it simply.

Since banks have already established relationship with customers. investment and purchase capability can be used to customize products and sell accordingly. it is a premium to be paid on time. For the investment-minded. as banks are a regular go. i. • Advantages to consumers • Comprehensive financial advisory services under one roof. mutual funds. The contractual guarantee is the promise to pay. Further service aspect can also be tackled easily. For others it offers liquidity since cash can be borrowed when needed. • • • Enhanced convenience on the part of the insured Easy accesses for claims. 1) Insurance Buys Time and Money 20 . Innovative and better product ranges WHAT DOES LIFE INSURANCE HAVE TO OFFER? Life insurance is many different things to many different people. For some. it denotes a constantly growing capital account and numerous other benefits. spending habits. insurance services along with other financial services such as banking.• Customer database like customers' financial standing. personal loans etc.. backed by one of the oldest and most stably regulated financial industry operating in the Indian sub-continent today.e. conversion ratio of leads to sales is likely to be high.

Permanent life insurance is designed on the concepts of long-term flexibility. 5) Financial Security 21 . 3) Multiple Applications The future is uncertain for each and every one. The investment benefit is paid to the insured's beneficiaries after his death or it can be used during the life as well. 4) Enduring Elasticity Since life insurance is flexible enough to serve several needs. the reason being that life insurance proceeds are paid to the insured's beneficiaries in case of death. Insurance provides large amounts of cash that will keep the lifestyle for the survivors the way it was before the insured's death. it offers absolute and complete peace of mind.People like to refer to life insurance as time insurance. the insured can keep several long-term goals in mind once he or she invests in the insurance plan. The money proffered by life insurance helps buy time to adjust to the change of circumstances. whether or not the individual may live to see it. No one knows how long he or she will live. 2) Insurance Offers Peace of Mind For the person who buys an insurance policy. 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. He or she knows that the decision made by him will provide sound benefits in the future. The cash value of the policy can be allocated towards augmenting the monthly income during the retirement years. Leisure years should be turned into pleasure years.

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. Life insurance offers complete financial security. No industry can back its products with reserves and surplus as sound as those of the insurance industry. 6) Regard for Family The purchase of life insurance clearly displays care and concern for the people the policy owner loves.The insurance policy offers contractual guarantees to people looking for peace of mind when they buy life insurance. The purchase of life insurance demonstrates concern for a family's future financial well being. 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 22 . OPPORTUNITIES FOR INSURANCE COMPANIES In the now open sector on insurance. 7) Insurance is Safer No financial institution can do what life insurance does. For generation after generation. life insurance has been acclaimed as the very benchmark of security against which the other industries are measured.

Insurance as a sector requires players who are strong financially and are willing to wait for returns. 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. Thus the 23 . • Trained professionals to build and sell the product. Their confidence can be bolstered only if there is an open and a transparent policy guidelines. • An open and transparent environment created under the IRDA. looks for. These are not exactly what any player. To cater to the largest democracy in the world is by no means a cakewalk. Insurance has always been used as a Tax saving tool. He makes you pay.Indians have always been wary of employing their hard-earned money in a venture that will pay them on their death. 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. no less. regularly. It creates an air of uncertainty in all the decision making process. It is said that the insurance agent is the best salesman in the world. Insurance profits are directly related to number of insured and this is in turn related to the reach. 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. an amount promising to pay back only on your death. No more. • A well-established distribution network. be it Indian or foreign.

00. SPECIAL PROVISIONS The Income Tax Act and Life Insurance policies • Under Section 10(10D). 2002. a grievance redressal system to address the complaints of policyholders. • Section 80C provides a deduction up to Rs. This will itself ensure the market grows. As per Regulations for Protection of policyholders’ interests.000/.to an individual assessee for any amount paid as a premium. • Encouragement of new and better products and letting the hackneyed ones die out. And that every class/society gets a product that best suits them.1. POLICYHOLDERS GRIEVANCES Policyholders may have complaints against insurers either in respect of their policies or their claims. But it is wise to remember that Pensions received from Annuity plans are not exempted from Income Tax. The IRDA has a Grievance Redressal Cell which plays a facilitative role by taking up complaints against insurers with 24 . any sum received under a Life Insurance policy (not being a Key Man policy) is also exempt from taxation.players will require an excellent sales team to sell their products in the now competitive environment. every insurer should have in place.

2. Less Promotional Campaigns. Best returns with the added advantage of 100% life insurance coverage. OPPORTUNITY 1. HDFC SLIC could not able to match LIC in remote areas services. 2. 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. . 3. 3. 3. WEAKNESS 1. Best commission charges paid to the agents which vary from 12% to 35% which is much higher as compared to mutual funds i.the respective companies for speedy resolution. As the stock market can be under the mark any time so it can bring loss to 25 . So there is a big opportunity for insurance companies. 2. The IRDA however does not adjudicate on complaints. Hidden charges taken by the companies.8 SWOT ANALYSIS OF INDUSTRY STRENGTH 1. Misleading facts given by life advisors about the returns of ULIPs. only 2-2.e.5%. 4. 80 percent of Indian population is still under insured.

4. Unit-linked products are exempted from tax and they provide life insurance.9 CONCLUSION With largest number of life insurance policies in force in the world.’s instability has a long term repercussions affecting company’s policies and its growth. Cannibalism within the industry by providing misleading figures to the investors. 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. Govt. 2. 3. THREAT 1. Company’s profile 26 . 4. Increasing consumer awareness about Insurance and its use. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security.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. 3. Insurance happens to be a mega opportunity in India. And also the changing attitude and increasing awareness level of the population is an indicator that growth potential for the insurance sector is immense. which is growing at the rate of 15-20 per cent annually.

HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai. OBJECTIVES AND BACKGROUND Background HDFC was 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.1HDFC Ltd 4. 27 . Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets.1. 119 crores. Business Objectives The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner.4. HDFC has since emerged as the largest residential mortgage finance institution in the country. 10 crores. The corporation has had a series of share issues raising its capital to Rs. HDFC was promoted with an initial share capital of Rs. India.1 INTRODUCTION Helping Indians experience the joy of home ownership. Incorporated in 1977 with a share capital of Rs. and to promote home ownership. 100 million.

Tarneja Mr. Shirish B. D M Satwalekar HDFC has a staff strength of 1029. Ram S. which includes professionals from the fields of finance. The board primarily focuses on strategy formulation. D N Ghosh Dr. policy and control. Patel Mr. 3. accountancy.1. engineering and marketing. FOUNDER – Mr. Hasmukhbhai Parekh BOARD OF DIRECTORS 2. D M Sukthankar Mr. B S Mehta Mr.2 SUBSIDIARY & ASSOCIATE COMPANIES 28 . D S Parekh – Chairman Mr. Keshub Mahindra – Vice Chairman Ms. construction and urban policy & development.ORGANIZATION AND MANAGEMENT HDFC is a professionally managed organization with a board of directors consisting of eminent persons who represent various fields including finance. law. S Venketaraman Dr. Rene S. K M Mistry – Managing Director Mr. N M Munjee Mr. designed to deliver increasing value to shareholders. Karnad – Executive Director Mr. taxation. S A Dave Mr.2 Mr.

2 HDFC STANDARD LIFE INSURANCE 4. HDFC Reality Other Companies Co-Promoted by HDFC  HDFC Trustee Company Ltd. Ltd.  HDFC Holdings Ltd.  HDFC Ventures Trustee Company Ltd. Each of the 29 .2.  HDFC Developers Ltd.1Introduction 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. HDFC Chubb General Insurance Company Ltd.  HDFC Investments Ltd.  Home Loan Services India Pvt.• HDFC Bank HDFC Mutual Fund • • HDFC Standard Life Intelenet Global Services Ltd.  HDFC Venture Capital Ltd.  Credit Information Bureau (India) Ltd • • • • 4.

In October 1995 the companies signed a 3 year joint venture agreement. 30 . HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.4 % stake and Standard Life has a stake of 18. HDFC is rated 'AAA' by both CRISIL and ICRA.000 Cr and Rs.6%. Towards the end of 1999. Standard Life is rated 'AAA' both by Moody's and Standard and Poors. HDFC is the majority stakeholder in the insurance JV with 81. Around this time Standard Life purchased a 5% stake in HDFC. to enter the Life Insurance market. Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. in January 1995. (IDFC). In October 1998. Deepak Satwalekar is the MD and CEO of the venture. the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. Similarly. Mr.000 Cr respectively. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. the joint venture agreement was renewed and additional resource made available. further strengthening the relationship. THE PARTNERSHIP : HDFC and Standard Life first came together for a possible joint venture.JV player is highly rated and been conferred with many awards. 15. 600. These reflect the efficiency with which HDFC and Standard Life manage their asset base of Rs.

Hence. company will aim to manage their investments very carefully and live up to this trust. COMPANY’S MISSION: To be the top life insurance company in the market. • • TRUST: Company appreciates the trust placed by our policy holders in us. 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. 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.Therefore. This not only means being the largest or the most productive company in the market. 31 . This is done by offering life insurance and pension products.

Each one of these stages may pose a different insurance need/cover for you. Take advantage of the time and power of compounding to ensure that you build up your dreams. 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.2.2. so start saving early.2 KNOWLEDGE MANAGEMENT When Should One Go For Insurance? Your insurance need will change as your life does. Your needs: oSave for a home and wedding 32 . 4. company will be offering a range of innovative products to meet these needs. 4. from starting to work to enjoying your golden years and all the stages in between.• INNOVATION: Recognizing the different needs of our customers. In this section.3 Life Stages Stage 1 : Young and Single This is an important stage where one lays down the foundation of a successful life ahead. we have drawn up the basic life stages and help you analyze various insurance needs accordingly.

and having enough life insurance is a way to help ensure that. your need for life insurance is even more.oTax Planning oSave for Golden years Stage 2 . it is equally important to ensure that eventualities don’t come in the way of shaping your dreams. o o 33 .Just Married Marriage brings about a significant change. Your needs: o Planning for home / securing your home loan liability Save for vacation Save for your first child Stage 3 . Ensure your protection umbrella takes into account the future cost of securing your child’s dream. While both of you look forward to a happy and secure life . You will want life to go on for your loved ones. New dreams and new opportunities also bring in additional responsibilities.Proud Parents Once you have children. You need to protect your family from an untoward incident.

34 .Planning for Retirement While you are busy climbing the ladder of success today. estate planning. Your needs: o o o Provide for regular income post retirement Immediate Tax benefits Lead a secure. risk profile and return expectations. asset protection and investment advice. family law. asset allocation. corporate/trust structures. Financial Planning takes into account:  Desired asset allocation. Think about your golden years even before you have reached them. The key is to think ahead and plan well using your time and money. Having an early start for retirement planning can make a significant difference to your savings. it is important for you to take time and plan for your life after retirement. tax. legal issues.Your needs: o o o Provide for children’s education Safeguarding family against loan liabilities Savings for post-retirement Stage 4 . independent and comfortable life style after retirement 4.3 FINANCIAL PLANNING A comprehensive financial advisory service involving financial strategies.

needs and desires. So does life. For example. But what happens if things take an untoward turn? Or. 4. 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. how many of these dreams can you hope to turn into reality? By planning well. you could be dreaming of: • • • • • Owning a new car. Building cash flows correlating all expenses and income. Why do you need Financial Planning? You may have many dreams. 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. Times change.. You expect life to be much better tomorrow than it is today. 35 .. housing and children's education / marriage or other needs. Tomorrow. Inflation and outflows due to loans are considering in building the financial plan. Buying a dream house.  Future goals like retirement. Providing your children with the best education. you can utilize your limited resources to the fullest.4 360º FINANCIAL PLANNING The only thing permanent in life is change. People change.

all-round view.• How will 360° Financial Planning help? Instead of investing in an ad-hoc manner. 360° Financial Planning helps you take a holistic. Once you have saved enough to take care of emergencies. you should start thinking about investing and to make your money grow. 360° Financial Planning comprises:  Investment Planning  Cash Flow Planning  Tax Planning  Insurance Planning  Children’ Future Planning  Retirement Planning INVESTMENT PLANNING: To make your wealth grow Everyone needs to save for a rainy day. Briefly. Investment Planning Service includes: • • • Risk Profiling Asset Allocation and Portfolio Construction Creation and Accumulation of Wealth through Systematic Investment Plans (SIP) Regular review of progress and Portfolio Rebalancing • CASH FLOW PLANNING: To provide for assets and meet the periodic cash requirements 36 .

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. INSURANCE PLANNING: To protect yourself. 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. cash flow refers to the inflow and outflow of money. so that his family's quality of life does not undergo any drastic change in case of an unfortunate eventuality. It is a record of your income and expenses. It is extremely important that every person. Decide upon a right mix of investments. your family and your Assets." goes a popular saying that explains the importance of Insurance Planning. "Insurance is not for the person who passes away. especially the breadwinner. According to the Income Tax Act. tax slabs and personal preferences. Insurance Planning is concerned 37 . covers the risks to his life. social liabilities. One will be eligible for Tax Benefits under Section 80C and Section 10(10D) of the act.In simple terms. 1961. 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. it for those who survive.

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. CHILDREN'S FUTURE PLANNING: To give your children a financially secure future Like every parent. Most young people today think of retirement as a distant reality. However. But retirement is a reality for every working person. and it will be time to provide for his or her higher education and wedding. All parents want to give the best possible upbringing to their children. because. This includes good education and security.with ensuring adequate coverage against insurable risks. 38 . RETIREMENT PLANNING: Because retirement is a time to relax. your little bundle of joy will grow up. This is extremely important. India does not have a social security net. you too must be overjoyed to watch your child grow. and to provide for an adequate security cover during their growing years. Some don’t. Soon. unlike developed nations. The purpose of Children's Future Planning is to create a corpus for foreseeable expenditures such as those on higher education and wedding. not to get worried Some like it. in case of any eventuality.

While the LIC. in order to face the competition is coming up with new strategies.5. CONCLUSION The various conclusions drawn from the project are: There has been a tremendous change in the insurance industry. New private players are leading the sector due to their strategic management and tailored made projects. 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. stocks and property. and as such one should consider different instruments as the ability to save increases. and growth of service sector. Life insurance as a form of protection is the singlemost important financial product any earning member of a family must have. rising literacy rates. and hence are an excellent addition to your portfolio. 39 . The demand for insurance is likely to increase with rising per-capita income. Possible investment options range from bank deposits and government small saving schemes to mutual funds. The opening up of the insurance sector has changed the whole look of the industry. Having said this. with savings. From the research. Certainly ULIPs successfully combine the first and most important need of protection. In-fact opening up of the insurance sector is an integral part of the liberalization process being persued by many developing countries. a well-diversified portfolio is one of the first rules of financial planning. And with it there has been continuous growth in this sector both in Indian as well as world context.

There is no right or wrong in this.All financial products have a certain amount of risk and charges. property. thereby making insurance widely popular. There should be clear demarcation in the marketing strategies of the company from this perspective. All intermediaries can’t sell all lines of business profitably in all markets. So let’s conduct this business with utmost economy with the spirit of trusteeship. Coupled with the right product mix. It would be unrealistic to assume that the features and benefits of a ULIP come at no cost. In fact. though the charges are considerably lower than that of a traditional product. be it a mutual fund. training and sales tools and technology enablers. the very reason the product is transparent is because the customer knows the charges and risks. The intermediaries need to be empowered with the right learning. 40 . Clients should also receive price differentials for using different channels. The success of marketing insurance depends on understanding the social and cultural needs of the target population. this Will help the insurers to survive and flourish in this competitive market scenario. and matching the market segment with the suitable intermediary segment. or even a bank deposit.

RECOMMENDATION • Positioning insurance as a means to fulfilling one’s duties during one’s lifetime. • rather than a financial investment. But in the wake of competition insurance 41 . positioning as “worry free”. simplifying the Need to promote the quality of awareness  testimonials. the LIC is especially synonymous with insurance. • • product and the procedure • The benefits: Leverage The product: catering on Risk Protection or Returns oriented or both  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 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. ailments.6. • Fears relating to thefts. security instrument Lack of understanding: Training of Channels  To provide quality advice on products best suited Lack of Knowledge: Ease of Process. death could be addressed through ‘sensitive’ communication • Fears relating to claims: Need to promote “trust”. Demonstrating claim Low returns: Reposition insurance as a risk cover. In rural India.

Below-mentioned positioning alternatives can be worth considering. This can be done successfully if a company has unique strengths to service a group of customer needs better than others. Each company has to choose its own unique positioning based on its unique strengths. The insurance needs of customers vary significantly for different groups of customers. All brands need to be built around well-differentiated and credible positioning that springs from the organization’s history. NEEDS-BASED POSITIONING This is the most commonly understood positioning and is based on the differing needs of different groups of consumers. The insurance needs of young family with small children will be quite different from that of a family in which the income-earner is close 42 . VARIETY-BASED POSITIONING This type of positioning is based on varieties in products and services rather than customer segments. investment and building exercise at least in Longer-term management of the brand are essential. not only for success but also survival. it is possible to achieve a unique position by focusing on certain category of products.companies have to do a considerable brand urban India. 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. Adequate time. In the insurance industry too. It is a sensible strategy for those companies who have distinctive advantages or strengths in offering certain products and services.

There is excellent opportunity in the insurance industry to employ access-based positioning by targeting the rural insurance sector. However. penetration of media and so retirement. 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. ACCESS-BASED POSITIONING Positioning of customers can also be done by the way they are accessible. Access is typically a function of customer geography or customer scale. The rural market for life insurance is very different from the urban market in terms of needs. income levels and distribution (seasonality. to successfully exploit the potential. and product design etc. That is different groups of customers may be accessible in different ways even though they may have similar needs. distribution. 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. 43 . Websites (search engine) Other References: Brochures of various plans 44 www.

Appendix QUESTIONNAIRE “Study of Financial Planning in Insurance Sector Perception about Insurance Industry” Name: ________________________ Age: ______ Gender: M F Single Marital Status: Married Occupation: ___________________ Contact No: __________________ Annual Income (appx.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) ________________ 2) ________________ 3) ________________ 4) ________________ 5) ________________ 6) ________________ Q3) How much do you save approximately of your annual income? 45 .) Upto 1.50 lacs 3 lacs-5 lacs 1. in Rs.

LIFE MAX NEW YORK LIFE RELIANCE MET LIFE ICICI PRUDENTIAL ING VYSYA SBI LIFE TATA AIG AVIVA KOTAK MAHINDRA OTHER ____________ (specify) NO Q7) which type of plan did you buy? Money Back Plan 46 . switch to Q 9) Q6) which company(s) policy(s) you have? LIC BIRLA SUNLIFE BAJAJ ALLIANZ HDFC STD. 1 being most preferable) Banks Insurance Mutual Funds Share Market Bonds & Securities 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 (If no.Q4) where do you invest/would like to invest your savings? (Rank in order of preference.

also Rank according to your preference from whom you are most likely to buy insurance? (√ 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 (Bancassurance) 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 47 .Endowment Plan Pension Plan ULIP Q8) What was your purpose/will be your likely purpose of taking insurance? RANK THEM (1 being most ideal) a) PROTECTION OF FAMILY b) TAX BENEFIT c) INVESTMENT d) RETIREMENT PLANNING Q9) Have you ever been approached for Life insurance by any of the following (Please √).

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? THANK YOU FOR YOUR CONTRIBUTION 48 .