Professional Documents
Culture Documents
1. INTRODUCTION
"The victory o£ success is half won when one gains the habit
of work."
- Sarah Knowles Bolton
When it says role of any life insurance company then one can define it in
a very simple way that a company is selling promise to a person and trying to
take the persons worries by taking less but by paying more. So, in this project I
will highlight all the major facts which have come across in Indian Life Insurance
Industry since its birth.
1.1 INSURANCE:
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Life Insurance can be defined as a policy that will pay a specified sum to
beneficiaries upon the death of the insured. It is an agreement that guarantees
the payment of a stated amount of monetary benefits upon the death of the
insured. Life Insurance could be said as protection against the death of the
insured in the form of payment to a designated beneficiary, typically a family
member or business.
The primary purpose of life insurance is therefore protection of the family
in the event of death. Today, insurance is also seen as a tool to plan effectively
for your future years, your retirement, and for your children's future needs.
Today, the market offers insurance plans that not just cover your life and but at
the same time grow your wealth too.
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6. Disability Benefits:
Death is only the hazard that is insured; many policies also include
disability benefits. Typically, these provide for waiver of future premiums and
payments of monthly installments spread over certain time period.
8. Tax Relief:
Under the Indian Income Tax Act, the following tax relief is available:
a) 20% of the premium paid can be deducted from your total income tax
liability.
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saving modes such as PPF, NSC etc. Moreover, the cost of insurance
is a very negligible.
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Largest life fund: With a business of more than 50 years LIC has maximum
amount of life fund (More than US$40 billion). Despite of it LIC‘s premium is
not the cheapest in the industry and also it does not give the highest returns
to its policyholders.
High clerical costs: In this modern era where everything is automated the
need for clerical staffs has reduced significantly. LIC has the maximum
numbers of employee in this clerical category which incurs LIC a large
amount of fixed costs.
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The IRDA Bill provides for the establishment of an authority to protect the
interests of the holders of insurance policies, to regulate, promote and insure
orderly growth of the insurance industry and amend the Insurance Act, 1938, the
Life Insurance Act, 1956 and the General Insurance Business (Nationalization)
Act, 1972. The bill allows foreign equity stake in domestic private insurance
companies to a maximum of 26 per cent of the total paid-up capital and seeks to
provide statutory status to the insurance regulator. Before privatization,
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insurance business in India was pegged at $ 6.6 Billion whereas industry leaders
expected at that time that privatization will increase it to $ 40 Billion within next 3-
5 years.
IRDA
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and
Development Authority (IRDA, which was constituted by an act of parliament)
specify the composition of Authority.
a) A Chairman;
b) five whole-time members;
c) four part-time members, (all appointed by the Government of India)
(1) Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.
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investment plans with insurance and good returns (unit linked plans), multi-
purpose insurance plans, pension plans, child plans and money back plans.
Future of Industry:
We live in the information age. Most of the people are becoming more
aware of the importance of insurance in their life.
Today, natural disasters on a large scale occur regularly and even
terrorism is increasing day by day. Specialized software’s are used in actuarial
science to predict accurately life expectancy and mortality. But natural disasters
are difficult to predict.
This shows that insurance is a basic and fundamental need for the safety
and security of the person and his family. Only a larger insurance cover can
guarantee a better future. However insurance claims for natural disasters are
very low. This is because insurance coverage was too low, and those who really
needed insurance had not taken it. There is the need to push insurance as a
social responsibility for those who really need it.
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As we found out nearly three decades ago, in 1977, the solution for
success is customer satisfaction. All you need is the courage to innovate, the
skill to understand your clientele and the desire to give them your best 32
Today, nearly three million satisfied customers whose dream we helped
realize, stand testimony to our success.
Our objective, from the beginning, has been to enhance residential
housing stock and promote home ownership.
Now, our offerings range from hassle-free home loans and deposit
products, to property related services and a training facility.
We also offer specialized financial services to our customer base through
partnerships with some of the best financial institutions worldwide.
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Background
HDFC was incorporated in 1977 with the primary objective of meeting a
social need – that of promoting home ownership by providing long-term finance
to households for their housing needs. HDFC was promoted with an initial share
capital of Rs. 100 million.
Business Objectives
The primary objective of HDFC is to enhance residential housing stock in
the country through the provision of housing finance in a systematic and
professional manner, and to promote home ownership. Another objective is to
increase the flow of resources to the housing sector by integrating the housing
finance sector with the overall domestic financial markets...
Organizational Goals
HDFC’s main goals are to
a) Develop close relationships with individual households.
b) Maintain its position as the premier housing finance institution in the
country.
c) Transform ideas into viable and creative solutions.
d) Provide consistently high returns to shareholders, and
e) To grow through diversification by leveraging off the existing client base.
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Board of Directors:
Mr. Deepak S. Parekh - Chairman
Sir Alexander M. Crombie - Group CEO
Mr. Keki M. Misty - MD
Ms. Marcia D. Campbell - Group operation Director
Ms. Renu S. Karnad - Executive Director
Mr. Norman K. Skeoch - Chief Executive
Mr. Gautam R. Divan - CA
Mr. Ranjan Pant - Global Management Consultant
HDFC has a staff strength, which includes professionals from the fields of
finance, law, accountancy, engineering and marketing.
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The Partnerships
HDFC and Standard Life commenced discussions about possible joint
venture, to enter the life insurance market, in Jan. 1995. It was clear from the
outset that both companies shared similar values and benefits and a strong
relationship quickly formed. In Oct.1995 the companies signed a 3 year joint
venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further
strengthening the relationship.
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A small project term was set up in UK and India and set about preparatory
work. Among other things, the team conducted market research, looked at
possible information technology, documented high level business process maps
and set about preparing the first project plan.
The next three years were filled uncertainty, due to change in insurance
Govt. and both ongoing delays in getting the insurance bill passed in parliament.
Despite this both companies remained firmly committed to venture.
In Oct.1998, the joint venture agreement was removed and additional
resources made available. Around this time Standard Life purchased 2%
Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also
started to use the services of the HDFC Treasury Department to advise them
upon their investment insurance India.
One of many success stories over the last few years has been the
actuarial student program. The program was designed to identify high caliber
individuals who would be sponsored by Standard Life to study for their actuarial
qualification in the UK.
The new company has 1 Indian actuary and 5 actuarial students in the
team. With a further 2 students undergoing training in the UK, Both parent
companies strongly believe the program will benefit the new company. Towards
the end of 1999, the opening of the market looked very promising and both
companies agreed the time was right to move the operation to the next level.
Therefore, in Jan.2000 and expect team form the UK joined a handpicked team
from HDFC to form the core project term based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC
bank. The Assets Management Company promoted by HDFC to enter the
mutual fund market. The mutual fund market was launched on 20 th July 2000 and
on 10th Nov.2000 assets under the management reached Rs. 1,063 crores. The
company was incorporated on 14th Aug. 2000 under the name of HDFC
Standard Life Insurance Company Limited. The ambition of the company from
as far as back as Oct. 1995 was first to be private company to re-enter in the life
insurance market in India. On 23rd of Oct.2000, this ambition was realized when
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HDFC Standard Life Insurance Company Limited were only life company to be
granted a certificate of registration.
HDFC are main shareholders in HDFC Standard Life Insurance Company
Limited with 81.4% while Standard Life own 18.6% given Standard Life’s existing
investment in the HDFC Group. This is maximum investment allowed under
current regulations.
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Values:
Values that we observe while we work:
Integrity
Innovation
Customer centric
People Care “One for all and all for one”
Team work
Joy and Simplicity
Awards & Accolades:
Awards received in 2008:
Received 2008 CIO Bold 100 and CIO Security Awards in Sept,
2008.
Received PCQuest Best IT Implementation Award 2008 in May,
2008.
Silver Abby at Goafest 2008 in March, 2008.
Unit Linked Savings Plan Tops Mint Best TV Ads Survey in March,
2008.
Deepak M Satwalekar Awarded QIMPRO Gold Standard Award
2007 in Feb, 2008.
Sar Utha Ke Jiyo Among India’s 60 Glorious Advertising Moments
in Jan, 2008.
Other rewards and honors:
“Best New Insurer” Award from Outlook Money – 2003.
“Most Respected Private Insurance Company” Award from
Business World – 2004.
“Best New Insurer” Award from Outlook Money – 2006.
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amongst 23 schemes). It was awarded the Best Fund over ten years in 2006 and
2007 as well. 2008 makes it three in a row.
ICRA Mutual Fund Awards – 2008 :
HDFC MF Monthly Income Plan - Long Term Plan - Ranked a Seven Star
Fund and has been awarded the Gold Award for "Best Performance" in the
category of "Open Ended Marginal Equity" for the three year period ending
December 31, 2007 (from amongst 27 schemes).
HDFC Sales:
HDFC Sales is a wholly owned subsidiary of HDFC Ltd. The company has
been floated as a distribution arm of HDFC with an objective of offering
doorstep service to prospective clients of HDFC group.
HDFC Sales offers financial management solutions to individuals
encompassing among other products Home Loans, Life Insurance, Mutual
Funds, Fixed Deposits and property Solutions.
Home Loans: HDFC Sales is present in over 100 locations across the
country with 55 offices and over 1750 employees.
Financial Management: HDFC Sales offers financial management solutions
in 9 cities and is continuously expanding its reach. HDFC Sales employs
sales persons across all spectrums of financial management enabling them
to meet a range of financial needs.
HDFC Realty:
HDFC Realty is a wholly owned subsidiary of HDFC. It assisted individuals in
acquiring homes valued at 5000 million rupees.
HDFC is a pioneer housing finance institution in India and with over 30 years
in operations has provided finance to over a million families in India.
It is a team of real estate professionals facilitating Buying, Selling or Leasing
of Residential / Commercial property.
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strategies of how to increase the sales of the products. How they can segment
the market to tap out its maximum potential profits. It also works on sales
promotion to increase the sales of company.
3. Sales department:
Controlling the sales force that brings the business to the company.
Maintain the regular flow of information about the product. These are sales
manager only who see after the acquiring and maintaining their agents.
The sales manager goes to different places and acquires the sales agents who
are IRDA certified.
4. Finance department:
This department keeps the proper track record of all the transactions
taking place. It maintains the record of all the insurance policies being issued
and their premium payments.
Organization structure:
Chairman
MD
Zonal
Manager
Regional
Manager
Recruitment
BDM Consultant Project Trainee
SDM
CDM – Channel Development Manager
BDM – Business Development Manager
SDM – Sales Development Manager
Financial
Consultant
Company structure:
Area Manager
Recruitment
SDM
Consultant
Financial
Consultant
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2. WORK SCHEDULE
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2.1 PHASE A: In this phase we were told to generate leads from our natural
market. I collected names, phone number of most prospective clients. Then I
divided these data into different parts based on the age of the client. This helped
me doing need analysis of the client .I also collected some references from those
clients .Then I created database in which I recorded all the relevant information
about the clients.
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• Stock market
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CALLING CUSTOMER
APPOINTMENT
CUSTOMER PROFILING
NEED ANALYSIS
FOLLOW UP
DOCUMENTATION
ACTUAL SALES
REFERALS
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• Occupation
• Annual income
• Marital status
After fixing an appointment we would visit the prospective customers and explain
them about the product which would suite their requirements. Apart from this
while pitching a Unit Linked Insurance Plan we would show them a chart for the
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which we could actually get the various needs of the customer. Depending upon
the need we approached the customer with the specific product.
People say that insurance selling is the most difficult in terms of selling
products. This phase is most important because it will decide the company’s
profitability & also the best way of testing the skills of a sales person.
During my internship at HDFC SLIC I met around 100 people for selling in
which I converted four client and 2 are in process of documentation the company
in the month of November.
2.4 LEARNING
LEARNINGS FROM TRAININGS
From IRDA Training as well as product training I taught a lot about
insurance, insurance industry, different types of product s its features and
benefits, different distribution channels.
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For data collection we went to various people which helped us to get different
views of them about insurance industry.
Data analysis helped us to gain confidence as this was our first project based on
primary data.
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3.1 INTRODUCTION
3.2 AIM
• To study the marketing and sales strategies of HDFC SLIC
3.3 OBJECTIVE OF THE PROJECT
• The new marketing strategies to be taken to get closer to its customer.
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3.5 LIMITATIONS
• Our studies are mainly confined to Bangalore only so there may be
irregularity in survey of consumer behavior due to geographical factor.
• Since our data consist of primary data and some people are reluctant to
give actual information so there may be some error in data analysis.
• Our sample consists of 100 people only so there may be error in data
analysis.
• Time constraint due to a wide geographical area that I had to travel to
customer’s premise where he wanted to meet at a given time.
• We have collected secondary data mainly through internet, newspaper,
magazines etc. So we are assuming those a data to be authentic as
those data may not be authentic.
• Introducing me as a financial consultant and explaining them need of
taking a life insurance is difficult many a times.
• It was very difficult to know all the required information related to our
project as executives and agents did not have that much time.
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• There could be some errors in sample size, data collection and data
interpretation.
• Historical secondary data.
3.6 METHODOLOGY
SAMPLING DESIGN
Due to time and cost limitations we took sample of 100 people only. As it was
convenient to collect data through questionnaire\in small sample.
QUESTIONNAIRE DESIGN
The final questionnaire evolved after many stages of reformulating and
restructuring. A pilot test was conducted with a sample of 30 respondents
prior to conducting the actual interviews. This was done to mainly to test the
language of the questionnaire and know whether the respondents interpreted
the question as intended. Errors and Confusing words were modified and
certain explanations were added. More questions were added to get the
responses about the required variables.
DATA COLLECTION
Primary Data
• Taking informal interview of agents: We took information from the agents
of various companies to know their views about the company. We took this
interview because we think that agents play very important role.
• Data related to analysis were collected by questionnaire.
Secondary Data
• Secondary data where mainly collected from internet, journals
etc.
DATA TABULATION: After data collection data were tabulated in SPSS.
DATA ANALYSIS: Data analysis were mainly done through three statistical
techniques.
1. Factor Analysis
2. Regression Analysis
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3. Cluster Analysis
LITERATURE SURVEY
IC – 33
This book is issued by the IRDA (Insurance Regulatory and Development
Authority of India). It contains all the minute details about insurance, its parties,
contract and various types of product.
Insurance Rules & Regulation
An in depth study of an insurance contract and parties to the contract. It also
speaks in detail about the rules and regulations of the contract and the
procedures that are to be undertaken at the time of death, maturity and claims.
Journals by IRDA, ICMR.
Books On Services Marketing
3.7 ANALYSIS
Analysis of Graphs as per Questionnaire:
AGE GROUP
• Among the responses we took 11% were of age group 18-25, 31% of age 26-
33,34% of age 34-45,20% of age 46-60 ,4% of age 60 and above.
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• Among all the responses we took 62% preferred pvt .insurance Company
and 38%prefered LIC.
• Among the responses we took 39% of the people spend for tax purpose,
21%for life risk cover, 23% for future security, and 17% for pension. It
implies that tax is the major factor for investing in insurance; life risk is the
secondary objective.
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Brand 46 31 11 12 0
Trust 16 66 18 0 0
Safety 62 38 0 0 0
Service 51 32 17 0 0
Liquidity 21 68 11 0 0
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• Based on survey we found that 10% strongly agree, 67% agree, 14 % are
neutral, 9% disagree, and 0% strongly disagree with the service of the
company.
Yes 73 73%
No 27 27%
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27
Yes
No
73
• The above graph shows that 73% of people are satisfied with ECS facility
while only 27% are not satisfied
Adviser 39 39%
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45
40
35
30
25 Adviser
20 company website
15
10 customer care
5 branch manager
0
Adviser company customer care branch
website manager
• The above graph shows that 39% people believes in Adviser, 28% of
people believes Customer care while company website and branch
Manager People clarify any query first respectively 16% and 17%.
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From the figure we can see that LIC is market leader in market share (asset
under management) with 63.64%, followed by ICICI Prudential, Bajaj Allianz
but still there is large difference between first and second. LIC has approx
8 times market share than ICICI Prudential. HDFC Standard Life market
share fell to 2.88% from 4 %last year.
LIC policy sold fell down by 1.6%.
There was a growth of 23.31% (92,988 crores) in new premium
collected with LIC 59,182 crores and others by 33,806 crores.
Bharati axa showed a phenomenal growth of 1355.7% (premium
collected). It is due to base effect.
Birla Sun Life showed a growth 122.61% (premium collected).
HDFC Standard Life grew by 63% (premium collected).
ICICI Prudential grew by 68% (premium collected).
FY 2008-09
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FY 2009-10
PFRDA launches pension solutions for unorganized sector.
Committee set up for review of multi-ties for banking companies.
Corporate governance framework in process.
Changes in investment and accounting regulations likely.
Disclosure & EV framework.
Circular for cap on ULIP charges.
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Since every life has a value so insurance is required for every person from a
child to an old person. Therefore insurance companies have divided the markets
according to following divisions:
I. Stage of life cycle
II. Regions
III. Occupation
IV. Gender
V. Psychographic
STAGES OF LIFE CYCLE: Insurance companies have divided the market into
various segments:
• Old people: As most of the families in India are becoming nuclear family
therefore the old people are becoming insecure about their future. To solve
this problem insurance companies are targeting old people by providing
pension plans and by various promotion tools. HDFC standard life has a
punch line” RESPECT YOURSELF” and “SAR UTHA KE JIO” .This gives a
feeling of respect and confidence to old people. People invest in pension
plans to make their future secure and can lead a respectful life. Private
companies have more market share in pension plans than LIC.ICICI
PRUDENTIAL is the top seller of pension plans in India. Products offered by
HDFC standard life for old people are Unit Linked Pension Plan (+, +2),
Pension Plan (Traditional).
• Young people: young people have now become very selective .therefore all
the insurance companies are providing sufficient choices. Companies provide
different products which cater the needs of insurance as well as security.
Companies are also providing various fund options according to risk taking
behavior. Like in ULIP for High risk taking people they have growth fund
option and for risk adverse people they have balanced fund where one can
choose ratio of debt and equity. Products offered by HDFC Standard Life for
young people are endowment plans (traditional, unit linked), money back
plans etc.
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• Children: For children below 18 years all the companies are having policies
that help in securing child’s future. Every company has policies that have
many benefits that help in saving money for a child’s education, marriage,
health etc.
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people also don’t have any pension therefore pension plans are offered to
them.
Gender: In this there are two divisions
Source (IRDA)
• Female: As among insured people only 14% of the females are insured
therefore there are large potential in this segments. As more number of
females are becoming working women .Therefore insurance is must for
them .companies are taking emotional route through various advertising
techniques to attract these segments. Some companies are coming with
various kinds of policies which are specially designed for these segments.
• Males: These segments accounts for more than 80% of working classes. As
they are more than 90% contributor of premium .Therefore these classes are
targeted the most by the companies .Still 80% of the male population in India
is uninsured ,therefore there immense opportunity in this segment.
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give high returns to customer .In this customers are free to choose the
allocations of money in debt and equity. Risk adverse people can keep
their more money in debt based fund. Risk loving people can keep their
more money in equity based fund.
PRODUCTS
Innovative products: After liberalization every companies are coming with
innovative products .these products are designed according to needs of the
customers to facilitate need based selling. These policies have different features
like transparency, flexibility, freedom to choose fund option, switching between
funds etc.
This is a plan which runs on market and here the risk is high but at the same
time return is also high. There is a perception in the minds of investing public that
the return from the traditional Life insurance products is not attractive and
therefore a demand arose for unit linked policies. Life Insurance companies
therefore design unit linked policies. A small part of the contribution is utilised for
providing life cover and the balance is invested in units (shares).
*Source –Outlook Money (March 2009)
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Term Plan:
Term Plan is a pure risk product that aims to cover your life at a nominal cost.
You may want to take this plan to cover your outstanding debts like a mortgage,
a home loan etc. Since this is a pure risk cover product, there are no maturity
benefits payables on survival. This is a non-participating plan.
Endowment Plan:
Endowment Plan is a protection plan that covers your life and at the same time
ensures that your money does not lie idle. It invests a portion of your premium in
financial instruments and ensures a considerable growth in savings. This is a
participating plan (with profits).
Retirement Plan:
Income Plan is a savings plan designed to meet your post-retirement needs. It is
a plan that gives you the choice to remain independent even after retirement.
PRICE
The main factor that affects the price of the products is the cost that they incur in
providing their best services to the customers. All the companies are trying to cut
the cost by adapting new technology etc. All the companies are trying to cut the
cost and transfer this benefit to the customer .As all the private insurance
companies are in the introduction stage .Therefore their cost of promotion is high
in this stage as they have to make awareness about their products and build
strong brand image. Despite of that some private companies charge fewer
premiums than LIC. The companies which are charging higher premium are
justifying it by giving better services. Companies have various pricing strategy
based on the factors such as age, sex, occupation, family history, health,
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If we will look at the graph we can easily see that premium charged by HDFC is
minimum in all the cases except for age 25 and 30.hdfcslic keeps its premium for
higher age group(>30) because they are the segment that require the term plan
most.
PLACE: This mainly deals with various distribution channels .private companies
now adapting mainly four ways of distribution
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products are offered through the distribution channels of the banking services
along with a complete range of banking & investment products & services. In
simple term we can say Bancassurance tries to exploit synergies between both
the insurance companies & banks. This is one of the most effective distribution
channels where one company uses the distribution channels of banks to
distribute policies. This is beneficial for all the three parties, customers, banks
and insurance company. HDFC standard life has HDFC, HDFC Bank, Union
Bank of India as Bancassurance partners.
Brokers: These are broking firms which sells all the financial products in India. In
broker firms one can find policy of different companies under one roof. Some of
the broker firms in India are India Infoline, Kotak Securities, Anand Rathi,
Religare, India Bulls etc.
Direct Marketing: This is the most recent distribution channel that all the private
companies have adapted .This is best way of selling those policies which have
very few features .Direct selling is mainly done through call centre .Now
companies are also adapting online direct selling through internet. This method
of selling is very useful for selling those product in which there is very low
features .It helps in preventing mis –selling as customer get all the information
directly from the company .
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From the figure above we can see that tied agents source the maximum amount
of business, followed by corporate agents and bancassurance.After two or three
years this ratio is going to change as bancaassurance and direct marketing are
becoming popular.
PROMOTION
As all the insurance companies are trying to build awareness as well as brand
image .therefore all companies are spending heavily on advertising.
From the figure we can see that around 80% of the total expenditure in insurance
industry comes from life insurance industry.
From the above figure we can see that advertising index has increased 138%
from 2004.yhat means private companies are spending heavily on advertising.
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MARKETING AND SALES STRATEGIES OF HDFC SLIC
PEOPLE
As insurance is a service industry so people are the most important asset .All the
private companies are working in this segment in the following manner:
• Employment: Insurance industry is one of the largest employment
providers in India .Private companies are providing jobs to a large number
of people .These jobs are from top managerial to clerk jobs. It is also
helping in eliminating employment in India.
• Training :All the private companies give training to employees .This
training helps in development of skills such as selling ,product
knowledge . It also helps in confidence development.
• Awards and recognition: All the private companies give awards and
recognition to top performer .these awards includes cash awards, medals,
tours, gifts etc.
• Incentives and commission: Incentives and commission given by private
companies are highest in any industry in India.
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MARKETING AND SALES STRATEGIES OF HDFC SLIC
PROCESS
These are the flow of activities through which the insurance company provide
services to their customer .Every company has standardized process of
providing services .These process are simple .Employees are trained to deal
with various situation that might arise while delivering services .Companies are
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MARKETING AND SALES STRATEGIES OF HDFC SLIC
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MARKETING AND SALES STRATEGIES OF HDFC SLIC
CONCLUSION
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MARKETING AND SALES STRATEGIES OF HDFC SLIC
RECOMMENDATIONS
Focus on Rural Areas: As rural areas are the large untapped market in India,
there is a huge market potential, private insurance companies have very small
presence in the rural market .Companies should open more offices in rural
areas. Company should also recruit financial consultant from rural areas to have
large penetration.
Balance between ULIPS and Traditional Policies: All the companies should
maintain balance between ULIPS and traditional policies .As ULIPS give high
returns on bullish market but very low return in bearish market .As main objective
of insurance is security so company should avoid adverse situation.
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