S.N o. Topic Page no. 1. INTRODUCTION PURPOSE OF THE STUDY AIM OF THE STUDY OBJECTIVE OF THE STUDY 8 2. Organization Information About HDFCSLIC company profile what is insurance? scope of insurance objective Award and accolade product of HDFCSL About ULIP 15 3. Descriptive work Factsheet Profiling of prospects Mode of contacting prospects Total number of people contacted 21 4. FINANCE DEPARTMENT OF HDFC LIFE 22 5. Conclusion,Recommendation And Suggestion 24 6. ANNEXURE 28 7. BIBLIOGRAPHY 29 Page 1 | 103
Transcript
S.No. Topic Page no.
1. INTRODUCTION
PURPOSE OF THE STUDY AIM OF THE STUDY OBJECTIVE OF THE STUDY
8
2. Organization Information
About HDFCSLIC company profile what is insurance? scope of insurance objective Award and accolade product of HDFCSL About ULIP
15
3. Descriptive work
Factsheet Profiling of prospects Mode of contacting prospects Total number of people contacted
21
4. FINANCE DEPARTMENT OF HDFC LIFE 22
5. Conclusion,Recommendation And Suggestion 24
6. ANNEXURE 28
7.BIBLIOGRAPHY
29
8. CONCLUSION 30
P a g e 1 | 75
Purpose of study
During my summer training in the Housing Development finance corporation standard life insurance company limited (HDFCSL). I have gotten the work of Analyzing financial need and manage the funds of the policies. The main focus area of the company is to manage and focus of customer profit which gets through managing the funds of the policy. Indeed the work of financial analyst is very significant and gives more and more customer assistance to the customer so company can earn customer base and through strong customer base gets more and more policies distribution and company can sell the policies. The main motive of this project is analysis of financials of HDFC LIFE.
HDFCSL is one of India’s leading private insurance companies. It offers both individual and group insurance solution. It is a joint venture between HDFC and a group of company of Standard Life. I have chosen insurance sector as the place for summer training because in these days this sector is in boom and it will never go down. All people invest their money in insurance and get more benefited. In the sector the work of Finance is more challenging then the other sector because there is 17 insurance companies in the market who are giving competition to each other and the work of convince people for investment in respective company is a challenging work and success in the sector proves that the respective person is a good f inance advisor . Today insurance sector India is on boom because all people want to invest. Those who don’t know about investment in share market and don’t want to invest in mutual funds they invest in insurance sector. Insurance sector gives them investment plus risk cover. Those who don’t want to take risk in the investment go to insurance sector. It also gives income tax benefits to the peoples. Insurance company are now launching ULIP plan and gives chance to the investor to choose their investment pattern according to their fund investment table. This fund investment tells us that how much the investor want to take risk. Generally in the ULIP plan, the thesis is that “The more you risk the more you have profit.”
P a g e 2 | 75
AIM OF STUDY
During the summer training I have done my work through telephone calling, natural market, and contact person having gone to their home. In the entire work I have contacted person who is policy holder of the company or willing customer and prospect customers of the company
I found that most of person can earn as well as get insured th rough insurance company and save taxes, life assurance with little effort, which will give him back support as a HEAD of the family in the diverse situation.
This project will help to understand the current market scenario and marketing in stiff competition. Being a student of management I can draw the relevant conclusion from the financial analyze and give the appropriate suggestion to the organization.
The company can take decision according to the suggestions and it will provide better experience to the students for their bright carrier. My project will provide help in these matters which are thus:-
Analyze the people perception about HDFC
Study financial markets and analyze the financials of the company
To find out the competitive edge of the company over the competitors.
P a g e 3 | 75
OBJECTIVE OF THE STUDY
The project was an attempt to explore the “Analyzing financial need and manage the funds of the policies” in HDFC LIFE. The project was started on 10th June, after knowing all the relevant information about the company insurance product and policies and its competitor’s insurance products in accordance with the prescribed schedule mentioned by management of HDFC LIFE.
The project started in Janakpuri branch where covering all the investors whom funds are down and bearing loss. In this process I meet 90 policy holders who facing loss .I have tried to convince them to continue with company and remain with the company. During my work I found the perception of the people about insurance, what they desire from it, and if they suffer loss than what they think . What the organization should do for the policyholder who suffering from loss. Many of the customer is not aware about the share market and if they suffer loss than they blame either company or agent/sales manager. So I have to manage the customers to remain with us and provide them the best financial solution to them
As I can say this project gives the abstract of my work at HDFC LIFE as financial analyst
P a g e 4 | 75
Chapter: - 1
P a g e 5 | 75
INTRODUCTION OF HDFC
LIFEINRODUCTION OF HDFC LIFE
Risk is found everywhere. It cannot be eliminated together, only it can
be minimized. Human life is full of risk. There is a risk when a man walks on
the road, travels in a bus, train or an aero plane and when he is engaged in
trade, profession or business. Also there is a risk when property is destroyed
by fire, flood, earthquakes, etc. Thus, the involvement of risk is inescapable.
P a g e 6 | 75
Risk Percentage
Drought 4%
Earthquakes 20%
Floods 35%
Storms 41%
4% 20%
35%
41%
Risk
DroughtEarthquakesFloodsStorms
Insurance is a method by which we can spread over the risk. It is a way of
reducing uncertainty of occurrence of an event. Insurance is entirely a method
of co-operative endeavor where in the loss caused by a particular risk is spread
over among a large section of persons. Insurance is a process in which a large
number of persons collect their small contributions, called the premium, in a
pool and out of this losses are paid to the suffering persons.
The Business of insurance is related to the protection of the economic
values of assets. Every asset has a value. The asset would have been created
through the efforts of the owner. The asset is valuable to the owner, because
he expects to get some benefits from it. It is a benefit because it meets some of
a factory or a cow, the product generated by it is sold and income is generated.
In the case of a motor car, it provides comfort and convenience in
transportation. There is no direct income. Both are assets and provide benefits.
P a g e 7 | 75
INTRODUCTION OF THE COMPANY
HDFC Life Insurance Company Limited. 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 Limited), India's leading housing
finance institution and a Group Company of the Standard Life Plc, UK. As on
February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius
Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest
is held by others.
HDFC Life believes that establishing a strong and ethical foundation is an
essential prerequisite for long-term sustainable growth. To ensure this, we
have concentrated our focus on expansion of branch network, organizing an
efficient and well trained sales force, and setting up appropriate systems and
processes with optimum use of technology. As all these areas form the basic
infrastructure for establishing the highest possible customer service standards.
Our core values are drilled down to all levels of employees, as these are
inviolable. We continue to promote high integrity in business practices and
shun short cuts and unethical practices, as we wish to be perceived as an
institution with high moral standing. Since our inception in 2000, when the
Indian insurance space was opened for private participation, we have
consistently focused on setting benchmarks in all aspect on insurance
business. Beingthe first private player to be registered with the IRDA and the
first to issue a policy on December 12, 2000,
The HDFC was established in 1977, for the purpose of providing the home
loan for long term
HDFC is rated as (AAA) by the CRISIL and ICRA.
P a g e 8 | 75
In the year 2004, it was awarded DREAM HOME AWARD.
It has got 3rd rank in the investment management, in year 2006.
One of the largest financial institution of India with more then 2 million
satisfied customer base.
HDFC HAS FOLLOWING GROUP COMPANIES
HDFC Ltd.
HDFC Standard life
HDFC Mutual fund
HDFC Securities
HDFC Bank
HDFC realty.com
HDFC CIBIL
HDFC Chubb General Insurance Co. Ltd.
HDFC Centre For Housing Finance
HDFC Distribution
HDFC Intel net
HDFC Securitization
HDFC Deposits
HDFC Home Loans
OUT STANDARD LIFE (U.K)
Founded in 1825, and is now one of the largest life Insurance companies in the
world.
Strong reputation build over 182 years
Currently over 5 mn. policyholders benefiting from the services offered
Europe’s largest mutual life insurer
P a g e 9 | 75
Values
P a g e 10 | 75
1.Integrity
Honest and Truthful in every action
Transparency
Stick to principles irrespective of outcome
Be just and fair to everyone.
2.Innovation
Building a store house of treasures through experiences.
Looking at every product and process through fresh eyes everyday.
3.Customer Centric
Understand customer expectations by keeping him as the centre – point.
Listen actively
Understand customer needs and deliver solutions.
Customer interest always supreme.
4.People Care
Genuinely understanding the people we work with.
Guiding their development through training and support.
Helping them develop requisite skills to reach their true potential.
Know them on a personal front.
Create an environment of trust and
Respect for the time of others.
5.Team Work
Whole team takes the ownership of the deliverables.
Consult all involved, understand and arrive at a company Co-operate and
support across departmental boundaries.
Identify strengths and weaknesses according allocate responsibility to
achieve common objectives.
P a g e 11 | 75
6.Joy and Simplicity
Environment that fosters fun in the form of celebration of individual and team
success.
To encourage work as fun that contributed to personal and organizational de-
velopment.
Joy is also derived through simple processes and forms.
VISION STATEMENTS
“ 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. In
short, “The most obvious choice for all”
P a g e 12 | 75
Plans
Traditional ULIP
DIFFERENT PLANS OF HDFC SLIC
Traditional
Traditional plan is a life insurance solution that provides the client only guar-
anteed return.
ULIP (Unit Linked Insurance Plan )
Unit Linked insurance plan is a life insurance solution that provides the client
with the benefits of protection & flexibility in investment .It is solution which P a g e 13 | 75
provides for life insurance where the policy value at any time varies accord-
ing to the value of the underlying assets at the time.
P a g e 14 | 75
CHAPTER-2
DISCRIPTIVE WORK
P a g e 15 | 75
LIFE INSURANCE SECTOR:
India is emerging a some of the two of the largest markets in the world for life insurance products, the other being China. In the case of India, the three key drivers of growth are a large insurable population, a high savings rate, roughly at about 25 percent and a low penetration, at a mere 2.3 percent. In the 11 months of fiscal year 2004-05, life insurance companies collected premium worth Rs172 billion and the market grew by a whopping 32.4 per cent during the year. Of this, the public sector Life Insurance Corporation (LIC) had the lion's share of the market with premium totaling Rs134 billion. Private sector players recorded a spectacular growth of 129 percent over the last year, compared to LIC's growth of 18 percent. India's GDP growth rate of 6 percent per annum holds great potential for the sector. According to one estimate real life premium are expected to grow at a compounded annual rate of 15 per cent over the next ten years.
How does India's life insurance market compare with China's? While India's market is currently the fifth largest, China's is the third largest in Asia after Japan and Korea. Low penetration rate of insurance products is common to IndiaandChina-atjustabout2.3 percent. In China, the savings rate is at 35 percent while for India it is a little lower at 25 percent. A large part of the growth of the life insurance market in China was driven by the conversion of bank deposits into endowment products. Demographically China's population is ageing faster than India's FDI in Insurance Sector. The government of India is planning to increase the equity limit for foreign direct investment from the current 26 percent to 49 percent in the insurance sector. Liberalizations of the FDI policy, including the Budget proposals for raising the sector al caps in insurance is one of the main factors for the higher FDI inflows during the current year. In 2003-04 the total FDI inflows in the country touched $3.4 billion. Indian insurance companies have been pushing for the FDI limit to be raised. The current paid-up requirement of Rs1 billion for general insurance and Rs2 billion for life insurance have become difficult targets to achieve for the companies. The companies feel that injection of additional foreign equity would reduce the costs. The sector was liberalized for private players towards the end of 1999. Currently, there are 14 insurance companies, including the key public sector company Life Insurance Corporation, in the life insurance sector and 13 general insurance companies.
P a g e 16 | 75
Changing Demographics
In 1999, according to KSA-Techno park, savings and investments comprised14 percent of an Indian consumer’s expenditure. The other items included grocery (44 percent), personal care items (6 percent), consumer durables (6.6 per cent), clothing and books and music (5 percent each), eating out (8 per cent), movies (1 percent). By 2003, expenditure on savings and investments had declined to just 4.1 percent. The other items included grocery (41percent) , personal care items (7.6 percent), consumer durables (6.6percent), clothing (6.9 percent), eating out (10.8 percent), movies and theatres (4.6percent), books and music (7.6 percent), vacations (3.9 per cent). Clearly, the increased spending on other items have had a huge impact on the amount people are spending on savings and investment products. (Source: Business World’s Marketing White book 2005).
Key Players in the Indian Market
While the public sector LIC dominates the Indian life insurance market with nearly 80 percent of the market share. It has 248 branches, 115,000 employees and over 1 million agents. It has also been improving internal processes and systems, upgrading skills of its agency force and managers And developing innovative products. LIC sold 1.69 corers policies during the year compared to 18 lakh policies sold by all the private players.
ICICI Prudential is the leader among the private players with a market share of 6.69 percent after its premium collection totaled Rs11.54 billion. Bajaj Allianz with sales of Rs 4.9 billion had a market share of 2.86 percent. Birla Sun Life with sales of Rs 4.8 billion had a market share of 2.81 percent and SBI Life with premium collection of Rs 3.9 billion, a market share of 2.29 percent. With its combination of aggressive marketing through an agency force and the use of the banking channel, ICICI has emerged as a key player. Initially, the company drove new business by opening branches in new locations. The focus has now shifted to penetrating the locations for increasing market share. The company is also trying to get higher penetration in the High Net Worth segment. The company has seven bank assurance partners and this is the largest contributor to non-agency business. It also has 15 key non-bank partners and 800 financial sales consultants. As of September 2004, it had 90 branches in 60+ locations. It took the initiative in launching non- traditional products such as life-stage products, retirement solutions and
P a g e 17 | 75
child plans. It also focused on Unit Linked Plans (ULIPs) to target new consumer segments. It has a presence in 15 states through partnership arrangements and as of 2003-04, it sold64, 764 policies in rural areas.
HDFC Standard Life has established its branches in 110 locations and is targeting non-metro towns. It is hoping to leverage its “pedigree/parentage” to gain more customer acceptance. As a result, it is focusing on quality – noJust volume growth. It has developed some innovative products like the Loan Cover Term Assurance Plan which provides a lump sum in case of death of the assured life during the term plan. Aimed at the growing segment of home loan takers, the plan helps the family to repay the outstanding loan. Given that HDFC has a huge database of home-loan customers; it can easily tap into this resource to acquire new business. The company is leveragingIts large customer database of home loan and banking clients to cross-sell insurance products.
Birla Sun Life
Birla Sun Life was the first to offer ULIPs in the Indian insurance market. And this has been the primary driver of its growth over the last one year. The company has been investing in customer education and feels that as a result customers don't view ULIPs as mutual funds but long term insurance. As of 2004, the company had 33 branches, 10,274 agents, 79 corporate relationships and 10 bank assurance partners.
Bajaj Allianz has been focusing on second tier towns and cities which are yet to witness the entry of other life insurance players apart from LIC. It is using first mover advantage by opening an office in the most prominent location in a non-metro town. It hires local people who are trained. Its mantra is to develop only the indispensable infrastructure so that it can match the pricing of LIC. Apart from that it claims that it is the only private player to provide policy servicing at the branch level .Standard Chartered is currently its biggest partner followed by Syndicate Bank and Centurion Bank. The biggest challenge that the company faces is the weak infrastructure – particularly transport and communications – in the smaller cities. It is also facing a challenge in terms of banking channels, particularly for customers who bank with cooperative banks, where delays in clearingCheques are in evitable. Tied agencies comprise the biggest channel (68%) of new business acquisitions for Bajaj Allianz. Bank insurance (27%) is the other significant channel of growth for the company.
P a g e 18 | 75
Product Preferences among Consumers
Pension policies are becoming popular as people prefer to opt for solutions that can offer them a regular income after retirement rather than a lump sum on retirement. Measurable policies for a bulk sum are being bought only for limited single use such as purchase of a house, children’s higher education, marriage, etc. This consumer trend is likely to helpcompanies that offer pension schemes. Term policies are finding favor withYoungsters. Term insurance policies are also finding more and more takers among the younger generation of consumers. Because the offer protection at extremely low costs.
It is assumed that life insurance is purchased only to avail of tax-breaks. But the fact remains that while the tax paying population in the country is just about 20 million, there is a huge population that has not been tapped. Only the urban salaried class who fall in the tax net has been targeted for life insurance policies for tax-saving purposes. The other income-earning classes such as businessmen, professionals, farmers, provide a great opportunity for life insurance marketers. There is a need to tap these customer segments effectively. Currently all their disposable income is going into purchase of consumer durables such as washing machines, TV, refrigerators and mobile phones(as is evident from the fact that spending on savings/investment products has declined from 14 percent to 4 percent in the past decade).
Mutual Funds (MF) have benefited the most during the last two years. Take the example of the Systematic Investment Plans (SIP) of mutual funds. In just one quarter ICICI PRU MF sold 20,000 SIPs and it has the potential of selling about 100,000 new SIPs in a year. There are 33 Mutual Fund companies in the country and based on this trend one could say that the estimated fund in flow in MFs through this route alone could touch the Rs20 billion per month. Due to the good performance of MF during the past 2 years, life insurance companies have lost out to mutual funds.
PROFILING PROSPECT
For the Providing assistance of financial management there are certain criteria for the selection of policy holder. These criteria differ from different insurance company. We can divide the profiling prospect of HDFCSLIC in two ways.Which are thus:-
P a g e 19 | 75
1.H.N.I (HIGHLY NET WORTH INDIVIDUALS)
Highly net worth individuals are those persons who having yearly income more than 20 lacs and they are specially treated as H.N.I clients and they have provided relationship manager who watching and manage their funds and provided financial advices and updating all information of policies
2.LOYAL CUSTOMERS FUND VALUE AND HAVING DOWN
Every Company Want more and more business and market share and we all know that the work in insurance sector is totally based upon the customer base. The more you have customer the more you earn business. So HDFCSL provide the facility to customers that they can contact with financial assistant in the company and manage their funds which is in loss or customer is not aware about their policies and managing funds also.
TOTAL NO. OF PEOPLECONTACTED
During the work of financial Assistance I have contacted 100 people including phone calling, meetings, and the other efforts. In these 100 people I have gotten appointment of 65people. In the 65 person I have assisted 39 people. The percentage of converting the profits at 9%.
During the meeting time with the customer these questions are generally asked by them which are thus:-
Which type of this policy in which I m getting loss!
Our premium will charge by your company or
premium is invested or not?
How your policy is working?
How can I believe on you and your company?
Mostly person have still faith in LIC so I have to convince them against theLIC.
P a g e 20 | 75
RESEARCH METHODOLOGY
ABSTRACT OF MARKET RESEARCH
Marketing Research provides information that assists and organization to define opportunities for product development and market strategy. It works by assessing whether marketing strategies are accurately targeted, and by identifying market opportunities or changes that are required by customers. Market research tends to confirm issues that are well-known in a market initially, but if planned well and effectively it will also identify new opportunities, market niches, or ways by which to improve sales, marketing and communications activities.
WHY MARKET RESEARCH STUDY
The role of market research, therefore, is to reduce uncertainty in decision making, to monitor the effects of decisions taken, and identify the performance of a company or a product in the market. During internship my market survey was related with the distribution enhancement of the insurance policies of HDFCSL. To be more specific, we can list five key uses for market research, namely to:
a. Identify the size, shape, and nature of a market, so as to understand the market and marketing opportunities.b. Test out strategic and product ideas which help to define the most effective customer-led strategies.c. Monitor the effectiveness of strategiesd. It will define when marketing expenditure, promotions and targeting need to be adjusted or improved.
The variety of purposes listed above makes it clear that market research is not simply a “first check.”It is useful ahead of any action, but it also provide same answer of checking and refining views as operations proceed. Companies, especially those for which budget seem tight, who have selected one of these uses for market research are always concerned to make the research a worthwhile investment. Best results come when their marketing and sales planning is influenced by the results of research. In other words, when research pays for itself by providing a basis for change and improvement in operational matters.
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It
may be understood as a science of studying now research is done
systematically. In that various steps, those are generally adopted by a researcher
in studying his problem along with the logic behind them.
It is important for research to know not only the research method but also know
methodology. ”The procedures by which researcher go about their work of
describing, explaining and predicting phenomenon are called methodology.”
Methods comprise the procedures used for generating, collecting and evaluating
data. All this means that it is necessary for the researcher to design his
methodology for his problem as the same may differ from problem to problem.
Data collection is important step in any project and success of any project will
be largely depend upon now much accurate you will be able to collect and how
much time, money and effort will be required to collect that necessary data, this
is also important step.
Data collection plays an important role in research work. Without proper data
available for analysis you cannot do the research work accurately.
OBJECTIVE OF PROJECT
My project is being undertaken in HDFCSL in which finance management program and distribution enhancement of insurance policies of HDFCSL has been implemented as a marketing strategy. HDFCSL tied up with world class insurance product.
Primary Objective
The primary objective of my project is to provide Financial assistance and to increase market share of HDFCSL. In the insurance sector the main work is done by the financial planning manager who brings selling for the organization as well providing the best solution for policies which is not in profit. It improves the services of the organization.
Secondary Objective
In this point we can conclude the company objective which is to increase the market share in the insurance sector and this will happens it becomes more beneficiary and reliable to the customer. Customer should have faith on it. It is trying to do it. Today it comes under top 5 insurance companies. It wants to reach on the top.
Working Procedure
In my summer training I have targeted Delhi. I have collected my data some parts of Delhi. Here I have to approach various detail of insurance product of HDFCSL and the other competitor of it, suggestions, its marketing strategy and its advertisement. As a part of marketing research I also have collect the data in order to find out market share of HDFCSL from our sample space. During the period I was in continuous touch with my senior and sales manager and I have to submit daily report of my work and full information about phone calls and questioners. Questionnaire consisting of open ended questions was used for collecting the information.
Sample Area
My working area was Delhi. As we know that those person will invest in insurance sector who are salaried or professional. I have targeted those person who’s age is equal or more than 25.
Instrument Used
I have collected my data form LIFE ASIA and through phone calling. Life asia is the software which used by every insurance company and this software help me to know the customer details and customer policy information which help me providing best solution through discussion with my seniors.
Types of data collection
There are two types of data collection methods available.
1. Primary data collection
2. Secondary data collection
1) Primary data
The primary data is that data which is collected fresh or first hand, and for first
time which is original in nature. Primary data can collect through personal
interview, questionnaire etc. to support the secondary data.
2) Secondary data collection method
The secondary data are those which have already collected and stored.
Secondary data easily get those secondary data from records, journals, annual
reports of the company etc. It will save the time, money and efforts to collect
the data. Secondary data also made available through trade magazines, balance
sheets, books etc. This project is based on primary data collected through
personal interview of head of account department, head of SQC department and
other concerned staff member of finance department. But primary data
collection had limitations such as matter confidential information thus project is
based on secondary information collected through five years annual report of
the company, supported by various books and internet sides. The data collection
was aimed at study of working capital management of the company
We used both methodology i.e. primary and secondary
We take the sample size of 100 POLICY HOLDERS
Sample location is Delhi
This is stratified sampling
LIMITATIONS OF THE STUDY
Limitations of the study
Following limitations were encountered while preparing this project:
1) Limited data:-
This project has completed with annual reports; it just constitutes one part of
data collection i.e. secondary. There were limitations for primary data collection
because of confidentiality.
2) Limited period:-This project is based on five year annual reports. Conclusions and
recommendations are based on such limited data. The trend of last five year
may or may not reflect the real working capital position of the company
3) Limited area:-
Also it was difficult to collect the data regarding the competitors and their
financial information. Industry figures were also difficult to get.
FINANCE DEPARTMENT
CRM is also referred to as Customer Service Management. Generally organizations are more
focused on the path they travel through to reach the success or determined goal. The stages
they traverse includes design, development, marketing, service support, analyzing managerial
track, channeling the development phase, research and development and many more. These
stages of one’s business life are as a whole supported with the Customer Relationship
Management features.
In the field of business development, and short term goal tracking with standard terms and
strategies, one must keep up certain flexible terms of communicational relationship and
managerial provisions among the company employees, customers, and clients and with
various departmental staff and members. This enhances a co-operative and comfortable zone
to make the right move of the company development on time.
Focusing on the marketing department, it is important to realize the important of promoting
one’s products sales via advertisements, and efficient marketing strands with better quality.
Advertising has to be powerful means to reach the targeted customers in a short time span
with less investment for a perfect outcome of the resulting sale. Sale includes product quality,
competitiveness, advertisement, managing the service to meet the requirements of the clients
and many more.
Marketing one’s product means to take the product to the customers who are into the track or
into the field of trade. Sales department is specific in making the product move to the clients
with respect to the deal of sale. This department is more concerned about the sales of the
product that make use of customer service and management terms to keep up good terms on
serving the customers with help-line service to solve problems related to purchase and utility
of products from the company.
Benefits of CRM techniques are more focused towards customer management and services.
Customer relationship management attracts and retains the customers winning the growing
loyalty of the customer and company relationship. CRM processes helps in guiding the way
an organization runs that are targeted generating quality leads, sales and services that are
more focused on the goals and objectives. They help in forming a tie between customer and
organizational relationship that improves the customer satisfaction with the high quality
service and makes the customers feel comfortable to take up business in futurity.
In many industries customers’ experience with a company’s customer service can
significantly affect their overall opinion of the product. Companies producing superior
products may negatively impact their products if they back these up with shoddy service. On
the other hand, many companies compete not because their products are superior to their
competitors’ but because they offer a higher level of customer service. In fact, many believe
that customer service will eventually become the most significant benefit offered by a
company because global competition (i.e., increase in similar products) makes it more
difficult for a company’s product to offer unique advantages.
Customer service manifests itself in several ways, with the most common being a dedicated
department to handle customer issues. Whether a company establishes a separate department
or spreads the function among many departments, being responsive and offering reliable
service is critical and in the future will be demanded by customers.
Our Vision & Values
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 one"
Team work
Joy and Simplicity
ORGANIZATIONAL STRUCTURE-
BRANCH DEVELOPMENT MANAGER
EXECUTIVE SALES MANAGER
SR. SALES MANAGER SR. SALES MANAGER
8 TO ASST. SALES MANAGERIN EAH SR. SALES MANAGER
25 TO 35 ADVISORES IN EACHASST. SALES MANAGER
Figure 1.2 Organization Structure
INDUSTRY OVERVIEW With an annual growth rate of 15-20% and the largest number of life insurance policies in
force, the potential of the Indian insurance industry is huge. Total value of the Indian
insurance market (2010-11) is estimated at Rs. 550 billion (US$10 billion). According to
government sources, the insurance and banking services contribution to the country's gross
domestic product (GDP) is 7% out of which the gross premium collection forms a significant
part. The funds available with the state-owned Life Insurance Corporation (LIC) for
investments are 8% of GDP. Till date, only 20% of the total insurable population of India is
covered under various life insurance schemes, the penetration rates of health and other non-
life insurances in India is also well below the international level. These facts indicate the
of immense growth potential of the insurance sector. The year 1999 saw a revolution in the
Indian insurance sector, as major structural changes took place with the ending of
government monopoly and the passage of the Insurance Regulatory and Development
Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign
players to enter the market with some limits on direct foreign ownership. Though, the
existing rule says that a foreign partner can hold 26% equity in an insurance company, a
proposal to increase this limit to 49% is pending with the government. Since opening up of
the insurance sector in 1999, foreign investments of Rs.8.7 billion have poured into the
Indian market and 21 private companies have been granted licenses. Innovative products,
smart marketing, and aggressive distribution have enabled fledgling private insurance
companies to sign up Indian customers faster than anyone expected. Indians, who had always
seen life insurance as a tax saving device, are now suddenly turning to the private sector and
snapping up the new innovative products on offer. The life insurance industry in India grew
by an impressive 36%, with premium income from new business at Rs. 253.43 billion during
the fiscal year 2004-2005, braving stiff competition from private insurers. This report "Indian
Insurance Industry: New Avenues for Growth 2012", finds that the market share of the state
behemoth, LIC, has clocked21.87% growth in business at Rs.197.86 billion by selling 2.4
billion new policies in2004-05. But this was still not enough to arrest the fall in its market
share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs.
24.29 billion in2003-04 Though the total volume of LIC's business increased in the last fiscal
year (2004-2005) compared to the previous one, its market share came down from 87.04 to
78.07%. The 14 private insurers increased their market share from about 13% to about 22%
in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak
of the growing share of the private insurers. The share of LIC for this period has further come
down to 75 percent, while the private players have grabbed over 24 percent. There are
presently 12 general insurance companies with four public sector companies and eight private
insurers. According to estimates, private insurance companies collectively have a 10% share
of the non-life insurance market.
I N T RODUC TION
Financial management means procurement of funds at minimum costs and
effective utilization in order to maximize the wealth of shareholders.
The term of financial management refers to its relationship with the closely-
related fields of economics and accounting, its functions, scope and objectives.
Financial management, as an academic discipline, has undergone fundamental
changes in its scope and coverage. In the early years of its evolution it was treated
synonymously with the raising of funds. In the current literature
pertaining to financial management, a broader scope so as to include, in addition to
procurement of funds, efficient use of resources is universally recognized.
Financial management, as an integral part of overall management, is not a totally,
independent area. It draws heavily on related disciplines and fields of study, such as
economics, accounting, marketing, production and quantitative methods. A part from
economics and accounting, finance also draws for its key day to day decisions on
supportive disciplines such as marketing, production and quantitative methods, for
instance, financial managers should consider the impact of new product
development and promotion plans made in the marketing area since their plans will
require capital outlays and have an impact on the projected cash flows.
Finally, the tools of analysis developed in the quantitative methods area are
helpful in analyzing complex financial management problem. Organization makes
their planning for the financial sources which are very helpful in the future course
of action.
Taking a commercial business as the most common organizational structure, the key
objectives of financial management would be to:
Create wealth for the business
Generate cash, and
Provide and adequate return on investment bearing in mind the risks that the busi-
ness is taking and the resources invested.
CONCEPT OF FINACING
1. Financial Planning
Management needs to ensure that enough funding is available at the
right time to meet the needs of the business. In the short term, funding may be
needed to invest in equipment, pay employees and fund sales made on credit.
In the medium and long term, funding may be required for significant
additions to the productive capacity of the business or to make acquisitions.
2. Financial Control
Financial control is a critically important activity to help the business ensure that
the business is meeting its objectives.
3. Financial Decision-Making
A key financing decision is whether profits earned by the business should be retained
rather than distributed to shareholders via dividends. If dividends are too high, the
business may be starved of funding to reinvest in growing revenues and profits
further.
FINANCIAL DECISIONS
Financial management consists of four major decisions or functions which are as
discussed as below.
1. Investment decision
Investment decision is the long term, strategic policies of an organization. Investment
decisions have a long term effect on the working of an organization.
Thus an enterprise should invest in proposals which maximize share value.
2. Financing decision
There are various sources of capital like equity, preference shares, borrowed funds, and
retained profits. The finance manager has to select a proper mix of owned at the
minimum cost. A financing decision adds to the value to the value of shareholders.
3. Dividend decision
Profits can either be distributed or reinvested into the business. The
proportion of profits that needs to be distributed and that needs to be retained is a crucial
decision. It is the job of finance manager to satisfy the shareholders as well as claw
back into the business. This division of profit when done in an optimum manner
maximizes shareholder value.
4. Liquidity decision
An enterprise needs finance for the day today activities for the smooth
functioning. The brand of FM that deals with investments in current assets &
liabilities, in other words investment is the net working capital comprises of the
liquidity decisions.
DEPRECIATION POLICY IN HDFC LIFE
Depreciation is charged as per the below mentioned rates
Asset Rate as per Companies Act
(Written Down Value method)
– WDV
Rate as per Income Tax
Act (Written Down Value
method) – WDV
Buildings Residential Units 1.63 %
Office Premises 1.63 %
(Straight Line Method –
SLM)
Residential units 5 %
Office Premises 10 %
Computers 25 % (SLM) 60 %
Air Conditioners &
Refrigerator
13.91 % 15 %
Furniture & Fixtures 18.10 % 10 %
Office Equipment 13.91 % 15 %
Electrical Installations 13.91 % 15 %
Vehicles (Motor Cars) 25.89 % 15 %
Companies Act
1. The rate 13.91 % is applicable to Plant and Machinery (applicable to A/C, Office
Equipment and Electrical Installations).
2. The Depreciation under Companies Act for Computers is 16.21 % (SLM). However,
the rate adopted by us is 25 % SLM.
3. Except Computers, all the rates are as per Companies Act.
4. No depreciation is charged in the year of sale.
5. Depreciation is charged for the full year in the year of purchase.
Income Tax Act
1. Machinery and Plant other than the specified – 15 % (applicable to A/C, Office Equip-
ment and Electrical Installations).
2. Rates of premises, computers, vehicles and furniture specified.
3. If the asset is put to use for 180 days or more in a year, 100 % depreciation is provided
during the financial year. If the period is less than 180 days ---50 % depreciation is
provided for tax purposes.
FINACIAL STATEMENT FOR THE YEAR 2009-10
1. Cash flow
Particular 2010 2009
Operating activities
Amount received form policy holder 70,817,804 54,747,190
Amount received to reinsurance -312,168 -384,636
Amount paid to policy holder -12,053,422 -5,414,218
Amount paid as commission -5,417,619 -4,136,736
Payment of employee and suppliers -13,207,483 -15,583,363
Deposited with RBI 0 100,00
Income tax paid -309,142 -230,833
Net cash flow from operating activities 39,821,183 29,453,152
Investing activities 155,217,800 68,782,936
Purchases of fix assets -217,752 -581,822
Sales of fix assets 5,444 3,159
Investment -48,767,468 -39,057,231
Interest income 48,17,558 3,805,029
Dividend income 1,338,737 745,975
Net cash flow from investing activities -42,823,481 -35,081,730
Financing activities
Issue of share 1,720,000 5,250,000
Net cash flow from financing activities 1,720,000 5,250,000
Net increase in cash and cash equivalents -1,282,298 -384,578
Cash and cash equivalent as at beginning of the
year
4,108,660 4,493,238
Cash and cash equivalent as at end of the year 2,826,362 0
2. BALANCE SHEET
Particular 2010 2009
Liability
Share capital 19,680,000 17,958,180
Reserve fund 552,892 552,892
Credit change a/c 184,435 -77,610
Credit change a/c 205,087 -296,885
policy liabilities 37,666,908 29,092,419
insurance reserve 0- 0
Provision for link liabilities 127,701,636 84,085,083
Add: Fair value change 27,516,164 -15,302,147
total provision 155,217,800 68,782,936
Funds 1,490,013 586,395
funds for provision 1,064,831 531,970
Surplus 0 0
Profit and loss 6,95,56,324 5,51,83,763
Total 216,061,966 117,130,297
Assets
Share holder 6,304,757 4,291,597
policy holder 43,415,382 30,152,727
Assets held to cover link liabilities 155,217,800 68,782,936
Loans 40,366 30,248
Fix assets 1,143,777 1,451,346
Cash and bank 2,826,362 4,108,660
Advance 4,917,758 5,428,699
Current asset 12,28,585 8,820,225
Provision 187,617 208,813
Net working capital 4,725,082 508,321
Miscellaneous expense 14,664,966 11,913,122
Other Asset 0 0
Total 216,610,966 117,130,297
3. RATIO ANALYSIS
(A) CURRENT RATIO
CURRENT ASSETS:
Cash and bank balances: 2,826,362
Advances and Other Assets: 4,917,758
CURRENT LIABILITIES: 12,281,585
CURRENT RATIO= CURRENT ASSETS
CURRENT LIABILITIES
2009-10 =77,44,120
12,281,585
=0.63:1
2008-09=95373598820225
=1.08:1
2009-2010 2008-20090
0.2
0.4
0.6
0.8
1
1.2
Current Ratio (%)
Comment
Current ratio of HDFC LIFE insurance, has 0.63:1, it means it is less than 1
that indicates firm’s ability to meet current obligations & greater the safety of funds of
short-term creditors. It also indicates the sound solvency of the company is lover.
(B) LIQUID RATIO
LIQUID RATIO: = CURRENT ASSETS−STOCK
CURRENT LIABILITIES−BOD∗100
2009-10=77,44,120−15,21,520
12,281,585∗100
= 0.60:1
2008-09=9537359−45,44,600
8820225
= 0.57:1
2009-2010 2008-20090.55
0.555
0.56
0.565
0.57
0.575
0.58
0.585
0.59
0.595
0.6
Column2
Comment
The liquid ratio of HDFC life in 2009 was 0.57 and in 2010 is .60 so increasing the
liquid ratio and company have a good liquid position over the year.
(C)Gross profit ratio
GROSS PROFIT RATIO = GROSS PROFIT
NETSALES∗100
2009-10 =70,051,044
31,48,95,290∗100
= 30.25 %
2008-09=55,646,93 0
25,56,98,360∗100
= 21.76%
2009-2010 2009-20100
5
10
15
20
25
30
35
Gross Profit Ratio(%)
Comment:-
The gross profit ratio of HDFC LIFE in 2009 was 21.76% and in 2010 is 30.25% so
increasing the gross profit of HDFE LIFE over the year and company become a strong
in his financial performance.
(D) NET PROFIT RATIO
NET PROFIT RATIO=NET PROFIT
NETSALES∗100
2009-10=6,95,56,32431,48,95,290
∗100
= 22.09%
2008-09 =5,51,83,763
25,56,98,360∗100
= 21.58%
2009-2010 2008-200921.3
21.4
21.5
21.6
21.7
21.8
21.9
22
22.1
Net Profit Ratio(%)
Comment:-
The net profit ratio of HDFC LIFE in 2009 was 21.58% and in 2010 is 22.09%
therefore the net profit is increasing. The company have good profit margin. The
company should more and more profit for the future.
(E)Net retention ratio
NET RETENTION RATIO=NET PREMIUM
GROSSPREMIUM∗100
2009-10 =6,95,56,32470,051,044
∗100
= 99.29 %
2008-09=55,183,76355,646,93 0
∗100
=99.17%
2009-2010 2008-200999.1
99.12
99.14
99.16
99.18
99.2
99.22
99.24
99.26
99.28
99.3
Net retention ratio(%)
Comment:-
The net retention ratio of HDFC LIFE in 2009 was 99.17% and in 2010 is
99.29% therefore increasing the net retention ratio of the HDFE LIFE. So company
become successful for maintain the premium level over the year.
(F)RATIO OF EXPENSES OF MANAGEMENT
RATIO OF EXPENSES OF MANAGEMENT
= MANAGEMENT EXPENSES
TOTALGROSSPREMIUM∗100
2009-10 =20,345,37670,051,044
∗100
= 29.04 %
2008-09 =21,915,90755,646,937
∗100
=39.38%
2009-2010 2008-20090
5
10
15
20
25
30
35
40
RATIO OF EXPENSES OF MANAGEMENT(%)
Comment:-
The ratio of expense of management of HDFC LIFE in 2009 was 39.38% and in
2010 is 29.07% so decreasing the management expenses over the year
(G)COMMISSION RATIO
COMMISSION RATIO = Gross commission
TOTALGROSSPREMIUM∗100
2009-10 = 5,254,973
70,051,044∗100
= 7.50 %
2008-09 =4,248,904
55,646,937∗100
=7.64%
2009-2010 2008-20097.4
7.45
7.5
7.55
7.6
7.65
COMMISSION RATIO(%)
(H)RATIO OF POLICY HOLDERS’ LIABILITIES TO
SHAREHOLDERS’ FUNDS:
RATIO OF POLICY HOLDERS’ LIABILITIES TO SHAREHOLDERS’ FUNDS :
=POLICY HOLDERS ’ LIABILITIES
SHAREHOLDERS ’ FUNDS :∗100
2009-10 =376669086304757
∗100
= 597.44 %
2008-09=290992419
4291597∗100
= 677.89%
2009-2010 2008-2009540
560
580
600
620
640
660
680
RATIO OF POLICY HOLDERS’ LIABILITIES TO SHAREHOLD-ERS’ FUNDS: (%)
(I)RETURN ON INVESTMENT
RETURN ON
INVESTMENT =EBIT
CAPITAL+SURPLUS+RESERVE∗100
2009-10 =5,029,631
19,680,000+552,892∗100
= 24.86%
2008-09 =2751844
19,680,000+552,892∗100
=13.60%
2009-2010 2008-20090
5
10
15
20
25
RETURN ON INVESTMENT(%)
Comment:-
The return on investment ratio of HDFC LIFE in 2009 was 13.60% and
in 2010 is 24.86% there increasing the return on investment over the year so company
become a profitable over the year.
(J) DEBT-EQUITY RATIO
DEBT-EQUITY RATIO = LONG−TERMDEBT
SHAREHOLDER ’ SFUND * 100
2009-10 =790592313500494238
∗100
=1.58%
2008-09¿579047751461137821
∗100
=1.25%
2009-2010 2008-20090
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
DEBT-EQUITY RATIO(%)
Comment:
The debt-equity ratio of HDFC LIFE in 2009 was 1.25% and in 2010 is 1.58% there
increasing the level of equity against long term debt.
In above diagram comparison of fund’s performance for year 2010.
The above diagram represents the comparison of various funds. The growth
fund in 2009 was 38% and at present in 2010 are 73% so increased by 35%. And
second fund is balance manage fund there was 32%in 2009 and at present jn 2010 is
48% so increase by 16%. And third fund is equity manage fund there was in 2009 was
34% and at present in 2010 are 62% so increase by 28%. And forth fund are liquid
fund there was in 2009 was 28% and present in 2010 are 31% so increase by 4%.
Equity markets
INDICES 31-5-12 30-4-2012 1month rate
of return
1year rate of
return
BSE Sensex 16,219 17,319 -6.35 -12.35
S&P CNX
Nifty
4,924 5,248 -6.17 -11.44
BSE 100 4,942 5,268 -6.19 -12.34
BSE Mid
Cap
5,908 6,316 -6.46 -14.50
BSE Small
Cap
6,271 6,765 7.30 -23.86
6.Processes
The process should be customer friendly in insurance industry. The speed and accuracy of
payment is of great importance. The processing method should be easy and convenient to the
customers. Installment schemes should be streamlined to cater to the ever growing demands
of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in ser-
vicing large no. of customers efficiently and bring down overheads. Technology can either
complement or supplement the channels of distribution cost effectively. It can also help to
improve customer service levels. The use of data warehousing management and mining will
help to find out the profitability and potential of various customers product segments.
What is Welcome Calling to the customer?
Welcome Calling is a call made to all our new customers to ensure that the policy chosen by
them is as per requirement.
What is the objective of Welcome Calling?
Welcome Calling serves mainly 2 objectives:
First, to contact the customer as per the given contact details thereby ensuring contact ability.
Second, to verify if the customer has fully understood the important features the insurance
plan chosen and whether it suits the customer's requirement, thereby avoiding mis-sale occur-
rences.
The process of customer Welcome Calling of customer
A welcome call is made to the customer after the application for insurance policy has been
accepted by the company.
Before disclosing any policy related information, our Customer Service Associate (CSA) will
do a mandatory verification by asking few questions.
If the policy holder is not available, information can be shared with a third party who takes
care of the policy holder's finances, post confirmation from the third party that all the dis-
cussed details will be shared with the Policy Holder.
Once the verification is done, the CSA will inform the customer on all the Key features of the
insurance plan.
Once all the key features have been communicated, the CSA can also make a note of any
query, request or complaint by the customer.
If the customer is not contactable despite multiple attempts, we will send a Welcome Calling
Letter to the communication address of the customer.
Physical Distributions
Distribution is a key determinant of success for all insurance companies. Today, the
nationalized insurers have a large reach and presence in India. Building a distribution
network is very expensive and time consuming. Technology will not replace a distribution
network though it will offer advantages like better customer service. Finance companies and
banks can emerge as an attractive distribution channel for insurance in India. In Netherlands,
financial services firms provide an entire range of products including bank accounts, motor,
home and life insurance and pensions. In France, half of the life insurance sales are made
through banks. In India also, banks hope to maximize expensive existing networks by selling
a range of products.
The physical evidences include signage, reports, punch lines, other tangibles, employee‘s
dress code etc.
A. Tangibles: banks give pens, writing pads to the internal customers. Even the
passbooks,chequebooks, etc reduce the inherent intangibility of services.
B. Punch lines: punch lines or the corporate statement depict the philosophy and attitude
ofthe bank. Banks have influential punch lines to attract the customers.
SOME CHANNEL OF DISTRIBUTIONS IN HDFC LIFE
Direct Sales ManagerIndividual Sales( Door to Door Marketing )
1. Direct Sales
Business through Financial Consultants2. Sales Development Manager’s Induction
Bank Relation( HDFC,SBI,BOB,Andra Bank,AXIS Bank etc...)
3. Alternative Induction
Group SellingCollabration with other Companies
4. Corporate Induction
conclusion
CONCLUSION
Introduction
1. It has got 3rd rank in the investment management, in year 2006One of the largest financial in-
stitution of
2. India with more then 2 million satisfied customer base.
3. 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 stand-
ards in the industry. In short, “The most obvious choice for all
Financial analysis is important aspect of financial management. The study of
financial managementat HDFC LIFE LTD. has revealed that the current ratio
was as per the standard industrial practice but the liquidity position of the
company showed an increasing trend.
Finance department
1. The proprietary ratios shows efficient capital structure. Considering the turnover ratios, the management having effective collection system and low investment in stocks.
2. The Depreciation under Companies Act for Computers is 16.21 % (SLM). However, the rate
adopted by us is 25 % SLM.
3. Machinery and Plant other than the specified – 15 % (applicable to A/C, Office Equipment
and Electrical Installations).
4. Current ratio of HDFC LIFE insurance, has 0.63:1 It also indicates the sound solvency of the
company is higher.
5. The net profit ratio in 2009 was 21.58% and in 2010 is 22.09% therefore the net profit is in-
creasing. The company have good profit margin. The company should more and more profit
for the future.
6. Issued Capital were 17,960,000 and in current year increase by 17,20,000 so as compare to
the previous year increase by 9.57 %
RECOMMENDATION AND SUGGSTION
RECOMMENDATIONS
The HDFC company should now try to identify the gap between current level of customer
service and customer expectations. Some of the strategies being recommended are as
follows:
Brand Building:
HDFC is a very huge Brand in US in Insurance but in India it is not known as a Insurance
brand. So HDFC need to focus on Brand building Activities which can be done through Ad-
