INDUSTRY REPORT ON

HDFC SLIC

Submitted in Partial fulfillment of the requirements for the award

of Degree

Bachelor of Business Administration

(BBA)

Submitted by: Under Guidance of:

MOHIT GOEL NEHA RALLI

Bharati Vidyapeeth University, School of Distance Education,

Academic Study Center: BVIMR, New Delhi
2009 – 2010
 Undertaking

I MOHIT GOEL have completed the Industrial Exposure in (HDFCSLIC)

under the guidance of Mr./Ms. (NEHA RALLI) in the partial fulfillment of
the requirement for the award of BBA of BVU, SDE, Academic Study
Center BVIMR, New Delhi. This is an original piece of work & I have
neither copied and nor submitted it earlier elsewhere.

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Students Signature

PREFACE

It was my privilege to have my research project at HDFC have got the opportunity to
work on “Concept of mutual fund with special reference to HDFC Mutual Fund”.

The subject of my study was PRODUCT ANALYSIS for HDFC STANDARD LIFE
INSURANCE, AND ITS COMPETITORS I have done by applying various tools like
Tele calling and through direct interaction with customer’s.

The report contains first of all brief introduction about the company. Then it contains the
complete description of the job done and in the last the growth opportunities and
suggestions.

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 ACKNOWLEDGEMENT

I would like to thank Prof. NEHA RALLI for supporting me during this project and
providing me an opportunity to learn outside the class room. It was a truly wonderful
learning experience.
I would like to dedicate this project to my colleagues and all those who help me to
complete this project. Without their help and constant support this project would not have
been possible.

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 CONTENTS

S.NO. TITLE PAGE NO.

1. INTRODUCTION 6
1.1 HISTORY
1.2 COMPANY PROFILE
1.3 VISSION
1.4 MISSION

2. PRODUCT 36
2.1 MARKTING STRATEGY
2.2 MARKETING MIX (4 P’S)

2. COMPETITORS 48

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3. SWOT ANALYSIS 63

4. FINDING AND RECOMMENDATIONS 69

5.1 CONCLUSION
5.2 LIMITATION

5. ANNEXURES 73

7. BIBLIOGRAPHY 77

CHAPTER 1: INTRODUCTION

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1. OVERVIEW OF THE INDUSTRY – INSURANCE INDUSTRY

The insurance sector in India has come a full circle from being an open competitive
market to nationalisation and back to a liberalised market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost two centuries.

With such a large population and the untapped market area of this population Insurance
happens to be a very big opportunity in India. Today it stands as a business growing at
the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per
cent to the country’s GDP .In spite of all this growth the statistics of the penetration of
the insurance in the country is very poor. Nearly 80% of Indian populations are without
Life insurance cover and the Health insurance. This is an indicator that growth potential
for the insurance sector is immense in India. It was due to this immense growth that the
regulations were introduced in the insurance sector and in continuation “Malhotra
Committee” was constituted by the government in 1993 to examine the various aspects of
the industry. The key element of the reform process was Participation of overseas

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insurance companies with 26% capital. Creating a more efficient and competitive
financial system suitable for the requirements of the economy was the main idea behind
this reform.
Since then the insurance industry has gone through many sea changes .The competition
LIC started facing from these companies were threatening to the existence of LIC. Since
the liberalization of the industry the insurance industry has never looked back and today
stand as the one of the most competitive and exploring industry in India. The entry of the
private players and the increased use of the new distribution are in the limelight today.
The use of new distribution techniques and the IT tools has increased the scope of the
industry in the longer run.

NEED FOR LIFE INSURANCE

As life insurance became more established, it was realized what a useful tool it was for a
number of situations, including –

I) Temporary needs/ threats - The original purpose of life insurance remains an

important element, namely providing for replacement of income on death etc.
Typically in the case of the breadwinner dying an early death.

II) Regular Saving - Providing for ones family and oneself, as a medium to long-term
exercise (through a series of regular payment of premiums). This has become
more relevant in recent times as people seek financial independence from their
family.

III) Investment - Put simply, the building up of savings while safeguarding it from the
ravages of inflation. Unlike regular saving products, investment products are

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 traditionally lump sum investment, where the individual makes a one-time
payment.

IV) Retirement - Provision for one’s own later years becomes increasingly necessary,
especially in a changing cultural and social environment. One can buy a suitable
insurance policy, which will provide periodical payments in one’s old age.

ADVANTAGE OF LIFE INSURANCE

(I) It is superior to a traditional saving vehicle

As well as providing a secure vehicle to build up savings etc, it provides peace of mind to
the policyholder. In the event of untimely death, of say the main earner in the family, the
policy will pay out the guaranteed sum assured, which is likely to be significantly more
than the total premiums paid. With more traditional savings vehicles, such as fixed
deposits, the only return would be the amount invested plus any interest accrued.

(II) It encourages saving and forces thrift

Once an insurance contract has been entered into, the insured has an obligation to
continue paying premiums, until the end of the term of the policy; otherwise the policy
will lapse. In other words, it becomes compulsory for the insured to save regularly and
spend wisely. In contrast savings held in a deposit account can be accessed or stopped
easily.

(III) It provides easy settlement and protection against creditors

Once a person is appointed for receiving the benefits (nomination) or a transfer of rights
is made (assignment), a claim under the life insurance contract can be settled easily. In
addition, creditors have no rights to any monies paid out by the insurer, where the policy
is written under trust. Under the Married Women’s Property Act (M.W.P Act), the money
available from the policy forms a kind of trust which cannot be attached by judgment
creditors.

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(IV) It helps to achieve the purpose of the Life Assured
If someone receives a large sum of money, it is possible that they may spend the money
unwisely or in a speculative way. To overcome this, the person taking the policy can
instruct the insurer that the claim amount is given in installments.

(V) It can be encashed and facilitates quick borrowing:

Some contracts may allow the policy to be surrendered for a cash amount, if a
policyholder is not in a position to pay the premium. A loan, from certain policies, can be
taken for a temporary period to tide over the difficult. Some lending institutions will
accept a life insurance policy as collateral for a personal or commercial loan.

(VI) Tax Relief

The policyholder obtains Income Tax rebated by paying the insurance premium. The
specified forms of saving which enjoy a tax rebate, under section 88 of the Income Tax
Act, include Life Insurance Premiums and contributions to a recognized Provident Fund
etc., section 10 (10D) & other sub-sections of Section 80 of the Income Tax Act

1.2 A BRIEF HISTORY

The origin of insurance is very old .The time when we were not even born; man has
sought some sort of protection from the unpredictable calamities of the nature. The basic
urge in man to secure himself against any form of risk and uncertainty led to the origin of
insurance.

The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

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

1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the
Triton Insurance Company Ltd., the first general insurance company established in the
year 1850 in Calcutta by the British.

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

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz.
1. National Insurance Company Ltd. 2. Oriental Insurance Company Ltd.
3. New India Assurance Company Ltd. 4. United India Insurance Company Ltd.
GIC incorporated as a company.

INSURANCE SECTOR REFORMS

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In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor
R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction.
The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector.
The reforms were aimed at “creating a more efficient and competitive financial system
suitable for the requirements of the economy keeping in mind the structural changes
currently underway and recognising that insurance is an important part of the overall
financial system where it was necessary to address the need for similar reforms…”

In 1994, the committee submitted the report and some of the key recommendations
included:

i) Structure
• Government stake in the insurance Companies to be brought down to 50%
• Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations
• All the insurance companies should be given greater freedom to operate

ii) Competition
• Private Companies with a minimum paid up capital of Rs.1bn should be allowed
to enter the industry.
• No Company should deal in both Life and General Insurance through a single
entity.
• Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
• Postal Life Insurance should be allowed to operate in the rural market.

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 • Only one State Level Life Insurance Company should be allowed to operate in
each state.

iii) Regulatory Body

• The Insurance Act should be changed.
• An Insurance Regulatory body should be set up.
• Controller of Insurance (Currently a part from the Finance Ministry) should be
made independent.

iv) Investments
• Mandatory Investments of LIC Life Fund in government securities to be reduced
from 75% to 50%
• GIC and its subsidiaries are not to hold more than 5% in any company (There
current holdings to be brought down to this level over a period of time)

v) Customer Service
• LIC should pay interest on delays in payments beyond 30 days.
• Insurance companies must be encouraged to set up unit linked pension plans.
• Computerization of operations and updating of technology to be carried out in the
insurance industry.
The committee emphasized that in order to improve the customer services and increase
the coverage of the insurance industry, it should be opened up to competition. But at the
same time, the committee felt the need to exercise caution as any failure on the part of
new players could ruin the public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirement of Rs.100 crores. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their performance and enable them
to act as independent companies with economic motives. For this purpose, it had
proposed setting up an independent regulatory body.
The Insurance Regulatory and Development Authority

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Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering
the private sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of the
IRDA’s online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to sell
their products, which are expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations. In the private sector 12 life insurance and 6 general
insurance companies have been registered.

IMPACT OF LIBERALIZATION
The introduction of private players in the industry has added to the colors in the dull
industry. The initiatives taken by the private players are very competitive and have given
immense competition to the on time monopoly of the market LIC. Since the advent of the
private players in the market the industry has seen new and innovative steps taken by the
players in this sector. The new players have improved the service quality of the
insurance. As a result LIC down the years have seen the declining phase in its career.
The market share was distributed among the private players. Though LIC still holds the
75%
of the insurance sector but the upcoming natures of these private players are enough to
give more competition to LIC in the near future. LIC market share has decreased from
95% (2002-03) to 81 %( 2004-05). The following companies has the rest of the market
share of the insurance industry.

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CURRENT SCENARIO OF THE INDUSTRY
INSURANCE MARKET IN INDIA
India with about 200 million middle class household shows a huge untapped potential for
players in the insurance industry. Saturation of markets in many developed economies
has made the Indian market even more attractive for global insurance majors. The
insurance sector in India has come to a position of very high potential and
competitiveness in the market.
Innovative products and aggressive distribution have become the say of the day. Indians,
have always seen life insurance as a tax saving device, are now suddenly turning to the
private sector that are providing them new products and variety for their choice.
Life insurance industry is waiting for a big growth as many Indian and foreign companies
are waiting in the line for the green signal to start their operations. The Indian consumer
should be ready now because the market is going to give them an array of products,
different in price, features and benefits. How the customer is going to make his choice
will determine the future of the industry.

1. CUSTOMER SERVICE

Consumers remain the most important centre of the insurance sector. After the entry of
the foreign players the industry is seeing a lot of competition and thus improvement of
the customer service in the industry. Computerisation of operations and updating of
technology has become imperative in the current scenario. Foreign players are bringing in
international best practices in service through use of latest technologies. The one time
monopoly of the LIC and its agents are now going through a through revision and
training programmes to catch up with the other private players. Though lot is being done
for the increased customer service and adding technology to it but there is a long way to
go and various customer surveys indicate that the standards are still below customer
expectation levels.

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2. DISTRIBUTION CHANNELS

Till date insurance agents still remain the main source through which insurance products
are sold. The concept is very well established in the country like India but still the
increasing use of other sources is imperative. It therefore makes sense to look at well-
balanced, alternative channels of distribution.
LIC has already well established and have an extensive distribution channel and
presence. New players may find it expensive and time consuming to bring up a
distribution network to such standards. Therefore they are looking to the diverse areas of
distribution channel to have an advantage. At present the distribution channels that are
available in the market are:
 Direct selling
Corporate agents
Group selling
Brokers and cooperative societies
Banc assurance

BANCASURANCE - India has an extensive bank network established over the years.
What Insurance companies have to do is to just take advantage of the customers' long-
standing trust and relationships with banks. This is a mutually beneficial situation as
banks can also expand their range of products on offer to customers, while the insurance
company will also earn profits from the exposure. Another advantage is that banks, with
their network in rural
areas, help to fulfill rural and social obligations stipulated by the Insurance Regulatory
and Development Authority (IRDA) recently. Insurance companies should see banc
assurance as a tool for increasing their market penetration in India. It is also good for the
one who sees banc assurance in terms of reduced price, high quality product and delivery
at doorsteps. Everybody is a winner here. The creation of banc assurance operations has
made an important impact on the financial services industry at large. This is though a new
concept but it has gained a lot of importance in the industry at present and has a great
future.

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3. PRODUCT INNOVATION

There has been a plethora of new and innovative products offered by the new players.
Customers have tremendous choice from a large variety of products from pure term (risk)
insurance to unit-linked investment products. Customers are offered unbundled products
with a variety of benefits as riders from which they can choose. More customers are
buying products and services based on their true needs and not just traditional money-
back policies, which is not considered very appropriate for long-term protection and
savings. There is lots of saving and investment plans in the market. However, there are
still some key new products yet to be introduced - e.g. health products.

4. RURAL MARKETING

Rural India seems to have an appetite for mobile phones, computers, and cars and to add
to it we have insurance. In India with the private players having entered into the
insurance industry, the expected explosion in job opportunities may not actually happen
but for them the catchments area is the opportunities in the rural India. In India the
insurance business can be said to be "a marathon, not a sprint". This is because of the
nature of the business being long term. With merely two years of the industry being
opened, not surprisingly, the new comers are making losses. The public sector
companies, notably the LIC, have gained in strength, thanks to the deepening of the
market consequent to the awareness created by the new companies. However this does
not deterred the private sector, which knows know that the race is a marathon, not a
sprint. However it seems that they if not anything, are only increasing their spending,
though only out of the capital. Today, there are 18 insurance companies in India
excluding the PSU’s, with 12 in the life insurance business and the rest in non-life .As
insurance companies go more and more rural in search of business, there will be
opportunities in the rural sector. A research conducted exhibited that the rural consumers
are willing to dole out anything between Rs 3,500 and Rs 2,900 as premium each year. In
the insurance the awareness level for life insurance is the highest in rural India, but the

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consumers are also aware about motor, accidents and cattle insurance. In a study
conducted by MART the results
showed that nearly one third said that they had purchased some kind of insurance with
the maximum penetration skewed in favor of life insurance. The study also pointed out
the private companies have huge task to play in creating awareness and credibility among
the rural populace. The perceived benefits of buying a life policy range from security of
income bulk return in future, daughter's marriage, children's education and good return on
savings, in that order, the study adds.
Regulatory and Development Authority (IRDA) have set stiff rural targets for insurance
companies. For the life sector, in the first year, 5 per cent of the total policies written
should come from the rural sector. This will go up to 15 per cent in five years. Similarly,
for the non-life sector, two per cent of the total gross premium income should come from
the rural sector going up to 5 per cent in five years, according to the regulation. All these
moves will make the investment the rural area a big start.

5. INFORMATION TECHNOLOGY AND INSURANCE

In the insurance industry today, there is a clear trend away from selling a broad range of
products to a large volume of customers in a one –size-fits-all manners. Instead of
focusing on their different products lines as silos (i.e., life, property and casualty etc)
insurers are looking for ways to offer highly targeted insurance products that are tailored
to the individuals customers with the highest propensity to buy them.

There is a evolutionary change in the technology that has revolutionized the entire
insurance sector. Insurance industry is a data-rich industry, and thus, there is dire need to
use the data for trend analysis and personalization.
With increased competition among insurers, service has become a key issue. Moreover,
customers are getting increasingly sophisticated and tech-savvy. People today don’t want

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to accept the current value propositions, they want personalized interactions and they
look for more and more features and add ones and better service The insurance
companies today must meet the need of the hour for more and more personalized
approach for handling the customer. Today managing the customer intelligently is very
critical for the insurer especially in the very competitive environment. Companies need to
apply different set of rules and treatment strategies to different customer segments.
However, to personalize interactions, insurers are required to capture customer
information in an integrated system.

With the explosion of Website and greater access to direct product or policy information,
there is a need to developing better techniques to give customers a truly personalized
experience. Personalization helps organizations to reach their customers with more
impact and to generate new revenue through cross selling and up selling activities. To
ensure that the customers are receiving personalized information, many organizations are
incorporating knowledge database-repositories of content that typically include a search
engine and lets the customers locate the all document and information related to their
queries of request for services. Customers can hereby use the knowledge database to
mange their products or the company information and invoices, claim records, and
histories of the service inquiry. These products also may be able to learn from the
customer’s previous knowledge database and to use their information when determining
the relevance to the customers search request.
The insurance sector remains a very competitive market and those companies that are
able to best utilize their data and provide their customer with the most personalized
options will have the distinct competitive advantage. The insurers that come up to the top
will be those who leverage the appropriate technology solutions effectively in order to
foster customer loyalty, attract new customers and improve operational efficiency by
providing common information across their lines of business.

6. MERGERS AND AQUISITIONS

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This is an era of mergers and acquisitions. Private companies including MNC’s are
amalgamating the world over to get more competitive edge. Currently, the general
insurance industry has been opened up. The question here is that for over two years, eight
private companies have operated and has the size of the cake expanded. The insurers are
doing enough to raise the level of risk awareness or are they merely content to compete in
the markets organized and established. However sooner or later the private sector players
will have to put in place strategies aimed not at winning the existing accounts of the
public players but at diversifying markets penetration as a whole. The private players in
the future would have to turn their attention to working in the unorganized and under
served markets.
What is likely to happen is that the private players would continue to skim the profitable
segments of the already organized business in the urban areas? The time has already
come for the government of India to evaluate the performance of private companies’ vis-
à-vis their declared objective of opening up the industry.
However it is high time for the government to realize that importance of merging the
public sector general insurance companies into single entity. The resent scenario calls for
a better performance from part of each of the public sector insurance companies against
each other; or in other words a competition to be the best. The result what we see is the
undercutting of premium to retain or wrest business and quoting an uneconomical rate of
premium. While this allows one of the Public Sectors Company to win a business form
another in this manner. The others suffer a loss and the resultant effect is a
cannibalization with a fall in the average premium of the public sector itself. This at
many times brings advantage to the private players who grab the business because of the
unethical competition among the public players.
The purpose of having four companies all subsidiaries of General Insurance Corporation
of India (GIC)– National Insurance Company, New India Assurance Company, Oriental
Insurance Company, And The United India Insurance Company; at the time of
nationalization was to have competition among themselves –in service and products at
the same price. The service provided by them was also equally good or bad depending on
the experience of the customers.

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Now with real competition coming in with most of the global insurance players setting
footprints here, it is felt that the time for merger has come and to enjoy the benefits if the
size. It is to be sated that size does matter in insurance business. All over the world’s
mergers and acquisitions in the risk-underwriting sector is common. The benefits if the
four insurance companies merge will be enormous. The merged entity will enjoy higher
underwriting and risk retention capacity; increase in reinsurance premium, reduction in
reinsurance outflow, healthy solvency margins, setting right the asset –liability mismatch
and reduction in cost. The insurance market thus becomes a gambling place. Had the
public sector companies made into a single entity, perhaps the total premium of the four
public sector companies in the year 2003-04 would have gone up but 25 percent. But the
public sector alone is forced to underwrite the loss making motor third party liability
(TPL) insurance. The public insurance companies insured a loss of Rs 1943 crore on this
portfolio on just one year (03-04). The cumulative loss under this portfolio is
astronomical. The loss of profitable business in view of undeserved competition among
the public sector companies is hampering the subsidization of social insurance including
the motor TPL.

It is thus clear that it is good for the public sector companies to merge immediately when
they are still strong, lest a merger becomes inevitable later after the independent public
sector companies fail one after another. This does not bid well for the public sector, nor
fort he insuring public and not for the economic development either. For a progress me
require merger of strong public sector companies. Else it would render public sector
companies weak and destroy them.

NAME OF THE PLAYER MARKET SHARE (%)

LIC 72.15

ICICI PRUDENTIAL 5.91

BIRLA SUN LIFE 2.6

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 BAJA ALLIANZ 1.62

SBI LIFE 1.19

HDFC STANDARD 3.88

TATA AIG 1.5

MAX NEW YORK 2.4

AVIVA 1.8

OM KOTAK MAHINDRA 1.9

ING VYASA 1.2

AMP SANMAR 1

METLIFE 1.4
OTHERS 1.45

Indian Life Insurance Joint Ventures

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Foreign Entity Local Company/Venture
AIG Tata
Allianz Bajaj
Aviva Life Dabur
Cardiff State Bank of India Life
ING Life Vysya
New York Life Max
Met Life J & K Bank, Pallonji Group & others
Old Mutual Kotak Mahindra
Prudential ICICI
Standard Life HDFC
Sun Life Birla

POTENTIAL OF INSURANCE INDUSTRY IN INDIA :

• Only ONE out of FIVE insurable population in India have insurance coverage.
• In terms of Insurance premium per capita and premium per GDP, India ranks as
one of the lowest in the world.
• Life insurance premium constitutes only 9% of domestic savings.
• By 2010, hundred million elderly look to planning for old age pension and
annuities.
• More than 325 million labor forces have no social security.

With an annual growth rate of 15-20% and the largest number of life insurance policies in
force, the potential of the Indian insurance industry is huge. Total value of the Indian
insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to
government sources, the insurance and banking services' contribution to the country's
gross domestic product (GDP) is 7% out of which the gross premium collection forms a
significant part. The funds available with the state-owned Life Insurance Corporation
(LIC) for investments are 8% of GDP.

Till date, only 20% of the total insurable population of India is covered under various life

23
insurance schemes, the penetration rates of health and other non-life insurances in India is
also well below the international level. These facts indicate the of immense growth
potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector, as major structural
changes took place with the ending of government monopoly and the passage of the
Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry
restrictions for private players and allowing foreign players to enter the market with some
limits on direct foreign ownership.

Though, the existing rule says that a foreign partner can hold 26% equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have
poured into the Indian market and 21 private companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected.
Indians, who had always seen life insurance as a tax saving device, are now suddenly
turning to the private sector and snapping up the new innovative products on offer.

The life insurance industry in India grew by an impressive 36%, with premium income
from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff
competition from private insurers. Though the total volume of LIC's business increased in
the last fiscal year (2004-2005) compared to the previous one, its market share came
down from 87.04 to 78.07%. The 14 private insurers increased their market share from
about 13% to about 22% in a year's time. The figures for the first two months of the fiscal
year 2005-06 also speak of the growing share of the private insurers. The share of LIC for
this period has further come down to 75 percent, while the private players have grabbed
over 24 percent.

There are presently 12 general insurance companies with four public sector companies

24
and eight private insurers. According to estimates, private insurance companies
collectively have a 10% share of the non-life insurance market.

1.3 PROFILE OF THE ORGANISATION—

HDFCSTANDARDLIFEINSURANCECO.LTD

HDFC Standard Life is one of India’s leading private life insurance companies , which
offers a range of individual and group insurance solutions. It is a joint venture between
Housing Development Finance Corporation Limited (HDFC), India’s leading housing
finance institution and Standard Life plc, a leading provider of financial services
in the United Kingdom. HDFC Standard Life’s product portfolio comprises solutions,
which meet various customer needs such as Protection, Pension, Savings, Investment,
and Health. Customers have the added advantage of customizing their Plans, by adding
optional benefits called riders, at a nominal price. The company currently has 25 retail
and 4 group products in its portfolio, along with five optional rider benefits catering to
the savings, investment, protection and retirement needs of customers. HDFC Standard
Life continues to have one of the widest reaches among new insurance companies
through a network of 595 offices serving over 720 cities and towns across the country.
The company has also increased its depth in existing markets with a strong base of more
than 207,000 Financial Consultants.

HDFC Limited
HDFC Limited has set benchmarks for the Indian housing finance industry. Recognition
for the service to the sector has come from several national and international entities
including the World Bank that has lauded HDFC as a model housing finance company
for the developing countries. HDFC has undertaken a lot of consultancies abroad
assisting different countries including Egypt, Maldives, and Bangladesh in the setting up
of housing finance companies. Customer Service and satisfaction has been the
mainstay of the organization. HDFC Limited has assisted more than 3.3 million families
own a home, since its inception in 1977 across 2400 cities and towns through its network
of over 250 offices. It has international offices in Dubai, London and Singapore with

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service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and PIOs to
own a home back in India.

Standard Life Group

The Standard Life Group has been looking after the financial needs of customers for over
180 years. It currently has a customer base of around 7 million people who rely on
the company for their insurance, pension, investment, banking and health-care needs. Its
investment manager currently administers £125 billion in assets. It is a leading
pensions provider in the UK, and is rated by Standard & Poor as ‘strong’ with a rating of
A+ and as ‘good’ with a rating of A1 by Moody’s. Standard Life was awarded the ‘Best
Pension Provider’ in 2004, 2005 and 2006 at the Money Marketing Awards, and it was
voted a 5 star life and pension provider at the Financial Adviser Service Awards for the
last 10 years running. The ‘5 Star’ accolade has also been awarded to Standard Life
Investments for the last 10 years, and to Standard Life Bank since its inception in 1998.
Standard Life Bank was awarded the ‘Best Flexible Mortgage Lender’ at the Mortgage
Magazine Awards in 2006.

Brief Profile of The Management Team

Mr. Amitabh Chaudhry

Managing Director and Chief Executive Officer

Mr. Amitabh Chaudhry is the Managing Director and Chief Executive

Officer of HDFC Standard Life.

Before joining HDFC Standard Life in Janaury 2010, he was the Managing Director and
CEO of Infosys BPO and was also heading an Independent Validation Services unit in
Infosys Technologies. Mr. Chaudhry started his career with Bank of America delivering
diverse roles ranging from Head of Technology Investment Banking for Asia, Regional
Finance Head for Wholesale Banking and Global Markets and Chief Finance Officer of
Bank of America (India). He moved to Credit Lyonnais Securities in 2001 in Singapore

26
where he headed their investment banking franchise for South East Asia and structured
finance practice for Asia before joining Infosys BPO in 2005.

Mr. Chaudhry completed his Engineering in 1985 from Birla Institute of Technology and
Science, Pilani and MBA in 1987 from IIM, Ahmedabad.

Mr. Paresh Parasnis

Executive Director and Chief Operating Officer

Mr. Paresh Parasnis is the Executive Director and Chief Operating

Officer of HDFC Standard Life.

A fellow of the Institute of Chartered Accountants of India, he has been associated with
the HDFC Group since 1984. During his 16-year tenure at HDFC Limited, he was
responsible, for driving and spearheading several key initiatives. As one of the founding
members of HDFC Standard life, Mr. Parasnis has been responsible for setting up
branches, driving sales and servicing strategy, leading recruitment, contributing to
product launches and performance management system, overseeing new business and
claims settlement, customer interactions etc.

Ms. Vibha Padalkar

Chief Financial Officer

Ms.Vibha Padalkar is the Chief financial Officer of HDFC Standard

Life.
Ms. Padalkar joined HDFC Standard Life in August 2008 after a seven year stint as
Executive Vice President-Finance at WNS Global Services, a NYSE listed leading global
business process outsourcing company. Vibha’s key achievement during her tenure at
WNS was to lead a team that successfully completed the Group’s IPO on the New York
Stock Exchange in a short span of six months. Prior to WNS, Vibha was with Colgate
Palmolive India for 7 years, including a short posting to the Group's New York

27
headquarters.

Ms.Padalkar became a member of the Institute of Chartered Accountants in England and

Wales in 1992, after having completed the last part of her schooling as well as college
education in London.

Mr. Sharad GangalGeneral Manager, Human Resources and

Administration
Mr. Sharad Gangal is the General Manager HR and heads the vertical in
HDFC Standard Life.

Mr. Gangal joined HDFC Standard Life in July 2007 with rich experience of more than
25 years in spearheading various departments of Human Resources arena in the FMCG
and pharmaceutical industry. Before HDFC Standard Life, he was associated with
Cadbury India for 11 years followed by a stint at Cadbury Australia, Asian Paints for 5
years and Boehringer Mannhein for seven years.

Mr. Gangal is a Post Graduate in Human Resources. Employee engagement and Change
Management are his areas of specialization.

Mr. Vikram Mehta

General Manager, Sales and Marketing

Mr.Vikram Mehta heads the Sales and Marketing function for HDFC
Standard Life.
Mr. Mehta joined HDFC Standard Life in February 2009. Before joining HDFC Standard
Life, he was associated with Citibank for 16 years serving various responsibilities

28
including the Head for Direct Sales - Citibank Credit Cards division in Germany,
Regional Director East - Citibank NA, India, and Acquisitions Head – Credit Cards,
Central and Eastern Europe cluster. Mr. Mehta started his career with Reckitt and
Colman (now Reckitt Benckiser) in 1988, and was associated with the company for 4
years. He has been a part of FMCG and banking industry for over 20 years.

Mr. Mehta has completed Chemical Engineering from the Indian Institute of Technology
(IIT) Delhi and holds a PGDM from IIM Calcutta.

Mr. Prasun Gajri

Chief Investment Officer

Mr. Prasun Gajri is the Chief Investment Officer of HDFC Standard

Life.

Mr. Gajri joined HDFC Standard Life in April 2009 with a rich experience of 14 years in
investments and banking industry. He started his career in 1995 with Citibank and was
associated with it for over 6 years delivering various roles. He joined Tata AIG Life
Insurance Company in October 2001 to start the investment function and stayed there
until April 2009, the last role being that of the Chief Investment Officer.

He holds a PGDM from IIM Ahmedabad and is also a CFA Charterholder.

The Board of Directors

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).

29
Sir 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. Sir Crombie is a fellow of the Faculty of Actuaries in
Scotland.

Mr. Keki M. Mistry joined the Board of Directors of the Company in December, 2000.
He is currently the Vice Chairman and 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.

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.

Ms. Renu S. Karnad is the Joint Managing director of HDFC Limited. She 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.

Mr. Norman K. Skeoch is currently the Chief Executive of Standard Life Investments
Limited and is responsible for overseeing Investment Process & Chief Executive Officer
Function. Prior to this, Mr. Skeoch was working with 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

30
also responsible for Economic and Investment Strategy research produced on a
worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005.
6 HDFC Standard Life Insurance Company Limited Annual Report 08-09

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 overseas
investments to and from India.

Mr. Ranjan K. 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. Gerald E. Grimstone was appointed Chairman in May 2007, having been Deputy
Chairman since March 2006. He became a director of The Standard Life Assurance
Company in July 2003. He is also Chairman of Candover Investments plc and was
appointed as one of the UK’s Business Ambassadors by the Prime Minister in January
2009. Gerry held senior positions within the Department of Health and Social Security
and HM Treasury until 1986. He then spent 13 years with Schroders in London, Hong

31
Kong and New York, and was Vice Chairman of Schroders’ worldwide investment
banking activities from 1998 to 1999. He is the Alternate Director to Sir Alexander
Crombie.

Mr. Paresh Parasnis is the Principal Officer and Executive Director of the company since
November 14, 2008. A fellow of the Institute of Chartered Accountants of India, he has
been associated with the HDFC Group since 1984. During his 16-year tenure at HDFC
Limited, he was responsible for driving and spearheading several key initiatives. As one
of the founding members of HDFC Standard life, Mr. Parasnis has been responsible for
driving corporate strategy besides handling specific responsibilities for sales and
operations in the
initial years.

Awards & Accolades

Sept, 2008
Received 2008 CIO Bold 100 and CIO Security Awards
HDFC Standard Life has received the 2008 CIO Bold
100 Award. This annual award recognizes
organizations that exemplify the highest level of
operational and strategic excellence in information
technology. This year's award theme, ‘The Bold 100,’
recognized those executives and organizations that
embraced great risk for the sake of great reward.
HDFC Standard Life has also been one of the five recipients of the Special 2008 CIO
Security Award aimed at CIOs, whose pioneering implementations have taken their
enterprise security to the next level. This award category identifies innovative and
groundbreaking deployment of technologies aimed at
creating a secure business infrastructure.
The company received the 2008 CIO Bold Award for
its mobile workforce portal and the CIO Security

32
Award for its initiatives for a secure computing environment, including identity
management.
May, 2008
Received PCQuest Best IT Implementation Award 2008
HDFC Standard Life received the PCQuest Best IT Implementation Award 2008 for
Consultant Corner, the applications for its financial consultants, providing centralized
control over a vast geographical spread for key business units such as inventory, training,
licensing, etc. Read more about the ‘Consultant Corner’ tool in the ‘HDFCSL in News’
Section.
HDFC Standard Life has won the PCQuest Best IT Implementation Award for two years
consequently. Last year, the company received the award for Wonders, its path-breaking
implementation of an enterprise-wide workflow system.

March, 2008
Silver Abby at Goafest 2008
HDFC Standard Life's radio spot for Pension Plans won a Silver Abby in the radio
writing craft category at the Goafest 2008 organised by the Advertising Agencies
Association of India (AAAI). The radio commercial ‘Pata nahin chala’ touched several
changes in life in the blink of an eye through an old man’s perspective. The objective was
drive awareness and ask people to invest in a pension plan to live life to the fullest even
after retirement, without compromising on one’s self-respect
March, 2008
Unit Linked Savings Plan Tops Mint Best TV Ads Survey
The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of the leading
private insurance companies in India, has topped Mint’s Top Television Advertisement
survey conducted, for February 2008. HDFC Standard Life’s Unit Linked Savings Plan
advertisement was ranked 4th in terms of a combined score of ad awareness and brand
recall and 3rd in terms of ad diagnostic scores (likeability, enjoyment, believability, and

33
claim). The respondents were between 18 and 40 years. Mint’s exclusive report, ‘New
voices in a makeover’ outlines the survey in detail.
February, 2008
Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007
Mr Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life, received
the QIMPRO Gold Standard Award 2007 in the business category at the 18th annual
Qimpro Awards function. The award celebrates excellence in individual performance and
highlights the quality achievements of extraordinary individuals in an era of global
competition and expectations.
January, 2008
Sar Utha Ke Jiyo Among India’s 60 Glorious Advertising Moments
HDFC Standard Life’s advertising slogan honoured as one of ‘60 Glorious Advertising &
Marketing Moments' over the last 60 years in India,’ by 4Ps Business and Marketing
magazine. The magazine said that HDFC Standard Life is one of the first private insurers
to break the ice using the idea of self respect (Sar Utha Ke Jiyo) instead of 'death' to
convey its brand proposition. This was then, followed by others including ICCI
Prudential, thus giving HDFC Standard Life the credit of bringing up one such glorious
advertising and marketing moment in the last 60 years.
HDFC is also financially very strong and for the last six years has enjoyed the highest
financial strength ratings from India’s two leading rating agencies.
The HDFC group includes:
 HDFC Bank
 HDFC Asset Management
 HDFC Realty Ltd.
 HDFC Securities Limited

Over the period of operations, HDFC group has been felicitated with various rewards.
Some of them are as follows:

 United Nations Scroll of Honor –1991

34
  India’s best managed company by Asiamoney magazine – 1995 and 1996
 Most competitive Indian company by Euromoney –1997
 One of the 5 best Indian Boards by Business Today – 1997
 Rated as one of the best companies in India for strategy & management and
investor relations by Asiamoney –1998.
 Excellence in service industry by the Indian Institute of Marketing Management
& Top Management Club (Pune) –1998
 Shield for the best presented accounts for banks and financial institutions – over
11 times (last 8 years in a row)
 1999 IMC Ramakrishna Bajaj National Quality Award in the service category.
 CII-Exim Bank Commendation Certificate for commitment to Total Quality
Management – 2000.

HISTORY OF THE JOINT VENTURE

Discussions commenced -- January 1995
Joint Venture agreement signed – October 1995
Joint venture agreement renewed – October 1998
Life insurance project team established – January 2000 (Mumbai)
Company officially incorporated - 14th August 2000
First Private Sector Life Insurance company to be granted a certificate of registration –
23rd October 2000
Shareholding – HDFC 81.4%
Standard Life 18.6%

VALUES THAT WILL BE OBSERVED IN HDFCSL :

 Integrity
 Innovation

35
  Customer Centric
 People Care
 Team Work – One for all & all for one
 Joy & Simplicity

SALES STRUCTURE OF THE ORGANIZATION

M a n a g i n g D i r e c t o r

G e n e r a l M a n a g e r
D i s t r i b u t i o n

H e a d - H e a d - C u s t o m C e er n t r a l D i s t
R e t a i l S Ga l re o s u p SS ae l r e v s i c e M S a un pa pg oe r t

B r a n c h M a n a g e r S a l e s
R e m u n e r a t
L i c e n s i n g

S a
l e s
R e p r e s Be n u t s a i nt i ve e s s O C D f of ie cr vp e e o l r o a p t em e n t T r a i n i n g
R e s i d e n M t a M n a a n g a e g r A e ( Brg eD n M t s ' s )

S
l e s a
T e a m o T f eB a D m M o' s f C o n s u l t a n t s M a n a g e m
I n f o r m a t i o

T e a m o f C o n s u l t a n t s

36
1.3 VISION STATEMENT

“ The most succesful and admired life insurance company, which means that we are the
most trusted company, the easiest to deal with , offer the best value for money, and set
the standards in the industry. In short, “the most obvious choice for all”.

1.4 MISSION STATEMENT OF HDFC SLIC :

 We aim to be the top new life insurance company in the market.

 This does not just mean being the largest or the most productive company in the
market, rather it is a combination of several things like –
 Customer service of the highest order
 Value for money for customers
 Professionalism in carrying out business
 Innovative products to cater to different needs of different
customers
 Use of technology to improve service standards
 Increasing market share.

37
38
\

CHAPTER 2: PRODUCT

39
40
Products of HDFC Standard Life Insurance

1) Child Plan

Children’s Plan is designed to provide a lump sum to the child at maturity. It also
provides financial security to the child in the future, even in case of the insured parent’s
unfortunate death during the policy term. Children’s Plan receives simple reversionary
bonuses, which are usually added annually. This is a flexible plan with three options for
you to choose from, depending on your requirements. The details of these options are
explained in the next section.

What are the options that are available with this plan?

On the death of the

Option insured parent during the On maturity
policy term

Future premiums waived

Maturity Benefit Plan
Accelerated Benefit Plan
Double Benefit Plan
Sum assured + bonuses
and the policy continues
paid.
till maturity.
On the survival of the
Sum assured + bonuses insured parent to the
paid and the policy stops. maturity date, sum assured
+ bonuses paid.
Sum assured paid, future
premiums waived, and the Sum assured + bonuses
policy continues till paid.
maturity.

2) Money Back Plan

41
It is a participating (with profits) insurance plan that offers the following features:
Ø Payment of cash lump sums, each of which is a proportion of the basic sum
assured, at 5-year intervals during the term of the policy. (Please refer to the table given
below.)
Ø On survival up to maturity, a payment equal to the basic sum assured plus any
bonus additions less the cash lump sums paid earlier is provided.
Ø In case of the unfortunate death of the life assured within the term of the policy, the
basic sum assured plus any bonus additions is provided. This is over and above the earlier
payouts.

Schedule of cash lump sum

(as a % of basic sum assured)

Number of Years from policy date

Total Policy Term
5 10 15 20 25
10 40%
15 30% 30%
20 25% 25% 25%
25 20% 20% 20% 20%
30 15% 15% 15% 15% 15%

3) Term assurance Plan

Under this plan, a sum assured is payable in case of death of the life assured during the
term of the contract. One can choose the lumpsum that would replace the income lost to
one's family in the unfortunate event of one's death. Since this non-participating (without
profits) plan is a pure risk cover plan, no benefits are payable on survival to the end of the
term of the policy.

Why should you buy this product?

42
If you have a family that you care for, you should consider what would happen in case of
your unfortunate death. The emotional void cannot be filled, but financial insecurity can
be avoided. By taking this affordable life insurance plan, you can
provide for the well-being of your family in case of your unfortunate death. This plan
comes to you at a minimal cost and is well-suited for the value-conscious customer.

4) Personal Pension Plan

Before you enter into any financial contract, it is important that you understand what the
product is, how it works, the risks involved and what a decision to buy could mean for
you. We recommend that you read this document before you purchase a policy from
HDFC Standard Life Insurance Company.

Purpose: The policy is basically a savings contract, which is designed to provide an

income for life from retirement, with an option to take the lump sum elsewhere to buy the
annuity, provided it is permitted by the prevailing regulations.

Your commitment: You agree to pay a single premium or level premiums with
installments due every quarter, half-year or year throughout the deferment period
of the policy, after which you will start receiving your pension.

Risk factors: If you cease to pay premiums we may pay a surrender value. This will be
determined at our discretion. If any of the information which you provide is incorrect, we
reserve the right to vary the benefits which may be payable and, further, if there has been
non-disclosure of a material fact then we may treat your Policy as void. We will not pay
out if a claim arises from an excluded cause of death. Future bonuses are not guaranteed.
They are dependent on our future experience. The principal elements of experience are
our investment performance and expenses.

How does your Personal Pension Plan work?

This participating (with profits) plan is basically a savings contract, which is designed to
provide an income for life from retirement. It does this by providing a notional lump sum

43
on retirement, comprising of sum assured plus any attaching bonus. Subject to the
prevailing regulations, part of this lump sum can be taken in form of cash and the rest
converted to an annuity at the rate then offered by HDFC Standard Life. Alternatively, if
it is permitted by the prevailing regulations, the notional lump sum can be used to buy an
annuity with any other insurance companywho will accept such business. On earlier
death after the first year, for Regular Premium policies all premiums paid to date will be
returned with interest at 8% per annum, subject to a maximum of the sum assured plus
bonuses declared to date. For Single premiums, it is sum assured plus bonuses declared to
date.
Normally, we will declare a reversionary bonus once a year. Once added, it cannot be
reduced. Reversionary bonus will take the form of a simple addition to your policy
benefits.
In addition, on maturity, a terminal bonus might be payable. On death, an interim bonus,
reflecting the period since the last addition of reversionary bonus, might also be payable.
5) Endowment Plan
It is a participating (with profits) insurance plan that offers the following features:
Ø Provides financial support to the family by way of a lumpsum payment in case of the
unfortunate death of the life assured within the term of the policy.
Ø Provides a lump sum payment to the life assured on survival up to maturity.
Why should you buy this product?
This plan is a with profits saving plan and is well suited for saving money for your long
term financial goals. This plan also helps provide for the needs of your family in your
absence by paying out a lump sum in the event of your unfortunate death during the term
of the policy.
6) Loan Cover Term Assurance
This plan provides a lump sum on the unfortunate death of the life assured during the
term of the plan. The lump sum will be a decreasing percentage of the initial sum assured.
As the outstanding loan decreases as per the loan schedule, the cover under the policy
decreases as per the policy schedule. Since this is a non-participating (without profits)
pure risk cover plan, no benefits are payable on survival to the end of the term of the
policy.

44
Why should you buy this product?
If you are taking a loan to buy a house for your family, this plan can help you ensure that
life's uncertainties do not affect their shelter. It is an affordable plan that has been
designed to help your family repay the outstanding loan in case of your unfortunate
death.

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 those member beneficiaries
to help meet some of the immediate financial needs following their loss.
Eligibility
Members of the development agency and their spouses with:
Minimum age at the start of the policy 18 years last birthday
Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The group to be
covered is only eligible if it contains more than 500 members.

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

2.1 MARKETING STRATEGY

45
MARKETING
Marketing deals with product. A product can be a good, service or an idea. Here as
HDFC STANDARD LIFE is an insurance company so the product here is ‘SERVICE’.

MARKETING OBJECTIVES OF HDFC STANDARD LIFE:

The following are the marketing objectives of HDFC STANDARD LIFE

 Focus on the productivity of each consultant, corporate or individual, while stressing

on the quality of proposals
 Quick roll out of Products
 Efficiency of Operations
 Meet Social & Rural sector obligations
 Increase/improvement in all the key growth parameters

KEY GROWTH PARAMETERS:

 Number of Financial Consultants

 Number of Policies
 Gross Premium
 Productivity - policies per month per consultant
 Physical points of presence

2.2 Marketing mix in insurance industry (4 P’s)

1. PRODUCT:

46
An Insurance company sells services and therefore services are their product.
HDFC standard life insurance company faces a bigger challenge due to the unique nature
of services provided by them.

FUNCTIONALITY: HDFC standard life is one of the leading company offering

insurance services to the users. Apart from offering life insurance policies, they also offer
underwriting and consulting services along with it the assistance and advice of the agent,
the prestige of the company and the facilities of claims and compensation.
.
STRATEGIES: HDFC standard life uses various strategies to market their services
They try to offer same standardized services to all their customers e.g., a courier services
They customize the service according to the needs of the customer: e.g., doctors,
consultants, etc.

BRAND: HDFC standard life also leverages on its brand name gained over the years.
HDFC’s brand name helps in differentiating its service and expressing brands
superiority over rival brands.

It is natural that the customers expect a reasonable return for their investment and the
insurance company wants to maximize their profitability.
Hence, while deciding the product portfolio or the product-mix, the services or the
schemes should be motivational.

SERVICE (PRODUCT): HDFC Standard Life Product portfolio comprises solutions,

which meet various customer needs such as Protection, Pension, Savings, Investment,
and Health.
The company currently has 25 retail and 6 group products in its portfolio, along with five
optional rider benefits catering to the savings, investment, protection and retirement
needs of customers.
HDFC Standard Life bouquet of children’s plans includes:
Children’s Plan

47
Unit Linked Young Star II
Unit Linked Young Star plus II
Unit Linked Young Star Champion

WARRANTY: These plans offer multiple advantages for the child, such as tax benefits
and long-term financial security. The plan is an affordable means to ensure a child’s
security and, apart from the parents, it can also be chosen by the grand parents or other
relatives of the child. However, its greatest strength is that company continues to make
savings on your behalf, in your absence. The savings can be directed 100% towards your
policy or 50% towards your policy and 50% will be available for the beneficiary’s regular
use until the original Maturity Date. The development of flexible products to suit
individual requirements is what will differentiate the HDFC standard life from the other
also-rans.

2. PRICING:

In the HDFC standard life insurance the pricing decisions are concerned with:
i) The premium charged against the policies,
ii) Interest charged for defaulting the payment of premium and credit facility, and
iii) Commission charged for underwriting and consultancy activities.

With a view of influencing the target market or prospects the formulation of pricing
strategy becomes significant. In a developing country like India where the disposable
income in the hands of prospects is low, the pricing decision also governs the
transformation of potential policyholders into actual policyholders.

The strategies may be high or low pricing keeping in view the level or standard of
customers or the policyholders. The pricing in HDFC insurance is in the form of
premium rates.

48
The three main factors used for determining the premium rates under a life insurance plan
are mortality, expense and interest. The premium rates are revised if there are any
significant changes in any of these factors.

• Mortality (deaths in a particular area):

When deciding upon the pricing strategy the average rate of mortality is one of the main
considerations. The Mortality Charge will apply on the Sum at Risk (SAR = Sum
Assured less the Fund Value pertaining to regular premiums). It will be deducted by
monthly cancellation of units from the accumulation unit account. The Mortality Charge
shall remain guaranteed throughout the policy term.

• Expenses:
The cost of processing, commission to agents, reinsurance companies as well as
registration are all incorporated into the cost of installments and premium sum and forms
the integral part of the pricing strategy.

• Interest:
The rate of interest is one of the major factors which determines people’s willingness to
invest in insurance. People would not be willing to put their funds to invest in insurance
business if the interest rates provided by the banks or other financial instruments are
much greater than the perceived returns from the insurance premiums.

Price is a relevant differentiator only in two segments - pure term insurance and in pure
annuities. Here too, service delivery and financial strength will need to be present at a
minimum acceptable level for price to be a relevant differentiator.
In case of savings oriented products, long term returns generated will be more relevant
than just the price of the product.
A focus on generating good investment performance and keeping a tight control on costs
will help in generating good long-term maturity value for customers.
Norms have been laid down on all of these by IRDA and adhering to these while
delivering good returns will be a challenge.

49
3. PLACE:

The Place Mix has two important dimension/ facets --

i) HDFC STANDARD LIFE Managing the insurance personnel, and
ii) Locating a branch i.e., No. of branch of HDFC located at different places

HDFC STANDARD LIFE MANAGING THE INSURANCE

PERSONNEL:

Strength of Financial Consultants reported year-on-year growth of 43% to over

2,07,000 in FY2008-09 compared to 1,45,000 last financial year
The management of agents and insurance personnel is found significant with the
viewpoint of maintaining the norms for offering the services.
This is also to process the services to the end user in such a way that a gap between the
services- promised and services – offered is bridged over.
In a majority of the service generating organizations, such a gap is found existent which
has been instrumental in making worse the image problem.

The transformation of potential policyholders to the actual policyholders is a difficult task

that depends upon the professional excellence of the personnel.
The agents and the rural career agents acting as a link, lack professionalism. The front-
line staff and the branch managers also are found not assigning due weightage to the
degeneration process.
The insurance personnel if not managed properly would make all efforts insensitive.
Even if the policy makers make provision for the quality up gradation, the promised
services hardly reach to the end users.

50
LOCATING A BRANCH:

HDFC operates through almost 450 locations throughout the country with its corporate
head quarters in Mumbai, India.
HDFC also has an International Office in Dubai, UAE with service associates in Kuwait,
Oman and Qatar. HDFC is the largest housing company in India for the last 27 years.

While locating branches, the branch manager needs to consider a number of factors, such
as smooth accessibility, availability of infrastructural facilities and the management of
branch offices and premises. In addition it is also significant to provide safety measures
and also factors like office furnishing, civic amenities and facilities, parking facilities and
interior office decoration should be given proper attention.

Thus the place management of insurance branch offices needs a new vision, distinct
approach and an innovative style. This is essential to make the work place conducive,
attractive and proactive for the generation of efficiency among employees. The branch
managers need professional excellence to make place decisions productive.

4. PROMOTION:

The insurance services depend on effective promotional measures.

In a country like India, the rate of illiteracy is very high and the rural economy has
dominance in the national economy.

It is essential to have both personal and impersonal promotion strategies.

51
In promoting insurance business, the agents and the rural career agents play an important
role. Due attention should be given in selecting the promotional tools for agents and rural
career agents and even for the branch managers and front line staff. They also have to be
given proper training in order to create impulse buying.

HDFC standard life insurance follows personal and impersonal promotion strategies like

-- Advertising and Publicity, (sar utha ke jiyo)

-- Organization of conferences and seminar,
-- Competitions like 'Spell Bee-India Spells 2009’
-- Exhibitions,
-- Participation in fairs and festivals,
-- Rural wall paintings and
-- Publicity drive through the mobile
-- Publicity van units

That would be effective in creating the impulse buying and the rural prospects would be
easily transformed into actual policyholders.

To maintain the level of demand for product and to be activated considerably in the
market
HDFC has developed its market by using the above promotion strategies to make a
Greater awareness of insurance and the need to have it as a protection tool rather than as
a tax planning measure.

52
53
CHAPTER 3: COMPETITORS

54
3. COMPETETIVE INFORMATION

 LIFE INSURANCE CORPORATION – MARKET LEADER

INTRODUCTION

The Life Insurance Corporation of India (LIC), a public sector enterprise, is the largest
insurance company in India, selling insurance products and related services. In March
2001, LIC had a total asset base of Rs.1936.2 billion and a total premium income of
Rs.342.07 billion. By April 2002, the total sum assured under 23.2 million policies stood
at Rs.1925.7 billion.

LIC had a variety of insurance plans to cater to various categories of people and their
diverse needs. The company offered life insurance and group insurance. It also provided
social security schemes and pension schemes. Each of its business products offered a
variety of different plans to suit different customers and situations. Investment in LIC
was considered by a majority of its customers to be reliable and secure. Housing loans
were granted through its subsidiary and LIC sold its market savings and investment
products through its mutual fund subsidiary, LIC Mutual Fund Ltd. To serve its 140
million policyholders (2001 end), the insurance giant had 1.25 lakh employees and 6.51
lakh agents across the country.

The company, which was based in Mumbai, had seven zonal offices, 100 divisional
offices, and 2,048 branch offices that spanned the country. LIC's penetration in rural
areas was very high; 18% of its total business came from rural areas.

Since LIC enjoyed monopoly status for over four decades, it emerged as one of the key
public fundraisers in India. However, things began changing in the mid-1990s, when the
Government of India decided to privatize the insurance sector. The Malhotra committee's
(formed to explore the possibility/feasibility? of privatizing the Indian insurance industry)
recommendations in 1994 brought about a sea change in the industry.

55
LIC found itself in a difficult situation when the newly formed Insurance Regulatory
Development Authority (IRDA) issued licenses to many private insurance companies
(starting November 2000).
To sustain its growth in an intensely competitive environment, the company, on the
recommendations of Booze, Allen and Hamilton, started initiated organizational changes
and became more customer-focused initiatives. The company's attitude towards the
changing insurance scenario was summarized by its Managing Director, N C Sharma,
"The element of competition will bring out the best (in us)."

HISTORY

The concept of life insurance came to India when two British insurance companies were
established in the country - the Oriental Life Insurance Company (in Calcutta in 1818)
and Bombay Life Assurance Company (in Bombay in 1823).
Over the next few decades, the life insurance business, which grew in an unregulated
environment, concentrated on urban areas and catered primarily to the higher strata of
society. In 1912, the Indian Life Assurance Companies Act was passed to regulate the life
insurance business.

Later, in 1928, the Indian Insurance Companies Act was enacted to enable the
government to collect statistical information on both life and non-life insurance business
transacted in India by Indian and foreign insurers, including provident insurance
societies. In 1938, the earlier legislation was consolidated and amended by the Insurance
Act, 1938, to protect the interests of the insuring public. The Insurance Act of 1938 was
amended in 1950, and brought about far-reaching changes in the insurance sector. These
included a statutory requirement of equity capital for companies carrying on life
insurance business, a ceiling on share holdings in such companies, stricter control on
investments, and submission of periodical returns relating to investments and other such
information to the controller. The controller could also call for the appointment of

56
administrators and could put a ceiling on the expenses of management and agency
commission for mismanaged companies.

By 1956, there were 154 life insurance companies in India. Malpractices and
mismanagement had crept into the management of several of these companies. More than
50 private insurance companies had been liquidated or swindled the policyholders. There
were complaints of different types of malpractices by many insurance companies. These
included falsification and denial of claims, and inter-locking of funds.

To protect the public, the government nationalized the insurance industry. On January 19,
1956, the management of the life insurance business of 245 Indian and foreign insurers
and provident insurance societies then operating in India were taken over by the central
government. The main objective of the nationalization of life insurance was to channel
insurance funds for the benefit of the community at large.

VISION :
"A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India" .

MISSION
"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering
resources for economic development."

TYPES OF PLANS OFFERED:

1. INDIVIDUAL PLANS
2. GROUP SCHEMES
3. PENSION PLANS

57
INDIVIDUAL PLANS

1. WHOLE LIFE SCHEMES

a. WHOLE LIFE WITH PROFITS

b. LIMITED PAYMENT WHOLE LIFE

c. Single Premium Plan

2. ENDOWMENT SCHEMES

a. Endowment plan with profit

b. Limited payment endowment

c. Jeevan Mitra (Double cover)

d. Jeevan Mitra (Triple cover)

e. Jeevan Anand

f. New Janaraksha

3. TERM ASSURANCE PLAN

a. Jeevan Anurag

b. Komal Jeevan

c. Jeevan Kishore

d. Jeevan Chhaya

e. Marriage/endowment annuity

f. Deferred endowment

58
 4. PERIODIC MONEY BACK PLAN

a. Bima Gold

b. Jeevan Rekha Plan

c. Money Back Plan

d. Jeevan surabhi

e. Jeevan Bharati

6. FOR BENEFIT OF HANDICAPPED

a. Jeevan Aadhar

b. Jeevan Vishwas

7. JOINT LIFE PLAN

a. Jeevan Saathi

8. PLAN FOR HIGH-WORTH INDIVIDUAL

a. Jeevan Shree-I

b. Jeevan Pramukh

9.CAPITAL MARKET LINKED PLAN

59
 a. Bima plus

10. SPECIAL PLAN

a. Jeevan Saral

b. Future Plus
11. INVESTMENT PLAN

a. Bima nivesh ‘05

GROUP SCHEMES

1. Group Term Insurance Scheme

2. Group Gratuity Scheme

3. Group Superannuation Scheme

4. Group Savings Link Insurance Scheme

5. Group Mortgage Redemption Assurance Scheme

Social Security Schemes

 Janashree Prima Yojana

 Krishi Shramik Samajik Yojana

 Samajik Suraksha Yojana

60
  Shiksha Sahayog Yojana

Pension Plans

a. Jeevan Nidhi

b. Jeevan Akshay III

c. New Jeevan Dhara I

d. New Jeevan Suraksha I

e. Future Plus

 ICICI PRUDENTIAL

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse and Prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).

ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential
plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005,
the company garnered Rs 1584 crore of new business premium for a total sum assured of
Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about
56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups. For the past
four years, ICICI Prudential has retained its position as the No. 1 private life insurer in

61
the country, with a wide range of flexible products that meet the needs of the Indian
customer at every step in life.
ICICI Pru offers a complete range of insurance products.

1. Protection Plans
2. Savings Plans
3. Child Plans
4. Investment Plans
5. Retirement Plans
6. Group Plans
7. Rural Plans
8. Plans for NRIs
9. Keyman Plans

Protection Plans

a. Life guard
b. Investshield life
c. Investshield cash
d. Investshield gold
e. Premier life
f. Life Time & Life Time II
g. SecurePlus
h. CashPlus
i. Save’n’Protect
j. CashBak

Child Plans
a. SmartKid regular premium
b. SmartKid unit-linked regular premium
c. SmartKid unit-linked regular premium II

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 d. SmartKid unit-linked single premium II

Investment Plans
a. LifeLink II

Retirement Plans

a. Golden Years
b. InvestShield Pension
c. LifeTime Pension II
d. LifeLink Pension II
e. SecurePlus Pension
f. Forever Life

ICICI Prudential offers 2 specially designed rural plans.

a. ICICI Pru Mitr – endowment plan

b. ICICI Pru Suraksha – regular premium

 TATA AIG
Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance Company Ltd.
(collectively "Tata AIG") are joint venture companies, formed from the Tata Group and
American International Group, Inc. (AIG). Tata AIG combines the strength and integrity
of the Tata Group with AIG's international expertise and financial strength. The Tata
Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance
26 per cent stake.

Tata AIG Life Insurance Company Ltd. provides insurance solutions to individuals and
corporates. Tata AIG Life Insurance Company was licensed to operate in India on
February 12, 2001 and started operations on April 1, 2001. Tata AIG Life offers a broad

63
array of life insurance coverage to both individuals and groups, with various types of
add-ons and options available on basic life products to give consumers flexibility and
choice.
The non-life insurance arm, Tata AIG General Insurance Company, which started its
operations in India on January 22, 2001 offers the complete range of insurance for
automobile, home, personal accident, travel, energy, marine, property and casualty, as
well as several specialized financial lines.

THE AIG GROUP

American International Group, Inc. (AIG) is the world's leading international insurance
and financial services organization, with operations in approximately 130 countries and
jurisdictions.
AIG member companies serve commercial, institutional and individual customers
through the most extensive worldwide property-casualty and life insurance networks of
any insurer.
In the United States, AIG is the largest underwriter of commercial and industrial
insurance and is one of the top three life insurers. AIG's global businesses also include
financial services, retirement savings and asset management. AIG's financial services
businesses include aircraft leasing, financial products, trading and market making.
AIG's growing global consumer finance business is led in the United States by American
General Finance. AIG also has one of the largest U.S. retirement savings businesses
through AIG SunAmerica and AIG VALIC, and is a leader in asset management for the
individual and institutional markets, with specialized investment management capabilities
in equities, fixed income, alternative investments and real estate. AIG's common stock is
listed in the New York Stock Exchange, as well as the stock exchanges in London, Paris,
Switzerland and Tokyo.

64
Products:

1. CHILDREN PLANS

2. ADULT PLANS

3. RETIREMENT PLANS

4. LIFE PLANS

CHILDREN PLANS
a. ASSURE EDUCARE
b. ASSURE CAREER BUILDER
c. MAHALIFE GOLD
d. ASSURE 21YEARS MONEY SAVER

ADULT PLANS
a. TATA AIG INVEST ASSURE
b. ASSURE LIFELINE
c. LIFEPLUS
d. ASSURE 21YEARS MONEY SAVER
e. ASSURE SECURITY AND GROWTH
f. TATA AIG HEALTH FIRST
g. MAHALIFE GOLD

RETIREMENT PLANS
a. ASSURE GOLDEN YEARS
b. MAHALIFE GOLD
c. NIRVANA
d. NIRVANA PLUS

65
 BIRLA SUN

Birla Sun Life Insurance is the coming together of the Aditya Birla group and Sun Life
Financial of Canada to enter the Indian insurance sector. The Aditya Birla Group, a
multinational conglomerate has over 75 business units in India and overseas with
operations in Canada, USA, UK, Thailand, Indonesia, Philippines, Malaysia and Egypt to
name a few.

Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla
Group, one of the largest business houses in India and Sun Life Financial Inc., a leading
international financial services organization. The local knowledge of the Aditya Birla
Group, coupled with the expertise of Sun Life Financial Inc., offers a formidable for your
future.

Aditya Birla Group

The Aditya Birla Group is India's first truly multinational corporation. Global in vision,
rooted in Indian values, the Group is driven by a performance ethic pegged on value
creation for its multiple stakeholders. A US$ 7.59 billion conglomerate, with a market
capitalization of US$ 7 billion, it is anchored by an extraordinary force of 72,000
employees belonging to over 20 different nationalities. Over 30 per cent of its revenues
flow from its operations across the world. The Group's products and services offer
distinctive customer solutions. Its 66 state-of-the-art manufacturing units and sectoral
services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia
and China.

A premium conglomerate, the Aditya Birla Group is a dominant player in all of the
sectors in which it operates. Such as viscose staple fibre, non-ferrous metals, cement,
viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, sponge iron,
insulators and financial services. It is:

66
  The world no. 1 in viscose staple fiber
 The world's largest single location palm oil producer
 Asia's largest integrated aluminum producer
 A globally competitive, fast-growing copper producer
 The world's third largest producer of insulators
 Globally, the fourth largest producer of carbon black
 The world's eighth largest producer of cement, and the largest in a single
geography
 India's premier branded garments player
 Among India's most energy efficient private sector fertilizer plants
 India's second largest producer of viscose filament yarn
 The no. 2 private sector insurance company, and the fourth largest asset
management company in India

The Group has also made successful forays into the IT and BPO sectors.

 Sun Life Financial

Sun Life Financial is a leading international financial services organization. With a

history that dates back to 1871, Sun Life Financial has evolved from a single mutual life
insurance to one of the most highly rated insurance and wealth management institutions
in the world. Sun Life Financial knows its value lies in more than assets and history. It
also lies in the culture of integrity and the pursuit of excellence that have marked all of
the organization’s endeavors. Today, the Sun Life Financial Group of companies and
partners are represented globally in Canada, the United States, the Philippines, Japan,
Indonesia, India and Bermuda.

Boundless Expansion

67
In March of 2000, Sun Life Financial Services of Canada, Inc., Sun Life Financials
parent company, listed its shares on stock markets in Toronto, New York, London and
the Philippines. This new access to shareholder equity provides Sun Life Financial with
even greater opportunities to grow around the world.

Innovation
The Sun Life Financial group of companies around the world, offer innovative and
practical financial solutions to individuals and corporations.

Products:

1. PRIME LIFE
2. LIFE COMPANION
3. FLEXI LIFE LINE PLAN
4. FLEXI CASH FLOW MONEY BACK PLAN
5. FLEXI SAVE PLUS ENDOWMENT PLAN
6. FLEXI SECURELIFE RETIREMENT PLAN
7. CLASSIC LIFE
8. CLASSIC LIFE PREMIER
9. BIRLA SUN LIFE TERM PLAN
10. SINGLE PREMIUM BOND
11. PREMIUM BACK TERM PLAN
12. FLEXI LONG TERM SAVINGS
13. FLEXI ACCESS MONEY
14. WOMAN FIRST PLAN
15. MY CHILD PLAN
16.BIMA KAVACH YOJANA

68
CHAPTER 4: S.W.O.T ANALYSIS

69
4 S.W.O.T ANALYSIS

HDFCSLIC

STRENGTHS

 Premiums are increasing and so are commissions.

 The variety of products is increasing.

 Transparency in working is followed.

70
  Fund charges are less i.e 0.8%

 Stronger financial base.

 Employee centric organization.

WEAKNESS

 Strong competitors like LIC, ICICI Pru, Birla Sun Life etc.

 Premium is priced high as compared top the market leader.

 Infrastructure cost is high.

 Less expenditure on promotion.

 Products not customized for lower segment.

OPPORTUNITIES

 The ability to cross sell financial services barely being tapped.

 Technology is improving to the point that paperless transactions are available.

 The client's increasing need for an "insurance consultant" can open new ways to
service the client and generate income.

THREATS

 Government regulations on issues like health care, mold and terrorism can
quickly change the direction of insurance.

 The increasing expenses and lower profit margins.

71
Intense competition from LIC.

WHY CUSTOMER SHOULD GO FOR HDFC

Because of the facts shown by following comparative study

72
POINTS OF ICICI HDFC LIC ALLIANZ BIRLA SUN
DIFFERENC PRUDENTIAL STANDARD BAJAJ LIFE
E LIFE
PRODUCT LIFE GUARD TERM ANMOL PROTECT RISK CARE
TERM ASSURANCE JEEVAN
ASSURANCE

25 YEARS 20 YEARS 30 YEARS 25 YEARS

MAX.TERM
30 YEARS

MIN.TERM 5 YEARS 5 YEARS 10 YEARS 5 YEARS 5 YEARS

MIN.SUM UPTO RS.2 S.A.CALCULAT UPTO RS. UPTO RS.2

ASSURED LACS S.A ED ON RS.1500 5LACS SUM - LACS SUM
( S.A.) SUBJECT TO PREMIUM P.A. ASSURED ASSURED
RS.2400 PREM.
P.A.
MAX.SUM UPTO 10 UPTO 100 UPTO 10
ASSURED LACS LACS LACS

MAX.AGE 60 YEARS 70 YEARS 60 YEARS 70 YEARS

65 YEARS
AT EXPIRY
PAYING MONTHLY, QUATERLY QUATERL QUATERLY
QUATERLY
PERIOD QTY HALF Y HALF YEARLY
HALF YEARLY HALF YEARLY YEARLY HALF ANNUALLY
ANNUALLY ANNUALLY ANNUALL YEARLY
Y ANNUAL
LY

73
 PREMIUM WISE COMPARISON FOR RS.10 LAKHS SUM ASSURED:

PREMIUM ICICI HDFC LIC ALLIANZ BIRLA SUN

COMPARIS PRUDENTIA STANDARD BAJAJ LIFE
ON L LIFE
TERM 20 30 20 30 20 30 20 30 20 30
YRS. YRS. YRS. YRS. YRS YRS YRS. YRS. YRS YRS.
. . .

AT AGE 30 2680 N.A. 2920 3430 2900 N.A. 4830 6630 3710 N.A.

NOTE:

1) TERM ASSURANCE PLAN IS SUBJECT TO MEDICAL EXAMINATION.

2) NO BENEFIT IS PAYABLE ON MATURITY OR SURRENDER.

74
CHAPTER 5 RECOMMENDATIONS AND FINDING

75
RECOMMENDATIONS

• The co. should focus on producing greater product variety and more
customization.
• Greater awareness about IRDA and the organization has to be created through
advertisements.
• Investment as an objective of insurance has yet to be established . Greater focus
should be paid on this.
• ICICI Prudential is the greatest competitor of HDFC SLIC. Therfore the
performance of HDFC in terms of product variety, growth rate, accessibility and
greater awareness should be monitored and enhanced.
• The potential target customer id of the age group 18-25 years and income bracket
2-3.5 lacs. Customized products for this class should be devised and offered.

76
 FINDING

1) 37% of the policy holders are employed in pvt. sector and 32% are self employed.
Only 17% of policy holders are employed in govt. sector.
1) HDFC ‘s insurance products are devised for customers of age group 18-25 and
25-40 yrs. But only 24% of customers are of group 18-25 yrs.
2) 35% of the sample population belongs to the income bracket of 2-2.5 lacs and
27% belong to 2.5-3.5 lacs. Therefore products suitable to this class of customers
must be developed.
3) Only 42% of the sample population is aware of IRDA. Therefore attempts have to
be made to create greater awareness about IRDA which help to increase the
reliability.
4) ICICI Prudential is considered to be the most reliable organization in the minds of
sample population followed by HDFC SLIC and then Om Kotak. Therefore
HDFC SLIC has to increase the level of reliability to beat its strongest competitor.
5) 39.5% of population prefers single premium covers. Therefore more of regular
premium products have to be produced.
6) 54.5% of the population prefers to invest for a term of less than 10years and 37%
of them prefer to invest for a term of 10-15 years.
7) Only 38.5% of the population has taken Unit linked plans. This implies there is a
large market that is available for this product.
8) 43% of the population purchase children plans, 32.5% purchase endowment and
24.5% purchase pension plans.

77
 9) 43% of the population has only one insurance cover, 35% have two covers and
only 22% have three or more covers.
10) HDFC SLIC has to focus on lower charges and providing greater benefits to
create a greater customer base.
11) ICICI Prudential is the biggest competitor of HDFC SLIC in terms of product
variety, creating awareness, accessibility, quality of service.

5.1 CONCLUSION

CONCLUSION
HDFC standard life insurance is first life insurance company in India. It has businesses
spread out across the globe. It was registered on 23rd December 2000. It currently ranks
number 4 amongst the insurers in India (Source: annual premium provided by the
company)
The company faces a large amount of competition. To sustain itself it must promote its
products through advertising and improve its selling techniques. Consumers must be
aware of the new plans available at HDFC SLIC. The medium of advertising used could
be television since most of its competitors use this tool to promote their products. The
company must be promoted as an Indian company since consumers seem to have more
trust in investing in Indian firms.
The unit linked concept must be specifically promoted. The general perception of life
insurance has to change in India before progress is made in this field. People should not
be afraid to invest money in insurance and must use it as an effective tool for tax
planning and long term savings.
HDFC SLIC could tap the rural markets with cheaper products and smaller policy terms.
There are individuals who are willing to pay small amounts as premium but the plans do
not accept premiums below a certain amount. It was usually found that a large number of
males were insured compared to females. Individuals below the age of 30 (mostly male)

78
were interested in investment plans. This was a general conclusion drawn during
prospecting clients.

5.2 Limitations

Limitations

The major limitations which I faced during this project are as follows
1) lack of awareness of people about this sector
2) Blindly faith on LIC
3) Though pvt. Insurance companies have made a big way in the last two years, but
still the doubt about the credibility of pvt. Companies are there. People still
believe that pvt. Companies will create problems while paying Death/ maturity
claim.

Training Support
HDFC SL believes in building up "sound advice" & "quality of sale" and endeavors
to do it continuously by way of providing training inputs on product, soft-skills
through a team of in-house training managers. However, we may agree on certain
number of people that we may undertake to train at our expense towards mandatory
100-hours training of your sales staff dedicated for selling HDFC SL products.

79
ANNEXURES

80
 QUESTIONAIRE

PERSONAL DETAILS

NAME :_______________________________________________

ADDRESS :_______________________________________________

SEX : M F

TEL NO :______________________________________________
F C:\WINDOWS\hinhem.scr
EMAIL :______________________________________________

Q1. WHAT IS YOUR PROFESSION ?

PVT. EMPLOYEE
BUSINESSMAN
DOCTOR

Q2. WHAT AGE GROUP YOU FALL INTO ?

18-25 25-35 35-50 ABOVE 50

Q3. WHICH INCOME GROUP YOU FALL INTO ?

> 2 Lac 2 – 2.5 Lac 2.5 – 3.5 Lac >3.5 Lac

81
Q4. DO YOU KNOW ABOUT IRDA ?

YES NO
Q5. DO YOU HAVE INSURANCE POLICIES ?

YES NO

Q6. WHICH INSURANCE COMPANIES ARE YOU AWARE OF THAT ARE

TRUSTED BODIES ?

HDFC STANDARD LIFE ALLIANZ BAJAJ AVIVA

ICICI PRUDENTIAL MAX NEW YORK ING VYASA
OM KOTAK BIRLA SUN LIFE MET LIFE

Q7.WHICH OF THE FOLLOWING YOU PREFER ?

SINGLE PREMIUM POLICIES

REGULAR PREMIUM POLICIES

Q8. WHAT IS YOUR OBJECTIVE OF INSURANCE ?

PROTECTION SAVINGS INVESTMENT

PENSION TAXATION EDUCATION OTHERS

Q9. FOR WHAT TERM DO YOU GENERALLY INVEST ?

LESS THAN 10 YRS 10-15 YRS MORE THAN 15 YRS

82
 Q10. ARE YOU AWARE OF UNIT LINKED PLANS ?

YES NO

Q11. WHAT TYPE OF UNIT LINKED PLANS DO YOU INVEST IN ?

CHILDRENS PLAN ENDOWMENT PENSION

Q12. WHAT BENEFITS YOU LOOK FOR BEFORE PURCHASING INSURANCE

POLICIES/PLANS ?

WITHDRAWALS SWITHCHING FUNDS INC/ DEC OF PREMIUMS

Q13. HOW MANY INSURANCE COVERS HAVE YOU TAKEN ?

ONE TWO THREE OR MORE

Q14. WHAT FACTORS YOU CONSIDER BEFORE PURCHASING INSURANCE

POLICIES AND HOW WOULD YOU RATE THEM ON A SCALE OF 1-5?
COMPANY NAME ____________
CHARGES ____________
MATURITY AMT ____________
BENEFITS ____________

Q15. HOW WOULD RATE HDFCSLIC ON THE FOLLOWING FACTORS ? (TICK)

EXCELLENT VERY GOOD GOOD AVERAGE

PRODUCT VARIETY
CREATING AWARENESS
ACCESIBILITY
QUALITY OF SERVICE

83
BIBLIOGRAPHY

84
 BIBILIOGRAPHY

• Marketing Management – Philips Kotler

• Service Marketing - Zeithal
• Insurance Post Asia –Apr ’05, Jun ‘05
• Marketing Mastermind –May ‘05
• Case Folio – Insurance marketing

Websites:
• www.lic.com
• www.hdfcsl.com
• www.icicipru.com

85