A SUMMER TRAINING REPORTIN

HDFC Standard Life Insurance Company LtdON CUSTOMER-BUYING BEHAVIOR WITH A FOCUS ON MARKET SEGMENTATION

CONTENTSPages

ACKNOWLEDGEMENT PREFACE EXECUTIVE SUMMARY INTRODUCTION TO THE INDUSTRY INTRODUCTION TO THE COMPANY RESEARCH METHODOLOGY Title Objective of the Study Scope of the Study Significance of the Industry Significance of the Research Research Technique Sampling Methodology Sampling unit Sampling Area Sample Size Limitations FACTS AND FINDINGS DATA AND INTERPRETATION CONCLUSION & RECOMMENDATIONS BIBLIOGRAPHY ANNEXURE Questionnaire

03 04 06 07 20 26

32 34 54 56 58

EXECUTIVE SUMMARYIn todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 7080% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and

HDFC Standard Life Insurance Company Ltd

has

given me the opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents or agency holders of the company. If a company like RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer

INTRODUCTION TO THE INDUSTRYTHE HISTORY OF INDIAN INSURANCE INDUSTRY

Life InsuranceIn 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. Unethical practices adopted by some of the players against the interests of the consumers then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and reach.

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: The market contained 154 Indian and 16 foreign life insurance companies.

General InsuranceThe General Insurance industry in India dates back to the Industrial Revolution and the subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the British brought General Insurance to India, and a similar path was followed in the development of this industry. A number of private companies were in existence for years and years until, in 1971, the Indian Government decided that the public interest would be served by nationalizing the industry, merging all the 107 companies into four companies, depending on the sort of business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras respectively. The General Insurance Corporation (GIC) was set up in 1972 as a holding company, having these four companies as its subsidiaries.

Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, KenIndia Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's

at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum

General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies. IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector.

The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-05). 1. HDFC Standard Life Insurance Company Ltd. HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have been covered through our group business tie-ups. 2. Max New York Life Insurance Co. Ltd. Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India. 3. ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups. 4. Om Kotak Mahindra Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. 5.Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.

1. Royal Sundaram Alliance Insurance Company Limited The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi. 2. Bajaj Allianz General Insurance Company Limited Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany. 3. ICICI Lombard General Insurance Company Limited ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate

engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001.

4. Cholamandalam General Insurance Company Ltd. Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag. 5. TATA AIG General Insurance Company Ltd. Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake. Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines.

6. Reliance General Insurance Company Limited. 7. IFFCO Tokio General Insurance Co. Ltd 8. Export Credit Guarantee Corporation Ltd. 9. HDFC-Chubb General Insurance Co. Ltd.

Marketing of Insurance In IndiaInsurance is in a manner of speaking the last frontier in the financial sector to open. It is also a sector, which leads to benefits across the full spectrum, from the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. In an under-insured economy, newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

Marketing Mix PoliciesDifferent companies can choose to position themselves differently and hence the Marketing Mix is different. However, there are certain common characteristics that one can cull out from the possible strategies that companies adopt. Product: The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans. The key to success is in providing insurance solutions, not standardized insurance products. The concept of riders/optional benefits has already been a huge

innovation brought about by the new players, which has led to customization of products for individual needs. However, companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in.

Place: Different companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. Many companies like HDFC Standard Life are focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these. Price: Price is a relevant differentiator only in two segments - pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long-term returns generated are more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating

good long-term maturity value for customers. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge. Promotion and Advertising: The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these. Process: Cashless settlement: One of the most defining and customer-friendly changes that weve seen in recent years relates to the way claims settlements are made. The advent of the third-party administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless settlement of health and auto insurance claims. TPAs are entities who process claims on behalf of insurers: the IRDA licenses them after it is satisfied that they have the financial strength, the trained manpower, the infrastructure and the skills to undertake this activity. Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for cashless settlement of auto insurance claims. Lower premiums: The spirit of competition and the broadening of the risk experience of insurance companies have contributed to a fall in premiums over the years. Thats because, other things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the lives of, say, 100 people. Further, a broader base will provide greater efficiencies on costs such as distribution, management and claims. A broad basing of the

mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to continue. Premium payment flexibility: Insurers have imparted certain flexibility to premium payment options in order to address this concern. For instance, one now have the option to pay your premiums upfront, which is then carried forward for the tenure of the policy. The yearly premiums are drawn from the initial corpus. Insurers have also introduced the concept of automatic cover maintenance to protect your policy from lapsing owing to your omission to pay your premium on time. Under this, in the event of your not paying the premium, the insurer dips into your investment account to the extent of the premium. Of course, this comes with an inbuilt drawback: your investment portion diminishes year on year to the extent of the amount paid to cover your risk. Physical Evidence: This can play a significant role for marketing in the Indian scenario. Since Internet users are comparatively lesser than countries such as US, the offline mode will be preferred in India. Although the distribution model is largely agent-based, wherever the customer is in contact with the company, this factor can play a significant role in luring the customer. People: The most important factor that materializes sales and maintains customer relationships on a longterm basis is this factor. No matter what distribution strategy a company adopts, customer relationship has to be taken care of in order to maintain the customer base on a long-term basis.

INTRODUCTION TO THE COMPANYCOMPANY PROFILE OF HDFC STANDARD LIFE INSURANCE COMPANY LTDABOUT HDFC STANDARD LIFE INSURANCEHDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance institution and a Group Company of the Standard Life, UK. HDFC as on December 31, 2007 holds 72.38 per cent of equity in the joint venture.

HDFC STANDARD LIFE INSURANCE PARENTAGEHDFC Limited.

HDFC is India leading housing finance institution and has helped build more than 23, 00,000 houses since its incorporation in 1977. In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr. As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors. Rated AAA by CRISIL and ICRA for the 10th consecutive year

Stable and experienced management High service standards Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development.

Presented the Dream Home award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards.

Standard Life Group (Standard Life plc and its subsidiaries)

Standard Life Group (Standard Life plc and its subsidiaries) 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 life and pensions provider at the Financial Adviser Service Awards for the last 10 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

HDFC KEYS STRENGHS

FINANCIAL EXPERTISEAS A JOINT VENTURE OF LEADINGFINANCIAL SERVICES GROUPS,

HDFC STANDARD LIFE HAS THE

FINANCIAL EXPERTISE REQUIRED TO MANAGE YOUR LONG -TERM INVESTMENTS SAFELY AND EFFICIENTLY .

RANGE OF SOLUTIONSWE HAVE A RANGE OF INDIVIDUAL AND GROUP SOLUTIONS , WHICH CAN BE EASILY CUSTOMISED TO SPECIFIC NEEDS . OUR GROUP SOLUTIONS HAVE BEEN DESIGNED TO OFFER YOU COMPLETE FLEXIBILITY COMBINED WITH A LOW CHARGING STRUCTURE .

TRACK RECORD SO FAROUR GROSS PREMIUM INCOME, FOR THE YEAR ENDING MARCH 31, 2008 STOOD AT RS. 4,859 CRORES NEW BUSINESS PREMIUM INCOME STOOD AT R S. 2,685 CRORES . THE COMPANY HAS COVERED OVER 9,59,000 LIVESYEAR ENDING AND

MARCH 31, 2008.

CORPORATE OBJECTIVE Our Vision'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'.

'The most obvious choice for all'.

Our ValuesValues that we observe while we work: .Integrity .Innovation .Customer centric .People Care One for all and all for ones .Teamwork .Joy and Simplicity

Accolades and Recognition.Rated by 'Business world' as 'India's Most Respected Private Life Insurance Company' in 2004. .Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India number 1 personal

finance magazine

BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE INSURANCE INSURANCE PLANS AVAILABLE

Individual ProductsWe at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, we have a varied range of Products that you can choose from to suit all your needs. These will help secure your future as well as the future of your family.Protection Plans

You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. Our Protection range includes our Term Assurance Plan & Loan Cover Term Assurance Plan.Investment Plans

Our Single Premium Whole Of Life plan is well suited to meet your long term investment needs. We provide you with attractive long term returns through regular bonuses.Pension Plans

Our Pension Plans help you secure your financial independence even after retirement. Our Pension range includes our Personal Pension Plan, Unit Linked Pension, Unit Linked Pension Plus

Savings Plans Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream home or fulfilling your children immediate and future needs. Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus, Unit Linked Endowment Plus II, Money Back, Unit Linked Enhanced Life Protection II, Children's Plan, Unit Linked Young Star, Unit Linked Young Star Plus, Unit Linked Young Star Plus II.

Group ProductsOne-stop shop for employee-benefit solutions HDFC Standard Life has the most comprehensive list of products for progressive employers who wish to provide the best and most innovative employee benefit solutions to their employees. We offer different products for different needs of employers ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment. We now offer the following group products to our esteemed corporate clients: Group Term Insurance Group Variable Term Insurance Group Unit-Linked Plan An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your company Also suitable for other employee benefit schemes such as salary saving schemes and wealth management schemes

Social ProductDevelopment Insurance PlanDevelopment Insurance plan is an insurance plan which provides life cover to members of a Development Agency for a term of one year. On the death of any member of the group insured during the year of cover, a lump sum is paid to those member beneficiaries to help meet some of

the immediate financial needs following their loss. Eligibility Members of the development agency and their spouses with: - Minimum age at the start of the policy 18 years last birthday - Maximum age at the start of policy 50 years last birthday Employees of the Development Agency are not eligible to join the group. The group to be covered is only eligible if it contains more than 500 members. Premium Payments The premium to be paid will be quoted per member in the group and will be the same for all members of the group. The premium can only be paid by the Development Agency as a single lump sum that includes all premiums for the group to be covered. Cover will not start until the premium and all the member information in our specified format has been received. The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member. Benefits On the death of each member covered by the policy during the year of cover a lump sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of an accident, an additional lump sum will be paid equal to half the sum assured. There are no benefits paid at the end of the year of cover and there is no surrender value available at any time. The role of the Development Agency Due to the nature of the groups covered, HDFC Standard Life will be passing certain administrative tasks onto the Development Agency. By passing on these tasks the premium charged can be lower. These tasks would include: Submission of member data in a specified computer format Collection of premiums from group members Recording changes in the details of group members Disbursement of claim payments and the mortality rebate (if any) to group members These tasks would be in addition to the usual duties of a policyholder such as: Payment of premiums Reporting of claims Keeping policy holder information up to date Training and support will be available to give guidance on how to complete the tasks appropriately. Since these additional tasks will impose a burden on the Development Agency, the

Development Agency may charge a Rs. 10 administration fee to their members. Prohibition of rebates Section 41 of the Insurance Act, 1938 states No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurer If any person fails to comply with sub regulation (previous point) above, he shall be liable to payment of a fine which may extend to rupees five hundred

Tax BenefitsINCOME SECTION TAX GROSS ANNUAL HOW SALARY MUCH HDFC STANDARD

TAX CAN YOU LIFE PLANS SAVE?

Sec. 80C

Across All income Upto Slabs saved

Rs.

33,990 All the life insurance on plans. of

investment Rs. 1,00,000. Sec. 80 CCC Across all income Upto slabs. saved Investment Rs.1,00,000. Sec. 80 D* Across all income Upto slabs saved Investment Rs. 10,000. Rs. Rs.

33,990 All the pension plans. on of

3,399 All the health insurance on riders available with the of conventional plans.

TOTAL SAVINGS POSSIBLE **

Rs37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10,00,000.

Sec. 10 (10)D

Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to the conditions laid down therein.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY TITLE:To determine customer-buying behavior with a focus on market segmentation for HDFC Standard Life Insurance.

TITLE JUSTIFICATION:pattern

The above title is self explanatory. The study deals mainly with studying the buying

in the insurance industry with a special focus on HDFC Standard Life Insurance. The various segments of the markets divided in terms of Insurance Needs, Age groups , Satisfaction levels etc will also studied.

OBJECTIVEObjective One To determine reasons behind opting for an insurance.

To provide the company with information of customer's Insurance policy if they have any and reasons for opting for that particular policies.

To know the most preferred policy.

Objective Two To determine customers perception towards private insurance companies and their expectation form private insurance companies. To determine the feedback on services provided by any other insurance agent. To study the types of benefits provided by insurance services. To determine the use of Internet for valuable information and decision-making

process.

SCOPE OF THE STUDYA big boom has been witnessed in Insurance Industry in recent times. A large number of new players have entered the market and are vying to gain market share in this rapidly improving market. The study deals with HDFC Standard Life in focus and the various segments that it caters to. The study then goes on to evaluate and analyse the findings so as to present a clear picture of trends in the Insurance sector.

SIGNIFICANCE OF THE STUDY

SIGNIFICANCE TO THE INDUSTRY :

This is a limited study which takes into consideration the responses of 100 people. This data can be explorated to take in the trends across the industry. The significance for the industry lies in studying these trends that emerge from the study. It is a rapiddly changing and evolving sector. People are only beginning to wake up to its vast possibilities. A study like this can attempt to guide the future of the industry based on current trends.

SIGNIFICANE FOR THE RESEARCHER :To facilitate and provide all the useful informtaion of the studt, the company, the insurance industry and also provide marketing ways, methods of HDFC Standard Life insurance.

RESEARCH DESIGN NON-PROBABILITY EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH

The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary & secondary. A well-structured questionnaire was prepared and personal interviews were conducted to collect the customers perception and buying behavior, through this questionnaire.

SAMPLING METHODOLOGY

SamplingTechnique:Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done. Thus my sampling came out to be judemental and convinent Sampling Unit: The respondants who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, Self Employeds etc.

Sample size: The sample size was restricted to only 100, which comprised of mainly peoples from different regions of Chennai due to time constraints. Sampling Area : The area of the research was CHENNAI,TAMILNADU, INDIA.

LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of CHENNAI (MADRAS) and does not necessarily shows a pattern applicable to all of Country.

2. Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

3. In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

FACTS & FINDINGS

FACTS/FINDINGS

1.As the people think that insurance is a tool to protect their family & a tax saving device. They are aware of the fact & realizing its, importance. The company should try to expand & build up its infrastructure because there is a large potential for insurance in India. 2.Company should come up with its branch in Chennai. With the objective and goals to meet the demands & expectations of the public. Because the entrance of private players will increase the competition and it would be a tough task to secure a good position in market. 3.Since HDFC STANDARD LIFE INSURANCE LTD is leading with several companies policies it should be easy for them to penetrate into the market and secure a good position if they

pay greater attention to the service part provided to their customer and thereby forming a long and trusted relationship. 4.As seen from the survey that at present 70% of the customer are having insurance policy out of which 87.5% of the customer are planning for new investments. So it can be a good potential for the company and they should make an attempt to trap these customers. 5.43% of the customer is even ready to go for insurance if a service provider away from their home is providing it. But intend they should provide good products and services. The company should try to convince these customers and get them in its favor.

DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS & INTERPRETATION DATA GIVES COMPANIES PREFERENCE OF RESPONDENTS OF INSURANCE

COMPANYS NAME L.I.C. HDFC ICICI PRUDENTIAL SBI LIFE RELIANCE LIFE INSURANCE TOTAL

NO.OF RESPONDENT 78 2 10 7 3 100

SHARE (%) 78 2 10 7 3 100

INTERPRETATION 78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1 by that percent of respondents.

DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTSBENEFITS Cover Future Uncertainty Tax Deductions Future Investment TOTAL NO.OF RESPONDENTS 55 20 25 100 SHARE (%) 55 20 25 100

INTERPRETATION

55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively

DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED RESPONDENTSFEATURE Money Back Guarantee Larger Risk Coverance Easy Access to Agents Low Premium Companys Reputation TOTAL NO.OF RESPONDENTS 15 37 7 30 11 100 SHARE (%) 15 37 7 30 11 100

INTERPRETATION Majority of the respondent (37%) found Larger risk coverance as the most attracted feature of the all.

DATA

PROVIDES

NUMBER

OF

INSURANCE

POLICY

TYPE

RESPONDENTSPOLICY TYPE LIFE POLICY NON LIFE POLICY BOTH NO. OF RESPONDENTS 75 25 45 SHARE (%) 75 25 45

INTERPRETATION 75% of the respondents have Life Insurance Policy while 45% have both. (The % is

calculated out of 280 positive response)

DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCERESPONSE NO. OF RESPONDENTS 81 74 100 SHARE (%)

A saving tool A tax saving device A tool to protect your family

81% 74% 100%

INTERPRETATION 81% of the respondents have perception of Insurance being a saving tool. And 74% of the respondents have perception of Insurance being a tax saving device. But 100% of the respondents are with the view that Insurance is a tool to protect

your family.

DATA SHOWS PEOPLES HAVING INSURANCERESPONSE NO. OF RESPONDENTS 70 30 SHARE (%) 70% 30%

Yes No

INTERPRETATION Of the sample size of 400 surveyed respondents 70% of the respondents are having

Insurance policy. 30% of the respondents are either not having any Insurance policy at present or their

policy is already matured. And at present 100% of the respondents are with the view that Insurance is a tool to

protect your family.

DATA SHOWS BUYING PROCESS OF THE PEOPLEBUYING PROCESS NO. OF RESPONDENTS 45 55 100 SHARE (%) 45% 555 100%

Customer approached Insurance company/Agent Company/agent approached customer Total

INTERPRETATION 44.5% of the respondents approached the Insurance Company / Agent. Whereas, 55.5% of the respondents were approached by the Company /Agent.

DATA SHOWS REASONS BEHIND FOR INSURANCERESPONSE NO. OF RESPONDENTS 80 80 100 SHARE (%) 80% 80.% 100%

Tax saving Saving / Investment Family protection

INTERPRETATION 80.71% of the Respondents opted for Insurance for tax saving benefits. 80.71% of the Respondents opted for saving / Investments. But all of them, i.e. 100% of the respondents have opted for insurance for their

family protection.

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICYRESPONSE Satisfied Not satisfied Not Responded Total NO. OF RESPONDENTS 60 40 0 100 SHARE (%) 60% 40% 0.0% 100%

INTERPRETATION 60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded.

DATA SHOWS SATISFACTION OF +RESPONDENTS WITH RESPECT TO

SERVICE AGENTRESPONSE Satisfied Not satisfied Not Responded Total NO. OF RESPONDENTS 45 55 0 100 SHARE (%) 45% 55% 0.0% 100%

INTERPRETATION 45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded.

DATA SHOWS NUMBER OF RESPONDENTS PAYING TAXNO. OF RESPONDENTS 100 100 SHARE (%) 100% 0% 100%

RESPONSE Paying tax Not paying tax Total

INTERPRETATION Of the sample size of 400 respondents, all the respondents are paying tax

DATA SHOWS RESPONDENTS INVESTMENTS FOR TAX SAVINGINVESTMENTS NO. OF RESPONDENTS 51 33 32 25 21 11 SHARE (%) 51% 33% 32% 25% 21% 11%

LIC NSC Bonds PPF PF EPF

INTERPRETATION 51% of the respondents save their tax by investing in LIC, which is the highest

among all Investment. This shows that most people for getting taxes benefits invest in LIC. 33.25% of the respondents do their tax saving by investing in NSC. 32.25% of the respondents to their tax saving by investing in bonds.

DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF

INVESTMENT FOR SECURING THEIR FUTURENO. OF RESPONDENTS Fixed Assets Bank deposits Jewellery Securities i.e. bonds, MFs Shares Insurance 75 11 25 40. 10 70 SHARE (%) 75% 11% 25% 40% 10% 70%

INTERPRETATION 75.25% of the respondents as with the view that Fixed Assets is the best form of

investment for securing their future. 70.5% of the respondents are with the perception that Insurance is the best form of

investment for securing their future, which is one of the highest and this shows that insurance is an important key for securing your future.

DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM THEIR INVESTMENTRESPONSE Saving & Returns Security Tax benefits NO. OF RESPONDENTS 100 90 71. SHARE (%) 100% 90% 71.%

INTERPRETATION 100% of the respondents intent to gain saving and returns from their investment. 90% of the respondents intent to gain security from their investments. Whereas, 71.75% of the respondents intent to gain tax benefits from their

investments.

DATA GIVES PEOPLES PERCEPTION ON APPROPRIATE AGE FOR

BUYING INSURANCERESPONSE After 25 years After 35 years After 45 years Anytime NO. OF RESPONDENTS 29 10 0 60 SHARE (%) 29% 10% 0% 60%

INTERPRETATION 29% of the respondents are with the view that insurance should be bought after the

age of 25 years. 10.5% of the respondents are with the view that insurance should be buyed after the

age of 35 years.

Whereas, 60.5% of the respondents are with the view that buying of insurance do not

have any thing to do with age i.e. there is no age limitations. It can be purchased any time according to the need.

DATA

SHOWS

PEOPLE

OPINION

ABOUT

INDIAN

INSURANCE

COMPANIESRESPONSE Rigid plans Non user friendly Unsatisfactory services Non Aggressive Satisfactory Good Very good NO. OF RESPONDENTS 67 29 26 35 24 10 0 SHARE (%) 67% 29% 26% 35% 24% 10% 0%

INTERPRETATION 67% of the respondents have the opinion that Indian Insurance Companies have

Rigid plans. 29.5% feel that Indian Insurance companies are Non-user friendly. 26.5% feel that services of Indian Insurance companies are Unsatisfactory. 35.75% of the respondents are with the view that Indian Insurance companies are

Non-aggressive. 24% of the respondents feel that products and services of Indian Insurance

companies is Satisfactory. Whereas only 10.25% feel that it is Good enough. And according to the data, no single person has felt that it is very good.

DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE

COMPANYRESPONSE A trusted name Friendly service responsiveness Good plans Accessibility & NO. OF RESPONDENTS 82 71 81 49 SHARE (%) 82% 71% 81% 49%

INTERPRETATION 82% customers look for a Trusted name in a company for insurance. 81.5% customers look for a good plan in a company for insurance. Friendly service & responsiveness and Accessibility are also important factors

looked by customers in a company.

DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS RESPONSE NO. OF RESPONDENTS 87 13 100 SHARE (%) 87% 13% 100%

Planning Not planning Total

INTERPRETATION Only 12.5% of the customers contacted are not planning for new investments

presently. Whereas, 87.5% of the customers are still planning for new investments this can be a great potential for Reliance Life Insurance to take them on their favor

DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A

SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTSRESPONSE Yes No Uncertain Total NO. OF RESPONDENTS 43 44 13 100 SHARE (%) 43% 44% 13% 100%

INTERPRETATION The interested customers i.e. 43% are ready to go for insurance even away from a

city if services and products are worthwhile, which again is a good prospect (potential) for Reliance Life Insurance to take them on their favor.

RECOMMENDATIONS As the people think that insurance is a tool to protect their family & a tax saving

device. They are aware of the fact & realizing its, importance. The company should try to expand & build up its infrastructure because there is a large potential for insurance in India. Company should come up with its branch in Chennai. With the objective and goals

to meet the demands & expectations of the public. Because the entrance of private players will increase the competition and it would be a tough task to secure a good position in market. Since HDFC Standard Life Insurance Company Ltd is leading with several

companies policies it should be easy for them to penetrate into the market and secure a good position if they pay greater attention to the service part provided to their customer and thereby forming a long and trusted relationship. As seen from the survey that at present 70% of the customer are having insurance

policy out of which 87.5% of the customer are planning for new investments. So it can be a good potential for the company and they should make an attempt to trap these customers. 43% of the customer is even ready to go for insurance if a service provider away from their home is providing it. But intend they should provide good products and services. The company should try to convince these customers and get them in its favor.

CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some intresting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been impressioned by the marketing and advertising campaigns of insurance companies. A high penetration of print , radio and Television ad campaigns over the years is beginning to have its impact now. Another heartning trend was in terms of people viewing insurance as a tax saving and investment instrument as much as a protective one. A very high number of respondants have opted for insurance for such purposes and it shows how insurance companies ahve been successful to attract public money in recent times. The general satisfaction levels among public with regards to policy and agents still requires improvement. But therein lies the oppurtunity for a relative new comer like HDFC Standard Life Insurance Company Ltd . LIC has never been known for prompt service or customer oriented methods and HDFC Standard Life can build on these factors.

BIBLIOGRAPHY

1.

BOOKS/MAGAZINES REFFERED: STUDY GUIDE- PRINCILES & PRACTICES OF LIFE / GENERALINSURANCE, by AIMA. Books published by INSURANCE INSTITUTE OF INDIA LIFE-INSURANCE, by Mc GILL INSURANCEWATCH. MONEYOUTLOOK.

2.

WEBSITES REFFERED:

URANCE.COM

WWW.CIFAINS

OUTLOOK.COM

WWW.MONEY

NCE.IND.COM URANCE.COM 3. REPORTS/ARTICLES REFFERED:

WWW.INSURA

WWW.HDFCIN

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY. Dec2005. BRIEF PROFILE OF LIC, INDIADec 2006. REPORT: COPING WITH COMPETITIONJan2007

ANNEXURES AND QUESTIONNAIRE

QUESTIONNAIRE 1.YES ARE YOU EMPLOYED? NO

If YES, only then proceed

2.YES

DO YOU HAVE ANY INSURANCE POLICY? NO WHICH INSURANCE POLICY DO YOU HAVE? LIFE NON-LIFE INSURANCE POLICY YOU BOTH PREFER THE MOST?

3.

4.

WHICH COS (RANK THEM) a) LIC

b) ICICIPRUDENTIAL c) SBI LIFE INSURANCE d) ING VYSYA LIFE e) RELIANCE LIFE INSURANCE f) TATA AIG LIFE g) ANY OTHER ________( Specify) (Please

5.Tick)

FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY? a)