A

Project Study Report

On

“Awareness of Life Insurance Products in Indian Market.”

At

HDFC STANDARD LIFE INSURANCE CO. LTD

Submitted in partial fulfillment for the Award of degree of

Master of Business Administration (MBA)

(2011-2013)

Submitted BY:- Submitted To:-

Aarti mourya Dr. Sunita Agrawal

MBA 3rd sem Professor

ADVENT INSTITUTE OF MANAGEMENT STUDIES UDAIPUR

1

PREFACE

All the learning in our M.B.A course is practice oriented. However, hands-on experience in

the corporate world during our course is very necessary to be able to test the ability and

extent of learning of the student before fully entering the corporate world.

The six week training which I underwent at HDFC-SL INSURANCE LTD, Panipat was a

wonderful learning experience. I was assigned the project “Awareness of Life Insurance

Products in Indian Market.”

With the guidance and suggestions provided by Mr. (Deepak Shrama), my Industry Guide. I

started first phase of my Research i.e. to identify which type of insurance plans HDFC-SL

should market to particular market segments in India. A survey was undertaken to

understand the preferences of Indian consumers with respect to insurance. While marketing

policies the sole duty of an advisor/ agent is to provide insurance plans as per customer

requirements.

2

ACKNOWLEDGMENT

I express my sincere thanks to Dr. R.K. Balyan, Director, Advent institute of Management

studies and my project guide Dr., Sunita Agrawal, Professor, Deptt AIMS, for guiding me

right from the inception till the successful completion of the project. I sincerely acknowledge

her for extending their valuable guidance, support for literature, critical reviews of project

and the report and above all the moral support she had provided to me with all stages of

this project.

I would also like to thank the supporting staff of Advent institute of management studies and

cooperation throughout our project.

(Signature of the student)

3

EXECUTIVE SUMMARY

The insurance is primarily a social device adopted by civilized society for mitigating the

incidence of loss of income to families by unforeseen contingencies. In India, when life

insurance companies started operating in the middle of 20th century the Evil play natural to

all business had its sway. There was a lot of cut throat competition as well as profiteering.

The avowed social objective of insurance had been totally relegated to background. As a

result Life Insurance Corporation of India (LIC) came into existence on 1st September,

1956 after nationalization of all the 245 companies engaged in life insurance business.

From its very inception, the Corporation has made impressive growth always striving for

further improvement. However, Government made a paradigm shift in the economic policy

by adopting the process of liberalization, privatization and globalization at the end of

previous decade. Consequently a committee was set up under the chairmanship of Mr.

Malholtra, Ex-governor of RBI for undertaking various reforms in the insurance sector in the

light of new economic policy. The Committee which submitted his report in 1993

recommended the establishment of a special regulatory agency along the lines of SEBI and

opening of insurance industry for private sector. This was aggressively opposed by the

various trade unions of then operating insurance companies which led to some delay in

implementation of Malhotra Committee’s recommendations. However, the Government

passed Insurance Regulatory and Development Authority (IRDA) Act in 1999 and

established IRDA to regulate the insurance business in the country. As a result, private

sector was allowed entry both in general and life insurance sector in India. IRDA also

allowed foreign participation up to 26 per cent in equity shareholding of private companies.

As a result many companies (both in general and life insurance) got themselves registered

with IRDA to operate in India. This project was to understand the different marketing

strategies adopted by the companies to increase their market share and along with it

meeting their own targets to achieve the position of no.1 in respective field or segment of

the market.Summer training learning helped a lot to complete this project in order to learn a

lot of things of the corporate. As a project trainee the first task given to me was to

understand the basic behavior of the consumer in order to manipulate the market according

to the target competition. For this developed a questionnaire and I did this survey in

Panipat.

4

Table of contents

Sr.

No:-

Chapter Name of content Page

no

1. Introduction 1.1 An overview 1-15

1.2 Profile of company 16-

2. Research methodology 2.1 Title of the study 30

2.2 Duration of the project 32

2.3 Objective of the study 34

2.4 Simple size &method 36

2.5 Scope of the study 37

2.6 Limitation of the study 41

3. Findings & Recommendations 3.1 Findings 45

4. Data Analysis 60

5. SWOT analysis of the company 62

6. Conclusion 63

7. Suggestions&Recommendations 64

8. Appendix 65

9. Bibliography 67

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Chapter 1

Introduction to the industry

6

INTRODUCTION

AN OVERVIEW

In today’s emerging Indian economy the role and scope of Insurance companies has

increased manifold and hence this sector has seen tremendous growth and competition

over the years. With largest number of life insurance policies in force in the world,

Insurance happens to be a mega opportunity in India. It’s a business growing at the rate of

15-20 per cent annually and presently is of the order of Rs 450 billion. Together with

banking services, it adds about 7 per cent to the country’s GDP. Gross premium collection

is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of

GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover while

health insurance and non-life insurance continues to be below international standards. And

this part of the population is also subject to weak social security and pension systems with

hardly any old age income security. This it is an indicator that growth potential for the

insurance sector is immense. A well-developed and evolved insurance sector is needed for

economic development as it provides long term funds for infrastructure development and at

the same time strengthens the risk taking ability. It is estimated that over the next ten years

India Would require investments of the order of one trillion US dollar. The Insurance sector,

to some extent, can enable investments in infrastructure development to sustain economic

growth of the country. Insurance is a federal subject in India. There are two legislations that

govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector

in India has come a full circle from being an open competitive market to nationalization and

back to a liberalized market again. Tracing the developments in the Indian insurance sector

reveals the 360 degree turn witnessed over a period of almost two centuries. One of the

premium sectors showing upward growth is insurance, which is a US$ 41-billion industry in

India. India is the fifth largest life insurance market in the emerging insurance economies

globally and is growing at 32-34 per cent annually. With increasing competitiveness

amongst these, the players are bringing out newer products to attract more customers into

their kitty. Foreign direct investment (FDI) up to 26 per cent is permitted under the

automatic route subject to obtain a license from the official regulator, Insurance Regulatory

and Development Authority (IRDA). The total number of life insurance companies operating

in India is currently 22. Two major factors impacting the general insurance segment are the

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Detariffing of interest rates by Insurance Regulatory Development Authority (IRDA), which

gave autonomy to insurers in pricing insurance policies and has created a competitive field

in general insurance business, the second being the financial meltdown, which has also

made Since the entry of private sector, the Indian life insurance sector has changed

dramatically to offer a variety of life insurance solutions through a distribution network

spread across the country. The Insurance Regulatory and Development Authority (IRDA)

have played an important role in providing direction to the industry. The initial phase of the

life insurance industry experienced high growth fuelled by a buoyant economy. As the

industry moved from its infancy towards maturity, the regulatory architecture played an

important role by guiding and steering the industry on the right track. It has helped in

building a robust insurance industry and made favorable initiatives to give the industry an

additional boost.

Segment wise splits of weighted new business premium collected during April to December

2010

8

Segment wise splits of weighted new business premium collected during April to December

2011

Life Insurance Industry in India

Insurance is a contract between the insurance company (insurer) and the policyholder

(insured). In return for a consideration (the premium), the insurance company promises to

pay a specified amount to the in secured on the happening of a specific event. Insurance is

a form of risk management primarily used to hedge against the risk of a contingent,

uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one

entity to another, in exchange for payment. An insurer, or insurance carrier, is a company

selling the insurance; the insured, or policyholder, is the person or entity buying the

insurance policy. The amount to be charged for a certain amount of insurance coverage is

called the premium. Risk management, the practice of appraising and controlling risk, has

evolved as a discrete field of study and practice. With the largest number of life insurance

policies in force in the world, Insurance happens to be a mega opportunity in India. It’s a

business growing at the rate of 15-20 per cent annually and presently is of the order of Rs

450 billion (for the financial year 2004 – 2005). Together with banking services, it adds

about 7% to the country’s Gross Domestic Product (GDP). The gross premium collection is

nearly 2% of GDP and funds available with LIC for investments are 8% of the GDP.

9

Even so nearly 80% of the Indian population is without life insurance cover while health

insurance and non-life insurance continues to be below international standards. A large part

of our population is also subject to weak social security and pension systems with hardly

any old age income security. This in itself is an indicator that growth potential for the

insurance sector in India is immense.

Growth in HDFC Standard Life Insurance Company Limited

Twelve months ended March 2010-11

Premium Income:

• A robust 17% growth in individual new business (regular premium)

• Focus on single premium polices in H2 results in growth of 120%

• High quality of existing business & continued focus on persistency led to 36% increase in

renewal premium

• A growth of 29% in total premium

10

Growth:

•New ULIP regulations have impacted growth in H2 FY11

•In H2 we have grown 1.6%, while private industry de-grew by 40.7%

•One of the very few private insurers to achieve positive growth in FY11

•We are fastest growing amongst the top 15 private players

•Since last 3 years grown faster than private industry

11

Market Share

•Have adapted well to post September 1, 2010 regime. Ranked # 1 in H2 FY 11 amongst

private insurance companies.

Ranked # 3 in private sector for the full year; # 5 during same period last year

•Highest market share gain of 4.2% in private space in FY11 over same period last year

12

Distribution & Product Mix:

• Ban assurance mix has improved in FY11

• We have initiated tied agency transformation program, which focuses on unique agent

value proposition

• Renewed focus on direct distribution has led to growth of 111%.

13

Commission Ratio:

•Total commission rates (new business plus renewal) are also reducing as a proportion of

total premium

•Post September 1, 2010, first year commissions have reduced

14

Operating Expenses:

•Management action on cost containment and productivity enhancement programmes has

seen operating expense ratio reduce over the last 3 years

•Operating expenses have increased marginally by 4% against individual new business

growth of 27%

Total Capital:

•Capital infusion by promoters has scaled down over the last 3 financial years

•Generation of surplus on existing policies has reduced the need for capital draw-down

•Out of the capital infusion of `1.9 bn promoters brought in `1.7 bn

•Solvency Ratio as at 31st Mar 2011 was 172% as against regulatory requirement of 150%

15

Importance of Life Insurance

Life insurance’s death benefit feature and, when it is a permanent policy, its cash value,

make it a unique, versatile financial planning product.

Financial Security in the Earning Years

During your productive earning years, your ability to generate a salary may be your greatest

asset. But if you die prematurely, your loved ones may not have the assets necessary to

meet those needs. Life insurance death benefits can help secure your family’s finances in

the event of your untimely death. Here’s a list of financial needs life insurance can help

meet in the event of premature death.

• Final expenses: The need for immediate cash at death is universal. Final expenses

typically include the cost of a last illness — which could span days, weeks or longer —

along with funeral and burial expenses. Death can also create a tax liability requiring

immediate payment.

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• Outstanding debt: Charge card balances, auto and school loans, home equity loans

and other installment accounts that were formerly paid when your steady, ongoing income

was available, still need to be paid.

• Housing expenses: Survivors need money for mortgage or rent payments. Ideally,

funds should be earmarked to pay off a mortgage or make rental payments for a number of

years.

• Family income: The need to find replacement income is usually the largest and most

important consideration. Even when there is more than one breadwinner, the loss of one

income can be financially devastating.

• Education fund: For a young family, an especially critical need is money to pay for a

dependent child’s education — something a parent’s continuing income was expected to

provide.

• Social Security “blackout” period: Generally, a surviving spouse with young

children receives Social Security benefits until the youngest child reaches age 16. At that

point the spouse’s benefit stops until age 60, at which point a widow’s or widower’s benefits

become payable. Funds may be needed to fill in the income void during this period. 2

• Special needs: Providing for children with special needs presents its own challenges.

While life insurance may be a cost-effective way to help provide for monetary needs, careful

planning is nonetheless required. To avoid unintended consequences, it is a good idea to

work closely with a qualified attorney.

Estate Cash and Income Needs: When we reach the end of our working years, or

are near retirement, there’s still a need to protect the assets we’ve accumulated over the

years and also to prevent needless estate shrinkage. Life insurance can help here also.

• A need for cash: Once an estate has reached a respectable size — thanks to

increasing income, savings, successful investing and similar wealth-building activities —

there can still be a need for cash at the estate owner’s death. This is especially true when

the property consists of non-liquid assets such as real estate, a business, or other property

that cannot quickly be converted to cash.

The other point is that estate taxes cannot be ignored. Depending on the size of the estate,

federal estate and income taxes, state taxes and other levies can dramatically shrink

assets, particularly retirement plan money. To compound the problem, estate taxes are

typically payable in cash at the time of death, or shortly afterward.

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• A need for income: Immediate cash needs aside, a surviving spouse may need

additional income if, for example, Social Security or pension benefits are lost or reduced at

a spouse’s death. And, depending on whether adequate retirement planning was actually

done, there may also be a need for supplemental retirement income, whether or not the

estate owner dies.

Estate Distribution Needs:

A different type of estate planning need is created by assets that are no longer necessary to

provide for the individuals who amassed them. Orderly asset distribution plans must be in

place to make sure the people and institutions who are supposed to receive the money

actually do.

• Family members: An important consideration is how to treat family members equitably

and fairly when distributing estate assets. Proper planning can go a long way in preserving

family harmony. Consider the example of the daughter and her siblings — she is in line to

assume ownership and control of the family business. If the business assets pass to her,

her siblings may feel shortchanged, unless other assets are available to provide equitable

estate distribution. Once again, life insurance can help with this type of planning.

• Charitable giving: An estate owner who provides funds and other support to one or

more favorite charities may want to ensure that this support continues after he or she

passes. Earmarking estate assets for charitable giving is one way to accomplish this, but

thoughtful plans need to be made well in advance, and sufficient assets have to be in place

to fulfill all the estate obligations.

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HISTORICAL PERSPECTIVE

The history of life insurance in India dates back to 1818 when it was conceived as a means

to provide for English Widows. Interestingly in those days a higher premium was charged

for Indian lives than the non - Indian lives, as Indian lives were considered more risky to

cover. The Bombay Mutual Life Insurance Society started its business in 1870. It was the

first company to charge the same premium for both Indian and non-Indian lives.

The Oriental Assurance Company was established in 1880. The General insurance

business in India, on the other hand, can trace its roots to Triton Insurance Company

Limited, the first general insurance company established in the year 1850 in Calcutta by the

British. Till the end of the nineteenth century insurance business was almost entirely in the

hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance

Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the

1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance

companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938 that

provided strict State Control over the insurance business. The insurance business grew at a

faster pace after independence. Indian companies strengthened their hold on this business

but despite the growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and

provident societies under one nationalized monopoly corporation and Life Insurance

Corporation (LIC) was born. Nationalization was justified on the grounds that it would create

the much needed funds for rapid industrialization. This was in conformity with the

Government's chosen path of State led planning and development.

The non-life insurance business continued to thrive with the private sector till 1972. Their

operations were restricted to organized trade and industry in large cities. The general

insurance industry was nationalized in 1972. With this, nearly 107 insurers were

amalgamated and grouped into four companies- National Insurance Company, New India

19

Assurance Company, Oriental Insurance Company and United India Insurance Company.

These were subsidiaries of the General Insurance Company (GIC).

Industry Reforms

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in April

2000 has fastidiously stuck to its schedule of framing regulations and registering the private

sector insurance companies. Since being set up as an independent statutory body the

IRDA has put in a framework of globally compatible regulations.

The other decision taken simultaneously to provide the supporting systems to the insurance

sector and in particular the life insurance companies was the launch of the IRDA online

service for issue and renewal of licenses to agents. The approval of institutions for

imparting training to agents has also ensured that the insurance companies would have a

trained workforce of insurance agents in place to sell their products.

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Chapter 2

Profile of the company

21

Profile of Company

HOUSING DEVELOPMENT FINANCE CORPORATION (HDFC)

The company was incorporated on 14th August 2000 under the name of HDFC Standard

Life Insurance Company Limited. Company’s ambition from as far back as October 1995,

was to be the first private company to re-enter the life insurance market in India. On the

23rd of October 2000, this ambition was realized when HDFC Standard Life was the only

life company to be granted a certificate of registration. HDFC and Standard Life have a

long and close relationship built upon shared values and trust. The ambition of HDFC

Standard Life is to mirror the success of the parent companies and be the yardstick by

which all other insurance companies in India are measured. Monopoly of LIC has been

broken to make Indian Insurance to change its face and pace to tap the market and to

make the new challenges in it. Insurance in India is not about India only; it is an open sector

for the private players. The names which see in Indian insurance market is something like: -

HDFC (Indian company) + Standard life (foreign player), BAJAJ (Indian company) + Allianz

(foreign player), TATA (Indian company) + Aig (foreign player), and so many like them.

HDFC has its joint venture with standard life. It is a private sector company. The company

was registered on 23/10/2000. HDFC Standard Life Insurance Company Ltd. is one of

India’s 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.), India’s leading housing finance institution and one of the

subsidiaries of Standard Life plc, leading providers of financial services in the United

Kingdom. Both the promoters are well known for their ethical dealings and financial strength

and are thus committed to being a long-term player in the life insurance industry – all-

important factors to consider when choosing your insurer. Mumbai based Housing

Development Finance Corporation was incorporated in 1977 by H.T. Parekh, founder

chairman of ICICI which has grown to be India's leading housing finance company. Its

services are aimed at individuals as well as companies availing loans for housing purposes.

It also provides lease finance to companies and to development authorities for financing

infrastructure and other assets along with its property related services.

Companies now are tapping a lot of ways to capture the market and hence adopting

different ways to hold the large portion of the market.

22

77%

12%

5%

4% 2%

SHAREHOLDING PATTERN of HDFC Ltd

FII & FDIIndividualsBamks & Insurance CompaniesMutual FundsCompanies

Figure 1: Share Holding Pattern of HDFC

2005-06 2006-07 2007-08

APPROVED 256.34 333.32 425.2

DISBURSED 206.79 261.78 328.75

25

75

125

175

225

275

325

375

425

LOANS APPROVAL & DISBURSED

IN b

n

Figure 2: Loans Approved & Disbursed by HDFC

VISION AND VALUES

23

“The most successful and admired life insurance company, which mean 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. In short, ‘the most obvious choice for all’”.

HDFC Limited:

HDFC is India’s leading finance institutions 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. 36000 Cr.

As at March 31, 2004 outstanding deposits stood at Rs 7840 Cr. The depositor base

now stands at around 1 million depositors.

Rated ‘AAA’ CRISIL and ICRA for the 10th consecutive year

Stable & experienced management high service standard.

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

third Annual Outlook money Award.

The Partnership:

HDFC is an organization that strives for excellence, with the twin objective of enhancing

customer satisfaction and shareholder value.

The standard life assurance company was present in the Indian life insurance market from

1847 to 1938 when agencies were setup in Kolkata and Mumbai.

Each of the JV player is highly rated and been conferred with many awards .HDFC is rated

‘AAA’ by both CRISIL and ICRA. Similarly, standard life is rated ‘AAA’ both by moody’s and

standard and poor’s. This reflects the efficiency with which HDFC and standard life

manage their asset base of Rs15000 Cr and Rs600000 Cr respectively.

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COMPANY’S VALUES:

1. INTRGRETY

Honest and trustful in every action

Transparency

Stick to principles irrespective of every action

Be just fair to every one

2. INNOVATION

Building a storehouse of treasure through experience.

Looking at every product and process through fresh eyes every day.

3. CUSTOMER CENTRIC

Understand his expectations by keeping him as a centric point

Listen actively

Understand customer needs and deliver solutions

Customer interest always supreme

4. PEOPLE CARE:

Genuinely understanding the people we work with

Guiding their development through training and support

Helping them develop requisite skills to reach their true potential

Know them on a personal front

Create an environment of trust and openness

Respect for the time of others

5. TEAM WORK:

Whole team take the ownership of the deliverables

Consult or involved, understand and arrive at a common objective

Cooperate and support across department boundaries

Identify strengths and weakness accordingly allocates responsibility to achieve

common objective.

25

HISTORY OF EVENTS

JANUARY 1995:

HDFC and Standard life first came together for a possible joint venture, to enter the

life insurance market. At the outset it was clear that both co. shared similar values

and beliefs and a strong relationship quickly formed.

OCTOBER 1995:

The companies signed a three year joint venture agreement. Around this time

Standard life purchased a 5% stake in HDFC, further strengthening the relationship.

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

ongoing delays in getting the IRDA (Insurance Regulatory and Development

Authority) Act passed in parliament.

In October 1998:

The joint venture agreement was renewed and additional resource made available,

around this time standard Life purchased 3% of Infrastructure Development Finance

company Ltd (IDFC) Standard life also started to use the services of the HDFC

Treasury department to advise them upon their investments in India.

End OF 1999

The opening of the market looked very promising and both companies agreed the

time was right to move the operation to the next level.

January 2000:

An expert team form the UK joined a handpicked team from HDFC to form the core

project team, based in Mumbai. Around this time Standard Life purchased a further

5% stake in HDFC and a 5% Stake in HDFC bank. In a further development

Standard Life agreed to participate in the Asset Management Company promoted by

HDFC to enter the mutual fund market .The Mutual fund was launched on 20th July.

26

14th August 2000:

The company was incorporated under the name :HDFC STANDARD LIFE

INSURACE COMPANY LIMITED: their ambition from as far back as October 1995

was to be the first private company to re enter the life insurance market in India

23rd October 2000:

HDFC Standard Life became the” First life insurance company in the private sector:

TO be granted a certificate to Registration by the Insurance Regulatory and

Development Authority to transact life insurance business in India.

HDFC are the main shareholders in HDFC Standard Life, with81.4%, while standard

Life owns 18.6%. HDFC and Standard Life have a long and close relationship built

Upon shared valued and trust. The ambitions of HDFC Standard life is to mirror the

Success of the parent companies and be the yardstick by which all other insurance

Companies in India are measured. HDFC Standard Life Insurance Company has been

Signed on by Blue Star to provide insurance cover to its 1805 employees across India

And overseas.

HDFC Standard life Insurance is one of the leading players in the group insurance

Segment of the life insurance business. Its group business has grown significantly since

Inception and now covers over 25,000 lives across the entire industry spectrum.

USP: Strong Financial History

Segment: Personal and Group Insurance

Target Group: Urban and Rural Investor

Positioning: Complete Insurance and Financial Solution

Sales

Operations27

Finance and accounts

Information technology

Plans

28

Insurance plans can be categorized under three major categories according to their

purpose and functionality as Shown in the following fig.

Products

Each of us leads a unique life and so has unique needs as per our life styles. HDFC

Standard Life offers a range of products and invites to choose the one that suits the best.

Our product mix covers all the life stage needs of our customers. At a broad level our major

“lines of business” catering to unique customer needs are life and pensions. We introduced

a few traditional products during this period though our major focus was on revamping the

unit linked portfolio in view of new regulations issued by IRDA. During the first half there

was a skew towards unit linked pension products as in the new regime pension products

would have limited flexibility.

Traditional plans

Traditional insurance plans, which include term, endowment and whole life policies, offer

multiple benefits in terms of risk cover, return, safety and tax benefit. Traditional policies are

considered risk-free, as they provide fixed income returns in case of death or maturity of the

policy. Investment guidelines also ensure safety of funds with a cap on equity investment.

Here are some of the reasons why traditional life insurance plans are the answer to the

apprehensions and challenges faced by consumers and the Life Insurance industry.

29

Insurance Plans

Traditional Plans ULIP Protection

Plans

1. The interest of the company and the customer are aligned: In participating products the

life insurance company can make margins only when the customer makes margins and to

that extent the interest of the company and the customer are aligned. As per the insurance

law, the company can retain only 1/10th of the profits with 9/10th of the profits shared with

the customers. This is colloquially known as the “90/10” rule in the industry. Put simply if the

company makes Rs 100 as profits, Rs 90 (approximately) has to be given to the customer

first.

2. Investment risk is managed better in Traditional products: In Unit Linked products the

investment risk lies with the customer. But most customers do not fully appreciate the risks

involved in such products. In traditional participating products the investments are managed

by the company in a prudent manner. This works out to the advantage of a passive investor

as there are investment guarantees built into the product design. Not only are investments

done in a more conservative manner, the dividends are also 'smoothed' and declared in a

steady fashion.

Unit Linked Insurance Plans

Unit Linked Insurance Plan (ULIP) is a life insurance policy which provides a combination of

risk cover and investment. The dynamics of the capital market have a direct bearing on the

performance of the ULIPs.

In a Unit Linked Policy, the investment risk is generally borne by the investor. Investment

returns from ULIP may not be guaranteed

Protection plans

Protection plans are Term Plans which provide only life cover. These plans can help get

adequately covered and secure our family financially in case of unfortunate event. These

are low cost life insurance plans. What’s more, depending on person’s future

responsibilities and financial commitments Increasing and Decreasing Term Plans offers

the flexibility to increase or decrease the sum assured in systematic manner.

An important aspect of our product offerings is our range of protection products within the

life segment which provide income protection for the family in the unfortunate event of

30

death or critical illness. These include our term assurance plans, home loan protection

plans and health plans besides the riders available along with our savings products.

Plans:

The major categorized plans can be further classified as under

SAVING PLANS

INVESTMENT PLANS

PROTECTION PLANS

RETIREMENT PLANS

Saving plans

Children’s plan:

The HDFC Children’s plan is designed to secure our child’s future by giving (the

beneficiary) a guaranteed lumps sum, on maturity or in case of your unfortunate demise,

early in the policy term. The premiums, paid by person, are invested by the company to

give a good long term returns.

The plan receives simple Reversionary Bonuses, which are usually added annually.

At the end of the term an additional Terminal Bonus may be paid depending on the

performance of the underlying investment.

The HDFC Children’s plan gives:

Invaluable financial support to person’s child

A choice to customize an ideal plan for person’s child

Multiple options for multiple benefits

ELIGIBILITY

31

The age and term limit for the insured parents for taking out the HDFC Children’s plan are

as show below:

TERM PERIOD (Yrs.) AGE AT ENTRY (Yrs.)MAXIMUM AGE AT

MATURITY (Yrs)Minimum Maximum Maximum Maximum

10 25 18 60 75

BONUSES:

The Reversionary Bonus is usually declared annually as a percentage of the basic Sum

Assured of this policy. Once added to a policy, the bonus is guaranteed to be payable either

on death or maturity. The Reversionary Bonus is declared keeping in mind a long-term view

of investment returns, expenses, mortality, and other experiences.

Beneficiaries:

The beneficiaries are the sole person it receive the benefit under the policy. At where the

beneficiary is less than 18 year of age, the benefit will be paid to the appointee.

TAX BENEFITS (Based on current tax lows):

Premiums paid are eligible for tax benefits under Sections 80C and Sections 10 (10 D) of

the income Tax Act, 1961, subject to provisions contained therein.

Under Sections 80C, a person can save up to 30900 Rs. From the tax each year as

premiums up to 1, 00,000 Rs. Are allowed as a deduction from person’s taxable

income.

Under Sections 10(10D), the benefits received from this policy are exempt from tax.

MONEY BACK PLAN:

HDFC SL New money back plan is a “with profit” plan that offers.

32

A proportion of Sum Assured as cash payout at regular 4 year intervals during the

policy term.

A lump sum payment on survival up to Maturity date.

Valuable financial protection to the family.

BONUSES

The Reversionary bonus as a percentage of the sun Assured would be declared at the end

of the financial year. Once added to the policy, the bonus is guaranteed to be payable on

the earlier death or on maturity.

The terminal Bonus is sometimes added to policy on maturity and enables the company to

pay a fair share of surplus at the end, based on the actual experience over the policy term

and allowing for the reversionary bonus already attached.

BENEFITS

a) Money back: On completion of every 4 years.

POLICY

TERM

(Yrs.)

SURVIVAL BENEFIT AS A % OF SUM ASSURED (MONEY BACK PAYOUT)

4th yr 8th yr 12th yr 16th yr 20th yr 24th yr

12 25% 25% 50%+attaching

bonus

- - -

16 25% 25% 25% 25%+attaching

bonus

- -

20 20% 20% 20% 20% 20%+attaching

bonus

-

24 15% 15% 15% 15% 15% 25%+attaching

bonus

b) Maturity Benefits: On maturity, A person will receive survival benefits due at that

point along with attaching bonuses on the full Sum Assured.

33

c) Death Benefits: On unfortunate death of life assured during the policy term, we

would pay the Sum Assured plus attaching bonuses to the nominee. There would be no

deduction for any of the money back payouts made prior to the unfortunate death of the life

Assured.

ELEGIBILITY

TERM (YRS) ENTRY AGE (YRS.) MAXIMUM MATURITY

AGE (YRS.)MINIMUM MAXIUM

12,16,20 or 24 14 53 65

TAX BENEFITS

Premiums paid are eligible for tax benefits under Sections 80C and Sections 10(10D) of the

Income Tax Act1961.

Under Sections 80C, a person can save up to 30900 Rs. From tax each year as

premiums up to 1, 00,000 Rs. Are allowed as a deduction from person’s taxable

income.

Under Sections 10(10D), the benefits received from this policy are exempt from tax.

Unit linked youngster plus plan

The HDFC Youngster plan gives.

Valuable financial protection for child.

Yearly payments to the family in case of person unfortunate demise.

Flexible Benefits Payment preferences-Save-n-Gain Benefit.

An outstanding investment opportunity by providing a choice of selected

investments.

34

ALL UNITS LINKED LIFE INSURANCE PLANS ARE DIFFERENT FORM TRADITIONAL

INSURANCE PLANS AND ARE SUBJECT TO DIFFERENT RISK FACTORS.

BENEFITS:

Save Benefit:

We will pay the sum Assured to the beneficiary.

Need not pay any further premiums, we will pay 100% of all the future regular

premiums, at the original level, towards the policy and all risk covers will cease.

On Maturity, We will pay the fund value to the beneficiary.

Save –n-Gain Benefit:

We will pay the sum Assured to the beneficiary.

Need not pay any further premiums, we will pay 50%of all the future premiums

towards the policy and 50% of the premiums will be paid to the beneficiary and when

due, on an annual basis and all risk covers will cease.

On Maturity, We will pay the fund value to the beneficiary.

ELEGIBILITY

ELEGIBILITY LIFE OPTION LIFE & HEALTH OPTION

MINIMUM ENTRY AGE 18 Years

MINIMUM ENTRY AGE 65 Years 55 Years

MAXIMUM MATURITY AGE 75 years 65 Years

MINIMUM POLICY TERM 10Years

MAXIMUM POLICY TERM 20 Years

TAX BENEFITS

35

Premiums paid are eligible for tax benefits under Sections 80C and Sections 10(10D) of the

Income Tax Act1961.

Under Sections 80C, you can save up to 30900 Rs. From your tax each year as

premiums up to 1, 00,000 Rs. Are allowed as a deduction from your taxable income.

Under Sections 10(10D), the benefits received from this policy are exempt from tax.

Unit link pension plan:

Our primary responsibility towards our customers in the Indian life insurance market is to

ensure that they have adequate life cover in the event of unforeseen circumstances. While

our pure protection products do that exclusively, our savings products also have an inbuilt

life cover.

The table below shows the in force sum assured and death benefit as on September, 30

2010 across all individual and group unit linked products.

Various plans with their benefits can be shown as under:36

PLAN BENEFITSAVING PLANS

Endowment Assurance Plan Life Insurance with savings

Unit linked endowment plan Life insurance and saving with

Choice of investment funds

Children’s plan Financial security for your child

Unit linked youngster plus plan Financial security for your child with

Choice of investment funds

Money back plan Life insurance with savings.

INVESTMENT PLANS

Single premium whole of life plan Investment with life insurance

PROTECTION PLANS

Term assurance plan Life insurance at an affordable price

Loan cover term assurance plan Life insurance customized for home loans

RETIREMENT PLANS

Personal pension plan Saving for retirement

Unit link pension plan Retirement saving with a choice of investment

funds.

COMPETITORS:37

In presently there are 46 life insurance corporation companies are working and performing

in India. So definitely HDFC Standard life has good competition with other. The main

competitors are as following.

LIFE Insurance Corporation.

ICICI Prudential Life Insurance.

BAJAJ Allianz.

SBI Life Insurance.

BIRLA Sun Life.

AVIVA.

TATA AIG.

Various Other Competitors In The Market

Bajaj Allianz Life Insurance Co. Ltd.

Birla Sun Life Insurance Co. Ltd.

ICICI Prudential Life Insurance Co. Ltd.

ING Vysya Life Insurance Co. Ltd.

Life Insurance Corporation Of India

Max New York Life Insurance Co. Ltd

Met Life India Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd.

SBI Life Insurance Co. Ltd.

Tata AIG Life Insurance Co. Ltd.

Reliance Life Insurance Co. Ltd.

38

Chapter 3

Research Methodology

39

RESEARCH METHODOLOGY

Research is defined as a scientific and systematic search for pertinent information on a

specific topic. The function of a marketing research is to provide information, which assist

40

marketer in recognizing and reacting to marketing opportunities and problems. In essence/

researchers mix managers to take the better decision.

STATEMENT OF THE PROBLEM

This study was undertaken to identify which type of insurance plans HDFC-SL should

market to particular market segments in India. A survey was undertaken to understand the

preferences of Indian consumers with respect to insurance. While marketing policies the

sole duty of an advisor/ agent is to provide insurance plans as per customer requirements.

In effect plans (insurance products) should be flexible to suit individual requirements. This

research tries to analyze some key factors which influence the purchase of insurance like

the term of the policy, the type of company, the amount of annual premium payable

(capacity and willingness to spend), risk taking ability and the influence of advertising.

Solutions and recommendations are made based on qualitative and quantitative analysis of

the data.

TITLE OF THE STUDY

“Awareness of Life Insurance Products in Indian Market. (With

respect to HDFCSL) ”

DURATION OF THE PROJECT

The duration of the project is 45 days

OBJECTIVES OF THE STUDY

To explore the awareness of life insurance product in Indian Market

To know the consumers’ willingness to spend on life insurance

To identify the factors that motivate purchase of insurance policies

To understand the type of company preferred for investment and awareness level of

consumers about unit linked insurance plans(ULIP’s)

41

SAMPLE SIZE

A sample of 130 people will be taken for the survey. The required data collected through

questionnaire.

SAMPLING AREA

The sampling unit may be a Geographical one such as state, District, Village etc., The

geographical sampling unit under study has covered the area of Sonipat ,Panipat ,Rohtak .

SAMPLING DESIGN

A sample design is a definite plan for obtaining a sample from a given population. It refers

to the techniques or procedures the researcher would adopt in selecting items for the

sample.

METHODOLOGY APPROACH

The primary data was collected by using structured questionnaire. . Getting

questionnaire filled up by respondents picked up spontaneously by simple random

sampling and face-to-face interview was conducted to collect the data

Developing questionnaire to conduct a survey: A questionnaire was developed

to gauge

Awareness of various private insurance companies

Types of plans sold in the market

Purpose for buying insurance policies

Awareness of life insurance & its products with emergence of private players

in the market.

42

Secondary Data: Secondary data is that data which somebody else had collected

and which had already been passed through the statistical process. The indirect

information of data from sources containing past and present information is collected

from newspapers, journals, business manuals, magazines, pamphlets etc.

DATA COLLECTION

The information required for our project was collect mainly from the primary sources and

even from secondary sources. The primary source consists of the data analyzed from

questionnaire and interaction with the user at that time only. And internet is used as

secondary source.

Convenience sampling is used in exploratory research where the researcher is

interested in getting an inexpensive approximation of the truth. As the name implies, the

sample is selected because they are convenient. This non probability method is often used

during preliminary research efforts to get a gross estimate of the results, without incurring

the cost or time required to select a random sample.

SCOPE OF STUDY

Through This project it’s trying to give an in depth analysis on the same scarping on the

growth and emergence of new companies in the turf which was predominated by

government backed companies. This study relates to evaluate various insurance

companies in terms of products, revenue, sales, and human resources on the basis of

consumer awareness about their products. It also covers emergence and growth of new

insurance companies in India. In this study will go through the customers of various

insurance companies and evaluate their awareness and satisfaction level with HDFCSLIC

products so that company can easily improve their productivity and boost their sales. In this

study a research will be conducted by using a structured questionnaire to compare the

awareness about various products and thus find out market share of various insurance

companies. It also helps in knowing customers needs which is very beneficial for company

to increase productivity and boost sales. It is also helpful to understand various marketing

strategies adopted by various insurance companies so that company can increase their

43

market share by modifying marketing strategies and can better serve the customers’ needs.

I am also collecting information from the company, websites, journals, magazines and

unpublished data available at company to compare various insurance companies. I have

also done a certification of IRDA to get a financial advisor license. I have also gone through

compliance sales training (CST) so that I can get better knowledge of existing products of

HDFCSLIC and it is also helpful in comparing with other companies products. A sample of

130 people will be taken to collect data by using structured and unbiased questionnaire and

probability sampling technique will be used to select sample of 130 people from whole

population and a convenience sample will be selected.

LIMITATIONS OF THE STUDY

The study was limited only to a few areas.

The study was conducted only for a short period of two month.

The study is based on the assumption that information provided by the respondents

is true.

Respondents want to hide some information.

.

44

Chapter 4

Facts and Findings

Findings and Recommendations

FINDINGS

Marketing is a very crucial activity in every business organization. Every product

45

produced within an industry has to be marketed otherwise it will remain as unsold

stock, which will be of no value.

In this project we found that the investor in insurance industry are taking interest to

have interest not only for security in a long term policy but also doing investment for

the short term policy which is presently called the ULIPS market.

ICICI Prudential, TATA AIG have better awareness in the market then HDFC SL in

private companies

Risk cover remains the most important purpose for buying insurance followed by

option as investment

Premium income for HDFC SL grows by 132% for financial year 2004-2005. the

company generated new business premium income of Rs.486 crore

Unit linked products accounted for over 50% of the new business premium

HDFC Standard Life continues to have one of the widest reaches among new

insurance companies. The company doubled the number of offices to 104 across the

country. Through these offices, the company today services customer needs in over

440 towns. The company also increased its depth in existing markets by increasing

its Financial Consultant strength from 17,000 as on 31st March 2004 to over 23,000

as on 31st March 2005.

The company expanded its portfolio of products by launching plans to cover

Superannuating and Leave Encashment needs, thereby offering a wide range of

employee benefit solutions to its corporate clients.

Alternate Channels including bank assurance have recorded an impressive growth of

over 400% to contribute 37% to the Effective Premium Income (EPI).

46

Chapter 5

Analysis and Interpretation

Data Analysis:

ANALYSIS & INTERPRETATION:

TABLE 1: AGE GROUP OF SURVEYED RESPONDENTS

47

Age group No. of Respondents

18 - 25 years 62

26 - 35 years 33

36 - 49 years 22

50 - 60 years 12

More than 60 years 2

CHART 1: AGE GROUP OF SURVEYED RESPONDENTS

47%

25%

17%

9%

2%

18 - 25 years

26 - 35 years

36 - 49 years

50 - 60 years

More than 60 years

Interpretations:

47% of the respondents fall in the age group of 18 – 25 years

25% in group of 26 – 35 years and 17% in 36 – 49 years.

Therefore most of the respondents are relatively young (below 26 years of age). These

individuals could be induced to purchase insurance plans on the basis of its tax saving

nature and as an investment opportunity with high returns.

TABLE 2: GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

48

Particulars No. of Respondents

Male 113

Female 17

CHART 2: GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

Gender of the respondents

17

113

0

20

40

60

80

100

120

Male Female

No

. of

res

po

nd

en

ts

Male

Female

Interpretation:

Mostly males are aware about the insurance and its various products only a few no. of

women are aware about the insurance sector. In their houses male take care all about their

insurance policy‘s related decisions.

TABLE 3: CUSTOMER PROFILE OF SURVEYED RESPONDENTS

Customer profile No. of respondents

Student 30

49

Housewife 3

Working Professional 55

Business 24

Self Employed 12

Government service employee 7

CHART 3: CUSTOMER PROFILE OF SURVEYED RESPONDENTS

23%

2%

43%

18%

9%

5%Student

Housewife

Working Professional

Business

Self Employed

Government serviceemployee

Interpretation:

From the chart above it can clearly be seen that 43% of the respondents are working

professionals, 23% are students and 18% are into business and only 2% are housewives.

Therefore the target market would be working individuals in the age group of 18 – 25 years

having surplus income, interested in good returns on their investment and saving income

tax.

TABLE 4: MARKET SHARE OF LIFE INSURANCE COMPANIES

LIFE INSURER NUMBER OF POLICIES

50

HDFC STANDARD LIFE 5

BIRLA SUN LIFE 4

AVIVA LIFE INSURANCE 8

BAJAJ ALLIANZ 9

LIC 64

TATA AIG 8

ICICI PRUDENTIAL 14

ING VYSYA 7

BHARTI AXA 3

OTHERS 2

CHART 4: MARKET SHARE OF LIFE INSURANCE COMPANIES

4% 3%

6%

7%

53%

6%

11%

6%2% 2%

HDFC STANDARD LIFE

BIRLA SUN LIFE

AVIVA LIFE INSURANCE

BAJAJ ALLIANZ

LIC

TATA AIG

ICICI PRUDENTIAL

ING VYSYA

BHARTI AXA

OTHERS

Interpretation:

The largest life insurance company is Life Insurance Corporation of India completely

owned by the Government of India covering 53% of market share.

The largest private insurance company in India is ICICI Prudential covering 11% followed

by Bajaj Allianz with 7% and HDFC is having only 4% of market share.

TABLE 5: ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE

Premium paid (p.a.) No. of respondents

Rs. 5000 – Rs. 10000 45

51

Rs. 10001 - Rs. 15000 29

Rs. 15001 - Rs. 24900 19

Rs. 25000 - Rs. 50000 12

Rs. 50001 - Rs. 60000 5

Rs.60001 – Rs. 80000 2

Rs. 80001 - Rs. 100000 3

CHART 5: ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE

39%

25%

17%

10%4% 2% 3%

Rs. 5000 - Rs. 10000

Rs. 10001 - Rs. 15000

Rs. 15001 - Rs. 24900

Rs. 25000 - Rs. 50000

Rs. 50001 - Rs. 60000

Rs.60001 - Rs. 80000

Rs. 80001 - Rs. 100000

Interpretation:

39% of the respondents pay an annual premium less than Rs. 10001 towards life

insurance. 25% pay less than Rs. 15001 and 17% pay less than Rs. 25000.HDFC-SL

would be able to capture the market better if it introduced products/plans where the

minimum premium starts at Rs. 5000 p.a. They should introduce more products like Easy

Life Plus and Safe Guard where the minimum premium is Rs.6000 p.a. and Rs. 12000 p.a.

respectively.

TABLE 6: POPULAR LIFE INSURANCE PLANS

Type of Plan No. of Respondents

Term Insurance Plans 53

52

Endowment Plans 62

Pension Plans 8

Child Plans 4

Tax Saving Plans 10

CHART 6: POPULAR LIFE INSURANCE PLANS

39%

45%

6%

3%7%

Term Insurance Plans

Endowment Plans

Pension Plans

Child Plans

Tax Saving Plans

Interpretation:

45% of the respondents hold endowment plans and 39% of the respondents hold term

insurance plans.

Endowment plans are very popular and serve two purposes – life cover and savings.

If the policy holder dies during the policy term the nominee gets the death benefit that is,

sum assured and accumulated bonus. On survival the policy holder receives the survival

benefit with a bonus. A term plan is a pure risk cover plan wherein the insured pays a lower

premium for a higher sum assured. Term insurance is the cheapest form of insurance and

helps the policy holder insure himself for a relatively low premium. For the returns sensitive

investor term plans do not find favor as they do not offer a return in case the individual does

not die during the policy term.

TABLE 7: AWARENESS OF UNIT LINKED INSURANCE PLANS

53

Awareness of Unit Linked Plans No. of Respondents

Yes 74

No 56

CHART 7: AWARENESS OF UNIT LINKED INSURANCE PLANS

57%

43%Yes

No

Interpretation:

57% of the respondents are aware of unit linked life insurance plans and 43% are not

aware of such plans.

Unit – linked plans are those where the benefits are expressed in terms of number of units

and unit price. They can be viewed as a combination of insurance and mutual funds. The

number of units a customer would get would depend on the unit price when they pay the

premium.

When the policy matures the individual gets his fund value. The value of his fund is

calculated by multiplying the net asset value and number of units held by them on that day.

TABLE 8: CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM

54

Willingness to spend on

premium

No. of

respondents Percentage

Less than Rs. 6000 20 15%

Rs. 6001 - Rs. 10000 35 27%

Rs. 10001 - Rs. 25000 54 41%

Rs. 25001 - Rs. 50000 20 15%

Rs. 50001 - Rs. 100000 2 2%

CHART 8: CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM

0

10

20

30

40

50

60

Less than Rs.6000

Rs. 6001 - Rs.10000

Rs. 10001 - Rs.25000

Rs. 25001 - Rs.50000

Rs. 50001 - Rs.100000

Interpretation:

41% of the respondents are willing to spend between Rs. 10001 – Rs. 25000 for life

insurance. 27 % to spend between Rs. 6001 – Rs. 10000 per annum. Only 15% would be

willing to spend more than Rs. 25000 per annum as life insurance premium.

We could say that the maximum premium payable by most consumers is less than Rs.

25000 p.a. This is further reduced as most customers have already invested with LIC, ICICI

Prudential, Birla Sun Life, Bajaj Allianz etc.

HDFC-SL is faced with a large amount of competition. Hence to capture a larger part of the

market the company could introduce more reasonable plans with lesser premium payable

per annum.

TABLE 9: CHART SHOWING IDEAL POLICY TERM

55

Ideal policy term No. of respondents

3 - 5 years 25

6 - 9 years 20

10 – 15 years 46

16 – 20 years 18

21 – 25 years 12

26 – 30 years 2

More than 30 years 1

Whole life Policy 6

CHART 9: CHART SHOWING IDEAL POLICY TERM

19%

15%

35%

14%

9%

2%

1%5%

3 - 5 years

6 - 9 years

10 - 15 years

16 - 20 years

21 - 25 years

26 - 30 years

More than 30 years

Whole life Policy

Interpretation:

From the chart given above it can be seen that 35% of the respondents prefer a policy term

of 10 – 15 years, 19% prefer a term of 3 – 5 years and 15% prefer a term of 6 – 9 years.

This means that HDFC-SL could introduce more plans wherein the premium paying term is

less than 15 years.

56

The outlook of insurance as a product should be changed from something which you pay

for your whole life (whole life policy) and do not receive any benefit (the nominee only

receives the benefit in case of your death) to an extremely useful investment opportunity

with the prospects of good returns on savings, tax saving opportunities as well as providing

for every milestone in your life like marriage, education, children and retirement.

10: FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE INSURANCE

57

Parameter No. of Respondents

Advertisements 17

High returns 42

Advice from friends 23

Family responsibilities 45

Others 3

CHART 10:

13%

31%

17%

33%

6%

Advertisements

High returns

Advice from friends

Family responsibilities

Others

Interpretation:

From the chart above it can be seen that 33% of the respondents purchase life insurance to

secure their families, 33% take life insurance to get high returns, 17% purchase insurance

on the advice of their friends and 13% purchase insurance because of the influence of

advertisements.

The main purpose of insurance is to cover the financial or economic loss that occurs to the

family in case of the uncertain death of the policy holder. But nowadays this trend is

changing. Along with protection (life cover), a savings element is being added to insurance.

With the introduction of the new unit linked plans in the market, policy holders get the option

to choose where their money will be invested. They can invest their money in the equity

market, debt market, money market or a combination of these. The debt and money

markets usually have low risk attached whereas the equity market is a high risk investment

option.

TABLE 11: PREFERRED COMPANY TYPE OF THE RESPONDENTS

58

Type of Company No. of Respondents Percentage

Government Owned

Company 67 47%

Public Limited Company 33 23%

Private Company 26 18%

Foreign Company 4 12%

CHART 11: PREFERRED COMPANY TYPE OF THE RESPONDENTS

0

10

20

30

40

50

60

70

80

Government OwnedCompany

Public LimitedCompany

Private Company Foreign Company

Interpretation:

From the graph above we find that 47% of the respondents preferred to purchase insurance

from a government owned company, 23% of the respondents preferred to purchase

insurance from a public limited company and only 12% of the respondents preferred a

foreign based company. HDFC-SL could be promoted as an essentially “Indian” company

with a foreign tie up. Its tie up with HDFC, a trusted name in an Indian industry, could be

used to give a “push” to its products/ services.

Heavy advertising through television, newspapers, magazines and radio is required. Very

few people know that HDFC-SL is one of the trusted insurance companies in the world.

These facts would surely increase the customer base it currently possesses and thereby

increase sales of HDFC-SL products in the Indian insurance market.

TABLE 12: MINIMUM EXPECTED RETURN ON INVESTMENT

59

Expected Returns No. of respondents

Less than 5% 3

5% - 10% 20

11% - 15% 22

16% - 20% 23

21% - 25% 22

26% - 30% 12

31% - 40% 11

41% - 50% 7

More than 50% 10

CHART 12: MINIMUM EXPECTED RETURN ON INVESTMENT

2%

15%

17%

18%17%

10%

8%

5%

8%

Less than 5%

5% - 10%

11% - 15%

16% - 20%

21% - 25%

26% - 30%

31% - 40%

41% - 50%

More than 50%

Interpretation:

From the chart above it can clearly been seen that 18% of the respondents would like 16 –

20% returns, 17% would like returns between 21 – 25% and 17% would like returns of 11 –

60

15% on their investments. Therefore the average return on investment should be at least 16

– 20 %.

Most consumers are willing to adapt to some amount of risk but still want some guaranteed

returns. Therefore the bulk of investment should be made in the balanced fund with 50%

debt and 50% equity. The returns on the Secure Fund are guaranteed as these involve

investment is government securities and the debt market. But the returns on these

instruments are low (8 – 10%). If the company invests in shares, returns are higher (39%)

but correspondingly risk borne by the policy holder is also higher. Therefore a good

combination of the two instruments is often a wise choice.

.

Chapter 6

SWOT Analysis61

SWOT ANALYSIS OF HDFC SL

STRENGTHS:STRENGTHS:

HDFC SL’s strengths are many, to mention a few:

a) Global Presence

Its collaborations and joint ventures with international companies such as Standard life, and

partnership with chub, enable it to bring the best service available worldwide to its

consumers.

b) Fast paced and flexible work culture, which provides its employees autonomy to

accomplish the task without much pressure from the higher authorities. Thus,

employees are motivated to give their best to the organization. The core strength of

HDFC SL is the talent and innovativeness of its people, which enables it to provide the

“right solution at the right time.”

62

c) The mass markets handled through a chain of financial consultants usage closer to the

individual. It has very strong distribution network.

d) Its pool of competencies: mutual funds, sum assured, etc

e) Ability to understand customer's business and offer right technology.

f) Long-standing relationship with customers.

g) support & service infrastructure.

h) Best-value-for-money offerings.

WEAKNESSES:

a) HDFC SL Could not able to match LIC in remote area services.

b) Always emphasizes on numbers and fast results.

c) After sales service.

d) Less promotional campaigns.

OPPORTUNITIES:OPPORTUNITIES:

a) Increasing consumer awareness about Insurance and its use.

b) Tremendous untapped potential of Insurance products in India.

c) Increasing competition.

d) Tie-ups with various MNC’s enable to extract their core competencies.

e) Insurance industry booming at a rate of 45% every year.

THREATS:THREATS:

a) New private players are coming in the market e.g. RELIANCE Insurance.

b) Entry of MNC’s giving direct competition.

c) Govt. instability has a long-term repercussion affecting company’s policies & its

growth.

63

LIMITATIONS

Though every effort was put in to make this report authentic in every respect,

there were few uncontrollable factors that might have had their influence on the

final report. The various limiting factors are:-

While making this report few typing and compilation result may have crept in

which have not been able to get rectified. Also the major part of the data

collect is primary in nature and hence the data may be subject to some human

errors.

The study was mainly conducted in the region of Sonipat, Panipat and few from

Rohtak. It has not have included relevant respondents in other areas in the

sample size.

The information about some scheme differs from one source to another.

64

As I was a trainee in the company the many secrets and the important facts,

figures and information has not been provided.

Chapter 7

Conclusion

65

Conclusion

The 6 weeks summer practical training undertaken at HDFC BANK was completed with a

great enthusiasm and success.

The main aim of having introduced to a totally new office environment and to learn stunning

new things in life was covered in the training period.

During my training period I come to know about the various perspectives of life

insurance .I learnt how to persuade the customer emotionally for buying insurance

policy. I interacted nearly 150 persons some of them have don’t the insurance

policy.

The problem is faced by us is that today also people considered insurance as a

negative product and they don’t want to buy it.

66

As a whole mostly people are aware about the various insurance providers and

their products through advertisement and reference of their relatives or friends.

Emotional appeal plays a very important role in the insurance sector.

Chapter 8

Suggestions

67

SUGGESTIONS & RECOMMENDATIONSSUGGESTIONS & RECOMMENDATIONS

HDFC SL is having large number of channel partners but it is not supporting & taking

care all of them equally which results in increasing discontentment among new channel

partners because it’s not possible for company to support all of them equally. Company

should take some positive action against it.

Company executive should visit customer on regular basis.

They should pay proper attention towards checking of various components of insurance

before end user delivery. Otherwise it tends towards defame of brand name in

comparison to rivals.

68

Need to expend customer care center as the consumer base of HDFC SL is increasing

with tremendously fast pace.

Proper attention should be paid for advertisement planning otherwise it may lead to

problem for customer as well as for company.

Company should tie up with some event management company to organize various

promotional activities like canopy, Carnival.

Company should make policy for fixed end user price for all customers so that fair game

will be played & customer would not to compromise on their margin.

Chapter 9

Appendex

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APPENDIX

Questionnaires

1. Do you own a life insurance policy/ investment plan in your name?

Yes No

2. If yes which company/ company’s insurance policies do you hold?

HDFC Standard Life Birla Sun Life

Aviva Life Insurance Bajaj Allianz

LIC Tata AIG

ICICI Prudential ING Vysya

Bharti AXA

Others (specify name)

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3. What is the approximate premium paid by you annually (in Rupees)?

Rs. 5000 – Rs. 10000 Rs. 10001 – Rs. 15000

Rs. 15001 – Rs. 24900 Rs. 25000 – Rs. 50000

Rs. 50001 – Rs. 60000 Rs. 60001 – Rs. 80000

Rs. 80001 – Rs. 100000

More than Rs. 100000 (specify premium)

4. What kind of insurance policy would suit you best in your current stage of life?

Life Insurance Life Insurance and Investment Plans

Pension Plans Child Plans

Tax saving plans

5.Are you aware of the new unit linked insurance plans in the market?

Yes No

6.How much would you be willing to spend per annum if you were to go for an

investment/ insurance plan?

Less than Rs. 6000 Rs. 6001 – Rs. 10000

Rs. 10001 – Rs. 25000 Rs. 25001 – Rs. 50000

Rs. 50000 – Rs. 100000 More than Rs. 100000

7. Which according to you is an ideal policy term? (Number of years you would be

willing to pay premium)

3 to 5 years 6 to 9 years

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10 to 15 years 16 to 20 years

21 to 25 years 26 to 30 years

More than 30 years Whole life policy

8. What motivates you to purchase insurance/ investment plans?

Advertisements

High Returns

Advice from friends

Family responsibilities

Others (specify)

9. In which kind of company would you prefer to make a purchase of insurance?

Government owned company

Public Limited Company

Private Company

Foreign based company

10. Typically what kind of returns would you look at from your investments? (Please

note: Higher returns involve greater risk)

Less than 5%

5% - 10 %

11% - 15 %

16% - 20 %

21% - 25%

26% - 30%

31% - 40%

41% - 50%

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More than 50%

11. Personal Details:

Name:

Phone:

Gender:

Male

Female

Age group:

18 – 25 years

26 – 35 years

36 – 49 years

50 – 60 years

Above 60 years

Profile of respondent:

Student

Housewife

Working Professional

Business

Self – Employed

Government Service employee

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Chapter 10

Bibliography

74

BIBLIOGRAPHY

WEBSITES

“Products and Services.” HDFC-SL. <http://www.hdfcinsurance.com>.

“Historical perspective.” <http://www.wikipedia.com>.

““Reforms." Wikipedia. <http://www.wikipedia.com>.

“Unit Linked Plans." Life insurance Corporation of India.

<http://www.lic.com>.

“Unit Linked Plans." Tata aig. <http://www.tataaig.com>.

“Life Insurance." Bajaj allianz. <http://www.bajajallianz.com/

“Convenience Sampling.” Statpac. <http://www.statpac.com>.

“Various private sectors companies in India.< <

www.hdfcstandardlife.com

www.irda.gov.in

www.legalpundits.com

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BOOKS

Business research by C.R. Kothari

IC-33 LIFE INSURANCE (Revised) by INSURANCE INSTITUTE OF INDIA

Indian Financial System by P.N. Varshney & D.K. Mittal

NEWSPAPERS

Economic times

The Times of India

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