(Declared as Deemed to be University Under Section 3 of UGC Act, 1956)

Bangalore - 560029

INTERNSHIP PROJECT REPORT AN ORGANIZATIONAL STUDY ON HDFC STANDARD LIFE INSURANCE

Submitted in partial fulfillment for the requirement of Master of Commerce Programme of Christ University

By
Usha.K.Yadav 1021629

Research Guide
Uma.V.R

Department of Commerce

Christ University Bangalore-560029

Certificate

This is to certify that the project report titled An Organizational Study On HDFC STANDARD LIFE INSURANCE, submitted for the award of Master of Commerce is based on the Internship training undergone in HDFC STANDARD LIFE INSURANCE Jayanagar Branch from 01June to 30 June under my guidance and supervision. This has not formed a basis for the award of any degree of Christ University or any other Universities.

Place: Guide Date:

HOD of Commerce

Project

Declaration

I, Usha.K.Yadav hereby declare that this organization report is a record of work carried out by me at HDFC STANDARD LIFE INSURANCE Jayanagar Branch under the guidance of Mr.Bharath Chabbi, Senior Channel Development Manager HDFC Standard Life Jayanagar Branch and faculty guide Uma.V.R of department of Commerce, in partial fulfillment of the requirement of the award of the Master of Commerce in Christ University Bangalore. I also declare that this has not formed a basis for the award of any degree of Christ University or any other Universities.

Place: Date

ACKNOWLEDGEMENT

I would like to acknowledge all who have helped me in completing my internship training as a part of the curriculum of the M.Com course. First of all I would like to thank the Management of Christ University for giving us an opportunity to gain experience in a corporate firm. I am also thankful to my faculty guide Uma.V.R for her guidance, support throughout the project and also giving us some good ideas during documentation from her past experience. I also thank Mr.Bharath Chabbi, Senior Channel Development Manager HDFC Standard Life Jayanagar Branch, for his kind cooperation and providing valuable support throughout the project. I thank all the staff of, HDFC Standard Life Jayanagar Branch for their guidance and support. I thank all my friends for their support.

PART-A INTRODUCTION

1.1 INDUSTRY PROFILE

The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. A brief history of the Insurance Sector 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. Some of the important milestones of the Life Insurance Sector in India are: 1. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 2. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 3. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 4. 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. 5. 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.

Insurance Sector reforms 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 recognizing 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 has 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.  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 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 crore. 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 (IRDA) 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 decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDAs 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.

2. COMPANY PROFILE OF HDFC - STANDARD LIFE 2.1 Background and inception of the company
HDFC Standard Life Insurance Company Limited is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited), India's leading housing finance institution and a Group Company of the Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others.

HDFC Limited HDFC Limited, Indias premier housing finance institution 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 service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India. As of December 2008, the total asset size has crossed more than Rs. 95,000 crores including the mortgage loan assets of more than Rs. 82,800 crores. The corporation has a deposit base of Rs. 17,551 crores, earning the trust of more than 9, 00,000 depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC 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.

HDFC is the largest Housing Company in India for the last 27 years.

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 wholetime 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).

Standard Life Group (Standard Life plc and its subsidiaries) The Standard Life Group has been looking after the financial needs of customers for over 180 years. It currently has a customer base of around 7 million people who 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's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006.

JOINT VENTURE

HDFC Life Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life insurance sector. Reach of the JV player is highly rated and been conferred with many awards. HDFC is rated AAA by both CRISIL and ICRA. Similarly, Life is rated AAA both by Moodys and Standard and Poors. These reflect the efficiency with which HDFC and Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr. Respectively. HDFC Life Insurance Company Ltd was incorporated on 14th August 2000. HDFC is the majority stakeholder in the insurance JV with 81.4 %stale and Standard of as a staple pf 18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture. HDFC Life Insurance Company Ltd. Is one of Indias leading Private Life Insurance Companies., which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.) Indias leading housing finance institution and the Life Assurance Company, a leading provider of financial services from the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry- all important factors to consider when choosing your insurer.

2.2Nature of the business carried

HDFC standard life is on the business of life insurance. But HDFC is in diversified business like banking, housing finance, securities etc.

2.3Vision, Mission, Values and Quality policy Vision

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

Mission
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

Values  Integrity  Innovation  Customer centric  People Care One for all and all for one  Team work  Joy and Simplicity

Quality policy:
Quality road map time lines Phase-1 to phase-3 should run simultaneously

Phases

Objectives

Visible proof

when

Phase-5

Business excellence

BE award (external)/service guarantee

12-24 months and Improve levels

Phase-4

Value stream map projects Process maturity

6 sigma processes, SLA, financial benefit. Process complaint functions

6-8 months and improve 8-12 months and sustenance

Phase-3

Organized work places Phase-2

Zone/region/branch/location certification

6-10 months and sustenance

Current business improvement Phase-1 programs

Completion of projects and benefits derived and sustenance

4-6 months and sustenance

Fig.1.1 Breadth of Quality Intervention

How (1)

how (2)

how (3)

how (4)

Workplace organization O B J E C T I V E S Current business improvement Prioritized functions/CFT All locations Optimize value streams Process maturity Organized workplace Align and integrate long term loans

Process manage ment

VALUE STREAM MAP PROJECTS

BUSINESS EXCELLENCE

IMPROVEMENT PROJECTS (KNOWN OPPORTUNITY)

Business Processes

Primary value Organization and Stake Streams holders

How (1): How to achieve        Quality awareness Identify known opportunities Implement prioritized projects Develop capability- BB/GB Deliver and quantify value Share and recognize Basic workplace hygiene

How (2): How to achieve     Standard processes Process rollout Process adherence Dash board

How (3): How to achieve    Value stream projects. SLA Service guarantee

How (4): How to achieve   Stake holders delight Business excellence

2.4 Area of operation

HDFC STANDARD LIFE is operating internationally, that means all over INDIA and outside India; it is rendering its insurance services including rural places.

2.5 Ownership pattern

It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited), India's leading housing finance institution and a Group Company of the Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. Associate Companies:      HDFC Limited HDFC Bank HDFC Mutual Fund HDFC Sales HDFC ERGO General Insurance

2.6 Competitors Information: AEGON Religare Life

AEGON, an international life insurance, pension and investment company, Religare, one of Indias leading integrated financial services groups and Bennett, Coleman & company, Indias largest media house, have come together to launch AEGON Religare Life Insurance Company Limited. This venture is dedicated to build a firm future, both for customers and employees and will continue to balance a local approach with the power of an expanding global operation.

The company launched pan-India multi-channel operations in July, 2008 with over 30

branches spread across India. The business philosophy is to help people plan their life better. They provide high quality advice to their customers and offer superior customer service.

Aviva India
Aviva India is a joint venture between one of the countrys oldest and largest groups, Dabur, and Aviva plc, the UK's largest insurance group, whose association with India dates back to 1834.

Dabur Group
Founded in 1884, Dabur Group is one of India's oldest and largest groups of companies with a consolidated annual turnover in excess of Rs 2,396 crores. A professionally managed company, it is the country's leading producer of traditional healthcare products.

Aviva Group
Aviva Group is the UKs largest and one of the biggest Insurance groups worldwide. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva Group has a 50 million customer base worldwide.

Bajaj Allianz Life Insurance Co Ltd

Bajaj Allianz Life Insurance is a union between Allianz SE, one of the largest Insurance Company and Bajaj Finserv. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a Trillion (Over INR. 55, 00,000 Crores). Allianz SE has over 115 years of financial experience and is present in over 70 countries around the world.

Canara HSBC OBC Life

The shareholding pattern of the Joint Venture is as follows - Canara Bank holds 51% equity, HSBC Insurance (Asia Pacific) Holdings Ltd 26% and Oriental Bank of Commerce 23%. The Venture has an initial paid up capital of INR 325 crores which will further increase in line with our expansion plans. The Company commenced business 16th of June, 2008 after receiving requisite approvals from the Insurance Regulatory Development Authority (IRDA). Canara HSBC Life has access to 4100 bank branches all over India.

Future Generali Life

Future Generali is a joint venture between the India-based Future Group and the Italybased Generali Group. Future Generali is present in India in both the Life and Non-Life businesses as Future Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. The company began operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, their nation-wide team comprises of 2074 branches (inclusive of 1,116 micro-offices), over 225,000 advisors; and 7 bank assurance partners. ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG

Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India.

2.7 Infrastructural facilities

HDFC SL is providing good infrastructural facilities which are required for employees to perform their work in a better way. During the year, the Company has invested in additional infrastructure capacity and human capital, in terms of offices, technology, staff, financial consultants, in order to be well positioned to increase the growth momentum in the year ahead. The company stepped up the recruitment programme in the latter part of the year in preparation for the next year.

2.8 Awards/achievements
CIO 'the Ingenious 100 2009' Award  HDFC Standard Life has received the CIO The Ingenious 100 - 2009 Award, for ATLAS (Agency Training Licensing and Servicing System). Additionally, the company has received the CIO 100 Security Award 2009 for pioneering LANDesk Management and Security Suite security implementation and taking its security to a higher level of technological excellence  HDFC Standard has received the CIO 100 Award for the third consecutive year. It had received the 2008 CIO Bold Award for Consultant Corner and CIO Security Award for our initiatives for a secure computing environment, including Sesame - Identity and Access Management. In 2007, the company received CIO 100 award for Wonders and a Special Award in Storage category  CIO magazine has a long tradition of honoring leading companies for business and technology leadership and innovations through its flagship award program CIO 100.

Its a celebration of 100 organizations (and the people within them) that are using IT in innovative ways to deliver business value, whether by creating competitive advantage, optimizing business processes, enabling growth or improving relationships with customers

Diamond EDGE Award 2009  HDFC Standard Life has received the Diamond EDGE Award 2009 for its mobile workforce portal - Consultant Corner. EDGE - Enterprises Driving Growth and Excellence (using IT) is an initiative by the ,Network Computing magazine to identify, recognize, and honors end-user companies in India that have demonstrated the best use of technology to solve a business problem, improve business competitiveness, and deliver quantifiable ROI to stakeholders.  Network Computing magazine is part of CMP Technology, which brings more than 100 IT media brands to more than 18 million technology and business decision makers worldwide 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 Award for its initiatives for a secure computing environment, including identity management. 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.  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 pathbreaking implementation of an enterprise-wide workflow system. 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 organized 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 mans 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 ones self-respect 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 Mints Top Television Advertisement survey conducted, for February 2008. HDFC Standard Lifes 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 claim).

Deepak M Satwalekar, M.D was 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. Sar Utha Ke Jiyo among Indias 60 Glorious Advertising Moments  HDFC Standard Lifes advertising slogan honored 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.

2.9 Work flow

The work will starts from innovating the new product or policy and giving training regarding products or new products to sales development officers. They will start their work of selling policies to the customers. Then from the premium amount company management take the decision to invest in different portfolios. Then when the customers withdraw money after a fixed term of minimum 3 years, they will be paid as market return or the company will reimburse their amount in case of the death of a person.

WORK FLOW MODEL: MANAGER CHANNEL DEVELOPMENT MANAGER FINANCIAL CONSULTANTS CUSTOMERS

MANAGER

CORPORATES

CUSTOMERS

2.10 Future growth and prospects

Fig.1.2 Depicting the growth of HDFC Standard Life

BAJAJ ALLIANZ: 8%

BIRLA SUNLIFE: 5%

REALIANCE LIFE: 6% MAX NEW YORK: 3% OTHERS: 59% LIC: 40% SBI LIFE: 9%

HDFC SL: 5%

ICICI PRUDENTIAL: 12%

OTHERS: 12%

Market Share for HDFC SL has gone up from 4.10% Mar 08 to 4.5% Mar 09

It is evident from the above diagram that HDFC SL is growing steadily with increasing market share from 4.10% to 4.5% in March 2009. Through strategies like, advertising, good service to customers compared to competitors etc, it can acquire a good market share in future.

2.11. Profile of Services offered by HDFC Standard Life Protection Plans

 HDFC Term Assurance Plan: This plan is designed to help secure familys financial needs in case of uncertainties. The plan does this by providing a lump sum to the family of the life assured in case of death or critical illness (if option is chosen) of the life assured during the term of the contract. One can choose the lump sum that would replace the income lost to ones family in the unfortunate event of ones death.  HDFC Loan Cover Term Assurance Plan: This plan aims to protect family from loan liabilities in case of unfortunate demise within the policy term. It provides the beneficiary with a lump sum amount, which is a decreasing percentage of the initial Sum Assured. This means that as the outstanding loan decreases as per the loan schedule, the cover under the policy also decreases as per the policy schedule.  HDFC Home Loan Protection Plan: This plan aims to protect family from loan liabilities in case of unfortunate demise within the policy term. It ensures that family does not lose the dream house that person have purchased for them, in case person is not around to repay the outstanding monthly installments on their housing loan.

Children's Plans
 HDFC Children's Plan: As a parent, everyone priority is their childs future and being able to meet their childs dreams and aspirations. With HDFC Childrens Plan, they can start building their savings today and ensure a bright future for their child.  HDFC Young Star Super: This Plan provides valuable protection to insured person child in case his/her is not around and gives them an outstanding investment

opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC Young Star Super Suvidha: It is a convenient plan, which saves insured person from the need of going for Medicals. This Unit Linked Plan provides valuable protection to his/her child in case he is not around and gives him with an outstanding investment opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC Young Star Supreme Suvidha: This Plan provides valuable protection to insured person child in case he is not around and gives him an outstanding investment opportunity to maximize his savings by providing him a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC SL Young Star Champion Suvidha: This is a convenient plan, which saves him from the need of going for Medicals. This Unit Linked Plan gives him with an outstanding investment opportunity to maximize his savings by providing you a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.

Retirement Plans
 HDFC Personal Pension Plan: The HDFC Personal Pension Plan is a With Profits insurance policy that is designed to provide a post-retirement income for life with the freedom to choose your retirement date.  HDFC Pension Super: The HDFC Personal Pension Plan is a With Profits insurance policy that is designed to provide a post-retirement income for life with the freedom to choose your retirement date.  HDFC Pension Supreme: The HDFC Pension Supreme is Unit Linked plan, designed to provide a post-retirement income for life with the freedom to choose their retirement date. This plan gives them with an outstanding investment opportunity to maximize

their savings by providing them a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at vesting.  HDFC SL Pension Champion: The HDFC SL Pension Champion is Unit Linked plan, designed to provide a post-retirement income for life with the freedom to choose their retirement date. This plan gives them with an outstanding investment opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at vesting.  HDFC SL Unit Linked Pension Maximiser II: HDFC SL Unit Linked Pension Maximiser II is a unique Single Premium unit linked plan, designed to provide a postretirement income for life with the freedom to maximize their investment returns. This plan also gives Bumper Addition* of 5% of initial single premium at vesting and on death.  HDFC Immediate Annuity: The HDFC Immediate Annuity is a contract that uses investor capital to provide them with a guaranteed gross income throughout their lifetime or over a period of their choice. The income is guaranteed and is unaffected by the rise and fall of interest rates. This means the investor can plan their life the way they want it to be, safe in the knowledge that their gross income will not fall during the period they have selected. The HDFC Immediate Annuity offers a number of options to meet all their income needs.

Savings & Investment Plans

 HDFC Endowment Super: With HDFC Endowment Super, investors can start building their savings and it ensures that their family remains financially independent, even when they are not around. This Unit Linked Plan also gives them with an outstanding investment opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments.  HDFC Endowment Supreme: With HDFC Endowment Supreme, investors can start building their savings today and it ensures that their family remains financially independent, even when they are not around. It is a convenient plan, which saves them from the need of going for Medicals. This Unit Linked Plan gives them with an

outstanding investment opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC SimpliLife: It is a convenient plan, which saves investors from the need of going for Medicals. This Unit Linked Plan gives them with an outstanding investment opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments.  HDFC Endowment Super Suvidha: It is a convenient plan, which saves investors from the need of going for Medicals. This Unit Linked Plan gives them with an outstanding investment opportunity to maximize their savings by providing you a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC Endowment Supreme Suvidha: It is a convenient plan, which saves insured person from the need of going for Medicals. This Unit Linked Plan gives them with an outstanding investment opportunity to maximize their savings by providing them a choice of thoroughly researched and selected investments. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC Wealth Builder: HDFC Wealth Builder is an exclusive plan crafted for elite achievers. An investment cum insurance plan that will actively help in building investor wealth and give them twin advantage of exclusive funds (actively managed ) along with choice of limited premium payment term. This plan provides the financial protection to their loved ones and builds up their wealth effortlessly. This plan also gives Bumper Addition to the fund value at Maturity.  HDFC Endowment Assurance Plan: With HDFC Endowment Assurance Plan, investors can start building their savings today and ensure that their family remains financially independent, even when they are not around. This With Profits plan is designed to secure their familys future by giving their family a guaranteed lump sum on maturity or in case of their unfortunate demise, early into the policy term.  HDFC Money Back Plan: With HDFC Money Back Plan, investors can plan now to ensure that they have the necessary funds to have the necessary funds to secure their long-term as well as short-term financial goals. This With Profits plan gives them a

proportion of the basis Sum Assured as Cash lump sums at regular 5-year intervals within the policy term.  HDFC Single Premium Whole of Life Insurance Plan: HDFC Single Premium Whole of Life Plan is a tailor made plan well suited to meet investors long-term investment needs and help them to maintain their familys financial independence. This single premium investment plan is a Whole of Life plan aimed at providing long-term real growth of their money.  HDFC Assurance Plan: HDFC Assurance Plan helps investors conveniently build their long-term savings while keeping their familys future protected. This With Profits savings plan helps them to build their long-term savings while securing their familys future.  HDFC Savings Assurance Plan: HDFC Savings Assurance Plan is a With Profits savings plan which helps investors conveniently build their long-term savings and ensure that their family is protected even if they are not around.

Health Plans
 HDFC Critical Care Plan: HDFC Critical care plan provides for a lump sum payment on survival post diagnosis of a critical illness, so that in the event a critical illness strikes, investors dont have to dig into those precious savings of them.  HDFC SurgiCare Plan: HDFC SurgiCare Plan provides investors with timely support in case they have to undergo a major surgery and hospitalization, as the case maybe, ensuring their financial independence at all times.

Rural Products
 HDFC Gramin Bima Kalyan Yojana  HDFC Gramin Bima Mitra Yojana  HDFC Bima Bachat Yojana

Social Products
 HDFC Development Insurance Plan

3. MCKENSEYS 7S MODEL

Structure: A little about HDFCLife Insurance. The company was on 14th August 2000, and is based in Mumbai, India. HDFC Life Insurance Company Limited operates as a subsidiary of Housing Development Finance Corporation Limited .

HDFC Life Insurance Co. Ltd. is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited) - India's leading housing finance institution, and a Group Company of the Life Plc, UK. HDFC Life Insurance is a new Indian life insurance company that operates out of 52 locations. HDFC Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and one of the subsidiaries of Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry all important factors to consider when choosing your insurer. HDFC Life Insurance is the first private life insurance company to be granted a license by IRDA. Skill Introduction at HDFC Life, we work towards helping our customers to live with pride and self respect. Being customer centric is a value dear to our heart. "Raising the bar", "Soar for More" is our business mantra; in doing so, rigor of processes is also what we adhere to .Integrity is our way of life. Providing a challenging work environment to employees goes hand in hand with our motto of customer delight. 8 incredible years and still going strong, we have literally made our mark with footprints over 600 cities & towns in India. The growth engine is driven by more than 16,000 committed employees who take pride in working for HDFC Life, a distribution channel with over 2,00,000 customer centric financial consultants and equally strong channel partners in private and public sector banking. While accelerating our growth, we foster a learning culture towards creating thought leadership in the industry. Strategy Lead a life of respect and dignity even after retirement HDFC Unit Linked Pension Maximizer II Ideally, just how spending comes to you, so must saving and investing. You are able to finance your expenses and take care of your expenses in present times. However, to ensure that you are able to maintain the same standard of living post retirement, you need to make the right kind of investment today. HDFC Unit Linked Pension Maximize II is a unique Single Premium unit linked plan, designed to provide a post-retirement income for life with the freedom to maximize

your investment returns. This plan also gives Bumper Addition of 10% of initial single premium at vesting and on death. Advantages this plan is designed to provide you a post retirement income for life You can choose your initial single premium, the investment strategy and retirement date. At the end of the policy term, you will receive the accumulated value of your funds including Bumper Additions, which will be used to provide your pension income in your golden years

Strategies: Strategies Employed to achieve the target are as follows: Tele calling  Contacting the person directly (interview)  Collect references.

Shared Values: These are the core values of the company that are evidenced in the corporate culture & the general work ethic. The values followed by HDFC SLIC are: y y y y y y Style: One element of manager is how he\she choose tom spend time, another aspect is symbolic behavior. This suggests a seconds attribute that is by no means confused to that of top. The style is reflected of culture, more than to change the organization or performance. The HDFC is basically is a democratic system. Before taking any decision meeting is conducted and a final decision is taken and decision is taken with the consent of all. Every employee gets Integrity Innovation Customer centric People Care One for all and all for one Team work Joy and Simplicity

chance to give his \her opinion. Every employee can participate decision making processes of the organization .The HDFC is a unit union body hence it takes people into confidence. it does not take any decision unilaterally .Managers are evaluated based on the quality of their decision

making and opinion of fellow employee. Hence participative and democratic type of system is the best system for such a big organization like HDFC life ltd. Staff: Work Culture the Company attributes its success to the contributions made by its employees. We believe that our strength is our people, so our Endeavour is to surpass their expectations and give them the best possible work environment and benefits that match the best in the industry. Talent management initiatives in HDFC Life are driven by a set of organizational core competencies (Mantra 10) as well as position-specific competencies. The competency set includes knowledge, skills, experience, and personal traits (demonstrated through defined behaviors) based on the bedrock of sharp vision and strong values of HDFC Life. In this endeavor of shaping and nurturing our talent pool, HDFC Life adopts a four-step model: Acquiring and Retaining Talent HDFC Life believes in building capability for superior performance leading to a superior shareholder value. We have a bouquet of people processes like Assessments, Potential Review. The company had 14,506 employees as of March 31, 2009 as compared to 15,411 employees as of March 31, 2008. Under the provisions of Section 217 (2A) of the Companies Act, 1956 and the rules framed there under, the names and other particulars of employees are set out in the annexure to this Report

Systems: All the processes & information flows that links the organization together. Communications practice and system. Management reporting system. Approval process.

Planning/budgeting system.

BEST PRACTICES: Five S Model:

5- S Model is followed by HDFC STANDARD LIFE instead of 7- s Model

Introduction:
FIVE S is a basic and the simplest methodology used to establish and maintain quality environment in organization. It is a part of a Japanese philosophy known as Kaizen; Kai in Japanese means, to change and Zen means for better. It involves setting standards and then continuously improving on those standards to achieve their goals. The ultimate goal of 5s is to make the workplace more effective and efficient by its own people in a short span of time so that efficiency of that workplace is enhanced in an innovative and sustainable manner. Thus it requires active involvement of everyone in the organization across the hierarchy and to come up with suggestions on regular basis.

The name stands for five Japanese words

Japanese S1 S2 S3 SEIRI SEITON SEISO English SORTING SYSTEMATIC ARRANGEMENT SPIC N SPAN/SANITIZE

S4 S5

SEIKET SHITSUKE

STANDARDISE SELF DISCIPLINE/SUSTENANCE

BENEFITS OF 5S: y y y y y y Can be started immediately. Reduces wastages and fatigue. Improves the efficiency of workplace and wastages are made visible. Improves self organization and overall self appearance of company. Everyone can participate and does not require any quality background. Brings in the feelings of ownership of workplace.

Thus the 5s are the pillars of visually managed workplace. This process starts with identifying the area where 5s is to be deployed. It can be a single workstation or area as big as entire office. Teams are nominated for carrying out the 5s and to ensure that everyone on a regular basis practices it.

In detail:
S1 sorting: The meaning of s1 that is sorting is to straighten and contain that is to divide the objects into 2 groups one that is needed and other that is wanted and then remaining the unneeded ones from the workplace. Needed items: needed items are items that are critical in terms of existence at the workplace and are required from process point of view.

Wanted items: wanted items are those, which we want, but are not required from process point of view. We can also determine the criteria to distinguish between the need and want items. Red Tag Square (R.T.S) The use of a red tag square is generally during the time of a blitz, that is during the blitz the material identified as obvious scrap and other abnormal material shall be parked in a common place which will be known as Red Tag Square, however the items which are in excess quantities can also be put in the R.T.S and be noted in the Red Tag Matrix. S 2 systematic arrangements: Place for everything and everything in place. After the needed and wanted items are identified properly and the R.T items have been parked at the R.T.S. The next step is to identify the right place for all the needed /wanted items kept at workplace. Workstation illustration: The layout of the workplace should be prepared in such a manner so that the owners know the exact location. Layout helps the owner to locate the workplace and assign responsibilities to his team. Again the needed and wanted items (from need want matrix) needs to taken into consideration. So that place to keep them can be decided according to the frequency or usage. Storeroom illustration: After sorting out the needed and unneeded items and putting the unneeded items in the red tag square, one must make the layout of the store and start specifying the areas where the things are supposed to be placed. It is very important to allocate right areas so that no rework needs to be done. S 3: Spin N Span Cleaning with meaning and cleaning is inspection

Sanitize means keeping things clean and in order. It is a maintenance made, which looks for damages, defects and potential problems. Once s1 and s2 have been done it is the responsibilities of the staff to ensure that s3 is done on regular basis so that the items stored are properly identified. S4 Standardize: This step is about making standards for all the procedures and practices followed in five s.  Abnormality identification register  R.T. Matrix  Cabinet index  Master index  Store master index S5 discipline: The main objective of five s is to follow and spread the learning to others. All employees need to keep five s as an ongoing improvement plan and for that there is a fifth s that emphasizes on sustenance. It is the culmination of s1, s2, s3, and s4, which is likely to happen over a period of time.

PEST Analysis PEST analysis of any industry sector investigates the important factors that are affecting the industry and influencing the companies operating in that sector. PEST is an acronym for political, economic, social and technological analysis. Political factors include government policies relating to the industry, tax policies, laws and regulations, trade restrictions and tariffs etc. The economic factors relate to changes in the wider economy such as economic growth, interest rates, exchange rates and inflation rate, etc. Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, changes in

tastes and buying patterns, etc. The technological factors relate to the application of new inventions and ideas such as R&D activity, automation, technology incentives and the rate of technological change.

4.1 Political Factors Increased service tax on premium 5% discount on corporate premium Hike in FDI limit Favorable regulation for rural insurance

4.2 Economic Factors Increase in Gross Domestic Savings Increased economic activities Interest rates Inflation rate

4.3 Social Factors Low insurance coverage Rise in elderly population Changing Indian perception Growth of Islamic insurance Increase in lifestyle diseases

Level of education Level of earnings

4.4 Technological Factors Automation of processes Increase in CRM solutions Internet driven information era Business Process Monitoring (BPM)

4. SWOT Analysis of HDFE LIFE: SWOT analysis is an acronym for the internal strengths and weaknesses of affirm and the external opportunities and threads facing that firm. SWOT analysis helps managers to have aquick overview of the firms strategic situation and assess whether there is a sound fit between internal resources, values, and external environment.

Strength The company is positioned it is first private company in the insurance sector in India Huge source of reserve base The company opened 23 offices during the year, taking the total to 595 across the country.

Corporate Agents and Brokers are able to service customers in over 720 cities and towns across the country. The company also reduced premium rates on its term insurance plans and passed on a substantial benefit to customers. Effective user of banc assurance The company also provides innovative products to cater to different needs of different Domestic image of HDFC supported by Prudentials international image is strength of the company. Large pool of technically skilled manpower with in depth knowledge and understanding of the market

Weakness The year 08-09 has been a difficult year for the financial sector and the impacts have been felt in the Indian life insurance industry. Growth rate in the private sector have declined over the year on the back of a much more cautious attitude adopted by individual customers. The return given by the company on its ULIP plan is very much below the market leader which reflects poor investment strategy. Though company is positioned as first private company in the insurance sector in India its market share stand at 3% which is very much low. Dividend - As the company has not earned profits, the directors do not recommend any Dividend. Unable to exploit rural market Low customer confidence on the private players Vertical hierarchical reporting structure with many designations and cadres Leading to power politics at all levels without any exception. Heavy management expenses and administrative costs. Poor retention percentage of tied up agents.

Opportunities HDFC should tie up with business organization and private maternity hospital to expand business. Innovative products, smart marketing, and aggressive distribution have enabled 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 product. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. Insurable population According to ING only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m People, with the potential to buy insurance, remain uninsured. There will be inflow of managerial and financial expertise from the worlds leading insurance markets. Further the burden of educating consumers will also be shared among many players. International companies will help in building world class expertise in local market by introducing the best global practices Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers, such as fire, export credit,.

Threats

Changing government regulation Huge competition in the market put pressure on the profit margin Provision for entry of foreign player Price War With Competitors Taxation On The Product And Service Competitors Have Superior Access To Channels Of Distribution.

FUNCTIONAL DEPARTMANT OF THE ORGANIZATION 1. Human resource department: The HR department performs the role of recruiting the efficient employees and financial consultants for the company. It also takes care of their appraisal to track their performance and contribution to the company. It gets the resume of applicants and processes it to check for its eligibility criteria, after that put that resume for the further processing of selection. HR specialists contribute to the goals and mission of the firm. HRM uses performance appraisal techniques to measure and evaluate the performance of the employees and then suggest them how to improve it. HRM helps in proper recruitment and selection of the desired talent who can prove beneficial to the sector. Proper training and development is given to the employees by the HR department for efficient working. HR department takes care of the work environment and maintains a quality work culture in the organization by organizing some social and entertainment programs for the employees in the organization. HRM makes strategies for the organization like that of strategy of offering best products, strategy of offering best service and strategy of offering best price etc. 2. Marketing department: Marketing department takes care of the marketing of all the products of the company. It helps in the increase of the business. It plays the major role in making the people aware of their product. It concentrates on making the strategies of how to increase the sales of the products. How they can segment the market to tap out its maximum potential profits. It also works on sales promotion to increase the sales of company. Insurers will often use insurance agents to initially market or underwrite their customers. Agents can be captive, meaning they write only for one company, or independent, meaning that they can issue policies from several companies. Commissions to agents represent a significant portion of an insurance cost and insurers such as State Farm that sell policies directly via mass marketing campaigns can offer lower prices. The existence and success of companies using insurance agents (with higher prices) is likely due to improved and personalized service.

3. Sales department: Controlling the sales force that brings the business to the company. Maintain the regular flow of information about the product. These are sales manager only who see after the acquiring and maintaining their agents. The sales manager goes to different places and acquires the sales agents who are IRDA certified. The goal of the Marketing Department is to help for the growth ,developing and implementing world-class marketing plans. We accomplish this through the selection and continuous development of high quality, customerfocused employees who strive to understand customer needs and meet those needs with the right products at the right time. We are committed to the professional development of employees and to promoting diversity and inclusion at all levels. Our work includes:
y y

y y

Developing and implementing marketing plans, materials, and advertising to support the business goals of the Company, our operations centers, and HDFC LIFE agents Working closely with agents, field leadership, Zone marketing managers, product lines, and other Corporate departments to aid in the development of marketing plans that integrate and align at all levels Creating strategies, marketing programs, and advertising designed to cross-sell to existing customers and to attract new customers Representing the voice of the customer and identifying the needs of different customer segments In addition, the Marketing Department serves as the steward of the HDFC LIFE brand. We help represent HDFC LIFEs added value to the customer and the Good Neighbor promise that differentiates our brand in the marketplace.

4. Finance department: This department keeps the proper track record of all the transactions taking place. It maintains the record of all the insurance policies being issued and their premium payments.

Organizational Structure of HDFC Standard Life Insurance

MD & CEO

GM- Sales and Marketing

HOD - IT

HOD - Legal & Secretarial Zonal Services Managers Zonal Managers Sale Zonal Services Managers Zonal Managers -

GM -Finance & Actuarial

GM- HR

GM Operation and Underwriting

Business Head-North

HOD-Audit HOD-HR

Actuarial

National Training Manager HR HOD -Health

Business HeadSouth

HOD-Inst. Sales

Medical

HOD OPERATION HOD -Underwriting

Regional Managers

HOD-Marketing

Territory Managers Finance Controller

Process

HOD-Sales Training

Branch Managers

HOD-Channel Development

Sales Development Managers

HOD-Accounts

The above structure (HDFC Standard Life) is a Divisional Structure. Divisional structure divides, shown above, the employees based on the product/customer

segment/geographical location. For example, each division is responsible for certain product and has its own resources such as finance, marketing, warehouse, maintenance etc. Accordingly, this structure is a decentralized structure and thus allows for flexibility and quick response to environmental changes. It also enhances innovation and differential strategies. On the other hand, this structure results in duplication of resources because, for ex., we need to have warehouse for each division. Obviously, it does not support the exchange of knowledge between people working in the same profession because parts of them are working in one division and the others are working in other divisions.

PART-B SPECIAL TASK

A Study on Portfolio Management with special reference to ULIP schemes of HDFC SL

A Study on Portfolio Management with special reference to ULIP schemes of HDFC SL

SPECIAL TASK 1 Introduction:

The business of life insurance is related to the protection of economic values of assets. Insurance is a mechanism that helps to reduce the effect of such situations. A well-developed and evolved insurance sector is needed for economic development as it provides long-term funds for infrastructure development and at the same time strengthen the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollars. The insurance sector, to some extent, can enable investments in infrastructure developments to economic growth of the country. With a large capital out lay and long gestation periods, infrastructure projects are Fraught with a multitude of risk throughout the development, construction and operation stages. These includes risks associated with project implementation, including geological risks, institutions are not willing to commit funds to the sector, especially because the financing of most private projects is on a limited or non-recourse basis. Life insurance policies are designed with different needs in mind. Whether the customer are looking for temporary protection, estate planning, cash accumulation ,or the ability to purchase a variable life insurance policy offered through north-western Mutual investment services, Life insurance have a policy that will provide security and peace of mind. Long-term care insurance provides benefits in the event of a long-term illness or injury. Owing a long-term care insurance policy also provides you choice in deciding where or how you receive care. It helps pay for benefits for care that is delivered in your home.

Life insurance can ensure that, in case of any unforeseen situation, their dependents and any outstanding debts are taken care of. The government of India in1956 brought together over 240 private life insurance and provident societies under one nationalized monopoly corporation LIC was born. Nationalization was justified on the grounds that it would create much-needed funds for rapid industrialization. This was in conformity with the governments chosen path of state lead planning and development.

Portfolio Management:
It is a complex process which tries to make investment activity more return and less risk. Portfolio Management is used to select a portfolio of new product development projects to achieve the following goals:  Maximize the profitability or value of the portfolio  Provide balance  Support the strategy of the enterprise Portfolio Management is the responsibility of the senior management team of an organization or business unit. This team, which might be called the Product Committee, meets regularly to manage the product pipeline and make decisions about the product portfolio. Often, this is the same group that conducts the stage-gate reviews in the organization.

2 Need for study:  To understand the investment pattern of the company through its ULIP schemes  To identify individual investments of the company (HDFCSL) in different portfolio
options

 To know how to study the Net Asset Value of companies

3 Objectives of the study:

The main objective of the current project is to study the Portfolio Management of ULIP scheme of HDFC Standard Life. Various schemes of ULIP are

 Defensive managed life fund  Equity Managed Life Fund  Balanced Managed Life Fund  Stable Managed Life Fund  Liquid Life Fund  Growth Life Fund

4 Methods of data collection

This report is prepared on the basis of secondary data only. The sources of secondary data are internal and external to the organization. The data collected from internal sources are companys information, product information etc. obtained from company brochures, company intranet. The data collected from external sources are from internet, newspaper and magazine etc. .

5 DATA ANALYSIS
Given below are some of the statistics which were derived from the data collected through the company figures. An analysis of the statistics follows

Hdfc Lifes Market Share Insurance Company LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Life Birla Sun life Reliance Life Max New York OM Kotak AVIVA Tata AIG Met Life Market Share(in per cent) 48.1% 13.7 % 10.3% 6.2% 4.1% 3.4% 3.4% 2.4% 1.9% 1.8% 1.5% 1.4%

Market Share(in per cent)

LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Life Birla Sunlife Reliance Life Max New York OM Kotak

SHOWS THE LOAN APPROVALS & DISBURSEMENTS.

GROWTH IN PREMIUM

growth in premium
6000 5000 4000 3000 2000 1000 0 FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 growth in premium

Financial Year 2008-09 Changes in unit linked product guidelines premium reduction capped at 25% Investment norms tightened (Process and risk management related) Reduction in solvency norms and Change in service tax from 12% to 10%. Insurers instructed to separate out assets backing the required Solvency Margin, from the other shareholder assets and hold it in a separate account New requirement to disclose payouts to non individual distributors FY 2009-10 PFRDA launches pension solutions for unorganized sector Committee set up for review of multi-ties for banking companies Corporate governance framework in process and Changes in investment regulations.

5.1 DEFENSIVE MANAGED LIFE FUND

The objective of this fund is to enhance long term returns for a portfolio predominantly invested in fixed income securities by taking a moderate exposure to equity and equity related securities. When this fund was introduced there was a very good response there was a

subscription of Rs 3,764,625 from the public.

Table 1 Asset Allocation of Defensive Managed Life

Asset Allocation
Debentures or bonds Equity Deposits and money market Government Securities Total

% of funds invested
52.47% 22.59% 14.47% 10.47% 100%

Fig.1 Asset Allocation of Defensive managed life fund

Deposits & Money market 14.47%

Government Securities 10.47%

Asset Allocation

Equity 22.59%

Debentures/ Bonds 52.47%

ANALYSIS:
Table 1 & Fig.1 depicts the asset allocation of defensive managed life is 52 .47% in debentures or bonds, 22.59% in equity, 10.47% in government securities, and 14.47 in deposits and money market. Table 6.2, Table 6.3, Table 6.4 & Table 6.5 depicts the company`s individual investment in each company through Debentures, Equity, Government securities & Deposits and Money market. Fig.6.3 shows the comparison of the company Net Asset Value with the set Crisil Index. We can clearly see that the investments are growing thus resulting in high yield.

Table 2 Investment in Debentures

Debentures / Bonds 7.45% LIC Housing Finance Ltd Mat 21-July-2012 10.40% PNB NCD Perpetual Bond Mat 20-07-2017 7.76% LIC Housing Finance Ltd Mat 06-Nov-2012 9.15% Larsen & Turbo Ltd NCD Mat 05-Jan-2019 11.45% Reliance Industries Ltd NCD 25/11/2013 5.55% Export & Import Bank of India NCD Mat 27/11/2012 10.60% IRFC NCD Mat 11-09-2018 8.89% IRFC NCD Mat 07-01-2011 IDFC LTD DDB Mat 04-11-2011 9.50% National Bank for Agriculture & Rural Development 8.46% IRFC NCD Mat 15.01.2014 10.95% Rural Elec Corp Ltd NCD Mat 14/08/2011 7.75% Rural Elec Corp Ltd NCD Mat 17/11/2012 10.00% IDFC NCD Mat 16 Dec 2013 11.50% Rural Elec Corp Ltd NCD Mat 26/11/2013 9.55% Power Finance Corp Ltd Mat 09/06/2011 6.55%National Housing Bank NCD Mat 20/11/2012 9.90 HDFC LTD NCD Mat 19/12/2013

%Net Assets 2.59% 2.09% 2.05% 2.04% 2.02% 2.01% 1.92% 1.84% 1.83% 1.70% 1.64% 1.56% 1.49% 1.44% 1.30% 1.28% 1.22% 1.19%

9.80 State Bank of Mysore(PER BOND) Mat 30/11/2017 11.35% Rural Elec Corp Ltd NCD Mat 24/102013 7.89% NTPC NCD Mat 05/05/2019 Others Total

1.18% 1.04% 1.04% 1.03% 52.47%

Table 3 Investment in Equity

Equity Reliance Industry Ltd Punjab National Bank Infosys Technologies Ltd State Bank of India Others Total

%Net Assets 1.30% 1.18% 1.09% 1.03% 17.99% 22.59%

Table 4 Investment in Government Securities

Government Securities 7.56% GOI Mat 03/11/2014 7.59% GOI 2016 8.20% GOI 15/02/2022 Others Total

%Net Assets 3.79% 2.20% 1.26% 3.22% 10.47%

Table 5 Investment in Deposits, Money market & other Assets

Deposits, Money market & other Assets

14.47%

Grand Total

100.00%

Fig..2 Fund Performance of Defensive managed life fund

Fig..3 Net Asset Value vs Crisil Index of Defensive managed life fund

5.1 INTERPRETATION:
This fund enhances the long term returns for a portfolio predominantly invested in fixed income securities by taking a moderate to medium exposure to equity and other related securities. From the Fig.6.3 its clear the company has invested its customers funds in debentures and bonds to a large extent as the risk involved is less and the returns are fixed. When compared with CRISIL MIP Balanced Fund Index the Defensive Managed Life Fund is beyond the set standards and leads a portfolio yield of 7.65%.

5.2 EQUITY MANAGED LIFE FUND

The objective of this fund is to achieve long term capital appreciation by investing predominantly in equity and equity related securities and balancing it by shifting assets to the fixed income securities according to the requirements. This fund had an over subscription of Rs 24,326,497 as the public showed a lot of interest in investing in equity because it gives high returns. Table 6 Asset allocation of Equity Managed Life Fund Asset Allocation
Equity Debentures or Bonds Government Securities Deposits and money market Total

% of funds invested
87.89% 5.92% 3.30% 2.88% 100%

Fig.4 Asset Allocation of Equity Managed Life Fund

Government Securities 3.30% Debentures/ Bonds 5.92%

Asset Allocation

Deposits& Money market 2.88%

Equity 87.89%

ANALYSIS
Table 6.5 & Fig.6.4 depicts the asset allocation of Equity Managed Life Fund has invested 87.89% in equity, 5.92% in debentures and bonds, 3.30% in government securities and 2.88% in deposits, money market and other assets. Table 6.7, Table 6.8, Table 6.9 & Table 6.10 depicts the company`s individual investment in each company through Equity, Debentures, Government securities & Deposits and Money market. Fig.6.6 shows the comparison of the company Net Asset Value with the set Crisil Index. We can clearly see that the investments are growing thus resulting in high yield.

Table 7 Investment in Equity

Equity Infosys technology Reliance Industries Ltd ICICI Bank Ltd Crompton Greaves State Bank of India Bharat Heavy Electricals Ltd Oil & Natural Gas corporation Bharathi Airtel Ltd Larsen & Turbo Ltd Sun Pharmaceuticals Ltd Siemens Ltd ITC Ltd Nestle India Ltd Asian Paints(India) Ltd Punjab National Bank Bank of Baroda United Phosphorous Ltd Zee Entertainment Enterprises Ltd Union Bank of India

%Net Assets 5.87% 5.42% 4.88% 4.68% 4.18% 3.64% 3.22% 3.05% 2.93% 2.62% 2.60% 2.57% 2.43% 2.32% 2.23% 2.17% 2.16% 2.15% 2.14%

RURAL ELETRIFICATION CORPORATION LTD Exide Industries Ltd National Thermal Power Corporation Ltd Blue Star Ltd Tata Steel Ltd Colgate Palmolive(India) Ltd Glaxo Smithkline Cons Mahindra & Mahindra Ltd OIL INDIA LIMITIED Divis Laboratories Ltd Power Finance Corporation Ltd IPCA Laboratories Ltd Dishman Pharmaceuticals & Chemicals Ltd Indraprastha Gas Ltd AMTEK AUTO LTD Others Total

2.08% 2.06% 1.94% 1.88% 1.85% 1.75% 1.68% 1.67% 1.43% 1.43% 1.12% 1.09% 1.08% 1.07% 1.06% 3.60% 87.89%

Table 8 Investment in Debentures

Debentures / Bonds 5.55% Export and Import bank of India NCD Mat 27/11/2012 Others Total

%Net Assets 2.37% 3.55% 5.92%

Table 9 Investment in Government Securities Government Securities 7% Oil Bonds Mat 09.Sep.2012 Others Total %Net Assets 2.12% 1.18% 3.30%

Table10 Investment in Deposits and money market Deposits, Money Market & other Assets 2.88%

Grand Total

100.00%

Fig.5 Fund performance of Equity Managed Life Fund

Fig.6 Net Asset Value vs Crisil Index of Equity Managed Life Fund

INTERPRETATION
The company has invested the funds of its customers in equity to a large extent because the returns are high in equity sector and the company assures fixed returns to its unit linked insurance policy customers. The company has even invested in debentures and bonds, it is a safe investment and the risk associated is very less. The company has invested its funds hugely in Infosys Technologies and Reliance Industries Ltd as the NAV of these two firms are 10.20% and 12.47%. From the Fig.6.6, the NAV matches the Crisil index to almost 80% of equity investment and leads to a portfolio yield of 7.2%.

5.3 BALANCED MANAGED LIFE FUND

The aim of this fund is to generate long term capital appreciation along with current income from a combined portfolio of equity and debt market instruments. When this fund was introduced there was a collection of Rs 2,989,079 from public.

Table 11 Asset allocation of Balanced Managed Life Asset Allocation Equity Debentures or Bonds Government Securities Deposits and money market Total % of funds Invested 49.06% 32.88% 11.73% 6.33% 100%

Fig.7 Asset Allocation of Balanced Managed Life

Asset Allocation
Government Secrities 11.73%

Deposits & Money market 6.33%

Debentures/ Bonds 33.88%

Equity 49.06%

ANALYSIS:

From the Fig.6.7 we can know that the company has invested its customers funds, 49.06% in equity, 32.68% in debentures, 11.73% in government securities and 6.33% in deposits, money market and other assets. Table 6.12, Table 6.13, Table 6.14 & Table 6.15 depicts the company`s individual investment in each company through Equity, Debentures, Government securities & Deposits and Money market. Fig.6.6 shows the comparison of the company Net Asset Value with the set Crisil Index. We can clearly see that the investments are growing thus resulting in high yield.

Table 12 Investment in Equity

Equity Infosys Technologies Ltd Reliance Industries Ltd Bharat Heavy Electricals Ltd Oil & Natural Gas Corporation Ltd Crompton Greaves Ltd ICICI Bank Ltd State Bank of India BHARTI AIRTEL LTD Larsen & Turbo Limited Siemens Ltd ITC Ltd Union Bank of India RURAL ELECTRIFICATION CORPORATION LTD Glaxo Smithkline Cons Tata Steel Ltd Zee Entertainment Enterprises Ltd Bank of Baroda National Thermal Power Corporation Ltd

%Net Assets 3.62% 3.28% 2.37% 2.35% 2.29% 2.27% 2.02% 1.83% 1.61% 1.54% 1.42% 1.37% 1.31% 1.28% 1.22% 1.20% 1.20% 1.18%

Punjab National Bank Nestle India Limited United Phosphorous Limited Others Total

1.18% 1.02% 1.02% 12.46% 49.06%

Table 13 Investment in Debentures Debentures / Bonds 8.10% Shree Cement Ltd Mat 23/11/2012 6.90% Power Finance Corp Ltd NCD Mat 11/05/2012 5.55% Export and Import Bank of India NCD Mat 27/11/2012 6% Export and Import Bank of India NCD Mat 07/01/2013 9.33% Power Grid Corp of India Ltd Mat 15-Dec-2015 7.75% Rural Elec Corp Ltd NCD Mat 17/11/2012 10.60% IRFC NCD Mat 11.09.2018 0% IDFC LTD DDB Mat 04/11/2011 8.80% Power Grid Corp of India Ltd Mat 29-Sep-2015 10.00% IDFC NCD Mat 16 Dec 2013 Others %Net Assets 2.16% 2.12% 1.79% 1.67% 1.55% 1.52% 1.48% 1.28% 1.08% 1.01% 17.20%

Total

32.88%

Table 14 Investment in Government Securities Government Securities 7.56% GOI Mat 03/11/2014 7.32% GOI 2014 Mat 20/10/2014 7% Oil Bonds Mat 09.Sep.2012 7.44% Oil Bonds 23/03/2012 Others Total %Net Assets 3.33% 3.22% 1.54% 1.09% 2.54% 11.73%

Table 15 Investment in Deposits & Money Market Deposits, Money Mkt Securities & other Assets 6.33%

Grand Total

100.00%

Fig.8 Fund performance of Balanced Life Managed Life Fund

Fig.9 Net Asset Value vs Crisil Index of Balanced Managed Life Fund

INTERPRETATION:
This fund generates long term capital appreciation along with current income from a combined portfolio of equity and debt market instruments. The main of this fund is to maintain a balance between equity, debentures and reduce the risk to get long term returns. The company has invested the most of the funds in Infosys Technologies; it has the NAV of 10.20% in 2010. Fig.6.9 shows the NAV vs CRISIL Balanced Fund Index and it leads to a portfolio yield of 7.2%.

5.4 STABLE MANAGED LIFE FUND

The main objective of this fund is to generate optimal returns for investors through short term investments in high credit quality securities so as to keep interest rates low and provide safety of capital over medium term horizon. This fund had a good subscription of Rs 2, 37, 711. In its initial stages there was less investment from the public but later it showed a growth

Table 16 Asset allocation of Stable Managed Life Fund Asset Allocation Deposits and Money Market Debentures or bonds Total % of funds Invested 50.52% 49.48% 100%

Fig.10 Asset Allocation of Stable Managed Life Fund

Debentures/ Bonds 49%

Assest Allocation

Deposits & Money market 51%

ANALYSIS:
From the Fig.6.10 we can clearly see that the company has invested its customers funds in debentures and bonds around 49.48% and 50.52% in deposits, money market and other assets. Table 6.17& Table 6.18 shows company`s individual investment in each company through Debentures and bonds & Deposits and Money markets.

Table 6.17 Investments in Debentures Debentures / Bonds 8.00% Infrastructure Dev Fin Corp NCD Mat 13 Apr 2011 6.75% LIC Housing Finance Ltd Mat 13-May-2011Mat 6.84% HDFC LTD NCD Mat 22/04/2011 9.80% GE Money Fin Ser Mat 25 Apr 2011 6.90% LIC Housing Finance Ltd Mat 23 Apr 2011 IDFC LTD DDB Mat 15/03/2011 7.75% TECH MAHINDRA LTD NCD Mat 24/03/2011 IDFC LTD DDB Mat 15/03/2011 9.55% Power Finance Corp Ltd NCD Mat 09/06/2011 7.45% Tata Capital Ltd NCD Mat 21/01/2011 Others Total %Net Assets 17.50% 7.94% 5.15% 4.79% 3.45% 2.41% 1.73% 1.33% 1.33% 1.20% 2.58% 49.49%

Table 6.18 Investment in Deposits & Money Market Deposits, Money Mkt Securities and other Assets 50.52%

Grand total

100%

Fig.6.11 Fund Performance of Stable Managed life Fund

Fig.6.12 Net Asset Value vs Crisil Index of Stable Managed Life Fund

INTERPRETATION:
This fund provides optimal returns to its investors through short term investments in high credit quality securities so as to keep interest rate risks low and provides safety of capital over the medium term horizon. When compared the NAV of Stable Managed Life with the CRISIL STBex it shows growth and gives a portfolio yield of 7.42%.

5.5 LIQUID LIFE FUND

This fund delivers high returns linked to Money Market with minimal interest rate risk and minimal credit risk so as to provide a high level of safety of capital.

Table 6.19 Liquid Life Fund Asset Allocation Deposits and money market % of funds Invested 100%

Fig.6.13 Asset Allocation of Liquid Life Fund

Assest Allocation

Dep, MMI & Others 100%

ANALYSIS:
From the Fig.6.13 we can clearly see that the company has invested its customers funds totally in deposits, money market and other assets i.e 100% investment.

Table 6.20 Investment in Deposits & Money Market Deposits, Money Market Securities and other Assets 100.00%

Grand total

100.00%

Fig.6.14 Fund Performance of Liquid Life Fund

Fig.15 Net Asset Value vs Crisil Index of Liquid Life Fund

INTERPRETATION:
From the Fig.6.15 it is clear the whole 100% of funds is invested in deposits, money market and other assets because many customers want to invest in low risk funds which have low rate of interest and provide a safety for their invested capital. When compared with the CRISIL Liquid Life Fund Index the NAV of Liquid Life Fund is above the standard which leads to a good portfolio yield of 10%.

5.6 GROWTH LIFE FUND

The main aim of this fund is to generate long term capital appreciation from a diverse portfolio of equity and equity related securities. This fund had a great opening from the public of around Rs 338, 836, 646. As investment in this fund guarantees a growth in the investor`s funds.

Table 21Asset Allocation of Growth Life Fund Asset Allocation Equity Deposits and Money Market Total % of funds Invested 95.86% 4.14% 100%

Fig.16 Asset Allocation Growth life Fund

Deposits & Money market 4.14%

Asset Allocation

Equity 95.86%

ANALYSIS:
From the Fig.6.16 it is clear the company has invested its customers funds, 95.86% in equity and 4.41% in deposits, money market and other assets. Table 6.22 & Table 6.23 show how the company has invested individually in Equity sector and in Deposits, Money market and other assets.

Table 22 Investment in Equity Equity Infosys Technologies Ltd Reliance India Ltd ICICI Bank Ltd Crompton Greaves Ltd State Bank of India Bharath Heavy Electricals Ltd Oil & National Gas Corporation Larsen & Turbo Limited Bharathi Airtel Ltd Siemens Ltd ITC Ltd Sun Pharmaceuticals India Ltd Asian Paints(India) Ltd %Net Assets 6.65% 5.86% 5.71% 5.65% 4.28% 3.91% 3.84% 3.40% 3.34% 2.97% 2.91% 2.81% 2.64%

Exide India Ltd Tata Steels Ltd Bank of Baroda Colgate Palmolive (India) Ltd Nestle India Ltd Zee Entertainment Enterprises Ltd Union Bank of India United Phosphorous Ltd Blue Star Ltd Rural Electrification Corporation Ltd Punjab National Bank National Thermal Power Corporation Ltd OIL INDIA LIMITED Divis Laboratories Ltd Glaxo Smithkline Cons Mahindra & Mahindra Ltd Power Finance Corporation Ltd Dishman Pharmaceuticals & chemicals Ltd Others Total

2.64% 2.61% 2.58% 2.56% 2.56% 2.52% 2.45% 2.45% 2.18% 2.07% 2.03% 2.00% 1.87% 1.78% 1.68% 1.51% 1.26% 1.10% 4.09% 95.86%

Table 23 Investment in Deposits & Money Market Deposits, Money Market Securities & other Assets 4.14%

Grand total

100%

Fig.17 Fund Performance of Growth Life Fund

Fig.18 Net Asset Value vs Crisil Index of Growth Life Fund

INTERPRETATION:
The growth life fund aims at long term capital appreciation through a diversified portfolio of equity and equity related securities. The company has invested its funds hugely in Infosys Technologies and Reliance Industries Ltd as the NAV of these two firms are 10.20% and 12.47% so the customer`s funds can grow to a large extent as their money is invested in big industries. The comparison of the NAV of Growth Life Fund and the BSE 100 shows a increase of almost 5.27%.

FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS:

1. LIC is the clear market leader across all age groups and income levels. May be HDFC Standard Life Insurance can excuse itself that people in the age of more than 55 years category could not take its policies because HDFC Standard Life Insurance was not around when these people made their life insurance choices. But what is disturbing is that the young age group (25 35) also prefers the government run LIC. 2. Stuff competition from the competitors offer alternative financial services such as Mutual fund, banking services, shares etc 3. 52.47% of funds of Defensive Managed Life Fund are invested in debentures as it is considered as a safe investment. 4. 49.06% of funds are invested in equity, 32.88% invested in debentures, 11.73% invested in Government bonds and securities and 6.33% in deposits, money market and other assets through Balanced Managed Life Fund to maintain a balance in all the investment options. 5. Around 87.89% of funds of Equity Managed Life Fund are invested in equity as customers aim at getting higher rate of returns. 6. In Stable Managed Life Fund 50.52% of funds are invested in deposits, money market and 49.48% in debentures to maintain stability and have a safe investment. 7. 95.86% of funds of Growth Life Fund are invested in equity so that there is a growth of the invested funds. 8. Whole 100% of funds of Liquid Life Fund are invested in deposits, money market and other assets so that the customers may enjoy low rate of interest and get the power to easily convert their investment into cash and use it when required. 9. The main advantage of investing in ULIP`s are it can be invested in stock markets in addition to bonds and government securities. 10. ULIP`s provide flexibility, tax benefits. They also provide with switching options between different funds.

SUGGESTIONS:

1. Number of branches are less and inadequate number of Life Insurance Agents. So, the

company should concentrate on this segment.

2. As competitors are introducing much of Unit Linked Insurance Plans. So, HDFC Standard

Life Insurance should concentrate on this segment.

3. HDFC Standard Life Insurance must advertise more about its website in the mass media so

people can gain firsthand knowledge about its products at their convenience in a more detailed manner.
4. The website is good but instead of having a glossary as a separate entity, link words which

are difficult to understand for a first timer (even if it is as simple as premium) must be marked up (underlined) in the text, which upon clicking must open out to a window giving details.
5. In order to acquire a good market share, it has to concentrate on good schemes with

affordable investment because it acts as the most important aspect for the investors. 6. Leverage information technology to service large numbers of customers efficiently and bring down overheads. Technology can complement or supplement distribution channels cost-effectively. It can also help improve customer service levels considerably.
7. Ensure high levels of training and development not just for staff but for agents and

distribution organizations. Existing organizations will have to train staff for better service and flexibility, while all companies will have to train employees to cope with new products and an intensive use of information technology.

CONCLUSIONS:
HDFC Standard Life Insurance is the renounce industry in the insurance sector. It believes in quality not in quantity. HDFC have total 12 group companies. It is the first insurance company who has gotten the license of insurance in firstly. It has started its insurance industry with the joint venture of U.K. based standard life insurance company. HDFC is currently focusing on The Pension Plan and the Child Plan aiming to cash in on the potential of these segments. The pension market in India is estimated to be around 1000 crore with a huge potential for growth in the future. The Unit Linked Plans introduced by HDFC Standard life Insurance are very attractive and is able to get many investors to invest in these plans. As a management student I learned how to invest through ULIP`s and I learned how the portfolio is maintained and managed. I learned how to study the Net Asset Value of companies which will be helpful in future. The market can grow bigger and a Portfolio Management industry can be started In short, I would like to say that the very act of the concerned management at HDFC Standard Life Insurance in giving me the job of critically examining the method of investing the customer`s funds through ULIP products of the company is a step in their continual mission of making all round improvements as a means of progress. I am sure the company has a very bright future to look forward to and will be achieve all the success.