Rom Hdfc Final

8/10/2019 Rom Hdfc Final

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EXECUTIVE SUMMARY

HDFC Standard Life insurance is the oldest life insurance company in the world.

It is the largest insurer in the UK and is the 28th largest company in the world.

In India, the company is marketing life insurance products and unit linked

investment plans. From my research at HDFC SLIC, I found that the company

has a lot of competition from other private insurers like ICICI, Aviva, Birla Sun

Life and Tata AIG. It also faces competition from LIC. To compete effectively

HDFC SLIC could launch cheaper and more reasonable products with small

premiums and short policy terms (the number of years premium is to be paid).

The ideal premium would be between Rs. 5000 Rs. 25000 and an ideal policy

term would be 10 20 years.

HDFC must advertise regularly and create brand value for its products and

services. Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use

television advertisements to promote their products. The Indian consumer has a

false perception about insurance they feel that it would not benefit them if

they do not live through the policy term. Nowadays however, most policies are

unit linked plans where a customer is benefited even if their death does not

occur during the policy term. This message should be conveyed to potential

customers so that they readily invest in insurance.

Family responsibilities and high returns are the two main reasons people invest

in insurance. Optimum returns of 16 20 % must be provided to consumers to

keep them interested in purchasing insurance.

On the whole HDFC standard life insurance is a good place to work at. Every newrecruit is provided with extensive training on unit linked funds, financial

instruments and the products of HDFC. This training enables an advisor/sales

manager to market the policies better. HDFC was ranked 13 in the Best Places to

Work survey. The company should try to create awareness about itself in India.

In the global market it is already very popular. With an improvement in the sales

techniques used, a fair bit of advertising and modifications to the existing

product portfolio, HDFC would be all set to capture the insurance market in India

as it has around the globe.


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CHAPTER

Introduction Of Insurance

History Of Insurance Sector

Milestones


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Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19

January 1956, that life insurance in India was completely nationalized,through a Government ordinance; the Life Insurance Corporation Act, 1956

effective from 1.9.1956 was enacted in the same year to, inter-alias, form

LIFE INSURANCE CORPORATION after nationalization of the 245 companies

into one entity. There were 245 insurance companies of both Indian and

foreign origin in 1956. Nationalization was accomplished by the govt.

acquisition of the management of the companies. The Life Insurance

Corporation of India was created on 1st September, 1956, as a result and

has grown to be the largest insurance company in India as of 2006.

Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian

insurance sector. The Govt. of India then introduced the Insurance

Regulatory and Development Authority Act in 1999, thereby de-regulating

the insurance sector and allowing private companies into the insurance.

Further, foreign investment was also allowed and capped at 26% holding in

the Indian insurance companies. In recent years many private players

entered in the Insurance sector of India. Companies with equal strength

competing in the Indian insurance market. Currently, in India only 2 million

people (0.2 % of total population of 1 billion), are covered under

Mediclaim, whereas in developed nations like USA about 75 % of the total

population are covered under some insurance scheme. With more and moreprivate players in the sector this scenario may change at a rapid pace.


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HISTORY OF INSURANCE SECTOR

The insurance sector in India has completed all the facets of competition from

being an open competitive market to being nationalized and then getting back to

the form of a liberalized market once again. The history of the insurance sector

in India reveals that it has witnessed complete dynamism for the past two

centuries approximately.

With the establishment of the Oriental Life Insurance Company in Kolkata, the

business of Indian life insurance started in the year 1818

SOME OF THE IMPORTANT MILESTONES IN THE LIFE INSURANCE

BUSINESS IN INDIA ARE:

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

regulate the life insurance business.

1928- The Indian Insurance Companies Act enacted to enable the government

to collect statistical information about both life and non-life insurance

businesses.

1938- Earlier legislation consolidated and amended to by the Insurance Act

with the objective of protecting the interests of the insuring public.

1956- 245 Indian and foreign insurers and provident societies taken over by

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

viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the

Government of India.


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Chapter 2

What Is Life Insurance

Life Insurance In India

Life Insurance Market

Types Of Life Insurance Policies


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WHAT IS LIFE INSURANCE

Life Insurance is the key to good financial planning. On one hand, it safeguards

your money and on the other, ensures its growth, thus providing you with

complete financial well being. Life Insurance can be termed as an agreement

between the policy owner and the insurer, where the insurer for a consideration

agrees to pay a sum of money upon the occurrence of the insured individual's or

individuals' death or other event, such as terminal illness, critical illness or

maturity of the policy.

Life insurance plans, unlike mutual funds, are beneficial when you look at them

as a long term avenue of investment which also offers protection through life

cover. Life insurance policies are broadly categorized into 2 types; Traditional

Plans and Unit Linked Insurance Plans (ULIPs)

Traditional policies offer in-built guarantees and define maturity benefits through

variety of products such as guaranteed maturity value. The investment risk in

traditional life insurance policies is borne by life insurance companies.

Additionally, the investment decisions are regulated to a large extent by IRDA

rules and regulations, ensuring stable returns with minimal risk. Investment

income is distributed amongst the policy holders through annual bonus. These

policies are ideal for policy holders who are not market savvy and do not wish to

take investment risks.

ULIPs, on the other hand provide a combination of risk cover and investment.

More importantly they offer a flexibility to decide your risk taking profile.


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LIFE INSURANCE IN INDIA

Life Insuranceis the fastest growing sector in Indiasince 2000 as

Government allowed Private players and FDI up to 26%. Life Insurance in India

was nationalised by incorporating Life Insurance Corporation (LIC) in 1956.All

privatelife insurance companies at that time were taken over by LIC.

In 1993 the Government of Republic of India appointed RN Malhotra Committee

to lay down a road map for privatisation of the life insurance sector.

While the committee submitted its report in 1994, it took another six years

before the enabling legislation was passed in the year 2000, legislation

amending the Insurance Actof 1938 and legislating the Insurance Regulatory

and Development Authority Actof 2000. The same year that the newly

appointed insurance regulator - Insurance Regulatory and Development

AuthorityIRDA --started issuing licenses to private life insurers.

LIFE INSURANCE MARKET

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 19 percent of the total

400 million of the insurable population. The state owned LIC sold insurance as a

tax instrument, not as a product giving protection. 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.

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.

The private insurers in the life insurance market have

already grabbed nearly 9 percent of the market in terms of premium income.

The new business premiums of the private players have tripled to Rs 1000 crore

Innovative products, smart marketing and aggressive distribution. That's the

triple whammy combination that has enabled fledgling private insurance

companies to sign up Indian customers faster than anyone ever expected.
http://en.wikipedia.org/wiki/956http://en.wikipedia.org/wiki/Life_insurancehttp://www.irdaindia.org/http://www.irdaindia.org/http://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/956


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

suddenly turning to the private sector and snapping up the new innovative

products on offer.

The 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.

With an annual growth rate of 15-20% and the largest

number of life insurance policies in force, the potential of the Indian insurance

industry is huge. According to government sources, the insurance and banking

services' contribution to the country's gross domestic product (GDP) is approx

7% out of which the gross premium collection forms a significant part. The funds

available with the state-owned Life Insurance Corporation (LIC) for investments

are 8% of GDP.

The year 1999 saw a revolution in the Indian insurance

sector, as major structural changes took place with the ending of government

monopoly and the passage of the Insurance Regulatory and Development

Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing

foreign players to enter the market with some limits on direct foreign ownership.

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 50,000.

That has risen to about Rs 80,000. But the private insurers are ahead in this

game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh-

way bigger than the industry average.


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TYPES OF LIFE INSURANCE POLICIES:

A. ENDOWMENT POLICY :

Endowment policies cover the risk for a specified period at the end of

which the sum assured is paid back to the policyholder along with all the

bonus accumulated during the term of the policy.

It is this feature that the payment of the endowment to the policyholder

depends upon the completion of the policys term which rightly accounts

for the popularity of endowment policies.

Typically, ones responsibility for the financial protection of the family

reduces significantly once the children are grown up and independently

settled.

The focus then shifts to managing a smaller family - perhaps only oneself

and ones spouse - after retirement.

This is where the endowment - the original sum assured and the

accumulated bonus - received back come handy.

You can either use the endowment amount for buying an annuity policy to

generate a monthly pension for the whole life,

It can also be put it in any other suitable investment of your choice. This

is the major benefit of an endowment policy over a whole life one.

B. WHOLE LIFE POLICY:

A typical whole life policy runs as long as the policyholder is alive.

In other words, the risk is covered for the entire life of the policyholder,

which is why they are know as whole life policies.

The policy money and the bonus are payable only to the nominee of the

beneficiary upon the death of the policyholder.

The policyholder is not entitled to any money during his or her own

lifetime, i.e. there is no survival benefit. In this sense whole life policies

are fairly rigid and inflexible and are suitable only in a few, very specific

cases.

On the whole, whole life policies may be best considered after the age of45 either for the purpose of leaving behind an estate for ones heirs or for


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covering the possibility of premature stoppage of pension income in the

case of relatively early death after retirement.

C. TERM LIFE POLICY :

Term life insurance policy covers risk only during the selected term period.

If the policyholder survives the term, the risk cover comes to an end.

Term life policies are primarily designed to meet the needs of those

people who are initially unable to pay the larger premium required for a

whole life or an endowment assurance policy.

No surrender, loan or paid-up values are granted under term life policies

because reserves are not accumulated.

If the premium is not paid within the grace period, the policy lapseswithout acquiring any paid-up value. A lapsed policy can be revived during

the

lifetime of the life assured but before the expiry of the period of two years

from the due date of the first unpaid premium on the usual terms.

Accident and / or Disability benefits are not granted on policies under the

Term plan.

Term life policies are the cheapest form of insurance

D. MONEY-BACK POLICY :

Unlike ordinary endowment insurance plans where the survival benefits

are payable only at the end of the endowment period, money back policies

provide for periodic payments of partial survival benefits during the term

of the policy, of course so long as the policy holder is alive.

An important feature of this type of policies is that in the event of death at

any time within the policy term, the death claim comprises full sum

assured without deducting any of the survival benefit amounts, which may

have already been paid as money-back components. Similarly, the bonus

is also calculated on the full sum assured.


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E. JOINT LIFE POLICY:

Joint life policies are similar to endowment policies in as much as these

policies also offer maturity benefits to the policyholders, apart form

covering the risks as all life insurance policies.

But these are categorized separately as these cover two lives together

thus offering a unique advantage in some cases; notable, for a married

couple or for partners in a business firm.

F. GROUP INSURANCE POLICY :

Group Insurance offers life insurance protection under group policies to

various groups such as employer-employee, professionals, co-operatives,

weaker sections of society etc.

It also provides insurance coverage to people under certain approved

occupations at the lowest possible premium cost. Besides providing

insurance coverage.

It also offers group schemes to employers, which provide funding of

gratuity and pension liabilities of the employers

H. PENSION PLAN OR ANNUITIES:

A pension plan or an annuity is an investment that is made either in a

single lump sum payment or through installments paid over a certain

number of years, in return for a specific sum that is received every year,

every half-year or every month, either for life or for a fixed number of

years.

Annuities differ from all the other forms of life insurance in that an annuity

does not provide any life insurance cover but, instead, offers a guaranteed

income either for life or a certain period.

Typically annuities are bought to generate income during one's retired life,

which is why they are also called pension plans. By buying an annuity or a

pension plan the annuitant receives guaranteed income throughout his

life.


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A person also receives lump sum benefits for the annuitant's estate in

addition to the payments during the annuitant's lifetime.

Pension plans are perfect investment instrument for a person who after

retiring from service has received a large sum as superannuation benefit.

One can invest the proceeds in a pension plan as it is safest way of

secured income for the rest of his life.

One can pay for a pension plan either through an annuity or through

installments that are annual in most cases.

I. UNIT LINKED INSURANCE PLAN:

Unit linked plans are based on the component of the premium or the

contribution of the customer towards the plan.

This contribution can be in different modes like yearly, half yearly,

quarterly and monthly.

Unit linked plans have multiple benefits like life protection, rider

protection, savings, transparency, investment choices, liquidity and

planning for taxes. These plans work like mutual funds.

The premium is collected from the policy holder. He is allotted a certain number of units based of his contribution.

The Net Asset Value is the value of each unit of the fund.

It is found by subtracting the charges and current liabilities from the

current assets and investments and dividing this number by the total

number of outstanding units.


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Chapter 3

COMPANY PROFILE

HDFC Standard Life Insurance

HDFC Bank

Standard Life

Associate Companies Of HDFC

Standard Life Insurance

Bank Assurance Partners

Companys Features


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COMPANY PROFILE

HDFC STANDARD LIFE INSURANCE

INTRODUCTION

HDFC Standard Life first came together for a possible joint venture, to

enter the Life Insurance market, in January 1995

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

It is a joint venture between Housing Development Finance Corporation

Limited (HDFC), Indias leading housing finance institution and Standard

Life ,the leading provider of financial services in United Kingdom

The next three years were filled with uncertainty, due to changes in

government and ongoing delays in getting the IRDA (Insurance

Regulatory and Development authority) Act passed in parliament. Despite

this both companies remained firmly committed to the venture

Towards the end of 1999, the opening of the market looked very

promising and both companies agreed the time was right to move the

operation to the next level. Therefore, in January 2000 an expert team

from the UK joined a hand picked team from HDFC to form the core

project team, based in Mumbai.

In a further development Standard Life agreed to participate in the Asset

Management Company promoted by HDFC to enter the mutual fund

market. The Mutual Fund was launched on 20th July 2000.

The company was then incorporated on 14th August 2000 under the name

of HDFC Standard Life Insurance Company Limited.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while

Standard Life owns 18.6%.


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In India, the company is marketing life insurance products and unit linked

Investment plans.

HDFC operates through almost 450 locations throughout the country with

its Corporate head quarters in Mumbai, India

HDFC Standard Life, one of Indias leading private life insurance

companies, has revamped its corporate website

((www.hdfcinsurance.com) in line with its communication philosophy.

HDFC BANK

HDFC Limited, Indias premier housing finance institution has assisted more

than 3.3 million families own a home, since its inception in 1977 across 2400

cities and towns through its network of over 250 offices. It has international

offices in Dubai, London and Singapore with service associates in Saudi Arabia,

Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India.As of December 2008, the total asset size has crossed more than Rs. 95,000

crores including the mortgage loan assets of more than Rs. 82,800 crores. The

corporation has a deposit base of Rs. 17,551 crores, earning the trust of more

than 9, 00,000 depositors. Customer Service and satisfaction has been the

mainstay of the organization. HDFC has set benchmarks for the Indian housing

finance industry. Recognition for the service to the sector has come from several

national and international entities including the World Bank that has lauded

HDFC as a model housing finance company for the developing countries. HDFC

has undertaken a lot of consultancies abroad assisting different countries

including Egypt, Maldives, and Bangladesh in the setting up of housing finance

companies

SNAPSHOT:

Incorporated in 1977 as the first specialized Mortgage Company in India.


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Almost 90% of initial shareholding in the hands of domestic institutes and

retail investors. Current 77% of shares held by foreign institutional

investors.

Besides the core business of mortgage HDFC has evolved into a financial

conglomerate with holdings In:

HDFC Standard Life insurance Company- HDFC holds 78.07 %.

HDFC Asset Management Company HDFC holds 50.1%

HDFC Bank- HDFC holds 22.25%.

Intel net Global (Business Process Outsourcing) HDFC holds 50%.

HDFC Chubb General Insurance Company HDFC holds 74%.

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 kits original Edinburgh premises,

opening offices in other towns and acquitting other similar businesses.

The Standard Life Group has been looking after the financial needs of

customers for over 180 years. It currently has a customer base of around 7

million people who rely on the company for their insurance, pension, investment,

banking and health-care needs. Its investment manager currently administers

125 billion in assets. It is a leading pensions provider in the UK, and is rated by

Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of

A1 by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004,

2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star lifeand pensions provider at the Financial Adviser Service Awards for the last 10


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years running. The '5 Star' accolade has also been awarded to Standard Life

Investments for the last 10 years, and to Standard Life Bank since its inception

in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at

the Mortgage Magazine Awards in 2006.

SNAPSHOT

Founded in 1875, company supporting generation for last 179 years.

Currently over 5 million Policy holders benefiting from the services

offered. & Europes largest mutual life insurer.

ASSOCIATE COMPANIES OF HDFC STANDARD LIFE INSURANCE

HDFC LIMITED

HDFC BANK

HDFC MUTUAL FUNDS

HDFC SALES
http://www.hdfc.com/others/popup/about_us/hlsil.htmhttp://www.hdfcfund.com/http://www.hdfcbank.com/personal/default.htmhttp://www.hdfc.com/http://www.hdfc.com/others/popup/about_us/hlsil.htmhttp://www.hdfcfund.com/http://www.hdfcbank.com/personal/default.htmhttp://www.hdfc.com/http://www.hdfc.com/others/popup/about_us/hlsil.htmhttp://www.hdfcfund.com/http://www.hdfcbank.com/personal/default.htmhttp://www.hdfc.com/http://www.hdfc.com/others/popup/about_us/hlsil.htmhttp://www.hdfcfund.com/http://www.hdfcbank.com/personal/default.htmhttp://www.hdfc.com/


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Other Companies:

HDFC Trustee Company Ltd.

GRUH Finance Ltd.

HDFC Developers Ltd.

HDFC Property Ventures Ltd.

HDFC Ventures Trustee Company Ltd.

HDFC Investments Ltd.

HDFC Holdings Ltd.

Credit Information Bureau (India) Ltd

HDFC Securities

BANK ASSURANCE PARTNERS

It is partnership between a bank and an insurance company whereby the

insurance company uses the bank sales channel in order to sell insurance

products. In case of HDFC standard life insurance the following are the

Bancassurance partners:
http://www.hdfcbank.com/personal/default.htmhttp://www.hdfcbank.com/personal/default.htmhttp://www.hdfcbank.com/personal/default.htmhttp://www.hdfcbank.com/personal/default.htm


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COMPANYS FEATURES

Strong promoter:

HDFC Standard Life is a strong, financially secure business supported by

two strong and secure promoters HDFC Ltd and Standard Life. HDFC Ltds

excellent brand strength emerges from its unrelenting focus on corporate

governance, high standards of ethics and clarity of vision. Standard Life is a

strong, financially secure business and a market leader in the UK Life &

Pensions sector.

Preferred & trusted brand:

It has managed to set a new standard in the Indian life insurance

communication space. We were the first private life insurer to break the ice

using the idea of self-respect instead of death to convey our brand

proposition (Sar Utha Ke Jiyo). Today, we are one of the few brands that

customers recognize, like and prefer to do business. Moreover, our brand

thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.

Investment policy:

It follows a conservative investment management philosophy to ensure that

our customers money is looked after well. The investment policies and

actions are regularly monitored by a formal Investment Committee

comprising non-executive directors and the Principal Officer & Executive

Director. As a life insurance company, we understand that customers have

invested their savings with us for the long term, with specific objectives in

mind. Thus, our investment focus is based on the primary objective of

protecting and generating good, consistent, and stable investment returns

to match the investors long-term objective and return expectations,

irrespective of the market condition.

Need based selling approach:

Despite the criticality of life insurance, sales in the industry have been

characterized by over reliance on tax benefits and limited advice-based


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selling. Our eight-step structured sales process Disha however, helps

customers understand their latent needs at the first instance itself

without focusing on product features or tax benefits. Need-based selling

process, 'Disha', the first of its kinds in the industry, looks at the whole

financial picture. Customers see a plan not piecemeal product selling.

Risk control framework:

HDFC Standard Life has fully implemented a risk control framework to

ensure that all types of risks (not just financial) are identified and

measured. These are regularly reported to the board and this ensures that

the company management and board members are fully aware of any risks

and the actions taken to ensure they are mitigated.

Focus on training:

Training is an integral part of our business strategy. Almost all employees

have undergone training to enhance their technical skills or the softer

behavioral skills to be able to deliver the service standards that our

company has set for itself. Besides the mandatory training that Financial

Consultants have to undergo prior to being licensed, we have developed

and implemented various training modules covering various aspects

including product knowledge, selling skills, objection handling skills and so

on.

Focus on long term value:

HDFC Standard Life do not focus in the business of ramping up the top line

only, but to create maximization of stakeholder's value. Today, we are

extremely satisfied with the base that we have created for the long-term

success of this company.

Transparent dealing:

One of the few companies whose product details, pricing, clauses are clearly

communicated to help customers take the right decision.


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Strict compliance with rules & regulation:

They have initiated and implemented many new processes, some of which

were found useful by the IRDA and later made mandatory for the entire

industry. The agents who successfully completed this training only, were

authorized by the company to sell ULIPs. This has now been made

compulsory by IRDA for all insurance companies under the new Unit Linked

Guidelines.

Diversified product profile:

HDFC Standard Lifes wide and diversified product portfolio help individuals

meet their various needs, be it:

Protection: Need for a sound income protection in case of your

unfortunate demise

Investment: Need to ensure long-term real growth of your money

Savings: Save for the milestones and protect your savings too

Pension: Need to save for a comfortable life post retirement

Health: Cover for health related exigencies.


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Chapter 4

MARKET STUDY OF HDFC STANDARD

LIFE INSURANCE

SWOT Analysis

Marketing Objectives Of HDFC

Standard Life

Cost Analysis

Sales Analysis


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MARKET STUDY OF HDFC STANDARD LI FE INSURANCE

SWOT ANALYSIS

STRENGTH

Domestic image of HDFC supported by Standard Lifes international image

is strength of the company.

Strong and well spread network of qualified intermediaries and sales

person.

Strong capital and reserve base.

The company provides customer service of the highest order .

Huge basket of product range which are suitable to all age and income

groups.

Large pool of technically skilled manpower with in depth knowledge and

under standing of the market.

The company also provides innovative products to cater to different needs

of different customers.

WEAKNESS

Heavy management expenses and administrative costs.

Low customer confidence on the private players.

Vertical hierarchical reporting structure with many designations and

cadres leading to power politics at all levels without any exception.

Poor retention percentage

OPPORTUNITIES

Insurable population: According to IRD A only 10% of the population is

insured which represents around 30% of the insurable population. This

suggests more than 300m people, with the potential to buy insurance,

remain uninsured.

There will be in flow of managerial and financial expertise from the world

s leading insurance markets.

Further the bur den of educating consumers will also be shared among

many players. International companies will help in building world classexpertise in local market by introducing the best global practices


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International companies will help in building world class expertise in local

market by introducing the best global practices.

THREATS

Other private insurance companies also targeting for the same uninsured

population.

Big public sector insurance companies like Life Insurance Corporation

(L IC) of India, National Insurance Company Limited, Oriental Insurance

Limited, New India Assurance Company Limited and United India

Insurance Company Limited. People trust and go to them more.

Poaching of customer base by other companies.

Most people dont understand the need or are not willing to take insurance

policies in general.


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MARKETING OBJECTIVES OF HDFC STANDARD L I FE

Marketing deals with product. A product can be a good, service or an idea. Here

as HDFC STANDARD LIFE is an insurance company so the product here is

SERVICE.

The following are the marketing objectives of HDFC STANDARD LIFE

Focus on the productivity of each consultant, corporate or individual, while

stressing on the quality of proposals

Quick roll out of Products

Efficiency of Operations

Meet Social & Rural sector obligations

Increase/improvement in all the key growth parameters

KEY GROWTH PARAMETERS:

Number of Financial Consultants

Number of Policies

Gross Premium

Productivity - policies per month per consultant

Physical points of presence

VISION STATEMENT:

'The most successful and admired life insurance company, which

means that we are the most trusted company, the easiest to deal

with, offer the best value for money, and set the standards in the

industry'.

The most obvious choice of all


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COST ANALYSIS

REVENUE OF PAST 3 YEARS OF HDFC STANDARD L I FE

HDFC Standard Life is a coalition company between HDFC and Standard

Life Plc.

HDFC Standard Life insurances revenue has come down from

Rs 33.07 crore in the financial year 2007-08 to Rs 27.77 crore in financial

year 2008-09

The company produced sum premium revenue of Rs.5, 564.69 crore as

opposed to Rs.4,858.56 crore last year, posting a y-on-y increase of

15%.its revitalization premium also witnessed an increase of 34% for theeconomic year as opposed to Rs.2,173.19 crore in the last year.

The companys EPI in regards to retail business grew by 5%.

HDFC Standard Life monitors its latest business premium due to EPI,

which is estimated by giving only a 10% value to a sole premium

strategy.

The economic downturn has hit the insurance industry. HDFC Standard

Life, one of the largest private insurers in the country, has seen mark-to

market losses of Rs 1,800 crore in their revenue account.

PARTICULARS MARCH 2006 MARCH 2007 MARCH 2008

REVENUE RS 27.77

CRORE

RS. 33.07

CRORE

RS. 25.75

CRORE

Due to the economic downturn which had hit the insurance industry.

HDFC Standard Life, one of the largest private insurers in the country, has

seen mark-to-market losses of Rs 1,800 crore in their revenue account during

the year.


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SALES ANALYSIS

The HDFC STANDARD LIFE generated Total Premium

Income of Rs.7005.10 crores in FY2009-10 registering a year-on-year growth of

26%. The growth was primarily driven by the companys structured sales

processes based on customer needs and their assessments, wide range of

product portfolio and diverse distribution network.

The financial year 2009-10 was a defining year with the

unfolding of several unexpected events - sharp correction in financial markets

and a spread of recessionary trends. These events also had an impact on the

Indian life insurance industry. HDFCs new policies issued grew by 26% over the

last year. However, given the uncertainty in the overall scenario, customers

have reduced their annual premium commitment on new policies. At the same

time, existing policies continued to be in force reflected in our renewal premium,

which posted a healthy growth of 34%

PARTICULARS MARCH

2004

MARCH

2005

MARCH

2006

MARCH

2007

MARCH

2008

MARCH

2009

NET SALES

GROWTH (%)

0 10.81 25.43 36.97 39.95 79

SALES 30689.30 34006.04 42655.38 58425.12 81763.46

The Sales of HDFC standard life is increasing year by year due to the companys

structured sales processes based on customer needs and their assessments,

wide range of product portfolio and diverse distributionnetwork.


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Chapter 5

Product Portfolio


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PRODUCT PORTFOLIO

PROTECTION PLAN

Protection Plans help you shield your family from

uncertainties in life due to financial losses in terms of loss of income that may

dawn upon them incase of your untimely demise or critical illness. Securing the

future of ones family is one of the most important goals of life. Protection Plans

go a long way in ensuring your familys financial independence in the event of

your unfortunate demise or critical illness. They are all the more important if you

are the chief wage earner in your family.

For instance, consider the example of Amit who is a healthy

25 year old guy with a income of Rs. 1,00,000/- per annum. Let's assume his

income increases at a rate of 10% per annum, while the inflation rate is around

4%; this is how his income chart will look like, until he retires at the age of 60

years. At 50 years of age, Amits real income would have been around Rs.

10,00,000/- per annum. However, in case of Amits unfortunate demise at an

early age of 42 years, the loss of income to his family would be nearly Rs.

5,00,000/- per annum.

Features of protection plan

Safeguard your familys financial independence

Security against uncertainties

Financial cushion in case of an eventuality

It is better explained below with help of graph


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However, with a Protection Plan, a mere sum of Rs. 2,280/- annually (exclusive

of service tax & educational cess) can help Amit provide a financial cushion of up

to Rs. 10, 00,000/- for his family over a period of 25 years.

Types of protection plan:

CHILDRENS PLANS:

Childrens Plans helps you save so that you can fulfillyour

childs dreams and aspirations. These plans go a long way in securing your

childs future by financing the key milestones in their lives even if you are no

longer around to oversee them. As a parent, you wish to provide your child with

the very best that life offers, the best possible education, marriage and life style.

Most of these goals have a price tag attached and unless you

plan your finances carefully, you may not be able to provide the required

economic support to your child when you need it the most.

For example, with the high and rising costs of education, if you are not

financially prepared, your child may miss an opportunity of a lifetime.

Today, a 2-year MBA course at a premiere management institute would cost you

nearly Rs. 3,00,000/- At a assumed 6% rate of inflation per annum, 20 years

later, you would need almost Rs. 9,07,680/- to finance your child's MBA degree.

An illustration of how education expenses could rise with passing time due to

inflation:


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Childrens Plans help you save steadily over the long term

so that you can secure your childs future needs, be it higher education,

marriage or anything else. A small sum invested by you regularly can help you

build a decent corpus over a period of time and go a long way in providing your

child a secured financial future along with

Types of Childrens Plans:-


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RETIREMENT PLANS:

Retirement Plans provide you with financial security so that

when your professional income starts to ebb, you can still live with pride without

compromising on your living standards. By providing you a tool to accumulate

and invest your savings, these plans give you a lump sum on retirement, which

is then used to get regular income through an annuity plan. Given the high cost

of living and rising inflation, employer pensions alone are not sufficient. Pension

planning has therefore become critical today.

Indias average life expectancy is slated to increase to over

75years by 2050 from the present level of close to 65 years. Life spans havebeen increasing due to better health and sanitation conditions in the country.

However, the average number of years of employment has not been rising

commensurately. The result is an increase in the number of post-retirement

years. Accordingly, it has become necessary to ensure regular income for life

after retirement, so that you can live with pride and enjoy your twilight years.

Priorities at different stages of life:-

However, skyrocketing costs can throw even a well-laid plan off balance.

With costs rising every day, you can just imagine how high they will be

when you are ready to hang up your boots. So, what should you do to

counter this? Its time to plan your retirement and that too sooner than

later.


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The above illustration shows how with each passing year your annual savings

requirement would increase. For instance, if you are 30 years old and plan to

retire at 60, then, with a current annual expenditure of Rs. 3,00,000/- , you

would need a corpus in excess of Rs. 2,00,00,000/- to maintain your living

standards, assuming you live till 85 years and the inflation rate is 4%. To build

this retirement corpus, you need to invest Rs 3,60,000/- per annum in a

retirement plan that offers 8% returns per annum. In case you delay planningyour retirement by 5 years then the investment amount would increase to Rs

6,90,000/- per annum.

Types of Retirement Plans:-


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SAVINGS & INVESTMENT PLANS:

You have always given your family the very best. And there

is no reason why they shouldnt get the very best in the future too. As a

judicious family man, your priority is to secure the well-being of those who

depend on you. Not just for today, but also in the long term. More importantly,

you have to ensure that your familys future expenses are taken care, even if

something unfortunate were to happen to you.

A big factor that you need to consider while building your

wealth is inflation. It has a dual impact on your hard-earned savings. Inflation

not only erodes your current purchasing power but also magnifies your monetary

requirements for the future. Sample this: An 35 Year individual needs to invest

Rs. 36,000/- per year with 8% returns to build a corpus of Rs. 10,00,000/- by

the age of 50 Years.

However, Rs. 10, 00,000/- after 15 years would be worth roughly around half of

what it is today once adjusted for inflation at the rate of 4%. Therefore, an

individual will need to save nearer to Rs 50,000/- annually to reach your

targeted savings at the age of 50 Years, if you consider inflation.

The Savings & Investment Plans provides you the

assurance of lump sum funds for your and your familys future expenses. While

providing an excellent savings tool for your short term and long term financialgoals, these plans also assure your family a certain sum by way of an insurance


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cover. With HDFC Standard Lifes range of Saving & Investment Plans, you can

therefore ensure that your family always remains financially independent, even if

you are not around.

Types of Savings & Investment Plans:

HEALTH PLANS:

Health plans give you the financial security to meet health

related contingencies. Due to changing lifestyles, health issues have acquired

completely new dimension overtime, becoming more complex in nature. It

becomes imperative then to have a health plan in place, which will ensure that

no matter how critical your illness is, it does not impact your financial

independence.

In the race to excel in our professional lives and provide the

best for our loved ones, we sometimes neglect the most important asset that we


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have our health. With increasing levels of stress, negligible physical activity

and a deteriorating environment due to rapid urbanization, our vulnerability to

diseases has increased at an alarming rate.

Source: National Commission on Macroeconomics and Health Report.

As it can be seen in the chart given, lifestyle diseases are

set to spread at disturbing rates. The result increased expenditure. In many

cases, people need to borrow money or sell assets to cover their medical

expenses. All it takes is a suitable plan to help you overcome the financial woes

related to your health by paying marginal amounts as premiums. For example, if

you are 30 years old, then a mere sum of approximately Rs 3500* annually

(exclusive of taxes) can provide you a health insurance plan of Rs 5 lakh over a

period of 20 years, and a worry-free future for you and your family.

Types of health plans:-


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Chapter 6

FIVE S

Company

Customer

Competitors

Collaborators

Climate (Context)


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FIVE CS

COMPANY

Name of the company HDFC STANDARD LIFE

INSURANCE

Industry Insurance

Market share 3.88%

Tag line Sar utha ke jiyo

Founded 14 August 2000

Founder Mr.Hasmukhbhai parekh

Key people Mr. Deepak S Parekh (Chairman)Mr. Deepak M Satwalekar (M.D

and CEO)

Competitors LIC

ICICI PRUD LIFE INSURANCE

Bajaj Allianz

TATA AIG

Partners HDFC, HDFC BANK INDIA LTD,

Union Bank of India, Indian Bank,

Bank of Baroda, Saraswat Bank,

Bajaj Capital

Products individual

Group

Other

Head quarters Mumbai, India

Branches 450 branches, almost 730

locations

throughout the country

GROSS PREMIUM INCOME

OF

HDFC

Rs. 5,565 Crores

NEW BUSINESS PREMIUM

INCOME

Rs. 2,679.61 Crores


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LIVES COVERED OVER YEAR

2008-

09 & policies issued

9,59,000 & 1.25 lakh

Key strengths Financial Expertise

Range of Solutions

Strong Ethical Values

Vision statement The most obvious choice for all

CUSTOMER

Any person who is interested in investing his/her money for

protecting his/herfuture from an uncertain event is the customer of insurance

company.

Customer Profile:

In HDFC Standard Life customer profiles are maintained

through customer data base. The customer is eligible for the policy according to

his age and his /her investment option. Minimum age is18 and maximum age is

65 years are to be considered.

Customer Segmentation:

Here segmenting can be done according to the age and Life

stages of the customer

Customer Buying Patterns:

Customers buy according to their convince through

online, or through the sales person. If the customer is well educated and he can

manage the things through online he will register Himself through online.


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COMPETITORS

There are total 22 insurance companies in India out of

which LIC is the only public Ltd Company & is also very good competitor to allthe insurance company.

The top ten companies are LIC, ICICI Prudential Life

Insurance Co Ltd, HDFC Standard Life Insurance Co Ltd, Bajaj Allianz Life

Insurance Co Ltd, SBI Life Insurance Co Ltd, Reliance Life Insurance Co Ltd,

Birla Sun Life Insurance Co Ltd, Max New York Life Insurance Co Ltd, Kotak

Mahindra Old Mutual Life Insurance Ltd, and Aviva Life Insurance Company India

Ltd.HDFC STANDARD LIFE faces a very stiff competitior with its other

players like LIC, ICICI, etc.

Some of the competitive features are as follows

Large amount of competition (22 players in the market)

Other brands are well advertised and have higher recall value

LIC is considered a safer option

Face competition from banks and mutual funds

High premium policies are difficult to market

Incorrect perception about private insurance company

Short term plans are available only at large premium

Lack of awareness about the unit linked funds in the market

The market share of HDFC is 3.88% & LIC is 64% as LIC is a public company it

is the major competitor for all the other 21 insurance company in India. Most of

the market concentration is occupied by LIC.

COLLABORATORS

Joint Collaboration of HDFC and standard life

Collaboration of HDFC with Manipal Education

HDFC Life insurance has evolved over the period with its start of 10

crores as the most massive mortgage institution of finance. With thrust

for standard life, HDFC is the joint collaboration of HDFC and Standard


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Life, which are protagonists in this marketing platform from commendable

years of enriching experience.

Moreover to add to its reputation, HDFC Life Insurance was the first

company to attain the license to work in the insurance arena and the rest

is history. It has operation from more than 52 locations.

Its just not about the renowned name of the company but more of its

customer based applications and services that make it bond with the best

HDFC Standard Life, one of Indias leading private life insurance

companies, in collaboration with Manipal Education.

Indiaspremier Academic and education services provider, has

announced the launch a three month Certificate Programme in Insurance

and Management.

CLIMATE (context)

The climatic condition refers to basically the overall study of environment both

internal & external affecting it.

Some of the main problems in marketing the policies are:

Large amount of competition (22 players in the market)

Other brands are well advertised and have higher recall value

LIC is considered a safer option

Face competition from banks and mutual funds

High premium policies are difficult to market

Incorrect perception about insurance

Interested prospects might have a lack of time and postponeinvestments

Customers get defensive if you cold call


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Chapter 7

Experience & Learnings

Job Profile

Observation

Conclusion

Recommendations


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EXPERIENCE & LEARNINGS

I was associated with HDFC Standard life Insurance as a

summer trainee. My job profile was of a financial consultant.

I was required to analyze customers financial needs along

with providing customized financial solutions to each customer individually. As a

Financial Consultant, I was being into conducting reviews on a regular basis to

keep customers on track record.

A financial consultant, according to IRDA (Insurance

Regulatory And Development Authority), is one who acts on the behalf of a

particular insurance company and who is remunerated by way of commission son the premium paid under policies procured through his efforts. He is the main

component of the distribution channel for the insurance business as a financial

consultant.

Job profile:

Contact prospects for life insurance, study their needs and persuade them

to buy.

Complete all related formalities, including filling up proposal for ms,

collecting premium, arranging medical examination, collecting proofs of

age and income, reports and other information required by the

underwriter.

Also I was required to decide upon a particular target audience to bring in

more financial consultants for the company

Eligibility criteria for becoming a financial consultant:

Minimum Eligibility Criteria (Any 3/5 Criteria required, first criteria being

mandatory)

Age : 20 and Above

Married.

Education: Graduate or higher.

Has spent > 3 years in the city of current residence.

Income > 3 Lakh per annum.


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Pre-requisites required to become a Financial Consultant

Should undergo IRDA Training for 50 hrs.

Should pass the pre-recruitment exam conducted by Insurance Institute

of India.

Licensing Process:

Step 1 Registration:

Documentation Required for Acquiring a License

Forms

Agency Application form

Form VA

Exam Form

Agreement Copy ( all pages to be signed by the FC )

Know Your Customer ( KYC ) Addendum

Supporting Personal Documents required

9 Passport size photographs

Age Proof

Proof of Education

Proof of Identity

Registration

IRDA Training

IRDA Examination


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Proof of Residence

PAN Card or PAN Application

Fee : Rs. 925 /- ( Off Line )

Fee : Rs. 775 /- ( On Line )

Step 2 IRDA Training:

All Candidates have to undergo and complete 50 hours of IRDA Training.

Types of Training:

Off Line (Class Room) Training

On Line Training

IRDA Refresher Classes are conducted for the FC before the IRDA Exam.

Step 3 IRDA Examination:

Pre Recruitment Examination can be done by 2 Modes,

On line

Off line [Exams are conducted by Insurance Institute of India (III)].

I had undergone offline training which was 7 days compulsory training

programme.

It was great learning experience in training programme as immense knowledge

about different insurance products available in the market was provided to us.

After the training programme IRDA exam is conducted then the task of targeting

the right person to be the financial consultant was assigned to me.


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The following is the market analysis with respect to the assigned job:

Target given: - To bring in minimum 3 prospective person who would become

companys financial consultant in one month

Objective: - to find out prospective person who would be willing to work as a

part time with HDFC Standard Life Insurance as financial consultant

Research methodology:-

Telephonic interview

Personal interview

Data base collection:-

Since there was no client database ,data was collected through personally

visiting colleges, schools, classes & nearby residential areas

Target audience:-

Age: 20& above

Gender: - male & female

Occupation:-

Housewife

Working person

Graduate

Any professional expert who wish to earn an extra income


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Target area: - KANDIVALI TO VIRAR

Location Schools/Colleges/Classes

Visited

Residential

Areas

Visited

Kandivali _ Patel Nagar

vasai St. Gonsalo Garcia College

Vatak College,

A_1 T.Y B.Com Classes

Topper Classes

Vasai Village

Vasai (West)

MG Road ,Nr.

Bus Stop

All the above mentioned areas were personally visited by me

Number of people approached: - 70

Number of people who agreed to become consultant: - 15

Number of people who became financial consultant: - 6

Finally, the project was concluded by me when people

became the financial consultant & thus expanding their scope of business


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OBSERVATION

The following are the observation which I found from my market study &

personal experience with HDFC Standard Life Insurance

A clear idea about how the market functions was understood during

my study

Very high level of competition exists in the market where LIC holds a

major market share

LIC is still considered a safer option inspite of many private players

in the market

Promotion done by the company is creating a lot of awareness aboutthe company giving it a brand recognition

In case of pricing customers are satisfied

People are not aware about different product portfolio available with

the company

No proper management in the organization & timely refund of the

policy given

Payment of commission takes long duration due to which other

process i.e. licensing, conducting of IRDA exam gets delayed

Lots of internal conflicts within the employees

Low customer retention

Delay in licensing procedure for becoming a financial consultant

A lot of cartel formed within the employees themselves

Different opinion of customers for quality service provided by the

company


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CONCLUSION

Insurance was considered as unsought good which

require hard core selling, but in changing trend in income and people

becoming financially literate, the demand for insurance is increasing day

by day. Proper after sale service can help the advisors to generate more

business. Gradually people are realizing the fact that insurance is not a

necessary evil but means to attain worry free life.

HDFC Standard Life Insurance is a major private

player in the market. Inspite of LIC capturing a major market share HDFC

Standard Life has been able to maintain its position in the market. Its

major selling product is ULIP Plans which has created is strong market

position. A very good training programme is conducted explaining every

aspect of the products giving the insights of how actually products are

sold in the market. It also provides a good business opportunity to the

unemployed section in the society. The publicity done by the company

has a very good impact on the people. The company is committed to itsvalues & culture but lacks somewhere creating some sort of negative

image due to certain areas of concern being left unfocused.

However, the company has a wide scope of becoming

a successful & attaining top most position in the insurance market

because of the dedicated of the superiors & their support for the

subordinates


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RECOMMENDATIONS

The following are some of recommendation as per my market study &

personal experience with the company:

Create more awareness about the insights of the product as people

are aware only about the basic types of the product.

A strict control among the subordinates needs to maintained

Proper vigilance & obedience needs to be developed within the

employees for the given targets

Stringent action needs to taken against the employee for any delay

in the payment of funds to the customer.

Since people are just satisfied with the pricing strategy , more

schemes needs to be introduced keeping in mind the target

audience in India have low dispensable income

Promote more in colleges rather than website promotion as

personally promoting in colleges creates a greater impact amongst

the youth to motivate them to be a part of the company More focus on after sales service would retain your customer as

human behavior cannot be predicted. So, as to hold on to your

customer treat them as king because in marketing your product

customer is the king


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BIBLIOGRAPHY

Books:-

Life insurance (insurance institute of India

The New Life Insurance Investment Advisor (By Ben G Baldwin)

Web resource:-

www.business-standard.com

www.banknet.com

www.economywatch.com

www. hdfcinsurance.com

www.icrmindia.com

www.irdaindia.com

www.netmba.com

www.researchconnect.com

www.researchandmarkets.com

www.wisegeek.com

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