Post on 18-Nov-2014
transcript
A SUMMER TRAINING REPORT
ON
CUSTOMER-BUYING BEHAVIOR WITH A FOCUS ON MARKET SEGMENTATION
Submitted in partial fulfillment of
POST GRADUATE DIPLOMA MANAGEMENT(APPROVED BY A.I.C.T.E.)
Session: 2008 – 2010
Submitted To
Mrs. Rosy Sharma (Lecturer)
Chandigarh Business School , Landran , Mohali
Submitted By
Praveen Kumar Tripathi
Roll No.: 08CBSPGDM37
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CONTENT
Page no.
A) CERTIFICATE OF SUPERVISOR 4
B) DECLARATION 5
C) ACKNOWLEDGEMENT 6
D) PREFACE (7-8)
E) EXECUTIVE SUMMARY 9
F) CHAPTER – 1 (10-22)
Introduction To Insurance Industry
History of insurance
Major players in insurance industry in India
Marketing of insurance
G) CHAPTER - 2
Company Profile (23-26)
About HDFC standard life insurance
HDFC standard life insurance parentage
About standard life group
HDFC key strength
Corporate objective
H) CHAPTER-3
Company’s Insurance Plans (26-32)
Individual products
Group products
Tax Benefits
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I) CHAPTER - 4
Research Methodology (33-37)
Objective of the Study
Scope of the Study
Significance of the Study
Research Design
Sampling Methodology
Limitations Of Research
J) CHAPTER – 6
FACTS AND FINDINGS (37-71)
DATA ANALYSIS AND INTERPRETATIONS
RECOMMENDATIONS
CONCLUSION
BIBLIOGRAPHY
3
Certificate of Supervisor
This is to certify that Mr. Praveen Kumar Tripathi Roll No.08CBSPGDM37 has completed the
research project titled “CUSTOMER-BUYING BEHAVIOR WITH A FOCUS ON
MARKET SEGMENTATION ” under my supervision in partial fulfillment of the Post
Graduation Diploma Management (Approved By A.I.C.T.E.)
Ms. Rosy Sharma
(Lecturer)
Chandigarh Business School
Date:
Place:
4
Declaration
I, hereby declare that the research project report titled “CUSTOMER-BUYING BEHAVIOR
WITH A FOCUS ON MARKET SEGMENTATION “ is my own original research work and
this report has not been submitted to any University/Institute for the award of any professional
degree or diploma.
Praveen Kumar Tripathi
Pgdm 3rdSem
Chandigarh Business School
Date:
Place:
5
ACKNOWLEDGEMENT
First of all I would like to thank the Management at HDFC Standard Life Insurance Company
Ltd for giving me the opportunity to do my two-month project training in their esteemed
organization. I am highly obliged to Miss. Geetika Sajjanhar (Channel Development Manager)
for granting me to undertake my training at Mohali branch.
I express my thanks to all Sales Managers under whose able guidance and direction, I was able to
give shape to my training. Their constant review and excellent suggestions throughout the project
are highly commendable.
My heartfelt thanks go to all the executives who helped me gain knowledge about the actual working and the processes involved in various departments.
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PREFACEThe liberalization of the Indian insurance sector has been the subject of much heated debate for
some years. The policy makers where in the catch 22 situation wherein for one they wanted
competition, development and growth of this insurance sector which is extremely essential for
channeling the investments in to the infrastructure sector. At the other end the policy makers had
the fears that the insurance premia, which are substantial, would seep out of the country; and
wanted to have a cautious approach of opening for foreign participation in the sector.
As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw
the day of the light thanks to the maturing polity emerging consensus among factions of different
political parties. Though some changes and some restrictive clauses as regards to the foreign
participation were included the IRDA has opened the doors for the private entry into insurance.
Whether the insurer is old or new, private or public, expanding the market will present multitude
of challenges and opportunities. But the key issues, possible trends, opportunities and challenges
that insurance sector will have still remains under the realms of the possibilities and speculation.
What is the likely impact of opening up India’s insurance sector?
The large scale of operations, public sector bureaucracies and cumbersome procedures hampers
nationalized insurers. Therefore, potential private entrants expect to score in the areas of
customer service, speed and flexibility. The critics counter that the benefit will be slim, because 7
new players will concentrate on affluent, urban customers as foreign banks did until recently.
This seems to be a logical strategy. Start-up costs-such as those of setting up a conventional
distribution network are large and high-end niches offer better returns. However, the middle-
market segment too has great potential. Since insurance is a volumes game. Therefore, private
insurers would be best served by a middle-market approach, targeting customer segments that are
currently untapped.
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EXECUTIVE SUMMARY
In today’s corporate and competitive world, I find that insurance sector has the maximum growth
and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-
80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts
me to enter in this sector and HDFC Standard Life Insurance Company Ltd has given me the
opportunity to work and get experience in highly competitive and enhancing sector.
The success story of good market share of different market organizations depends upon
the availability of the product and services near to the customer, which can be distributed
through a distribution channel.
Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the Customer.
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CHAPTER - 1
Introduction To Insurance Industry
THE HISTORY OF INDIAN INSURANCE INDUSTRY
LIFE INSURANCE
In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life
Insurance Company. First attempts at regulation of the industry were made with the introduction
of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were
made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the
power given to the Government to collect statistical information about the insured and the high
level of protection the Act gave to the public through regulation and control. When the Act was
changed in 1950, this meant far reaching changes in the industry. The extra requirements
included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in
such companies to prevent dominant control (to protect the public from any adversarial policies
from one single party), stricter control on investments and, generally, much tighter control. In
1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was
heavily concentrated in urban areas and targeted the higher echelons of society. “Unethical
practices adopted by some of the players against the interests of the consumers” then led the
Indian government to nationalize the industry. In September 1956, nationalization was
completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It
was felt that “nationalization has lent the industry fairness, solidity, growth and reach.”
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Some of the important milestones in the life insurance business in India are:
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 to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: The market contained 154 Indian and 16 foreign life insurance companies.
GENERAL INSURANCE
The General Insurance industry in India dates back to the Industrial Revolution and the
subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the
British brought General Insurance to India, and a similar path was followed in the development
of this industry. A number of private companies were in existence for years and years until, in
1971, the Indian Government decided that the public interest would be served by nationalizing
the industry, merging all the 107 companies into four companies, depending on the sort of
business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company
Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the
United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras
respectively. The General Insurance Corporation (GIC) was set up in 1972 as a ‘holding’
company, having these four companies as its subsidiaries.
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Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general
insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and
grouped into four companies viz. the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.
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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA
LIFE INSURANCE CORPORATION OF INDIA (LIC)
Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the
message of life insurance in the country and mobilise people’s savings for nation-building
activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta,
Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in
important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the
country.
The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United
Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-
India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited,
Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered
into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension
policies in U.K.
In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC
recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy
average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per
cent in Europe, 1.4 per cent in the US).
LIC has even provided insurance cover to five million people living below the poverty line, with
50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's
at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth
rate for Life insurance business has been 19.22 per cent per annum
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General Insurance Corporation of India (GIC)
The general insurance industry in India was nationalized and a government company known as
General Insurance Corporation of India (GIC) was formed by the Central Government in
November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers
which were operating in the country prior to nationalization, were grouped into four operating
companies, namely,
(i) National Insurance Company Limited;
(ii) New India Assurance Company Limited;
(iii) Oriental Insurance Company Limited; and
(iv) United India Insurance Company Limited.
(However, with effect from Dec'2000, these subsidiaries have been de-linked from the
parent company and made as independent insurance companies). All the above four
subsidiaries of GIC operate all over the country competing with one another and
underwriting various classes of general insurance business except for aviation insurance of
national airlines and crop insurance which is handled by the GIC.
Besides the domestic market, the industry is presently operating in 17 countries directly through
branches or agencies and in 14 countries through subsidiary and associate companies.
IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN
PERMITTED TO ENTER INTO INSURANCE BUSINESS: -
The introduction of private players in the industry has added to the colors in the dull industry.
The initiatives taken by the private players are very competitive and have given immense
competition to the on time monopoly of the market LIC. Since the advent of the private players
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in the market the industry has seen new and innovative steps taken by the players in this sector.
The new players have improved the service quality of the insurance. As a result LIC down the
years have seen the declining phase in its career. The market share was distributed among the
private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures
of these private players are enough to give more competition to LIC in the near future. LIC
market share has decreased from 95% (2002-03) to 82 %( 2004-05).
1. HDFC Standard Life Insurance Company Ltd.
HDFC Standard Life Insurance Company Ltd. is one of India’s 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.), India’s leading
housing finance institution and The Standard Life Assurance Company, a leading provider of
financial services from the United Kingdom. Their cumulative premium income, including the
first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005.
They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have
been covered through our group business tie-ups.
2. Max New York Life Insurance Co. Ltd.
Max New York Life Insurance Company Limited is a joint venture that brings together two large
forces - Max India Limited, a multi-business corporate, together with New York Life
International, a global expert in life insurance. With their various Products and Riders, there are
more than 400 product combinations to choose from. They have a national presence with a
network of 57 offices in 37 cities across India.
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3. ICICI Prudential Life Insurance Company Ltd.
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier
financial powerhouse and prudential plc, a leading international financial services group
headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector
insurance companies to begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). The company has a network of about
56,000 advisors; as well as 7banc assurance and 150 corporate agent tie-ups.
4. Om Kotak Mahindra Life Insurance Co. Ltd.
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra
Bank Ltd. (KMBL), and Old Mutual plc.
5.Birla Sun Life Insurance Company Ltd.
Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life
financial Services of Canada.
Tata AIG Life Insurance Company Ltd.
SBI Life Insurance Company Limited
ING Vysya Life Insurance Company Private Limited
Bajaj Allianz Life Insurance Company Ltd.
MetLife India Insurance Company Pvt. Ltd.
AMP SANMAR Assurance Company Ltd.
Dabur CGU Life Insurance Company Pvt. Ltd.
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6. Royal Sundaram Alliance Insurance Company Limited
The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance
Limited started its operations from March 2001. The company is Head Quartered at Chennai, and
has two Regional Offices, one at Mumbai and another one at New Delhi.
7. Bajaj Allianz General Insurance Company Limited
Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited
and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength.
Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority
(IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business
(including Health Insurance business) in India. The Company has an authorized and paid up
capital of Rs 110 crores. Bajaj Auto holds 74% and Allianz, AG, holds the remaining 26%
Germany.
8. ICICI Lombard General Insurance Company Limited
ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank
Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's
second largest bank, while Fairfax Financial Holdings is a diversified financial corporate
engaged in general insurance, reinsurance, insurance claims management and investment
management.17
Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of
Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company
received regulatory approvals to commence general insurance business in August 2001.
9. Cholamandalam General Insurance Company Ltd.
Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the
Murugappa Group & Mitsui Sumitomo.
Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in
its first calendar year of operations. The company has a pan-Indian presence with offices in
Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi,
Chandigarh, and Kolkata.
10. TATA AIG General Insurance Company Ltd.
Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata
Group and American International Group, Inc. (AIG). Tata AIG combines the strength and
integrity of the Tata Group with AIG's international expertise and financial strength. The Tata
Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per
cent stake.
Tata AIG General Insurance Company, which started its operations in India on January 22, 2001,
offers the complete range of insurance for automobile, home, personal accident, travel, energy,
marine, property and casualty, as well as several specialized financial lines.
11. Reliance General Insurance Company Limited.
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12. IFFCO Tokio General Insurance Co. Ltd
13. Export Credit Guarantee Corporation Ltd.
14. HDFC-Chubb General Insurance Co. Ltd.
MARKETING OF INSURANCE IN INDIA
Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a
sector, which leads to benefits across the full spectrum, from the individual who now have wider
choices, to the economy, which see increased savings, to the infrastructure sector, which can
look forward to long term funding being available. In an under-insured economy, newer channels
of distribution have to be utilized to intensify the reach of insurance both in urban and rural
markets. This will create huge employment opportunities not only within insurance companies
but also as agents and consultants of insurance companies.
Marketing Mix Policies
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.
Product:
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.
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Place:
Different companies may however choose different channels and different geographies to focus
on. The channel options are - tied agency force, corporate agents and brokers and this is an area
where different companies will make different choices. Many companies like HDFC Standard
Life are focusing on all channels whereas companies like Max New York Life are focusing on
the tied agency force only. Customer interface will be a key challenge for life insurance
companies and includes every that interaction that the customer has with the company, such as
sales, new business underwriting, policy servicing, premium payments, claim processing and so
on. Technology can play a crucial role in delivering the highest standards of service set by the
company and it will be imperative for any serious player to excel in all of these.
Price:
Price is a relevant differentiator only in two segments - pure term insurance and in pure
annuities. Here too, service delivery and financial strength will need to be present at a minimum
acceptable level for price to be a relevant differentiator. In case of savings oriented products,
long-term returns generated are more relevant than just the price of the product. A focus on
generating good investment performance and keeping a tight control on costs help in generating
good long-term maturity value for customers. Norms have been laid down on all of these by
IRDA and adhering to these while delivering good returns will be a challenge.
Promotion and Advertising:
The level of demand is latent and will have to be activated considerably. The market needs to be
developed. Greater awareness of insurance and the need to have it as a protection tool rather than
as a tax planning measure needs to be appreciated by the Indian people. Various communication
tools including advertising, direct marketing and road shows contribute to all this and different
companies take different approaches on these.
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PROCESS
Cashless settlement:
One of the most defining and customer-friendly changes that we’ve seen in recent years relates
to the way claims settlements are made. The advent of the third-party administrator (TPA)
regime has facilitated the transition to the hugely convenient era of cashless settlement of health
and auto insurance claims. TPAs are entities who process claims on behalf of insurers: the IRDA
licenses them after it is satisfied that they have the financial strength, the trained manpower, the
infrastructure and the skills to undertake this activity.
Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for
cashless settlement of auto insurance claims.
Lower premiums:
The spirit of competition and the broadening of the risk experience of insurance companies have
contributed to a fall in premiums over the years. That’s because, other things being equal, an
insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the
lives of, say, 100 people. Further, a broader base will provide greater efficiencies on costs such
as distribution, management and claims. A broad basing of the mortality experience, therefore,
gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to
continue.
Premium payment flexibility:
Insurers have imparted certain flexibility to premium payment options in order to address this
concern. For instance, one now have the option to pay your premiums upfront, which is then
carried forward for the tenure of the policy. The yearly premiums are drawn from the initial
corpus. Insurers have also introduced the concept of ‘automatic cover maintenance’ to protect
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your policy from lapsing owing to your omission to pay your premium on time. Under this, in
the event of your not paying the premium, the insurer dips into your investment account to the
extent of the premium. Of course, this comes with an in-built drawback: your investment portion
diminishes year on year to the extent of the amount paid to cover your risk.
Physical Evidence:
This can play a significant role for marketing in the Indian scenario. Since Internet users are
comparatively lesser than countries such as US, the offline mode will be preferred in India.
Although the distribution model is largely agent-based, wherever the customer is in contact with
the company, this factor can play a significant role in luring the customer.
People:
The most important factor that materializes sales and maintains customer relationships on a long-
term basis is this factor. No matter what distribution strategy a company adopts, customer
relationship has to be taken care of in order to maintain the customer base on a long-term basis.
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INTRODUCTION TO THE COMPANY
COMPANY PROFILE OF HDFC STANDARD LIFE INSURANCE COMPANY LTD
ABOUT HDFC STANDARD LIFE INSURANCE
HDFC Standard Life Insurance Company Ltd. is one of India's leading private
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.), India's leading housing finance institution and a Group
Company of the Standard Life, UK. HDFC as on December 31, 2007 holds 72.38
Percent of equity in the joint venture.
HDFC STANDARD LIFE INSURANCE PARENTAGE
HDFC Limited.
HDFC is India 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.
36,000 Cr.
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
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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.
Standard Life Group (Standard Life plc and its subsidiaries)
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
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
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KEY STRENGTHS
1) FINANCIAL EXPERTISE
AS A JOINT VENTURE OF FINANCIAL SERVICES GROUPS, HDFC
STANDARD LIFE HAS THE FINANCIAL EXPERTISE REQUIRED TO MANAGE YOUR
LONG-TERM INVESTMENTS SAFELY AND EFFICIENTLY.
2) RANGE OF SOLUTIONS
WE HAVE A RANGE OF INDIVIDUAL AND GROUP SOLUTIONS, WHICH CAN BE EASILY
CUSTOMISED TO SPECIFIC NEEDS. OUR GROUP SOLUTIONS HAVE BEEN DESIGNED
TO OFFER YOU COMPLETE FLEXIBILITY COMBINED WITH A LOW CHARGING
STRUCTURE.
3) TRACK RECORD SO FAR
OUR GROSS PREMIUM INCOME, FOR THE YEAR ENDING MARCH 31, 2008 STOOD AT
RS. 4,859 CRORES AND NEW BUSINESS PREMIUM INCOME STOOD AT RS. 2,685
CRORES.
THE COMPANY HAS COVERED OVER 9,59,000 LIVES YEAR ENDING MARCH 31,
2008.
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CORPORATE OBJECTIVE
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 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 ones
. Teamwork
. Joy and Simplicity
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BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY HDFC STANDARDS
LIFE INSURANCE
INSURANCE PLANS AVAILABLE
a) INDIVIDUAL PRODUCTS
We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in
mind, we have a varied range of Products that you can choose from to suit all your needs. These
will help secure your future as well as the future of your family.
Protection Plans
You can protect your family against the loss of your income or the burden of a loan in the event
of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a
small price. Our Protection range includes our Term Assurance Plan & Loan Cover Term
Assurance Plan
Investment Plans
Our single Premium Whole Life plan is suited to meet your long term Investment needs. We
provide you with attractive long-term returns through Regular bonuses
Pension Plans
Our Pension Plans help you secure your financial independence even after Retirement. Our
Pension range includes our Personal Pension Plan, Unit Linked Pension, and Unit Linked
Pension Plus
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Savings Plans
Our Savings Plans offer you flexible options to build savings for your future needs such as
buying a dream home or fulfilling your children immediate and future needs. Our Savings range
includes Endowment Assurance Plan , Unit Linked Endowment, Unit Linked Endowment Plus,
Unit Linked Endowment Plus II , Money Back Unit Linked Enhanced Life Protection II ,
Children's Plan , Unit Linked Young Star, Unit Linked Young Star Plus, Unit Linked Young Star
Plus II
b) GROUP PRODUCTS
One-stop shop for employee-benefit solutions
HDFC Standard Life has the most comprehensive list of products for progressive employers who
wish to provide the best and most innovative employee benefit solutions to their employees. We
offer different products for different needs of employers ranging from term insurance plans for
pure protection to voluntary plans such as superannuation and leave encashment.
We now offer the following group products to our esteemed corporate clients:
Group Term Insurance
Group Variable Term Insurance
Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined
Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your
company
Also suitable for other employee benefit schemes such as salary saving schemes.
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c) SOCIAL PRODUCT
Development Insurance Plan
Development Insurance plan is an insurance plan that provides life cover to members of a
Development Agency for a term of one year. On the death of any member of the group insured
during the year of cover, a lump sum is paid to those member beneficiaries to help meet some of
the immediate financial needs following their loss.
Eligibility
Members of the development agency and their spouses with:
- Minimum age at the start of the policy 18 years last birthday
- Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The group to
be covered is only eligible if it contains more than 500 members.
Premium Payments
The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.
Benefits
On the death of each member covered by the policy during the year of cover a lump sum equal to
the sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of
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an accident, an additional lump sum will be paid equal to half the sum assured. There are no
benefits paid at the end of the year of cover and there is no surrender value available at any time.
The role of the Development Agency
Due to the nature of the groups covered, HDFC Standard Life will be passing certain
administrative tasks onto the Development Agency. By passing on these tasks the premium
charged can be lower. These tasks would include:
Submission of member data in a specified computer format
Collection of premiums from group members
Recording changes in the details of group members
Disbursement of claim payments and the mortality rebate (if any) to group members. These
tasks would be in addition to the usual duties of a policyholder such as:
Payment of premiums
Reporting of claims
Keeping policy holder information up to date
Training and support will be available to give guidance on how to complete the tasks
appropriately. Since these additional tasks will impose a burden on the Development Agency, the
Development Agency may charge a Rs. 10 administration fee to their members.
Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
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No person shall allow or offer to allow, either directly or indirectly, as an inducement to any
person to take out or renew or continue an insurance in respect of any kind of risk relating to
lives or property in India, any rebate of the whole or part of the commission payable or any
rebate of the premium shown on the policy, nor shall any person taking out or renewing or
continuing a policy accept any rebate, except such rebate as may be allowed in accordance with
the published prospectus or tables of the insurer.
If any person fails to comply with sub regulation (previous point) above, he shall be liable to
payment of a fine, which may extend to rupees five hundred
TAX BENEFITS
INCOME TAX
SECTION
GROSS ANNUAL
SALARY
HOW MUCH
TAX CAN YOU
SAVE?
HDFC STANDARD
LIFE PLANS
Sec. 80C Across All income
Slabs
Upto Rs. 33,990
saved on
investment of
Rs. 1,00,000.
All the life insurance
plans.
Sec. 80 CCC Across all income
slabs.
Upto Rs. 33,990
saved on
Investment of
Rs.1,00,000.
All the pension plans.
Sec. 80 D* Across all income
slabs
Upto Rs. 3,399
saved on
Investment of
Rs. 10,000.
All the health insurance
riders available with the
conventional plans.
TOTAL SAVINGS
Rs37,389
31
POSSIBLE **Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under
Sec. 80 D, calculated for a male with gross annual income
exceeding Rs. 10,00,000.
RESEARCH METHODOLOGY
TITLE:
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free,
subject to the conditions laid down therein.
32
To determine customer-buying behavior with a focus on market segmentation for HDFC
Standard Life Insurance.
TITLE JUSTIFICATION :
The above title is self explanatory. The study deals mainly with studying the buying pattern in
the insurance industry with a special focus on HDFC Standard Life Insurance. The various
segments of the markets divided in terms of Insurance Needs, Age groups , Satisfaction levels
etc will also studied.
OBJECTIVE:
Objective One
To determine reasons behind opting for an insurance.
To provide the company with information of customer's Insurance policy if they have any
and reasons for opting for that particular policies.
To know the most preferred policy.
Objective Two
To determine customers perception towards private insurance companies and their
expectation form private insurance companies.
To determine the feedback on services provided by any other insurance agent.
To study the types of benefits provided by insurance services.
SCOPE OF THE STUDY
A big boom has been witnessed in Insurance Industry in recent times. A large number of new
players have entered the market and are trying to gain market share in this rapidly improving
33
market. The study deals with HDFC Standard Life in focus and the various segments that it
caters to. The study then goes on to evaluate and analyse the findings so as to present a clear
picture of trends in the Insurance sector.
34
SIGNIFICANCE OF THE STUDY
SIGNIFICANCE TO THE INDUSTRY :
This is a limited study which takes into consideration the responses of 100 people. This data can
be explorated to take in the trends across the industry. The significance for the industry lies in
studying these trends that emerge from the study. It is a rapidly changing and evolving sector.
People are only beginning to wake up to it’s vast possibilities. A study like this can attempt to
guide the future of the industry based on current trends.
SIGNIFICANCE FOR THE RESEARCHER :
To facilitate and provide all the useful information of the study, the company, the insurance
industry and also provide marketing ways, methods of HDFC Standard Life insurance.
35
RESEARCH DESIGN
NON-PROBABILITY
EXPLORATORY & DESCRIPTIVE EXPERIMENTAL RESEARCH
The research is primarily both exploratory as well as descriptive in nature. The sources of
information are both primary & secondary.
A well-structured questionnaire was prepared and personal interviews were conducted to collect
the customer’s perception and buying behavior, through this questionnaire.
SAMPLING METHODOLOGY
Sampling Technique:
Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study
was done in order to know the accuracy of the Questionnaire. The final Questionnaire was
arrived only after certain important changes were done. Thus my sampling came out to be
judemental and convinient
Sampling Unit:
The respondants who were asked to fill out questionnaires are the sampling units. These
comprise of employees of MNCs, Govt. Employees, Self Employed people etc.
Sample size:
The sample size was restricted to only 100, which comprised of mainly peoples from different
regions of Chandigarh due to time constraints.
36
Sampling Area :
The area of the research was mohali, INDIA.
LIMITATIONS OF THE RESEARCH
1) The research is confined to a certain parts of CHANDIGARH and does not necessarily
shows a pattern applicable to all of Country.
2) Some respondents were reluctant to divulge personal information, which can affect the
validity of all responses.
3) In a rapidly changing industry, analysis on one day or in one segment can change very
quickly. The environmental changes are vital to be considered in order to assimilate the
findings.
37
FACTS/FINDINGS
1) As the people think that insurance is a tool to protect their family & a tax saving device. They
are aware of the fact & are realizing its, importance. The company should try to expand & build
up its infrastructure because there is a large potential for insurance in India.
2) Company should come up with its branch in Chandigarh. With the objective and goals to
meet the demands & expectations of the public. Because the entrance of private players will
increase the competition and it would be a tough task to secure a good position in market.
3) Since HDFC STANDARD LIFE INSURANCE LTD is leading with several companies’
policies it should be easy for them to penetrate into the market and secure a good position if they
pay greater attention to the service part provided to their customer and thereby forming a long
and trusted relationship.
4) As seen from the survey that at present 70% of the customer are having insurance policy out
of which 87% of the customer are planning for new investments. So it can be a good potential for
the company and they should make an attempt to trap these customers.
5) 43% of the customers are even ready to go for insurance if a service provider away from their
home is providing it. But intend they should provide good products and services. The company
should try to convince these customers and get them in its favour.
38
DATA ANALYSIS & INTERPRETATION
1) DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES
COMPANY’S NAME NO.OF RESPONDENT SHARE (%)
L.I.C. 78 78
HDFC 2 2
ICICI PRUDENTIAL 10 10
SBI LIFE 7 7
RELIANCE LIFE
INSURANCE3 3
TOTAL 100 100
39
INTERPRETATION
78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1
by that percent of respondents. Only 2% prefer HDFC Standard Life.
2) DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS
BENEFITS NO.OF RESPONDENTS SHARE (%)
Cover Future Uncertainty 55 55
Tax Deductions 20 20
Future Investment 25 25
TOTAL 100 100
40
INTERPRETATION
55% of the respondents believe that covering future uncertainty is the biggest benefit of
an insurance policy.
Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and
future investments respectively
41
3) DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED
RESPONDENTS
FEATURE NO.OF
RESPONDENTS
SHARE (%)
Money Back Guarantee 15 15
Larger Risk Coverance 37 37
Easy Access to Agents 7 7
Low Premium 30 30
Company’s Reputation 11 11
TOTAL 100 100
42
INTERPRETATION
Majority of the respondent (37%) found Larger risk coverance as the most attracted
feature of the all.
4) DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS
POLICY TYPE NO. OF
RESPONDENTS
SHARE (%)
LIFE POLICY 52 52
NON LIFE POLICY 17 17
BOTH 31 31
43
INTERPRETATION
52% of the respondents have Life Insurance Policy while 31% have both.
44
5) DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
A saving tool 32 32%
A tax saving device 29 29%
A tool to protect your family 39 39%
INTERPRETATION
32% of the respondents have perception of Insurance being a saving tool.
And 29% of the respondents have perception of Insurance being a tax saving device.
But 39% of the respondents are with the view that Insurance is a tool to protect your family.
45
6) DATA SHOWS PEOPLES HAVING INSURANCE
RESPONSE NO. OF RESPONDENTS SHARE (%)
Yes 70 70%
No 30 30%
46
47
INTERPRETATION
Of the sample size of 100 surveyed respondents 70% of the respondents are having
Insurance policy.
30% of the respondents are either not having any Insurance policy at present or their policy
is already matured.
And at present 100% of the respondents are with the view that Insurance is a tool to protect
your family.
48
7) DATA SHOWS BUYING PROCESS OF THE PEOPLE
BUYING PROCESS NO. OF
RESPONDENTS
SHARE (%)
Customer approached Insurance
company/Agent
44 44%
Company/agent approached
customer
56 56%
Total 100 100%
49
INTERPRETATION
44% of the respondents approached the Insurance Company / Agent.
Whereas, 56% of the respondents were approached by the Company /Agent.
50
8) DATA SHOWS REASONS BEHIND FOR INSURANCE
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Tax saving 31 31%
Saving / Investment 31 31%
Family protection 38 38%
51
INTERPRETATION
31% of the Respondents opted for Insurance for tax saving benefits.
31% of the Respondents opted for saving / Investments.
But all of them, i.e. 38% of the respondents have opted for insurance for their family
protection.
9) DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Satisfied 60 60%
Not satisfied 40 40%
Not Responded 0 0%
Total 100 100%
52
INTERPRETATION
60% of the respondents are more or less satisfied with their existing policy.
40% of the respondents are not satisfied with their existing policy.
In this case all of those who have taken a policy have responded.
10) DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO
SERVICE AGENT
53
RESPONSE NO. OF RESPONDENTS SHARE (%)
Satisfied 45 45%
Not satisfied 55 55%
Not Responded 0 0%
Total 100 100%
INTERPRETATION
45% of the respondents are satisfied with their existing service agent.
55% of the respondents are not satisfied with their existing insurance agent.
All of those who have taken a policy have responded.
54
11) DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Paying tax 100 100%
Not paying tax - 0%
Total 100 100%
INTERPRETATION
Of the sample size of 100 respondents, all the respondents are paying tax
55
12) DATA SHOWS RESPONDENT’S INVESTMENTS FOR TAX SAVING
INVESTMENTS NO. OF
RESPONDENTS
SHARE (%)
LIC 30 30%
NSC 19 19%
Bonds 19 19%
PPF 14 14%
PF 12 12%
EPF 6 6%
INTERPRETATION
56
30% of the respondents save their tax by investing in LIC, which is the highest among all
Investment. This shows that most people for getting taxes benefits invest in LIC.
19% of the respondents do their tax saving by investing in NSC.
19% of the respondents to their tax saving by investing in bonds.
13) DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF
INVESTMENT FOR SECURING THEIR FUTURE
INVESTMENTS NO. OF
RESPONDENTS
SHARE (%)
Fixed Assets 33 33%
Bank deposits 5 5%
Jewellery 11 11%
Securities i.e. bonds, MFs 17 17%
Shares 4 4%
Insurance 30 30%
57
INTERPRETATION
33% of the respondents as with the view that Fixed Assets is the best form of
investment for securing their future.
30% of the respondents are with the perception that Insurance is the best form of
investment for securing their future, which is one of the highest and this shows that
insurance is an important key for securing your future.
58
14) DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM THEIR
INVESTMENT
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Saving & Returns 38 38%
Security 35 35%
Tax benefits 27 27%
INTERPRETATION
38% of the respondents intent to gain saving and returns from their investment.
35% of the respondent’s intent to gain security from their investments.
59
Whereas, 27% of the respondent’s intent to gain tax benefits from their investments.
15) DATA GIVES PEOPLE’S PERCEPTION ON APPROPRIATE AGE FOR BUYING
INSURANCE
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
After 25 years 29 29%
After 35 years 10 10%
After 45 years 0 0%
Anytime 61 61%
60
INTERPRETATION
29% of the respondents are with the view that insurance should be bought after the
age of 25 years.
10 % of the respondents are with the view that insurance should be buyed after the
age of 35 years.
Whereas, 61% of the respondents are with the view that buying of insurance do not
have any thing to do with age i.e. there is no age limitations. It can be purchased any time
according to the need.
61
16) DATA SHOWS PEOPLE OPINION ABOUT INDIAN INSURANCE COMPANIES
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Rigid plans 35 35%
Non user friendly 15 15%
Unsatisfactory services 14 14%
Non Aggressive 18 18%
Satisfactory 13 13%
Good 5 5%
Very good 0 0%
62
INTERPRETATION
35% of the respondents have the opinion that Indian Insurance Companies have Rigid plans.
15% feel that Indian Insurance companies are Non-user friendly.
14% feel that services of Indian Insurance companies are Unsatisfactory.
18% of the respondents are with the view that Indian Insurance companies are Non-
aggressive.
13% of the respondents feel that products and services of Indian Insurance companies is
Satisfactory.
Whereas only 5% feel that it is Good enough.
63
And according to the data, no single person has felt that it is very good.
64
17) DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE COMPANY
RESPONSE NO. OF RESPONDENTS
SHARE (%)
A trusted name 29 29%Friendly service & responsiveness 25 25%
Good plans 29 29%Accessibility 17 17%
INTERPRETATION
29% customers look for a Trusted name in a company for insurance.
29% customers look for a good plan in a company for insurance.
Friendly service & responsiveness and Accessibility are also important factors
looked by customers in a company.
65
66
18) DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Planning 87 87%
Not planning 13 13%
Total 100 100%
INTERPRETATION
Only 13% of the customers contacted are not planning for new investments
presently.
Whereas, 87% of the customers are still planning for new investments this can be a great
potential for Reliance Life Insurance to take them on their favor
67
19) DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE
PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS
RESPONSE NO. OF
RESPONDENTS
SHARE (%)
Yes 43 43%
No 44 44%
Uncertain 13 13%
Total 100 100%
INTERPRETATION
The interested customers i.e. 43% are ready to go for insurance even away from a city if services
and products are worthwhile, which again is a good prospect (potential) for HDFC Standard Life
Insurance to take them on their favor.
68
RECOMMENDATIONS
As the people think that insurance is a tool to protect their family & a tax saving device.
They are aware of the fact & realizing its, importance. The company should try to expand &
build up its infrastructure because there is a large potential for insurance in India.
Company should come up with its more number of branch in Chandigarh with the objective
and goals to meet the demands & expectations of the public. Because the entrance of private
players will increase the competition and it would be a tough task to secure a good position
in market.
Since HDFC Standard Life Insurance Company Ltd is leading with several companies’
policies it should be easy for them to penetrate into the market and secure a good position if
they pay greater attention to the service part provided to their customer and thereby forming
a long and trusted relationship.
As seen from the survey that at present 70% of the customer are having insurance
policy out of which 87% of the customer are planning for new investments. So it can be a
good potential for the company and they should make an attempt to trap these customers.
69
43% of the customer is even ready to go for insurance if a service provider away
from their home is providing it. But intend they should provide good products and services.
The company should try to convince these customers and get them in its favor.
CONCLUSION
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 impressioned 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 it’s impact now.
Another heartning 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 respondants have opted for
insurance for such purposes and it shows how insurance companies ahve 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 oppurtunity 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.
70
BIBLIOGRAPHY
BY THE HELP OF BOOK
Research Methodology
“C.R. Kothari”
Marketing Management
“Phillip Kotlar”
BY THE HELP OF MANUALS
www.hdfcstandardlifeinsourence.com & internet
BY THE HELP OF OTHER SOURCESS
By the guider of my collage & the company guider
BY THE HELP OF WEB SIDE
www.scribe.com
www.hdfcstandardlifeinsourance.com
www.google.com
www.wikkipedia.com
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