customer buying behaviour with a focus on market segmentation in hdfc life insurance

8/13/2019 CUSTOMER BUYING BEHAVIOUR WITH A FOCUS ON MARKET SEGMENTATION IN HDFC LIFE INSURANCE

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A PROJECT REPORT

ON

HDFC Standard Life Insurance Company Ltd

IN

CUSTOMER-BUYING BEHAVIOR IN LIFE INSURANCE

INDUSTRY

Submitted to the

SCHOOL OF MANAGEMENT

In partial fulfillment of the requirements

for the award of the degreeOf

MASTER OF BUSINESS ADMINISTRATION

By

Anand. N

(Reg.No.35080039)

Under the guidance of

Prof S. Sundararajan

PROFESSOR

SCHOOL OF MANAGEMENTSRM UNIVERSITY

SRM NAGAR, KATTANKULATUR,

KANCHIPURAM DISTRICT-603203

1

MAY-2010


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BONAFIDE CERTIFICATE

Certified that this project report titled CUSTOMER-BUYING

BEHAVIOR IN LIFE INSURANCE INDUSTRY is the bonafide work

of Anand. N who carried out the research under my supervision. Certified

further, that to the best of my knowledge the work reported here in does notform part of any other Project report or dissertation on the basis of which a

degree or award was conferred on an earlier occasion on this or any other

candidate.

PROJECT GUIDE HEAD OF THE MBA

Prof S. Sundararajan DR.JAYSHREE SURESH

. ..

EXTERNAL EXAMINER

-----------------------------------

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DECLARATION

We hereby declare that this project work entitled CUSTOMER-BUYING

BEHAVIOR IN LIFE INSURANCE INDUSTRYsubmitted at SRM School

of Management studies is partial fulfillment of the requirement for the degree of Master

of Business Administration is a record of original work done by use for Department

Business Administration, SRM School of Management Studies. It has not been submitted

to the award of any Degree.

Place: Chennai Signature of the Candidate

Date: _____________________

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CONTENTS

CHAPTER

NO.

PARTICULARS PAGE

NO.

I INTRODUCTION 05

1.1 INTRODUCTION TO THE STUDY 06

1.2 OBJECTIVES OF THE STUDY 08

1.3 SCOPE OF THE STUDY 08

1.4 LIMITATIONS OF THE STUDY 09

II INDUSTRY & COMPANY PROFILE 10

2.1 INDUSTRY PROFILE 11

2.2 COMPANY PROFILE 23

III RESEARCH METHODOLOGY 32

3.1 RESEARCH DESIGN 33

3.2 METHODOLOGY 33

IV ANALYSIS AND INTERPRETATION 35

V 5.1 FINDINGS 67

5.2 SUGGESTIONS 68

VI CONCLUSION 70

BIBLIOGRAPHY 71

ANNEXURE 72

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LIST OF TABLES

TABLE

NO.PARTICULARS

PAGE

NO.

4.1 Age group of respondents 36

4.2 Occupation of the respondents 38

4.3Respondents awareness of investment option

40

4.4Respondents having an insurance policy

42

4.5Respondents interest of investing options

44

4.6 Term of investment preferred 46

4.7Perception about insurance

48

4.8Kind of buying process preferred

50

4.9What people look for in an insurance company

52

4.10Features made you to invest in HDFC-SLIC

54

4.11Perception towards HDFC-SLIC

56

4.12Satisfaction with respect to policies offered.

58

4.13 Respondents preference for clarifying any query. 60

4.14 Benefits of insurance perceived by respondents 62

4.15 Satisfaction with current policy 64

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LIST OF FIGURES

FIGURE

NO.PARTICULARS

PAGE

NO.

4.1

Age group of respondents

374.2

Occupation of the respondents39

4.3Respondents awareness of investment option

41

4.4Respondents having an insurance policy

43

4.5Respondents interest of investing options

45

4.6 Term of investment preferred 47

4.7 Perception about insurance 49

4.8Kind of buying process preferred

51

4.9What people look for in an insurance company

53

4.10Features made you to invest in HDFC-SLIC

55

4.11Perception towards HDFC-SLIC

57

4.12Satisfaction with respect to policies offered.

59

4.13Respondents preference for clarifying any query.

61

4.14 Benefits of insurance perceived by respondents 63

4.15Satisfaction with current policy

65

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EXECUTIVE SUMMARY:

In 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 70-80% while as FMCG sector has maximum 12-15% of

growth rate. This growth potential attracts me to enter in this sector and HDFCStandard

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 dependsupon the availability of the product and services near to the customer, which can be

distributed through a distribution channel. However understanding the market, consumer

preference and introducing new products to suit different tastes and at the same time

offering a value product would be the key steps to fight competition.

Marketing is an important activity in any organizations sales strategy.

Marketing helps in promoting the products in the targeted market and create a recall

value and branding to the products. Marketing department perform the initial marketstudy for the suitability of the product launches; study the market requirements in the

existing markets to further strengthen the market capitalization identity the feature

needed for a longevity of a product. 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.

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CHAPTER -- I

INTRODUCTION

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1.1INTRODUCTION TO THE STUDY

Customer is the king and it is the customer who decides what a business is and

therefore a sound marketing programme starts with a careful analysis of habits, attitudes,

motives and needs of the customers.

Definition of Buying Behavior:

Buying Behavior is the decision processes and acts of people involved in buying

and using products.

Customer buying behavior:Customer buying behavior refers to the buying behavior of the ultimate end user

i.e. the customer. A firm needs to analyse the buying behavior for :

Buyers reactions to a firms marketing strategy has a great impact on the firmssuccess.

The marketing concept stresses that a firm should create a marketing mix thatsatisfies a customer and therefore need to analyze the what, where, when and how

the customers buy.

Marketers can better predict how customers will respond to marketing strategies.How Consumer Buy:

1. Need/Want/Desire is recognized:In the first step the customer has determined that for some reason he/she is

not satisfied(i.e. customers perceived actual condition) and wants to improvehis/her situation. External factors can also trigger the customers needs. Marketers

are particularly good at this through advertising, in-store displays etc.

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2. Search for information:Assuming that customers are motivated to satisfy his/her need they will


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undertake a search for information on possible solutions. The sources may be

simple like the past experience or the customer may expend considerable effort to

locate information from outside sources(internet, etc.). How much effort the

customer directs towards searching depends on factors such as:

The importance of satisfying the need Familiarity with available sources The amount of time available for search.

3. Evaluate options:Customers search efforts may result in set of options from which a choice

can be made. It should be noted that there may be two levels to this stage. At level

one the customer may create a set of possible solutions to their solution while at

level two the customer may be evaluating particular products within each solution.

4. Purchase:In many cases the solution chose by the customer is the same as the

product whose evaluation is highest. The intended purchase may be altered at the

time of purchase for many reasons such as the product is out of stock, a competitor

offering incentive at the time of purchase, the customer lacking in necessary offunds.

5. After purchase evaluation:Once the customer has made the purchase they are faced with the

evaluation of the decision. If the product performs below the customers

expectation then he/she will re-evaluate the satisfaction with the decision, which at

its extreme might result in the customer returning the product while in less extreme

situations the customer will retain the product but may take a negative view of the

product. Such evaluations might occur in expensive or highly important purchases.

Customer service centre and follow-up market research are useful tools in helping

to address the purchasers concern.

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1.2 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES: To determine reasons behind opting for an insurance. To determine customers buying behaviour 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.

SECONDARY OBJECTIVES:

To know whether the service offered by the company has satisfied the needs of allgroups of people.

To find out the benefits preferred by the customers. To know about their views about the company and to assess to their views.

1.3. SCOPE OF THE STUDY:

A big boom has been witnessed in Insurance Industry in recent times. A large

number of new players have entered the market and are trying 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 analyze the

findings so as to present a clear picture of trends in the Insurance sector.

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1.4. LIMITATIONS OF THE STUDY:

1) The research is confined to a certain parts of Coimbatore and does not necessarily

show a pattern applicable to all parts of the 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.

4.) The data collected from the customers may be biased.

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CHAPTER--II

INDUSTRY & COMPANY PROFILE

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INDUSTRY PROFILE

THE 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 collectstatistical 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.

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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 INSURANCE

The 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 InsuranceCorporation (GIC) was set up in 1972 as a holding company, having these four

companies as its subsidiaries.

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Some of the important milestones in the general insurance business in India are:

1907: TheIndian 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 solvencymargins and the Tariff Advisory Committee set up.

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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.


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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR 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 andUnited Kingdom. LIC is associated with joint ventures abroad in the field of insurance,

namely, Ken-India 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 incomegrew 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.

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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 107Indian 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 associatecompanies.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN

PERMITTED TO ENTER INTO INSURANCE BUSINESS: -

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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


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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.

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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 7banc assurance and 150

corporate agent tie-ups.


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4. Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between KotakMahindra 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 Bajaj Allianz Life Insurance Company Ltd. MetLife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.

6. 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.

7. Bajaj Allianz General Insurance Company Limited

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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.


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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 Allianz, AG,

holds the remaining 26% Germany.

8. 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.

9. 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, and Kolkata.

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10. 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.

11. Reliance General Insurance Company Limited.

12. IFFCO Tokio General Insurance Co. Ltd

13. Export Credit Guarantee Corporation Ltd.

14. HDFC-Chubb General Insurance Co. Ltd.

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MARKETING OF INSURANCE IN INDIA

Insurance 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 Policies

Different 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:

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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


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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 marketneeds 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.

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INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY

The Insurance Regulatory and Development Authority (IRDA) is a national

agency of the Government of India, based in Hyderabad. In 1999, the InsuranceRegulatory and Development Authority (IRDA) was constituted as an autonomous body

to regulate and develop the insurance industry. The IRDA was incorporated as a statutory

body in April, 2000.

The key objectives of the IRDA include promotion of competition so as to

enhance customersatisfaction through increased consumer choice and lower premiums,

while ensuring the financial security of the insurance market. The IRDA opened up the

market in August 2000 with the invitation for application for registrations. Foreign

companies were allowed ownership of up to 26%. The

Authority has the power to frame regulations under Section 114A of the Insurance Act,

1938 and has from 2000 onwards framed various regulations ranging from registration of

companies for carrying on insurance business to protection of policyholders interests.

Role of IRDA:

Protecting the interests of policyholders. Establishing guidelines for the operations of insurers, and brokers. Specifying the code of conduct, qualifications, and training for insurance

intermediaries and agents.

Promoting efficiency in the conduct of insurance business. Regulating the investment of funds by insurance companies. Specifying the percentage of business to be written by insurers in rural sectors. Handling disputes between insurers and insurance intermediaries.

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COMPANY PROFILE

ABOUT HDFC STANDARD LIFE INSURANCE

HDFC 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

Percent of equity in the joint venture.

HDFC STANDARD LIFE INSURANCE PARENTAGE

HDFC Limited.

HDFC is India leading housing finance institution and has helpedbuild 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 financeProvider in 2004 at the third Annual Outlook Money Awards.

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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 relyon 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, 2005and 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 MortgageMagazine Awards in 2006

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KEY STRENGTHS

1) FINANCIAL EXPERTISE

As a joint venture of financial services groups, hdfc standard life has the

financial expertise required to manage your long-term investments safely and

efficiently.

2)RANGE OF SOLUTIONS

We 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.

3)TRACK RECORD SO FAR

Our gross premium income, for the year ending March 31, 2008 stood at

Rs.4,859 crores and new business premium income stood at Rs. 2,685 crores. The

company has covered over 9,59,000 lives year ending March 31, 2008.

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SWOT ANALYSIS OF HDFC-SLIC

STRENGHTS:

1.)Domestic image of HDFC supported by Standard Lifes international image is

the strength of the company.

2.) Strong and well spread network og qualified intermediaries and sales person.3.) Strong capital and reserve base.4.) The company provides customer service of the highest order.5.) Huge basket of product range which are suitable for all age and incomegroups.

6.) Large pool of technically skilled manpower with in depth knowledge andunderstanding of the market.

7.) The company also provides innovative products to cater to different needs ofdifferent customers.

WEAKNESS:

1.) Heavy management expenses and administrative costs.2.) Low customer confidence on private players.3.) Vertical hierarchical reporting structure with many designations and cadres

leading to power politics at all levels without any exception.

4.) Poor retention percentage of tied up agents.

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OPPORTUNITIES:

1.) Insurable population: According to IRDA only 10% of people are insured.This suggests that more than 300m people, with the potential to buy insurance,

remain uninsured.

2.) There will be inflow of managerial and financial expertise from the worldsleading insurance markets. Further the burden of educating consumers will

also be shared among many players.

3.) International companies will help in building world class expertise in localmarket by introducing the best global practices.

THREATS:

1.) Other private insurance companies also vying for the same uninsuredpopulation.

2.) Competition from public sector insurance companies like LIC, NationalInsurance Company Limited, Oriental Insurance Limited, New India

Assurance Company Limited and United India Insurance Company Limited.

People trust and go to them more.

3.) Poaching of customer base by other companies.4.) Most people dont understand the need or are not willing to take insurance

policies in general.

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CORPORATE OBJECTIVES

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

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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 childrens immediate and future

needs. Our Savings range includes

Endowment Assurance Plan Unit Linked Endowment Unit Linked Endowment Plus Money Back Plan Children's Plan Unit Linked Young star Unit Linked Young star Plus

Health Plans

Our health plans provides you with timely support in case of any health related

emergencies and helps you and your family to remain financially independent in difficult

times

Critical care plan Surqi care plan

Group Products:

One-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

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http://www.hdfcinsurance.com/products/grp_gtistdprop.aspxhttp://www.hdfcinsurance.com/products/grp_gvti.aspxhttp://www.hdfcinsurance.com/products/grp_gvti.aspxhttp://www.hdfcinsurance.com/products/grp_gtistdprop.aspx


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Social Product

Development 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 that members

beneficiaries to help meet some of the immediate financial needs following their loss.

Other product:

Rural products Tax benefits

The Value Added Services Offered By The HDFC std. life insurance:

Electronic clearing system:

It is a system where your premium gets directly debited from your bank account

on your due dates. This helps the customer to pay the insurance premium with out to the

insurance company.

Financial advisors:

Advisors are the back is not just selling of the policies but listen to the customer

like what they need, how much they can invest, which policy suits them the and what

kind of policy expect from us i.e. what kind of policies should be designed for them.

Ease in renewal of the lapsed policy:Policy holder can easily renew their policy without much more difficulties for

these customers can seed the help of financial consultant.

Other service:

Customized products All the information about the companies and its products are available in

companys web site. In case a customer wants to pay their premiums through cheque then they can

draw them in favors of the insurance company in which he has the policy.

Market information: customers can check their policy status through online.

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Clime settlement: clime settlement in private life insurance company is faster thanthe other insurance company.


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CHAPTERIII

RESEARCH METHODOLOGY

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3.1. RESEARCH DESIGN OF THE STUDY:

Marketing research can be defined as the systematic design, collection, analysis,

and reporting of the data and finding relevant to a specific marketing situation facing the

company.

Research design is the basic plan which guides the researchers in the collection

and analysis of data required for practicing the research product. In fact the research

design is the conceptual structure with which research is conducted. It consist the blue

print for the collection, measurement and analysis of the data that was followed

completing the study to ensure that study is relevant to the problem and will follow the

predetermined and set data.

The main data feature of Research Design is that it specifies population to be

studied. The main them of the chapter is to know the source of the data the researcher has

collected. Data are raw facts of observation, typically about physical phenomenon.

Descriptive research :

The research design selected for this research is descriptive research design.

3.2. METHODOLOGY:Collection of the data for the study can be drawn from following methods for

study.

Sources of the data:

After determining the objectives of study and research design, the next important

step is data is step collection method. The information has to be collected from the

retailers. During the process of the study the data is collected from the target segment that

is customers, dealers and distributors with help of a structured well designed

questionnaire.

Data is collected from

Primary data

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Secondary data


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Primary data

It was collected through questionnaire prepared contains relevant questions that

are both close ended and opened. Individual and group interviews also under taken with

difference consumers,

I have collected mainly the Primary Data for my study by utilizing the questionnaire and

interview methods.

Secondary data

These data are collected from published sources such as Magazines, NEWS

papers, several books, and also from the help of web site www.hdfcsl.com.

(A)Sampling plan of the study:Sample size:

Sample size refers to number of elements to be included in the study several qualitative

factors should also be taken into consideration when determining the sample size. These

include the nature of research, number of variable, and nature of analysis, sample size

used in similar studies incidence rates, completion rates, and resources constraints.

During the process of the study, survey has been conducted on 100respondents.

Sampling method:

The researcher had choice between probability and non probability sampling

methods. In this study a simple non probability method namely convenience sampling

was adopted.

NON PROBABILITY METHOD CONVENIENCE SAMPLING METHOD

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CHAPTERIV

ANALYSIS & INTERPRETATION

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TABLE 4.1: AGE GROUP OF RESPONDENTS

Age Group No. of respondent Percentage

Below 25 31 31%

25 to 35 39 39%

35 to 45 25 25%

45 and above 5 5%

Total 100 100%

Sources: primary data collected through questionnaire

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FIG-4.1: AGE GROUP OF RESPONDENTS

0

5

10

15

20

25

30

35

40

45

below25 25to35 35to45 45andabove

No.ofrespondents

INTERPRETATION:

The above figure reveals that most of the people 32% are working in government and

29%are Business sector

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Table 4.2: OCCUPATION OF THE RESPONDENTS

Working sector No. of respondent Percentage

Govt. 32 32%

IT 16 16%

Education 6 6%

Finance 13 13%

Business 29 29%

Other 4 4%

Total 100 100%


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FIG - 4.2: OCCUPATION OF THE RESPONDENTS

0

5

10

15

20

25

30

35

Govt IT Education Finance Business Other

no.ofrespondents

INTERPRETATION:

The above figure reveals that most of the people 32% are working in government and

29%are Business sector

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Table 4.3: RESPONDENTS AWARENESS OF

INVESTMENT OPTION

Awareness No. of respondent Percentage

Yes 33 33%

No 14 14%

Have some knowledge 53 53%

Total 100 100%


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FIG - 4.3: RESPONDENTS AWARENESS OF

INVESTMENT OPTION

0

10

20

30

40

50

60

Yes No HavesomeKnowledge

No.ofRespondants

INTERPRETATION:

This graph shows that only 33% of people are aware of the investment option and 53% of

people have some knowledge about it. But 14% of people are not aware of the investment

option available to them

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Table 4.4: RESPONDENTS HAVING AN INSURANCE

POLICY

Response No .of respondents percentage

Yes 53 53%

No 47 47%

Total 100 100%


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FIG - 4.4: RESPONDENTS HAVING AN INSURANCE

POLICY

44

45

46

47

48

49

50

51

52

53

54

Yes No

no.ofrespondents

INTERPRETATION:

This graph shows that 47% of people not having an insurance policy and 53% of people

having an insurance policy.

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Table 4.5: RESPONDENT INTEREST OF INVESTING

OPTIONS

Need for investment Respondents percentage

Retirement 28 28%

Tax saving 21 21%

Earnings 33 33%

Liquidity 18 18%

Total 100 100%


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FIG - 4.5: RESPONDENT INTEREST OF INVESTING

OPTIONS

0

5

10

15

20

25

30

35

Retirement TaxSaving Earnings Liquidity

No.ofrespondentas

INTERPRETATION:

The figure shows 33% of people have insurance for future earnings and 28% are

investing for Retirement.

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Table 4.6: TERM OF INVESTMENT PREFERRED

Investment Method No .of respondents percentage

Short term 32 32%

Medium Term 22 22%

Long Term 46 46%

Total 100 100%


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FIG - 4.6: TERM OF INVESTMENT PREFERRED

0

5

10

15

20

25

30

35

40

45

50

ShortTerm MediumTerm LongTerm

No.ofrespondants

INTERPRETATION:

The above figure shows 46% of respondents prefer long term investment where as 32%

prefer medium term and only 22% prefer short term.

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Table 4.7: PERCEPTION ABOUT INSURANCE

RESPONSENO. OF

RESPONDENTSSHARE (%)

A saving tool 32 32%

A tax saving device 29 29%

A tool to protect your

family39 39%


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FIG - 4.7: PERCEPTION ABOUT INSURANCE

INTERPRETATION

The above figure shows that 32% of the respondents have perception of Insurance being a

saving tool and 29% of the respondents have perception of Insurance being a tax savingdevice.But 39% of the respondents are with the view that Insurance is a tool to protect

your family.

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Table 4.8: KIND OF BUYING PROCESS PREFERRED

BUYING PROCESSNO. OF


Customer approached

Insurance company/Agent 44 44%

Company/agent approached

customer56 56%

Total 100 100%


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Table 4.9: WHAT PEOPLE LOOK FOR IN INSURANCE

COMPANY?


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RESPONSENO. OF


A trusted name 29 29%

Friendly service &responsiveness

25 25%

Good plans 29 29%

Accessibility 17 17%


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FIG - 4.9: WHAT PEOPLE LOOK FOR IN INSURANCE

COMPANY?

INTERPRETATION

29% customers look for a Trusted name in a company for insurance. 29% customers look for a good plan in a company for insurance.

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Friendly service & responsiveness and Accessibility are also important factorslooked by customers in a company.


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Table 4.10: FEATURES MADE YOU TO INVEST IN

HDFC STANDARD LIFE INSURANCE

FEATURE NO.OF RESPONDENTS SHARE (%)

Money Back Guarantee 15 15

Larger Risk Coverance 37 37

Easy Access to Agents 7 7

Low Premium 30 30

Companys Reputation 11 11

TOTAL 100 100


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FIG - 4.10: FEATURES MADE YOU TO INVEST IN

HDFC STANDARD LIFE INSURANCE

INTERPRETATION:

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

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Table 4.11: RESPONDENT PERCEPTION TOWARDS THE

HDFC STANDARD LIFE INSURANCE COMPANY

Opinion No .of respondents Percentage

Average 29 29%

Aggressive 21 21%

Excellent 14 14%

Professional 36 36%

Total 100 100%


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FIG - 4.11: RESPONDENT PERCEPTION TOWARDS THE

HDFC STANDARD LIFE INSURANCE COMPANY

0

5

10

15

20

25

30

35

40

Average Aggressive Excellent professional

Noofrespondents

INTERPRETATION:

The above graph shows that 36% of Respondents believes the operations of the company

to be professional and 29% believe it is Average.

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Table 4.12: SATISFACTION OF THE RESPONDENTS

WITH RESPECT TO POLICIES OFFERED.

RESPONSENO. OF


Satisfied 60 60%

Not satisfied 40 40%

Not Responded 0 0%

Total 100 100%


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FIG - 4.12: SATISFACTION OF THE RESPONDENTS

WITH RESPECT TO POLICIES OFFERED.

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.

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Table 4.13 - RESPONDENTS PREFERENCE FOR

CLARIFYING ANY QUERY

Services No. of Respondents Percentage

Advisor 39 39%

company website 16 16%

customer care 28 28%

branch manager 17 17%

Total 100 100%


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FIG - 4.13: RESPONDENTS PREFERENCE FOR

CLARIFYING ANY QUERY

0

5

10

15

20

25

30

35

40

45

Advisor com panywebsite customercare branchmanager

No.ofrespondents

INTERPRETATION:The above graph shows that 39% people believes in Advisor, 28% of people believes

Customer care while company website and branch Manager People clarify any query first

respectively 16% and 17%

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Table 4.14: BENEFITS OF INSURANCE PERCIEVED BY

RESPONDENTS

BENEFITSNO.OF


Cover Future

Uncertainty 55 55

Tax Deductions 20 20

Future Investment 25 25

TOTAL 100 100


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FIG - 4.14: BENEFITS OF INSURANCE PERCIEVED BY

RESPONDENTS

INTERPRETATION

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

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


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Table 4.15: SATISFACTION OF CURRENT POLICY

Satisfaction level No. of Respondents Percentage

Yes 82 82%

No 18 18%

Total 100 100%


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FIG - 4.15: SATISFACTION OF CURRENT POLICY

82

18

0

10

20

30

40

50

60

70

80

90

Yes No

No.ofrespondents

INTERPRETATION:

The above figure shows that 82% of respondents are satisfied with their current policy

and only 18% of people are not happy with their policy.

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CHAPTER V

FINDINGS & SUGGESTIONS

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5.1 FINDINGS:

It reveals that 39% of respondents belong to 25 to 35 age group and 31% arebelong to below 25 ages. ( Ref: Table 4.1)

The survey shows that maximum 32% of the respondents are in working govt.sector. ( Ref: Table 4.2)

Out of 100respondents 33% of the respondents were well known about HDFCSLinvestment option. ( Ref: Table 4.3)

53% of the people having a insurance policy. ( Ref: Table 4.4) 33% of respondents are indented to invest on their earning only. ( Ref: Table 4.5) 46% of respondents are preferred long term investment term in HDFC-SLIC.

( Ref: Table 4.6)

56% of the respondents prefer the buying process of the company/agentapproaching the customer while 44% prefer vice-versa. ( Ref: Table 4.8)

36% of the respondents perception about HDFC-SLIC is professional, and 21%has told that it is being aggressive and 14% are Excellent. ( Ref: Table 4.11)

60% of the respondents are satisfied with the policies offered in HDFC-SLIC.( Ref: Table 4.12)

39% of the respondents using Advisor service which the service offered by theHDFC-SLIC. ( Ref: Table 4.13)

55% of the respondents perceive the benefits of insurance as a cover for futureuncertainity. ( Ref: Table 4.14)

82% of respondents are satisfied with current policy offered by HDFC-SLIC.( Ref: Table 4.15)

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5.2 SUGGESTIONS:

In Coimbatore most of the people are working in Government and Business sector

and they dont have much financial planning. Another important point is they have good

compensation package. So the company should bring more innovative and should carry

out more promotional activities in government fields. Better promotion of unit linked

plans can generate more sales to the company.

HDFC STANDARD LIFE INSURANCE COMPANYs unit linked insurance plans

can effectively meet the requirements of the customers, because unit linked plans are

directly related to the market, so the customers can creates more wealth through fund and

they can enjoy the tax benefit, and also the insurance cover. The pressure on the salesteam would be lessoned by increasing the awareness among the people about the

credibility of the companies and need for capitalizing on the various insurance plans

offered by the private life insurance companies.

As the awareness of insurance is less among the people, its awareness should becreating among the people by conducting stage shows and explaining its need and

importance.

Insurance should not be considered only as a risk cover element but also as a longterm investment

It is also recommended to concentrate to on lower income group people. More efforts should be taken by the companys financial consultants to convert

the leads into policy holder of HDFC-SLIC.

Follow up should be taken and customer relation should be maintained by theinviting the existing customers to the seminars conducted when launching a new

product or any changes are made to the products or rules to retain them.

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Coming with new promotional activities like giving new advertisements, keepingstalls, conducting seminars in companies, and giving ads through SMS can be

done by HDFC Standard Life insurance Co. to create awareness among

customers.


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73

CHAPTER VI

CONCLUSION


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BIBLIOGRAPHY

WEBSITES REFFERED:

www.irda.com www.hdfcinsurance.com www.insurance.ind.com www.moneyoutlook.com

BOOKS & JOURNALS REFFERED:

Marketing Management- Philip kotler. Research Methodology- C.R. Kothari. IRDA Journal. Outlook The laymans guide to insurance.

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ANNEXURE

QUESTIONNARE:

I am Anand.N, MBA second year student of SRM University

currently doing my project in HDFC Standard Life Insurance Company. As

a part of mystudy I am collecting information of the existing customers to

know the CUSTOMER-BUYING BEHAVIOUR IN LIFE INSURANCE

INDUSTRY. I kindly request you to fill the following questionnaire.

(1) What is your name?(2) Sex: [ ]Male [ ]Female(3) Which age group do you belong to?

[ ] less than 25years, [ ] 25 to 35 tears,

[ ] 35 to 45 years [ ] above 45years(4) Which sector are you working in?

[ ] Education [ ] Finance [ ] Business

[ ] Government [ ] IT [ ] others

(5) Are you aware of the all the Investment options available?[ ] Yes [ ] No

[ ] Have some knowledge

(6) Do have any insurance policy?[ ] Yes [ ] No

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(7) Why do you want to investin to insurance?[ ] Retirement [ ] Tax saving

[ ] Earnings [ ] Liquidity(8) Which term of investment preferred?

[ ] Short term [ ] Medium term [ ] Long term

(9) What is your perception about insurance?

[ ] A saving tool [ ] A tax saving device

[ ] A tool to protect your family

(10) What kind of buying process do you prefer?

[ ]Customer approached Insurance company/Agent

[ ] Company/agent approached customer

(11) What do you look for in an insurance company?

[ ] A trusted name [ ] Friendly service & responsiveness

[ ] Good plans [ ] Accessibility

(12) Which features made you to invest in HDFC Standard Life Insurance?

[ ] Money Back Guarantee [ ] Larger Risk Coverance

[ ] Easy Access to Agents [ ] Low Premium

[ ] Companys Reputation

(13) What is your opinion towards the services provided by HDFC Standard

Life Insurance?

[ ] Average [ ] Aggressive

[ ] Excellent [ ] professional

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(14) Are you satisfied with the policies of the insurance provider?

[ ] Satisfied [ ] Not satisfied

[ ] Not Responded

(15) If you want to clarify any query to whom you consult first?

[ ] advisor [ ] company website

[ ] customer care [ ] branch manager

(16)How do you perceive the benefits of insurance provided?

[ ] Cover Future Uncertainty [ ] Tax Deductions

[ ] Future Investment

(17) Are you satisfied with your current policy?

[ ] Yes [ ] No

Any more information you would like to share regarding your perceptionabout HDFC-SLIC.

THANK YOU

customer buying behaviour with a focus on market segmentation in hdfc life insurance

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