Work Culture

The company attributes its success to the contributions made by its employees. We believe that our strength is our people, so our endeavour is to surpass their expectations and give them the best possible work environment and benefits that match the best in the industry. Talent management initiatives in HDFC Life are driven by a set of organizational core competencies (Mantra 10) as well as position-specific competencies. The competency set includes knowledge, skills, experience, and personal traits (demonstrated through defined behaviors) based on the bedrock of sharp vision and strong values of HDFC Standard Life. In this endeavor of shaping and nurturing our talent pool, HDFC Life adopts a four-step model:

Introduction to the Insurance Industry Insurance and risk management make up an immense global industry. According to a survey conducted by a leading global insurance firm, Swiss Re, worldwide insurance premiums totaled $4.33 trillion in 2010 (the latest data available), up from $4.06 trillion in 2009. This was equal to 6.89% of global GDP. Global life insurance premiums were $2.52 trillion during 2010, while all other types of insurance totaled $1.81 trillion. In America alone, the insurance business employed about 2.23 million people in 2010. Gross insurance premiums totaled $1.16 trillion (per SwissRe). More than 4,000 companies underwrite insurance in America, but the industry is dominated by a handful of major players.

while the U. a recovery in stock and bond markets that began in the spring of 2009 and ran through late 2011 provided a boost to the investment earnings of the insurance industry. due to natural disasters such as hurricanes. up 10. these figures are from Swiss Re (www. In emerging nations. and property & casualty companies to a lesser degree. That may not sound like much compared.9%. Premiums on a per capita basis remain very low in much of the world. total premiums were $650 billion. Massive amounts of insurance company earnings come from the sale of annuities and other retirement and investment products. It would be hard to overstate the importance of emerging nations. The devastating tsunami and related nuclear power plant meltdown in Japan in March 2011 put a severe strain on the insurance . to the future growth of the insurance industry.7%. extending life spans. along with profits (or losses) that insurance underwriters earn on the investment of their own assets and reserves.. insurance is unique in the financial services field because. However. unemployment and cost-cutting by both businesses and consumers hurt insurance sales. India. In America.2% over the previous year.Total insurance premium volume for 2010 in industrialized nations was $3. including $128 billion in Latin America and the Caribbean.K. The global financial crisis hurt nearly all of these asset classes and thus hit the capital base of the insurance industry in a hard way. which are regulated largely (although not entirely) by federal agencies such as the Securities and Exchange Commission. private equity. increasing education and financial sophistication among consumers. business bankruptcies. for example. pointing to excellent longterm opportunity for expansion of sales of insurance products of all types. few insurance underwriters offer all of their insurance products in all 50 states. insurance is regulated primarily at the state level. many do business only in a limited number of states. they must develop dozens of different premium rate structures that appropriately reflect the costs of meeting local risks and fulfilling state requirements.9% over the previous year. unlike banking and investments.6 trillion. India¶s premiums in 2010 totaled $78 billion.¶s were down by 2. At the same time. At the same time. Insurance companies also hold immense investments in real estate. The insurance market in the emerging world will be boosted by a combination of rising household incomes. hedge funds. especially China.swissre. where the fastest growth is to be found. and a tradition of families relying on personal savings and initiative rather than government social programs to provide for retirement funds and health care. up a respectable 4. Again. It is a regulatory and administrative nightmare that limits consumer choices and drives up overall insurance costs. to $310 billion in the U. Brazil and Indonesia. and $67 billion in Africa. $33 billion in the Middle East and Central Asia. 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. including annuities. Insurance underwriting does not earn consistent levels of profits. 2008¶s stock market meltdown had a significant effect on profits and assets at life insurance companies in particular. Total premiums in China were $215 billion in 2010. venture capital funds and other types of investments.K. floods or an overly active fire season. rather than As a result. Property and casualty insurance companies sometimes face a year of losses. but China¶s premiums were up 26. This means that insurance firms must deal with up to 50 different sets of state regulations and 50 different state regulatory agencies.

there are insurance brokers. which have traditionally posted enviable profits. Recent regulatory changes have heightened competition within the insurance industry²an area in which competition has always been fierce. there are also large numbers of consulting firms. high-risk insurance policies.industry. creating financial services mega-firms. data collection firms and myriad other specialized fields serving the industry. banks such as Wells Fargo are slowly gaining market share in the sale of insurance products. Many changes resulted. At one time. However. Massive mergers and acquisitions have resulted.S. 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. some of which offer a broad range of services and products to their customers. particularly annuities and life insurance. took bankruptcy in October 2008. Insurance brokers represent the interests of corporate clients while finding these customers the best coverage at the best rates. most notably in Citigroup¶s attempt to put together a financial empire by adding a major investment firm (Smith Barney) and a leading insurance company (Travelers) to its existing banking organization. More recently. this strategy was a failure. Investment companies like Merrill Lynch (now part of Bank of America) have been eager to sell insurance to their customers as well. Competition will only become more intense. In addition. much of the total loss was either uninsured or was covered by government. Occasionally. During 2005. however. many of which enjoy brands that are household names. much of each hurricane season¶s risk has been sold by primary underwriters to hedge funds and reinsurers who buy portions of large. a leading Japanese firm that had been in business for nearly 100 years. cost insurance underwriters vast amounts (damages. The insurance industry includes a wide variety of sectors and services. Elsewhere. The focus is on making risks held by such firms more transparent and maintaining sufficient levels of capital to cover potential losses. and firms that rate the financial stability of insurance underwriters always list more than a few that are not financially sound. In the world¶s leading economies. especially in Gulf Coast markets. and insurance underwriters felt compelled to boost rates for many types of insurance. Hurricanes Katrina and Rita in the U. claims processing firms. along with the agencies that sell insurance. While there are tens of thousands of small insurance firms worldwide. . the industry tends to be concentrated in a few hundred major companies. from checking accounts to investment products to life insurance. insurance underwriters go broke. For example. bank holding companies were aggressively acquiring insurance agencies. In some cases. A handful of these leading firms operate on a truly global scale. Yamato Life Insurance Company. both insured and non-insured. The most obvious are insurance underwriters that cover the risks and issue the policies. The insurance industry is going through significant scrutiny and oversight as a result. totaled about $58 billion) and created significant controversy over flood insurance in general. regulators are in the process of forcing vast changes in the regulation and oversight of financial services firms of all types.

small businesses with fewer than 25 employees and average annual wages of less than $50. informational office. After 2014. Also in 2014. a 3. Large employers with more than 50 employees that do not offer health benefits would begin paying $2.300-page reform act does not apply to the insurance industry. the act streamlines the reinsurance and surplus lines sector. Insurance providers may eventually suffer. President Obama signed the Patient Protection and Affordable Care Act. and new policies being required to pay the full cost of selected preventive care and exempt that care from deductibles.In the U. or be forced into consolidation in order to streamline operations and deal with lower profit margins. the act was hotly contested in both houses of Congress. Costs for the government could rise so quickly and so high that it could even impose profit limits. In March 2010. described as a non-regulatory. Most of the 2. However. The problem for the industry is that Congress will undoubtedly attempt to reduce costs and profits throughout the health industry.000 per year and families earning more than $250. including gathering data from the various state-level insurance regulators.5% of income by 2016. a sweeping reform bill. one section of the act creates a new Federal Insurance Office (FIO).8% unearned income tax will be levied on individuals earning more than $200. in dealings with the International Association of Insurance Supervisors. The act calls for sweeping changes in the near term to be followed by even more comprehensive changes by 2014 or beyond. The fine will start at $95 per year or 1% of annual income (whichever is greater). Effective in 2010. Provisions taking effect within the first six months of signing include coverage for adult children up to age 26 on their parents¶ policies. Businesses with more than 200 employees will be required to enroll all staff automatically in health insurance plans. For better or worse. health care reform may provide positive growth to the earnings of health insurance providers. The FIO¶s role includes monitoring the American insurance industry.000 per year to fund the programs in the act. The FIO will also represent America. For . when needed. Initially. policies that provide enhanced coverage above and beyond basic coverage mandated by universal care. Supplemental insurance is typically a much higher profit margin business. making it unlawful for insurers to place lifetime caps on payouts or deny coverage should a policy holder become ill. It will advise Congress and various federal agencies on insurance matters. was signed by President Obama in July 2010.S. insurance providers may find that they have to innovate and evolve by offering supplemental policies²that is. Also. after European finance ministers approved similar regulations a few months earlier. the government will begin fining citizens who choose not to carry health insurance.000 will be eligible for tax credits to cover up to 35% of staff insurance premiums. The result could easily turn into a profit squeeze for both insurers and providers. On the other hand. the Dodd-Frank Wall Street Reform and Consumer Protection Act. regulation of insurance remains largely with the 50 states. and rise to $695 per year or 2.000 per full time staff member if any of the workers receives a tax credit to buy coverage. A key provision makes the home state of an insured party the sole regulatory authority in a surplus lines transaction. Designed to strengthen insurance company regulation and provide medical coverage to more than 30 million uninsured Americans.

2. to enter the life Insurance market. Strong and well spread network of qualified intermediaries and sales person. Strong capital and reserve base. 3. Huge basket of product range which are suitable to all age and income groups. Large pool of technically skilled manpower with in depth knowledge and understanding of the market. the companies signed a 3-year joint venture agreement. 7. 4. The company provides customer service of the highest order. 5. Poor retention percentage of tied up agents. with the potential to buy insurance. in January 1995. Vertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any exception. WEAKNESS 1. STRENGTH 1. Low customer confidence on the private players. 3. Heavy management expenses and administrative costs.example. Insurable population According to ING only 10% of the population is insured. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. which represents around 30% of the insurable population. Domestic image of HDFC supported by Prudential¶s international image is strength of the company. 2. This suggests more than 300m people. remain uninsured. 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. OPPORTUNITIES 1. . In October 1995. The company also provides innovative products to cater to different needs of different customers. 4. It is reasonable to assume that pain from a scenario like this would be passed along to insurers. 6. Swot Analysis Of Hdfc Standard Life Insurance Analysis of the industry¶s environment (SWOT Analysis) HDFC and Standard Life first came together for a possible joint venture.

2. such as fire. Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers. International companies will help in building world class expertise in local market by introducing the best global practices. 4... There will be inflow of managerial and financial expertise from the world s leading insurance markets. Further the burden of educating consumers will also be shared among many players. . export credit.. 3.