A M ANAGEMENT THESIS ON STRATEGIES ADOPTED TO INCREASE SALES IN HDFC STANDARD LIFE INSURANCE CO. LTD. A THESIS ON STRATEGIES ADOPTED TO INCREASE SALES IN HDFC STANDARD LIFE INSURANCE CO. LTD. CERTIFICATE This is to certify that the Management Thesis titled ___________________________________________________ ___________________ submitted during semester ____________ of the MBA Program (The Class of 2010) embodies original work done by me. Signature of the Student 1
Transcript
A MANAGEMENT THESIS ON
STRATEGIES ADOPTED TO INCREASE SALES
IN
HDFC STANDARD LIFE INSURANCE CO LTD
A THESIS ON
STRATEGIES ADOPTED TO INCREASE SALES
IN
HDFC STANDARD LIFE INSURANCE CO LTD
CERTIFICATE
This is to certify that the Management Thesis titled ______________________________________________________________________ submitted during semester ____________ of the MBA Program (The Class of 2010) embodies original work done by me
Signature of the Student
Name (in Capitals) ________________________
Enroll Number ________________________
1
TABLE OF CONTENTS
ACKNOWLEDGEMENT
ABSTRACT
1 INTRODUCTION
11 CONCEPT AND OVERVIEW OF INSURANCE INDUSTRY
12 OBJECTIVES
13 INDIAN SCENARIO
14 HDFC IN INSURANCE INDUSTRY
15 GROWTH DRIVERS AND CHALLENGES IN INSURANCE INDUSTRY
16 MARKETING STRATEGIES OF HDFC INSURANCE
17 INSURANCE EFFORTS
2 REVIEW OF LITERATURE
3 RESEARCH METHODOLOGY
4 RESULTS AND ANALYSIS
5 CONCLUSION
6 SUGGESTIONS
7 BIBLIOGRAPHY
8 ANNEXURE
2
81 QUESTIONNAIRE
ACKNOWLEDGEMENT
The making of any project calls for contributions and co-operation from
many individuals It is the result of meticulous planning with the
contribution of inputs by individuals that led to the formation of the final
project
It is indeed a moment of immense gratification for me to express my deepest
gratitude to the faculty of INC Adam Smith Institute Of Management Ms
Manisha (Management thesis guide) for providing me with an opportunity to
carry out this study and guide me to make this report on Strategies adopted
to increase sales in HDFC Standard life insurance
I would like to convey my sincere gratitude to Mr Amar Singh for his
valuable suggestions while pursuing the project Without the help of his
valuable inputs the completion of this project would not have been possible
I would also like to thank classmates for there suggestions and support to
undertake this work and also during the course of study
3
ABSTRACT
The thesis is an attempt to provide a detailed analysis to know about insurance and the customers satisfaction and perception towards HDFC Standard Life Insurance
However the survey done for this thesis suggests that of the total number taken the maximum are of the opinion that in this fast changing world retailing and retail outlets are important Considering the bigger role that retail is expected to play in Indian economy this reports aims at highlighting and analyzing the different facets of the retail industry and analysis how much customerrsquos are satisfied with the new retail outlet of Reliance ie Reliance Fresh
By 2011 industry experts believe modern retail could be worth as much as $100 billion out of a total $600 billion Indian consumer market Also the government has taken a good note of all this and has already paved the path for major changes in the segment like increasing the FDI limit etc it seems retail is going to play a very vital role in the growth of Indian economy as a whole The next venture in retail will be Feel Fresh Plus in which customers could find fruits and vegetables as well as apparel consumer electronics FMCG items and medicines tooAccording to Retail consultancy Technopak Advisors the size of Indiarsquos retail is about $300 billion and it will go to $427 billion by the end of 2010
4
INTRODUCTION
Insurance is the compensation of Financial Loss on happening of an
uncertain event When Insurance is purchased the risk of financial loss due
to happening of that uncertain event is transferred from the policyholder to
the company When the claim arises company will pay a Lump Sum amount
to the policy holder or his nominee that will be utilized to generate income
from them It is important to note that the company is not protecting the life
of the policyholder but the income earning capacity on happening of
specified uncertain event
Uncertainty is part of our everyday life However all the uncertain
events cannot be insured We will be focusing only in those events where the
income earning capacity is lost Income stops on the happening of four
major events
Death
Sickness
Accident
Retirement
First three events are uncertain However retirement is a certain event
we know our retirement age and it is a certain event and we can plan our
retirement hence there is a no risk cover for that Another important point to
be considered is the nature of accidents and sickness There could be minor
Illnesses or accidents resulting in temporary disability All of them need not
results into loss of income earning capacity Insurance covers only those
5
accidents and sickness where the income earning capacity is lost either
permanently or for a specified minimum period
6
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
TABLE OF CONTENTS
ACKNOWLEDGEMENT
ABSTRACT
1 INTRODUCTION
11 CONCEPT AND OVERVIEW OF INSURANCE INDUSTRY
12 OBJECTIVES
13 INDIAN SCENARIO
14 HDFC IN INSURANCE INDUSTRY
15 GROWTH DRIVERS AND CHALLENGES IN INSURANCE INDUSTRY
16 MARKETING STRATEGIES OF HDFC INSURANCE
17 INSURANCE EFFORTS
2 REVIEW OF LITERATURE
3 RESEARCH METHODOLOGY
4 RESULTS AND ANALYSIS
5 CONCLUSION
6 SUGGESTIONS
7 BIBLIOGRAPHY
8 ANNEXURE
2
81 QUESTIONNAIRE
ACKNOWLEDGEMENT
The making of any project calls for contributions and co-operation from
many individuals It is the result of meticulous planning with the
contribution of inputs by individuals that led to the formation of the final
project
It is indeed a moment of immense gratification for me to express my deepest
gratitude to the faculty of INC Adam Smith Institute Of Management Ms
Manisha (Management thesis guide) for providing me with an opportunity to
carry out this study and guide me to make this report on Strategies adopted
to increase sales in HDFC Standard life insurance
I would like to convey my sincere gratitude to Mr Amar Singh for his
valuable suggestions while pursuing the project Without the help of his
valuable inputs the completion of this project would not have been possible
I would also like to thank classmates for there suggestions and support to
undertake this work and also during the course of study
3
ABSTRACT
The thesis is an attempt to provide a detailed analysis to know about insurance and the customers satisfaction and perception towards HDFC Standard Life Insurance
However the survey done for this thesis suggests that of the total number taken the maximum are of the opinion that in this fast changing world retailing and retail outlets are important Considering the bigger role that retail is expected to play in Indian economy this reports aims at highlighting and analyzing the different facets of the retail industry and analysis how much customerrsquos are satisfied with the new retail outlet of Reliance ie Reliance Fresh
By 2011 industry experts believe modern retail could be worth as much as $100 billion out of a total $600 billion Indian consumer market Also the government has taken a good note of all this and has already paved the path for major changes in the segment like increasing the FDI limit etc it seems retail is going to play a very vital role in the growth of Indian economy as a whole The next venture in retail will be Feel Fresh Plus in which customers could find fruits and vegetables as well as apparel consumer electronics FMCG items and medicines tooAccording to Retail consultancy Technopak Advisors the size of Indiarsquos retail is about $300 billion and it will go to $427 billion by the end of 2010
4
INTRODUCTION
Insurance is the compensation of Financial Loss on happening of an
uncertain event When Insurance is purchased the risk of financial loss due
to happening of that uncertain event is transferred from the policyholder to
the company When the claim arises company will pay a Lump Sum amount
to the policy holder or his nominee that will be utilized to generate income
from them It is important to note that the company is not protecting the life
of the policyholder but the income earning capacity on happening of
specified uncertain event
Uncertainty is part of our everyday life However all the uncertain
events cannot be insured We will be focusing only in those events where the
income earning capacity is lost Income stops on the happening of four
major events
Death
Sickness
Accident
Retirement
First three events are uncertain However retirement is a certain event
we know our retirement age and it is a certain event and we can plan our
retirement hence there is a no risk cover for that Another important point to
be considered is the nature of accidents and sickness There could be minor
Illnesses or accidents resulting in temporary disability All of them need not
results into loss of income earning capacity Insurance covers only those
5
accidents and sickness where the income earning capacity is lost either
permanently or for a specified minimum period
6
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
81 QUESTIONNAIRE
ACKNOWLEDGEMENT
The making of any project calls for contributions and co-operation from
many individuals It is the result of meticulous planning with the
contribution of inputs by individuals that led to the formation of the final
project
It is indeed a moment of immense gratification for me to express my deepest
gratitude to the faculty of INC Adam Smith Institute Of Management Ms
Manisha (Management thesis guide) for providing me with an opportunity to
carry out this study and guide me to make this report on Strategies adopted
to increase sales in HDFC Standard life insurance
I would like to convey my sincere gratitude to Mr Amar Singh for his
valuable suggestions while pursuing the project Without the help of his
valuable inputs the completion of this project would not have been possible
I would also like to thank classmates for there suggestions and support to
undertake this work and also during the course of study
3
ABSTRACT
The thesis is an attempt to provide a detailed analysis to know about insurance and the customers satisfaction and perception towards HDFC Standard Life Insurance
However the survey done for this thesis suggests that of the total number taken the maximum are of the opinion that in this fast changing world retailing and retail outlets are important Considering the bigger role that retail is expected to play in Indian economy this reports aims at highlighting and analyzing the different facets of the retail industry and analysis how much customerrsquos are satisfied with the new retail outlet of Reliance ie Reliance Fresh
By 2011 industry experts believe modern retail could be worth as much as $100 billion out of a total $600 billion Indian consumer market Also the government has taken a good note of all this and has already paved the path for major changes in the segment like increasing the FDI limit etc it seems retail is going to play a very vital role in the growth of Indian economy as a whole The next venture in retail will be Feel Fresh Plus in which customers could find fruits and vegetables as well as apparel consumer electronics FMCG items and medicines tooAccording to Retail consultancy Technopak Advisors the size of Indiarsquos retail is about $300 billion and it will go to $427 billion by the end of 2010
4
INTRODUCTION
Insurance is the compensation of Financial Loss on happening of an
uncertain event When Insurance is purchased the risk of financial loss due
to happening of that uncertain event is transferred from the policyholder to
the company When the claim arises company will pay a Lump Sum amount
to the policy holder or his nominee that will be utilized to generate income
from them It is important to note that the company is not protecting the life
of the policyholder but the income earning capacity on happening of
specified uncertain event
Uncertainty is part of our everyday life However all the uncertain
events cannot be insured We will be focusing only in those events where the
income earning capacity is lost Income stops on the happening of four
major events
Death
Sickness
Accident
Retirement
First three events are uncertain However retirement is a certain event
we know our retirement age and it is a certain event and we can plan our
retirement hence there is a no risk cover for that Another important point to
be considered is the nature of accidents and sickness There could be minor
Illnesses or accidents resulting in temporary disability All of them need not
results into loss of income earning capacity Insurance covers only those
5
accidents and sickness where the income earning capacity is lost either
permanently or for a specified minimum period
6
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
ABSTRACT
The thesis is an attempt to provide a detailed analysis to know about insurance and the customers satisfaction and perception towards HDFC Standard Life Insurance
However the survey done for this thesis suggests that of the total number taken the maximum are of the opinion that in this fast changing world retailing and retail outlets are important Considering the bigger role that retail is expected to play in Indian economy this reports aims at highlighting and analyzing the different facets of the retail industry and analysis how much customerrsquos are satisfied with the new retail outlet of Reliance ie Reliance Fresh
By 2011 industry experts believe modern retail could be worth as much as $100 billion out of a total $600 billion Indian consumer market Also the government has taken a good note of all this and has already paved the path for major changes in the segment like increasing the FDI limit etc it seems retail is going to play a very vital role in the growth of Indian economy as a whole The next venture in retail will be Feel Fresh Plus in which customers could find fruits and vegetables as well as apparel consumer electronics FMCG items and medicines tooAccording to Retail consultancy Technopak Advisors the size of Indiarsquos retail is about $300 billion and it will go to $427 billion by the end of 2010
4
INTRODUCTION
Insurance is the compensation of Financial Loss on happening of an
uncertain event When Insurance is purchased the risk of financial loss due
to happening of that uncertain event is transferred from the policyholder to
the company When the claim arises company will pay a Lump Sum amount
to the policy holder or his nominee that will be utilized to generate income
from them It is important to note that the company is not protecting the life
of the policyholder but the income earning capacity on happening of
specified uncertain event
Uncertainty is part of our everyday life However all the uncertain
events cannot be insured We will be focusing only in those events where the
income earning capacity is lost Income stops on the happening of four
major events
Death
Sickness
Accident
Retirement
First three events are uncertain However retirement is a certain event
we know our retirement age and it is a certain event and we can plan our
retirement hence there is a no risk cover for that Another important point to
be considered is the nature of accidents and sickness There could be minor
Illnesses or accidents resulting in temporary disability All of them need not
results into loss of income earning capacity Insurance covers only those
5
accidents and sickness where the income earning capacity is lost either
permanently or for a specified minimum period
6
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
INTRODUCTION
Insurance is the compensation of Financial Loss on happening of an
uncertain event When Insurance is purchased the risk of financial loss due
to happening of that uncertain event is transferred from the policyholder to
the company When the claim arises company will pay a Lump Sum amount
to the policy holder or his nominee that will be utilized to generate income
from them It is important to note that the company is not protecting the life
of the policyholder but the income earning capacity on happening of
specified uncertain event
Uncertainty is part of our everyday life However all the uncertain
events cannot be insured We will be focusing only in those events where the
income earning capacity is lost Income stops on the happening of four
major events
Death
Sickness
Accident
Retirement
First three events are uncertain However retirement is a certain event
we know our retirement age and it is a certain event and we can plan our
retirement hence there is a no risk cover for that Another important point to
be considered is the nature of accidents and sickness There could be minor
Illnesses or accidents resulting in temporary disability All of them need not
results into loss of income earning capacity Insurance covers only those
5
accidents and sickness where the income earning capacity is lost either
permanently or for a specified minimum period
6
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
accidents and sickness where the income earning capacity is lost either
permanently or for a specified minimum period
6
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
Insurance Industry-An Overview
Insurance is as old as civilization It has been developing from the family
form of insurance to mutual associations stock exchange securities and
again to state owned organizations
The concept of formal insurance originated in the 12 th century in the
form of protection against financial loss to the seafarers involved in foreign
trade Growing economic uncertainties caused not only by multiplicity of
social cultural ethnic and political factors but also natural calamities
necessitated invention and development of avenues capable of providing
economic security to the bereaved family in the event of loss of bread
earner And thus began the concept of Life Insurance With the development
of social security and the welfare status of the societies the business of life
insurance assumed multidimensional The disintegration in most of the
societies of the extended family system and ancient social institution
which provided natural umbrella of economic protection and emotional
solace upon the death of the bread earner led to a greater acceptability of the
doctrine of life insurance and the growth of life insurance industry around
the globe From a meager beginning of providing pecuniary protection on
the death earner it has moved to become major vehicle in the financial
planning both for security and investment purpose It would have been
impossible to conceive then the development that has propelled extensive
changes in the product field customer attitudes and market environment
7
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
INSURANCE PRODUCTS
Today there are many insurance products available in the market Each
company has its set of products that it offers to the customers This makes it
difficult to keep track of all the products all the time A better way to
understand them is by way of classification All insurance products can be
classified in 4 basic categories
P
This classification is based on the needs of the customers
Accordingly each of these categories has an end need to be satisfied and all
the products coming under that category aim to fulfill that need eg Products
coming under Investment category aim to provide long term real growth
over the period Thus understanding these categories will not only help us to
understand various products but also help us to position our products
strongly in a competitive market
Let us take a look at the distinctive features of each category
Protection type of products A typical protection type of product aims
at protecting income-earning capacity of the customers on happening
8
Protection Investment
Pension Savings
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
of uncertain events These are the pure risk products having no
savings element Naturally these products donrsquot have any maturity
benefits High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want
high insurance cover without spending much for it Usually offered
for a definite term mainly the Term Assurances come under this type
Various riders offered by different companies also a part of protection
category The claim is paid only if the stipulated event happens
otherwise there are no maturity values at the end of the term
Investment type of products In investment type of products the focus
is on maximizing returns for the customer over a period time In a
way it is opposite to Protection type where the focus is maximizing
the risk cover Here the risk cover is very low The objective is to put
maximum in investments The underlying principle is to commit
money for a certain period of time and get the benefits of real long-
term growth The products are usually single premium policies where
the entire premium is collected in advance Surrenders are
discouraged and there is a commitment for certain minimum no of
years In death during the term value of the investments is returned
Pension products This is another very popular type of product
Along with the risk of an untimely death or disability we also have a
risk of living too long ndash outliving our source of income In other
words one needs to ensure that he gets a decent income even after his
retirement and continues to get it as long as he lives This is where we
9
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
have pension products addressing the need for a comfortable
retirement One can opt for an immediate pension or for pension at a
future date (also called as deferred pension) There is a range of
options that one can have when selecting a pension plan There is a
great amount of flexibility when it comes to selecting a pension
product The important point to be noted is that Pensions is a part of
onersquos present income that he reserves for future consumption Every
year that income is accumulated and invested The lump sum
accumulation then is used for purchasing pension on the vesting date
Savings type products People like to save Our saving rate has been
well above 20 of our GDP for last few years They save for
events like childrenrsquos marriage education etc Savings types of
products aim to strike a good balance between risk cover as well as
returns It acts as a protection on savings Sum assured is usually the
targeted savings that one looks for He gets that amount at the end of
the term along with bonuses if it is a participating policy On the
protection side if any unfortunate event happens during the term the
sum assured (in other words the targeted savings) is still paid So it
encourages a person to save for an event at the same time ensures that
his savings are protected This is the unique advantage of savings
through life insurance that no other financial product offers We find
very popular products like Endowment Assurances Money Back
plans in this category
10
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
Global Insurance (Source CSO MGI Study)
2007 2008
Total Insurance(US $ Trillion)
4061 4270
Global Life Insurance Premiums
279 298
Share of Organized Insurance
32 48
Top Rank Worldwide and Home Country Retailers
1 American Intl Group USA
2 AXA Group France
3 Allianz Worldwide Germany
4 Manulife Financial Japan
5 Generali Group Italy
11
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
OBJECTIVES
To know about the Indian Insurance Industry and its origin
To know about the financial consultant recruitment process and their
functions
To know basics about the products available in HDFC Standard Life
Insurance
To understand the marketing and advertising strategies of HDFC
Standard Life Insurance
To analyze the strategies and its effect on the corporate profile of the
company
To realize the role being played by advertising and promotion on the
change in sales volume of the company
To understand the future trends in advertising and marketing in
insurance industry
12
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
INDIAN SCENARIO
The Government of India liberalized the insurance sector in March 2000
with 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 Under the current guidelines there is a 26 percent equity cap for
foreign partners in an insurance company There is a proposal to increase
this limit to 49 percent
The opening up of the sector is likely to lead to greater spread and deepening
of insurance in India and this may also include restructuring and revitalizing
of the public sector companies In the private sector 15 life insurance
companies have been registered A host of private Insurance companies
operating in life segments have started selling their insurance policies since
2001 Table shows the current market players in the life Insurance Industry
(Source IRDA)
Sr No Name of the Company
1 Bajaj Allianz Life Insurance Co Limited
2 Birla Sun Life Insurance Co Ltd
3 HDFC Standard Life Insurance Co Ltd
13
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
4 ICICI Prudential Life Insurance Co Ltd
5 ING Vysya Life Insurance Co Ltd
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co Ltd
8 Met Life India Insurance Co Pvt Ltd
9 Kotak Mahindra Old Mutual Life Insurance Ltd
10 SBI Life Insurance Co Ltd
11 Tata AIG Life Insurance Co Ltd
12 Reliance Life Insurance Co Ltd
13 Aviva Life Insurance Co India Pvt Ltd
14 Sahara India Life Insurance Co Ltd
15 Shriram Life Insurance Co Ltd
16 Bharti AXA Life Insurance Co Ltd
14
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act 1938 had provided for setting up of the Controller of
Insurance to act as a strong and powerful supervisory and regulatory
authority for insurance Post nationalization the role of Controller of
Insurance diminished considerably in significance since the Government
owned the insurance companies
But the scenario changed with the private and foreign companies foraying in
to the insurance sector This necessitated the need for a strong independent
and autonomous Insurance Regulatory Authority was felt As the enacting of
legislation would have taken time the then Government constituted through
a Government resolution an Interim Insurance Regulatory Authority pending
the enactment of a comprehensive legislation
The Insurance Regulatory and Development Authority Act 1999 is an act to
provide for the establishment of an Authority to protect the interests of
holders of insurance policies to regulate promote and ensure orderly growth
of the insurance industry and for matters connected therewith or incidental
thereto and further to amend the Insurance Act 1938 the Life Insurance
Corporation Act 1956 and the General insurance Business (Nationalization)
Act 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business)
15
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
The act extends to the whole of India and will come into force on such date
as the Central Government may by notification in the Official Gazette
specify Different dates may be appointed for different provisions of this
Act
The Act has defined certain terms some of the most important ones are as
follows
appointed day means the date on which the Authority is established under
the act Authority means the established under this Act Interim Insurance
Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No 17(2) 94-lns-V dated the
23rd January 1996
Words and expressions used and not defined in this Act but defined in the
Insurance Act 1938 or the Life Insurance Corporation Act 1956 or the
General Insurance Business (Nationalization) Act 1972 shall have the
meanings respectively assigned to them in those Acts
A new definition of Indian Insurance Company has been inserted Indian
insurance company means any insurer being a company (a) which is
formed and registered under the Companies Act 1956 (b) in which the
aggregate holdings of equity shares by a foreign company either by itself or
through its subsidiary companies or its nominees do not exceed twenty-six
per cent Paid up capital in such Indian insurance company (c) whose sole
16
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
purpose is to carry on life insurance business general insurance business or
re-insurance business
HDFC IN LIFE INSURANCE INDUSTRY
STANDARD LIFE
Standard Life is Europes largest mutual life assurance company Standard
Life which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy
in 1825 The company expanded in the 19th century from its original
Edinburgh premises opening offices in other towns and acquiring other
similar businesses
Standard Life currently has assets exceeding over pound70 billion under its
Management and has the distinction of being accorded AAA rating
consequently for the past six years by Standard amp Poor
THE JOINT VENTURE
HDFC Standard Life Insurance Company Ltd is one of Indiarsquos
leading private life insurance companies offering a range of individual and
group insurance solutions It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd) Indiarsquos leading
housing finance institution and the Standard Life Group United Kingdom
Both the promoters are well known for their ethical dealings and financial
strength and are thus committed to being a long-term player in the life
insurance industry ndash important factors to consider when choosing your
17
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
insurer As a joint venture of leading financial services groups HDFC
Standard Life has the financial expertise required to manage long-term
investments safely and efficiently
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 Moodys and Standard and Poors
These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs 15000 Cr and Rs 600000 Cr respectively
HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000 HDFC is the majority stakeholder in the insurance JV
with 814 stake and Standard Life has a stake of 186 Mr Deepak
Satwalekar is the MD and CEO of the venture
HDFC Ltd and Standard Life Group UK have a long and close
relationship built upon shared values and trust The ambition of HDFC
Standard Life is to mirror the success of the parent companies and be the
yardstick by which all other insurance companies in India are measured
The Companyrsquos premium income including the first year premiums
and renewal premiums was Rs153221 crores for the period April 2005 to
March 2006 HDFC Standard Life has covered over 16 million individuals
HDFC Standard Life has been recording consistent growth since itrsquos
inception The company recorded a strong year on year growth of 112 for
the period April-March 2005- 06 in comparison with the same period 2004-
18
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
05 with new business first year premium of Rs 1029 crore The growth
achieved by the company was considerably higher than the private sector
industry average of 84 for 2005-06 HDFC Standard Lifersquos Effective
Premium Income (EPI) grew by 103 from Rs 43608 crore to
acommendable Rs 88730 crore ldquoThe company wants to be as close to its
end customers as possible and wants to ensure complete customer
convenience and delight
Letrsquos look at the milestones in the journey of HDFC STANDARD LIFE
INSURANCE
Partnership discussions with Standard Life commenced in January
1995
It resulted into the signing of joint venture agreement in October
1995 the agreement was later renewed in October 1998
With government clearing the decks a project team was
established in Mumbai in January 2000
Company got Certificate of incorporation on 14th August 2000
HDFCSL became the first private sector life insurance company
when certificate of registration was granted on 23rd October 2000
The initial shareholdings were HDFC 814 and Standard Life
86
Since then itrsquos the journey of excellence All of us are contributing
towards building up a great company that the world will admire Itrsquos a
journey of creating the world-class company We have already made a mark
Letrsquos take a look the highlights of the performance so far
We have insured over 350000 lives and have already underwritten a
Sum Assured of 15000 crores
19
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
We are the first private life insurance company to declare the bonus
and last yearrsquos bonus declaration was 4th in the row It makes us the
only private company to have declared bonuses for 4 consecutive
years
Winner of Outlook Money award for 2 years
Company with largest distribution network among the private life
insurers
Our claims experience has been best so far across the industry
Recently voted as lsquoIndiarsquos most respected private insurance
companyrsquo by Business World
20
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
Life Insurance Market Growth
The Life Insurance market in India is an underdeveloped market that was
only tapped by the state owned LIC till the entry of private insurers The
penetration of life insurance products was 22 percent of the total 400 million
of the insurable population Most customers were under- insured with no
flexibility or transparency in the products With the entry of the private
insurers the rules of the game have changed
Life insurance business in terms of first year premium has shown a growth
of more than 95 over the previous year and non life or general insurance
is not far behind either growing at 22 during 2006-07The 15 private
insurers in the life insurance market have already grabbed nearly 24 percent
of the market in terms of premium income The new business premium of
the 15 private players has tripled over last year Meanwhile state owned
LICs new premium business has fallen Figure1 shows comparison between
premiums being collected by private and public limited players in year 2006
and 2007
Innovative products smart marketing and aggressive distribution - thats the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected
Indians who have always seen life insurance as a tax saving device are now
21
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
suddenly turning to the private sector and snapping up the new innovative
products on offer
Figure1 Gross premium collected by the life insurance sector
The growing popularity of the private insurers shows in other ways They
are coining money in new niches that they have introduced The state owned
companies still dominate segments like endowments and money back
policies But in the annuity or pension products business the private insurers
have already wrested over 33 percent of the market And in the popular unit-
linked insurance schemes they have a virtual monopoly with over 90
percent of the customers
22
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies For instance the average size
of a life insurance policy before privatization was around Rs 50000 That
has risen to about Rs 80000 But a rejuvenated LIC is also trying to fight
back to persuade new customers
Many factors can provide an overview of the industry but some of the
particular factors taken into the consideration here are
o area covered by various companies
o equity values
o market share
o new policies issued
o fresh premium
o policy holders account
23
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
Sales needs to be memorable -- otherwise delegates knowledge retention
will be lower than the IQ of a plank Justin Skelton managing director of
Apex SALES fails if all the emphasis is only on the day itself rather than
the before or after of the event as well Here are tips on how to make training
memorable 1 Gauge enthusiasm 2 Mix it up 3 Share and share alike
Inspiring debate on managers as coaches
Elizabeth Eyre Training Journal Ely Oct 2007 pg 10 2 pgs
Abstract
He agreed with [Carol Wilson] that managers could be effective coaches for
their teams - as long as they dont have to manage Management gets in the
way of being an effective coach The problem is the role when the manager
has the managers hat on he cant also wear a coachs hat The role of
manager has the potential to distort the relationship between manager and
learner
master trainers amp good training programs make a difference
T L Stanley SuperVision Burlington May 2007 Vol 68 Iss 5 pg 6 3
pgs
31
Abstract
A dynamic process is put into high gear when an exceptionally seasoned
employee undertakes a training mission directed toward enhancing the
growth of an inexperienced employee An experienced employee can
transfer essential skills abilities and job knowledge to an inexperienced
employee Master Trainers and good training programs make a difference
At the Department of Homeland Security a Master Trainer program has
been designed to help this Federal agency train employees to carry out
critical functions in the defense of the US Organizations must explore all
training options in maximizing their organizational resources Front line
employees with outstanding skills are invaluable The Master Trainer will
need to empathize with inexperienced employees and understand their
apprehension A good Master Trainer continually asks for feedback from the
new employee Being calm and supportive is essential Effective Master
Trainers will show and then allow the inexperienced employees to practice
Research Instruments
Basic methods of collecting Primary Data
Questionnaire Method Primary data will be collected with the help of one-
on-one interviews and interactive sessions to fill up the questionnaire
Contact Method In order to derive information from the intended
organization it was elementary for me to search for a link which could
enable me to conduct a research in that organization
32
RESEARCH METHODOLOGY
Primary Data-
bull I visited HDFC Standard Life Insurance Gurgaon (Haryana)
bull Interviewed Mr Amar Singh on the basis of the questionnaire prepared to know the strategies adopted by them to increase sales
bull Recorded the relevant answers for the questionnaire related to the topic
Secondary Data-
Database
Journals
Newspapers
websites
33
Data Interpretation of the Survey
34
AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23
Gender No of Member
MALE 66
FEMALE 34
35
Family member No of Member
2-4 40
5-8 48
36
8 to above 12
Income No of Members
40K -70K 17
70K-1 Lakh 41
1 Lakh to 3 Lacs 28
37
3 Lacs 14
Only 42people having insurance in Delhi so it is potential for insurance company to capture to
all that market
38
Insurable Member Uninsurable member
42 58
Among that 42 people who having insurance they have insurance 40 for self 28for spouse
21 for children and 18 for their parents and 11 for all family member
Having insurance No of members
Self 40
Spouse 28
Children 21
Parents 18
All 11
39
Different policy bought by customers
Under insurable persons Fully insurable persons
40
82 18
Only 42 people having life insurance but among them 82 people are underinsurance and
only 18 people are fully insured according to them income
Insurance Plan Market Share
41
Term Plan
39
Money back Plan 14
Endowment Plan 15
Child Plan 8
Unit link Plan 24
CONCLUSION
42
After collection of data interpretation is done on that basis conclusion is
drawn
The conclusion drawn
Customer prefers government insurance company other than private
insurance companies due to its reliability
Customers are more brand oriented rather than product oriented
Customers are less aware about the private insurance companies
Private Players in order to encase maximum number of customers are
introducing new and innovative scheme for their FC
Customers like to invest in other investment zones due to the hectic rules
and regulations associated with entering into a contract with insurance
companies
Customers do not feel secure with private insurance companies
Customers donrsquot want commission base job
The central problem with the insurance companies is having that they are
trying to convince customers for a product which do not have any present
relevance ie each policy which the customer is going to purchase will have
a future set of action and benefits Due to which most of the people like to
invest in those securities or investment which will give them a fruitful
return in short period of time
43
Life insurance Corporation has completed more than three decades and
thatrsquos where counts inters of brand name different number of policies for
differed class and age group of customers
The Private players are on the way but they need a lot of time investment
for creating a favorable brand image
SUGGESTIONS
Customers should be made aware of the brand name of Insurance
company through advertisement
The fear in the customer mind should be removed by company
The insurance companies should try to nurture their brand name
timely and attractive facility provide to customer
44
Suggestions for government
Indiarsquos Insurance sector which accounts for about 7 of the countryrsquos GDP
remains one of the least developed sectors in India By 2010 Insurance
sector in India has the potential to reach to the almost 300 Bn Dollars
For this to happen the government have to bring about the required
liberalization in the insurance sector if India is to ever become a developed
economy
What government should do
There are numerous ways the government can please protectionist and bring
about the liberalization
I think the licensing approach might be a good way forward
The license should be divided into three different categories
1 Local
2 Regional and
3 National
45
BIBLIOGRAPHY
References
Websites
wwwirdaindiaorg
wwwkotaklifeinsurancecom
wwwinvestorwordscom
httpwwwallbusinesscom
wwwbajajcapitalcom
wwwwikipediacom
wwwnseindiacom
Books
Insurance and Banking (2008) Hyderabad ICFAI University Press
James Triechschmann (2008) Risk Management and Insurance
Research Paper
Kawra M and Dhavale A (2008) Banking and Finance Motilal Oswal
Insurance chronicle January 2006 Special issue ldquoInsurance Industry 2006rdquo
Dr Ahmed A M and Professor Zairi M(2002) Customer Satisfaction The Driving Force for Winning Business Excellence Award Working Paper No 0206 March
46
ANNEXURE
Questionnaire
Name
Age
Income
Occupation
Gender
Q1 Do you know about HDFC SLIC
Ans (a) Yes (b) No
Q2 Do you know about the working of financial Consultant of
ldquoHDFC SLICrdquo
Ans (a) Yes (b) No (c) Insufficient Information
Q3 Do you currently have an agency of any life insurance Company
Ans (a) Yes (b) No
Q4 What would be the size of your social contact base who knows
you on first name basis
(Eg Friendly family relative colleagues if any helliphelliphellipetc)
Ans Mention in appropriate nos
Q5 How many members of your family are dependent on the income
earner of the family
47
Q6 Do you have an idea about financial market
Ans (a) Yes (b) No
Q 7 Do you have any sales experience If yes how many years
Ans (a) Yes (b) No
Q8 Do you have experience in selling financial product eg credit
card insurance etc If yes how many years (If yes to question 6)
Ans (a) Yes ( ) (b) No ( )
Q9 In which of the financial market you have invested your money
Ans (a) Share (b) Mutual fund (c) Insurance
Q 10 Are you interested in getting the opportunity of earning some
additional income as being financial consultant of ldquoHDFC SLICrdquo
and why
Ans (a) Yes (b) No
48
Investment
Protection
Savings
Pension
Cold Calling
Final Documentation
Abstract
Abstract
Abstract
Abstract
CHALLENGES OF INSURANCE IN INDIA
Insurance as an industry in India has still a long way to go To become a
truly flourishing industry Insurance needs to cross the following hurdles
1 Industry Challenges
(i) Commoditization in personal line products
(ii) Shifting consumer requirements( everyone wants products tailored to them customization)
(iii) Heightened competition
(iv) Global economic meltdown
2 Business Challenges
The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products
Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity
3 Process Challenges
Lack of stream lined processes change management automated processes central repository
24
MARKETING STRATEGIES OF HDFC STANDARD LIFE INSURANCE
Strategies Employed to achieve the target are as follows-
Telecalling
Contacting the person directly (interview)
Collect references
Some important steps to make effective telecalling-
Open the call in a friendly and positive way
State the name position and company name
Check the prospect has time to speak
State the reason for the call
Clearly succinctly explain how the meeting will be benefiting the prospect
25
INSURANCE EFFORTS
In a competitive market customer is always considered as king therefore in
order to increase companyrsquos market share HDFC is implanting all Insurance
strategies so that it can satisfy its old customers and can attract new ones
also
Insurance Strategies are as follows
Tele calling
After Market segmentation Tele calling was the medium to interact with the
peoples on phone line and then fix the appointments for the further
conversation Tele calling was done on the data provided by management of
the company and some data was collected from the sources like Just Dial
Services Internet and References While Tele calling a proper pitch was
developed to talk to peoples because it is a job to perform as the best
offering which a person can think of while offering the same thing a
different way was developed to talk to people having different background
Cold Calling
Cold calling was also tried as a tool for sales promotion but it has given
results in very few cases the reason behind less success of this source was
unavailability of the people at their office or they are busy and few of them
take cold calling casually The profile that was targeted requires proper
channel to contact them and move forward
26
Fixing Appointments and meeting People
While Tele calling a proper pitch is maintained to meet the persons
requirement by offering them the best what they want when a person is
convinced on phone appointment was fixed to have further discussion After
fixing the appointments it is very important to reach in time and proper
documentation is required about the appointments so that one should not
miss an appointment in confusion
Supporting Documents really help a lot while meeting peoples as people
believe in the proofs While taking to people it was observed that with the
information about the industry sometime making a relationship with them by
any means helps a lot in doing a job
Follow Ups
Follow up was instrumental in the entire project This is the thing to which I
will like to give utmost importance As selling insurance and appointing
Financial consultants requires two or more than two meetings hence proper
follow up is required to have good results The reason behind giving so
much importance to follow up is any person who is targeted to offer the
agency may not in a position to take the agency at that point of time or he
wants to weigh all the alternatives available in the market In such cases
follow-up becomes the Key to Success
Final Documentation
Final Documentation is done when a person gets ready to take the agency
This step requires all the basic formalities to be completed After the
27
documentation the training starts and after taking a training of 100 hours
specified by IRDA a candidate has to appear for the test and once he passes
the test heshe becomes liable to sell Insurance
Given this environment we believe that the successful advisor will have to
assume the responsibility of a financial lsquoConsultantrsquo The title Consultant
therefore reflects the image we wish to develop in the market
28
Future Plan and Ability
Significant ability to manage downside
Capacity to capture upside
Group Capital adequacy of 23
Unique business model
Grow and consolidate in a calibrated manner
Banking and Life Insurance 1048753 Steady players
Invested in world class Infrastructure amp Technology
Continued focus on cost rationalization
Fully geared up for opportunities in capital market space
Going forward
Tough year for the industry
Slower growth likely
No capital infusion expected in FYrsquo10
29
LITERATURE REVIEW
Main emphasis of the thesis is to analyze ldquostrategies adopted by HDFC
Standard Life Insurance co to increase salesrdquo The project involved meeting
with graduates housewives businessmen employees in MNC private
firms students retired person to sell the proposal of being a financial
consultant and convincing them to be a part of channel development
program and using their contacts thereby assessing the financial need of the
customer by handling their financial matter
The study is aimed at analyzing the current scenario of strategies adopted to
boost sales in Indian Insurance Industry
Based on the information provided by HDFC STANDARD LIFE
INSURANCE and with the experience gathered through selling proposal of
being a financial consultant recommendations were provided to HDFC
STANDARD LIFE INSURANCE
Literature review
Practice Remains an Important Part of sales
Ralph Palmer Kitchen amp Bath Design News Fort Lee Jan 2008 Vol 26
Iss 1 pg 34 1 pgs
Abstract
Its said that to create a new habit or get rid of an old one it takes days of
repetition Therefore if we have a positive behavior we want to make a habit
30
of we must have the discipline to do things over and over again until it
