contributon of hdfc life in insurence sector

8/22/2019 Contributon of Hdfc Life in Insurence Sector

1/104

SUMMER TRAINING PROJECT REPORT

ON

CONTRIBUTION OF HDFC LIFE IN

INSURANCE SECTOR

HDFCL, DEHRADUN

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE

MASTERS DEGREE IN BUSINESS ADMINISTRATION

OF

UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN

SUBMITTED TO:

INTERNAL GUIDE EXTERNAL GUIDE

Name: Mr. Abhishek Tripathi Name Mr.: Abhinav Jain

Designation Designation : Branch Manager

IMS Company Name: HDFC LIFE

Dehradun Location: DEHRADUN

SUBMITTED BY:

Himadri Thapliyal

( MB12FB10)

INSTITUTE OF MANAGEMENT STUDIES, DEHRADUN

BATCH 2012-14

1


2/104

ACKNOWLEDGEMENT

This project is an outcome of the support and encouragement provided

by a number of people at HDFC STANDARD LIFE INSURANCE

COMPANY that embodies some of the best aspect of Indian corporate

world.

I would like to express my sense of gratitude to the company for giving

me this valuable learning opportunity and for allowing me to conduct

this summer project.

I sincerely thanks my project guide. Mr. Sachin Gupta(Circle Manager)

& Mr .Abhinav Jain (Branch Manager), HDFC STANDARD LIFE

INSURANCE COMPANY for guiding me throughout the project and

helpful in furnishing the required information.

2


3/104

CERTIFICATE

I have the pleasure in certifying that Mr./Ms. .......is a

bonafide student of IIIrd Semester of the Masters Degree in Business Administration

(Batch 2012-14), of Institute of Management Studies, Dehradun under Uttarakhand

Technical University Roll No. ... .

He/She has completed his/her project work entitled

.. under my guidance.

I certify that this is his/her original effort & has not been copied from any other source.

This project has also not been submitted in any other Institute / University for the purpose

of award of any Degree.

This project fulfils the requirement of the curriculum prescribed by this Institute for the

said course. I recommend this project work for evaluation & consideration for the award

of Degree to the student.

Signature :

Name of the Guide :

Designation :

Date :

3


4/104

EXECUTIVE SUMMERY:

HDFC Standard Life Insurance has core computer in selling and has a very

aggressive sales team. Since it is a services industry where world of mouth is very

important. A negative world of mouth may remove 10 existing customers on the other

hand a positive word of mouth may earn 10 customers. So service should be targeted at a

level, which not only should meet the customers expectation but also exceed it.

However understanding the market, consumer preference and introducing new

products to suit different tastes and at the same time offering a value product would be

the key steps to fight competition.

Marketing is an important activity in any organizations sales strategy. Marketing

helps in promoting the products in the targeted market and create a recall value and

branding to the products. Marketing department perform the initial market study for the

suitability of the product launches; study the market requirements in the existing markets

to further strengthen the market capitalization identity the feature needed for a longevity

of a product.

4


5/104

INDEX

INTRODUCTION .. 9-14

COMPANY PROFILE 15-31

FORM OF ORGANISATION . 32-33

HISTORY OF INSURANCE . 34-37

PRODUCTS OF HDFC STANDARD LIFE INSURANCE 38-45

BARRIERS TO ENTRY 46-49

GROWTH POTENTIAL 50

FUTURE TRENDS 51-52

UNIT LINKED INSURANCE PLAN 53-58

FUTURE OF INSURANCE INDUSTRY 59-62

AWARDS & ACCOLADES 63-65

DISTRIBUTION STRATEGY 66-74

COMPETTIVE ANALYSIS 75-81

RESEARCH METHODOLOGY .. 82-83

ANALYSIS & FINDINGS OF SURVEY 84-93

LIMITATIONS . 94

CONCLUSION . 95

RECOMMENDATIONS . 96-97

BIBLIOGRAPHY . 98

ANNEXURE. 99-100

5


6/104

List of figures

Figure no. Description Page no.

01. Young and single stage 42

02 just married stage 42

03 proud parents 43

04 planning of retirement 43

05 life stage 44

List of table

Table no. List of tables Page no.

01 list of plans 30

02 Willingness to be FC for HDFC 71

6


7/104

OBJECTIVES OF STUDY

Exposure to financial Service sector particularly insurance and mutual

funds sector.

The study of Insurance in India & Unit Linked Insurance Plans.

And gain the professional knowledge while working in corporate

environment.

7


8/104

SCOPE OF THE STUDY

The scope of my project was to get an overall view of the Indian

insurance market through comparative study and analysis.

8


9/104

INTRODUCTION

BRIEF IDEA ABOUT THE PROJECT

The outlook of the modern day investors has undergone a dramatic change.

In the changed fiscal scenario with drastic fall in the interest for

investment and the volatile capital market with limited investment

options, ULIP comes to the rescue of the prudent investors. Investment

in insurance has become the style of the day. The individual looks at

buying an insurance policy more of an investment, which comes with

the additional benefits of life cover and tax benefit also.

Unit Linked plans provides one with not only an effective protection

against individual investment risks and inflation but above all it brings

along a long-term growth potential of financial means. Everyone

decides on their own what is the right method of investment for them,

which predetermines evaluation of deposited money.

9


10/104

THE INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With the largest number of life insurance policies in force in the world, Insurance

happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per

cent annually and presently is of the order of Rs 1560.41 billion (for the financial year

2006 2007). Together with banking services, it adds about 7% to the countrys Gross

Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and funds

available with LIC for investments are 8% of the GDP.

Even so nearly 65% of the Indian population is without life insurance cover while health

insurance and non-life insurance continues to be below international standards. A large

part of our population is also subject to weak social security and pension systems with

hardly any old age income security. This in itself is an indicator that growth potential for

the insurance sector in India is immense.

A well-developed and evolved insurance sector is needed for economic development as it

provides long term funds for infrastructure development and strengthens the risk taking

ability of individuals. It is estimated that over the next ten years India would require

investments of the order of one trillion US dollars. The Insurance sector, to some extent,

can enable investments in infrastructure development to sustain the economic growth of

the country.

10


11/104

KEY MILESTONES

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers along with provident societies were taken over by

the central government and nationalized. LIC was formed by an Act of

Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the

Government of India.

INDUSTRY REFORMS

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing regulations and registering

the private sector insurance companies. Since being set up as an independent statutory

body the IRDA has put in a framework of globally compatible regulations.

The other decision taken simultaneously to provide the supporting systems to the

insurance sector and in particular the life insurance companies was the launch of the

11


12/104

IRDA online service for issue and renewal of licenses to agents. The approval of

institutions for imparting training to agents has also ensured that the insurance companies

would have a trained workforce of insurance agents in place to sell their products.

PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA

The life insurance industry in India grew by an impressive 47.38%, with premium

income at Rs. 1560.41 billion during the fiscal year 2007-2008. Though the total volume

of LIC's business increased in the last fiscal year (2007-2008) compared to the previous

one, its market share came down from 85.75% to 81.91%.

The 17 private insurers increased their market share from about 15% to about 19% in a

year's time. The figures for the first two months of the fiscal year 2008-09 also speak of

the growing share of the private insurers. The share of LIC for this period has further

come down to 75 percent, while the private players have grabbed over 24 percent.

With the opening up of the insurance industry in India many foreign players have entered

the market. The restriction on these companies is that they are not allowed to have more

than a 26% stake in a companys ownership.

Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7

billion have poured into the Indian market and 19 private life insurance companies have

been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling

private insurance companies to sign up Indian customers faster than anyone expected.

Indians, who had always seen life insurance as a tax saving device, are now suddenly

turning to the private sector and snapping up the new innovative products on offer. Some

12


13/104

of these products include investment plans with insurance and good returns (unit linked

plans), multi purpose insurance plans, pension plans, child plans and money back plans.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Reforms in the Insurance sector were initiated with the passes of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously such to its schedule of framing regulations and registering the

private sector insurance companies.

The other decision taken simultaneously to provide the supporting systems to the

insurance sector and in particular the life insurance companies was the launch of the

IRDA online service for issue and renewal of licenses to agents.

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA..

(1) Subject to the provisions of this Act and any other law for the time being in force, the

Authority shall have the duty to regulate, promote and ensure orderly growth of the

insurance business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the

powers and functions of the Authority shall include,

(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend

or cancel such registration;

(b) protection of the interests of the policy holders in matters concerning assigning of

policy, nomination by policy holders, insurable interest, settlement of insurance claim,

13


14/104

surrender value of policy and other terms and conditions of contracts of insurance;

(c) specifying requisite qualifications, code of conduct and practical training for

intermediary or insurance intermediaries and agents;

(d) specifying the code of conduct for surveyors and loss assessors;

(e) promoting efficiency in the conduct of insurance business;

(f) promoting and regulating professional organisations connected with the insurance and

re-insurance business;

(g) levying fees and other charges for carrying out the purposes of this Act;

(h) calling for information from, undertaking inspection of, conducting enquiries and

investigations including audit of the insurers, intermediaries, insurance intermediaries

and other organisations connected with the insurance business;

(i) control and regulation of the rates, advantages, terms and conditions that may be

offered by insurers in respect of general insurance business not so controlled and

regulated by the Tariff Advisory Committee under section 64U of the Insurance Act,

1938 (4 of 1938);

(j) specifying the form and manner in which books of account shall be maintained and

statement of accounts shall be rendered by insurers and other insurance intermediaries;

(k) regulating investment of funds by insurance companies;

(l) regulating maintenance of margin of solvency;

(m) adjudication of disputes between insurers and intermediaries or insurance

intermediaries;

(n) supervising the functioning of the Tariff Advisory Committee;

14


15/104

COMPANY PROFILE

HDFC STANDARD LIFE INSURANCE

HDFC Standard Life Insurance Company Ltd. is one of Indias leading

private life insurance companies, which offers a range of individual and

group insurance solutions. It is a joint venture between Housing

Development Finance Corporation Limited (HDFC Ltd.), Indias leading

housing finance institution and one of the subsidiaries of Standard Life plc,

leading providers of financial services in the United Kingdom. Both the

promoters are well known for their ethical dealings and financial strength

and are thus committed to being a long-term player in the life insurance

industry all-important factors to consider when choosing your insurer.

15


16/104

HDFC Limited

HDFC is Indias leading housing finance institution and has helped

build more than 23,00,000 houses since its incorporation in 1977.

In Financial Year 2003-04 its assets under management crossed

Rs.36,000Cr.

As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores.

The depositor base now stands at around 1 million depositors.

Rated AAA by CRISIL and ICRA for the 10th consecutive year

Stable and experienced management.

High service standards.

Awarded The Economic Times Corporate Citizen of the year Award

for its long-standing commitment to community development.

Presented the Dream Home award for the best housing finance

provider in 2004 at the third Annual Outlook Money Awards.

16


17/104

Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life group has been looking after the financial needs of

customers for over 180 years.

It currently has a customer base of around 7 million people who rely

on the company for their insurance, pension, investment, banking

and health-care needs.

Its investment manager currently administers 125 billion in assets.

It is a leading pensions provider in the UK, and is rated by Standard &

Poor's as 'strong' with a rating of A+ and as 'good' with a rating of

A1 by Moody's.

Standard Life was awarded the 'Best Pension Provider' in 2004, 2005

and 2006 at the Money Marketing Awards, and it was voted a 5 star

life and pensions provider at the Financial Adviser Service Awards

for the last 10 years running. The '5 Star' accolade has also been

awarded to Standard Life Investments for the last 10 years, and to

17


18/104

Standard Life Bank since its inception in 1998. Standard Life Bank

was awarded the 'Best Flexible Mortgage Lender' at the Mortgage

Magazine Awards in 2006.

BOARD MEMBERS

Brief Profile of The Board of Directors

Mr. Deepak S. Parekh is the Chairman of the

Company. He is also the Executive Chairman of

Housing Development Finance Corporation Limited

(HDFC Limited). He joined HDFC Limited in a senior

management position in 1978. He was inducted as a whole-time director

of HDFC Limited in 1985 and was appointed as its Executive Chairman

in 1993. He is the Chief Executive Officer of HDFC Limited. Mr.

Parekh is a Fellow of the Institute of Chartered Accountants (England &

Wales).

Sir Alexander M. Crombie joined the Board of

Directors of the Company in April, 2002. He has been

with the Standard Life Group for 34 years holding

various senior management positions. He was

appointed as the Group Chief Executive of the Standard Life Group in

18


19/104

March 2004. Sir Crombie is a fellow of the Faculty of Actuaries in

Scotland.

Mr. Keki M. Mistryjoined the Board of Directors of

the Company in December, 2000. He is currently the

Managing Director of HDFC Limited. He joined

HDFC Limited in 1981 and became an Executive

Director in 1993. He was appointed as its Managing Director in

November, 2000. Mr. Mistry is a Fellow of the Institute of Chartered

Accountants of India and a member of the Michigan Association of

Certified Public Accountants.

Ms. Marcia D. Campbell is currently the Group

Operations Director in the Standard Life group and is

responsible for Group Operations, Asia Pacific

Development, Strategy & Planning, Corporate

Responsibility and Shared Services Centre. Ms. Campbell joined the

Board of Directors in November 2005.

Ms. Renu S. Karnad is the Executive director of

HDFC Limited, is a graduate in law and holds a

Master's degree in economics from Delhi University.

She has been employed with HDFC Limited since

1978 and was appointed as the Executive Director in 2000. She is

19


20/104

responsible for overseeing all aspects of lending operations of HDFC

Limited.

Mr. Norman K. Skeoch is currently the Chief

Executive in Standard Life Investments Limited and is

responsible for overseeing Investment Process &

Chief Executive Officer Function. Prior to this, Mr.

Skeoch was working with M/s. James Capel & Co. holding the positions

of UK Economist, Chief Economist, Executive Director, Director of

Controls and Strategy HSBS Securities and Managing Director

International Equities. He was also responsible for Economic and

Investment Strategy research produced on a worldwide basis. Mr.

Skeoch joined the Board of Directors in November 2005.

Mr. Gautam R. Divan is a practising Chartered

Accountant and is a Fellow of the Institute of

Chartered Accountants of India. Mr. Divan was the

Former Chairman and Managing Committee Member

of Midsnell Group International, an International Association of

Independent Accounting Firms and has authored several papers of

professional interest. Mr. Divan has wide experience in auditing

accounts of large public limited companies and nationalised banks,

financial and taxation planning of individuals and limited companies

and also has substantial experience in structuring overseas investments

to and from India.

20


21/104

Mr. Ranjan Pant is a global Management Consultant advising

CEO/Boards on Strategy and Change Management. Mr. Pant, until 2002

was a Partner & Vice-President at Bain & Company, Inc., Boston,

where he led the worldwide Utility Practice. He was also Director,

Corporate Business Development at General Electric headquarters in

Fairfield, USA. Mr. Pant has an MBA from The Wharton School and

BE (Honours) from Birla Institute of Technology and Sciences.

Mr. Ravi Narain is the Managing Director & CEO of

National Stock Exchange of India Limited. Mr. Ravi

Narain was a member of the core team to set-up the

Securities & Exchange Board of India (SEBI) and is also

associated with various committees of SEBI and the Reserve Bank of

India (RBI).

Mr. Gerald E. Grimstone was appointed Chairman

in May 2007, having been Deputy Chairman since

March 2006. He became a director of The Standard

Life Assurance Company in July 2003. He is also

Chairman of Candover Investments plc and was appointed as one of the

UKs Business Ambassadors by the Prime Minister in January 2009.

Gerry held senior positions within the Department of Health and Social

Security and HM Treasury until 1986. He then spent 13 years with

21


22/104

Schroders in London, Hong Kong and New York, and was Vice

Chairman of Schroders worldwide investment banking activities from

1998 to 1999. He is the Alternate Director to Sir Alexander Crombie.

Mr. Paresh Parasnis is the Principal Officer and

Executive Director of the company since November

14, 2008. A fellow of the Institute of Chartered

Accountants of India, he has been associated with the

HDFC Group since 1984. During his 16-year tenure at HDFC Limited,

he was responsible for driving and spearheading several key initiatives.

As one of the founding members of HDFC Standard life, Mr. Parasnis

has been responsible for setting up branches, driving sales and servicing

strategy, leading recruitment, contributing to product launches and

performance management system, overseeing new business and claims

settlement, customer interactions etc.

HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since

emerged as the largest residential mortgage finance institution in the country. The

corporation has had a series of share issues raising its capital to Rs. 119 Crores. The gross

premium income for the year ending March 31, 2007 stood at Rs. 2,856 Crores and new

22


23/104

business premium income at Rs. 1,624 Crores. The company has covered over 8,77,000

lives year ending March 31, 2007.

HDFC operates through almost 450 locations throughout the country with its corporate

head quarters in Mumbai, India. HDFC also has an International Office in Dubai, UAE

with service associates in Kuwait, Oman and Qatar. HDFC is the largest housing

company in India for the last 27 years.

SNAPSHOT - I

Incorporated in 1977 as the first specialized Mortgage Company in India.

Almost 90% of initial shareholding in the hands of domestic institutes and retail

investors. Current 77% of shares held by foreign institutional investors.

Besides the core business of mortgage HDFC has evolved into a financial

conglomerate with holdings In:

HDFC Standard Life insurance Company- HDFC holds 78.07 %.

HDFC Asset Management Company HDFC holds 50.1%

HDFC Bank- HDFC holds 22.25%.

Intelenet Global (Business Process Outsourcing) HDFC holds 50%.

HDFC Chubb General Insurance Company HDFC holds 74%.

SNAPSHOT-II

Loan Approvals Rs. 805 billion.

(up to Dec 2007) (US $ 18.30 bn.)

23


24/104

Loan Disbursements Rs.669 billion

(up to Dec. 2007) (US $ 15.20 bn)

Housing Units Financed 2.5 million.

Distribution

Offices 181

Outreach Programs 90

KEY PLAYERS

Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive

Chairman of Housing Development Finance Corporation Limited (HDFC Limited). He

joined HDFC Limited in a senior management position in 1978. He was inducted as a

whole-time director of HDFC Limited in 1985 and was appointed as its Executive

Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a

Fellow of the Institute of Chartered Accountants (England & Wales).

Mr. Deepak M Satwalekar is the Managing Director and CEO of the Company since

November, 2000. Prior to this, he was the Managing Director of HDFC Limited since

1993. Mr. Satwalekar obtained a Bachelors Degree in Technology from the Indian

Institute of Technology, Bombay and a Masters Degree in Business Administration from

The American University, Washington DC.

24


25/104

GROUP COMPANIES

HDFC Bank: World Class Indian Bank- among the top private banks in India.

HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.

Intelenet Global: BPO services for international customers.

CIBIL: Credit Information Bureau India Limited.

HDFC Chubb: Upcoming Private companies in the field of General Insurance.

HDFC Mutual Fund

HDFC reality.com: Helps to search properties in all major cities in India

HDFC securities

STANDARD LIFE

Standard Life is Europes largest mutual life assurance company. Standard Life, which

has been in the life insurance business for the past 175 years is a modern company

25


26/104

surviving quite a few changes since selling its first policy in 1825. The company

expanded in the 19th century from kits original Edinburgh premises, opening offices in

other towns and acquitting other similar businesses.

Standard Life Currently has assets exceeding over 70 billion under its management and

has the distinction of being accorded AAA rating consequently for the six years by

Standard and Poor.

SNAPSHOT

Founded in 1875, company supporting generation for last 179 years.

Currently over 5 million Policy holders benefiting from the services offered.

Europes largest mutual life insurer.

JOINT VENTURE

HDFC Standard Life Insurance Company Limited was one of the first companies to be

granted license by the IRDA to operate in life insurance sector. Reach of the JV player is

highly rated and been conferred with many awards. HDFC is rated AAA by both

26


27/104

CRISIL and ICRA. Similarly, Standard Life is rated AAA both by Moodys and

Standard and Poors. These reflect the efficiency with which HDFC and Standard Life

manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr. respectively.

HDFC Standard Life Insurance Company Ltd was incorporated on 14 th August 2000.

HDFC is the majority stakeholder in the insurance JV with 81.4% staple and Standard of

as a staple 18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture.

HDFC Standard Life Insurance Company Ltd. Is one of Indias leading Private Life

Insurance Companies, which offers a range of individual and group insurance solutions.

It is a joint venture between Housing Development Finance Corporation Limited (HDFC

Ltd.) Indias leading housing finance institution and the Standard Life Assurance

Company, a leading provider of financial services from the United Kingdom. Both the

promoters are will known for their ethical dealings and financial strength and are thus

committed to being a long-term player in the life insurance industry- all important factors

to consider when choosing your insurer.

BUSINESS GROWTH

Track Record so far

The gross premium income of HDFC, for the year ending March 31, 2007 stood at Rs.

2,856 crores and new business premium income at Rs. 1,624 crores.

The company has covered over 8,77,000 lives year ending March 31, 2007. Company

also declared our 5th consecutive bonus in as many years for our with profit

policyholders.

27


28/104

KEY STRENGTH

Financial Expertise

As a joint venture of leading financial services groups. HDFC standard Life has the

financial expertise required to manage long-term investments safely and efficiently.

Range of Solutions

HDFC SLIC has a range of individual and group solutions, which can be easily

customized to specific needs. These group solutions have been designed to offer

complete flexibility combined with a low charging structure.

Strong Ethical Values:

HDFC SLIC is an ethical and Cultural Organization. False selling or false commitment

with the customers is not allowed.

Most respected Private Insurance Company

HDFC SLIC was awarded No-1 Private Insurance Company in 2004 by the World Class

Magazine Business World for Integrity, Innovation and Customer Care.

CORPORATE OBJECTIVE

Vision

28


29/104

'The most successful and admired life insurance company, which means that we are the

most trusted company, the easiest to deal with, offer the best value for money, and set the

standards in the industry'.

'The most obvious choice for all'.

Values

.Integrity .Innovation

.Customer centric .People Care One for all

.Teamwork .Joy and Simplicity

Our key strengths

Financial Expertise

As a joint venture of leading financial services groups, HDFC

Standard Life has the financial expertise required to manage your

long-term investments safely and efficiently.

29


30/104

Range of Solutions

We have a range of individual and group solutions, which can be

easily customized to specific needs. Our group solutions have been

designed to offer you complete flexibility combined with a low

charging structure.

Track Record so far

Our cumulative premium income, including the first year premiums

and renewal premiums is Rs. 1532.21 Crores Apr-Mar 2005 - 06.

We have covered over 1.6 million individuals out of which over

5,00,000 lives have been covered through our group business tie-ups.

Our Vision

'The most successful and admired life insurance company, which means that

we are the most trusted company, the easiest to deal with, offer the best

30


31/104

value for money, and set the standards in the industry'.

'The most obvious choice for all'.

Our Values

Values that we observe while we work::

Integrity

Innovation

Customer centric

People Care One for all and all for one

Team work

Joy and Simplicity

Accolades and Recognition

Rated by 'Business world' as 'India's Most Respected Private Life

Insurance Company' in 2004.

31


32/104

Rated as the "Best New Insurer - 2003" by Outlook Money magazine,

Indias number 1 personal finance magazine.

Form of Organisation

HDFC standard life insurance belongs to a life insurance sector in India.

Life Insurance in India

Introduction

With such a large population and the untapped market area of this

32


33/104

population, insurance happens to be a very big opportunity in India.

Today it stands as a business growing at the rate of 15-20 percent annually.

Together with banking services, it adds about 7 percent to the countrys

GDP. In spite of all this growth the statistics of the penetration of the

insurance in the country is very poor. Nearly 80% of the Indian population is

without life insurance cover and the health insurance.

This is an indicator the growth potential for the insurance sector is immense

in India. It was due to this immense growth that the regulations were

introduced in the insurance sector and in continuation the government in

1993 to examine the various aspects of the industry constituted Malhotra

committee. The key element of the reform process was participation of

overseas insurance companies with 26% capital. Creating a more efficient

and competitive financial system suitable for the requirements of the

company was the main idea behind this reform.

Since then the insurance industry has gone through many sea changes.

The competition LIC started facing from these companies were

threatening to the existence of the LIC. Since the liberalization of the

industry, the insurance industry has never looked back and today

stand as one of the most competitive and exploring industry in India.

The entry of the private players and the increased use of the new

33


34/104

distribution are in the limelight today. The use of new distribution

techniques and the IT tools have increased the scope of the industry in

the longer run.

HISTORICAL PERSPECTIVE

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (

Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ). The writings

talk in terms of pooling of resources that could be re-distributed in times of calamities

such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day

insurance. Ancient Indian history has preserved the earliest traces of insurance in the

form of marine trade loans and carriers contracts. Insurance in India has evolved over

time heavily drawing from other countries, England in particular.

34


35/104

1818 saw the advent of life insurance business in India with the establishment of the

Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In

1829, the Madras Equitable had begun transacting life insurance business in the Madras

Presidency. 1870 saw the enactment of the British Insurance Act and in the last three

decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and

Empire of India (1897) were started in the Bombay Residency. This era, however, was

dominated by foreign insurance offices which did good business in India, namely Albert

Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian

offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in

India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to

regulate life business. In 1928, the Indian Insurance Companies Act was enacted to

enable the Government to collect statistical information about both life and non-life

business transacted in India by Indian and foreign insurers including provident insurance

societies. In 1938, with a view to protecting the interest of the Insurance public, the

earlier legislation was consolidated and amended by the Insurance Act, 1938 with

comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there

were a large number of insurance companies and the level of competition was high.

There were also allegations of unfair trade practices. The Government of India, therefore,

decided to nationalize insurance business.

An Ordinance was issued on 19 th January, 1956 nationalising the Life Insurance sector

and Life Insurance Corporation came into existence in the same year. The LIC absorbed

35


36/104

154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign

insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was

reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the west and

the consequent growth of sea-faring trade and commerce in the 17 th century. It came to

India as a legacy of British occupation. General Insurance in India has its roots in the

establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the

British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first

company to transact all classes of general insurance business.

1957 saw the formation of the General Insurance Council, a wing of the Insurance

Association of India. The General Insurance Council framed a code of conduct for

ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum

solvency margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalization) Act, general

insurance business was nationalized with effect from 1 st January, 1973. 107 insurers were

amalgamated and grouped into four companies, namely National Insurance Company

Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and

the United India Insurance Company Ltd. The General Insurance Corporation of India

was incorporated as a company in 1971 and it commence business on January 1sst 1973.

This millennium has seen insurance come a full circle in a journey extending to nearly

200 years. The process ofre-opening of the sector had begun in the early 1990s and the

last decade and more has seen it been opened up substantially. In 1993, the Government

36


37/104

set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to

propose recommendations for reforms in the insurance sector. The objective was to

complement the reforms initiated in the financial sector. The committee submitted its

report in 1994 wherein , among other things, it recommended that the private sector be

permitted to enter the insurance industry. They stated that foreign companies be allowed

to enter by floating Indian companies, preferably a joint venture with Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the

Insurance Regulatory and Development Authority (IRDA) was constituted as an

autonomous body to regulate and develop the insurance industry. The IRDA was

incorporated as a statutory body in April, 2000. The key objectives of the IRDA include

promotion of competition so as to enhance customer satisfaction through increased

consumer choice and lower premiums, while ensuring the financial security of the

insurance market.

The IRDA opened up the market in August 2000 with the invitation for application for

registrations. Foreign companies were allowed ownership of up to 26%. The Authority

has the power to frame regulations under Section 114A of the Insurance Act, 1938 and

has from 2000 onwards framed various regulations ranging from registration of

companies for carrying on insurance business to protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were

restructured as independent companies and at the same time GIC was converted into a

national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in

July, 2002.

37


38/104

Today there are 14 general insurance companies including the ECGC and Agriculture

Insurance Corporation of India and 14 life insurance companies operating in the country.

The insurance sector is a colossal one and is growing at a speedy rate of 15-20%.

Together with banking services, insurance services add about 7% to the countrys GDP.

A well-developed and evolved insurance sector is a boon for economic development as it

provides long- term funds for infrastructure development at the same time strengthening

the risk taking ability of the country.

PRODUCTS

At HDFC Standard Life, we offer a bouquet of insurance solutions to meet

every need. We cater to both, individuals as well as to companies looking to

provide benefits to their employees. This section gives you details of all our

products. We have incorporated various downloadable forms and product

details so that you can make an informed choice about buying a policy.

For individuals, we have a range of protection, investment, pension and

38
http://www.hdfcinsurance.com/products/individual.asphttp://www.hdfcinsurance.com/products/individual.asp


39/104

savings plans that assist and nurture dreams apart from providing protection.

You can choose from a range of products to suit your life-stage and needs.

For organizations we have a host of customized solutions that range from

Group Term Insurance, Gratuity, Leave Encashment and Superannuation

Products. These affordable plans apart from providing long-term value to the

employees help in enhancing goodwill of the company.

Following are the major plans of HDFC:

Endowment plan.

Whole life plan

Pension plan

Childrens plan

Money back plan

HDFCSL product plan is a Life Stage Plan

39
http://www.hdfcinsurance.com/products/group.asphttp://www.hdfcinsurance.com/products/group.asp


40/104

We can see its plan is like a LIFE STAGE Plan. According to it there are four

stage of life, young and single stage, Just Married stage, proud parents and

Planning and Retirements

Stage 1

Young and Single stage:-

It is an important stage where on lays down the

foundation of a successful life ahead. It helps in this

stage for taking advantage of the time and power of

compounding to ensure that you build up your dreams. Our needs in this stage our

needs are save for home and weeding, tax planning and save for golden years.

Figure1

Stage 2

Just Married stage:-

Marriage brings about a significant change. New dreams

and new opportunities also bring in additional

responsibilities. In this stage our needs are planning for

home, save for vacation, and save for our child

40


41/104

Stage 3

Proud Parents:-

Once you have children, your need for life insurance is even

more. In this stage our need will be provide good education

for childrens, safeguarding family against loan liabilities,

and saving for post-retirement.

(Figure 3)

Stage 4

Planning for Retirement:-

In this stage our needs becomes more like as we

need more secure, independent and comfortable life style in

our retirement years.

Life Stage Structure

41


42/104

42


43/104

HDFCSLIC have divided our whole life into four stages and describe above the

different needs of our different stage. It all insurance plan are based upon these

states and it tried to fulfill all the requirement of all the need of each stages of life

through endowment plan, young star plan , retirement plus plan, and pension plus

plan.

ENDOWMENT PLAN

The HDFCSL Endowment Assurance Plan gives you:An ideal way to secure your long-term financial goalsValuable protection to your family by way of lump sum payment in case of your

unfortunate death within policy termProvides lump sum payment (basic Sum Assured plus any bonus additions) on

survival up to maturity dateVery flexible benefit options and payment options

In case of your unfortunate demise during the policy term, this participating

(With Profits) insurance plan will pay your family the Sum Assured

(together with the attached bonuses) you had chosen.

The plan receives simple Reversionary Bonuses, which are usually added

annually. At the end of the term an additional Terminal Bonus may be paid

depending on the performance of the underlying investment.

43


44/104

WHOLE LIFE PLAN

HDFC Single Premium Whole Of Life Insurance Plan is a tailor-made

plan well suited to meet your long-term investment needs. This participating

plan offers you the following benefits:

Whole of life plan aimed at providing long-term real growth of your

money.

Single premium investment planIn case of your unfortunate demise during the policy term, this

participating (With Profits) insurance plan will pay your family the

Sum Assured and compound Reversionary Bonuses, which are usually

added annually. An additional Terminal Bonus may be paid depending on

the performance of the underlying investments.During Guaranteed Surrender Periods you get the Sum Assured and all

bonuses vested as at the date of surrender.

44


45/104

PENSION PLAN

HDFC PERSONAL PENSION PLAN

We understand your need to build a secure future for yourself. Hence, the

HDFC Personal Pension Plan is an insurance policy that is designed to

provide a post - retirement income for life with the freedom to choose your

retirement date.

You can choose your premium, the Sum Assured and your retirement date.

At the end of the policy term, you will receive the Sum Assured plus any

attaching bonus, which will provide your post - retirement income.

The HDFC Personal Pension Plan is an insurance policy, which can benefit

you in the following ways:

Provides a post retirement income in your golden yearsGives you the flexibility to plan your retirement dateGives you tax benefits on your premiums


annually. At the end of the term an additional Terminal Bonus may be paid

depending on the performance of the underlying investment.

Dont compromise on your self-respect, ever. Go ahead, hold your head high

and enjoy life with the HDFC Personal Pension Plan.

45


46/104

CHILDRENS PLAN

The HDFC Children's Plan gives you:

Invaluable financial support to your childHelps you customize an ideal plan for your childProvides you multiple options for multiple benefits

The HDFC Childrens Plan is designed to secure your childs future by

giving your child (the beneficiary) a guaranteed lump sum, on maturity or

in case of your unfortunate demise, early in the policy term. The

company to give you good long-term returns invests the premiums, paid

by you.


annually. At the end of the term an additional Terminal Bonus may be

paid depending on the performance of the underlying investment (See

Bonuses for more details).

MONEY BACK PLAN

The HDFC Money Back Plan is a With Profit Plan that gives you:

A proportion of the basic Sum Assured as cash lump sums at regular 5-

46


47/104

year intervals within the policy term (see the table given below) an

ideal way to secure your long- term as well as short-term financial goalsA lump sum payment on survival up to maturity dateValuable protection to your family by way of lump sum payment in case

of your unfortunate death within the policy term. This is over and above

any earlier payouts

Making the right kind of investment will enable you to achieve your

objectives be it your immediate expenses or else securing your future

financial needs. Our Money Back Plan gives you a wide range of terms and

cash benefit schedule to choose from. A summary of Key Benefits including

the cash lump sum payments, expressed as a percentage of Sum Assured is

shown below:

Key Benefits

Total Policy

TermSurvival Benefit

Death

Benefit

5 Yrs. 10 Yrs. 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs.

Within

Policy

Term10 40% 60% +

Attaching

Bonuses

- - - - 100%

Sum

Assured

47


48/104

+

attaching

bonuses

(Over

and

above

the

earlier

payouts).

15 30% 30%

40% +

Attaching

Bonuses

- - -

20 25% 25% 25%

25% +

Attaching

Bonuses

- -

25 20% 20% 20% 20%

20% +

Attaching

Bonuses

-

30 15% 15% 15% 15% 15%

25% +

Attaching

Bonuses

Maturity Value

On maturity you receive survival benefit due at that point of time along with

attaching bonuses for the full Sum Assured calculated for the full term.

You can ensure your financial independence. And be able to live life on your

own terms. Always.

48


49/104

BARRIERS TO ENTRY

Capital requirements

High gestation period

Access to distribution channels

Brand equity

Indian consumer psychology

Tax avoidance

49


50/104

Capital Requirements

The huge capital requirements pose a major barrier to entry in the

insurance sector . These requirements can be attributed to the costs

incurred in setting up your distribution network. To achieve

economies of scale you would require a nationwide presence, unless

you want to cater to a niche group, which would involve setting up a

huge sales force.

High Gestation Period

On an average a player in the insurance sector would require around

7-10 years to break-even. This comparatively long gestation period would

entail the player to have sufficiently deep pockets to bear the losses till the

time he breaks even.

Access to Distributional Channels

Given the poor reach of the insurance companies amongst the Indian

public especially in the rural sector the distribution channels adopted

50


51/104

will determine the future growth of the industry. For the insurance

industry to take off in a big way in India companies will have to adopt new

and innovative distribution channels to be able to cover the vast

majority of the Indian population which is still not covered by the

insurance companies.

Brand equity

Customer loyalty in the insurance sector is very high, thus benefiting

players whove already been there in the market for a long time.

While going in for an insurance policy, the brand and the trust that it

generates are essential criteria on which the customer makes his

judgement. Thus a brand, which has been there for a long period of

time and has managed to serve it customers well , would be in a

position to leverage its brand equity.

Indian Consumer Psychology

The Indian customer, liken his global counterpart , buys policies for

tax benefits and to ensure secure savings for the future. Although he

is price sensitive , he still deserves value and sound services for his

51


52/104

money.

Insurance as savings: There is reluctance amongst Indians to use

insurance policies as a means of investment of their savings.

Traditionally Indians have invested the bulk of their savings in bank

fixed deposits followed by the capital markets in spite of the low

returns offered by the banks and the large risk involved in trading in

stocks. The changing mindset of the Indian public will be a key driver

for growth in the liberalized era.

Insurance for Tax Avoidance:

The urban educated class of Indians traditionally looked at insurance as

a tax avoidance tool. Mindsets are now changing, but purchase patterns

are not. The months of February and March still are the busiest at

LIC. The traditional hook of tax incentives and savings will take a

long time to change. Private players need to step up their selling in

terms of need and protection.

Due to low consumer awareness of the need for insurance and benefits

52


53/104

attached to it, most of the insurance is still sold through agents. Other

distribution channels like banc assurance are now being explored.

Growth potential of the Indian insurance market

India at a glance

Population: 1 Billion

Economy: 5th largest in the world in terms of Purchasing Power

Parity (PPP)

GDP growth Rate: Over 6% per year on an average for the last decade

Savings Rate: Around 26% of GDP

Estimated middle class population: 300 Million

53


54/104

Insured population: 70 million only

Future Trends

The Insurance sector is set to see a whole lot of changes in the way

business was traditionally done with new and innovative products,

distribution networks , etc. Changes in the external environment for the

life Insurance market will have to be suitably understood in order to

avoid excessive selling and mis-selling out of over-enthusiasm.

New Products

Most of the insurance products offered by the traditional Indian players

are outdated, as they are not suitable to the needs of the consumers.

Hence, old as well as new insurers will be offering innovative

54


55/104

products to the consumers. The consumers are particularly expecting

good pension plans, health insurance, term insurance and Investment

products like unit-linked insurance, from the life insurers. Similarly, the

consumers expect innovative products from the general insurers for

managing healthcare, property insurance, accident insurance and other

products related to the personal line of insurance. The consumers also

expect reduction in the premium of the insurance products as the

mortality rate in India has come down by three times in the last 50

years.

Consumer Education

Very soon the market will be flooded with a large number of products

by a fairly large number of insurers operating in the Indian market.

Even with the limited range of traditional insurance products , the

consumers are confused. Their confusion will further increase in the

face of a large number of products in the market. The existing level

of awareness of the consumers for insurance products is very low. This

is because only 65 percent of the Indian population is literate. Even

the educated consumers are ignorant about the various products of

insurance. Moreover , there is a shortage of trained agents and brokers.

55


56/104

It is necessary that all the insurers should undertake extensive plans

for educating the consumers.

UNIT LINKED INSURANCE PLAN

Now One should know what it means Unit Linked Insurance

Imagine an ideal combination of insurance and life savings that will

help One in the future to finance lofty plans, whether referring to

purchase of a car, contribution to education of children or grandchildren

or just some extra income when retired.

Unit Linked provides you with not only an effective protection

against individual investment risks and inflation but above all it brings

along a long-term growth potential of financial means. Everyone

decides on their own what is the right method of investment for them,

which predetermines evaluation of deposited money.

Financial means invested into Unit Linked are evaluated in the course

of insurance period through four financial funds. It is one oneself that

56


57/104

decide on division of the invested means. One can at any time

reallocate Ones money among the funds. The four funds for

investments are :-

Balancer, Maximizer, Protector, Preserver.

Types of riders offered:

Waiver of premium

Accidental death rider

Accidental death and disability rider

Accidental full disability annuity rider

Specified accidents and accidental disability rider for a child

How can a person draw the saved money

After the insurance period is over, One will be paid out the invested

sum increased by evaluation, this as a lump-sum payment or regular

annuity.

57


58/104

In case of death in the course of insurance period, the sum assured

agreed upon or the fund value is immediately paid out to a beneficiary

(beneficiaries). The investment value is paid out if it is higher than

the sum assured agreed upon.

How to pay premium

Premium can be paid in regular monthly installments: monthly,

quarterly, semi-annually, and annually. In the course of insurance

period, it is possible to invest other financial means in the form of

top-ups, thus reinforcing the investment part of insurance.

The three in one option - Unit-linked policies:

The outlook of the modern day investors has undergone a dramatic

change. In the changed fiscal scenario with drastic fall in the interest

for investment and the volatile capital market with limited investment

options, ULIP comes to the rescue of the prudent investors. Investment

58


59/104

in insurance has become the style of the day. The individual looks at

buying an insurance policy more of an investment, which comes with

the additional benefits of life cover and tax benefit also.

ULIP - Unit Linked Insurance Policy - ULIP is a unique, multiple

benefits Plan which combines the basic benefit of life insurance, tax

benefits and accident insurance cover. The plan offers tax deductions

on the amount invested under Section 80C of the Income Tax Act

within the overall limit of Rs. 1,00,000/-.

With the Insurance industry booming up in the Indian economy

following liberalized regulations from the IRDA, the ULIPs have

regained their strength. This was further boosted by the private

insurance companies with foreign partners. .

Under ULIPs, the premiums are invested after deducting the charges

and fees in a fund similar to that of a mutual fund along with a life

insurance cover.

59


60/104

The IRDA regulates that a unit-linked plan must be offered to the

investor with an option to select among debt, balanced and equity

funds. For example, if an investor opts for a unit-linked endowment

policy, he can choose to invest his premiums in debt, balance or

equity funds. If he selects a debt fund, the majority of his premium

will be invested in debt securities like gilts and bonds. If the option

is equity, a major portion of the premium is invested in the equity

market. The selection of policy depends upon its risk profile and the

Investment needs. Higher the risk, higher would be the returns and

vice versa..

60


61/104

The HDFC Unit Linked Endowment Plan gives you:

An outstanding investment opportunity by providing a choice of

thoroughly researched and selected investmentsValuable protection to your family in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity

You can choose your premium and the investment fund or funds. We will

then invest your premium, net of premium allocation charges in your chosen

funds in the proportion you specify. At the end of the policy term, you will

receive the accumulated value of your funds.

In case of your unfortunate demise during the policy term, we will pay the

greater of your Sum Assured (less any withdrawals you have made in the

two years before your claim) and your total fund value to your family.

Use HDFC Standard Lifes excellent investment options to maximize your

savings & secure your and your familys future. We will provide financial

security for your family in your absence.

61


62/104

THE FUTURE OF THE INSURANCE INDUSTRY

The insurance industry is today witness to a massive

transformation from its earlier days. From a humble beginning

made in 1956 since the nationalization of the industry and the birth of

the Life Insurance Corporation, the industry today sees a deluge of

multinational insurers all charging in to set up shop here considering

the existent vast unexploited potential.

Multinational partnerships:

The winds of liberalisation have initiated vast changes in the functioning of

the industry today. Increasing number of multinational partnerships with

private insurers have paved the way for a radical shift in insurance selling -

through a number of new distribution channels besides bringing about more

awareness on the need for insurance and also stressing on the important role

technology can play.

With major trade barriers gone, the Indian insurance industry is slowly

opening itself from a protected environment to e-business, incorporating

newer technologies in insurance, thanks to competition, that will hopefully

bring forth a marked improvement in customer service, insurance marketing,

risk management, claim settlement, underwriting etc in comparison to its

62


63/104

earlier days.

Faster decision making:

Today, information dissemination is increasingly faster with the advent

of information technology, which will largely help individuals gain

access to every bit of information they would require, enabling faster

decision-making. This is in stark contrast with the pre-liberalization era

wherein information sourcing was virtually non-existent except from the

recruited agents of the insurance company.

Policy servicing, an area that has long remained neglected will now receive a

major thrust with insurance companies redefining strategies to weed out

sluggishness and provide the policyholder with prompt service. Online

policy servicing too will soon become the norm thereby cutting down on the

unnecessary delays.

63


64/104

Information explosion:

The oncoming technological revolution is all set to totally revamp the very

concept of Knowledge management. Automating knowledge management

will become the sole aim to increase productivity. Large databases of raw

information on individuals' investment patterns can be fed into computers to

enable faster segregation of information as per required categories.

Computerizing information can make a major difference to the general

insurance industry wherein motor claim losses particularly have been hitting

the roof. With an organized system of data collection and storage, data

analysis and claim management system, keeping track of the claim

applicants behavioral patterns becomes easy.

Easier Claims settlement:

Claims settlement that was hitherto a time consuming affair will see a

marked difference in operations. With competition building and improved

customer service becoming the new mantra the time taken for claim

settlements will reduce considerably. World over underwriting risks, claims

management, risk surveys etc are far more simplified thanks to technology.

64


65/104

Insurance companies are slowly realizing the mass difference information

technology can make to business. Consider policy information being made

available online. Tracking policy details, the premiums to be paid, premiums

paid so far, the bonus percentage, maturity date of the policy and several

such details can be accessed at the mere click of a mouse soon.

Improved customer service - the ultimate aim:

The insurance industry, with competition hooting up is has woken up

to ground realities and is in the process of implementing software

solutions. Realizing the unlimited power information technology holds,

insurance companies have realized that strategic deployment of

technology for integrating office operations, and gaining customer

confidence through improved customer service is the need of the hour.

65


66/104

Awards & Accolades

Sept, 2008

Received 2008 CIO Bold 100 and CIO Security Awards

HDFC Standard Life has received the 2008 CIO Bold

100 Award. This annual award recognizes

organizations that exemplify the highest level of

operational and strategic excellence in information

technology. This year's award theme, The Bold 100,

recognized those executives and organizations that embraced great risk for the sake of

great reward.

HDFC Standard Life has also been one of the five recipients of the Special 2008 CIO

Security Award aimed at CIOs, whose pioneering implementations have taken their

enterprise security to the next level. This award

category identifies innovative and groundbreaking

deployment of technologies aimed at creating a

secure business infrastructure.

The company received the 2008 CIO Bold Award for

its mobile workforce portal and the CIO Security Award for its initiatives for a secure

computing environment, including identity management.

66


67/104

May, 2008

Received PCQuest Best IT Implementation Award 2008

HDFC Standard Life received the PCQuest Best IT Implementation Award 2008 for

Consultant Corner, the applications for its financial consultants, providing centralized

control over a vast geographical spread for key business units such as inventory, training,

licensing, etc. Read more about the Consultant Corner tool in the HDFCSL in News

Section.

HDFC Standard Life has won the PCQuest Best IT Implementation Award for two years

consequently. Last year, the company received the award for Wonders, its path-breaking

implementation of an enterprise-wide workflow system.

March, 2008

Silver Abby at Goafest 2008

HDFC Standard Life's radio spot for Pension Plans won a Silver Abby in the radio

writing craft category at the Goafest 2008 organised by the Advertising Agencies

Association of India (AAAI). The radio commercial Pata nahin chala touched several

changes in life in the blink of an eye through an old mans perspective. The objective was

drive awareness and ask people to invest in a pension plan to live life to the fullest even

after retirement, without compromising on ones self-respect

March, 2008

Unit Linked Savings Plan Tops Mint Best TV Ads Survey

The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of the leading

private insurance companies in India, has topped Mints Top Television Advertisement

67
http://www.hdfcinsurance.com/MediaCenter/News/Sunil%20Rawlani,%20CIO%20on%20HDFC%20SL's%20Financial%20Consultant%20tool%20.pdfhttp://www.hdfcinsurance.com/MediaCenter/News/Sunil%20Rawlani,%20CIO%20on%20HDFC%20SL's%20Financial%20Consultant%20tool%20.pdf


68/104

survey conducted, for February 2008. HDFC Standard Lifes Unit Linked Savings Plan

advertisement was ranked 4th in terms of a combined score of ad awareness and brand

recall and 3rd in terms of ad diagnostic scores (likeability, enjoyment, believability, and

claim). The respondents were between 18 and 40 years. Mints exclusive report, New

voices in a makeover outlines the survey in detail.

February, 2008

Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007

Mr Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life, received

the QIMPRO Gold Standard Award 2007 in the business category at the 18th annual

Qimpro Awards function. The award celebrates excellence in individual performance and

highlights the quality achievements of extraordinary individuals in an era of global

competition and expectations.

January, 2008

Sar Utha Ke Jiyo Among Indias 60 Glorious Advertising Moments

HDFC Standard Lifes advertising slogan honoured as one of 60 Glorious Advertising &

Marketing Moments' over the last 60 years in India, by 4Ps Business and Marketing

magazine. The magazine said that HDFC Standard Life is one of the first private insurers

to break the ice using the idea of self respect (Sar Utha Ke Jiyo) instead of 'death' to

convey its brand proposition. This was then, followed by others including ICCI

Prudential, thus giving HDFC Standard Life the credit of bringing up one such glorious

advertising and marketing moment in the last 60 years.

68


69/104

DISTRIBUTION STRATEGY

Why HDFC is better ?

1. Investment returns: investment returns and business growth provided by HDFC

is validated by bajaj Capital report. HDFC pacify the need of invertors up to healthy level

and make the strong relationship with them.

2. Financial Background and Experience: HDFC existing in the market since

1977. It has a very handsome experience in the field of finance because it completely

involved in finance Sector only where as the others are running in many other field also

like Reliance (Petroleum, Textile, Telecom etc.)

3. Ethics and Values: HDFC is an ethical and cultural organization which prevents

the false selling and prohibit the false commitment to the customer.

4. Sales Force: Properly trend licensed and Educated People are the strength of the

company. So that they could give the best customer service.

5. Huge branch network HDFC is having 450 branches in all over the country.

6. Online accessibility : It makes the process faster and make the customer

delighted.

Who can be the financial consultant: ?

Section 42(4) of the amended Insurance Act, 1938 states an agent to be one who is not: A

minor.

69


70/104

Found to be sound mind by a court of competition jurisdiction.

Found guilty of criminal background.

Found guilty of having knowingly participated in or connived at any fraud

/dishonesty or misrepresentation against an insured.

Work of financial consultant:

The FC is the interface between the customer and insurance company. The agent should

be able to accomplish the following service.

Assessing and analyzing the clients risk profile.

Finding the best product or products available in the market.

Negotiating the best deal available.

Continuity of service throughout the period of insurance.

Objective of FC:

Recruitment of Financial consultant (FCs) of a excellent profile and their retention

strategies and what are their benefit that company going to provided for retention of their

FCs.

(A) What type of people are we looking for ?

1- Committed people who have the drive, determination and ability to become

professional financial consultants.

2- Ability to sell a range of financial products.

(B) What do We Expect from financial Consultant ?

1- Devote a time and energy during training.

2- Sell at least 5 policies each month once after licensed with company.

70


71/104

3- We look forward to a long term mutually beneficial relationship.

(C) Why should financial consultant choose HDFC standard life ?

Brand value and the reputation of the partners (HDFC Limited) Market leader in

housing finance:

15 lakhs home financed.

11 lakhs retail deposits customer base.

Reputation for providing the higher standards of customer service.

Financial Strength of the partners.

Brand value and the reputation of the partners standard life:

175 years experience in life insurance.

Largest mutual life insurer in Europe.

Product innovation.

Strategies for recruitment of FC:

Strategies Employed to achieve the target are as follows:-

Telecalling

Contacting the person directly (interview)

Collect references.

Some important steps to make effective telecalling:-

Open the call in a friendly and positive way.

State the name, position and company name.

Check the prospect has time to speak.

71


72/104

State the reason for the call.

Clearly succinctly explain how the meeting will be benefiting the prospect.

Achievements:

Recruited eight financial consultants for company.

Increase in confidence level.

Got the knowledge about, how to differentiate our product form that of LIC.

Made more and more people aware about my companies Products (Policies)

Taken some appointments for policies and got positive response from 8 persons with the

help of my BDM.

Limitations:-

So though the study aim to achieve the above mentioned Objective in full earnest and

accuracy, it may be hampered due to certain limitation. Some of the limitations are as

follows:

To cover the various section for the society.

Respondents may not be at home and may have to re-contacted or replaced by

others.

Getting accurate response form the respondents due to their inherent problem is

difficult.

Limited response from client.

There is a time limitation it is not possible to study whole thing I covered some

special aspect as well as some topics.

72


73/104

FIELD METHODOLOGY

The methodology adopted in the field to collect the data represented diagrammatically

below:

TABULATION AND

ANALYSIS

73

Filling up questionnaire

and Schedule

Meeting with People

Segmentation of People


74/104

In order to determine the willingness of the people to become FC for HDFC SLIC in

Bilaspur, data collected by surveying is treated as analysis. Response to the parameter

like professional, unemployed students, housewives, investment consultant, post office

agent.

Willingness to be FC for HDFC

Yes No TotalProfessional 2 28 30

Working employees 2 33 35

House wives 2 18 20

Students 3 22 25

Investment consultants 2 18 20

Post office agents 3 12 15

Others - - 10

Total 14 131 155

74


75/104

75


76/104

76


77/104

77


78/104

COMPETITIVE ANALYSIS

LIFE INSURANCE CORPORATION OF INDIA (LIC)

LIC has an excellent money back policy which provides for periodic payments of partial

survival benefits as long as the policy holder is alive. 20% of the sum assured is payable

after 5, 10, 15 and 20 years and the balance 40% is payable at the 20 th year along with

accrued bonus. (www.lic.com)

For a 25 years term , 15% of the sum assured becomes payable after 5,10,15 and 20 years

and the balance 40% plus the accrued bonus becomes payable at the 25 th year. An

important feature of these types of policies is that in the event of the death of the policy

holder at any time within the policy term the death claim comprises of full sum assured

without deducting any of the survival benefit amounts which have already been paid. The

bonus is also calculated on the full sum assured.

HDFC SLIC does not have a money back policy. It could offer a money back plan and

capture some portion of this market. While marketing insurance products I found that

many customers wanted to purchase these plans.

LIC offers 66 different plans; plans are formulated for specific occasions whole life

plans, term assurance plans, money back plan for women, child plans, plans for the

handicapped individuals, endowment assurance plans, plans for high worth individuals,

pension plans, unit linked plans, special plans, social security schemes diversified

portfolio of products. HDFC SLIC could diversify its product portfolio. It could add more

plans for high worth individuals and women.

78


79/104

ICICI PRUDENTIAL

ICICI Prudential is a stiff competitor for HDFC SLIC. The company is a merger between

ICICI Bank which is the biggest private bank in India and Prudential Plc which is a

global life insurance company.

The company has an investment plan which is market related Invest Shield Life. In this

plan even if the market falls, the premium will be returned to investors. It is a guaranteed

plan which ensures the company carefully invests your money. The stock market

performance of ICICI Prudential is much better than HDFC SLIC. The returns on the

growth fund were 46.28% compared to the 42.70% offered by HDFC SLIC. Customers

are attracted by higher returns and this is a plus point for Prudential.

The company is very well advertised. The advertisements are showcased in movies,

television, newspapers, magazines, bill boards, radio etc. The company has an excellent

brand ambassador Mr. Amitabh Bacchan. His promotion of the company builds trust

and faith in the minds of our people.

However the charges are very high in the plans offered by ICICI Prudential. It is 35%

during the first year, 15% in the next year and 3% from the third year onwards. Also a

higher minimum premium of Rs. 8000 is charged. Hence the policies are not accessible to

the lower strata of the society.

BIRLA SUN LIFE

Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla

Group, one of the largest business houses in India and Sun Life Financial Inc., a leading

international financial services organization. The local knowledge of the Aditya Birla

79


80/104

Group combined with the expertise of Sun Life Financial Inc., offers a formidable

protection for your future. (Source: www.birlasunlife.com)

The Aditya Birla Group has a turnover close to Rs. 33000 crores with a market

capitalization of Rs. 53400 crores (as on 31st March 2007). It has over 72000 employees

across all its units worldwide. It is led by its Chairman - Mr. Kumar Mangalam Birla.

Some of the key organizations within the group are Hindalco and Grasim.

Sun Life Financial Inc. and its partners today have operations in key markets worldwide,

including Canada, the United States, the United Kingdom, Hong Kong, the Philippines,

Japan, Indonesia, India, China and Bermuda. It had assets under management of over

US$343 billion, as on 31st March 2007. The company is a leading player in the life

insurance market in Canada.

Being a customer centric company, BSLI has invested heavily in technology to build

world class processing capabilities. BSLI has covered more than a million lives since

inception and its customer base is spread across more than 1000 towns and cities in India.

All this has assisted the company in cementing its place amongst the leaders in the

industry in terms of new business premium income. The company has a capital base of

520 crores as on 31st July, 2007.

Its Flexi Life Line Plan offers life long insurance cover till the policy holder is 100 years

of age. There are guaranteed returns of 3% p.a. net of policy charges after every 5 years

from the eleventh policy year onwards. However the charges are very high. The initial

charges for the first year are 65%. Hence the fund value is greatly reduced.

80


81/104

BAJAJ ALLIANZ

Bajaj Allianz is a joint venture between Allianz AG with over 110 years of experience in

over 70 countries and Bajaj Auto, a trusted automobile manufacturer for over 55 years in

the Indian market. Together they are committed to offering you financial solutions that

provide all the security you need for your family and yourself. Bajaj Allianz is the

number one private life insurer for the year 2005 2006. It is leading by 78 crores. It has

experienced a whopping growth of 216% in the last financial year.

The company has sold 13, 00,000 policies and is backed by 550 offices across India. It

offers travel insurance, motor insurance, home insurance, health and corporate insurance.

The mortality charges are lower than HDFC SLIC. The entry age could be zero years

which allow even new born babies to be insured.

TATA AIG

Tata Aig is a joint venture between the Tata group and American International Group Inc.

In one of the plans the company offers hospital cash benefit wherein it will pay Rs. 2500

per day in case of hospitalization and Rs.12.5 lakhs in case the person suffers from any

critical illness. Annual premium is much less (about Rs. 6712) to avail such a good

benefit. Charges are relatively low compared to HDFC SLIC for some policies.

81


82/104

The company offers high coverage plans at low cost. There is a plan even for a policy

term of 1 year. Your family can continue to enjoy their current lifestyle even in the case

of something happening to you. These plans are very flexible and HDFC SLIC could

adopt this idea of insuring individuals for short periods of time. For example; there is a

family of four. The only earning member is the father.

He has just taken a loan from a bank of 20 lakhs to purchase a new home. He is able to

repay the loan with his current salary in 15 years. The problem arises if something were

to happen to him within these fifteen years. Not only will the family face the emotional

and financial loss of their father but they will also have to repay the home loan or risk

being homeless.

82


83/104

MARKETING PROBLEMS

The old and out dated technique of tele marketing is used to prospect customers. More

modern techniques must be adopted. The company must sponsor shows and give

presentations in corporate houses. The financial health check must be performed for

every prospect to assess his/her true financial position and needs. Some of the advisors

skip this vital step and the prospect ends up with a plan they do not appreciate and soon

surrender or discontinue.

Some of the main problems in marketing the policies are:

Large amount of competition (18 players in the market)

Other brands are well advertised and have higher recall value

LIC is considered a safer option

contributon of hdfc life in insurence sector

Documents