47764600 Hdfc Final Report Sakib Final

8/3/2019 47764600 Hdfc Final Report Sakib Final

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(In partnership with Standard Life plc)

This three dimensional logo comes together to create a frame, capturing

lifes special moments that can be looked upon with pride & joy and lends

well to a memorable look & feel.

Red Vibrancy, Youthfulness, exuberance

Blue Dependability, Financial Expertise

Dark Red Vermillion (Sin door Long Life)


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PREFACE

There are number forces that make marketing an endlessly changing

activity. The constantly activity sociological, psychological and political

environment may represent the uncontrollable marketing factors. To

understanding these factors in better way marketing research is of atmost

importance.

This Project Report has been completed in Partial fulfillment of my

Management Program, Master of Business Administration in the company

HDFC STANDARD LIFE INSURANCE. The objective of my project

was Enhancement of Channel Distribution.

HDFC STANDARD LIFE is the name which is working as one of the best

private insurance company in insurance secto33r.

With such large population and the untapped market of populations

insurance happens to be very big opportunity in India. Today it stands as a

business growing at the rate of 15-20 percent annually. In spite of all this

growth the statistics of the penetration of the insurance in the country is

very poor. This is an indicator that growth potential for the insurance sector

is immense in India.


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CONTENT

ACKNOWLEDGEMET05

EXECUTIVESUMMARY10

PROJECT OBJECTIVE.13

RESEARCH METHODOLOGY.19-24

a) Types of Research

b) Data Collection

c) Sampling unit & Size

d) Limitation

Section 1: INDUSTRY PROFILE.26-50

a) Overview & Historical Perspective

b) Insurance Sector Reforms

c) Nature of Industry

d) Indian Insurance Industry

Regulatory Body : IRDA

e) Impact of Liberalization

Market share of various players

f) Current Scenario

g) SWOT Analysis of Industry

h) Conclusion

Section 2: COMPANYS PROFILE..51-75

HDFC Ltd:

a) Introduction

b) Subsidiary & Associate Companies


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HDFC STANDARD LIFE:

a) Introduction

b) Key Personnel

c) Knowledge Management.Life Stages

d) Product Mix

e) Current Sales

f) Future Plans

Section 3: MAIN SECTION.76-88a) Financial Planning

b) 360 Financial Planning

c) Consumption Pattern

d) Objective & Sales Procedure

Section 4: DATA ANALYSIS AND FINDING.89-108

Section 5: CONCLUSIONS & RECOMMENDATIONS109-116

Section6: APPENDICES117-137

a) Questionnaire

b) Glossaire

c) Bibliographie


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ACKNOWLEDGEMENT

On the successful completion of the project I would like to express my

gratitude to all the people who have helped me throughout the

project

At first, I owe my debt of thanks to HDFC Standard Life, which gave me

an opportunity to do this project work. I wish to extend my deep

and sincere gratitude to Mr. Varun Singh (CDM) who providedme with their guidance from day one and also helped me whole

heartedly to achieve the ultimate goal of the project.

I would also like to thank all the employees ofHDFC SLIC MEERUT zonal

office for their expert guidance and encouragement they have

given me in spite their demanding schedule. Their informal

discussions and constructive criticism of has helped this project a

rewarding experience for me. .

I am also indebted to the Institute faculty Mr. Anirudha Ghosh Vidya College

of Engineering for his continuous encouragement and suggestions

offered by him. Last but not least, I must acknowledge the

encouragement and help given by my beloved parents, friends,

teacher family members, whose best wishes and emotional

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support have enabled me to complete this project.

MOHD. SAKIB

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DECLARATION

The summer project on Enhancement of channel of Distribution in

HDFC Standard Life Insurance is the original work done by me. This is

the property of the institute and use of this report without prior permission of

the institute will be considered illegal and actionable.

Date:

Place: Meerut

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EXECUTIVE SUMMARY

Overall, the life insurance and pension sector is set for rapid changes and

growth in the years ahead. Delivering service, building trust and being

innovative are key areas in which any company will have to excel in order to

do well in the long road ahead. Different companies will take different

approaches and it would be myriad of solutions that will be found to delight

the Indian customer.

During the first part, I was given complete classroom training about the

various Commission and Renewal structure, Club Membership-Additional

benefit which the company offers.

Later, Market Research was done through various activities and tele-calling

which are discussed further in the report finally, interesting conclusions were

drawn out of the data collected regarding the Awareness of Financial Planning

among the people in todays environment.

It was great experience because conveing general people to make him

Financial Consultant are a great deal of confidence.

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PROJECT OBJECTIVES

1) To Enhance Distribution Channel through generating Financial

Consultant.

2) To study the awareness of Financial Planning among the people.

3) To study the importance of Insurance in todays scenario.

4) Other Objective:

Brand awareness of various private insurance companies

Preference among different investment tools

Purpose of buying insurance.

Preference in choosing channel for buying life insurance.

Quality of service provided by agents and clients satisfaction

Level.

Customers perception of improvements brought in by entry of

Private Insurance Companies.

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RESEARCH METHODOLOGY

1- JOB PROFILE

Working in HDFC-SLIC was of a very good learning experience for me. I

learned a lot from my unit manager. He taught me different aspects of

corporate world and how to make the sales effective. He made sure that I put

in my best efforts and gave me the deep insight of insurance sector. From the

very beginning he told me that he wont provide me with any kind of leads and

databases, so that I put my efforts and generate my own leads and complete

my targets in the given time.

During my training I interacted with customers who were very much unknown

to me and in the nascent stages I was having a little bit of hitch but later on I

started enjoying while interacting with the customers.

2-RESEARCH DESIGN

The research design applied here was exploratory research and descriptive

research.

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Exploratory Research is one in we dont know about the problem, we have to

find about the problem and then work on solving the problem. Whereas in case

of descriptive research, we know the problem, we just have to find the solution

to the problem. Generally descriptive research design is applied after

exploratory research design. As in first case we tried to find out the problem

area, as in initially there was problem in pitching the right thing to the

customer and finding out the right customer who is actually interested in

entering into the insurance market..

3-SAMPLE SIZE:

To complete the research, the questionnaire was filled by minimum 100 sales

development managers.

4- RESEARCH TOOL AND QUESTIONNAIRE

Research tool:

In this project we have used primary data as well as secondary data.

Primary data is one in which we find out the raw data through directly

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contacting the people and asking them to fill in the questionnaire ands

secondary data is by using the contacts which are already available Primary

data is applied as we have used the questionnaire and through marketing

activities, secondary data has been used in form various personal contacts.

Questionnaire:

Questionnaire contains around fifteen questions contain the information about

the financial consultants and their work. The questions relate to as in what

kind of difficulties do they face before becoming the financial consultants and

how much the company helps them to achieve their goals.

SPSS & Excel has been used to fill in the data and to analyze the data

collected.

5- ACTION PLAN

The target given to me was to recruit 5(five) Insurance Advisors and with

the Guidance and Motivation of my sales development Manager I achieved my

target during my training of 8 Weeks and I recruited 5(five) Insurance

Advisors,

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I Divided whole period of my training into four parts:

1 Finding the data and appropriate leads

2 Fixing the appointments

3 Negotiating with customers

4 Closing the case

STEP 1:FINDING THE DATA AND APPROPIATE LEADS

Collection of data or leads is the first thing before making a customer a

client of HDFC STANDARD LIFE. I collected data by six ways:

1 Through Yellow Pages

2 Through marketing activities

3 Through Telephone Directory

4 Through Internet

5 Through Newspaper

6 Through cold calling

After collection of data my second job was to make cold calls and door-to-

door marketing. Which I did by making Tele calls from the Company and

went to different offices as well as to the court clients about latest offer of part

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time Business opportunity as a life advisor. In all, I collected data of about 150

customers. So Data Collection Means Looking for the Suspect who May or

May Not be interested in the Business Proposal.

STEP 2: FIXING THE APPOINTMENT

Data collection and cold calling are just the primary steps in marketing of any

product the real thing is to find out opportunities out of those leads which one

has generating. I got many opportunities where the customer was interested in

becoming the client of mine and I use to fix meetings with these customers so

that I can tell them the details of our Part time Business Opportunity. In all I

got 40 opportunities where the customer was interested in becoming the Life

Advisor. So these 40 Clients were those who were converted into Prospects of

becoming a Life Advisor.

STEP 3: NEGOTIATING WITH CUSTOMERS

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After meeting with the customers and negotiating with them I tried to

convince them to become the Insurance Advisor of the best Private Life

insurance Company which already has more than 30,000 Insurance Advisors.

And through this interaction I came to know about the one to one interaction

skills. And at the end I closed the Deal by convincing about 5 Clients for

becoming the Corporate Agents of HDFC STANDARD LIFE within a

period of 8 weeks.

Step-4 AREA ASSIGNED

I use to fix meetings by making Tele calls and then go to the residence or the

office of the clients, sometimes in Ganga Nagar, and Often in Meerut.

During my training I enjoyed both the in-house on job training but in field was

little problem for me as I dont know much areas in Meerut and that I didnt

had any of my personal conveyance to go. Sometimes it was very frustrating

when I use to go to the residence of my client and he refuses to talk to me or

he was not present at the given address. But later I realized that life is a

journey and you have to move on and on.

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6- MAJOR PROBLEMS FACED

Some people, even if hey are not interested, they directly dont say

NO rather they linger on and have a series of appointments till the

time the seller loses enthusiasm and makes sure that the client is not

going to give a sale.

Some of the prospects dont even listen to anything and straight away

say NO they dont even give you the chance to say what one wants to ;

most of these men were businessmen who perhaps had less time to

listen to sales pitch

I find difficulty in interacting with people due to negative responses

that made me demoralized sometimes

Some people dont even understand the concept of insurance the worse

is that they dont even want to know about it.

The other difficulty was sometimes the client was ready to become the

insurance advisor of HDFC STANDARD LIFE but it was difficult to

fetch out nine hundred for the examination fees.

I also faced difficulty in traveling to different areas of Delhi, Gurgaun,

Gr.Noida and Noida to meet the clients for part time business proposal.

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It was difficult to convince the clients to become insurance advisor of

HDFC STANDARD LIFE by paying nine hundred rupees when some

other companies were taking less or no fees for the examination.

The difficulty was to maintain a continuous level of self-motivation

because we are giving our best shot but results dont come.

The sales pitch if delivered to a group of friends together, has a more

probability of landing up in a mockery, as then everyone in group tries

to out smart the salesperson.

7- DATA ANALYSIS

The whole project work of 8 weeks gave an understanding that the insurance is

one of the most difficult products to sell because of its nature being intangible

but convincing peole to become the insurance advisor is much more difficult

then selling insurance policies. Insurance sector has a huge potential in India

to grow, keeping in mind the huge unexplored market in India and increasing

per capita income of the country. People today are more educated and hence

more aware and receptive towards the concept of life insurance.

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Private players in the market have really revolutionized the insurance industry

by providing immaculate services, unique policy options, great distributions

channels and greater awareness through advertisement.

The real difference today lies in how much the customers are aware of the

brand and how much do they have faith on the brand. The distribution channel

and reaching the customer first is also a major aspect to counter the

competition.

Insurance is a product that is sold by putting the hands over the nerve of

emotion so the products and the company should be positioned as a family

member to the client.

Major thing is to do marketing at two levels both internal as well as external.

In this business, because the products are almost same for all the companies,

the real edge can be provided if the life advisors or agents of the company

themselves have real faith on their products and integrity of the company.

Only a well motivated and aware sales person can make the great sales. The

other type of marketing is external marketing, which is done for the end

customer of the product and this marketing should also be appropriate

providing the company a great positioning in the minds of the customer.

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The study of awareness about Financial Planning among the people and

particularly the insurance sector covers data collection through questionnaire

and interview of consumers.

Identify the course of action to solve it. For this purpose the information

proved useful for giving right suggestion to the company.

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INDUSTRY PROFILE

Overview

With 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.

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 per cent of Indian population

is without life insurance cover while health insurance and non-life insurance

continues to be below international standards. And this part of the population

is also subject to weak social security and pension systems with hardly any old

age income

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Historical Perspective

The insurance came to India from UK; with the establishment of the Oriental

Life insurance Corporation in 1818.The Indian life insurance company act

1912 was the first statutory body that started to regulate the life insurance

business in India. By 1956 about 154 Indian, 16 foreign and 75 provident

firms were been established in India. Then the central government took over

these companies and as a result the LIC was formed.

Important milestones in the life insurance business in India:

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

regulate the life insurance business.

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

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

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

Government of India.

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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.

1972: The general insurance business in India nationalized through The

General Insurance Business (Nationalization) Act, 1972 with effect from 1st

January 1973. 107 insurers amalgamated and grouped into four companies- the

National Insurance Company Limited, the New India Assurance CompanyLimited, the Oriental Insurance Company Ltd. and the United India Insurance

Company Ltd. GIC incorporated as a company.

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Insurance Sector Reforms

Prior to liberalization of Insurance industry, Life insurance was

monopoly of LIC.

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI

Governor R.N. Malhotra- was formed to evaluate the Indian insurance

industry and recommend its future direction. The Malhotra committee was set

up with the objective of complementing the reforms initiated in the financial

sector. The reforms were aimed at creating a more efficient and competitive

financial system suitable for the requirements of the economy keeping in mind

the structural changes currently underway and recognizing that insurance is an

important part of the overall financial system where it was necessary to

address the need for similar reforms. In 1994, the committee submitted the

report and some of the key recommendations included:

Structure

Government stake in the insurance Companies to be brought down to 50%.

Government should take over the holdings of GIC and its subsidiaries so that

these subsidiaries can act as independent corporations.

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Competition

Private Companies with a minimum paid up capital ofRs.1 billion should be

allowed to enter the sector. No Company should deal in both Life and GeneralInsurance through a single entity. Foreign companies may be allowed to enter

the industry in collaboration with the domestic companies.

Regulatory Body

The Insurance Act should be changed. An Insurance Regulatory body should

be set up. Controller of Insurance- a part of the Finance Ministry- should be

made independent

Investments

Mandatory Investments of LIC Life Fund in government securities to be

reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than

5% in any company (there current holdings to be brought down to this level

over a period of time)

Customer Service

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LIC should pay interest on delays in payments beyond 30 days. Insurance

companies must be encouraged to set up unit linked pension plans

Computerization of operations and updating of technology is to be carried out

in the insurance industry

STATISTICS (INDIAN & GLOBAL)

This section gives the users important and detailed statistics of the Indian as

well as the Global insurance industry. These statistics would give important

insights of where the respective markets are headed for.

The global life insurance market stands at $1,521.2 billion while the

non-life insurance market is placed at $922.4 billion.

The United States itself accounts for about one-third of the $2443.6

billion global insurance market and Japan stands next with a 20.62%

share.

India takes the 23rd position with US $9.933 billion annual premium

collections and a meager 0.41% share.

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Out of one billion people in India, only 35 million people are covered

by insurance.

The income derived by GIC and its subsidiary companies through

investment was Rs.2991.76 crore and the investable fund generated was

Rs.3543 crore in 2001-2010.

Indian insurance market is set to touch $25 billion by 2010, on the

assumption of a 8 per cent real annual growth in GDP.

A variety of perils. By purchasing insurance policies, individuals and

businesses can receive reimbursement for losses due to car accidents, theft of

property, and fire and storm damage; medical expenses; and loss of income

due to disability or death.

The insurance industry consists mainly of insurance carriers (or insurers)

and insurance agencies (Financial Consultant) and brokerages. In general,

insurance carriers are large companies that provide insurance and assume the

risks covered by the policy. Insurance agencies and brokerages sell insurance

policies for the carriers.

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Insurance companies assume the risk associated with annuities and insurance

policies and assign premiums to be paid for the policies. In the policy, the

companies states the length and conditions of the agreement, exactly which

losses it will provide compensation for, and how much will be awarded.

The premium charged for the policy is based primarily on the amount to be

awarded in case of loss, as well as the likelihood that the insurance carrier will

actually have to pay. In order to be able to compensate policyholders for their

losses, insurance companies invest the money they receive in premiums,

building up a portfolio of financial assets and income-producing real estate

which can then be used to pay off any future claims that may be brought.

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Direct insurance carriers offer a variety of insurance policies.

Life insurance provides financial protection to beneficiariesusually spouses

and dependent childrenupon the death of the insured.

Disability insurance supplies a preset income to an insured person who is

unable to work due to injury or illness

Health insurance pays the expenses resulting from accidents and illness.

AnAnnuity(a contract or a group of contracts that furnishes a periodic income

at regular intervals for a specified period) provides a steady income during

retirement for the remainder of ones life.

Property-casualty insurance protects against loss or damage to property

resulting from hazards such as fire, theft, and natural disasters.

Liability insurance shields policyholders from financial responsibility for

injuries to others or for damage to other peoples property. Most policies, such

as automobile and homeowners insurance, combine both property-casualty

and liability coverage. Companies that underwrite this kind of insurance are

called property-casualty carriers.

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What is Life Insurance

Human life is subject to risks of death and disability due to natural and

accidental causes. When human life is lost or a person is disabled permanently

or temporarily, there is a loss of income to the household. The family is put to

hardship. Risks are unpredictable. Death/disability may occur when one least

expects it. There are a number of life insurance products which offer

protection and also coupled with savings.

A Term insurance product provides a fixed amount of money on death during

the period of contract.

A Whole Life insurance product provides a fixed amount of money on death.

An Endowment Assuranceproduct provided a fixed amount of money either

on death during the period of contract or at the expiry of contract if life

assured is alive.

A Money Back Assurance product provides not only fixed amounts which

are payable on specified dates during the period of contract, but also the full

amount of money assured on death during the period of contract.

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An Annuity product provides a series of monthly payments on stipulated

dates provided that the life assured is alive on the stipulated dates.

A Linked product provides not only a fixed amount of money on death but

also sums of money which are linked with the underlying value of assets on

the desired dates.

There are a variety of life insurance products to suit to the needs of various

categories of peoplechildren, youth, women, middle-aged persons, oldpeople; and also rural people, film actors and unorganized laborers.

Life insurance products could be purchased from registered life insurers

notified by the IRDA. Insurers appoint insurance agents to sell their products.

As per regulations, insurers have to give the various features of the products at

the point of sale. The insured should also go through the various terms and

conditions of the products and understand what they have bought and met their

insurance needs. They ought to understand the claim procedures so that they

know what to do in the event of a loss.

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INDIAN INSURANCE INDUSTRY

REGULATORY BODY

Insurance is a federal subject in India. The primary legislation that deals with

insurance business in India is: Insurance Act, 1938, and Insurance Regulatory

& Development Authority Act, 1999.

The Insurance Regulatory and development

Authority (IRDA)

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.

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 IRDAs online service for issue and renewal of licenses to

agents. Since being set up as an independent statutory body the IRDA has put

in a framework of globally compatible regulations.

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MISSION-IRDA

To protect the interests of the policyholders, to regulate, promote and

ensure orderly growth of the insurance industry and for matters

connected therewith or incidental thereto.

The following companies have the rest of the market share of the insuranceindustry.

COMPANY NAME MARKET SHARELIC 79.30

ICICI PRUDENTIAL 5.63BAJAJ ALLIANZ 3.27

HDFC STANDARD LIFE 3.11BIRLA SUNLIFE 2.32

TATA AIG 1.45SBI LIFE 1.24

MAX NEWYORK 0.90AVIVA LIFE 0.82ING VYSYA 0.66

OM KOTAK LIFE 0.54AMP SANMAR 0.38

METLIFE 0.33RELIANCE LIFE 0.05

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CURRENT SCENARIO OF THE INDUSTRY

INSURANCE MARKET IN INDIA

India with about 200 million middle class household shows a huge untapped

potential for players in the insurance industry. Saturation of markets in many

developed economies has made the Indian market even more attractive for

global insurance majors. The insurance sector in India has come to a position

of very high potential and competitiveness in the market.

Innovative products and aggressive distribution have become the say of the

day. Indians, have always seen life insurance as a tax saving device, are now

suddenly turning to the private sector that are providing them new products

and variety for their choice. Life insurance industry is waiting for a big growth

as many Indian and foreign companies are waiting in the line for the green

signal to start their operations. The Indian consumer should be ready now

because the market is going to give them an array of products, different in

price, features and benefits. How the customer is going to make his choice will

determine the future of the industry.

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CUSTOMER SERVICE

Consumers remain the most important centre of the insurance sector. After the

entry of the foreign players the industry is seeing a lot of competition and thusimprovement of the customer service in the industry. Computerization of

operations and updating of technology has become imperative in the current

scenario. Foreign players are bringing in international best practices in service

through use of latest technologies. The one time monopoly of the LIC and its

agents are now going through a through revision and training programs to

catch up with the other private players. Though lot is being done for the

increased customer service and adding technology to it but there is a long way

to go and various customer surveys indicate that the standards are still below

customer expectation levels.

DISTRIBUTION CHANNELS

Till date insurance agents still remain the main source through which

insurance products are sold. The concept is very well established in the

country like India but still the increasing use of other sources is imperative. It

therefore makes sense to look at well- balanced, alternative channels of

distribution.

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LIC has already well established and have an extensive distribution channel

and presence. New players may find it expensive and time consuming to bring

up a distribution network to such standards. ]. At present the distribution

channels that are available in the market are:

Direct selling/Retail

Corporate agents

Group selling

Brokers and cooperative societies

Bancassurance

DIRECT SELLING/RETAIL

Direct selling or retail business is carried out by Agents (Financial Consultant)of the company. This is the main distribution channel due to the

complexity of most insurance products (Endowment, Whole of Life, Unit

Linked). This tends to be the focus of most companies due to its past success

as well as its ability to deliver the right advice. However, this channel can be

expensive. Hence it is important that this face is always smiling and

presentable and the facts and figures at his/ her command are updated and

correct.

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.BANCASSURANCE

Banc assurance is the distribution of insurance products through the bank's

distribution channel. It is a phenomenon wherein insurance products are

offered through the distribution channels of the banking services along with a

complete range of banking and investment products and services. To put it

simply, Bancassurance, tries to exploit synergies between both the insurance

companies and banks.

The distribution network and the increasing share of Banc

assurance

We ended the first half with 531 distribution points across the country and

through the network of these offices our Financial Consultants, Corporate

Agents and Brokers were able to service customers in approximately 725 cities

and towns across the country.

During the last six months, we have started consolidation of our tied agency

business. The new regulatory regime will reduce commissions payable to

Agents and therefore reduce earnings of small and inactive agents. During the

year we have not renewed agency contracts with inactive agents and hence our

numbers of agents has fallen to around 1.5 lacks from 2 lacks six months back.

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Our distribution mix witnessed a change in the share of new business EPI. The

share of ban assurance channel of distribution viz. banks, brokers and other

corporate agents increased to 62.3% from 56.4% in first half of 2009-10. The

banc assurance channels EPI grew by 60.3% to `8.5bn from `5.3bn in first

half of 2009-10. The retail (tied agency) channel grew by 22.1% to `4.8bn

from `4.0bn in first half of 2009-10. Our focus on direct channel has yielded

an EPI growth of 112.3% to `0.31bn from ` 0.15bn in first half of 2009-10.

Advantages to banks

Productivity of the employees increases.

Increase in return on assets by building fee income through the sale of

Insurance products.

Banks can cross sell insurance products e.g.: insurance products with

Loans.

Advantages to insurers

Insurers can exploit the banks' wide network of branches for distribution

of products. The penetration of banks' branches into the rural areas can

be utilized to sell products in those areas.

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Customer database like customers' financial standing, spending habits,

investment and purchase capability can be used to customize products

and sell accordingly.

Since banks have already established relationship with customers,

conversion ratio of leads to sales is likely to be high. Further service

aspect can also be tackled easily.

Advantages to consumers

Comprehensive financial advisory services under one roof. i.e.,

insurance services along with other financial services such as banking,

mutual funds, personal loans etc.

Enhanced convenience on the part of the insured

Easy accesses for claims, as banks are a regular go.

Innovative and better product ranges

OPPORTUNITIES FOR INSURANCE COMPANIES

In the now open sector on insurance, the following is what I feel will

determine the success of the company in particular and the industry in general:

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A change in the attitude of the population

Indians have always been wary of employing their hard-earned money in a

venture that will pay them on their death. Insurance has always been used as a

Tax saving tool. No more, no less. It is depend upon the Financial

Consultant to educate the people to secure/insure their future against any

unknown calamity and make a shield around their families and businesses.

An open and transparent environment created under the IRDA.

The reason for this being on the top of our understanding is that when ever we

have seen any sector open up in India there are always grey areas and unsure

policies. These are not exactly what any player, be it Indian or foreign, looks

for. It creates an air of uncertainty in all the decision making process.

Insurance as a sector requires players who are strong financially and are

willing to wait for returns. Their confidence can be bolstered only if there is an

open and a transparent policy guidelines. This will also help the consumers

feel safe that the regulatory is an active one and cares to do everything

possible to keep things under control and help the insurance environment grow

maturely.

A well-established distribution network.

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To cater to the largest democracy in the world is by no means a cakewalk.

Insurance profits are directly related to number of insured and this is in turn

related to the reach.

Trained professionals to build and sell the product.

It is said that the insurance agent (Financial Consultant) is the best salesman

in the world. He makes you pay, regularly, an amount promising to pay back

only on your death. Thus the players will require an excellent sales team to selltheir products in the now competitive environment.

Encouragement of new and better products and letting the hackneyed

ones die out.

This will itself ensure the market grows. And that every class/society gets a

product that best suits them.

SPECIAL PROVISIONS

The Income Tax Act and Life Insurance policies

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Under Section 10(10D), any sum received under a Life Insurance policy

(not being a Key Man policy) is also exempt from taxation. But it is wise

to remember that Pensions received from Annuity plans are not exempted

from Income Tax.

Section 80C provides a deduction up to Rs.1,00,000/- to an individual

assessee for any amount paid as a premium.

POLICYHOLDERS GRIEVANCES

Policyholders may have complaints against insurers either in respect of their

policies or their claims. As per Regulations for Protection of policyholders

interests, 2008, every insurer should have in place, a grievance redressal

system to address the complaints of policyholders. The IRDA has a Grievance

Redressal Cell which plays a facilitative role by taking up complaints against

insurers with the respective companies for speedy resolution. The IRDA

however does not adjudicate on complaints.

SWOT ANALYSIS OF INSURANCE INDUSTRY

STRENGTH

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1.Best returns with the added advantage of 100% life insurance coverage.

2. Good option for new investors into the market as all the money is invested

By best fund managers so with less knowledge also they can earn good

Returns.

3. Best commission charges paid to the agents which vary from 12% to 40%

Which is much higher as compared to mutual funds i.e. only 2-2.5%.

WEAKNESS

1. HDFC SLIC could not able to match LIC in remote areas services.

2. Misleading facts given by Financial Consultant about the returns of ULIPs.

3. Hidden charges taken by the companies.

4. Less Promotional Campaigns.

OPPORTUNITY

1. 80 percent of Indian population is still under insured. So

there is a big opportunity for insurance companies.

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2. As the stock market can be under the mark any time so it can bring loss to

the investors but as in ULIPs there is proper mixture of debt securities and

Equity so the loss is incurred during dark trading days also.

3. Unit-linked products are exempted from tax and they provide life

insurance.

4. Increasing consumer awareness about Insurance and its use.

THREAT

1. Cannibalism within the industry by providing misleading figures to the

investors.

2. Govt.s instability has a long term repercussions affecting companys

policies and its growth.

CONCLUSION

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

happens to be a mega opportunity in India, which is growing at the rate of 15-

20 per cent annually.

Nearly 80 per cent of Indian population is without life insurance cover while

health insurance and non-life insurance continues to be below international

standards. And this part of the population is also subject to weak social

security and pension systems with hardly any old age income security.

And also the changing attitude and increasing awareness level of the

population is an indicator that growth potential for the insurance sector is

immense.

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COMPANYS PROFILE

INTRODUCTION

Helping Indians experience the joy of home ownership.

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. HDFC operates through 75 locations throughout the country with its

Corporate Headquarters in Mumbai, India.

OBJECTIVES AND BACKGROUND

Background

HDFC was incorporated in 1977 with the primary objective of meeting a

social need that of promoting home ownership by providing long-term

finance to households for their housing needs. HDFC was promoted with an

initial share capital of Rs. 100 million.

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Business Objectives

The primary objective of HDFC is to enhance residential housing stock in the

country through the provision of housing finance in a systematic and

professional manner, and to promote home ownership. Another objective is to

increase the flow of resources to the housing sector by integrating the housing

finance sector with the overall domestic financial markets..

ORGANIZATION AND MANAGEMENT

HDFC is a professionally managed organization with a board of directorsconsisting of eminent persons who represent various fields including finance,

taxation, construction and urban policy & development. The board primarily

focuses on strategy formulation, policy and control, designed to deliver

increasing value to shareholders.

FOUNDER Mr. Hasmukhbhai Parekh

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BOARD OF DIRECTORS

Mr. D S Parekh Chairman

Mr. Keshub Mahindra Vice ChairmanMs. Rene S. Karnad Executive Director

Mr. K M Mistry Managing Director

Mr. Shirish B. Patel

Mr. B S Mehta

Mr. D M Sukthankar

Mr. D N Ghosh

Dr. S A DaveMr. S Venketaraman

Dr. Ram S. Tarneja

Mr. N M Munjee

Mr. D M Satwalekar

HDFC has a staff strength of 1229, which includes professionals from the

fields of finance, law, accountancy, engineering and marketing.

SUBSIDIARY & ASSOCIATE COMPANIES

HDFC Bank

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HDFC Mutual Fund

HDFC Standard Life

Intelenet Global Services Ltd.

HDFC Chubb General Insurance Company Ltd.

HDFC Reality

Other Companies Co-Promoted by HDFC

HDFC Trustee Company Ltd.

HDFC Developers Ltd.

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HDFC Venture Capital Ltd.

HDFC Ventures Trustee Company Ltd.

HDFC Investments Ltd.

HDFC Holdings Ltd.

Home Loan Services India Pvt. Ltd.

Credit Information Bureau (India) Ltd

HDFC STANDARD LIFE INSURANCE

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INTRODUCTION

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. Each of the JV player is highly rated and been conferred with many

awards. HDFC is rated 'AAA' by both CRISIL and ICRA. Similarly, Standard

Life is rated 'AAA' both by Moody's 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.

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HDFC Standard Life Insurance Company Ltd was incorporated on 14th

August 2000. HDFC is the majority stakeholder in the insurance JV with 81.4

% stake and Standard Life has a stake of 18.6%. Mr. Deepak Satwalekar is the

MD and CEO of the venture.

THE PARTNERSHIP:

HDFC and Standard Life first came together for a possible joint venture, toenter the Life Insurance market, in January 1995. It was clear from the outset

that both companies shared similar values and beliefs and a strong relationship

quickly formed. In October 1995 the companies signed a 3 year joint venture

agreement.

.In October 1998, the joint venture agreement was renewed and additional

resource made available. Around this time Standard Life purchased 2% of

Infrastructure Development Finance Company Ltd. (IDFC). Towards the end

of 1999, the opening of the market looked very promising and both companies

agreed the time was right to move the operation to the next level. Therefore, in

January 2000 an expert team from the UK joined a hand picked team from

HDFC to form the core project team, based in Mumbai.

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Around this time Standard Life purchased a further 5% stake in HDFC and a

5% stake in HDFC Bank.

COMPANYS MISSION:

To be the top life insurance company in the market.

This not only means being the largest or the most productive company in the

market, but a combination of several things like-

Customer service of the highest order

Value for money for customers

Professionalism in carrying out business

Use of technology to improve service standards

Increasing market share

COMPANYS 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.

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IN SHORT: The most obvious choice for all .

COMPANYS VALUES:

SECURITY: Providing long term financial security to our policy

holders will be our constant endeavor. This is done by offering life

insurance and pension products.

TRUST: Company appreciates the trust placed by our policy holders in

us. Hence, company will aim to manage their investments very carefully

and live up to this trust.

INNOVATION: Recognizing the different needs of our customers,

company will be offering a range of innovative products to meet these

needs.

Companys mission is to be the best new life insurance company in India and

these are the values that will guide us in this.

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KEY MANAGEMENT PERSONNEL

Chairman:

Mr. Deepak S. Parekh

Board of Directors:

Mr. K. M. Mistry

Ms. Renu S. Karnad

Mr. A. M. Crombie

Ms. Marcia D. Campbell

Mr. Norman Keith Skeoch

Mr. G. R. Divan

Mr. G. N. Bajpai

Mr. Ranjan Pant

Mr. Ravi Narain

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Managing Director & CEO:

Mr. D. M. Satwalekar

AUDIT COMMITTEE

Haribhakti & Company

Chartered Accountants

B.K. Khare & Co.

Chartered Accountants

Bankers

HDFC Bank Ltd.

Union Bank of India

Indian Bank

The Saraswat Co-operative Bank Ltd.

Federal Bank

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KNOWLEDGE MANAGEMENT

When Should One Go For Insurance?

Your insurance need will change as your life does, from starting to work to

enjoying your golden years and all the stages in between. Each one of these

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stages may pose a different insurance need/cover for you. In this section, we

have drawn up the basic life stages and help you analyze various insurance

needs accordingly.

Stage 1: Young and Single

This is an important stage where one lays down the foundation of a successful

life ahead. Take advantage of the time and power of compounding to ensure

that you build up your dreams, so start saving early.

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Your needs:

oSave for a home and wedding

oTax Planning

oSave for Golden years

Stage 2 - Just Married

Marriage brings about a significant change. New dreams and new

opportunities also bring in additional responsibilities. While both of you look

forward to a happy and secure life , it is equally important to ensure that

eventualities dont come in the way of shaping your dreams.

Your needs:

Planning for home / securing your home loan

Liability

o Save for vacation

o Save for your first child

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Stage 3 - Proud Parents

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

to protect your family from an untoward incident. Ensure your protection

umbrella takes into account the future cost of securing your

childs dream. You will want life to go on for your loved ones, and having

enough life insurance is a way to help ensure that.

Your needs:

o Provide for childrens education

o Safeguarding family against loan liabilities

o Savings for post-retirement

Stage 4 - Planning for Retirement

While you are busy climbing the ladder of success today, it is important for

you to take time and plan for your life after retirement. Having an early start

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for retirement planning can make a significant difference to your savings.

Think about your golden years even before you have reached them. The key is

to think ahead and plan well using your time and money.

Your needs:

o Provide for regular income post retirement

o Immediate Tax benefits

o Lead a secure, independent and comfortable

life style after retirement

PRODUCT MIX

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At HDFC Standard Life, there is a bouquet of insurance solutions to meet

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

provide benefits to their employees.

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

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

One can choose from a range of products to suit ones life-stage and needs.

For organizations they have customized solutions that range from Group TermInsurance, Gratuity, Leave Encashment and Superannuation Products.

PRODUCTS FOR INDIVIDUALS

PROTECTION- 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.

Plans: Term Assurance Plan

Loan Cover Term Assurance Plan.

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INVESTMENT- This includes a plan that is well suited to meet your long

term investment needs. We provide you with attractive long term returns

through regular bonuses.

Plan: Single Premium Whole Of Life

PENSION - Our Pension Plans help you secure your financial independence

even after retirement and live a relaxed retired life.

Plans: Personal Pension Plan

Unit Linked Pension

Unit Linked Pension Plus

SAVING- Our Savings Plans offer you flexible options to build savings for

your future needs such as buying a dream home or fulfilling your childrens

immediate and future needs.

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Plans: Endowment Assurance Plan,

Unit Linked Endowment,

Unit Linked Endowment Plus,

Money Back Plan,

Childrens Plan,

Unit Linked Youngstar,

Unit Linked Youngstar Plus .

GROUP PLANS

HDFC Standard Life has the most comprehensive list of products for

progressive employers who wish to provide the best and most innovative

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employee benefit solutions to their employees. They 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.

Plans: Group Term Insurance with Riders

Group Term Insurance with Profit-Share

Group Unit-Linked Plan

For Gratuity

For Defined Benefit Superannuation

For Defined Contribution Superannuation

Group Leave Encashment Plan

RURAL CUSTOMER- According to research findings, there is keenness

among rural customers to invest in savings cum protection plan with a term of

five years, especially, if the premium amount is low and affordable. Keeping

this in view, HDFC STD> LIFE has plans like:

Plans: Bema Bichat Yojana.

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Super Bachat Yojana

DISTRIBUTION OFFICES

In addition to the corporate office at Mumbai, your Company had 169 offices

in over 135 cities/towns in the country. It has a widespread network of

Financial Consultants, Corporate Agents and Brokers servicing customers in

these cities and towns.

FINANCIAL CONSULTANTS

The number of licensed Financial Consultants appointed by your Company

increased from over 23,000 in the previous year to over 33,000 in the currentyear. During the year, the Company continued its

CURRENT SALES-HDFC Standard Life

HDFC STANDARD LIFE PACING AHEAD

The Financial Express 15th May 2010

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HDFC Standard Life has recorded a strong year-on-year growth of 112% for

the period April-March 2006-07, in comparison to the same period 2005-06,

with a new business first year premium of Rs 1,029 crore.

In terms of effective premium income (EPI), which gives a 10% value to a

Single Premium policy and is an internationally-accepted indicator of an

insurance company's performance, the EPI grew by 103% to Rs 887 cr from

Rs 436 crore.

HDFC Standard Life's growth in new business is a manifestation of the

number of lives insured as well as an increase in the average premium. For the

individual business, volume measured by the number of lives insured

witnessed a 32% growth.

The average premium also grew by 62% to Rs 27,500 in 2006-07 from Rs

17,000 in 2005-06.

During the year the company issued over 3, 97,000 policies and has covered

more than 22, 50,000 lives

Table Showcasing Financial Results:

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Parameters

April-March

2006-07

(Rs. Cr)

April-March

2007-08

(Rs. Cr)

Growth

(%)

Total received premium 668.40 1532.21 129.23

i. New Business 486.15 1028.94 111.65

ii. Renewal 182.25 503.27 176.14

Effective Premium

Income (Total) 436.08 887.30 103.47Group Business

Premium (EPI) 49.40 135.15 173.58

FUTURE PLANS

HDFC has always been market-oriented and dynamic with respect to resource

mobilization as well as its lending program. This renders it more than capable

to meet the new challenges that have emerged. Over the years, HDFC has

developed a vast client base of borrowers, depositors, shareholders and agents,

and it hopes to capitalize on this loyal and satisfied client base for future

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growth. Internal systems have been developed to be robust and agile, to take

into account changes in the volatile external environment.

HDFC has developed a network of institutions through partnerships with some

of the best institutions in the world, for providing specialized financial

services. Each institution is being fine-tuned for a specific market, while

offering the entire HDFC customer base the highest standards of quality in

product design, facilities and service

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FINANCIAL PLANNING

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A comprehensive financial advisory service involving financial strategies, tax,

corporate/trust structures, estate planning, legal issues, family law, asset

allocation, asset protection and investment advice.

Financial Planning takes into account:

Desired asset allocation, risk profile and return expectations.

Building cash flows correlating all expenses and income. Inflation and

outflows due to loans are considering in building the financial plan.

Future goals like retirement, housing and children's education / marriage

or other needs.

Why do you need Financial Planning?

You may have many dreams, needs and desires. For example, you could be

dreaming of:

Owning a new car,

Buying a dream house,

Providing your children with the best education,

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Planning a grand wedding for your children

Having a great time after your retirement

But in today's world how many of these dreams can you hope to turn into

reality? By planning well, you can utilize your limited resources to the fullest.

EXPERIENCE THE POWER 360 FINANCIAL PLANNING

The only thing permanent in life is change. Times change. People change. So

does life. You expect life to be much better tomorrow than it is today.

Tomorrow, you hope to fulfill all your dreams and aspirations. But what

happens if things take an untoward turn? Perhaps it's time for you to change

the way you plan your investments...

How will 360 Financial

Planning help?

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Instead of investing in an ad-hoc manner, 360 Financial Planning helps you

take a holistic, all-round view. Briefly, 360 Financial Planning comprises:

Investment Planning

Cash Flow Planning

Tax Planning

Insurance Planning

Children Future Planning

Retirement Planning

INVESTMENT PLANNING: To make your wealth grow

Everyone needs to save for a rainy day. Once you have saved enough to take

care of emergencies, you should start thinking about investing and to make

your money grow.

Investment Planning Service includes:

Risk Profiling

Asset Allocation and Portfolio Construction

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Creation and Accumulation of Wealth through Systematic Investment

Plans (SIP)

Regular review of progress and Portfolio Rebalancing

CASH FLOW PLANNING:To provide for assets and meet the periodic

cash requirements

In simple terms, cash flow refers to the inflow and outflow of money. It is a

record of your income and expenses.

Cash flow planning refers to the process of identifying the major expenditures

in future (both short-term and long-term) and making planned investments so

that the required amount is accumulated within the required time frame.

TAX PLANNING:To save on taxes and increase your income

Proper tax planning is a basic duty of every person which should be

carried out religiously.

According to the Income Tax Act, 1961, One will be eligible for Tax Benefits

under Section 80C and Section 10(10D) of the act.

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One has to compare the advantages of several tax saving schemes and

depending upon your age, social liabilities, tax slabs and personal preferences,

decide upon a right mix of investments, which shall reduce your tax liability to

zero or the minimum possible.

INSURANCE PLANNING:To protect yourself, your family and your

Assets.

"Insurance is not for the person who passes away, it for those who

survive," goes a popular saying that explains the importance of Insurance

Planning.

It is extremely important that every person, especially the breadwinner, covers

the risks to his life, so that his family's quality of life does not undergo any

drastic change in case of an unfortunate eventuality. Insurance Planning is

concerned with ensuring adequate coverage against insurable risks.

CHILDREN'S FUTURE PLANNING: To give your children a

financially secure future

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Like every parent, you too must be overjoyed to watch your child grow. All

parents want to give the best possible upbringing to their children. This

includes good education and security, in case of any eventuality. Soon, your

little bundle of joy will grow up, and it will be time to provide for his or her

higher education and wedding.

The purpose of Children's Future Planning is to create a corpus for foreseeable

expenditures such as those on higher education and wedding, and to provide

for an adequate security cover during their growing years.

RETIREMENT PLANNING:Because retirement is a time to relax, not

to get worried

Some like it. Some dont. But retirement is a reality for every working person.

Most young people today think of retirement as a distant reality.

However, it is important to plan for your post-retirement life if you wish to

retain your financial independence and maintain a comfortable standard of

living even when you are no longer earning. This is extremely important,

because, unlike developed nations, India does not have a social security net.

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CONSUMPTION PATTERN

*Source-Business world magazine 2nd week April 2009

The consumption pattern is determined by the income so more would be the

income more would be the consumption. The consumption though can differ

in terms of areas where the money is actually spent. The above representation

tells us the consumption pattern of the consumer in India i.e. where do they

actually invest their money and in what proportion do they spend in various

areas. The chart shows that people are spending 7.9% of their savings into

savings and investments.

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40.10%

4.10%8.80%7.90

%

6.60%

3.90%

10.80%

2.330%

7.60%

2.10%0.80%

1.60%

4.60%Food & Grocery

Home Textiles

Personal Care

Saving & Investment

Clothing

Consumer Durable

Vacation

Eating out

Footwear

Movies & Theater

Entertainment

Accessories

Books & Music


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FIRSTCONVERSATION

APPOINTMENT

FILLING THEPROPOSAL FORM

COLLECT THEREQUIRED

DOCUMENTS AND

THE FIRSTPREMIUM

Follow Up

Follow Up

SALES PROCEDURE:

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STEP 1: FIRST CONVERSATION WITH A KNOWN OR

AN UNKNOWN CUSTOMER

This is the first time, when you interact with a person and try to get the

information from him about the industry or the company and understand the

customers insight i.e. what actually does a customer expects from the

companies.

The objective was to know the awareness about Financial Planning among the

customers and this was done by getting a questionnaire filled by the people.

The various activities performed were:

1) CITY RAILWAY STATION: Here we interacted with the

Passenger & collectedthe data.2) MARKETS: (Abu lane & Sadar Bazaar) During this

Activity, we interacted with the shopkeepers as well as the walking

People regarding their views about the industry.

3) TELE-CALLING: This was random calling from the data base

provided by the company and the aim was to collect

information from them.

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STEP 2: APPOINTMENT

All the potential and interested customers of all the activities performed are

then followed up and an appointment is fixed for further details.

The motive is to explain the customer in detail, about the various plans offered

by the company. The customer is informed about the procedure and the

options he can opt for like:

1) Choose the premium he wish to invest

2) Select the Premium Payment Option i.e. annual mode, half yearly

Mode, quarterly mode, or monthly mode.

3) Choose the amount of protection i.e. the sum assured, he desires.

4) With Maturity Benefit, choose the additional benefits like:

a) Life option Death Benefit

b) Life & Health option Death Benefit + Accidental

Death

Benefit

c) Extra Life & Health option Death Benefit +

Critical Illness

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Benefit + Accidental Death Benefit

5) Choose the Investment funds or funds one desires.

The various funds available are:

Liquid Fund

Secure Managed Fund

Defensive Managed Fund

Balanced Managed Fund

Equity Managed Fund

Growth Fund

6) Other information like:

a) Tax Benefit

b) Various Charges

c) Switching option

d) Surrendering

e) Terms & Conditions etc.

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STEP 3: FILLING THE PROPOSAL FORM

After the second step, the interested customers are required to fill the proposal

form which requires the following information:

b) Personal details of the policy holder,

c) The Premium amount selected

d) The Term of the policy

e) The Fund choice for investment

STEP 4: COLLECTING THE DOCUMENTS

Once the form is filled all the necessary documents are collected like :

a) Address proof,

b) DOB certificate etc.

And also the first premium amount in form of cheque or cash is collected.

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Within 15 days, the policy documents reach the customers place, and the

customer is required to read the documents carefully.

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AGE DISTRIBUTION

0-30 35%

31-45 41%

Above-45 24%

Total 100%

AGE

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Highest number of Respondents (41%) from Age group 31 to 45

yrs.

35% respondents are of age below 30 yrs, small percentage of which

is unemployed.

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MARITAL STATUS

Total num of single respondents 19+4 23Total num of married respondents 37+24+16 77Total num of respondents 100 100

MARITAL ST

90%

100%

Total number of single respondents 23

Total number of married respondents 77

Total number -100

Income Distribution

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Age of Respondent Num of Respondent IncomeBelow 30 16+13+5+1 1.5 lacks31-45 7+12+12+10 slabsAbove 45 6+12+6 5 lacks

Total 100

Table ofIncome Distribution

INCOME D

5

1 1

> 5 lacs

INCOM

E

Highest, 16 respondents in income bracket below 1.5 lacs, which

mainly comprises of age group below 30 years.

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Respondents of the age group 31-45 yrs, lie in all the income slabs.

Minimum, 6 respondents in income bracket of above 5 lacs, which

are in age group of above 45 years.

ARE YOU AWARE ABOUT FINANCIAL PLANNING ?

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OFPEO

PLE

DF

98% of the respondents were aware about Financial Planning.

2% of the respondent were no aware about Financial Planning.

BRAND RECALL

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NAME OF THE BRAND BRAND RECALLLIC 100%ICICI PRUDENTIAL 96%HDFC STD LIFE 92%TATA AIG 82%BIRLA SUN LIFE 86%KOTAK MAHINDRA 72%SBI LIFE 64%AVIVA 75%MAX NEW YORK 71%MET LIFE 60%INGVYSYA 51%

Table of Brand Recall

BRAND RECALL

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B

64

75

71

60 5

100 % respondents mentioned first name to be LIC

Among private players, ICICI Prudential has the highest

Brand Recall i.e. 96%

HDFC Standard life has Brand Recall of 92%

INVESTMENT PREFERENCE

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INVESTMENT PREFERENCE Percentage (%)Banks & Post Office 21%Share Market 18%Insurance 20%

Bonds 11%Mutual funds 21%Real Estate 9%Total 100%

Table of Investment preference

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INVESTMENT PR

11%

21%

2

21% respondents prefer banks and post office schemes as an

investment tool preference.

Respondents of age group below 30 years prefer Mutual Funds,

as they provide higher returns than banking investment tools.

Insurance ranks 2nd as an investment tool choice, which itself

includes various protection, saving and pension plans.

Govt. Bonds & securities are mostly preferred by people of

higher age group rather than young generation..

INSURED PERCENTAGE

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Insured Respondent 87%Uninsured Respondent 13%

Total Respondent 100%

13%

87 % of respondents were insured on own life and on life of their

family members.

So we had 13 % of potential customers to approach.

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COMPANY PREFERENCE

COM

55% of respondents have insurance cover provided by LIC only

15% of respondents have insurance cover provided by Private

Cos. only

Whereas 30% have got insurance from both LIC and Private

Companies.

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Total number of LIC policies sums up to 85% and total numberof Pvt. Companies policies sold sums up to 45%.

Data provides that though LIC is still got a maximum market

share but Private Companies are making a fast move in the market.

TYPE OF PLAN BOUGHT

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TYPE OF PLAN Num of Respondent PLAN BOUGHT

Money Back 26 29%

Endowment 20 23%Pension 24 28%

Ulips 17 20%

Total 100 100%


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Money back Policies have been most popular and also the

endowment plans.

As people today are more aware about financial planning, sopeople of the age 30 years have planned for their Retirement now.

ULIPs are fast gaining popularity as they provide investment

Benefit with Insurance.

PURPOSE OF BUYING INSURANCE

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PUR

11%

2

14

RetirementPlanning

Risk cover remains the most important purpose for buying

insurance followed by option as Tax saving tools.

Retirement planning in a early period is also gaining the market

share.

ULIPs are responsible for increasing popularity of insurance as an

investment tool

DISTRIBUTION CHANNEL PREFERENCE

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C

According to the data, known/current Advisors remains the 1st

choice for buying Insurance.

In retail also known Advisors are preferred over referrals.

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Banc assurance is emerging as a popular option for buying life

Insurance.

Group insurance is a channel which customers expect but it is not

so popular because only few employers have taken the initiative.

Buying insurance from a unknown person or getting a phone call is

still not preferred by most of the people

THE BARRIERS FACED DURING THE PROCESS:

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The Attitudinal Barriers to Purchasing ..

Death - a taboo topic for discussion

Its quite ashubh talking about death The belief in karma destiny

Jo kismet me likha hai wohi hoga, hum kya kar sakte hai

The Product/ Service Barriers

Liquidity

What if I need my money urgently for some medical illness?

Service quality of the Agent

He disappears after he takes the first premium

Sanctity of the contract

What if my dependents do not get the money once I die?

o ChargesIts better to invest in Mutual Funds, the charges there are very less

The Other Barriers.

Unsure about Pvt. Companies

Low rate of return

Better to put my money in PPF, at least I get fixed returns Money gets tied up

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RECOMMENDATION

Positioning insurance as a means to fulfilling ones duties during ones

lifetime.

Fears relating to thefts, ailments, death could be addressed through

sensitive communication

Fears relating to claims: Need to promote trust. Demonstrating

claim testimonials, positioning as worry free.

Low returns: Reposition insurance as a risk cover, security instrument

rather than a financial investment.

Lack of understanding: Training of Channels

To provide quality advice on products best suited

Lack of Knowledge: Ease of Process, simplifying

the product and the procedure

Need to promote the quality of awareness

The benefits:

Leverage on Risk Protection or Returns oriented or both

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The product:

catering to life stages

Need for Branding in Insurance: Branding is more relevant in the

Insurance market which not only faces the problem of securing and

retaining customers in an increasingly competitive marketplace but also

experiences the need for heightened relevance of the brand proposition in a

world where brand has been termed the new religion.

In rural India, the LIC is especially synonymous with insurance. But in the

Wake of competition insurance companies have to do a considerable brand

Building exercise at least in urban India. Adequate time, investment and

Longer-term management of the brand is essential, not only for success

but also survival. All brands need to be built around well-differentiated and

Credible positioning that springs from the organizations history. The brand

Must not only be believed but lived by management and employees.

Focus on different segments to survive and thrive in a competitive

environment. Each company has to choose its own unique positioning

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based on its unique strengths. Below-mentioned positioning alternatives

can be worth considering.

VARIETY-BASED POSITIONING

This type of positioning is based on varieties in products and services rather

than customer segments. It is a sensible strategy for those companies who

have distinctive advantages or strengths in offering certain products and

services. In the insurance industry too, it is possible to achieve a unique

position by focusing on certain category of products.

NEEDS-BASED POSITIONING

This is the most commonly understood positioning and is based on the

differing needs of different groups of consumers. This can be done

successfully if a company has unique strengths to service a group of

customer needs better than others.

The insurance needs of customers vary significantly for different groups of

customers. The insurance needs of young family with small children will

be quite different from that of a family in which the income-earner is close

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to retirement. However, in India most of the life insurance companies have

a wide variety of products tailored for different customer needs and there is

no company focusing on a particular customer need.

ACCESS-BASED POSITIONING

Positioning of customers can also be done by the way they are accessible.

That is different groups of customers may be accessible in different ways

even though they may have similar needs. Access is typically a function of

customer geography or customer scale. There is excellent opportunity in

the insurance industry to employ access-based positioning by targeting the

rural insurance sector.

The rural market for life insurance is very different from the urban market

in terms of needs, income levels and distribution (seasonality, for example),

penetration of media and so on. Rural market can be a highly profitable

position if one is able to carefully plan and tailor an entire set of low-cost

activities of advertising, distribution, and product design etc. to

successfully exploit the potential.

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CONCLUSION

The various conclusions drawn from the project are:

There has been a tremendous change in the insurance industry. And with it

there has been continuous growth in this sector both in Indian as well as world

context.

The opening up of the insurance sector has changed the whole look of the

industry. While the LIC, in order to face the competition is coming up with

new strategies. New private players are leading the sector due to their strategic

management and tailored made projects.

From the research, we also conclude that though the awareness and people

opting for LIC plans are more as compared to other private players but the

latter are gaining momentum in the market day by day.

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The demand for insurance is likely to increase with rising per-capita income,

rising literacy rates, and growth of service sector. In-fact opening up of the

insurance sector is an integral part of the liberalization process being persued

by many developing countries.

Life insurance as a form of protection is the single-most important financial

product any earning member of a family must have. Having said this, a well-

diversified portfolio is one of the first rules of financial planning, and as such

one should consider different instruments as the ability to save increases.

Possible investment options range from bank deposits and government small

saving schemes to mutual funds, stocks and property.

Certainly ULIPs successfully combine the first and most important need of

protection, with savings, and hence are an excellent addition to your portfolio.

All financial products have a certain amount of risk and charges, be it a mutualfund, property, or even a bank deposit. It would be unrealistic to assume that

the features and benefits of a ULIP come at no cost, though the charges are

considerably lower than that of a traditional product.

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In fact, the very reason the product is transparent is because the customer

knows the charges and risks.

There is no right or wrong in this. The success of marketing insurance depends

on understanding the social and cultural needs of the targe population, and

matching the market segment with the suitable intermediary segment.

All intermediaries cant sell all lines of business profitably in all markets.

There should be clear demarcation in the marketing strategies of the company

from this perspective. Clients should also receive price differentials for using

different channels.

The intermediaries need to be empowered with the right learning, training and

sales tools and technology enablers. Coupled with the right product mix, this

will help the insurers to survive and flourish in this competitive market

scenario.

So lets conduct this business with utmost economy with the spirit of

trusteeship; thereby making insurance widely popular.

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Questionnaire

Glossary

Bibliography

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Steps in the Development of the Survey Instruments

The main instruments required for survey was a well developed

questionnaire.

The questionnaire development took place in a series of steps as described

below.

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The Appropriate data collection methods have beendeterminedStep 2

Step 3 The information required by each objective is beingdetermined.

Step

1

Research objectives are being transformed intoinformation objectives.


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Page | 120

Research objectives are being transformed into

information objectives.

Step 4Specific Questions/Scale Measurement format is

developed.

Step 5

Question/Scale Measurements is being evaluated.

Step 6

The number of information needed is being determined.Step 7

The questionnaire and layout is being evaluated.Step 8


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Page | 121

Step 9Revise the questionnaire layout if needed.

Step10

The Questionnaire format is being finalized.

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