HDFC FINAL report

8/7/2019 HDFC FINAL report

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APROJECT REPORT

ON

Submitted in Partial Fulfillment of the Requirement forMaster of Business Administration

SUBMITTED TO: SUBMITTED BY:IILM-BUSINESS SCHOOL Sanjay Kumar SharmaNEW DELHI July2008-10 Batch

ROLL NO.-820850229

PUNJAB TECHNICAL UNIVERSITY

JALANDHAR

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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 utmost 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. Together with banking services,

It adds about 7 percent to the countrys GDP. In spite of all this growth thestatistics of the penetration of the insurance in the country is very poor. Nearly

80% of Indian populations are without Life Insurance cover and the Health

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

immense in India.

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CONTENTSPage No

ACKNOWLEDGEMENT 7-8

EXECUTIVE SUMMARY 15

PROJECT OBJECTIVE 16

RESEARCH METHODOLOGY 17-24

Section 1 : INDUSTRY PROFILE 26-48

1) Overview & Historical Perspective

2) Insurance Sector Reforms

3) Nature of Industry4) Indian Insurance Industry

Regulatory Body : IRDA

5) Impact of Liberalization

Market share of various players

6) Current Scenario

7) SWOT Analysis of Industry

8) Conclusion

Section 2 : COMPANYS PROFILE 50-68

HDFC Ltd. : 1) Introduction

2) Subsidiary & Associate Companies

HDFC STANDARD LIFE

1) Introduction

2) Key Personnel

3) Knowledge Management

Life Stages

4) Product Mix

5) Current Sales

6) Future Plans

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Section 3 : MAIN SECTION 69-79

1) Financial Planning

2) 360 Financial Planning

3) Consumption Pattern

4) Objective & Sales Procedure

Section 4 : DATA ANALYSIS AND FINDINGS 80-92

Section 5 : CONCLUSIONS & RECOMMENDATIONS 93-98

APPENDICES 99-111

1) Questionnaire

2) Tables3) Glossary

4) Bibliography

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Acknowledgement

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ACKNOWLEDGEMENT

On the successful completion of this 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. Rajeev

Ranjan Dixit (AM) who provided me 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 of HDFC SLIC

New Delhi 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.

My sincere thanks goes to Mrs. Charu Verma (Placement

Cell), IILM-BS(International Institute for Learning in

Management,New Delhi for continuous encouragement &

suggestions offered by her.

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I am also indebted to the Institute faculty members for

providing me with this learning opportunity.

Last but not least , I must acknowledge the encouragement

and help given by my beloved parents, friends, teachers,

family members, whose best wishes and emotional support

have enabled me to completed this project.

SANJAY KUMARSHARMA

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Declaration

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DECLARATION

The summer project on Distribution Enhancement 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: NEW DELHI SANJAY KUMAR SHARMA

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Certificate

OfApproval

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CERTIFICATE OF APPROVAL

The following Summer Project report titled DISTRIBUTIONEENHANCEMENT is hereby approved as a certified study inmanagement carried out and presented in a manner satisfactory towarrant its acceptance as prerequisite for the award ofMASTER OFBUSINESS ADMINISTRATION for which it has been submitted. It isunderstood that by this approval the undersigned do not necessarilyendorse or approve any statement made, opinion expressed orconclusion drawn therein but approve the summer project report onlyfor the purpose it is submitted.

Summer Project Report Examination Committee for evaluation ofsummer project report.

Name Signature

MBA Summer Project __________ _____________Coordinator

Approval by HDFD-SLIC ---------------- ----------------------

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Executive

Summary

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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. Activities led to practical exposure

and taught me the aspects of people dealing.

Finally, interesting conclusions were drawn out of the data collected regardingthe 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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ProjectObjective

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PROJECT OBJECTIVES

To Enhance Distribution Channel through generate Financial

Consultant.

To study the awareness of Financial Planning among the people.

To study the importance of Insurance in todays scenario.

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

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RESEARCH METHODOLOGY

D.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 mewith 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.

D.2 RESEARCH DESIGN:

. The research design applied here was exploratory research and

descriptive research.

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

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customer who is actually interested in entering into the insurance

market. Once the problem was known, then descriptive research was

applied as to what benefits and extra thing could be given to customer

so as to attract the customer.

D.3 SAMPLE SIZE:

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

(hundred) personals.

D.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

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

through some activities ands secondary data is by using the contacts

which are already available Primary data is applied as we have used thequestionnaire and through marketing activities, secondary data has been

used in form of yellow pages, 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 financialconsultants and how much the company helps them to achieve their

goals.

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SPSS has used to fill in the data in excel and to analyze the data

collected.

D.5 ACTION PLANThe target given to me was to recruit 6(six) 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

6(six)Insurance Advisors, 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 time Business opportunity as a life advisor.

In all, I collected data of about 100 customers. So Data Collection

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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 48 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

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 6 Clients for becoming the Corporate Agents of HDFC

STANDARD LIFE within a period of 8 weeks.

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AREA ASSIGNED

There was no as such a particular area was assigned. Out of six Advisors

which I have recruited from different areas of New Delhi. I use to fix

meetings by making Tele calls and then go to the residence or the office

of the clients, sometimes in Noida, and Often in New Delhi.

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 Delhi 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.

TARGET ASSIGNED

The Target assigned to me was to Recruit 6(six) Insurance Advisors for

HDFC STANDARD LIFE and to sell insurance policies. The Tenure of the

project was of 8 weeks. And due to Gods Grace I achieved the target

and Recruited 6(six) Insurance Advisors within 8 Weeks.

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D.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.

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.

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D.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.

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.

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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.

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

Historical Perspective

The insurance came to India from UK; with the establishment of theOriental 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. Since then LIC has worked towards spreading life insurance

and building a wide network across the length and the breath of thecountry.

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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.

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 Company Limited, 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.

Competition

Private Companies with a minimum paid up capital of Rs.1 billion

should be allowed to enter the sector. No Company should deal in both

Life and General Insurance through a single entity. Foreign companies

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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

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.

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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 nextwith a 20.62% share.

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

premium collections and a meager 0.41% share.

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

covered by insurance.

India's life insurance premium as a percentage of GDP is just 1.77per cent.

The income derived by GIC and its subsidiary companies through

investment was Rs.2491.76 crore and the investable fund

generated was Rs.2843 crore in 1999-2000.

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

assumption of a 7 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.

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.

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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.

Nature of Industry

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

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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 DevelopmentAuthority (IRDA)

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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.

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.

IMPACT OF LIBERALISATION

The introduction of private players in the industry has added to the

colors in the dull industry. The initiatives taken by the private players

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are very competitive and have given immense competition to the on

time monopoly of the market LIC. Since the advent of the private

players in the market the industry has seen new and innovative steps

taken by the players in this sector.

The new players have improved the service quality of the insurance. As

a result LIC down the years have seen the declining phase in its career.

The market share was distributed among the private players. Though

LIC still holds the 79% of the insurance sector but the upcoming natures

of these private players are enough to give more competition to LIC in

the near future. LIC market share has decreased from 95% (2002-03) to

81 %( 2004-05).

LIC has the current market share of 79%.

Among the private players ICICI Prudential has the maximum of appx5.60%

Followed by Bajaj Allianz (3.27 %) and HDFC Standard Life of about3.11%.

Below is the table that shows the market share of various players of theindustry.

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

insurance industry.

COMPANY NAME MARKET SHARE

LIC 79.30ICICI PRUDENTIAL 5.63

BAJAJ ALLIANZ 3.27

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HDFC STANDARD LIFE 3.11

BIRLA SUNLIFE 2.32TATA AIG 1.45SBI LIFE 1.24

MAX NEWYORK 0.90

AVIVA LIFE 0.82ING VYSYA 0.66OM KOTAK LIFE 0.54AMP SANMAR 0.38

METLIFE 0.33RELIANCE LIFE 0.05

The liberalization of the Indian insurance sector has opened new doors

to private competition and the new and improved insurance sector today

promises several new job opportunities. With private players now in

the field, there will be innovative products, better packaging, improved

customer service, and, most importantly, greater employment

opportunities.

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 marketeven 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.

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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.

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 thus improvement 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

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imperative. It therefore makes sense to look at well- balanced,

alternative channels of distribution.

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.

Therefore they are looking to the diverse areas of distribution channel to

have an advantage. 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 channeldue 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 and it is a time

consuming sales process. An agent is the public face of an Insurance

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

presentable and the facts and figures at his/ her command are updatedand correct.

A Financial Consultant should be a pleasing personality with complete

knowledge about the various plans and solutions which the company has

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to offer and must also understand the customers psychology well to

deal in an efficient manner.

BANCASSURANCE

Bancassurance 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.

Advantages to banks

Productivity of the employees increases.

By providing customers with both the services under one roof,

they can

improve overall customer satisfaction resulting in higher customerretention

levels.

Increase in return on assets by building fee income through the

sale of

insurance products.

Can leverage on face-to-face contacts and awareness about the

financialconditions of customers to sell insurance products.

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

products with

loans.

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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.

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

WHAT DOES LIFE INSURANCE HAVE TO OFFER?

Life insurance is many different things to many different people. For

some, it is a premium to be paid on time. For others it offers liquidity

since cash can be borrowed when needed. For the investment-minded, it

denotes a constantly growing capital account and numerous other

benefits.

The contractual guarantee is the promise to pay, backed by one of the

oldest and most stably regulated financial industry operating in the

Indian sub-continent today.

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1) Insurance Buys Time and Money

People like to refer to life insurance as time insurance, the reason being

that life insurance proceeds are paid to the insured's beneficiaries in

case of death. The money proffered by life insurance helps buy time toadjust to the change of circumstances. Insurance provides large

amounts of cash that will keep the lifestyle for the survivors the way it

was before the insured's death.

2) Insurance Offers Peace of Mind

For the person who buys an insurance policy, it offers absolute and

complete peace of mind. He or she knows that the decision made by himwill provide sound benefits in the future, whether or not the individual

may live to see it.

3) Multiple Applications

The future is uncertain for each and every one. No one knows how long

he or she will live. The investment benefit is paid to the insured's

beneficiaries after his death or it can be used during the life as well. Lifeinsurance policy owners can turn to the cash value of the policy in case

of a financial emergency when all avenues are either blocked or denied.

4) Enduring Elasticity

Since life insurance is flexible enough to serve several needs, the

insured can keep several long-term goals in mind once he or she invests

in the insurance plan. The cash value of the policy can be allocated

towards augmenting the monthly income during the retirement years.

Leisure years should be turned into pleasure years. Permanent life

insurance is designed on the concepts of long-term flexibility.

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5) Financial Security

The insurance policy offers contractual guarantees to people looking for

peace of mind when they buy life insurance. Life insurance offers

complete financial security. The purchase of life insurance demonstratesconcern for a family's future financial well being.

6) Regard for Family

The purchase of life insurance clearly displays care and concern for the

people the policy owner loves.

7) Insurance is Safer

No financial institution can do what life insurance does. No industry can

back its products with reserves and surplus as sound as those of the

insurance industry.

The proof of strength and safety that insurance companies have ensured

even under the most adverse of conditions is a matter of pride for the

entire insurance industry. For generation after generation, life insurance

has been acclaimed as the very benchmark of security against which the

other industries are measured.

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.

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

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promising to pay back only on your death. Thus the players will require

an excellent sales team to sell their 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

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, 2002, 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

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for speedy resolution. The IRDA however does not adjudicate on

complaints.

SWOT ANALYSIS OF INSURANCE INDUSTRY

STRENGTH

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 isinvested

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.

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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.

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.

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CONCLUSION

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.

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..

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SUBSIDIARY & ASSOCIATE COMPANIES

HDFC Bank

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.

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

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HDFC STANDARD LIFE INSURANCE

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.

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,

to enter the Life Insurance market, in January 1995. It was clear from

the outset that both companies shared similar values and beliefs and a

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strong relationship quickly formed. In October 1995 the companies

signed a 3 year joint venture agreement.

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

strengthening the relationship.

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). Standard Life also started to use the services of the HDFC

Treasury department to advise them upon their investments in India.

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.

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 companyin 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

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Innovative products to cater to different needs of different

customers

Use of technology to improve service standards

Increasing market share

COMPANYS VISION:

The most successful and admired life insurance company. Whichmeans that We are the most trusted company, the easiest to dealwith offer the best value for money, and set the standards in theindustry.

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

Managing Director & CEO

Mr. D. M. Satwalekar

AUDIT COMMITTEE

Haribhakti & Company

Chartered Accountants

B.K. Khare & Co.

Chartered Accountants

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Bankers

HDFC Bank Ltd.

Union Bank of India

Indian Bank

The Saraswat Co-operative Bank Ltd.

Federal Bank

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

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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:

o Planning for home / securing your home loan

liability

o Save for vacation

o Save for your first child

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

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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 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

Term Insurance, 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 asmall price.

Plans: Term Assurance Plan

Loan Cover Term Assurance Plan.

INVESTMENT - This includes a plan that is well suited to meet yourlong term investment needs. We provide you with attractive long term

returns through regular bonuses.

Plan : Single Premium Whole Of Life

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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.

Plans : Endowment Assurance Plan,

Unit Linked Endowment,

Unit Linked Endowment Plus,

Money Back Plan,

Childrens Plan,

Unit Linked Youngstar,

Unit Linked Youngstar Plus .

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period 2004-05, 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 2005-06 from

Rs 17,000 in 2004-05.

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

covered more than 22,50,000 lives

Table Showcasing Financial Results:

Parameters

April-

March

2004-05

(Rs. Cr)

April-March

2005-06

(Rs. Cr)

Growth

(%)

Total received

premium668.40 1532.21 129.23

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i. New Business 486.15 1028.94 111.65

ii. Renewal 182.25 503.27 176.14

Effective Premium

Income (Total) 436.08 887.30 103.47

Group 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

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FINANCIAL PLANNING

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. Inflationand 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 couldbe dreaming of:

Owning a new car,

Buying a dream house,

Providing your children with the best education,

Planning a grand wedding for your children

Having a great time after your retirement

But in today's world of skyrocketing costs and increasing inflation, how

many of these dreams can you hope to turn into reality? By planning

well, you can utilize your limited resources to the fullest.

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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? Or, if there is an

eventuality? Perhaps it's time for you to change the way you plan your

investments...

How will 360 Financial Planninghelp?

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

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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

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 periodiccash 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.

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

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

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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

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 theirgrowing years.

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

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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.

CONSUMPTION PATTERN

*Source-Business world magazine 2nd week April 2006

73

40.10%

4.10%8.80%

6.90%

6.60%

3.90%

10.80%

2.30%

7.60%

2.10%0.80%

1.60%4.60%

Food & Grocery

Home Textiles

Personal Care

Saving & InvestmentClothing

Consumer Durable

Vacation

Eating out

Footwear

Movies & Theater

Entertainment

Accessories

Books & Music


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FIRST

CONVERSATION

APPOINTMENT

FILLING THE

PROPOSAL FORM

COLLECT THE

REQUIRED

DOCUMENTS AND

THE FIRST

PREMIUM

Follow Up

Follow Up

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 6.9% of their savings into savings and investments.

OBJECTIVE & SALES PROCEDURE:

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STEP 1: FIRST CONVERSATION WITH A KNOWN ORAN 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) DELHI METRO : Here we interacted with the commuters &

collectedthe data.

2) MARKETS : (Cannaught Place & Karol Bagh) During

this

activity, we interacted with the shopkeepers as well as the

walking

people regarding their views about the industry.

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3) CANOPY AT GURGAON: This activity was designed to

target the people working in BPOs and other IT companies.

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

base provided by the company and the aim was to collect

information from them.

5) CORPORATE PRESENTATION: A presentation was

arranged for the employees of VED RAM AND SONS (Paras), to

make them aware about the importance of Financial Planning in

todays unpredictable environment.

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

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Benefit

c) Extra Life & Health option Death Benefit +Critical Illness

Benefit + Accidental DeathBenefit

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.

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) Personal details of Beneficiary or Nominee

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d) The Premium amount selected

e) The Term of the policy

f) 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.

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

79

SECTION 4

SAMPLE SIZE: 100

Sample was collected on Random Basis


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AGE

24%

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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INCOME DISTRIBUTION

INCOME D

5

1 1

> 5 lacs

IN

COME

Highest, 16 respondents in income bracket below 1.5 lacs,

which mainly comprises of age group below 30 years.

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.

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ARE YOU AWARE ABOUT FINANCIAL PLANNING ?

F

PEOPLE

D

F

98% of the respondents were aware about FinancialPlanning.

BRAND RECALL

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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.

Property as an investment option is most lucrative

choice. However it is important to mention that majority of

respondents are in age group of above 30 years and people

with high income bracket prefers to invest in Real Estate.

INSURED PERCENTAGE

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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.

COMPANY PREFERENCE

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COM

ONLY LIC

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.

Total number of LIC policies sums up to 85% and total

number of 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.

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TYPE OF PLAN BOUGHT

24 28%

Money back Policies have been most popular and also the

endowment plans.

As people today are more aware about financial

planning, so people of the age 30 years have planned for their

Retirement now.

ULIPs are fast gaining popularity as they provide investment

benefit with Insurance.

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PURPOSE OF BUYING INSURANCE

PUR

11%

2

14

Retirement

Planning

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

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DISTRIBUTION CHANNEL PREFERENCE

C

According to the data, known/current Advisors remains the

1st choice for buying Insurance.

In retail also known Advisors are preferred over referrals.

Bancassurance 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

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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.

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 target

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 thecompany 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 thespirit of trusteeship; thereby making insurance widely popular.

RECOMMENDATION

Positioning insurance as a means to fulfilling ones duties during

ones lifetime.

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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

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 marketplacebut 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, investmentand

longer-term management of the brand are essential, not only for

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

differentiated and

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Steps in the Development of the Survey Instruments

The main instruments required for survey was a well developedquestionnaire .The questionnaire development took place in a series of steps asdescribed below.

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Research objectives are being transformed intoinformation objectives.

The Appropriate data collection methods have been

determinedStep 2

Step 3The information required by each objective is being

determined.

Step

1

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

Step 9Revise the questionnaire layout if needed.

Step

10

The Questionnaire format is being finalized.

Research objectives are being transformed into

information objectives.


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Q5) Have you taken any life insurance policy on your own life or on life

of

any of your family member?

YES NO

(If no, switch to Q 9)

Q6) Which company(s) policy(s) you have?

LIC ICICI PRUDENTIAL

BIRLA SUNLIFE ING VYSYA

BAJAJ ALLIANZ SBI LIFE

HDFC STD. LIFE TATA AIG

MAX NEW YORK LIFE AVIVA

RELIANCE KOTAK MAHINDRA

MET LIFE OTHER ____________(specify)

Q7) which type of plan did you buy?

Money Back Plan

Endowment Plan

Pension Plan

ULIP

Q8) What was your purpose/will be your likely purpose of takinginsurance?

RANK THEM (1 being most ideal)

a) PROTECTIONOF FAMILY

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b) TAX BENEFIT

c) INVESTMENT

d) RETIREMENT

PLANNING

Q9) Have you ever been approached for Life insurance by any of thefollowing

(Please ), also Rank according to your preference from whomyou are most likely to buy insurance?

( Here) (Rank) 1) Known/Current Advisor

2) Advisors referred by friends/family

3) Telesales and subsequent visit by unknown Advisor

4) Schemes offered by your bank (Bancassurance)

5) Group Insurance Policies offered by your employer

Q10) Do you feel opening up of the sector has created more insurance

Awareness among the public?

YES NO

Q11) How many dependents do you have?

6

Q12) Do you really think insurance cover in todays scenario is not

Essential?

_____________________________________________________

_____________________________________________________

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THANK YOU FOR YOUR CONTRIBUTION

GLOSSARY

Accident Benefit

An add-on with a life policy. It compensates a policyholder in the event

of death or injury by accident

Annuity

An investment option that makes a series of regular payments to an

individual in exchange for a premium or a series of premium.

Asset allocation

How your investments are spread across various asset classes

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Bonus

The amount paid as return in a with-profit policy. The bonus, expressed

as a percentage of the sum assured, is generally declared every year.

The amount is linked to the profits earned by the insurer. Depending on

the time of withdrawal, there are two kinds of bonuses reversionary

and cash. A reversionary bonus can be encased only on maturity of the

policy; a cash bonus can be withdrawn when declared

Capital gains

Profit earned from the sale of stocks, mutual fund units and real estate.

Long-term capital gains arise from assets owned for more than a year

while short-term capital gains are made from assets owned for less than

a year.

Corpus

The amount of money available with a scheme for investing. If already

invested, the corpus is the current value of the schemes portfolio.

Cover

Another word for insurance; it also refers to the amount of insurance.

Critical illness rider

A rider that provides a policyholder financial protection in the event of a

critical illness

Death benefit

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The amount payable to the nominee on death of the policyholder. The

amount paid is the sum assured plus benefits applicable (if any) less

outstanding loans.

Endowment plans

An insurance plan that provides a policyholder risk cover and some

return on investment. Usually suitable for the risk-averse

ELSS (equity-linked savings schemes)

Diversified equity funds that additionally offer a tax deduction under

Section 80C on investments up to Rs.1 lakh.

Financial planning

It covers the essential elements of a persons financial affairs and is

aimed at achieving a persons financial goals.

Group Insurance

An insurance policy taken out by employers to provide life cover to their

employees. Usually the cheapest form of insurance.

Insured

The policyholder: The person who buys an insurance policy

Insurer

The insurance company

Investments

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Pension Plan

Investment products offered by insurance companies and mutual funds

that required the investor to make defined contributions over regular

periods, mostly every year. The contributions are invested according to

a pre-decided investment plan. At retirement, the accumulation is paid

out through regular pay-out options.

Policy

The legal document issued by an insurance company to a policyholder

that states the terms and conditions of an insurance contract.

Policy term

The period for which an insurance policy provides cover

Post office schemes

Also known as Small Savings schemes, they are offered at post offices

and carry the highest returns among fixed income instruments.

Government backing makes these instruments like Public Provident Fund

(PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and

Post Office Monthly Income Scheme (POMIS) risk-free

Premium

The amount paid by the insured to the insurer to buy cover

Riders

Additional covers that can be added to a life policy, for a cost

Sum assured

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Whole-life plans

Class of life insurance policies that provide cover through your lifetime.

BIBLIOGRAPHY

Websites

www.rbi.org.inwww.irdaindia.orgwww.banknetindia.com

www.hdfcinsurance.comwww.businessworldonline.com

Other References:

Brochures of various plans

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http://www.rbi.org.in/http://www.irdaindia.org/http://www.banknetindia.com/http://www.hdfcinsurance.com/http://www.businessworldonline.com/http://www.rbi.org.in/http://www.irdaindia.org/http://www.banknetindia.com/http://www.hdfcinsurance.com/http://www.businessworldonline.com/


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