A Project Report On Marketing Strategies and

Financial Statement
Analysis of HDFC LIFE INSURANCE

IITM, Janakpuri

Submitted in partial fulfillment of the requirements

for the award of the degree of

Bachelor of Business Administration (BBA)

To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Submitted by: Abhishek Batra

(Guide Name) (Student name)
Roll No.: 06990301721

Institute of Innovation in Technology& Management,

New Delhi– 110058
Batch (2021-2024)

1
 Certificate

I, Mr. Abhishek Batra, Roll No. 06990301721 certify that the Project Report (BBA-
114) entitled “A Project Report on Marketing Strategies and Financial Statement
Analysis of HDFC LIFE INSURANCE” is done by me and it is an authentic work
carried out by me at IITM, Janakpuri. The matter embodied in this project work has
not been submitted earlier for the award of any degree or diploma to the best of my
knowledge and belief.

Signature of the Student

Date:

Certified that the Project Report (BBA-311) entitled “A Project Report on

Marketing Strategies and Financial Statement Analysis of HDFC LIFE

INSURANCE” done by Mr. Abhishek Batra, Roll No. 06990301721 , is completed

under my guidance.

Signature of the Guide

Name of the Guide:
Designation:
Date:

Countersigned
(Director/Project Coordinator)

2
 CONTENTS

S No Topic Page No

1 Certificate (s) 2

2 Chapter-1: Company Profile 5

3 Chapter-2: Marketing Strategies of The 19

Company
4 Chapter-3: Financial Ratios 33

5 Chapter-4: CSR initiatives and Unique 41

Practices
6 Chapter-5: Conclusion and Suggestions 47

7 References 49

Table
Table No. Topic Page No.

1.1 Major Milestones 8

1.2 Eligibility Criterion of HDFC Life Click 2 15

Protect Plus

1.3 Eligibility Criteria for HDFC Life Saral 16

Jeevan Bima

1.4 Eligibility Conditions of HDFC Life Sanchay 17

Plus Plan

1.5 Eligibility Conditions 17

1.6 Eligibility Conditions of HDFC Life Smart 18

Women Plan

3
 Figure

Figure Topic Page no.

No.
2.1 Market Cap 20

2.2 Stock Returns for Last 5 Years 21

2.3 Revenue 22

2.4 Profit 22

2.5 Promotors Shareholding 23

2.6 ROE 24

2.7 ROCE 24

3.1 Current Ratio 34

3.2 Quick Ratio 35

3.3 Return On Investment 36

3.4 Return On Assets 37

3.5 Proprietary Ratio 38

4
 Chapter-1
COMPANY PROFILE

a.) About the company

HDFC Standard Life Insurance Company was established in 23 rd

October, 2000 as a joint venture between Housing Development

Finance Corporation Limited (HDFC Ltd) and Standard Life Aberdeen.

This long-term life insurance provider offer both individual and group

insurance policies. The insurance company has 421 branches and is

present in around 980+ towns and cities in India. It even has its own

liaison office in Dubai. It deals with a wide range of products such as

pension, protection, HDFC Life of Savings & Investment, child, women

5
and health plans – thus covering the three key risks of mortality,

morbidity and longevity.

It was the first private company to get a license from IRDAI in 2001. In

the financial year 2018-19 alone, HDFC life insured over 5.1 crores of

life and was awarded the Best Life Insurance Company at the BFSI

Award 2018. As of March 2019, the company was providing 38 individual

and 11 group insurance products. After strong period of growth, the

company completed its initial public offer (IPO) in 2017. HDFC Life

continues to benefit from its presence across the country with 414 branches

and additional distribution touch points through several partnerships. The

partnerships comprise 265 bancassurance partners including NBFCs (Non-

Banking Financial Companies), MFIs (Micro Finance Institutions), SFBs

(Small Finance Banks), etc. and 39 partnerships within non-traditional

ecosystems.

HDFC Standard Life is one of the most profitable life insurers based on Value of

New Business (VNB) margin. Besides consistently being among the top three

private life insurers in terms of profitability based on VNB margin the company has

also consistently been among the top three private life insurers in terms of market

share based on total new business premium.

Over the years, it have successfully developed an agile framework for

multi-tie distribution that has allowed us to tie up with 300+ partners. te

continue to strengthen our distribution and expand the breadth of our

relationships by adding newer partners. It believe in offering superior

service in a timely manner. We have leveraged technology to offer a

range of digital initiatives that are completely contactless and paperless,

across most of our channels including our branch offices.

6
Objective of the Company

HDFC Life Insurance Company Limited (HDFC Life) hasthe vision to be the most

successful and admired life insurance company and 'the most obvious choice for all'.

We are committed to building a sustainable business whilst creating value for all

stakeholders. To achieve our vision and long term business objectives, we operate

within a framework that is just, fair, equitable to all our stakeholders and society.

In line with this objective, we are committed to following the principles of Responsible

Investment (RI). As an active asset manager for our policyholders, who have entrusted

their savings with us, it is our fiduciary responsibility to generate optimal risk adjusted

returns over the long term. We believe that this objective can be served by following

the RI approach which includes core stewardship principles and consideration of

environmental (E), social (S) and governance (G) factors in addition to financial

parameters and outlook, while making investment decisions. This framework

complements the organisation’s philosophy of achieving sustainable growth.

This policy document outlines HDFC Life’s approach to assessing and managing the

ESG aspects across its investment portfolio.

Scope

The RI framework will be applicable to all major asset classes including equity and

bonds. This framework will be integral to investment analysis. It will be reviewed

7
regularly and will be aligned to the organisation’s objective of achieving sustainable

growth.

b.) Major Milestones

2001
HDFC Standard Life is first life insurer to obtain registration from the
IRDAI.

2003
HDFC Standard Life 1 Lakh+ policies & 10000+ individual agents and tie-
ups with HDFC Bank and other bank.

2004
It launch the unit linked fund and distribution tie-ups Saraswat Co-operative
Bank Limited.

2007
It crossed the 5 Lakh policy milestone.

2010
Its total assets under management (AUM) Rs. 200000 million.

2011
Incorporated the Subsidiary, HDFC Pension on June 20, 2011.

2012
The company turned profitable and registered a profit of Rs. 2710 million
and the total premium for the crossed Rs. 1 Lakh million.

2014
Company’s AUM crossed Rs.5Lakh million; Dividend was declared for the
first time in December, 2013.

8
 2016 Total premium crossed the Rs. 1.6 Lakh million mark. HDFC international
was authorised by Dubai Financial Authority to carry o financial services.
Standard Life Maruitius increased its stake from 26% to 35%.

2017
Company’s AUM Rs.900000 million.

Table1.1 Major Milestones

c.) Organisational Structure

9
d.) Top Management of HDFC Life Insurance

10
1. Excecutive Chairman

Mr. Deepak Parekh is a Nominee Director and the Chairman of our Company.

He has been on our Board since August 2000. He is also the chairman of our

Promoter i.e., HDFC. Mr. Parekh is an associate of the Institute of Chartered

Accountants of England and Wales. He is a on the board of several leading

corporations across diverse sectors. He is the non-executive chairman of

Siemens Limited, GlaxoSmithkline Pharmaceuticals Limited and BAE Systems

India (Services) Private Limited.

He is also on the boards of Indian Hotels Company Limited and Bangalore

International Airport Limited (BIAL). Mr. Parekh has won several awards,

which includes Padma Bhushan conferred by Government of India in 2006,

‘Bundesverdienstkreuz’, which is Germany’s Cross of the Order of Merit, being

one of the highest distinction by the Federal Republic of Germany, in 2014,

“Knight in the Order of the Legion of Honour”, one of the highest distinction

by the French Republic, in 2010 and he was also the first international recipient

of the Outstanding Achievement Award by Institute of Chartered Accountants

in England and Wales, in 2010.

2. Independent Director

11
 Mr. Keki Mistry is a Nominee Director of our Company. He has been on our

Board since December20, 2000. He is also the vice chairman and chief

executive officer of our Promoter. He is a Fellow of the ICAI. Mr. Mistry joined

HDFC in 1981. He was appointed as the executive director of HDFC in 1993,

as the deputy managing director in 1999 and as the managing director in 2000.

He was re-designated as the vice chairman and managing director of HDFC in

October 2007 and as the vice chairman and chief executive officer with effect

from January 1, 2010.

Some of Mr. Mistry's recent recognitions include, being awarded “Best

Independent Director Award 2014” by Asian Centre for Corporate Governance

& Sustainability, the Best CEO Financial Services (Large Companies) 2014 by

Business Today magazine, honored with the “CA Business Achiever of the

year” award in the Financial Sector by the Institute of Chartered Accountants of

India (ICAI) in 2011, CNBC TV18's - CFO of the Year for 2008. Mr. Mistry is

the chairman of the of CII National Council on Corporate Governance and a

member of the Committee on Corporate Governance set up by the Securities

and Exchange Board of India.

3. Chief Distribution Officer

12
 Niraj has been associated with HDFC Life since February 2019. He has over

24 years of experience in financial services, primarily in life insurance,

corporate finance advisory and audit. Prior to joining HDFC Life, he was

associated with PNB MetLife, ICICI Prudential Life, EY and BNP Paribas. He

holds a Post Graduate Diploma in Management from the Indian Institute

of Management, Bangalore and is a member of the Institute of Chartered

Accountants of India since 1997.

4. Managing Director

Ms. Renu Karnad is a Nominee Director of our Company. She has been on our

Board since January 25, 2006. She is also the managing director of our Promoter

i.e., HDFC. She holds a bachelor’s degree in law from the University of Mumbai

and a master’s degree in economics from the University of Delhi. She is a Parvin

Fellow – Woodrow Wilson School of International Affairs, Princeton

13
 University, USA. Ms. Karnad joined HDFC in 1978 and she was appointed as

the managing director of HDFC in January 2010.

5. Chief Executive Officer

Vibha has been associated with HDFC Life since August 2008. She qualified as

a member of the Institute of Chartered Accountants of England and Wales in

1992, and is also a member of the Institute of Chartered Accountants of India.

Prior to her appointment at HDFC Life, she worked in varied sectors, such as

global Business Process Management, global FMCG, and in an international

audit firm.

Over the years Vibha has been the recipient of various awards which includes

the 'CA Business Leader - For Large Corporates - BFSI' at the 15th ICAI Awards

by The Institute of Chartered Accountants of India. She has also been felicitated

with awards by ET Prime Women Leadership Awards, IMA India, and has been

recognised as one of the ‘Top 30 Most Powerful Women in Business’ by

Business Today for four consecutive years. In 2021, Vibha has been recognized

as one of the 'Most Powerful Women in Business' by Fortune International and

Fortune India magazines.

14
 e.) Products and Services

Why choose HDFC Insurance?

Ans. These benefits are as follows –

1. You can find a range of life insurance plans offered by the company right
from term insurance to health insurance and investment-oriented plans.
2. In the financial years 2020-221, the company insured about 4 crore lives.
3. The company also won the 11th Aegis Graham Bell Award for Innovative
digital transformation for Vision AI.
4. The company has a high claim settlement ratio which stands currently at
99.03%.
5. You can easily buy an HDFC Life Insurance policy online with some simple
clicks of the mouse.
HDFC Life Insurance offers the following types of plans to its customers –

Term insurance

Term insurance plans are those which cover the risk of premature death. These plans
promise the payment of a lump sum benefit if the insured dies during the policy tenure.
The premiums are very low and the plans ensure that the family is financially supported
in the absence of the bread-winner.

Term plans offered by HDFC Life Insurance

1. HDFC Life Click 2 Protect Life
This plan customises itself to your changing needs and assists you in various
stages of life. Along with multiple options and alternatives, the plan allows you
to focus on your particular insurance needs. Here are the key features of HDFC
Life Click 2 Protect Life:

15
 The plan comes in options:
• The Life Protect Option or the Basic Life Cover
Here, in case of death of the insured during the term of the policy, the nominee will
receive the sum assured in a lump sum
• Life & CI Rebalance Option or Life Cover + Critical Illness Cover
Here, at every policy anniversary, the Critical Illness cover will increase. In case the
insured is diagnosed with any of the listed illnesses, the future premiums will be
waived off
• Income Plus Option or Life Cover + Regular Income
Here the individual would receive a lump sum on the maturity of the plan and would
also get a steady income from the age of 60 years
• If you select the Return of Premium Option, at the time of maturity you will receive
all the premiums that you have paid so far
• There are special deals for women customers and non-smokers
Let us now take a look at the eligibility criterion of HDFC Life Click 2 Protect Life:

Minimum Entry Age 18 to 45 Years

Maximum Entry Age 50 to 65 Years

Plan Duration 10 to Whole Life

INR 50000 onwards for life protect and income

Minimum Sum Assured plus
INR 20 lakhs for Life & CI Rebalance Option
Table1.2 Eligibility Criterion of HDFC Life Click 2 Protect Life

2. HDFC Life Saral Jeevan Bima

A simple and easy to understand term insurance plan, HDFC Life Saral Jeevan
Bima allows you to safeguard the future of your loved ones against an unforeseen
tragedy. This is a very affordable term insurance plan that offers financial
protection to your family in case something happens to you. The policy offers
flexibility in terms of policy tenure as well as premium payment.

16
 Let us take a look at the main features of the HDFC Life Saral Jeevan Bima:

• There is no maximum limit on the sum assured

• The policy comes with a waiting period of 45 days, however, in case the
insured dies in this period a lump sum amount is payable to the nominee
• You can opt to pay the premium in one of the following ways:
✓ Single Pay
✓ Regular Pay
✓ Limited – 5 Pay
Eligibility Criteria for HDFC Life Saral Jeevan Bima:
Entry Age Minimum 18 years
Maximum between 60 to 70years

Plan Duration 5 years to 40 years

Sum Assured INR 5 Lakh onwards

Minimum Premium Amount Regular Pay Monthly Rs.215

Table1.3 Eligibility Criteria for HDFC Life Saral Jeevan Bima

Traditional savings plans

Traditional savings plans are endowment or money back insurance plans which offer
you guaranteed returns along with life insurance coverage. These plans are suitable
for investors who are looking to create a secured corpus over a long term period and
also need insurance coverage for protection purposes. The different types of
traditional savings plans offered by HDFC are as follows –

1. HDFC Life Sanchay Plus Plan

This is a non-participating endowment assurance plan where the maturity and death
benefits are promised. The features include the following –

a. There are four plan options under this plan. These are as follows:
➢ Guaranteed maturity option wherein the maturity benefit is guarantee

17
➢ Guaranteed income option wherein the maturity benefit is paid as incomes for 10
or 12 years
➢ Lifelong income option wherein guaranteed incomes are paid till 99 years of age
➢ Long term income option wherein guaranteed incomes are paid for 25 or 30 years
b. The premiums paid are also returned under lifelong income option and long term
income option

Eligibility conditions of HDFC Life Sanchay Plus Plan:

Entry Age 5 years to 60 years

Maturity Age 18 years to 80 years

Sum Assured Depends on the premium and plan option

selected
Premium Amount Minimum- INR 30000/- annually
Maximum- No limit

Table1.4 Eligibility conditions of HDFC Life Sanchay Plus Plan

2. HDFC Life Sampoorn Samridhi Plus Plan

This is an endowment assurance plan which can be chosen to cover you for your whole
life. The plan’s features are as follows –

a. There are two plan options. One is the Endowment option wherein the sum assured
is paid on maturity. The other is the Endowment with Whole Life option wherein
one benefit is paid when the term comes to an end and the maturity benefit is paid
when you attain 100 years of age
b. The plan participates in bonus declarations and earns reversionary bonuses
c. Guaranteed additions are also added to the sum assured
d. There is an inbuilt accidental death benefit under the plan
Eligibility conditions of HDFC Life Sampoorn Samridhi Plus Plan
Entry Age 30 days to 60 years

Plan Duration 15 years to 40 years

18
 Sum Assured INR 65,463 onwards

Premium Amount Minimum- INR 12000/- annually

Maximum- No limit

Table1.5 Eligibility conditions of HDFC Life Sampoorn Samridhi Plus Plan

Women Plans

Women insurance plans are those which are specifically designed to cater to the
insurance and savings needs of women. HDFC Life offers one specialised women’s
plan which is as follows –

1. HDFC Life Smart Woman Plan

This is a unit linked insurance plan which allows market-linked returns while also
providing life insurance coverage. The features of the plan are as follows –

a. There are three plan benefit options which are Classic, Premier and Elite
b. Under all benefit options, premiums are waived for three years in case of childbirth and
diagnosis of cancer. Periodic payments are made under the Premier and Elite options
to provide you with funds when you need them
Eligibility conditions of HDFC Life Smart Woman Plan

Entry Age 18 years to 45 years

Plan Duration 10 years or 15 years

Sum Assured Up to 40 times the annual premium

Premium Amount Minimum- INR 24000 payable annually

Maximum- INR 1 lakh payable annually

Table1.6 Eligibility conditions of HDFC Life Smart Woman Plan

19
 Chapter-2
Marketing Strategies of the Company

a) Market Share Of The Company With Competitors

HDFC Life Insurance

• Established in 2000, HDFC life is a part of most prestigious HDFC group of the

country with a joint venture between HDFC ltd, which is India’s leading

housing finance institution and a Mauritius based global investment company

name Standard Life Aberdeen.

• Company has 421 branches, with access to additional touchpoints through a

very strong and diversified distribution channel with 270+ partners ranging

from traditional banks to NBFCs to new age fintech and insurtech firms.

• As on March 31, 2020, the Company had 37 individual and 11 group products

in its portfolio including protection, pension, savings, investment annuity and

health solutions.

• As of Sep 20, HDFC life has an AUM of 1.5 lakh crore.

SBI Life Insurance

• Established in 2000, SBI life is a joint venture between India’s largest

commercial bank SBI and BNP Paribas.

20
 • The company has developed a multi-channel distribution network comprising

bank branches of SBI and its associated banks, individual agent network (93,

849 agents) and other distribution channels including direct sales and sales

through corporate agents, brokers, insurance marketing firms and other

intermediaries.

• As of Sep20, SBI life has an AUM of 1.8 lakh crore.

ICICI Prudential Life Insurance

• Established in year 2001, ICICI prudential is a part of ICICI bank and prudential

corporation holding limited.

• As of FY20, company has 517 company branches, 1,90,924 Agents and 25,182

Partner Branches.

• As of Dec 20, it has a total AUM of Rs2 lakh Crore.

Financial Comparison Between HDFC

• Market Cap: If we look at the market cap, HDFC life has a market cap of ~

Rs1.4 lakh Crore, SBI life has a market cap of Rs.87,000 Cr and ICICI

prudential life has a market cap of Rs.70,000 Cr. So in terms of market cap, is

HDFC life is #1 followed with SBI life and ICICI Pru is #3.

21
 Market Cap

24%

47%

29%

HDFC SBI ICICI Prudential

Figure2.1 Market Cap

• Last 5 year stock returns: If we look at the stock return, HDFC life has an IPO

in Nov 2017 at price band of Rs290. Since then, it has zoomed to the current

levels of Rs713 at a CAGR of 32%. SBI life had the IPO in Sep 2017 at price

band of Rs700 and since then its share price has jumped to Rs895 at a CAGR

of 7.2%. ICICI prudential life has its IPO in Sep 2016 at a price band of Rs.334.

Since then it has grown to currently at Rs.490 a CAGR of 8.9%. So all 3

companies are relatively new in terms of share listing. In terms of returns since

22
 listing, HDFC life is #1, ICICI prudential is #2 and SBI life is at 3rd position.

Stock Returns for Last 5 Years

900 895
800
700 713
700
600
490
500
400 334
290
300
200
100
0

HDFC SBI ICICI Prudential

Figure2.2 Stock Returns for Last 5 Years

• Revenue: If we look at the revenue in the last 5 years, HDFC life revenues have

increased from Rs.18141 Cr to currently at Rs.52683 Cr by Dec20. SBI life

revenues have increased from Rs.19,324 Cr to currently at Rs.66,798 Cr by

Dec20 and ICICI prudential life revenues have increased from Rs.20,849 Cr to

Rs.55,562 Cr by Dec20. As per the latest revenue figure, SBI life is #1 followed

by ICICI prudential and HDFC life is at 3rd position. Although there is very

little difference in revenues of ICICI prudential and HDFC Life.

23
 80000
REVENUE
70000 66798

60000 55562
52683
50000
40000
30000
18141 19234 20489
20000
10000
0
Dec,15 Dec,21
HDFC SBI ICICI Prudential

Figure2.3 Revenue

• Profits: If we look at the profits in the last 5 years, HDFC Life profits

have increased from Rs 817 Cr to currently at Rs 1353 Cr for dec20.

SBI life profits have increased from Rs 844 Cr to currently at Rs 1454

Cr by Dec20 and ICICI prudential profits have reduced from Rs 1650

Cr to Rs 1072 Cr by Dec20. As per the latest profit figure, SBI life is #1

followed by HDFC life and ICICI prudential is at 3rd position.

Profit

1072
Dec,20 1454
1353

1650
Dec,15 844
817

0 200 400 600 800 1000 1200 1400 1600 1800

ICICI Prudential SBI HDFC

Figure2.4 Profit
24
• Promoters shareholding & % change in promoters shareholding: If

we look at the promoters shareholding, HDFC life promoters

shareholding for Dec20 stood at 58.87%. SBI life promoter shareholding

stood at 60.7% and ICICI promoters shareholding stood at 50.39%. So

all 3 companies have good amount of holding from promoters which

shows the trust of promoters in the company.

Promotors Shareholding

50.39 58.87

60.37

HDFC SBI ICICI Prudential

Figure2.5 Promotors Shareholding

• Valuations: If we look at the valuations, HDFC life share is currently trading

at Rs 713at a PE ratio of ~105 whereas its median PE since IPO is 90. Its PEG

ratio is 11.That makes HDFC life a super expensive stock at current valuation.

SBI life share is currently trading at Rs 895 at a PE ratio of ~60 whereas its

median PE since launch is also 56. It means SBI life is trading at fair valuation.

Although the PEG ratio is still on the higher side at 5. But SBI life is available

at much better valuation than HDFC life. ICICI prudential is currently trading

at Rs 334 at a PE ratio of ~65 whereas its median PE since IPO is 35. Again,

the valuations are very expensive.

25
 • ROE: If we look at the return on equity, HDFC life ROE for Dec20

stood at 17.3%. SBI life ROE is 14.35% and ICICI prudential ROE

stood at 12%. So HDFC life is #1 in terms of ROE followed with SBI life

and ICICI prudential at 3rd position.

ROE
12

17.3
HDFC
SBI
ICICI Prudetial

14.35

Figure2.6 ROE

• ROCE: If we look at the return on capital employed, HDFC life ROCE for

Dec20 stood at 18.3%, SBI Life has the ROCE of 17%. ICICI prudential

ROCE stood at 12.6%. So HDFC life is #1 followed with SBI life and

ICICI prudential at 3rd position.

ROCE

18.3 17
20 12.6

10

HDFC SBI ICICI Prudential

Figure2.7 ROCE

26
 b) SWOT Analysis HDFC Life Insurance

Strengths in the SWOT analysis of HDFC Life Insurance:

This helps in understanding the core areas of the business where it beats the competition

and has the competitive advantage in the market. The business should use its strength

to create differentiation in the market. Strengths are generally the core competency of

the business.

1. Customized Packages – The business offers its customers with customized

insurance plans based on the needs of the customer. This is an interesting feature

because everyone needs an insurance plan according to their requirements and

offering that clearly creates a differentiating factor in the market.

2. Brand Image – HDFC life insurance has a very well established domestic image

in the Indian market. Supported by the international image of Standard Life

insurance which further ads up to the credibility of the brand.

3. Well established Networks – The business has a well-established network in the

country who further sells the policies to customers. It has a network of over 500

branches in over 700 cities.

4. Customer Service is Best in the market – The customer service offered by the

business is exceptionally good and hence it helps in building brand reputation

27
Weaknesses in the SWOT analysis of HDFC Life Insurance:

This is the pain area of the organization where it does not have the resources or skills.

Business has to work upon these areas so that they are not left behind from the

competition. Though there will be some or the other weakness it should not be an area

which takes the business pout off the market

1. High Cost of operations – The business involves high administration cost and

management expenses. As selling needs some investment and hence there is a

continuous cash flow going out in order to do business development.

2. Retention of the network is poor – Thought the business has a well-established

network but there is a high churn in the network and hence it further adds to the

cost of operations.

Opportunities in the SWOT analysis of HDFC Life Insurance:

This helps in understanding what other things a business can do with the current skills

and resources. It helps the business to know the areas where it can expand and take a

lead in order to diversify the business and expand the customer base

1. Population – the population of India is increasing at a rapid pace and also the

insurable population is too high and not yet covered completely and hence there

is a huge potential for the business in Indian market.

2. Liberalization in Laws – The liberalization of the insurance laws in India will

help the business to further expand the new avenues which were earlier restricted

due to the stringent policies and laws of the insurance sector.

28
Threats in the SWOT analysis of HDFC Life Insurance:

This analysis helps in understanding what are the areas which can impact the business

in future or right away. So business has to prepare itself to handle the threats in the

market landscape. Competition or increasing number of players in the market with

same value proposition is a threat to business as it directly lowers down the customer

base and revenue.

1. Instability in Economy – There is a high instability in the economy which

impacts the business to great extent. Global crisis inhibits people from investing

in such policies as the guarantee of getting the returns or even the principal

amount is not known

2. NBFC’s Entry in the industry – There is a high competition in the market

owing to the fact that many new players are entering the market and biggest threat

is from NBFC’s

3. Movement of Employees – The industry experiences high churn ratio and hence

the employees who are successful in the industry keeps on moving from one

company to another which puts a lot of pressure on hiring and also the candidates

who are driven for sales and increasing the business in terms of new insurances

issued for the brand.

29
 c) Marketing Strategies over past 5 years

1. Ads Campaign

i. HDFC Life says be safe and smart in new digital campaign

HDFC Life, the life insurance company, has launched a new digital campaign that

focuses on the role of Unit Linked Insurance Plans (ULIPs) as part of a prudent

financial plan. The campaign debunks the commonly held myths surrounding the

ULIP category and highlights the unique features of HDFC Click2Wealth plan.

Through the central message of '#SirfSafeNahiSmartBhiBano', the brand aims to

change the way consumers look at ULIPs.

The campaign, comprising one main and two short films, features two characters - Meet

(myth) and Jeet (the myth buster). Meet and Jeet have opposite viewpoints when it

comes to their lifestyles, with Meet confessing to having doubts about in vesting in a

unit linked insurance plan while Jeet dispels his doubts in a light hearted manner by

subtly weaving HDFC Life Click2Wealth's benefits into the narrative.

ii. HDFC Life’s campaign aims to make retirement planning look

attractive
HDFC Life has recently launched an annuity campaign redefining the archaic concept

of this category. A simple question to potential retirees, “Aap bade hoke kya banna

30
chahte ho?” sets the tone for the ad.

Mark The ad conveys that human potential is beyond one’s retirement years thereby

inspiring individuals to choose a retirement product that enables fulfillment of

dreams. It is centered on HDFC Life’s annuity product ‘Pension Guaranteed Plan’

that is designed to provide guaranteed monthly income which not only secures an

individual’s retirement but also enables one to fulfill the dreams of their youth which

got abandoned once responsibilities took over.

The campaign has been conceptualised in collaboration with Wieden & Kennedy. In

the quest to impact culture, a social campaign has been created and thought leaders have

been on-boarded to drive credibility, scale and the reach of the message.

Vishal Subharwal, executive vice president, e-commerce and digital marketing, HDFC

Life, said, “Retirement planning is a critical part of every financial plan. Most

individuals ignore this activity. This is also because of the fact that retirement seems

boring and individuals don’t look forward to it like other phases of their lives. Through

this campaign, we want to break the stereotype and make retirement planning

aspirational and enable Indian consumers manage longevity risk.”

31
 iii. HDFC Life’s latest ad campaign talks about accepting setbacks as a step
to #BounceBack to success

Life Insurance company HDFC Life, has launched a new ad film that speaks about

bouncing back from life's setbacks, instead of letting them bring you down.

'BounceBack' has been used as a theme in the brand's recent campaigns.

As a society, we tend to glorify success. However, on the path to success, one often

needs to overcome challenges, which are seldom spoken about. This creates a

perception that successful people never face difficulties, leading to unnecessary

pressure on individuals, especially children.

Pankaj Gupta, senior executive vice president (sales) and chief marketing officer, said,

"Preparing the young generation to face challenges and pressures, in order to do well

and live a life of pride, is an integral part of parenting. Especially in today’s scenario

where in we often see students struggling due to academic, parental and peer pressures.

Support from the family is what one counts on, to bounce back from setbacks. We have

tried to portray this through the ad film."

32
2.Marketing Mix Of HDFC Life Insurance

Different companies can choose to position themselves differently and hence the

Marketing Mix is different. However, there are certain common characteristics that one

can cull out from the possible strategies that companies adopt.

e. Product in the Marketing Mix:

The development of flexible products to suit individual requirements is what will

differentiate the winners from the also-rans. The key to success is in providing

insurance solutions, not standardized insurance products. The concept of riders/optional

benefits has already been a huge innovation brought about by the new players, which

has led to customization of products for individual needs. However, companies may

differentiate themselves on the basis of product segments that they choose to focus on

and excel in.

f. Place in the Marketing Mix

HDFC Life Insurance offers its services in every part of India and has its headquarters

base at Mumbai in Maharashtra. It has a strong distribution channel that helps in

providing its products to its customers all over the country. It includes services of

Insurance Agents, Online Insurance Portals, Insurance Brokers and Bancassurance

33
Partners. Multichannel network of HDFC Life Insurance has spread to nearly nine

hundred and eighty cities and towns in India and is handled via an estimated three

hundred and ninety-eight branches. Its workforce includes two lakh financial

consultants to meet every consumer demand successfully by providing individual

attention. A liaison office has been established by HDFC Life Insurance in Dubai.

g. Price in the Marketing Mix

HDFC Life Insurance has been a trendsetter in the insurance industry by offering value

for money. The company is determined in providing best and high-value products to its

customers at minimum prices. It has kept premium prices for insurance policies at

minimum levels so that maximum people can benefit from its plans. HDFC is relatively

a new company and faces stiff competition from several established companies in the

insurance sector. In order to create a loyal consumer base of its own, it has adopted

reasonable pricing policy and kept its rate of premium affordable and pocket-friendly.

h. Promotions in the Marketing Mix

HDFC Life Insurance has the distinction of being one of the most trusted brands in

India. It has put its onus on CSR activities for improving conditions in society. It has

been the recipient of several awards for different plans. One of its most popular taglines

is Sar Utha Ke Jiyo and it has created high visibility amongst consumers. HDFC Life

has adopted several promotional activities to create positive brand awareness.

Successful advertising campaigns have been launched via electric media in radio and

several television channels. Its ads are displayed in magazines, hoardings and

newspapers. It has an official website that offers related information to interested

parties.

34
 Chapter-3
Financial Ratios
i. Balance Sheet of HDFC Life Insurance

35
ii. Ratio Analysis
1. Current Ratio
The current ratio is a liquidity ratio that measures a company’s ability to pay off its

short-term debts and obligations, which are typically due within one year. It tells you

whether the company has enough current/liquid assets to repay its short-term dues.

2020-21:

Current Liabilities=6520.06 cr

Current Assets=5054.72 cr
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
CURRENT RATIO = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

5054.72
=6520.06 =0.77:1

2019-20:
Current Liabilities = 4989.93 cr
Current Assets = 4338.37 cr
current assets
CURRET RATIO = current liabilties
4338.37
= =0.87:1
4989.93

0.86
0.86
0.84

0.82

0.8

0.78 0.77

0.76

0.74

0.72
2020-21 2019-20

Figure3.1 Current Ratio

Comment: Current ratio of HDFC LIFE insurance, has 0.77:1, it means it is less than
1 that indicates firm’s ability to meet current obligations & greater the safety of funds
of short-term creditors. It also indicates the sound solvency of the company is lover.

36
2. Quick Ratio
Quick ratio is also known as Acid test ratio is used to determine whether a company or

a business has enough liquid assets which are able to be instantly converted into cash

to meet short term dues.

2020-21:
𝑞𝑢𝑖𝑐𝑘 𝑎𝑠𝑠𝑒𝑡𝑠
QUICK RATIO = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
1099.26
= 6520.06

= 0.17:1

2019-20:
𝑞𝑢𝑖𝑐𝑘 𝑎𝑠𝑠𝑒𝑡𝑠
QUICK RATIO = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
690.75
= 4989.90

= 0.13:1

2019-20

2020-21

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18

Figure3.2 Quick Ratio

Comment: The liquid ratio of HDFC life in 2019-20 was 0.13 and in 2020-21 is
0.17. So it is increasing the liquid ratio and company have a good liquid position
over the year.

37
3. Return on Investment (ROI)

Return on Investment estimates the loss and gain generated on the amount of money

invested. ROI is generally expressed in the percentage to analyse an organisation’s

profit or the earnings of different investments.

2020-21:

Earnings Before Interest and Taxes (EBIT) = 13,534,938

𝐸𝐵𝐼𝑇
ROI = 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 ∗ 100

1354.28
=11,192.83 ∗ 100 = 12.09%

2019-20:

Earnings Before Interest and Taxes (EBIT) = 13,117,442

𝐸𝐵𝐼𝑇
ROI = 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 ∗ 100

1313.92
= 6801.03 ∗ 100 = 19.31%

12.09%
2020-21
2019-20
19.31%

Figure3.3 Return on Investment

Comment: The return on investment ratio of HDFC LIFE in 2020 was 19.31% and in

2021 is 12.09% there decreasing the return on investment over the year so company

become not so profitable over the year.

38
4. Return on Assets Ratio

The return on assets ratio gives you an idea of how efficient a company is at using its

assets to earn revenue. A high return on assets indicates that a company is good at

utilising its assets to generate earnings. It is denoted in percentages and is calculated

using the following formula.

2020-21:

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥

ROA = ∗ 100
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

1360.87
= 1,79,643.26 ∗ 100 =0.76%

2019-20:

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥

ROA = ∗ 100
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

1297.44
= 1,32,223.85 − 100 =0.98%

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2020-21 2019-20

Figure3.4 Return on Assets

Comments: The company shows low return on assets indicates that a company is bad
at utilising its assets to generate earnings.

39
5. Proprietary Ratio

Proprietary ratio is a type of solvency ratio that is useful for determining the amount or

contribution of shareholders or proprietors towards the total assets of the business. It is

also known as equity ratio or shareholder equity ratio or net worth ratio. The main

purpose of this ratio is to determine the proportion of the total assets of a business that

is funded by the proprietors.

2020-21:

𝑝𝑟𝑜𝑝𝑟𝑖𝑒𝑡𝑜𝑟𝑠 𝑓𝑢𝑛𝑑𝑠
Proprietary Ratio = 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

11,192.83
= 1,79,641.26 = 0.06

2019-20:

𝒑𝒓𝒐𝒑𝒓𝒊𝒆𝒕𝒐𝒓𝒔 𝒇𝒖𝒏𝒅𝒔
Proprietary Ratio = 𝒕𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕𝒔

6801.03
= = 0.05
1,32,223.85

0.05

0.06

2020-21 2019-20

Figure3.5 Proprietary Ratio

Comment: When expressed in the form of a percentage, it comes to 6%. It means 6%

funds of the business are financed by the proprietors.

40
iii. Stock Price Analysis

Price Graph

Margin & Trade Information of HDFC Life Insurance Company Ltd

41
10 Year X-Ray of HDFC Life Insurance:

Valuation of HDFC Life Insurance

42
 Chapter-4
CSR Initiatives and Unique Practices
a. Objectives of the Policy
1. To define HDFC Life’s framework for CSR.

2. To constitute a Board CSR Committee that will ensure compliance to Section

135 of the Act and oversee implementation of CSR Policy and interventions.

3. To lay down the guidelines & mechanism to carry out CSR projects/

programmes by HDFC Life and to report the impact and outcome in the

reporting format prescribed by the Rules in the Act.

4. To undertake CSR activities as projects/ programmes with specific timelines,

implementation and monitoring mechanism.

b. CSR activities done by HDFC Life Insurance

Health

Health is a crucial area of intervention that aids underprivileged sections of society.

Promoting preventive healthcare among them is the first step towards ensuring aware-

ness and improved healthcare. HDFC Life has tied up for a large project to focus on

reducing and preventing protein energy malnutrition among 43,000 children under 5

year, in 24 Gram Panchayats in West Bengal. Another project has been initiated for

children affected with cancer by providing them holistic healthcare.

43
Education

We have undertaken various projects educational for underprivileged children with the

primary aim of promoting better quality education and holistic development. A fully

paid sponsorship through which employees work as full time teachers for children from

underprivileged backgrounds. Through this direct intervention program we have

impacted 400 plus children across schools. An NGO in west Bengal with our help has

built a library and dining space for school children to insure equitable access to facilities

within the school for 500 plus children.

c. CSR Framework of HDFC Life

HDFC Life may undertake CSR activities in any of the following areas, which are in

line with Schedule VII of Companies Act, 2013:

1. Eradicating hunger, poverty and malnutrition, promoting health care including

preventive health care and sanitation including contribution to the Swachh

Bharat Kosh set-up by the Central Government for the promotion of sanitation.

2. Promoting gender equality, empowering women, setting up homes, and hostels

for women and orphans; setting up old age homes, day care centres and such

44
 other facilities for senior citizens and measures for reducing inequalities faced

by socially and economically backward groups.

3. Ensuring environmental sustainability, ecological balance, protection of flora

and fauna, animal welfare, agro forestry, conservation of natural resources and

maintaining quality of soil, air and water including contribution to the Clean

Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.

4. Protection of national heritage, art and culture including restoration of buildings

and sites of historical importance and works of art; setting up public libraries;

promotion and development of traditional arts and handicrafts.

5. Contribution to Prime Minister’s National Relief Fund or Prime Minister’s

Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund

or any other fund set up by Central Government for socio economic

development and relief and welfare of the Scheduled Castes, Scheduled Tribes,

other backward classes, minorities and women.

d. CSR Budget

a. The Company will ensure that in each Financial Year (FY), at least two per cent

of the average net profit made during the immediately preceding FYs, is spent

on CSR projects / programmes subject to regulatory requirements as applicable

from time to time. The Chief Financial Officer shall certify to the utilisation and

manner of utilisation of the funds disbursed by HDFC Life.

b. If the amount indicated above is not spent in entirety in that FY, the reasons

thereof will be outlined as per Section 134 (3) (o) of the Act read with the Rules

and the said unspent amounts shall be dealt with in accordance with the

provisions of section 135(5) or s. 135(6) of the Act.

45
c. Projects/programmes will be identified and budgets allocated through a process,

incorporating identification of suitable implementation agencies, need

assessment (where required) and clear outlining of desired outcomes.

d. HDFC Life shall ensure that the administrative overheads shall not exceed 5%

(five percent) of the total CSR expenditure of HDFC Life for the financial year.

Further, the expenditure for impact assessment, where impact assessment is

mandatory, shall not exceed 5% (five percent) of the total CSR expenditure or

INR 50,00,000 (Indian Rupees Fifty lakhs), whichever is less, for the financial

year in which such impact assessment is undertaken.

e. If the Company makes any surplus or profit from pursuing its CSR projects /

programmes, including interest accrued from the amount transferred to the

Unspent CSR Account of HDFC Life, these will not form part of the business

profit.

f. When undertaking a CSR project in collaboration with other companies,

institutions, HDFC Life will ensure that it is in a position to report separately

on such projects or programmes independent of the collaborating companies

and will report on its share of CSR expenditure only.

g. In line with the CSR legal framework:

In case the unspent amount pertains to an ongoing project, such amount shall be

transferred to the Unspent CSR Account of HDFC Life within 30 (thirty) days

from the end of the financial year, further such amount remaining unspent for a

period of 3 (three) years, shall be transferred to the funds specific in Schedule

VII within 30 (thirty) days from the end of the third financial year.

46
 In case the unspent amount does not pertain to an ongoing project, such amount

shall be transferred to the funds specific in Schedule VII within 6 (six) months

from the end of the financial year.

e. Unique Practices by HDFC Life Insurance

The HDFC Life has already evolved from a product-centric to a customer-centric model

of approach. It needed to set the customers in the middle of our business model,

influence the vast quantities of customer data that is being produced and deliver specific

offerings fitted to their unique necessities, which it is continuing to work on.

Everything and everyone are required to be accessible anytime and anywhere. It implies

that the services are needed to be created digitally first! The life insurance business

models have improved over the last decade, ridden by the policyholders. The company

is working on it and presently created a robust customer approval architecture; you

would see businesses striding into the successive era of customer-centricity.

The life insurance company of HDFC has classified its product portfolio that covers all

the major five principal categories across the individual and company categories

namely participating, non-participating insurance term, non-participating insurance

health, other non-participating, and unit-linked insurance products.

Moving on to decoding the company's business model, the company has two types of

products and services. The first category includes lean products such as ULIP. The

second category of products is the traditional products.

Lean products contribute about 55% to the business model of the company. On the other

47
hand, traditional products contribute about 45% to the business model of the company.

The company also has tie-ups with many bancassurance, SFBs, MFIs which help in

selling the products of the company on their premises.

The company has a scaling-based business model, which means the profit during the

initial years wasn't much. HDFC Life Insurance Company started getting earnings from

2011. It's the blend of perfect consumer-oriented architecture along with proper scaling

and investment which has helped HDFC Life Insurance Company reach glorious

heights.

48
 Chapter-5
Conclusions and Suggestions

Conclusions

Our exhaustive research in the field of Life Insurance threw up some interesting trends

which can be seen in the above analysis. A general impression that we gathered during

Data collection was the immense awareness and knowledge among people about

various companies and their insurance products.

People are beginning to look beyond LIC for their insurance needs and are willing to

trust private players with their hard earned money. People in general have been

impressed by the marketing and advertising campaigns of insurance companies. A high

penetration of print, radio and Television ad campaigns over the years is beginning to

have its impact now. Another heartening trend was in terms of people viewing

insurance as a tax saving and investment instrument as much as a protective one. A

very high number of respondents have opted for insurance for such purposes and it

shows how insurance companies have been successful to attract public money in recent

times.

The general satisfaction levels among public with regards to policy and agents still

requires improvement. But therein lies the opportunity for a relative new comer like

HDFC Standard Life Insurance Company Ltd. LIC has never been known for prompt

service or customer oriented methods and HDFC Standard Life can build on these

factors.

49
Suggestions

➢ HDFC Life should try to increase his financial performance in the future. The

company should try to increased his product cycle.

➢ HDFC Life should take initiative to educate the consumers regarding all these

aspects & take competitive Advantage on this front as its Allocation charges

are minimum in the whole Indian Insurance Industry.

➢ HDFC is a very huge Brand in US but in some areas of India it is not known

as Insurance brand. So HDFC need to focus on Brand building Activities which

can be done through Advertising, Road shows, Sponsoring Events in rural &

Urban Areas.

➢ Wrong interpretations/ non-awareness of policy document by the customer

may have serious implications in the long term and the possibility of the same

should be alleviated by the company which leads to.

➢ HDFC need to concentrate more towards the rural areas as 60-70% of India

population is living in rural areas and most of the people in rural areas are not

insured so there is a huge potential in the rural sector.

50
 References

✓ https://www.hdfc.com.mv/about/company-structure/#1513850522529-

1ff78fb8-8a81 accessed on 5th May, 2022.

✓ https://www.hdfclife.com/about-us/leadership# accessed on 5th May, 2022.

✓ https://www.turtlemint.com/life-insurance-companies/hdfc-life-insurance/

accessed on 6th May, 2022.

✓ https://www.marketing91.com/swot-analysis-hdfc-life-insurance/ accessed on

6th May, 2022.

✓ https://www.sahilbhadviya.in/blog/hdfc-life-vs-sbi-life-vs-icici-prudential-life-

top-companies-in-insurance-

sector?msclkid=0b3b17ddceab11ec84b0d4c9973e008b accessed on 7th May,

2022.

✓ https://brandequity.economictimes.indiatimes.com/news/advertising/hdfc-life-

says-be-safe-and-smart-in-new-digital-campaign/79567157 accessed on 7th

May, 2022.

✓ https://www.hdfclife.com/content/dam/hdfclifeinsurancecompany/about-

us/csr/HDFC-Life-Swabhimaan-CSR-Policy.pdf accessed on 8th May, 2022.

51