A PROJECT REPORT ON ANALYSIS OF AGENCY DEVELOPMENT& CONSURMER AWARENESS IN LIFE INSURANCE

Sar Utha Ke Jiyo

For Partial Fulfillment In award degree of Master of Business Administration ACADAMIC YEAR 2007-09

SUBMITTED BY
GUIDED BY Mr. Ravi Kumar Verma Lakhan Mr. Yadvendra

INSTITUTE OF CO-OPERATIVE &CORPORATE MANAGEMENT RESEARCH &TRAINING RING ROAD, INDIRA NAGAR, LUCKNOW

ABSTRACT

PGDM program is one of the most reputed professional course in the field of management. This course includes both theory and its application contents of curriculum. Summer training is an integral part of the PGDM program at ACCORD BUSINESS SCHOOL SHAHJANPUR Each student is required to undergo summer training from an institute of repute in his or her trimester. As complimentary to that, every trainee has to prepare and submit a report on the research work conducts by the students. This report is at continuation of the above tradition. This summer training was done at HDFC Standard Life Insurance Co. Ltd. Gorakhpur. The topic of the training was Analysis of Agency Development & Consumer awareness in life Insurance is very significant for the Life Insurance Company. This research is an attempt to present a report on account of interviews and surveys with the customers and consumers.

Sasheysh Tripathi PGDM 3rd Trimester

ACKNOWLEDGEMENT

Success of my project depends upon two factors internal & external. External factor includes sincere efforts, dedication to the work and good potential whereas internal factors includes cooperation and support of potential customers who patiently hears about the schemes and plans of insurances plan and then gives response about the product. Good guidance and cooperation from others are external factors, which affects the percentage of success. Though in completing this project I tried my level best but it could not be possible without proper guidance from the staff of HDFC Standard Life Insurance Co. Ltd. Im heavily indebted to .. suggestion, which I sincerely value and appreciate. I also want to give my thanks to ... for his valuable guidance and

RAVI KUMAR VERMA M.B.A IIIrd Semester

CONTENTS

TOPIC

PAGE NO

1. INTRODUCTION...8-25
Introduction of Insurance8 Fundamental Principles of Insurance...9-11 History of Insurance.12-13 Why Life Insurance..14-16 Review of Insurance Sector..16 Privatization of Insurance16-17 Libralization of Insurance Sector.17-19 IRDA19 Why Insurance in India20-22 Need of Brand Name in Insurance...22-23 Market Share among Private Companies.24 4

 Market Potential for Private Co...25

2. COMPANY PROFILE26-31 3. PRODUCT AND SERVICES..33-44 4. CHANNEL DEVELOPMENT45-60

Why to recruit ?...............................................................47 Who to recruit ?...............................................................47-48 How to recruit ?..............................................................48-49 Recruitment Activities ?................................................50-51 What to check while we are recruiting ?.......................51-52 Advisor Role.52-53 Working Environment...53 Your opportunity...53 Benefits of joining HDFC SLIC...54-56 Recognition Programms.56 Career progression & future opportunity...57 Fast trak pinnacle programmes...57-58 Extensive Advisor Training...58-59 Support team the co59 Expectation of team60 5. CONSUMER AWARENESS IN HDFC SLIC61-65 6. PROBLEMS OF INVESTORS.66-68 7. RESEARCH METHODOLOGY.69-71 8. RESEARCH OBJECTIVE72 9. FINDING ABOUT ADVISORS WHO ARE WORKING IN HDFC

SLIC
QUESTIONNARE...74-89

10. FINDING ABOUT THE SELECTION OF NEW ADVISORS

5

 QUESTIONNARE91-100 11. S.W.O.T ANALYSIS.101-103 12. CONCLUSION .104 13. RECOMMENDATION105-106 14. BIBLIOGRAPHY.107

INTRODUCTION

The aim of all insurance is to compensate the owner against loss arising from a variety of risks, which he anticipates, to his life, property and business. Insurance is mainly of two types: life insurance and general insurance. General insurance means Fire, Marine and Miscellaneous insurance which includes insurance against burglary or theft, fidelity guarantee, insurance for employer's liability, and insurance of motor vehicles, livestock and crops.

The Insurance Act, 1972 and the General Insurance Business (Nationalisation) Act, 1972 govern Fire and Marine Insurance, while the Indian Marine Insurance Act, 1963 governs marine insurance in our country. These laws contain provisions relating to the constitution, management and winding up of insurance companies and the conduct of insurance business of all types. All insurance business in India has been nationalised. A Contract of insurance is a contract by which one party undertakes to make good the loss of another, in consideration of a sum of money, on the happening of a specified event, e.g. fire accident or death. Law recognises insurance as a system of sharing risk too great to be borne by one individual.

FUNDAMENTAL PRINCIPLES OF INSURANCE

Some useful terms in Insurance:

INDEMNITY

A contract of insurance contained in a fire, marine, burglary or any other policy (excepting life assurance and personal accident and sickness insurance) is a contract of indemnity. This means that the insured, in case of loss against which the policy has been issued, shall be paid the actual amount of loss not exceeding the amount of the policy, i.e. he shall be fully indemnified. The object of every contract of insurance is to place the insured in the same financial position, as nearly as possible, after the loss, as if he loss had not taken place at all. It would be against public policy to allow an insured to make a profit out of his loss or damage. 8

UTMOST GOOD FAITH

Since insurance shifts risk from one party to another, it is essential that there must be utmost good faith and mutual confidence between the insured and the insurer. In a contract of insurance the insured knows more about the subject matter of the contract than the insurer. Consequently, he is duty bound to disclose accurately all material facts and nothing should be withheld or cancealed. Any fact is material, which goes to the root of the contract of insurance and has a bearing on the risk involved. It is only when the insurer knows the whole truth that he is in a position to judge (a) whether he should accept the risk and (b) what order to get money. Insurable Interest - A contract of insurance effected without insurable interest is void. It means that the insured must have an actual pecuniary interest and not a mere anxiety or sentimental interest in the subject matter of the insurance. The insured must be so situated with regard to the thing insured that he would have benefit by its existence and loss from its destruction. The owner of a ship run a risk of losing his ship, the charterer of the ship runs a risk of losing his freight and the owner of the cargo incurs the risk of losing his goods and profit. So, all these persons have something at stake and all of them have insurable interest. It is the existence of insurable interest in a contract of insurance, which distinguishes it from a mere watering agreement. Causa Proxima - The rule of causa proxima means that the cause of the loss must be proximate or immediate and not remote. If the proximate cause of the loss is a peril insured against, the insured can recover. When a loss has been brought about by two or more causes, the question arises as to which is the causa proxima, although the result could not have happened without the remote cause. But if the loss is brought about by any cause attributable to the misconduct of the insured, the insurer is not liable. Risk - In a contract of insurance the insurer undertakes to protect the insured from a specified loss and the insurer receive a premium for running the risk of such loss. Thus, risk must attach to a policy. 9 premium he should charge. If that were so, the insured might be tempted to bring about the event insured against in

 Mitigation of Loss - In the event of some mishap to the insured property, the insured must take all necessary steps to mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he does not do so, the insurer can avoid the payment of loss attributable to his negligence. But it must be remembered that though the insured is bound to do his best for his insurer, he is, not bound to do so at the risk of his life. Subrogation - The doctrine of subrogation is a corollary to the principle of indemnity and applies only to fire and marine insurance. According to it, when an insured has received full indemnity in respect of his loss, all rights and remedies which he has against third person will pass on to the insurer and will be exercised for his benefit until he (the insurer) recoups the amount he has paid under the policy. It must be clarified here that the insurer's right of subrogation arises only when he has paid for the loss for which he is liable under the policy and this right extend only to the rights and remedies available to the insured in respect of the thing to which the contract of insurance relates.

Contribution - Where there are two or more insurance on one risk, the principle of contribution comes into play. The aim of contribution is to distribute the actual amount of loss among the different insurers who are liable for the same risk under different policies in respect of the same subject matter. Any one insurer may pay to the insured the full amount of the loss covered by the policy and then become entitled to contribution from his coinsurers in proportion to the amount which each has undertaken to pay in case of loss of the same subject-matter. In other words, the right of contribution arises when (I) there are different policies which relate to the same subject-matter (ii) the policies cover the same peril which caused the loss, and (iii) all the policies are in force at the time of the loss, and (iv) one of the insurers has paid to the insured more than his share of the loss.

10

THE HISTORY OF INSURANCE IN INDIA:

(Insurance

Regulatory

and

Development

Authority)

in

April

2000.

The Indian Insurance Industry was dominated by two states Insures i.e. The Life Insurance Corporation in Life Insurance and The General Insurance Corporation in general insurance before 2000 which were created after the nationalization of the Life and non Life sector in 1956 and 1972 respectively. In Dec99, the IRDA Act was passed which limited foreign investors to a 26% cap on equity participation, and minimum capital requirement of $20 Million. At present, more than 12 private 11

players are in the market and some are in the pipeline. The advent of the new kids poses to LIC to somewhat extent, for which LIC will have to change its current policies regarding marketing and product management. Insurance is not necessarily an investment from which one expects

THE LIFE INSURANCE SCENARIO IN INDIA:

Since 1956, with the nationalization if Insurance Industry, the states run Life Insurance Corporation of India (LIC) has held the monopoly in countrys life insurance sector. General Insurance Corporation of India (GIC), with its four subsidiaries, was its counterpart in the casualty sector. Over the time, taking advantages of its monopoly and virtual prerogative in establishing the premiums, LIC has evolved into a monolith. With around 60,000 agents in every nook and corner of the vast country, it has created an enviable brand name, particularly among the rural population of the country. It has around $40 billion as its financial sector. However, on the qualitative side, it has every little pride in, And there lies the potential for players to challenge this behemoth. As typical with monopolies, the premiums rates charged LIC are among the highest in the world, and its track record in customer service can at best be called shabby. With a huge unionized, rigid workforce mostly in clerical category. LIC run the risk of high fixed cost, which will be the deciding factor productivity in the competitive scenario. While boasting full-scale automations of its operation, the truth is that its technology outdated. The new players, with the state- of-the- art technology under the belt, will be in advantageous position. 80% of LICs business is procured by 20% of its ill-trained agent force. The foreign player, with the domestic partners string brand value, can test the unconventional distribution channels like brokers, the Internet, the banking distribution system etc., although foreign players may be tempted to keep their operations in big cities for the 12

cream layer of the society, the real market lies in rural India, which accounts for the lions share of LICs present business. The foreign players must adapt to Indian realities, the well published failures of the world famous consumer goods companies like Electrolux, Whirlpool, Reebok, Nike etc. to gauge the Indian psyche and sentiments demonstrate the concept. They failed in the area of realistic pricing, product promotion and reaching to the consumer. The foreign companies know the ground realities to the details.

WHY LIFE INSURANCE:

Life Insurance has come a long way from the earlier days when it was originally conceived medium for short periods of tome. covering temporary risk situation, such as sea voyages. As Life Insurance became more established, it was realized what a useful tool it was for a number of including

13

 TEMPORARY NEED / THREATS:

The original purpose of the Life Insurance remains an important elements, namely for replacement of income on death etc.

REGULAR SAVING : Providing for ones family and oneself, as a medium to long term exercise (through a series of regular payment or premiums). This has become more relevant in recent times as people sect financial independence for their family.

INVESMENT : Put simply, the building up of saving while safeguarding it from the ravages of inflation. Unlike regular saving products, investment products are traidonailly lump sum investment, where the individual makes a one off payment.

RETIREMENT:
Provision for later years becomes increasingly necessary, especially in a cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in ones old age.

14

Let us take an example to understand the need for Insurance:

Mr. VINOD is 45 and self-employed. His wife VENEETA, who is a housewife, looks after their two children aged 3 and 7 years. They stayed in a rented accommodation, where the rent is Rs.15000/- per month. Mr. VINOD, has taken a loan of Rs. 2 Lakh. His monthly earnings on average are Rs.40,000/-. Mr. Amit passes away in an unfortunate road accident. What are some of the financial implications of his death on his family?

There may be several financial implications on his family. Some of these are:
The monthly income, previously provided would stop. His wife and children may have to seek financial assistance from other relatives. His wife may not have enough money to pay back the loan of Rs.2 lakhs. The families have to move into a cheaper accommodation. The widow may have to take up work to earn money. The education of their children may suffer.

This simple example illustrates the impact premature death can have on a family, where the main earner has no life cover. Had Mr. VINOD, taken a life cover, his family would not have faced such hardships in the event of his unfortunate death. A simple life insurance policy could have provided Mr. VINODs family with a lump sum that could have been invested to provide an income equal to all or part of his income. In simple words, insurance protects against untimely losses. Insurance has been found useful in the lives of persons both in the short-term and long-term. Short term needs like sudden medical costs and long-term needs like marriage expenses etc. can be met with using life insurance.

REVIEW OF INSURANCE SECTOR :

15

India is having population of 1 Billion with a middle class population estimated up to 300 million. It being the 5th largest economy in the world in terms of Purchasing Power Parity (PPP) has a GDP growth rate of over 6% per year on an average for the last decade. The saving rate is estimated to be about 26% of the GDP. In the total population, the insured the population is estimated to be about 70 million.

PRIVATIZATION OF INSURANCE :

The Indian Insurance Sector has finally opened up and it is with much anticipation that new players are awaiting their share of market. License have been issued to both Indian and Foreign Players- Reliance, HDFC Standard-Life, Max India-New York, Royal Sundaram Alliance, ICICI Prudential, IFFCO-Tokyo Marine, Bajaj Allianz, Birla Sunlife, Tata AIG, AVIVA Life Insurance, SBI Life, Om Kotak Mahindra are some of the entrants into the newly liberalized Indian Insurance market . The first move for the liberalization came with the Malhotra Committee Report in 1993 which recommended the privatization of Insurance, setting of an insurance regulatory authority and restructuring the government monopoly LIC and GIC and its subsidiaries IRDA Act passed in November 1999 had set ball rolling for the entry of Private Players in domestic sector.

LIBERALIZATION OF INSURANCE SECTOR:

16

Liberalization commitment of the country to help in disciplining future economic policies will include the insurance reforms. When world over insurance market has been opened up. India cannot remain in isolation. History has shown that it is very difficult to proper in isolation. Globalization is the new economic reality, which is here to stay, heralding a new era of Insurance in India. With the opening of the insurance industry, Indian stands to gain with the following major advantages. Globalization will provide opportunities to the consumer for the better production. With more reasonable and affordable pricing. The customer will get quicker service It will enhance the saving rate. Long-term funds for infrastructure development will be available to the country. It will secure for India larger inflow of foreign capital need to sustain our GDP growth

ADVANTAGES OF LIBERLIZATION:
The opening up will enable the country to save more and invest more for the development in infrastructure. With new insurance intermediaries and more distribution channels the market is bound to develop by leaps and bounds In the next few years it is established that the Indian insurance sector will develop a better understanding of consumer requirement leading to more satisfaction of consumers. Lead to increase in employment. Social and rural obligations will also be served as IRDA has come out with clear regulation in this regard, which makes the development in this area mandatory. Global competition will help in building expertise with their global practice.

17

Unlike west, in India, insurance is sold as the instrument of saving. About 18% of the policies are sold as death risk consideration. Impression about LIC is that they are not meant for the market requirements. They are only intended to find customers. Insurance awareness is therefore low. Unit linked insurance products are not available. Insurance covers are expensive and returns are low. Turn over the agent is high. The choice available to the insuring public is inadequate in terms of services, products and prices. These are the areas of weakness, which may act as opportunities for new players who may work to offer policies to the customer with the value additions at a competitive premium with much improved servicing.

The IRDA Governs the critical aspect of Insurance Sector Including:

The number and role of Private Sector operates including-Roman area intermediaries. Regulate covering investment, solvency norms Product Range Accounting Practices Consumer Protection Norms Ensuring the Rural and Health Insurance are developed. Fixing of License fee

Perhaps all the most critical regulation is the 26% equity Capital for Foreign Insurers. This regulation bring in issues regarding management control and one of the reasons for joint venture breaking up Cubb-Kotak, Liberty-Dabur, AllState-Dabur, Manu Life-UTI are some of the broken up alliances.

IRDA(Insurance Regulatory Development Authority):

18

The insurance sector has been opened up in India, as there was an urgent need. The international experience indicates those country with a liberalized insurance sector have witnessed a rapid growth in premium volumes enhancing the domestic saving rate. This happened in China, Malaysia and Singapore where a competitive market has led to improvement in Services and quicker settlement of claims. It is also important to note that competition will bring about advancement in information, communication and technology. And rightly therefore a decision was taken by the Government of India to open up Insurance sector. The establishment of IRDA in the month of April 2000 has been important development in this direction, making the end of monopoly in the insurance sector.

WHY INSURANCE IN INDIA:

Only 22% of the insurance population has been extended cover. Market penetration is low and the potential to exploit is high. Insurance premium per capita is very low. Lack of comprehensive social system benefit and welfare means that demand for pension products is high. 19

Huge middle class of approximately 300 Million. Existing insurance company score low on customer service front.

The insurance market registered growth in the Asian region even though Indias share in global insurance is less than 0.5% (1988) as compared to USA (24.2%) and Japan (21%). Studies have reveled that in an emerging market, as disposable income rises, Insurance premiums as a ratio of GDP shoots up. The confederation of Indian Industry projected a growth of Life Insurance premiums from Rs. 350 Billion at present to Rs.140 Billion. The growth of non-life insurance premium is expected to increase from 75 billion to 375 billion. Out of which, only 10% is tapped by the existing insurer. Insurance even more than banking is a volume game. A very exclusive approach in view is unlikely to provide meaningful numbers. Currently, insurance is bought for the purpose of tax-benefits. A higher percentage of business is in the rural market. The share of rural new business insurance total new business is 55% in terms of policies and 47% in terms of sum assured. However, this needs to be viewed in the light of some recent issues that have been raised regarding as to what constitutes the rural market. Therefore, private insurers will be best served by middle market approach, targeting the customer segments that are presently unexploited. How many Indians are aware that LIC has more than 60Products and GIC has more than 180Products? Not only there is a reduction in the premiums of Life Insurance products have long overdue since Indian morality rate has decreased three folds in the last 50years. There is also scope to increase the yield on life insurance policies (presently 6%) with proper risk management in place. It is been debated that insurance business does not produce profit in the first five years cross subsidization is a feature of Indian market. Even the first portfolio vote that is 20

considered profitable, cross subsidizes other departments. Tariffs reduction is likely to reduce profits; further insurers have to institute proper claims management progress in order to extract efficiencies. At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The government is soon to present a new model of taxing life insurance companies at international rates. New entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to produce or technology will prove most valuable in the long run. Banks and financial companies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which already apply in other world market. First Banking food insurance, fund management and other financial services companies are being to increase their profitability and provide maximum value to their customers. Therefore, they are themselves looking for a range of products to distribute. In other market notably Europe; this has resulted in bank assurance. Bank entering into the insurance business in India to bank hope to maximize expensive existing network by selling a range of products more of a loss alliance between insurance and bank than a formal ownership. Some Indian entrants like Reliance, ICICI and HDFC and hope to ride their existing network and customer bases.

NEED OF BRAND NAME IN INSURANCE:

21

Branding is the new key challenge in the financial services industry. Life in the 21st century will be longer with more choice in more field of activity. The financial consequence of the increased life span is particularly likely to be tough. Inevitably, this will lead to more complexity, which in turn necessities greater clarity and appeal from the service providers. Branding is more important in the financial services market which not only faces the problem of securing and retaining customers in an increasing competitive market place but also experience the need for heightened relevance of the brand positioning in a world where brand has been termed as new religion.

Life Insurance Company

LIC

Premiums
0.32

Sum Assured
5.52

Reliance life insurance

0.56

25.50

ICICI Prudential

0.67

30.15

HDFC Standard-Life

5.97

100

22

Birla Sunlife

14099.66

2,03,085.28

Focus and strategies are essential for development of brand in any sector but the less tangible world of financial products historically has escaped the branding issues that have governed development and culture in other industries. If there was an industry, which is least, considered as an essentiality it would be the insurance industry. It was always felt as abstract services or a fall back, more likely a safety net. But it is more of shifting through competitive products to select most appropriate one, but with liberalization of the industry, players have to realize the need for branding in a competitive environment. Insurance companies need to strive for a greater customer focus regardless the customer is the end or the intermediary.

Market Share Among Private Companies:

23

Market Share of private players

3% 0% 8% 3% 7% 5% 1% 32% 12% 15% 2% 5% 7%

TATA AIG OMKOTAK MAHINDRA BIRLA SUNLIFE MAX NEW YORK ING VYSYA HDFC STANDARD MET LIFE BAJAJ ALLIANZ ICICI PRUDENTIAL SBI AVIVA RELIANCE LIFE SAHARA LIFE

Pie Chart of market share of private life insurance companies

Market Potential for Private Life Insurance Companies in India :

It has been found that: 85 percent of the Indians prefer LIC than any other insurance companies.

24

Prevention of Loss, Assured Returns and Long term Investment are the important factors influencing Indians in opting for Life Insurance

Only few of the Indians are aware of private life insurance companies. Most of the Indians are of the opinion that private insurance companies would be able to perform well in the long run. Most of the Indians are interested in Money back policies than others Most of them are interested in insuring for an amount of Rs. 1- 2 lakhs There is significant relationship existing between monthly household income and amount insured Based on the monthly household income, Indians prefer to their investment needs like bank deposit, post office schemes, real estate, insurance, gold, chit funds, shares etc. * Agents are mostly responsible for selling insurance products in India.

25

ABOUT HDFC SLIC

HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance company, 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 % of equity in the joint venture.

26

Our key strengths

Financial

Expertise

As a joint venture of leading financial services groups, HDFC Standard Life has the financial expertise required to manage your long-term investments safely and efficiently.

Range ofSolutions We have a range of individual and group solutions, which can be easily customized to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure.

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.

FACT SHEET

HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC Ltd., India's largest housing finance institution and Standard Life Assurance Company, Europe's

27

largest mutual life company. It was the first life insurance company to be granted a certificate of registration by the IRDA on the 23rd of October 2000. Standard Life, UK was founded in 1825 and has experience of over 180 years. Companies. The company is rated as "very strong" by Standard & Poor's (AA) and "excellent" by Moody's (Aa2).

HDFC Standard Life's cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 Crores for the financial year, AprNov 2005. So far the company has covered over 11,00,000 individuals and has declared 5th consecutive bonus in as many years for its 'with profit' policyholders.

Board Members

Brief profile of the Board of Directors

28

Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive Chairman of Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited in a senior management position in 1978. He was inducted as a whole-time director of HDFC Limited in 1985 and was appointed as its Executive Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales). Mr. Keki M Mistry joined the Board of Directors of the Company in December, 2000. He is currently the Managing Director of HDFC Limited. He joined HDFC Limited in 1981 and became an Executive Director in 1993. He was appointed as its Managing Director in November, 2000. Mr. Mistry is a Fellow of the Institute of Chartered Accountants of India and a member of the Michigan Association of Certified Public Accountants. Mr. Alexander M Crombie joined the Board of Directors of the Company in April, 2002. He has been with the Standard Life Group for 34 years holding various senior management positions. He was appointed as the Group Chief Executive of the Standard Life Group in March 2004. Mr. Crombie is a fellow of the Faculty of Actuaries in Scotland. Ms. Marcia D Campbell is currently the Group Operations Director in the Standard Life group and is responsible for Group Operations, Asia Pacific Development, Strategy & Planning, Corporate Responsibility and Shared Services Centre. Ms. Campbell joined the Board of Directors in November 2005. Mr. Keith N Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. Prior to this, Mr. Skeoch was working with M/s. James Capel & Co. holding the positions of UK Economist, Chief Economist, Executive Director, Director of Controls and Strategy HSBS Securities and Managing Director International Equities. He was also responsible for Economic and Investment Strategy research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005. Mr. Gautam R Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India. Mr. Divan was the Former Chairman and Managing Committee Member of Midsnell Group International, an International Association of Independent Accounting Firms and has authored several papers of professional interest. Mr. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also has substantial experience in structuring 29

overseas investments to and from India. Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management. Mr. Pant, until 2002 was a Partner & Vice-President at Bain & Company, Inc., Boston, where he led the worldwide Utility Practice. He was also Director, Corporate Business Development at General Electric headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton School and BE (Honours) from Birla Institute of Technology and Sciences. Mr. Ravi Narain is the Managing Director & CEO of National Stock Exchange of India Limited. Mr. Ravi Narain was a member of the core team to set-up the Securities & Exchange Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI). Mr. Deepak M Satwalekar is the Managing Director and CEO of the Company since November, 2000. Prior to this, he was the Managing Director of HDFC Limited since 1993. Mr. Satwalekar obtained a Bachelors Degree in Technology from the Indian Institute of Technology, Bombay and a Masters Degree in Business Administration from The American University, Washington DC. Ms. Renu S. Karnad is the Executive director of HDFC Limited, is a graduate in law and holds a Master's degree in economics from Delhi University. She has been employed with HDFC Limited since 1978 and was appointed as the Executive Director in 2000. She is responsible for overseeing all aspects of lending operations of HDFC Limited.

Group Companies

30

Bancassurance Parteners Some of our valued bancassurance partners.

31

32

Individual Products

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

Protection Plans

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

Investment Plans

HDFC Standard Life provide you with attractive long term returns through regular bonuses. Our Investment range includes Single Premium Whole Of Life plan

Pension Plans

33

Our Pension Plans help you secure your financial independence even after retirement. Our Pension range includes Personal Pension Plan Unit Linked Pension, Unit Linked Pension Plus Our Immediate Annuity plan will aid you in receiving income post retirement and securing you financial independence.

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 Assurance Plan Savings Assurance Plan Childrens Plan Money Back Unit Linked Endowment Unit Linked Endowment Plus Unit Linked Endowment Suvidha Unit Linked Endowment Suvidha Plus Unit Linked Endowment Plus II Unit Linked Young Star Unit Linked Young Star Plus Unit Linked Young Star Suvidha Unit Linked Young Star Suvidha Plus Unit Linked Young Star Plus II Unit Linked Enhanced Life Protection II

Group Products
34

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 An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your company Also suitable for other employee benefit schemes such as salary saving schemes and wealth management schemes

Social Product

Development Insurance Plan 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 member beneficiary to help meet some of the immediate financial needs following their loss.

Eligibility:

35

Members of the development agency and their spouses with: - Minimum age at the start of the policy 18 years last birthday - Maximum age at the start of policy 50 years last birthday Employees of the Development Agency are not eligible to join the group. The group to be covered is only eligible if it contains more than 500 members.

Premium Payments

The premium to be paid will be quoted per member in the group and will be the same for all members of the group. The premium can only be paid by the Development Agency as a single lump sum that includes all premiums for the group to be covered. Cover will not start until the premium and all the member information in our specified format has been received. The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.

Benefits

On the death of each member covered by the policy during the year of cover a lump sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of an accident, an additional lump sum will be paid equal to half the sum assured. There are no benefits paid at the end of the year of cover and there is no surrender value available at any time.

The role of the Development Agency

Due to the nature of the groups covered, HDFC Standard Life will be passing certain administrative tasks onto the Development Agency. By passing on these tasks the premium charged can be lower. These tasks would include: Submission of member data in a specified computer format Collection of premiums from group members Recording changes in the details of group members Disbursement of claim payments and the mortality rebate (if any) to group members These tasks would be in addition to the usual duties of a policyholder such as: Payment of premiums 36

Reporting of claims Keeping policy holder information up to date Training and support will be available to give guidance on how to complete the tasks appropriately. Since these additional tasks will impose a burden on the Development Agency, the Development Agency may charge a Rs. 10 administration fee to their members.

Prohibition of rebates

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

37

Tax Benefits:

INCOME TAX SECTION

GROSS ANNUAL SALARY Across All income Slabs.

HOW MUCH TAX CAN YOU SAVE?

HDFC STANDARD LIFE PLANS

Upto Rs. 33,990 saved on investment of All the life insurance plans. Rs. 1, 00,000. Upto Rs. 33,990 saved Across all Sec. 80 CCC on Investment of Rs.1, All the pension plans. income slabs. 00,000. Upto Rs. 3,399 saved All the health insurance riders Across all Sec. 80 D* on Investment of available with the income slabs. Rs. 10,000. conventional plans. Rs. 37,389 TOTAL Rs. 33,990 under Sec. 80C and under Sec. 80 CCC, Rs.3, 399 under SAVINGS Sec. 80 D, calculated for a male with gross annual income POSSIBLE ** exceeding Rs. 10, 00,000. Under Sec. 10(10D), the benefits you receive are completely tax-free, Sec. 10 (10)D subject to the conditions laid down therein. * Applicable to premiums paid for Critical Illness Benefit, Accelerated Sum Assured and Waiver of Premium Benefit. ** These calculations are illustrative and based on our understanding of current tax legislations, which are subject to change. Please contact your tax consultant for exact calculation of your tax liabilities. Sec. 80C

Benefits:

38

Life Cover Benefit: You can choose the basic Sum Assured within the minimum and
maximum levels mentioned below

Minimum Sum Assured:

Regular Premium: Annualized Premium for 5 years or for half the Policy term Single Premium: 125% of the single premium

Maximum Sum Assured: No Limit (Rs 500,000 for age up to 12 years)

In case of unfortunate loss of life, your Beneficiary will get sum Assured or Unit Account Value whichever is higher.

Maturity Benefit: On survival, at maturity the value of your Unit Account will be paid
out.

Rider Benefit: You can add the Accidental Death & Accidental Total and Permanent
Disablement Benefit Rider (available only with regular premium option).

What are the different fund options?

39

HDFC Standard Life Insurance co. understands the value of your hard earned money and in our endeavour to help you grow your wealth, we offer you 4 different tailor-made investment funds. You have the option to allocate your premium in these funds as you wish. The four different funds offered are:

1.Capital Secure Fund: The investment objective of this fund is to maintain the value of all contributions (net of charges) and all interest additions. This Fund offers steady return for very little risk. The risk profile of this fund is low. Your funds are invested 100% in Bank Deposits, Government Bonds and debt instruments that offer financial security. Further, allocation in Capital Secure Funds for a policy is a subject to a maximum limit of 20% at any time.

2.Balanced Fund: The investment objective of this Fund is to provide you with investment returns which exceed the rate of inflation in the long term while maintaining a low probability of negative investment returns. In this fund, a major portion of your funds are invested in fixed securities while a small percentage is invested in the equity market, which is exposed to market movements. The risk profile of this fund is low to medium.Investment would be at least 80% in fixed interest securities and maximum 20% in equities.

3.Growth Fund: The investment objective of this Fund is to provide you with investment returns which exceed the rate of inflation in the long term while 40

maintaining a moderate probability of negative investment returns. This fund offers a greater portion of your funds are invested in fixed securities while a small percentage is invested in the equity market, which is exposed to market movements. The equities. risk profile of this fund is medium to high. Investment would be at least 60% in fixed interest securities and maximum 40% in

4.Equity Fund: The investment objective of this fund is to provide Policyholders with high exposure to equities and the possibility of investment recognizing that there is a significant probability of negative investment returns in the short term. This fund offers a totally equity based investment option. Your returns depend entirely upon the performance of the equity market. The risk profile of this fund is high. The higher risk of this portfolio means that expected returns would also be higher. Investments would not exceed 30% in Bank Deposits and may be 100% in equities.

Value of Units:
The unit price of each Fund will be the unit value calculated on a daily basis. Total Market Value of assets plus/less expenses incurred in the purchase/sale of assets plus Current Assets plus any accrued income net of fund management charges less Current Liabilities less Unit Price = Provision Total Number of units on issue (before any new units are allocated/redeemed)

Flexibility:

41

Pay top-ups

If you have received a bonus or some lumpsum money you can use that as a top-up to increase the investments component in your Policy. Top-ups are allowed only if all premiums due till date are paid. There is no restriction on the maximum amount of top-ups. However top-ups made over and above 25% of the basic regular premium paid till date will lead to an increase in Sum Assured to the extent of 125% of the excess top up premiums. The minimum top-up amount is Rs. 2,500. 98% of any amount paid as top-up is allocated to your funds.

Make partial withdrawals

After three years,

If your Unit Account Value is less than the Sum Assured, then the maximum partial withdrawal can be Rs 5,000 per partial withdrawal. If your Unit Account Value is more than the Sum Assured, then the maximum partial withdrawal is the difference between the Unit Account Value and the Sum Assured plus Rs 5000.

Higher amounts of partial withdrawals are allowed subject to underwriting. Two partial withdrawals are allowed every year. Minimum Fund Value after each partial withdrawal should be Rs 10,000.

For the purpose of partial withdrawals, top-ups would have a lock-in of three years from the date the top-ups are made until then no partial withdrawals are allowed. This condition is not applicable if the top-ups premiums are paid during the last three years of the Policy term.

42

Assured is minor, - partial withdrawals are allowed on or after attainment of age 18 returns which generate a high real rate of return in the long term while Where the Life years or after 3 years if later.

the maturity date instead of a lump sum on the maturity date. You can choose to redeem the units in his/her Unit Fund anytime up to 5 years from the date of maturity.

Who can buy this product?

Minimum Age at entry Maximum Age at entry

30 days 65 years

Maximum Age at maturity 80 years

43

44

CHANNEL DEVELOPEMENT
Why to recruit ?...............................................................47 Who to recruit ?...............................................................47-48 How to recruit ?..............................................................48-49 Recruitment Activities ?.................................................50-51 What to check while we are recruiting ?........................51-52 Advisor Role..52-53 Working Environment....53 Your opportunity....53 Benefits of joining HDFC SLIC....54-56 Recognition Programms.56 Career progression & future opportunity...57 Fast trak pinnacle programmes...57-58 Extensive Advisor Training...58-59 Support team the co59 Expectation of team60

45

WHY TO RECRUIT
There are two aspects of employment in the insurance sector today. One is Permanent Employment, for sales, operation, IT support, back office services and So on. We are also offering the other kind of employment for people to sell Life Insurance they are called Life Advisors. Or Certifide Financial Consultant . This is a Because we are supposed to !! That the way to do this business. More recruits, more active advisors, more BDM big area of employment.

WHO TO RECRUIT
Quality Deptt. has given some indicators in terms of what are the common traits(Q-SCORE) of our successful advisorsThe commonalities w ere Age Education : between 30 -45 : graduate

Family Income : above Rs. 2 lacs p.a. The important fact to remember is that 61% of our RED category advisors do not fall into any of this category-

This is a broad pointer for us to remember what are the his/her profile Some other pointer from Quality Most of the RED category advisors FAILED in the DISC profile which means that DISC is good indicator of chanced of success or failure

46

Successful advisors usually have 2 years of work exp. In their current profession Small time businessmen / entrepreneurs v. successful profile Women/Housewives are very successful- however they have not been sustainable over long periods. They usually have become inactive after 6 7 months of joining. But till the time they are working, their average WAPI & Productivity is very high compared to others.

People who are new to the city are least probable to do well.

How to Recruit?
Things which you should have while meeting the prospect. BOP Presenter. Reward points booklet OR take a copy of the catalog from the website show the gifts, a prospect wouldnt understand points, but will value the gifts. Advisor Manual - can show how the manual can answer many procedural issues. Talk about email id & tech support the prospect would like to know what all ill the company give My Market show 100 show the booklet and stress its importance. Copy of any certificate MDRT certificates, Sales Champion certificate etc to show recognition. Insist on doing the BOP presentation it gives a complete picture of what you have to present & answers a lot of questions.

47

 Stress on different things to different profiles change your proposition as per the customer. Women Rewards, - gift items, household goods, gold . Young marketing background career Pinnacle. Tax/ MF/ LIC Agents Rewards & Recognition, Star Clubs. As foreign trips, preferential treatment in all aspects, dont talk about commissions, stress on the extras. Small businessman / Entrepreneurs show ROE Return on Energy , to the earn the same amount of money from your business; you would be spending much more time & energy a lot of capital from your pocket.

THE

POWER

RENEW AL

COMMISIONS :A lways,

always,

always stress on the fact that renewal commissions ARE THE differentiator from every other sort of business Spend lot of time on the Commissions structure given in the BOP Try to do an example in front of them trying to portray the commissions payable for the same amount of business done every year THE EARNING CALCULATOR WILL BE OF THE HELP HERE

48

Recruitment Activities

Each of us should have a mix of

Mass Media Activities - Spray & Pray

Lead Generation activities

Database calling, cold calling, teleAds, Classified, paper Inserts, Pamphlets, Banners calling, mailers, mass BOPs, fish bowl activity, Yellow Pages, Trade Directories etc.

Over the last one year, the response from this basket of activities has gone down drastically, thus forcing us to be creative to create other avenues

We need to develop lead generation activities more so as to have more people to touch upon and tell about this career opportunity

Activities which have done well with us in the recent past:

49

 Joggers Park Summer Trainees Mass BOPs Database Calling Lead Generation Activities Tele Calling set ups

Some more ways on how to recruit:

Database Attack can be done through a trainee. Cold Calling helps a lot as the respondent does not waste your time by dilly dallying. RWA Activities Tambola or children painting competitiongives real time leads, cost effective per lead. Look at level MBA colleges for Pinnacle probable. Source local databases Cable TV Service providers, home delivery caterers. Fish Bowl Activity- in high football places.

What to check while recruiting:

ENERGY, ENERGY always check the persons energy levels, as this career is all about meeting new people, finding new prospects and more so handling rejections

50

His past/ present occupation gives tremendous insight into his energy levels Show him the path in his current environment how insurance selling can fit in lowers the resistance of time availability Check his environment his family locality Check whether he can work on his own Find out if he is looking for money or career as he can have both here

Things to check while recruiting:

Always try to meet the person at his residence- check for the locality, his household, standard of living, try to involve the spouse in the presentation so that they know what they are getting into Always check on need for money & a drive to do well in life if he has been doing well in life, he will make efforts to do well with us Ask questions about his past, find instances of accomplishments Keep checking on the pointers & do a mental check list of the acceptable points Be convinced about the profile and then only go ahead

Advisor Role
To provide ongoing financial advice for his/her client: Identify future client Making appointments Conduct financial review meetings with prospects/clients 51

 Close sale Get referrals Provide service to clients Follows internal sales & reporting systems:

Working environment:
To be part of a world class sales team. Work from your own office or residence. Work full time or part time. Earn commission, bonus $ incentives. No upper limits in earnings . Flexible career.

Your opportunity:
No startup capital required. Flexible working environment. Be your own boss. Unlimited earning potential. To be part of world - class team.

52

BENEFITS OF JOINING HDFC SLIC:

Commission & Renewals: As insurance advisor you can earn handsome commission,
which varies from 5% to 40% depending upon product to product and in addition 1st year commission entitled to renewal commission also.

Star on debut: If our new advisor sources RENP 2,00,000 in 30 days licensing then
he/she is entitled to Silver Medal(Approx value Rs. 5,000) + certificate (signed by ZM & Reg. Mgr).

Rising Star on Debut: If our new advisors sources RENP of Rs. 5,00,000 in 30 days
of licensing then he/she is entitled to Gold Medal(Approx value Rs.13000) + certificate (signed by ZM & Reg. Mgr).

Millionaire Star on Debut: If our new advisors sources RENP of Rs. 10,00,000 in 30
days of licensing then he/she is entitled to Gold Medal(Approx value Rs.25000) + certificate (signed by ZM & Reg. Mgr).

Global Star on Debut: If our new advisors sources RENP of Rs. 24,00,000 in 30 days
of licensing then he/she is entitled to Gold Medal(Approx value Rs.60000) + certificate (signed by ZM & Reg. Mgr).

Star of the Month: Top 3 FCs, 1st Rank: Trophy + Certificate recognizing the
performance signed by ZM & Reg. Mgr., 2nd &3rd Reg. Mgr. 53

To recognize best talent our company has following clubs:

Bronze Club: Non Monetary Benefit 1%. Minimum RENP Rs. 3, 00,000 (contest
period 5th July-30th Jun)

Silver Club: Non Monetary Benefit 3% and Retention Bonus Rs.5,000. Minimum
RENP Rs. 6, 00,000 (contest period 5th July-30th Jun)

Gold Club: Non Monetary Benefit 5% and Retention Bonus Rs.10,000. Minimum
RENP Rs. 15, 00,000 (contest period 5th July-30th Jun)

Toppers Club: Top 101st to 225th ranked CFCs on RENP Minimum RENP Rs.40,
00,000 Non Monetary Benefit 5% and Retention Bonus 1% Total 6%. (Contest Period 5th July-30th Jun)

Centurion Club: Top 100 ranked CFCs on RENP Minimum RENP Rs.40,00,000 Non
Monetary Benefit 5% and Retention Bonus 1.25% Total 6.25% up to 10% (Contest Period 5th July-30th Jun)

Other Schemes & Incentives:

Our Company announces from time to time different incentive schemes in which gifts vary from small item like Leather bag to luxury car for example Skoda Octavia. 54

 Career Opportunity for Certified FCs

Branch Manager Assistant Sales Manager Branch Development Manager Sales Development Manager Certified Financial Consultants

CFC Welcome Kit: Welcome letter Laminated Identity Card Copy of agency agreement IRDA License Bank account 100 visiting card from the branch Commission booklet Reward& recognition booklet Pin to access HDFCSLIC website

Recognition programs : Foreign trips & seminars. Select club memberships: 55

o Presidents club. o DHFC SLIC star club. MDRT Membership.

Career progression & future opportunities:

Exclusive program for high potential achievers. Hand picked advisors. A fast track career path. Recognition as Tiger Continue doing your business. Criteria. -Age 25 40 years -At least 1 year in system -Case count 2 per month

Part time career as a Trainer. Conduct foundation programs. Share best flied practices. Replicate your business. Continue doing your business. Criteria. -Age 25-45 years -At least 6 months s in system - 2 case count per month

Fast track pinnacle programmes: A full time career as audit manager Growth within HDFC SLIC. 56

Greater earning potential Personal Development Performance criteria -Age 25-45 years -At least 6month in system -30 issuance within 6 months

Agency champion: Take your business to the next level Entrepreneurs ,develop your own business Recruit new advisor and make your own team Increased reach and earning potential Criteria -At least 1 year in system -Minimum 60 policies and 9.0 lacs premium -Selection process (assessment center)

Extensive training to make you a professional advisor:

Selling skills Product knowledge 57

 Training

Relationship skills delivery through several convenient options Face to face Online Self learning

Next steps
Confirmation of mutual interest Selection interview Profiling test dates Draft payment favoring Reliance life insurance co.Ltd payable in Channai Finalize Training Dates,venue

Support team the Company :

Field visits Training on products & selling skills regular business reviews be a coach & mentor recognize high performers help you become financially indipendent

58

Expectations of team
Achieve sales targets Participate in all meetings Attend all training programs Weekly reviews at the office Follow the sales process Follow weekly reporting process

59

CONSUMER AWARENESS : INSURANCE SECTOR

IRDA's regulatory initiatives have set the stage for a new era in functioning of the Insurance Companies. 60

The theme for this conference organized by FORTE & IRDA: "Consumer Awareness : Insurance Sector" is another major step which hopefully leads to meaningful discussions. For the purpose of this conference, I rather use a different nomenclature to facilitate recognizing the issues and aspects relevant to the theme: Life insurance always involves two beneficiaries (consumers), namely, those who are designated to benefit in the event of death of the 'insured', and also, and this is highly important, the premium payer himself while he is living. The protective influence of life insurance extends to the insured himself enabling him to live more efficiently and fully than otherwise be the case. When we start with the 'beneficiary' in the modern life insurance as the center of thinking, the line of thought moves out in the direction of an ever widening circle. The thought process gives rise to a host of economic, social, psychological, legal, actuarial and financial implications of great magnitude. Only by emphasizing the potential needs of "beneficiaries", by fostering a keen sense of responsibility on the part of the family heads for the welfare of their dependents, by developing effective procedures for translating family love and affection into practical financial plans, and by using motivation techniques built on beneficiary relationships could the institution of life insurance ever attain the stature and achievement required to make life insurance a more effective instrument for safeguarding the interest of beneficiaries. Legislators and regulators all over have evidenced their concern for the beneficiaries and the latter's confidence in life insurance as a practical means of furthering the social welfare. Courts have evidenced similar beliefs in their numerous decisions. Every life insurance policy must some day be measured against the job that it must perform for "beneficiaries". THE trouble is that if it is not measured until it becomes a claim and then falls short of doing the job, there is nothing that can be done to remedy the situation. Therefore, the important role of the intermediaries (Agents, Brokers etc). A skilled and competent intermediary must be able to take men in their imagination into the future to be 61

able to foresee the risk and by proper planning lessen the impact of financial consequences. The primary service they offer should be prescriptive through recommending suitable plans.

Product and Service Combined :

Because life insurance should be purchased to meet 'beneficiaries' financial needs, it is essential to look beyond the policy as a product and consider their personal situation. Service includes selling the right policy to fill the policy owner's need, making sure the policy owner understands the transaction fully, arranging ownership and beneficiary designation as required. Thus the product and the service are very much interwoven. In the light of these factors, it is understandable that a number of life insurance industry organizations abroad, specially in USA and Canada are continuously engaged in special research projects with a view to understanding better the service function. Improvements in the nature and quality of service to beneficiaries/policy owners should follow when the industry has a clearer understanding of what services policy owners require and how they are best rendered. Important as life insurance is today, its real progress is yet to come, largely through the national education system - collegiate level education as well as public education. Our time-honoured professions use colleges and universities as allies for the effective initial preparation of their practitioners and to provide opportunity for continued study. It has to be so with insurance subject as well which is a relative newcomer on our socio-economic scene. Insurance and financial counseling as a vocation and profession could advance and acquire stature and dignity in direct proportion to the education received and success achieved by those in the business and with the public. Also Public education in insurance represents a "great selling / teaching movement" to spread the beneficial influence of the concept of life insurance into millions of our homes and business enterprises. Public education should be designed to prepare the buying public for ready and willing acceptance of the professional service of the intermediaries. In fact,

62

this should be the first and most important step taken in the process of developing marketing methodology and marketing orientation. It is true that the life insurance business has tended to describe as a duality, a combination of protection and savings account, what is really the unity of permanent life insurance. We have not communicated with sufficient clarity that the savings like features of life insurance are a by-product of the reserves necessary for long term or life time protection, and that without them the protection runs out when the need might be greatest. Need for regulatory mechanism is recognized as Insurance is effected with public interest in view of the large numbers involved. As a contract necessarily embodying a host of legal details, and specially imbalance of bargaining power of the insured (Asymmetrical information) insurance invites regulatory oversight to adequately protect the insurance consuming public. (beneficiaries) No element of insurance business deals more closely with the insurance consuming public than insurance intermediaries(Agents, brokers and others) Most of the major problems and issues confronting the life insurance business are market oriented. Questionable market conduct and misleading sales practices on a widespread basis could emerge as a major issue.

Related closely to these issues are:

1. How should industry foster thinking on risk with a view to building up a body of thinkers and a body of literature, which shall be the beginning of more adequate recognition of the subject influencing our actions?

63

2. What kind of men and women should be selected to solicit etc., insurance? What kind of persons to direct the life insurance marketing programme? It is true we have not perfected the techniques of selecting and recruiting, and managing retention of agents to keep turnover within limits that would be optimum for the economics of the business and for the satisfaction of all the individuals involved. Insurance industry is in transition and passing through an era of discontinuity. Competitiveness demands a commitment to truth and willingness to confront brutal facts of reality. We need to cultivate and use "truth tellers" - people on whom we can rely to "call them the way they see them". We need "unfiltered feedback".

64

Changing Consumer Perceptions about Insurance HDFC SLIC

Abstract
The caselet details the well-designed marketing communications initiatives developed by HDFC Standerd Life Insurance (HDFC SLIC) that helped it gain leadership position in the Indian life insurance market. During its initial years HDFC SLIC focused on creating a strong brand identity and awareness and designed the marketing communication strategy 65

accordingly. However, in 2002 it completely changed the communications strategy and began to promote specific products from its product portfolio based on the consumer research study. One of the promotional objectives designed was to create a feel good factor around retirement and change customers perception of retirement as a mark of old age and loss of financial independence

Issues:
Role of marketing communications in financial services sector Corporate advertising and its role in financial services Product specific advertising and its significance Importance of post advertising tests

Introduction
In the year 2000, the Government of India opened up the life insurance market to private players. Till then, the Indian life insurance industry had been dominated by Life Insurance Corporation of India (LIC), the only player in the insurance market. This monopoly had created such a strong brand identity and awareness for LIC that LIC became a generic word for life insurance in India. After deregulation, many domestic and international players entered the life insurance market. However, the Indian insurance industry continued to face various problems such as low penetration (only 22% of the insurable population were insured) and low premium to 66

GDP ratio (of 1.3). Growth was also hampered by the existing customer perception that life insurance was a tax saving tool. Another problem was that the entry of many players had cluttered up the market.

Questions for Discussion:

1.

HDFC SLIC deviated from the usual advertising strategy that other insurance providers

adopt of promoting the product line. Instead, it launched an ad campaign Sar Utha Ke Jiyo, that highlighted the HDFC SLIC brand. Explain the motives of the co. in launching this ad campaign?
2. Though

HDFC SLIC corporate advertising campaign reaped rich dividends, the company

chose to adopt a product specific advertising strategy in later years. What customer demographics did the company identify, that led it to adopt a change in the existing advertising strategy?

67

RESEARCH METHODOLOGY

The Research specifies the following information required to address needed issues, designs the methods for collecting information, manages and implements the data collection process, analyzes and communicates the findings and their implications. The research methodology implemented in this project primarily consists of personal interviews with the Public of GORAKHPUR. To understand and evaluate the Interest of earned extra income and the perception of financial Advisors in HDFC STANDARD 68

LIFE INSURANCE, I had conducted interviews to get the general overview about the company policies, system of working and employee psychology.

Information Sources:
PRIMARY DATA was collected with the help of interviews with the employees of different cadre and a structured questionnaire has been floated in different places to get inside knowledge of the research topic. SECONDARY DATA was collected through the Internet, Magazines, Newspapers and Corporate Profile

Data Collection Tools:

The main methodology used was Descriptive Design with its main tools being Discussion Guidelines Questionnaire Personal Interviews

Sample size:
It could be very difficult and more time consuming to collect data from whole population, so accordingly the sample size of 100 has been taken through careful design and analysis, for this study purpose.

69

70

RESEARCH OBJECTIVES

In any research the objective or purpose for which the research has been conducted lies on the focal point around which whole project revolves. It is the foundation on which the project is build The objective of my project was-

71

To find out the perceptions of Respondent for the interest of the extra To find out the perceptions of Financial Advisor who are working as a

income and join as financial advisor in HDFC STANDARD LIFE INSURANCE CO. financial Advisor in HDFC STANDARD LIFE INSURANCE CO. The sub objectives of my project are To find out the percentage of respondent for the interest of extra income To find out the percentage of financial advisor who are working in HDFC

STANDARD LIFE INSURANCE CO.

72

QUESTIONNAIRE

1:- Name .. 73

2:- Age A) less than 25 B) 25-35 C) 35-50 D) 50 Above

3:- Address 4:- Contact No. 5:-Annual Business Provided by Advisors? A) 0-35000 B) 35000-70000 C) More than 70000

6:-Satisfaction Level of Financial Advisor? A) Highly Satisfied B) Satisfied C) Dissatisfied D) Highly Dissatisfied E) Cant Say 7:- Reasons of Liking HDFC SLIC? A) Integrity B) Good Working Environment C) Customer- friendly D) Can work all over the country 8:-Working Environment of the Company? A) Very Good 9) Pattern of Working ? A) Part Time B) Full Time B) Good C) Average D) Poor

10) Duration of Working with HDFC SLIC? A) 0-1 yrs. B) 1-2 yrs. C) 2-3 yrs. D) More than 3 yrs.

11) Previous Sales Experience Sales of Advisors? A) Nill B) Less than 1 yrs. C) 1-3 yrs. D) More than 3 yrs.

12) Duration of Advisor Residence in Gorakhpur? A) By Birth B) less than 5 yrs. C) More than 5 yrs.

13) Total Household Income of Advisor (per annum)?

74

A) Less than 1 lakh B) 1 lakh - 2 lakh 14) Main Profession of Advisors? A) Engineer E) Teacher B) Doctor F) MBA

C) 2 lakh 3 lakh D) More than 3 lakh

C) CA/CWA/CFA/ CS D) Lawyer G) Businessman H) others

15) Educational Qualification of Advisors? A) Post Graduate B) Graduate C) Diploma D) 12th

16) Marital Status of Advisor? A) Unmarried B) Married

17 Male vs. Female Advisor? A) Male B) Female

Finding # 1

75

Annual Business Provided by Advisors

5%

14%

81%

0-35000

35000-70000

MORE THAN 70000

Analysis:
A majority of financial advisors are able to deliver a good results and giving good figures. About 81% are giving business more than Rs. 70,000 a year but it is not last it needs some proper attention to develop it more.

Satisfaction Level of Financial Advisors

8%

8%

19%

Finding # 2

22% 43%

76
HIGHLY SATISFIED SATISFIED DISSATISFIED

HIGHLY DISSATISFIED

CAN'T SAY

Analysis:

The finding is able to tell that satisfaction is higher than dissatisfaction but the real achievement will be to convert that dissatisfaction into satisfaction too. In this direction the first step should be to think and make a proper action plan to increase the level of satisfaction.

Findings # 3

77

Reasons of Liking in HDFC SLIC.

30%

27%

11% 32%

Good Working Integrity Customer-friendly policiesEnvironment Can work all over the country

Analysis:
The finding is able to tell that the Advisor Liking HDFC STANDARD LIFE INSURANCE CO., because of coustomer friendly policy and can work all over the country & Its benefit to the Advisors and for the company.

Findings # 4

78

Working Enviournment of the Company

5% 24% 32%

39% Very Good Good Average Poor

Analysis:

The finding shows the most Advisor Perceptions for the HDFC SLIC. Good working enviourment and somebody are says very good environment. it is benefits for the company then they can provide the better facility for the Advisors.

79

Findings # 5

P a tte r n o f W o r k in g
43% 57%

P a rt T im e F u ll T im e

Analysis:

The findings shows the many people join the Advisors ships for the part time work

80

Findings # 6

Durations of Working with HDFC SLIC 14% 3% 41% 42% 0-1 yrs 1-2 yrs 2-3 yrs More than 3 yrs

Analysis:
In the HDFC SLIC maximum Advisors are working between one to two years. The findings show the advisors growth in the company.

Findings # 7

81

Previous Sales Experience of Avisors

55%

27%

41% 27%

Nill

Less than 1yrs

1-3 yrs

More than 3 yrs

Analysis:
The findings shows that maximum Advisors working and worked in other companies then they have maximum experience in sales fields

Findings # 8

Durations of Advisor Residence in Lucknow

19%

14% 67%

By Birth

Less than 5 yrs

More than 5 yrs

Analysis:
82

It is the show the maximums advisors living in Lucknow by birth. Then can have a good relations in Lucknow, They can do the work in company .

Findings # 9

T o ta l H o u se h o l d I n c o m e o f A d v i so r( p e r a n n u m ) 14% 14%

40%

32%

L e s s th a n 1 0 0 0 1 0 0 0 0 0 0 -2 0 0 0 0 0 2 0 0 0 0 0 -3 0 0 0 0 0 M o re t h a n 3 0 0 0 0 0

83

Findings # 10

Main Profession of Advisors

8%

3% 22%

50% 3% 0% 3% 11%

Engineer Teacher

Doctor MBA

CA/ICWA/CFA/CS Businessman

Lawyer Others

84

Findings # 11

Edcational Qualification of Advisors

32%

19%

8%

41%

Post Graduate & Above

Graduate

Diploma

12th

85

Findings # 12

Marital Status of Advisors

41% 59%

Unmarried

Married

86

Findings # 13

Male vs. Female of Advisors

19%

81%

MALE

FEMALE

87

Findings # 14

Age of Advisors

5%0% 49% 46%

Beloe 25

25-40

40-55

Above 55

88

89

QUESTONNAIRE
1. Gender: A) Male 2. Marital status: A) Married 3. Age: A) Less 25 4. Qualification: A) 12th 5. ] A) None 6. Occupation: A) Student House Wife 7. B) Govt. Service F) Others C) Pvt. Service D) Business E) B) Two C) Above Two Dependency: B) Graduation C) Post Graduation B) 25-35 C) 35-45 D) Above 55 B) Unmarried B) Female

How Many Hours You Give Your own Profession? A) Less 5hrs. B) 5hrs. -7hrs. C) 7hrs.-12hrs. D) Above12hrs.

8.

Annual Family Income? A) Less than 1lakh. B) 1lakh 2lakh. C) 2lakh 4lakh. D) Above 4lakh .

9.

Associated with Any Club or Social Organization? A) Yes B) No

10. Interest in Extra Earning? 90

A) Yes

B) No

11. The Person Who are interested in Extra Earning? A) Yes 12. Fields of Interest? A) Insurance B) IT C) banking D) Telecom E) Others B) No

13. Happy with Present Level Of Income? A) Yes B) No

Findings # 1
91

Male vs. Female Respondence

27%

73%

Male

Female

Findings # 2

Marital Status of Respondent

39% 61%

Married

Unmarried

Findings # 3

92

Age of Respondent
2%

18%

53% 27%

Less 25

25-35

35-45

Above 55

Findings # 4

Qualification Of Respondent
16%

27%

57% 12th Graduction Post Graduction

Findings # 5

93

Dependent Of Respondent
15% 23%

62%

None

Two

Above Two

Findings # 6

Occupation of Respondent
12% 13% 33% Student Business Govt. Service House Wife Pvt. Service Others 7% 9% 26%

Findings # 7

94

How Many Hours You Give Your Own Profession

Less 5hr 05hr-07hr 07hr-12hr Above 12hr

Findings # 8
Annual Family Income of Respondence
17% 7% 23%

53% Less 100000 200000-400000 100000-200000 Above 400000

Findings # 9

95

Associated With Any Club Or Social Organisation

22%

78% Yes No

Findings # 10

Interest In Extra Earning

24%

76%

Yes

No

Findings # 11

96

Referance To The Persons Who are Interested In Extra Earning

33% 67%

Yes

No

Findings # 12

Fields Of Interest
19%

23%

27% 17% Insurance IT Banking

14%

Telecom.

Others

Finding # 13

97

Happy With Present Level Of Income

17%

83%

Yes

No

Findings # 14

Durations Of Residence In Gorakhpur

35% 52% 13%

By Birth

Less Than 5 yrs

More Than 5yrs

98

SWOT ANALIYSIS
99

STRENGTH :
Multi-channel distribution and one of the largest distribution

networks in India. Implementing Six-Sigma process. Customer centric products and services. Superior investment and risk management framework 1 Million Policies sold within 3 and half years. Company has maximum number of MDRT as well as good number of HNI advisors. Training process of the company is very strong. Different plan for different peoples According to the change in surrounding environment like changes in customer requirement.

WEAKNESS:
COMPANY does not penetrate on the rural market at a time. There is no plan for the low income group. High failure of IRDA exam.

OPPORTUNITY:
100

Insurance market is very big, where company can expand its horizon in insurance industry . Though good investment and insurance it is easy to top Indian customers. The huge insurance market (77%) is left so company has opportunity to expand our products. To associate with the more number of HNI.

THREATS:

OLD HABITS DIE HARD:

Its still difficult task to win the confidence of

public towards private company. The company is facing major threats from LIC -which is an only government company. Plans for all income groups is not available which can create adverse effect later on the market share of the company.

Conclusion
101

The market potential for private insurance companies is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. The private and foreign insurance companies have to take immediate steps in appointing more number of agents and/or advisors in addition to the employees as it has been found out that agents are the best channel to reach the general public regarding selling of insurance products. The private and foreign insurance companies have to concentrate on the factors like 'Prevention of Loss', 'Assured Returns' and 'Long term Investment' . They can also focus on an insurance amount of Rs. 1 2 lakhs with 'money back policies'. Hence, the market has potential. The private and foreign insurance companies that are taking immediate steps can tap it easily & rapidly.

RECOMMENDATION

The following are few recommendations that I would like to suggest to HDFC STANDARD LIFE INSURANCE COMPANY LIMITED that can help them to improve their services:

102

My suggested recommendation for this project are as follows:

Increasing awareness:One of the major problems in recruiting FCs was that they were not aware of the prospects and profit of becoming an FC. So, it was really hard to convince them which could have been easier if they had been aware.

Increment of target areas:The potential areas which are generally targeted by the company should be increased. This will give the opportunity to many people of society those who want to work in the insurance sector & they also have the zeal to achieve something, can proved themselves in this field. And these areas include government employees etc.

Providing incentives to hard working FCs:The extra incentives in the form of additional rewards should be provided to the hard working FCs. This will increase their will power to achieve highest target & this will also boost-up their morale & loyalty towards company. And because of this strategy of company many people will be attracted towards us.

Promotion areas should be extended:Advertisement plays a very important role in promoting something in the market. So major emphasis should be laid on the advertisement, strategy. Today, net advertisements also have a very strong approach in the general public. So there are many methods which can help achieve our target. Others: To penetrate in the rural market To provide plans for the low-income group To decrease the training fees compared to competitors (fees of advisors training) To increase the incentive package To open more number of branches in different cities. 103

 To make training time flexible Hope these points will be taken into consideration.

BIBLIOGRAPHY

1. RESEARCH METHODOLOGY:- Deepak Bhattacharya, G.S. Beri 2. ECONOMIC ENVIRONMENT OF BUSINESS:- Francis Cherunillam 3. www.hdfcslic.co.in 4. AVAILABLE COMPANY BROWCHURES.

104

105