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In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent and uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance and a policyholder is a person who is buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a large, possibly devastating loss. The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated. A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance. The act of insuring, or assuring, against loss or damage by a contingent event; a contract whereby, for a stipulated consideration, called premium, one party undertakes to indemnify or guarantee another against loss by certain specified risks.
Insurance is a plan by themselves which large number of people associate and transfer to the shoulder of all, risk that attach to individuals. ……..John Magee
Insurance is a contract in which a sum of money is pad to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency ……Justice Tindal
Classification of Insurance
Life is full of uncertainty. Trials and tribulations abound in each and every aspect of life. No one can truly predict or even estimate what the future has in store for him. Life offers no guarantees by itself, except the incidences of death and taxation. This lack of security present throughout life can be overcome partially through insurance. Insurance can never replace or repair a loss. But the monetary value offered by insurance helps in adjusting to the new circumstances. Despite offering innumerable options and immense scope, insurance can be classified into four main categories:
Insurance of Property.
Insurance of Interest.
Insurance of Liability.
Under the purview of this class of insurance, the risks associated with human life in general can be covered up to the limit specified. A person can insure his or her life and his health against any unplanned contingencies. In event of his death, his dependants will be reimbursed to the full amount that he was insured for. If the insured person meets with an accident or suffers from an illness that cripples him forever, he will be compensated with the complete sum assured anyway since he may not be able to lead a normal life again. In case, the accident is not that severe, he should be able to recover after medical treatment and rehabilitation. If he or she has opted for medical cover, then his or her medical expenses, treatment and medication will be paid for by his insurance policy.
Insurance of Property:
Everyone possesses material value in the form of tangible assets. Assets can be in the form of a landed estate or a vehicle, share holdings or plain old paper money. Since tangible property has a physical shape and consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery. An individual's lifetime of hard work can be wiped out in a blink of an eye. But if a person judiciously invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the extent of damage is ascertained.
Insurance of Liability:
Every person has to regulate his actions and behaviour so as not to cause injury or damage to other people and their property. Everyone is personally responsible and liable for his actions. If due to lack of control over his actions or prejudiced behavior, a person incurs any liability then he has to provide compensation out of his personal resources. Liabilities: legal, civil or criminal can have severe repercussions on social standing and prestige besides the financial status. By investing in liability insurance, an individual can ward off any
It is possible to insure all these as they have the possibility of becoming non functional by any disaster or an accident. leg of a footballer. accidents and uncertainty. the premiums payable on liability insurance are fairly minimal when compared to the damages that have to be compensated in the long run. ‘A guard against pecuniary loss arising on the happening of an unforeseen event’. Tangible or intangible – an individual can insure anything! Be it a house.. factory. Majority of the people in the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that the insurance sector is still to grow. Insurance cannot arrest the risk from taking place. Basic functions of Insurance: Primary Functions Secondary Functions Other Functions Primary functions of insurance: Providing protection – The elementary purpose of insurance is to allow security against future risk. by apportioning the risk with others. 67 . or the voice of a singer. insurance means.. In developing economies.. but can for sure allow for the losses arising with the risk. In a layman's words. Concept of Insurance The functions of Insurance will give you an idea that how to go ahead with the approach of insurance and what type of insurance to choose. Besides. and the hand of an author. Insurance is in reality a protective cover against economic loss.. the insurance sector still holds a lot of potential which can be tapped. car.liabilities he might incur due to his actions and behavior.etc.
Helps in the development of larger industries – Insurance provides an opportunity to develop. 67 . All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. people take up insurance as a good investment option. Provide Certainty – Insurance is a device. which assists in changing uncertainty to certainty. restricting unnecessary expenses by the insured. Secondary functions of insurance: Preventing losses – Insurance warns individuals and businessmen to embrace appropriate device to prevent unfortunate aftermaths of risk by observing safety instructions. any country can earn foreign exchange by way of issue of marine insurance policies and other different ways. or reimbursement. to those larger industries which have more risks in their setting up. There are different types of insurance policies under the sun cover almost anything that one might think of. Covering larger risks with small capital – Insurance assuages the businessmen from security investments. This is done by paying small amount of premium against larger risks and dubiety. making foreign trade risk free with the help of different types of policies under marine insurance cover. Risk Free trade – Insurance boosts exports insurance. Insurance provides indemnity. Other functions of insurance: It is a savings and investment tool – Insurance is the best savings and investment option. Also to take the benefit of income tax exemptions. There are lots of companies who are providing such customized insurance policies.Collective risk bearing – Insurance is an instrument to share the financial loss. It is a medium through which few losses are divided among larger number of people. Medium of earning foreign exchange – Being an international business. in the event of an unanticipated loss or disaster.
Insurance companies ensure financial reimbursement of the insured losses to the policy holders or his/her beneficiary. the insurance companies have been able to reach more number of customers and consequently their customer base has also mopped up significantly. every customer looks at this rate first and then to the other associated benefits. Affordability of Insurance The foremost insurance benefit in today’s world is the low insurance rate and premium one has to pay. Every company is trying to woo all the customers into its fold and in a way offering more and more innovative Insurance Benefits to the consumers. among all the insurance benefits. customers can search. health and nonlife general issues. Now-a-days. low insurance rate and premium is the most coveted one. Insurance is mainly a instrument used by consumers for hedging the future contingent risks related with life. The online access to insurance companies and their policies has made them more lucrative to the customers. Thus. 67 . Accessibility Of Insurance The easy accessibility of a insurance is the next most coveted Insurance Benefits that the customers look for. This is the most coveted Insurance Benefits. This has been observed that through online services. Insurance benefits help the policy holder or beneficiary in combating with the losses or hazards associated with him/her. the more affordable the insurance becomes.Insurance Benefits Insurance Benefits encompass the facilities associated with buying of insurances. While choosing a insurance policy. The lesser the insurance rate. But with time. The policy holder buys the insurance to hedge against the future perceived losses by paying a regular amount to the insurance company known as the Premium. compare and select their insurance coverage through the click of a mouse from their own residence. more and more insurance companies have cropped up and consequently the competition among them has increased.
Some of the other Insurance Benefits are :Basic benefits of the insurance policy- The person enrolling for the policy is entitled to receive the financial compensation in case of actual occurrence of the loss/hazard/damage. Optional Insurance Benefits are also given by the companies to their policy holders in order to entice them to access their insurance package. These optional benefits include health and dental insurance of the family, life insurance of the spouse and the child, accidental death policy for the policy holder in addition to the actual insurance for which he/she has enrolled for, long term and short term insurance plans against disability of the policy holder unit linked insurance schemes meant for appreciation of the accumulated capital during the life span of the same, managed by an experienced and well-learned fund manager
Insurance in India
Insurance is a federal subject in India. The insurance sector has gone through a number of phases and changes. Since 1999, when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26%, the insurance sector has been a booming market. However, the largest life-insurance company in India is still owned by the government. Insurance in India started without any regulations in the nineteenth century. It was a typical story of a colonial era: a few British insurance companies dominating the market serving mostly in large urban centers. After the independence, the Life Insurance Company was nationalized in 1956, and then the general insurance business was nationalized in 1972. Only in 1999 private insurance companies were allowed back into the business of insurance with a maximum of 26 per cent of foreign holding (World Bank Economic Review 2000).The entry of the State Bank of India with its proposal of bank assurance brings a new dynamics in the game. On July14,2000 Insurance Regulatory and Development Authority bill was passed to protect the interest of the policyholders
from private and foreign players. India insurance is a flourishing industry, with several national and international players competing and growing at rapid rates. Thanks to reforms and the easing of policy regulations, the Indian insurance sector been allowed to flourish, and as Indians become more familiar with different insurance products, this growth can only increase, with the period from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry. The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance sector. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India. The Malhotra Committee attempted to improve various aspects of the insurance sector, making them more appropriate and effective for the Indian market. The recommendations of the committee put stress on offering operational autonomy to the insurance service providers and also suggested forming an independent regulatory body. The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000.The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.
Brief History Of Insurance
The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912. The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of India insurance. The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as substandard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The
National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. it was much later on the 19th of January. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. in Calcutta. putting the Indian companies at a disadvantage.298 crore in 1938. 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. In the year 1912. Prior to 1912 India had no legislation to regulate insurance business. it rose to 176 companies with total business-in-force as Rs. 1956. Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko. and the Life Insurance Corporation of India was created on 1st September. However. providing them adequate financial cover at a reasonable cost. initially the management of the companies was taken over by means of an Ordinance. General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. The Life Insurance Companies Act. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. house of the great poet Rabindranath Tagore. the Life Insurance Companies Act. and the Provident Fund Act were passed.44 crore. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956. apart from its corporate office in the year 1956.United India in Madras. But the Act discriminated between foreign and Indian companies on many accounts. with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country. The first two decades of the twentieth century saw lot of growth in insurance business. that life insurance in India was nationalized. 33 divisional offices and 212 branch offices. and later. LIC had 5 zonal offices. 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Since life insurance contracts are long term contracts and during the 67 .22. The Indian Mercantile. About 154 Indian insurance companies. 1956. From 44 companies with total business-in-force as Rs. the ownership too by means of a comprehensive bill. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. In 1907. Nationalization was accomplished in two stages.
Chennai.32. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. With a vision of providing easy access to its policyholders. posting a healthy growth rate of 16. 2005. Bangalore. Info Centres have been commissioned at Mumbai. 109 divisional offices.00 crore mark of new business. by 1985-86 LIC had already crossed 7000. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future.67% over the corresponding period of the previous year. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records.955 new policies by 15th Oct. Today LIC functions with 2048 fully computerized branch offices. From then to now. LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business.00 crores of New Business in 1957 the corporation crossed 1000.currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. New Delhi. It worked wonders with the performance of the corporation. It may be seen that from about 200. Hyderabad. Ahmedabad.00 crores only in the year 1969-70. Apart from on-line Kiosks and IVRS.01. LIC has launched its SATELLITE SAMPARK offices. Pune and many other cities.00 crore Sum Assured on new policies. leaner and closer to the customer. It has crossed the milestone of issuing 1. 67 . The satellite offices are smaller. Kolkata. But with re-organisation happening in the early eighties. Re-organization of LIC took place and large numbers of new branch offices were opened. 8 zonal offices. LIC’s Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. As a result of re-organization servicing functions were transferred to the branches. and it took another 10 years for LIC to cross 2000. and branches were made accounting units. 992 satallite offices and the Corporate office. LIC has issued over one crore policies during the current year.
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. with a capital contribution of Rs. on the other hand. 1957: General Insurance Council.. the first general insurance company established in the year 1850 in Calcutta by the British. 67 . a wing of the Insurance Association of India. can trace its roots to the Triton Insurance Company Ltd. frames a code of conduct for ensuring fair conduct and sound business practices. The General insurance business in India. Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. viz. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. set up. 1870: Bombay Mutual Life Assurance Society. LIC Act.The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. the first Indian life insurance company started its business. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. the first life insurance company on Indian soil started functioning. 5 crore from the Government of India. LIC formed by an Act of Parliament. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. the first company to transact all classes of general insurance business. 1956.
the Oriental Insurance Company Ltd. 1972: The General Insurance Business (Nationalization) Act. It is true that the cost of new technology and the desire for economies of scale continue to drive consolidation. 67 . viewing the industry against this backdrop can now provide only a superficial view. Rapidly developing technology. An evolving socioeconomic and political context. These are commonly identified as: Increasing consolidation. and the United India Insurance Company Ltd. the New India Assurance Company Ltd. Over the past few years it has become apparent that the global insurance industry is being shaped by a small number of well-defined external drivers of change. But the real winners are likely to be those who can successfully implement change. 107 insurers amalgamated and grouped into four companies viz. Changing consumer concerns and buying behavior. the National Insurance Company Ltd. Global Insurance Industry Trends Understanding global insurance industry trends and what they mean for U.. Broadening distribution patterns. GIC incorporated as a company. bringing with it market power and reduced costs. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. While each of these drivers of change is still relevant. 1972 nationalized the general insurance business in India with effect from 1st January 1973. For some time. convergence and globalization. and Shifting regulations. size seems to have been viewed by many insurers as an objective in itself. insurers is important.S..
and still fewer will be able to successfully obtain the management skills to be winners in all lines of business in a more open competitive environment. Successful companies will become more focused. our domestic companies are in the same market with the same language. "Although foreign companies have certain advantages in some aspects. however. In an Internet world no one can own the customer. It is easier for domestic companies to contact each other. The good news about the Internet is that its real power is as a driver for complex business models that integrate all methods of distribution. Multiline global insurers present management challenges of significant scale. and European insurers moving into Asia. and legislation. and other developing markets face challenges in managing cross-cultural issues. with some getting out of any activity where they are not best in class. the foreign companies are no match. the new thinking must be get more specialized. The bottom line is that customers will always self-select distribution. commissioner of China's Insurance Regulatory Commission in Shanghai at the China Rendezvous conference earlier this year when he said.S. few groups will have the required capital to achieve global dominance." The cost of acquisitions is becoming increasingly prohibitive as suitable targets become fewer. if the old thinking was get bigger to get more cost-effective. culture. U.In our judgment. The Internet It has been said that the Internet will do for services what the production line has done for goods. We can expect to see more outsourcing of noncore activities and more strategic alliances with both financial services and nonfinancial services companies as insurance groups move to operate in a flexible alliance model. as a facilitator of straight-through processing in policy 67 . Latin America. This was nicely put by Thou Yan Li. the reality is that as markets increasingly deregulate. The Internet will become a strong distribution channel for simpler products but no one should underestimate the power of the agent or adviser. In these aspects. the customer is empowered by knowledge. So.
Regulation is Shifting Deregulation worldwide is encouraging the emergence of universal financial services organizations. financial services group AXA has estimated that policy management costs will drop by 98 percent. this deregulation is being countered by increasing controls over the way products are delivered and sold to consumers. At the same time. the priority should be to use the Internet first to re-engineer business processes. Market conduct is an emerging issue in many countries well beyond just the United Kingdom and United States. This trend is already affecting Asia where the Malaysian and Singapore industries are classic examples of the deregulatory forces at work. Only after that should it be used to create new distribution models. Business @ the Speed of Thought. As Bill Gates put it in his book. The winners will be those that target their spending most effectively. and brokerage firms. to replace stand-alone banks. It is also enabling new and nontraditional players. agency forces face particular challenges in channel enhancement but also have much to gain. Traditional insurers with large. There is a shift from regulation of what is sold by a particular institution to regulation of how it is sold. Big Bang in Japan is another. like Zurich Financial Services. such as Virgin of the UK. for example. Business costs will fall dramatically. All the major global insurance companies are spending billions of dollars on their e-business strategies. this promises to be a new test for ban assurance models. often part-time. and as a reducer of procurement costs. insurers. and second to enhance existing distribution channels. A more professional and productive agency force will be a logical outcome of insurers adopting modern Internet-driven business models. Overall." For most insurers. "we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.administration and claims management. Malaysia. to enter the market. earlier this year confirmed this trend will continue. 67 . The conference for Emerging Insurance Markets in Kuala Lumpur.
theirs and other peoples. savings products. national borders are already becoming increasingly unimportant as a result of the Internet. Mo. life risk and property risk are all points on the same continuum. Although regulators and customer reluctance may restrict cross-border selling. in one offering designed to deliver wealth creation.To meet this new situation. Breaking the Value Chain The traditional view of an insurance business as a provider of fully integrated service delivery is obsolete. This legislation covers matters like agent authorization and training as well as the way in which advice can be given to consumers. The battle will be for the opportunity to serve customers in tomorrow's market. In this context. state legislatures and regulators are promulgating laws and/or regulations to implement all or part of the new model privacy regulation adopted by the National Association of Insurance Commissioners in Kansas City. in order to enforce the Gramm-Leach-Bliley Act mandates on privacy. In some state legislatures. the insurance industry is vigorously opposing proposed legislation to the extent that it varies from the national uniform standards or would restrict the sharing of information for business purposes. An implication for insurers is that their customers will become more demanding as they become better educated and have access to better remedies. underwriting (manufacture). In the United States. Successful insurers will increasingly need to pay close attention to corporate governance issues including privacy and market conduct. Distributors will seek to provide customer convenience and greater value by bringing together a range of products. Distribution. One effect will be that we can 67 . they will need to place emphasis on multiple channels and multiple relationships rather than providing all the products and services themselves. Customer convenience is the key. As companies seek to meet customer needs. administration. and funds management are becoming increasingly disaggregated. new regulators are emerging--such as the Financial Services Authority in the United Kingdom and the Australia Prudential Regulation Authority--supported by new consumer protection legislation that typically sets out how an insurer can deal with its agents and its customers.
67 . Cathay Life in Taiwan. and underwriting are all suitable for relocation. Do Brands Matter The answer has to be yes.expect to see labor-intensive tasks being performed in low-wage countries. global groups like Allianz. strong brands will be needed to get access to independent distribution channels. and Europe.S. A conclusion to be drawn from this is that we should not expect to see start-ups rising to prominence in insurance in the same way as we have seen in the technology sector unless they are backed by strong brands and extensive capital. There are many insurers with strong domestic brands--Sun Life in Canada. policy administration. HSBC in Hong Kong. Northwestern Mutual in the United States. Swiss Re is a good example of a company that has sharply increased its shareholder value by actively managing its capital. On the surface. Active capital management is needed to maximize shareholder returns. Samsung Life in Korea and Tokyo Marine & Fire in Japan. For this reason. and ING are changing the names of their operations around the world to their own. global companies have advantages in building brand awareness. Insurance companies. Claims management. financial services brands have yet to be exploited in the same way as consumer products brands like Nike and Coca Cola but the trend is emerging. One we live in a lifestyle society that buys the image as much as the product. particularly in the U. Generally. Many insurers still have a lot of work to do in this area. This was because the whole emphasis of insurers was on maintaining statutory solvency rather than profitability. Successful capital management requires a combination of actuarial and financial skills. It used to be true for insurers that too much capital was barely enough. Strong brands will provide opportunities for both insurers and a whole range of nonfinancial services companies to distribute financial services products. For manufacturers. AXA. to name just a few-but the challenge remains for an insurer to build a global or at least pan-North America/pan-Asia brand before existing global brands take over. are now recognizing that they compete for capital with other types of companies. accounting. Store brand and Chubb are others.
it will follow that larger players with strong brands and quality management will have a clear advantage. however. Aubrey Whitear is chairman. but a cohesive team with strong project management skills to implement it.0 million people in this industry USA Insurance Market is about $ 1. at PricewaterhouseCoopers. John S.061 trillion in 2007. Insurance Industry is 6% of world’s GDP Life Insurance is close to $ 2. But it is a realistic expectation that strong Asian-based global insurers will also emerge.8 trillion worldwide Other Insurance is about $ 1. Some of the important Global Insurance Industry & Trends Worldwide insurance premiums totaled $4. as they centralize their back-offices in low-cost jurisdictions. as funds are increasingly managed globally. is only a part of the battle. Or as Bob Mendelssohn. Americas Insurance Group." This is reprinted with permission from Insurance Digest. PricewaterhouseCoopers. up about 6.3% from $4. CEO of Royal & Sun Alliance put it. Choosing a strategy. Asia Insurance Group.As global brands become increasingly important. Implementation linked to constant innovation will be the true key to success. a publication of PricewaterhouseGoopers.1 trillion . "Companies that are successful will be those that learn fast. fail fast and recover fast.270 trillion in 2008. the largest and over 25% of global market Life. accident (including supplemental health) and annuity premiums in the United States will total an estimated $679 billion 67 .8 trillion (Health Insurance. General Insurance or P&C Insurance) USA employees about 2. This means having not just a good leader to set the strategy. Asian and developing insurance markets presently are widely seen as opportunities for the existing global players. as global companies learn to leverage their skills worldwide. Scheid is chairman.
2% decline while North America showed a 3.9 billion in Latin America and the Caribbean. $29.1% decline. convergence and globalization An evolving socioeconomic and political context Changing consumer concerns and buying behavior Rapidly developing technology to achieve Business @ the Speed of Thought 67 . compared to $2.7 billion in Africa.75 trillion in Europe.990 in North America. Per capita premiums worldwide were $646 in 2008. life insurance firms held about $4. The best growth was in emerging markets. and $54. More than 87% of that year’s premiums were earned in industrialized nations. but say only about 45 carriers in Life.2 billion in the Middle East and Central Asia. Massive sources of insurance company earnings come from the sale of annuities and other retirement and investment products 2008’s stock market meltdown had a significant effect on profits and assets at life insurance companies in particular.S. according to the Federal Reserve Bank Approximately 4. $104. leaving a bit more than 12% earned in emerging markets.3 billion in Asia. General Trends Increasing consolidation. total insurance premium volume for 2008 was $1.500 companies underwrite insurance in America. Europe showed a 6. including a 16. Health & P& has the exposure or capacity to underwrite risks across majority States in America According to Swiss Re. and property & casualty companies to a lesser degree.3% premiums increase in 2008 in South and East Asia. $933.51 trillion in assets in 2008. USA Property and casualty premiums will total about $450 billion U.
Broadening distribution patterns including Social Media Shifting regulations IT Trends Total insurance IT spending devoted to e-business is estimated at about US$1. Reputation & Retention. most IT budgets are devoted to agent/ distributor systems. Claims c. but life/health insurers devote almost double the amount to policyholder portals that property/casualty insurers do Big IT spends are into large transformational projects involving a. Underwriting Property/Casualty trends from IT & Portal point of view E-business accounts for approx 10% percent of P&C IT spending mostly retail insurance like Auto & Home P/C e-business means agent e-business Insurers look to agent e-business to differentiate themselves from close competitors The value of agent e-business is in speed and cost savings Insurers Portal use is limited in B2C but growing Insurers Portals are for Information. even more than cost savings 67 . Policy Admin b.6 billion today and will likely grow 5 percent yearly for the next two years In both Life & General sectors.
but the industry is dominated by a handful of major players. up about 6. Introduction to the Global Insurance Industry: Insurance and risk management make up an immense global industry.S. the world’s largest insurance market. 67 . according to the Federal Reserve Bank. According to a survey conducted by a leading global insurance firm. In America alone.31 million people in 2008. For 2009. while all other types of insurance totaled $1. This was equal to about 6.3 billion in Asia. According to Swiss Re.Life & Annuity trends from IT & Portal Point of view E-business accounts for about 6% of IT spending E-business is tilted toward agents. accident (including supplemental health) and annuity premiums in the United States will total an estimated $679 billion.13 trillion. $104. Again. Global life insurance premiums were $2. Approximately 4.79 trillion during 2007. but policyholder portals are important and growing Agent portal use is strong and creating value + market differentiators Agent e-business is also about information sharing Insurers Portal use is limited.3% from $4.com). these figures are from Swiss Re (www.270 trillion in 2008 (the latest data available).78 trillion.500 companies underwrite insurance in America.51 trillion in assets in 2008.9 billion in Latin America and the Caribbean. life insurance firms held about $4. worldwide insurance premiums totaled $4. life.swissre. and insurance gross premiums totaled $1.75 trillion in Europe.061 trillion in 2007. Property and casualty premiums will total about $450 billion for 2009. and $54. making the U. but growing especially into B2B segment Insurers Portals deliver cost savings as well as improved brand and service Investment in e-business for prospects is minimal. total insurance premium volume for 2008 was $1. U.18% of global GDP. the insurance business employed about 2.S. $933. $29. Swiss Re.2 billion in the Middle East and Central Asia.7 billion in Africa.
Massive sources of insurance company earnings come from the sale of annuities and other retirement and investment products. The global financial meltdown hurt all of these asset classes and thus hit the capital base of the insurance industry in a hard way. leaving a bit more than 12% earned in emerging markets. much of the world is still clearly a fertile field for expansion of companies that are willing and able to invest time and money in emerging markets. The best growth was in emerging markets.2% decline while North America showed a 3. Insurance companies also hold immense investments in real estate.1% decline. More than 87% of that year’s premiums were earned in industrialized nations. venture capital funds and other types of investments. unlike banking and investments. they must develop dozens of different premium rate structures that appropriately reflect the costs of meeting local risks and fulfilling state requirements. few insurance underwriters offer all of their insurance products in all 50 states. pointing to excellent long-term opportunity for expansion of sales of insurance products of all types. hedge funds. unemployment and cost-cutting by both businesses and consumers hurt insurance sales in developed countries. insurance is unique in the financial services field because. and property & casualty companies to a lesser degree. Europe showed a 6. In America. This means that insurance firms must deal with up to 50 different sets of state regulations and 50 different state regulatory agencies. business bankruptcies. Per capita premiums worldwide were $646 in 2008. 67 . 2008’s stock market meltdown had a significant effect on profits and assets at life insurance companies in particular. As a result. It is a regulatory and administrative nightmare that limits consumer choices and drives up overall insurance costs. At the same time. which are regulated largely (although not entirely) by federal agencies such as the Securities and Exchange Commission.990 in North America. At the same time. along with profits (or losses) that insurance underwriters earn on their own assets and reserves. compared to $2. While it will take many years for underdeveloped nations to begin spending significant amounts on insurance products. many do business only in a limited number of states. including annuities. insurance is regulated primarily at the state level.Premiums on a per capita basis remain very low in much of the world.3% premiums increase in 2008 in South and East Asia. including a 16. private equity.
property and casualty company. but many of its overseas operations have been sold. MetLife raised $2 billion in new capital during the same month. The American government promised AIG up to $85 billion in loans in exchange for effective control of the firm and a change of top management. For example. Property and casualty insurance companies sometimes face a year of losses. Yamato Life Insurance Company. Hartford Financial raised $2. CDS are essentially an unregulated form of insurance. Occasionally. and firms that rate the financial stability of insurance underwriters always list more than a few that are not financially sound. government’s need to bail out global insurance giant American International Group (AIG) in the fall of 2008. AIG was considered by most analysts to be a reasonably well-managed insurance company with good long-term potential in the global market. markets were reacting to the fact that net profits can fall sharply during tough economic times. rather than profits. The company lost nearly $100 billion in 2008. primarily as a U.5 billion in new capital in October 2008 by selling shares to Allianz. a major German insurance firm. Unfortunately. a leading Japanese firm that had been in business for nearly 100 years. insurance underwriters go broke. American insurance underwriters found their stocks falling sharply in 2008 when investors realized that many of these companies needed to raise new levels of capital due to losses in the firms’ reserves and investment assets. floods or an overly active fire season. This is what broke the company’s back. Over the mid-term.S. That need quickly grew to about $150 billion when AIG found it difficult to find buyers for assets and operating companies that it intends to sell. At the same time. Course.Underwriting does not earn consistent levels of profits. AIG is refocusing. due to natural disasters such as hurricanes. It will retain some strategic investments in foreign general insurance and life insurance operations.S. 67 . took bankruptcy in October 2008. a relatively small division at AIG had taken immense risks by writing credit default swaps (CDS) totaling hundreds of billions of dollars. used by investors and financial firms of all types to hedge against potential losses in the value of bonds and debt instruments of all types—such as collateralized debt obligations consisting of pools of mortgages. the biggest news was the U.
Investment companies like Merrill Lynch (now part of Bank of America) have been eager to sell insurance to their customers as well. and underwriters earned fat profits. which have traditionally posted enviable profits. This enables property & casualty underwriters to continue to earn reasonable profits while laying-off a significant part of potential losses if there is a devastating hurricane. The insurance industry includes a wide variety of sectors and services. particularly annuities and life insurance. high-risk insurance policies. both insured and non-insured totaled about $58 billion) and created significant controversy over flood insurance in general. along with the agencies that sell insurance. insurance brokers—companies that are supposed to represent the interests of major corporate clients while finding these customers the best coverage at the best rates—would be little known to the general public. claims processing firms. creating financial services mega-firms. Normally. 67 .S. cost insurance underwriters vast amounts (damages. data collection firms and myriad other specialized fields serving the industry. Many changes resulted.2005. many of which offer a complete range of financial services and products to their customers. For example. and a focus on acting as advocates for clients. Hurricanes Katrina and Rita in the U. In addition. large losses did not occur. Meanwhile. Despite predictions of damaging hurricane seasons for 2006 and 2007. especially in Gulf Coast markets. some members of the brokerage industry promoted the idea of important changes from within. hurricanes caused significant and costly damage in Louisiana and Texas. Massive mergers and acquisitions have resulted. scandal rocked the brokerage sector during 2004. there are also large numbers of consulting firms. Recently. The most obvious are insurance underwriters that cover the risks and issue the policies. During 2008. there are insurance brokers. including the abolition of “incentive payments” from underwriters to brokers. banks are slowly gaining market share in the sale of insurance products. Recent regulatory changes have heightened competition within the insurance industry—an area in which competition has always been fierce. and insurance underwriters felt compelled to boost rates for many types of insurance. from checking accounts to investment products to life insurance. However. and regulators’ efforts to control this sector created significant changes. much of each hurricane season’s risk was sold by primary underwriters to hedge funds and reinsurers who buy portions of large. However.
At the same time. The U. and Europe. to companies that only underwrite health insurance. While there are tens of thousands of small insurance firms worldwide. Generally speaking. or be forced into consolidation in order to streamline operations and deal with lower profit margins. insurance providers may find that they have to innovate and evolve by offering supplemental policies—that is. A handful of these leading firms operate on a truly global scale. health insurance industry may be in for massive changes. health care reform may provide positive growth to the earnings of health insurance providers. then insurance industry revenues may rise as a result of increased volume.S.S. As a result. health coverage in the United States is provided by a wide variety of providers ranging from firms that operate hospital systems and sell policies that provide care within those hospitals.S. Insurance providers may eventually suffer. The insurance industry will undergo additional scrutiny and oversight as a result. On the other hand.6% largely via Medicaid. 67 . many of which enjoy brands that are household names. the federal government pays for about 35% of all U. Meanwhile. America is unique among the world’s most highly-developed economies in that the government does not offer or oversee a universal health coverage system. Initially. If Congress enacts a plan that relies primarily on the private sector to cover Americans who are currently uninsured. regulators are considering sweeping changes in the regulation and oversight of financial services firms of all types. policies that provide enhanced coverage above and beyond basic coverage mandated by universal care. health costs via Medicare and other systems. this is a highly-profitable business that has shown stellar growth over the past few decades. which may include the extension of coverage to about 25 million currently-uninsured people. As of late October 2009. the industry tends to be concentrated in a few hundred major companies. The focus will be on making risks held by such firms more transparent and maintaining sufficient levels of capital to cover potential losses. Competition will only become more intense.At one time. while the states pay for 12. The problem for the industry is that Congress will undoubtedly attempt to reduce costs and profits throughout the health industry. the U. Supplemental insurance is typically a much higher profit margin business. bank holding companies were aggressively acquiring insurance agencies. Congress was battling fiercely over proposed reforms of America’s health system.
1) If there is a public option. certain specialists. etc. like Proton Beam Radiation (PBRT). in this case. and then health care reform could result in one of three possible outcomes depending on the socalled public option. This supplemental coverage might include special. Costs for the government could rise so quickly and so high that it could even impose profit limits. government-imposed restrictions on what can be covered. noncovered. For example. insurers over the long term could eventually face Medicare-like. The result could easily turn into a profit squeeze for both insurers and providers. It is reasonable to assume that pain from a scenario like this would be passed along to insurers. 67 . both Massachusetts and Tennessee have been forced to backtrack substantially on their relatively new statewide universal plans because costs ramped up much higher and much faster than they ever thought possible. then private insurance companies will eventually suffer as current private sector clientele migrate to the public option for lower premiums. then today’s private insurers might grow substantially in terms of number of people covered. subsidized when necessary. then private companies will evolve into something like today’s supplemental companies. or might cover expenses of private rooms. providing special coverage somewhat similar to the way that Aflac does today. how much can be charged. However.Universal coverage is highly subsidized by the federal government. treatments for cancer. 2) If there are stringent limits on care provided by a public option. or non-covered very expensive pharmaceuticals. 3) If there is no public option but the government sets up a procedure whereby virtually everyone will have insurance.
and customer base. after the Reserve Bank of India allowed establishing private sector banks.22.8 crore in 2008-09 History HDFC Bank was incorporated in the year of 1994 by Housing Development Finance Corporation Limited (HDFC).9 crore. HDFC Bank has 1. For the fiscal year 2008-09.000. up 41% from the previous fiscal.19. in 2000. incorporated in August 1994. Times Bank Limited (promoted by Bennett. (BSE: 500180.000 crore. As of September 30.2. 1.. This was the first merger of two private banks in India.HDFC STANDARD LIFE INSURANCE HDFC Bank Ltd. and all branches of the bank are linked on an online real-time basis. and a bigger pool of skilled manpower. The amalgamation added significant value to HDFC Bank in terms of increased branch network. 244. the bank has reported net profit of Rs. a premier housing finance company (set up in 1977) of India. 67 .82 billion.000 crore. geographic reach. 622. shareholders of Times Bank received 1 share of HDFC Bank for every 5. in 528 cities in India. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India.412 branches and over 3. 63. / Times Group) was merged with HDFC Bank Ltd. Total annual earnings of the bank increased by 58% reaching at Rs. In a milestone transaction in the Indian banking industry. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1.000 crore and net advances of around Rs. The balance sheet size of the combined entity is over Rs. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. NYSE: HDB) is a major Indian financial services company based in Mumbai. The Bank commenced its operations as a Scheduled Commercial Bank in January 1995 with the help of RBI's liberalization policies. 1.75 shares of Times Bank. The Bank was promoted by the Housing Development Finance Corporation. India's premier housing finance company. 89. 2008 the bank had total assets of INR 1006. The amalgamated bank emerged with a strong deposit base of around Rs. Coleman & Co.295 ATMs.
transactional services. 67 . mutual funds. Retail Banking Services. It has entered the banking consortia of over 50 corporate for providing working capital finance. money markets and debt trading and equity research. Net Banking and Mobile Banking. and Treasury. the Bank provides a wide range of commercial and transactional banking services. blue-chip manufacturing companies in the Indian corporation to small & mid-sized corporate and agri-based businesses. which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Wholesale banking services The Bank's target market ranges from large. Retail banking services The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services. It is also providing sophisticated product structures in areas of foreign exchange and derivatives. giving the customer a one-stop window for all his/her banking requirements.Wholesale Banking Services. corporate finance and merchant banking. cash management. stock exchange members and banks. companies from the domestic business houses and prime public sector companies.Business focus HDFC Bank deals with three key business segments . as well as through alternative delivery channels like ATMs. The bank is also a leading provider of structured solutions. trade services. etc. HDFC Bank has made significant inroads into the banking consortia of a number of leading Indian corporate including multinationals. including working capital finance. The products are backed by world-class service and delivered to customers through the growing branch network. It is recognized as a leading provider of cash management and transactional banking solutions to corporate customers. trade services. For these customers. Phone Banking.
The Bank launched its credit card business in late 2001. 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 Our Vision: We aim to be the best new life insurance company in India and these are the values that will guide us in this. The Bank is well positioned as a leader in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits. Our Mission: We aim to be the top new life insurance company in the market. Bill Payments. Loans. This does not just mean being the largest or the most productive company in the market. 67 . The Bank is also one of the leading players in the “merchant acquiring” business with over 70.HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. the bank had a total card base (debit and credit cards) of over 13 million.000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. By March 2009. etc.
The Bank has a presence in all major industrial and commercial centers across the country. Plus/Cirrus and American Express Credit/Charge cardholders. TRUST: We appreciate the trust placed by our policy holders in us. Moreover. we will be offering a range of innovative products to meet these needs. Visa Electron/Maestro. Associate Companies of HDFC Standard Life Insurance: HDFC Limited HDFC Bank HDFC Mutual Fund HDFC Securities 67 .898 networked ATMs across these cities. Being a clearing/settlement bank to various leading stock exchanges. The Bank also has 3. Distribution network HDFC Bank is headquartered in Mumbai. We will be do this by offering life insurance and pension products. INNOVATION: Recognizing the different needs of our customers.725 branches spread in 771 cities across India. the Bank has branches in the centers where the NSE/BSE have a strong and active member base.Our Values: SECURITY: Providing long term financial security to our policy holders will be our constant Endeavour. All branches are linked on an online real-time basis. Customers in over 500 locations are also serviced through Telephone Banking. The Bank has an network of 1. Hence. we will aim to manage their investments very carefully and live up to this trust. HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard.
expected to report Fiscal Year 2011 results on May 30. HDFC Standard Life Insurance Co. India... is planning to come out with an Initial Public Offer (IPO) early next year. This event was calculated by Capital IQ (Created on June 27. 2011. Ltd. HDFC Standard Life Insurance Co. there is anticipation that the government will take a view on raising the FDI ceiling in the insurance sector to 49% from the current 26%. 67 . he said. Sep-15-2010 Venue: Hotel ITC Gardenia. But before it can come out with its IPO. At the same time. Ltd. Speakers: Sunil Rawlani. Karnataka. In addition. These rules are expected to be out in the next 6-9 months. 2010).. the company will have to wait for guidelines from the Insurance Regulatory and Development Authority. disclosure norms and guidelines on embedded valuation are also expected to be issued by the government. he said. HDFC ERGO General Insurance Key developments for HDFC Standard Life Insurance Co. which would help in taking a view on the IPO. which will open the field for more foreign investment. Ltd. Quality HDFC Standard Life Presents at NASSCOM Infrastructure Management Services Summit 2010. Process. Bangalore. IT. Executive Vice President.
.CEO OF THE COMPANY Mr. Ltd. Amitabh Chaudhry Amitabh Chaudhry has been the Chief Executive Officer and Managing Director of HDFC Standard Life Insurance Co. from March 2006 to December 2009. Chaudhry who has over 17 years of experience. Mr. Chaudhry joined Infosys Business Process Outsourcing in 2003 as the Head of Transition. Mr. 67 . Mr. was earlier with Credit Lyonnais Securities in Singapore as the Head of the Investment Banking Franchise for South East Asia and Structured Finance practice for Asia. Chaudhry completed his Engineering in 1985 from Birla Institute of Technology and Science. He serves as Director of HDFC Standard Life Insurance Co. Mr. since January 19. Ltd.. Ahmedabad. 2010. and he rose to the position of the Chief Operating Officer from April 2005 to December 2009. Pilani and MBA in 1987 from IIM. Chaudhry served as the chief Executive Officer and Managing Director at Infosys BPO Limited (known as Progeon Limited) of Infosys Technologies Ltd.
Plans of HDFC Standard Life Insurance I. • • • Protection Plans: HDFC Term Assurance Plan HDFC Loan Cover Term Assurance Plan HDFC Home Loan Protection Plan II. Retirement Plans Type Regular Premium Conventional Plans HDFC Personal Pension Plan Unit Linked Insurance Plans HDFC Unit Linked Pension II Single Premium/Investment HDFC Unit Linked Pension Maximiser II IV. Savings & Investment Plans 67 . III. Children's Plans Unit Linked Insurance Plans Conventional Plans HDFC Plan Children's HDFC Young Star Super HDFC Unit Linked Young Star II HDFC Unit Linked Young Star Plus II HDFC Unit Linked Young Star Champion.
Type Conventional Plans • Unit Linked Insurance Plans • HDFC Endowment Assurance Plan HDFC Unit Linked Endowment Plus II • Regular Premium • • HDFC Money Back Plan HDFC Assurance Plan HDFC Savings Assurance Plan • HDFC Unit Linked Endowment II • HDFC Unit Linked Enhanced Protection II Life • • HDFC Simply Life HDFC Unit Linked Endowment Winner Single Investment Premium/ • HDFC Single Premium Whole of Life Insurance Plan • HDFC Unit Linked Wealth Plus Maximiser Limited Premium Payment • HDFC Unit Linked Wealth Multiplier V. Health Plans • • HDFC Critical Care Plan HDFC Surgi Care Plan Locations of HDFC Standard Life Insurance Companies City Address 67 .
2.19 / 11 Salem Nagar Colony Malakpet. 15 / 181 Kavita Krishna Annexe Subedar Peth Kanakamaha Centre Nellore 524001 10 . 36. Veerabhadra Complex Opp. 6-4-102. Ramalayam Kaman Near Kukatpally Bus Stop Kukatpally Hyderabad 500072 2nd floor MCH 8 .293 / 82 / A -103 Road no. Jubilee Hills Hyderabad 500033 16 . 1st floor D. 4/3.2 . Raju Complex Nellore Rajahmundry 67 . P. Dilsukhnagar Hyderabad 500036 Guntur Hyderabad Hyderabad Hyderabad Kakinada Srideepthi Towers 1st Floor Subhash Road (Main Road) Next to Chandana Brothers Kakinada 533001 Ground floor.522 002 1st floor. V. Guntur . B.11 .2 . Vasanthi Complex Opp. Arundel Peth. road Bhimavaram .534 202 st Floor.Bhimavaram 1st floor. Ayyapa Swami Temple J.
Ring road. Labbipet Visakhapatnam Vijayawada 520010 1st floor. Towers.23. Office no. Bus stand road. Community Centre. 1st floor 'Lala 1 .Landmark' opp. E. Connaught Place. road. Raniganj bus stop 5 . Vanijya Bhavan. G.Opp. Near Chandra Maurya talkies. Bilaspur . Waltair Club. G. road Vijayawada Secunderabad 500003 M.4 . Delhi . H . 40 . Opp. Lajpat Nagar 3. Nabyug building Opp.110 024 67 . Janakpuri. Rama Trade Centre. L. Durg District . 1st floor. Chauhan Estate. B . ABC bus stop. Waltair Main road.182 M. Pushkar Ghat Secunderabad Rajahmundry 533101 101 & 102.1 .Raipur 492 009 1st floor. 202. New Delhi . Bank of Maharashtra Exhibition road Durg Bilaspur Raipur New Delhi Janakpuri Patna 800001 3rd floor. Saigopal Arcade Opp. Outer Circle. 1st floor Door no. Bhilai. Sai Nagar.G. Siripuram Guwahati Visakhapatnam 530003 3rd floor. New Delhi .69.94.490 023 (Chattisgarh) 3rd floor. Mayur Garden opp. road. New Delhi 47. Next to HDFC Bank. M.495 001 1st floor. Rajiv Plaza.110001. Bhangagarh Patna Guwahati 781005 2nd floor.Devendra Nagar road.110 058.
'Milroc Lar Menezes'.Panaji G . Goa . Old Passport Office. Swami Vivekanand road.403 001 Services Provided by Company: Premium Payment Options At a Branch By Post Online Payment Credit Card Facility 67 .1. Opp. Panaji. Ground floor.
etc 67 . Units held. Next Premium Due Date. it having a nationwide footprint of over 572 branches. NAV & Fund Value. So it help the customers to operate by sitting home or anywhere in the world.00. HDFC Standard life insurance has experienced substantial growth over the last year and today cover over 34. Policy Status. Use keywords to: Locate a branch One can his/her policy Sum Assured.000 Policy Holders. SMS On The Move It can be easily accessible by the help of mobile anywhere in the world. Easy Bill Drop Boxes Electronic Bill Payment BONUS HDFC Standard life insurance announce the Eighth Successive Reversionary Bonus for the year from 1 April 2007 to 31 March 2008. just doing SMS. the customers of HDFC standard life insurance can access their account with the help of mobile . Now. Premium Amount. As a result of an improved performance and a growing business. This bonus declaration will benefit all 'With Profits' customers who have paid all premiums in full when due.
KEYWORDS BRANCH FUND NAV POLICY NAV REG SMS FORMAT BRANCH <space> <city name> FUND <space> <policy number> NAV <space> <policy number> POLICY PREMIUM <space> <policy number> REG <space> <policy number> Map Location Of HDFC Life Insurance Bank 67 .
Introduction To Topic 67 .
When buyers are powerful. They can identify their own strengths and weaknesses. Customer satisfaction. The Need to Measure Customer Satisfaction: Satisfied customers are central to optimal performance and financial returns. it is more important to pay attention to the customer. Assets on the balance sheet – basically assets of production – are good predictors only when buyers are weak. 67 . a business term. So it is no wonder that the relationship between those assets and future income is becoming more and more tenuous. Evidence is mounting that placing a high priority on CS is critical to improved organizational performance in a global marketplace. chart out path future progress and improvement.Customer satisfaction Good customer service is the life blood of any business. Forward-looking companies are finding value in directly measuring and tracking customer satisfaction (CS) as an important strategic success indicator. Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company. As buyers become empowered. but with buyer power on the rise. the health and strength of the company's relationship with its customers – its most critical economic asset – is its best predictor of the future. In many places in the world. where they stand in comparison to their competitors. Focusing on competition has its place. companies can determine the actions required to meet the customers' needs. Customers are viewed as a group whose satisfaction with the enterprise must be incorporated in strategic planning efforts. With better understanding of customers' perceptions. business organizations have been elevating the role of the customer to that of a key stakeholder over the past twenty years. is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business. Although new customers are important good customer service will help generate customer loyalty and repeat business. sellers have no choice but to adapt.
In essence. Companies may gather similar information by participating in a Consortium Survey. Usually. and discuss the steps that need to be taken in order to measure and track customer satisfaction. Satisfaction drivers are those aspects of a company's product/service mix that are most strongly related to customer satisfaction. In addition.e.i. a phone call. identification of satisfaction and loyalty drivers is not dependent on the unique characteristics of one company.Customer satisfaction is quite a complex issue and there is a lot of debate and confusion about what exactly is required and how to go about it. products or the agent. By improving performance on key drivers. Customer satisfaction can also be measured at the time of a specific transaction. company managers can improve customer satisfaction and loyalty. This article is an attempt to review the necessary requirements. a billing statement. we might also be interested in the customer's satisfaction with a specific interaction with the company . when we think of customer satisfaction. Measuring Satisfaction Customer satisfaction can be measured at many different levels. and satisfaction drivers. These surveys often measure different kinds of satisfaction. As part of a consortium. Focusing on a specific transaction will enable the organization to accurately measure the customers' perception or acceptance of the processes and procedures for that transaction. a Consortium Survey project involves administering the same survey (or a similar one) to customers of several different companies. is the process easy for the customer. A major advantage of using a consortium is that it provides a baseline to which the consortium participants can measure themselves. In other words.. such as satisfaction with service. participants have an opportunity to learn how the results of their customer satisfaction survey compares to other companies. To measure general customer satisfaction. we think of a general feeling: Is the customer happy with XYZ Company or mad? However. and does it meet their needs? 67 . companies often use a relatively lengthy and detailed customer opinion survey.
Customer satisfaction measurement systems must provide actionable information. but rely on trend analysis and management's knowledge of operational changes during the survey time period to determine whether service changes were effective. REVIEW OF LITERATURE Kang. a report card or other grading system can be prepared. modified and improved. 2004 and provide a list that can guide investigation on the first approach. Another way to measure transaction satisfaction is mystery shopping. focus on measuring what can be controlled. For the insurance industry. In other words. and focus on customer reactions to that specific contact with the company. and a policy is put on the carrier's system. The objective is to manage customer satisfaction to attain or maintain the desired goals. The mystery shopper provides feedback to the insurance company on the service experience. J (2004) analyzed 10 determinants of service quality established by James Kang. An effective measurement system should help to evaluate service improvement initiatives. The mystery shopper will then contact the carrier and evaluate the service received on specific transactions.Transaction satisfaction surveys are usually very short. They are also more immediate. taking place within a week or so of the contact. Ongoing grading or recording of scores allows companies to compare changes in service over time. a mystery shopper is generally contracted by the carrier. with the ultimate goal of increasing profits. Based on the results of either transactional or general customer satisfaction surveys. These surveys don't measure satisfaction drivers per se. The authoress subsequently 67 . or a combination of both.
1988). 2004): an American and a European perspective. two-part instrument for measuring service quality that was refined later (Parasuraman et al. such as opinion of providers and literature.. suggest that the researches generally adopt one of the two conceptualizations in their work. Much of the research till date has focused on measuring service quality using this approach and its use has became quite widespread (brown et al. Brady. the process of identifying customers’ attitude beings with determining customers’ requirement or quality dimension. The first one uses different source of information. but some will apply only to specific types of services. James Kamg .developed SERVQUAL (Parasuraman et al. 1991). as in customer satisfaction questionnaires. Parasuraman et al. 91985) identified in a first study 10 quality dimensions based on a series of focus group sessions. some quality dimensions are generalized across many services. The author explains then two ways of identifying important quality dimensions of service: quality dimensions development approach and critical incident approach. 1993. their two main lines of thoughts on measuring service quality (James Kang. As described by Hayes (1997). M (1997) analyzed important quality dimensions of services and however. In this sense. C (2001) studied that the emergence of service quality and its assessment has attract the attention of numerous researchers in the past two decades or so. The other one is a process to obtain information from customers... The focus on functional quality attribute is referred to as the American perspective of service quality while the European perspective suggests that service quality considered two more components. Parasuraman et al. (1985) analyzed functional quality of a service is often assessed by measurer of customers’ attitude. Hayes. From this study. 2004). 67 . and it is necessary to understand quality dimensions to be able to developed measures to assess them. the authors concluded use the same criteria to assess service quality independently to the type of service.
and image (how the customer view the company). 67 . technical (the outcomes generated by the service to the customers).considering those dimensions. so I accomplish the objective conducted the study. the quality of the service and perceived service. noted that the quality of a service as perceived by customers consists of three dimensions functional (the process of service delivery to customers).Gronroos (1984) studied the European perspective additional aspects other than the process of service delivery. For instance. OBJECTIVES OF THE STUDY The company wants to know about the awareness of insurance sector to the customer and their attitude towards company.
Normally research design is the plan and structure of investigation so conceived as to obtain answers to research questions . Research Methodology A central part of research activity is to develop an effective research strategy or design. RESEARCH 67 . To analyses the motive behind the purchasing policy of HDFC Standard Life Insurance. To study the customer satisfaction level regarding HDFC Standard life Insurance. Methodology involves the most suitable method of investigations.The plan is overall scheme or program of the research. A research design is a frame work or blue print for conducting the marketing research project.The objectives were: To study the customer awareness regarding products and services of HDFC Standard Life Insurance. To know the loyalty of respondent towards the HDFC standard life insurance. The nature of research instruments are the sampling plan and the type of data. It specifies the details of the procedures necessary for obtaining the information needed to structure and/or solve marketing research problems.
education level. etc. A descriptive study is undertaken when the research wants to know the characteristics of certain groups such as age. formulating hypothesis or suggested solutions. TYPE OF RESEARCH ADOPTED 67 . It is preliminary investigation which does not have a rigid design. occupation. making deductions and reaching conclusions and at least carefully testing the conclusion to fit the formulating hypothesis. c) Exploratory research: An Exploratory Research focuses on the discovery of ideas and is generally based on secondary data. It has multiple dimensions and includes all the research methods and techniques.Research comprises of defining and redefining problems. b) Casual research: Casual research is used to obtain evidence of cause and effect relationship between two or more variables. RESEARECH METHODOLOGY Research methodology is the science of research as to how research is done scientifically using the research methods. sex. TYPE OF RESEARCH a) Descriptive Research: Descriptive Research is to describe something usually market characteristics or functions. organizing and evaluating data.
The research design adopted is Descriptive research design. Primary data was obtained by • Questionnaire. the data from the source primary data and secondary data have been gathered. Internet SAMPLE PLAN 67 . Secondary data The secondary data are those which have already been collected by someone else and have been passed through the statistical process. DATA COLLECTION: For the purpose of present study. The key to good Descriptive research design is knowing exactly what you want to measure and selecting a survey method in which every respondents is willing to co-operate and capable of giving you the complete and accurate information efficiently. Questionnaire was used for the survey. Secondary data was obtained in followings ways • • Company’s Brochure. Primary data The primary data are those which are collected fresh and for the first time and thus happen to be original in characters.
LIMITATIONS It is said. “Nothing is perfect” and if the quote is true. I am sure that there would be few shortcomings in this project also. Most expressive and attractive shape should be given to information in the form of chart. diagrams and pictorial representation.150 people.Sample size: . Sincere efforts have been made to eliminate discrepancies as far as possible but few would have remained due to limitations of the study. This could have brought bias into the study not possible to cover people of all professions and age group. • Restrictive approach of analysis as other people may have different opinion. local residents of Ludhiana Sampling Unit: . These are: • The sample size taken for the purpose of the study does not very significantly represent the whole society and their saving investment patterns may not clearly bring out the average trends existing in the market • • Time constraint The survey was conducted in Ludhiana thus the respondents belonged to only this region of the country.Ludhiana DATA ANALYSIS AND INTERPRETATION In this study tables and pie charts were used for analyzing and for interpretation purpose. 4.1 Customers of HDFC Standard Life Insurance 67 .1: Are you a customer of HDFC standard life insurance? Tab:4. Data should be presented in specialized form otherwise the aim of collection of facts & figures will not be achieved.
of Respondents Percentage of respondents Percentage of Respondents (approx) Yes No Total 70 80 150 46.Response No.33% 100% 47% 53% 100% Figure 4.1Customers of HDFC Standard Life Insurance Interpretation : From the above figure it is clear that 47% of the respondents which are taken in survey are the customers of HDFC Standard life insurance and 53% of the respondents are not the customers of HDFC Standard life insurance. 67 .66% 53.
e.3 Insurance plans of HDFC Standard Life Insurance. Television etc. of Respondents 13% 37% 23% Electronic Media Print Media Agents Others 27% Figure 4. life insurance through Electronic Media i. life insurance through Print Media i. • • 4.2 Awareness of HDFC Standard Life Insurance. Journals etc.3: Which of the following insurance plans is being adopted by you? Tab4. Response Electronic Media Print Media Agents Others Total No. 67 .e. 27% of the respondents have heard about HDFC Std. Computers.2: From where did you hear about HDFC standard life insurance? Tab4. Internet.85% 100% Percentage of respondents (approx) 37% 27% 23% 13% 100% No.85% 12. 23% have heard about it from their agents and remaining 13% have heard about HDFC Std. Newspapers.2 Awareness of HDFC Standard Life Insurance Interpretation : • 37% of the respondents have heard about HDFC Std. Magazines. life insurance through others sources.14% 22. of Respondents 26 19 16 9 70 Percentage of respondents 37.14% 27.4.
4: Are you satisfied with the plan you are using offered by HDFC standard life insurance? 67 .3 Insurance plans of HDFC Standard Life Insurance Interpretation: • • • • • Majority of the respondent i. Respondents of Percentage of respondents 2.31% adopted saving & investment plan.e.85% 25. 23% of the respondent adopted Retirement plan. Only 3% respondents adopted protection plan.Response No.85% 31. 26% of the respondent adopted children plan 17% of the respondents adopted health plans. 4.14% 100% No.71% 22.42% Percentage of respondents ( approx) 3% 26% 23% 31% Protection Plans Children's Plans Retirement Plans Savings & Investment Plans Health Plans Total 2 18 16 22 12 70 17. of Respondents 17% 100 3% 17% 26% Protection Plans Children's Plans Retirement Plans Savings & Investment Plans 31% 23% Health Plans Figure 4.
57% 100% Percentage of respondents ( approx) 91% 9% 100% Fig:4.4 Satisfaction regarding products of HDFC Standard Life Insurance Interpretation: From the above graph it is clear that majority of the respondents are satisfied with the plans being offered by HDFC standard life insurance i.5 Awareness of services being offered be HDFC Std.e.Tab4.5: Are you aware of the following services provided by HDFC standard life insurance? Tab4.4 Satisfaction regarding products of HDFC Standard Life Insurance Response No. of Respondents 9% Yes No 91% Figure4. of Respondents Percentage of respondents Yes No Total 64 6 70 91. Life Insurance. 91% and 9% respondents are not satisfied with the plans offered by HDFC standard life insurance.4 No. 67 .42% 8. 4.
Interpretation: From the above graph it is clear that majority of the respondents are aware of Premium payment option i. life insurance. of Respondents 6% 14% Premium Payment Options Bonus 23% 57% SMs On The Move ALL Figure 4.5 Awareness of services being offered be HDFC Std. 57% and 23% and 14% are aware of Bonus and SMS on move service.28% 5. of Respondents Percentage of respondents Percentage of respondents ( approx) 57% Premium Payment Options Bonus SMs On The Move ALL Total 40 57. Life Insurance.87% 14. Where as only 6% of respondents are aware ALL services which are provided by HDFC std.Response No. 4:6 Are you satisfied with the service being offered by the HDFC standard life insurance? 67 .e.71% 100% 23% 14% 6% 100% No.14% 16 10 4 70 22.
4. Life Insurance Interpretation: From the above graph it is clear that majority of the respondents are satisfied with the services offered by HDFC std. of Respondents Percentage of respondents Percentage of respondents ( approx) Yes No Total 52 18 70 74.6 Satisfaction level regarding services of HDFC Std. Only 26% respondents are dissatisfied with the services offered by HDFC std. Life Insurance Response No.7: What motives you to buy HDFC Standard Life Insurance policy? Tab4.28% 28.71% 100% No. of Respondents 74% 26% 100% 26% Yes No 74% Figure4.6 Satisfaction level regarding services of HDFC Std.7 Motives to buy HDFC Std Life Insurance Policy 67 . life insurance. 74%.e. i.Tab4. life insurance.
Life Insurance 67 . of Respondents Percentage of Percentage of respondents responden ( approx) 46% 20% 11% 23% 100% ts 45. of Respondents 23% 11% 20% Tax Saving 46% Lives Cover Liquidity Secure Investment Figure4.Response No. 4. 46% respondents are in favor of this. 20% and 11% are with life cover and Higher Return respectively.71% 20% 11. 23% respondents gave preference to secure investment.85% 100% Tax Saving Life Cover Higher return Secure Investment Total 32 14 8 16 70 No.8: For how long you are the part of HDFC standard life insurance? Tab4.7 Motives to buy HDFC Std Life Insurance Policy Interpretation: As the above figure showed that most of the respondents buy insurance policy for the purpose of saving tax.42% 22.8 Customers Loyalty towards HDFC Std.
of Respondents 26 18 14 12 70 Percentage of Percentage of respondents ( approx) 37% 26% 20% 17% 100% respondents 37.8 Customers Loyalty towards HDFC Std. of Respondents 17% 37% 20% Less than 6 Months Less than 1 Year More than 1 Years More than 2 Years 26% Figure 4. Life Insurance from 6 month i. 37%.e. Life Insurance Interpretation : From the above graph it is clear that majority of the respondents are the new customer of HDFC Std.14% 100% No. Life Insurance from less than 1 years.9 Recommendation of polices to their friends and relatives 67 .14% 25.9 Do you recommend HDFC standard life insurance polices to your friends and relatives? Tab4. 26% of the respondents are part of HDFC Std.Response Less than 6 Months Less than 1 Year More than 1 Years More than 2 Years Total No. 4.7%1 20% 17. 20% respondents from more than 1 year and remaining 17% respondents are part of HDFC Std Life Insurance for more than 2 year.
10 Do you repurchase the products of HDFC standard life insurance? Tab4. of Respondents Percentage of Percentage of respondents responde ( approx) 71% 29% 100% nts 71.i. 71%. 4. of Respondents 29% YES NO 71% Figure4. Life Insurance 67 .e.Response No.9 Recommendation of polices to their friends and relatives Interpretation: From the above graph it is clear that majority of the respondents will recommend HDFC std. Only 29% respondents will not recommend to their friends and relatives.57% 100% YES NO Total 50 20 70 No. life insurance bank plans to their friend and relatives.14% 28.10 Repurchased the products of HDFC Std.
e. life insurance.10 Repurchased the products of HDFC Std. 4. of Respondents 83% 17% 100% 17% YES NO 83% Figure4.14% 100% No.11 Overall quality of relationship with HDFC Std. of Respondents Percentage of respondents Percentage of respondents ( approx) YES NO Total 58 12 70 82. Only 17% respondents wouldn’t repurchase the products and services of HDFC std. 83%.Response No. i. Life Insurance Interpretation: From the above graph it is clear that majority of the respondents are willing to repurchase the products and services of HDFC std. life insurance.87% 17.11 How would you rate the overall quality of relationship with HDFC standard life insurance considering all your experience with them? Tab4. Life Insurance 67 .
20% are feel very good about the company. of Respondents Percentage of respondents 20% 37.Response No.11 Overall quality of relationship with HDFC Std.37% feel good .14% 100% No.57% 17. FINDINGS OF THE STUDY 67 .14% 7. life insurance bank feel good with over all experience and relationship with the company. of Respondents 7% Percentage of respondents ( approx) 20% 37% 19% 17% 7% 100% Very good Good Average Bad Very bad Total 14 26 13 12 5 70 17% 20% 37% 19% Very good Good Average Bad Very bad Figure4. Life Insurance Interpretation: From the above data it is clear that most of the customers of HDFC std. 19 % feel average and 17% fell bad and 7% feel very bad with the over all experience and relationship with the HDFC std.14% 18. life insurance bank.
life insurance through Print Media i. 17% of the respondents adopted health plans. From the above study it is clear that majority of the respondents are satisfied with the services offered by HDFC std. Only 3% respondents adopted protection plan. Magazines. 23% have heard about it from their agents and remaining 13% have heard about HDFC Std.From the above figure it is clear that 47% of the respondents which are taken in survey are the customers of HDFC Standard life insurance and 53% of the respondents are not the customers of HDFC Standard life insurance.e 46% respondents are in favor of this.e.e.e. Majority of the respondent i.e. From the above study it is clear that majority of the respondents are aware of Premium payment option i. life insurance. 26% of the respondent adopted the children plan.31% adopted saving & investment plan. From the above study it is clear that 37% of the respondents have heard about HDFC Std. From the above study it is clear that majority of the respondents are satisfied with the plans being offered by HDFC standard life insurance i. As the above study showed that most of the respondents buy insurance policy for the purpose of saving tax. 23% respondents gave 67 . life insurance. Newspapers. 23% of the respondent adopted the Retirement plan. Journals etc. 74%. life insurance through others sources.i. life insurance through Electronic Media i.e. Computers. 91% and 9% respondents are not satisfied with the plans offered by HDFC standard life insurance. Where as only 6% of respondents are aware ALL services which are provided by HDFC std. life insurance. Only 26% respondents are dissatisfied with the services offered by HDFC std. 57% and 23% and 14% are aware of Bonus and SMS on move service. Television etc 27% of the respondents have heard about HDFC Std. i. Internet.e.
83%.e. life insurance From the above study it is clear that most of the customers of HDFC std. 20% . life insurance bank feel good with over all experience and relationship with the company i. SUGGESTIONS FOR THE STUDY 67 . life insurance.preference to secure investment. 26% of the respondents are part of HDFC Std. 20% respondents from more than 1 year and remaining 17% respondents are part of HDFC Std Life Insurance for more than 2 year. life insurance bank plans to their friend and relatives.e. i. life insurance bank. 37%. From the above study it is clear that majority of the respondents are willing to repurchase the products and services of HDFC std.i. Only 17% respondents wouldn’t repurchase the products and services of HDFC std. From the above study it is clear that majority of the respondents are the new customer of HDFC Std. From the above study it is clear that majority of the respondents will recommend HDFC std.e. Life Insurance from less than 1 years.e. Life Insurance from 6 month i. 71%. 37% and 20% of respondent feel very good about the company i. 19 % feel average and 17% fell bad and 7% feel very bad with the over all experience and relationship with the HDFC std. 20% and 11% are with life cover and liquidity respectively. Only 29% respondents will not recommend to their friends and relatives.e.
credibility. Measures to build faith among people about HDFC Standard Life Insurance must be taken on accounts of its reliability. HDFC Standard Life Insurance should cover rural areas. as they are not aware of the advantages of the policies for tax savings. HDFC Standard Life Insurance should cover uneducated people. HDFC Standard Life Insurance must conduct seminars and presentations at all kinds of places whether cities or towns and focus should be on people who have large network of references. sincerity and the long lasting establishment. 67 . as they are also the segment of population not aware of the advantages of policies. HDFC Standard Life Insurance should do efforts to promote the brand name and create awareness through channels such as advertisements. responsibility. The agent should be given sufficient traveling allowance so as to compensate the expenditures made by them to meet customers from one place to another. The agent should not only be provided with training at the time of selection but they should also be given refresher training periodically.
the customers are satisfied with the product and services offered by HDFC Standard Life Insurance which is very well rivaled by the responses given by the respondent during the survey.CONCLUSION The research title “Customer Satisfaction regarding Product and services of HDFC standard Life Insurance Bank” can be concluded on the basis of the survey conducted. LEARNING EXPERIENCE 67 . To conclude .
This experience would definitely prove productive in my work life.The training period had been the best work experience I could gather in my student life. REFERENCES 67 . I have gained this priceless experience of being with such a competitive and learned team at HDFC Standard Life Insurance. I could now analyze the important of so called concepts ‘CUSTOMER IS THE KING’ Last but not the least. It was delight to interact with the uses of the services provided by the HDFC Standard Life Insurance. This was the best part of the training I had undergone. The concepts could be related to reality only when we get our hands on the practical know-how of the same.
hdfcinsurance.hdfcinsurance.irdaindia.mapsofindia.com/insurance/standard-life-insurance-india.aspx http://www.mapsofindia..com/Products/ProtectionPlans/ProtectionPlans. Philip.Books • Kotler.aspx http://www.com/the-global-executive-network-organizes-executive-r1813443.html http://business.org/ http://www.com/Products/PensionPlans/PensionPlan.aspx http://www.com/Products/ChildrensPlans/ChildrensPlansLP.hdfcinsurance.htm 67 .in/history.html http://www.com/Industries/Insurance/InsuranceTrends/tabid/239/Default.hdfcinsurance.com/Products/HealthPlans/HealthPlans.aspx http://www.com/Products/SavingsPlans/SavingsPlans.com/insurance/brief-history-of-insurance-sector.pr-inside.aspx http://www.R. “Research Methodology: Methods & Techniques” Web sites http://www.aspx http://www.plunkettresearch. C.gov.aspx http://www.aspx?page=PageNo4&mid http://www.hdfcinsurance. “Marketing Management” • Kothari.in/ADMINCMS/cms/NormalData_Layout.com/index.htm http://business.irda.licindia.hdfcinsurance.
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