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A REPORTON
PERCEPTION OF SALARIED PEOPLE TOWARDS
PENSION PLANS
MASTER OF BUSINESS ADMINISTRATION
Submitted To : Submitted By:
FMS, MAIET Priyanka Khatri
MBA 3rd Sem
Maharishi Arvind Institute of Engineering & Technology
Jaipur
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DECLARATION
I undersigned Priyanka khatri a student of MBA 4 th semester declare that I have
prepared this project report on PERCEPTION OF SALARIED
PEOPLE TOWARDS PENSION PLANS under Mr. MILAP AMBAVI
I also declare that this project report is my own preparation and not copied from
anywhere else.
Student's Name - Priyanka khatri
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ACKNOWLEDGEMENT
To dear God, whose external blessings and divine presence helps us to
fulfill all our goals.
When emotions are profound words sometimes are not sufficient to
express our thanks and gratitude. With this few words, I am trying to express my
extreme gratitude and sincere thanks to all those people who have helped and
provided the very much needed enthusiasm and consistent encouragement
required to convert this idea in my dream into project.
I would also like to express my gratitude to Mr. MILAP AMBAVI (Sales
Development Manager) for his practical guidance and consistent support in
making this project.
The last but not least I gratefully acknowledge all my friends and relatives
for their physical presence and sentimental support.
PRIYANKA KHATRI
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CONTENTSTable no. 1
Sr.No
Particulars Pageno
1 Executive Summary 72 Introduction
(a) Company Details 2(b) Industry Details 17(c) Competitors details 21(d) Regulatory Environment details
3 Organizational Study 34a) Marketing Department study 35b) Operations Department Study 62
c) Financial Department Study 64d) Human Resource Department Study 734 Research 78
a) Research Objectivesb) Research Methodology
1) Research Design2) Unit of Analysis3) Sampling Design4) Data Collection Methods)5) Data Analysis
c) Data Analysis & Findings 80
d) Conclusions 90e) Limitations of the Study 91f) Recommendations 92g) Appendixes:
(1) Questionnaire(2) Forms(3) List of Graphs(4) List of Tables(5) Glossary
5 Bibliography 125
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EXECUTIVE SUMMARY
I have taken training in Jaipur dairy. As per my view it is working superbly.
I have gone deep in the study of the organization; every department of the
company is working very effectively.
Jaipur dairy is having financial background from Nation anal Dairy development
board. The bank gives totally financial support. Every financial transaction carried
out by the effective way so company does not face any problem related with the
finance. Marketing department is now in a progress some advertisement also
released recently before that this type of activity was not carried out.
Operation department and HR department both are working effectively.
Human Resource is taken care most in the organization.
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Definition Of Life Insurance
According to the US Life Office Management Association Incorporation (LOMA),life insurance is defined as follows:
Life insurance provides a sum of money if the person who is insured dies
whilst the policy is in effect.
In other words, surely this is far too brief an explanation for a financial service
that provides a very sophisticated range of savings and investment products, as
well as mere compensation for death.
Other Definitions:
Life insurance is a plan by themselves which large number of people
associate and transfer to the shoulders of all, risks that attach to
individuals.
- John Magee
Life insurance accumulated contributions of all parties participating in the
scheme.
- D.S.Hansell
Life insurance is a contract in which a sum of money is paid to the
assured as consideration of insurers incurring the risk of paying a large
sum upon a given contingency.
- Justice Tindall
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A) COMPANY DETAILS
1. HDFC STANDARD LIFE INSURANCE
2. INCORPORATION OF HDFC STANDARD LIFE INSURANCE COMPANYLIMITED
3. HDFC STANDARD LIFE TO BE FIRST LIFE INSURANCE COMPANY INPRIVATE SECTOR
4. HDFC STANDARD LIFE INSURANCE COMPANY LIMITED
5. COLLOBORATION OF HDFC AND STANDARD LIFE
6. MISSION OF HDFC STANDARD LIFE INSURANCE
7. VALUES OF HDFC STANDARD LIFE INSURANCE
8. HDFC STANDARD LIFE DECLARES RESULTS FOR FY 2004-05
9. NATIONAL LEVEL HIERARCHY
10. BRANCH LEVEL HIERARCHY11. SWOT ANALYSIS
12. FUTURE PLAN
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1) HDFC STANDARD LIFE INSURANCE:
HDFC and Standard Life first came together for a possible joint venture, to
enter the Life Insurance market, in January 1995. It was clear from the outset
that both companies shared similar values and beliefs and a strong relationship
quickly formed. In October 1995 the companies signed a 3-year joint venture
agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further
strengthening the relationship.
The next three years were filled with uncertainty, due to changes in
government and ongoing delays in getting the IRDA (Insurance Regulatory and
Development authority) Act passed in parliament. Despite this both companies
remained firmly committed to the venture.
In October 1998, the joint venture agreement was renewed and additional
resource made available. Around this time Standard Life purchased 2% of
Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also
started to use the services of the HDFC Treasury department to advise them
upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising
and both companies agreed the time was right to move the operation to the next
level. Therefore, in January 2000 an expert team from the UK joined a hand
picked team from HDFC to form the core project team, based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC and
a 5% stake in HDFC Bank.
In a further development Standard Life agreed to participate in the Asset
Management Company promoted by HDFC to enter the mutual fund market. The
Mutual Fund was launched on 20th July 2000.
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2) INCORPORATION OF HDFC STANDARD LIFE INSURANCE COMPANYLIMITED:
The company was incorporated on 14th August 2000 under the name of
HDFC Standard Life Insurance Company Limited.
Our ambition from as far back as October 1995 was to be the first private
company to re-enter the life insurance market in India. On the 23rd of October
2000, this ambition was realized when HDFC Standard Life was the only life
company to be granted a certificate of registration.
HDFC are the main shareholders in HDFC Standard Life, with 81.4%,
while Standard Life owns 18.6%. Given Standard Life's existing investment in the
HDFC Group, this is the maximum investment allowed under current regulations.
HDFC and Standard Life have a long and close relationship built upon
shared values and trust. The ambition of HDFC Standard Life is to mirror the
success of the parent companies and be the yardstick by which all other
insurance companies in India are measured.
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3) HDFC STANDARD LIFE TO BE THE FIRST LIFE INSURANCE COMPANY
IN PRIVATE SECTOR
Our Economic Bureau
New Delhi, Oct 23: The Housing Development Finance Corporation has
received a new lease of life. The Insurance Regulatory and Development
Authority (IRDA) has granted registration to HDFC Standard Life Insurance, as
the first private sector life insurance company in India. Reliance Fire and General
Insurance and Royal Sundaram Alliance Insurance have been given certificates
of registration for underwriting non-life insurance business in the country.
The IRDA board, which met here on Monday under the chairmanship of NI
Rangachari, has decided to grant licenses to these three companies under Sec 3
of the Insurance Act 1938.
The IRDA board also considered the applications of ICICI Prudential Life
Insurance Company, Iffco Tokyo Marine Insurance and Max India New York Life
Insurance and decided to grant in-principle registration to these companies.
However, these three will be required to furnish more details about their
respective financial strengths and business plans to the IRDA before getting
registration. Talking to The Financial Express, HDFC chairman Deepak Parekh
said the joint venture would have a total equity of Rs 168 crore. HDFC would
hold 81.4 per cent of the equity and foreign partner Standard Life would
contribute the remaining 18.6 per cent.
The HDFC Standard Life proposes to go in for what is described as a "soft
launch" in December 2000 and officially open the business in January 2001 with
offices in 12 cities.
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Expressing delight at being awarded an operating license, Royal
Sundaram Alliance Insurance chairman GK Raman said: "We will serve the
Indian consumers with a portfolio of insurance products suited to their interests.
Service and customization will be the defining features of our new venture." Mr.
Micky Brigg, managing director of the joint venture company, said: "India is a
high priority on Royal Sun Alliance Group's strategic business map. We will
support the Indian venture with world-class underwriting, risk management and
claim-handling techniques."
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4) HDFC STANDARD LIFE INSURANCE COMPANY
HDFC Standard Life Insurance Company Limited is the First Private
Sector Life Insurance Company to be granted a license by the IRDA. As a part of
the ongoing liberalization of the Insurance Sector, the Insurance Regulatory and
Development Authority (IRDA) has granted the first set of licenses on 23rd Oct
00.
The Company is a joint venture with Standard Life, UK. Founded in 1825,
Standard Life has been at the forefront of the UK insurance industry for 175
years by combining sound financial judgment with integrity and reliability. It is the
Largest Mutual Life company in Europe and has total assets of Rs.5, 50,000
crore.
Standard Life is one of the insurance companies in the world to have
received 'AAA' rating from two of the leading international credit rating agencies,
Moody's and Standard & Poor's. The Independent Brokers called IFAs recently
voted Company of the Decade standard Life in U.K.
Number of branches:
United kingdom 31 branches
Canada 11 branches
Ireland 7 branches
Spain 31 branches
Germany 1 branches
Austria 2 sales office
Hong Kong 3 representative office
China 2 representative office
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5) COLLOBORATION DETAIL
HDFC SLIC is a joint venture between Housing development FinanceCorporation limited, India and standard life assurance Company, UK.
In 1995, HDFC LIMITED and standard life assurance Company entered
into a joint venture relationship. Values were shared, beliefs merged through the
hurdle-race of time, and the two partners stood by each other. And emerged at
the forefront. On 23rd October 2000, HDFC SLIC limited was the first private life
insurance company to be granted the certificate of registration by the IRDA.
HDFC and standard life are companies with tremendous financial strengthas endorsed by credit rating agencies. Both enjoy an excellent reputation in
terms of goodwill and efficient customer service.
Certificate of registration : 23rd October 2000 by IRDA
Discussion started with SL : 1995, January
Joint venture agreement betweenHDFC and SL : 1995, October
Company officially incorporated : 14th August 2000
Share of HDFC in equity : 81.4%
Share of SL in equity : 18.6%
First policy : 2000, DecemberHDFC
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6) MISSION OF HDFC STANDARD LIFE INSURANCE:
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 companyin 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 differentcustomers
Use of technology to improve service standards
Increasing market share
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7)VALUES OF HDFC STANDARD LIFE INSURANCE:
SECURITY: Providing long term financial security to our policyholders will be our constant endeavor. We will be do this by offering
life insurance and pension products.
TRUST: We appreciate the trust placed by our policyholders in us.Hence, we will aim to manage their investments very carefully andlive up to this trust.
INNOVATION: Recognizing the different needs of our customers,we will be offering a range of innovative products to meet theseneeds.
Our mission is to be the best new life insurance company in India andthese are the values that will guide us in this.
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8) HDFC STANDARD LIFE DECLARES RESULTS FOR FY 2004-05
Premium Income grows by 132%
HDFC Standard Life Insurance Company Limited declared its annual
results for the financial year ending March 31st, 2005. The company generated
New Business Premium Income of Rs. 486 Crore in 2004-05 registering a year-
on-year growth of 132%. The growth was primarily driven by the success of the
company's initiative on structured sales processes based on customer needs and
their assessments.
Mr. Deepak Satwalekar, Managing Director & CEO, and HDFC Standard
Life attributed this growth to the quality of life insurance solutions offered by the
company. Speaking on the occasion he said, "We are equipped to offer some of
the best solutions to our customers given our wide range of products and the
quality of advice offered by our Financial Consultants and Corporate Consultants.
Training was one of the biggest initiatives we had undertaken last year. Clearly,
this initiative has started giving us good results."
Highlights of Financial Year 2004-05
New Business Premium Income up by 132% to Rs. 486 Crores. Total
Premium Income of Rs.687 Crores as against Rs. 298 Crores in FY 03-04.
Alternate Channels including bancassurance have recorded an impressive
growth of over 400% to contribute 37% to the Effective Premium Income
(EPI).
Group business increased to Rs. 32 Crores on EPI basis.
The average premium doubled to Rs 17,000
Company products and services available in 444 locations across the
country.
Over 220% increase in MDRT numbers over the previous year.
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HDFC Standard Life tracks its New Business Premium on the basis of
Effective Premium Income (EPI). EPI is calculated by giving only a 10% value to
a Single Premium policy and is an internationally accepted indicator of an
insurance company's performance. While the company recorded New Business
Premium Income of Rs. 486 Crores, the EPI figure was lower at Rs. 436 Crores.
The total premium income (including renewal premium) grew by 130% to touch a
figure of Rs. 687 Crores. High levels of persistency have resulted in a higher
level of renewal premiums. High persistency is an important contributor to future
profitability. The cumulative sum assured for all policies issued up to March 31,
2005 crossed Rs. 30,000 Crores.
In the first full year of offering unit linked products, the structured sales
process adopted by the company has paid rich dividends. HDFC Standard Life
offers, both, life insurance policies as well as pension products on a unit linked
platform. Unit linked products accounted for over 50% of the new business
premium. Given the nature of the unit linked product, the company provided
specialized training to a limited number of its Financial Consultants who were
then tested for their understanding of the products and separately licensed.
HDFC Standard Life is unique in stipulating this requirement for its sales force.
The company's national relationships with HDFC Limited, HDFC Bank,
Union Bank of India, Indian Bank and Saraswat Bank have also helped it reach
out to a larger number of customers across the country. The alternate channel
business grew by over 400% to contribute 37% of the premium income. The
company plans to further strengthen these relationships through the introduction
of products specially designed for this channel.
HDFC Standard Life continues to have one of the widest reaches among new
insurance companies. The company doubled the number of offices to 104 across
the country. Through these offices, the company today services customer needs
in over 440 towns. The company also increased its depth in existing markets by
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increasing its Financial Consultant strength from 17,000 as on 31st March 2004
to over 23,000 as on 31st March 2005. There has been a huge jump, of over
220%, in the number of its Financial Consultants who have qualified to become
members of the prestigious Million Dollar Round Table (MDRT). From 38
members as on 31st December 2003, the number has increased to 124
members as on 31st December 2004.
During the year, the company expanded its portfolio of products by
launching plans to cover Superannuating and Leave Encashment needs, thereby
offering a wide range of employee benefit solutions to its corporate clients.
Consequently, HDFC Standard Life's Group Business saw a huge growth over
the previous financial year. The New Business Premium grew to Rs. 49 Crore to
cover over 200,000 lives for a sum assured of over Rs.10,000 Crores.
Given its parentage and its financial expertise, the company is confident of
offering good long-term returns to its policyholders. Speaking on this Mr.
Satwalekar said, "Our investment philosophy and cost consciousness together
will help us in providing good long term growth to policyholders on their
investments with us. This is evident in the performance of our equity based unit
linked funds which have outperformed most indices over the last one year".
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9) NATIONAL LEVEL HIERARCHY OF THE ORGANIZATION
Managing director
General Manager Sales & customer services
_______________________________________
Head of group sales centralRetail sales distribution
Branch manager sales remuneration
Contract licenser
__________________________________
Representative office BDM corporate sales training
Resident manager agent
Team of
FC Sales management
Information
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10) BRANCH HIERARCHY
REGIONAL MANAGER
ASSISTANT SALES MANAGER
BUSINESS DEVELOPMENT MANAGER
SALES DEVELOPMENT MANAGER
FINANCIAL CONSULTANT
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11) SWOT ANALYSIS
SRENGTH
HDFC Standard LIFE insurance Company (HDFC SLIC) is having a good
market reputation
HDFC SLIC believe to do business by the ethical way
Service of the HDFC SLIC is excellent.
Stable and experienced management
HDFC SLICS main strength is depending upon financial consultant.
Asset base of Rs. 27,000 crores which indicates high financial strength
Strength of foreign partner which has total asset of Rs. 5, 81,000 crores
Deposits and bonds are AAA rated by Standard and Poors, FAAA and
MAAA by CRISIL and ICRA.
WEAKNESS
Need identification of the customer took a back seat and this, in turn, is
largely responsible for the high lapsation ratio.
One issue that is being hotly debated presently is whether we should go
for total detarrification or not.
The tendency not to Share information or datas to other insurers in one
company as data plays major role in the insurance business.
HDFC SLIC have been spending very less in advertising. Recently they
have released advertisements but still it is not enough. HDFC SLIC does not have enough branches in rural market. Large part
of rural market is untouched.
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OPPORTUNITY
HDFC SLIC can open branches in the small cities also.
HDFC SLIC can expand more and more branches in the rural sector.
HDFC SLIC has been doing business since last five years still they have
so many opportunities to expand business.
There is a golden opportunity for the HDFC SLIC if it uses its brand name
effectively and advertises it effectively.
Opportunity to capture more market share if it increases its strength of
financial consultant.
THREAT
From the other private players.
Large distribution network of LIC
Decades of experience and brand name of LIC
12 % service tax on investment
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12) FUTURE PLAN
HDFC Standard Life Insurance has been doing business since last five
years because before that any private companies were not allowed to do
business of insurance. Company has been continuously trying to increase
workforce and number of branches. Company has doubled number of branches
it is about 104 in the country and also increased number of financial consultants
it is about 23000 in 2005 compare to 17000 in 2004. Future plan of the company
is still to increase workforce and number of branches in all over India. Today
company provides services in about 440 towns.
For future company has plan
To increase more products in its portfolio
To increase more benefits for its financial consultants and customers
To capture more market
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BOARD OF DIRECTORS
HDFC standard life insurance company limited
Chairman Mr. Deepak Parekh
Directors Mr. I.c. lumsden
Mr. K.m.mistry
Mr. A.m.crombie
Mr. M.r.pai
Mr. A.R. Forbes
Mr. P.d.robertson
Alternate to Mr. I.c. lumsden
Mr. P.d.inman
Alternate to Mr. A.m. crombie
Managing director and CEO Mr. D.m.satwalekar
Authors Mr. S.b.billimoria and company
Chartered accountantsMr. B.k kher & company
Chartered accountants
Bankers HDFC bank ltd.
Registered office Ramon house,
H.t.parekh marg,
169, Back Bay
Reciamation,
Church gate
Mumbai 400 020
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Corporate office The IL&FS financial centre
5th floor, plot no. c-22, g block
Bandra kurla complex,
Bandra (e), Mumbai
400 051.
Tele no. 2653 3666
Fax. 22-2653 3655
E-mail response@hdfcinsurance.com
Internet www Hdfcinsurance.com
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(B) INDUSTRY PROFILE
Insurance constitutes one of the major segments of the financial market.
Insurance services play predominant role in the process of financial intermediary.
Today insurance industry is one of the most growing sectors in India. There is lot
of potential in the Indian Insurance Industry.
There are many issues, which require study. The scope of the study of
insurance industry of India would be very great as there are ongoing
developments in the industry after the opening of the sector.
The major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26% to 49% in the insurance sector. Government may in near future
allow 49% FDI in Insurance. This would lead to more capital inflow by foreign
partners.
Another major issue is the effects on LIC after the entry of private players
in the market. Though market share of LIC has been affected, it has improved in
terms of efficiency.
There are number of other hot topics like penetration of Health Insurance,
Rural marketing of insurance, new distribution channels, new product ranges,
insurance brokers regulation, incentive scheme of development officers of LIC
etc. So it offers lot of scope for studying the insurance industry.
Right now the insurance industry has great opportunities in a country like
India or China which huge population. Also the penetration of insurance in India
is very low in both life and non-life segment so there is lot potential to be tapped.
Before starting the discussion on insurance industry and related issues, we have
to start with the basics of insurance. So first we understand what is insurance?
How the wordinsurance is different from the wordassurance?etc.
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History of Insurance
The roots of insurance might be traced to Babylonian and that is only for
goods.
In the middle of 14th century as evidenced by earliest known insurance
contract, marine insurance was practically universal among maritime
nations of Europe.
By the end of the 18th century, Lloyds coffeehouse, in London, had
progressed into one of the first modern insurance companies.
Insurance developed rapidly with the growth of British commerce in the
17th and 18th century.
After 1840, with the decline of religious prejudice against the practice, life
insurance entered a boom period. In the 1830s the practice of classifying
risk began.
The workmans compensation act of 1897 in Britain requires employers to
insure their employees against industrial accidents.
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Time line in insurance history
Major Landmarks
1818 British introduced the life insurance to India with the
establishment of the Oriental Life Insurance Company in Calcutta.
1850 Non life insurance started with Triton Insurance
Company.
1870 Bombay Mutual Life Assurance Society is the first India
Owned life insurer.
1912 The Indian Life Assurance Company Act enacted to regulate the
Life Insurance Business.
1938 The Insurance Act was enacted. Nationalization took place.
Government took over 245 Indian and foreign insurers and
provident societies.
1972 Non-life business nationalized, General Insurance
Corporation (GIC) came into being.
1993 Malhotra committee was constituted under the
Chairmanship of former RBI chief R. N. Malhotra to draw
a blue print for insurance sector reforms.
1994 Malhotra committee recommended reentry of private
Players.
1997 IRDA (Insurance Regulatory and Development
Authority) was set up as a regulator of the insurance.
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Market in India.
2000 IRDA started giving license to private insurers. ICICI
Prudential, HDFC were first private players to sell
Insurance Policies.
2001 Royal Sundaram was the first non-life private player to
Sell an insurance policy.
2002 Bank allowed to sell insurance plans as TPAs enter the
scene, insurersstart setting non-life claims in the cashless mode.
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(C) COMPETITORS DETAIL
At present there are total 14 players in Indian life insurance sector.
There is only one player in the government sector and it is the Life Insurance
Corporation of India. Rest of the players is in the private.
Now lets look at these players and their market share
TABLE NO.2
8 Max New York Life Insurance Company 0.90
9 Aviva 0,79
10 Kotak Mahindra Life Insurance Company 0.51
11 ING Vysya 0.37
12 AMP Sanmar 0.26
13 Met Life Insurance Compnay 0.21
14 Guardian Life Insurance Co Ltd.
No. Name of the Company Market
Share in
%
1 Life Insurance Corporation (PSU) 82.30
2 ICICI Prudential Life Insurance Company 5.63
3 Birla Sunlife Insurance Company 2.56
4 Bajaj Allianz Life Insurance Company 2.03
5 SBI Life Insurance Company 1.80
6 HDFC Standard Life Insurance Company 1.36
7 Tata AIG 1.29
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Now lets depict the market share of these players on diagram
Table -1: insurers as on 31-3-2003
Company Foreign
shareholder
Major local
shareholder
Business of local
shareholder
Allianz Bajaj life Allianz Bajaj Auto Auto manufacturer
Birla sun life Sun life of Canada Birla global
finance
Diversified
conglomerate
Dabur CGU CGNU Dabur Medical &
consumer
productsHDFC standard
life
Standard life HDFC Investment &
finance
ICICI Prudential
life
Prudential(UK) ICICI Investment &
finance
ING Vysya life ING Vysya bank Bank & other
investors
Max New York
Life
New York Life Max India Diversified
conglomerate
MetLife India MetLife Jammu & Kashmir
bank: Pallonji
group
Bank & diversified
conglomerate
OM Kotak
Mahindra
Old Mutual Kotak Mahindra Investment &
finance
SBI Life Cardiff SBI Bank
TATA-AIG Life AIG TATA Diversified cong.
Source: The Hindu survey of the Indian industry, 2003
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Graph No.1 MARKET SHARE OF THE COMPETITORS
Here we can see from the diagram that LIC is the market leader and it
commands the major part of the total life insurance market. Its market share was
approximately 98% before 2000 but after the entry of private players it has
significantly decreased.
Among private players ICICI Prudential stands first. It has the market
share of approximately 5.7% in the total market and it constitutes 40% of themarket share among private players.
Birla Sun life Insurance Company comes third. Bajaj Allianz is also one of
the fastest growing life insurance companies in India.
Rest of the players has market share below 2%.
Market Share
LIC
ICICI Prudential Life Insurance Company
Birla Sunlife Insurance Company
Bajaj Allianz Life Insurance Company
SBI Life Insurance Company
HDFC Standard Life Insurance Company
Tata AIG
Max New York Life Insurance Company
Aviva
Kotak Mahindra Life Insurance Company
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LIFE INSURANCE CORPORATION
The Life Insurance Corporation (LIC) was established about 44 years ago
with a view to provide an insurance cover against various risks in life. A monolith
then, the corporation, enjoyed a monopoly status and became synonymous withlife insurance.
Its main asset is its staff strength of 1.24 lakh employees and 2,048
branches and over six-lakh agency force.
LIC has hundred divisional offices and has established extensive training
facilities at all levels. At the apex, is the Management Development Institute,
seven Zonal Training Centres and 35 Sales Training Centres.
At the industry level, along with the Government and the GIC, it has
helped establish the National Insurance Academy. It presently transacts
individual life insurance businesses, group insurance businesses, social security
schemes and pensions, grants housing loans through its subsidiary; and markets
savings and investment products through its mutual fund. It pays off about Rs
6,000 crore annually to 5.6 million policyholders.
BIRLA SUN LIFE INSURANCE
Birla Sun Life Insurance Company Limited, a joint venture between Sun
Life Assurance Company of Canada and Aditya Birla Management Corporation
Limited, recently completed a successful first year of operations. The company
emerged as a strong private sector insurance player in the newly opened
insurance market in India with its pioneering efforts in the area of Unit Linked
insurance plans. The company sold over 20,000 policies covering more than
33,000 lives in its first year of operations. It achieved an annualised premium
income of Rs.350 million with a total sum assured of Rs.16,000 million.
The company has more than 2,700 insurance advisors who sell company
products across the country. The company offers an array of products in the
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individual and group life segments.
The company established a strong presence in India with 22 branches and
two development centres across 17 cities.
ICICI Prudential Life Insurance Company
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 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 615,000policies. The company has a network of about 56,000 advisors; as well as 7
bancassurance 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 the country,
with a wide range of flexible products that meet the needs of the Indian customer
at every step in life.
Bajaj Allianz Life Insurance Company
Bajaj Allianz General Insurance a joint venture non-life company promoted
jointly by Bajaj Auto and the German insurer- Allianz. Indian auto major holds
74% while Allainz holds 26% in the Joint Venture, and has an authorized and
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paid up capital of Rs. 110 crores. Mr. Graham Norris is the CEO of the company.
Bajaj Allianz General Insurance will leverage the customer base and expertise of
Bajaj Auto Ltd and Allianz AG
Incorporated in September 2000, Bajaj Allianz General Insurance received the
certificate of registration from Insurance Regulatory and Development Authority
in May 2001.
SBI Life Insurance Company
SBI Life Insurance Co. Ltd. is a registed Life Insurance Company which has
been licenced by Insurance Regulatory and Development Authority of India. Itbelongs to State Bank of India (SBI) group.
State Bank of India has joined hands with Cardif of France to form a Life
Insurance Company:
SBI - The Largest bank in India
Cardif - A wholly owned subsidiary of BNP PARIBAS (one of the top 10 banks in
the world), is a leading Insurance Company in France operating in 27 countries
all over the world.
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 insuranceventures 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
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operate in India on February 12, 2001 and started operations on April 1, 2001.
Tata AIG Life offers a broad 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.
ING Vysya
ING Vysya (a group terminology) has 3 businesses in India, ING Vysya
Life Insurance, ING Vysya Bank and ING Vysya Mutual Fund. ING Vysya Bank is
a premier private sector bank with a 70-year heritage and 1.5 million satisfied
customers. ING Vysya Mutual Fund is a mid sized asset management company
with a retail investor focus.
Kotak Mahindra Life Insurance Company
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between
Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance,
we aim to help customers take important financial decisions at every stage in life
by offering them a wide range of innovative life insurance products, to make them
financially independent. Jeene Ki Azaadi...
AMP Sanmar
A Joint venture combining AMP's life Insurance expertise and Sanmar's
Indian Business Expertise.
The Life Insurance joint venture company between AMP of Australia and
the Sanmar Group of Chennai will create a better future for you and your family,
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by helping you build and manage your wealth.
AMP Sanmar offers a comprehensive range of life insurance Products
that will enhance your savings and provide financial security to people who need
your support. AMP is a leading international financial services group with over
150 years with core business in Insurance, Asset Management and Financial
Planning.
The Sanmar Group is a leading industrial group in South India and one of
the top corporations in the country that helped pioneer industrialization in India
for over six decades. Both AMP and Sanmar are deeply committed to this Life
Insurance joint venture and to create a long-term relationship with the customer
Aviva Life Insurance Company India Pvt. Ltd.
In India, Aviva has a joint venture with Dabur, one of India's oldest, and
largest Group of companies. A professionally managed company, Dabur is the
country's leading producer of traditional healthcare products.
Aviva pioneered the concept of Bancassurance in India, and has leveraged
its global expertise in Bancassurance successfully in India. Currently, Aviva has
Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara
Bank, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank.
Aviva has 34 Branches (including rural branches) in India supporting its
distribution network. Through its Branches and its Bancassurance partner
locations, Aviva products are available in 165 towns and cities across India.
Aviva has also opened four rural branches in Faridkot, Udaipur, Nasik and
Nagpur.
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Max New York Life Insurance
Max New York Life Insurance Company Limited is a joint venture
between Max India Limited, a multi-business corporation focusing on life
insurance, health care and information technology, and New York Life, a Fortune
100 company with over 150 years of experience in the life insurance business.
In 2000, Max New York Life became the first Indo-American insurance
joint venture registered and granted a license to conduct business in India. Since
that time, Max New York Life has acquired a national presence, establishing a
wide distribution network with 35 offices located across 27 cities in India, which
are staffed by over 1,500 employees and over 7,700 highly competent life
insurance Agent Advisors.
In 2003, Max New York Life became the first life insurance company in
India to receive the ISO 9001:9002 certification for its commitment to quality. All
of Max New York Lifes offices are supported by state-of-the-art technology
designed to enhance its goal of providing excellent service to customers. It has
also set up a Centre for Operational Excellence at its head office in Gurgaon,
Haryana, just outside of New Delhi.
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(D) REGULATORY ENVIRONMENT DETAILS
REGULATORY FRAMEWORK (INSURANCE ACT & IRDA)
Insurance Act, 1938
The Insurance Act was enacted in 1938 with a view to control the
insurance market in India. The Insurance Act provides major guidelines to
insurance companies to do insurance business.
The Insurance Act prescribes rules for Assignment or transfer of policies
and nominations, commission and rebates and licensing for agents,
amalgamation or transfer of insurance business, setting up of the Tariff Advisory
Committee, solvency margins, insurance cooperative societies, reinsurance,
registration etc.
The Insurance Act, 1938 allows for only Indian Insurance companies
registered under the Companies Act, to transact insurance business in India
Amendment in 2001
For smooth functioning of the market, certain amendments were made in
the Act. The amendments contain entry of insurance co-operative societies,
provisions relating to payment of commission and fee for insurance
intermediaries, allowing flexibility in the eligibility qualifications for corporate
agents., allowing a more flexible mode of payment of premium through credit
cards, smart cards, internet, etc.
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Insurance Regulatory and Development Authority(IRDA)
The Insurance Regulatory and Development Authority (IRDA) was
constituted as an autonomous body to regulate and develop the business of
insurance and re-insurance in India. The Authority was constituted on April 19,
2000; vide Government of Indias notification No. 277.
The Insurance Regulatory and Development Authority Act, 1999, was
enacted by Parliament in the fiftieth year of the Republic of India to provide for
the establishment of an Authority to protect the interests of holders of insurance
policies, to regulate, promote and ensure orderly growth of the insurance industry
and for matters connected therewith or incidental thereto and further to amend
the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the
General Insurance Business Act, 1972. IRDA was constituted in terms of the
Insurance Regulatory and Development Authority Act, 1999, as the regulator of
the Indian Insurance industry.
IRDA was setup in 1996 but it was formally constituted as a regulator of
the insurance industry in April 2000. The regulator was initially known as theInsurance Regulatory Authority but was subsequently rechristened as Insurance
Regulatory and Development Authority as it was provided that it had broader role
to perform in the Indian insurance market. It has not only to frame and issue
statutory and regulatory stipulations, guidelines, and clarification but it has also to
perform a developmental and promotional role. The developmental and
promotional role of the regulator include facilitating the growth of the market by
attracting large number of players, integrating of the insurance market with the
domestic financial services market, and synchronizing the Indian Insurance
market with that of global insurance market.
Thus, the objectives of IRDA are two fold: policyholder protection and
healthy growth of the insurance market.
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IRDA has till 2001 issued seventeen regulations in the areas of
registration of insurers, their conduct of business, solvency margins, conduct of
reinsurance business, licensing, and code of conduct intermediaries. It follows
the practice of prior consultation and discussion with various interest groups
before issuing regulations and guidelines.
Operations of IRDA
1. IRDA has developed its internal parameters to assess the promoters
credentials.
2. IRDA is the sole authority for awarding licenses. There is no restriction in the
number of licenses it can issue, but licenses for life and non-life business are
to be issued separately. Licenses are issued only on a national basis. The
new players should commence business within 15-18 months of getting the
license.
3. All insurance intermediaries, such as agents and corporate agents, have to
undergo compulsory training prior to their obtaining a license. IRDA also
specified the minimum educational qualifications for these intermediaries.
IRDA conducts examinations and then issues licenses to these agents,. IRDA
believes that well trained and informed intermediaries can service the
consumers better. IRDA insured or renewed. 1, 18,154 agents licenses by the
end of March 2001.
4. IRDA has come out with the Insurance Advertisement and Disclosure
Regulations to ensure that the insurance companies adhere to fair trade
practices and transparent disclosure norms while addressing the
policyholders or the prospects.
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Potentiality in the Insurance Sector.
Scope of Insurance Business in India
The Malhotra Committee estimated that the insurance penetration in India is to
the extent of about 25% of the insurable population. As of 1999-2000, LICs
Insurance Premium Income was approximately Rs. 32,000/- carores. It is
observed that currently LIC has about 10 Crore policies in force, which
contributed a premium of about 6% of the GDS (Gross Domestic Savings) of
household in India.
Based on a report by the Confederation of Indian Industries (CII), it is anticipated
that this figure of 10 carore policies in force is likely to double in the next decade.
By the year 2010, the premium income is expected to account for 18% of the
GDS, amounting to Rs. 5,12,000 carore.
YEAR
Chart 1-: Number Policies In Forces
0
20
40
60
80
100
120140
160
180
1999 2002 2006 2010
Policies inForces (million)
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International Presence of IRDA
IRDA is a member of the International Association of Insurance
Supervisors, (IAIS) headquartered at Basel, Switzerland. The IAIS is anorganization set up by regulators and supervisors of insurance industry. The
aims and objectives of the IAIS are to bring in prudential regulations, to prescribe
guidelines for the insurance supervisors to observe the industry, to promote
international co-operation and understanding among the supervisors, and to
represent before world forums the cause of the insurance industry and the matter
of its functioning and regulation. IRDA is a member of the Emerging Markets and
Technical Committees. Its Chairman is also a member of the Accounting Sub-
Committee and the Insurance Frauds Committee, IRDA is putting in efforts to
bring the Indian insurance market to international standards in areas of financial
viability, competence, technology and prudential regulations.
Table no.3 KEY MARKET INDICATORS
Life and non-life Market in India Rs. 83,645.11 crore
Global insurance market US $2940.67 billion
(as on 31st December, 2003) Nominal growth: 11.71 per cent
Inflation adjusted: 2.0 per cent
Growth in premium underwritten Life: 18.91 per cent
in India and abroad in 2003-04 Non-life : 11.16 per cent
Geographical restriction for None
New playersEquity restriction Foreign promoter can hold up to
26 per cent of the equity
Registration restriction Composite registration not
Available
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Table no.5 NUMBER OF REGISTERED INSURERS IN INDIA
Type of business Public sector Private sector
TotalLife Insurance 01 13 14
General Insurance 06 08 14
Reinsurance 01 0 01
Total 08 21 29
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ORGANIZATION STUDY
A) MARKETINGDEPARTMENT
B) OPERATIONS DEPARTMENT
C) FINANCE DEPARTMENT
D) HUMAN RESOURCE DEPARTMENT
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A) MARKETING DEPARTMENT STUDY
1) Marketing scenario Segmentation
2) Target Market Customers profile
3) Positioning strategy
4) Product details & Product Portfolio
5) Channel of Distribution
6) Pricing Policy
7) Promotional Tools employed, etc.
8) Marketing Strategy etc.
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INRODUCTION
Broadly defined the term Market is whenever and wherever there
is a potential demand for the product is known as Market. The concept of
market brings full circle to the concept of marketing. Marketing means working
with market actualize potential exchange for the purpose of satisfying human
needs and wants. Marketing has been originated from distribution function, due
to the centralized production function.
According to the guru of modern marketing concept, Fillip Kotler,
Marketing is a set of human activity directed at facilitating change. Their element
must be present to define a marketing situation.
Two or more party who are potentially interested in exchange.
Each possessing thing or valued to other.
Each capable of communication and delivery.
Marketing management looks after the marketing system of the
enterprise. So we can say that marketing is the process of discovering andtransferring consumers needs and wants into product and service involving
purchasing power so as to achieve the profit target as other objective set by the
company.
In HDFC Standard Life Insurance Company, generally higher
expenditure on marketing and advertisement is not made. Aggressive marketing
strategy has not been adopted by the company like the some competitors have
been.
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1) MARKET SCENARIOSEGMENTATION
Market segment is the division of the market into different subjects
to customers where any subject may consciously be selected as target market to
be reach with different marketing mix. Basically market segment is process of
desegregating total market into number of sub markets. In other words market
segment means division of total market with view of serving and attaining market.
HDFC Standard Life Insurance Company has divided target market into
various segments. For example they have different segment for children,
youngster, middle-aged people, old age people and so on.
They have market segment basis on four types
Age wise: children, middle age, and old age
Gender wise: Male and Female
Income wise: High income, middle income and lower income
Geographical: East, West, North, South
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this global market. We should keep in mind that Great ideas need landing gear
as well as wings.
We know that everybody is having his/her own life or we can say that each
of us leads a unique life and own needs. HDFC standard life offers a range of
products or we can say different products that invite to choose the one that suits
best. Following are the individual product.
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The letters PIPS can be used to remember the classification. Let us now look
at the features of the various categories of the life insurance plans.
Life insurance products
Protection products investment products
1. Pure life insurance 1. To be sold to investors
2. Low premium with high covers 2. The aim is to get long
term real growth
3. No maturity values 3. The risks covered
are investment risks.
4. Cover for income earning capacity.
5. Riders fall in this category.
Pension products Savings products
1. Provide income 1. Helps a person to save
for an event.
2. Protection of the income. 2. Protection of the
savings.
3. The risk covered is the risk of 3. The risk covered is the
living long. inability to save due to
death.
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The HDFC standard life offer plans in each of the above category.
PRODUCTS FOR INDIVIDUAL:
1. Protection products 1.Term assurance
2 Loan cover term assurance plan.
2. Savings plan 1.Endowment assurance plan
2. Money back plans
3. Childrens plan
(With profits)
4. Unit linked endowment plan.
3. Investment plans 1.Single premium whole of life plan.
4. Pension plans 1.Personal pension plan (With
Profits)
2. Unit linked pension plan.
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GROUP PRODUCTS:
Group term insurance:
A group insurance scheme called group term insurance is offered by HDFC
standard life insurance. The key features of these plans are convenient medical
procedures, flexibility for members to join or leave premium options, flexible
cover, globally valid, and no limit on the size of the group.
GRATUITY PLAN
The HDFC gratuity plan is an insurance policy which offers an employer a new
and flexible way to fund his gratuity liability. The contributions that he decides to
invest in this policy will assist him in meeting his gratuity obligations in an
organized way.
LEAVE ENCASHMENT PLAN
This plan is a flexible insurance policy which helps employers and leave
encashment scheme trustees in funding leave encashment obligations without
the employers profit and loss account being unexpectedly affected.
DEVELOPMENT ASSURANCE PLAN
The development assurance plan is designed for the economically weaker
sections of the society to satisfy their needs. It makes available life cover for a
period of one year top a specific group, and in case of the death of any member
of the group insured during the year of cover, a lump sum amount is paid to that
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members beneficiaries to help meet some of the immediate financial needs
following their loss.
ENDOWMENT ASSURANCEPLAN:
It is a participating (with profits) insurance plan that offers the followingfeatures:
Provides financial support to the family by way of a lump sum payment incase of the unfortunate death of the life assured within the term of thepolicy.
Provides a lump sum payment to the life assured on survival up tomaturity.
The lump sum mentioned is the basic sum assured plus any bonusadditions.
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.
BENEFITS OF THIS PLAN :
You can add the following optional benefits to customise your policy to suityour needs:
Critical Illness (CI) Benefit provides an amount, equal to the sumassured chosen under this optional benefit, on diagnosis of any one of the6 common critical illnesses (1). The sum assured is payable if you survivefor 30 days after the date of the claim. Once such a claim has been met,
no further Critical Illness Benefit is payable. However, your basic policycontinues even after we pay a claim on this benefit.
Additional Term Benefit (ATB) provides an additional amount equal tothe sum assured chosen under this optional benefit, in case of yourunfortunate death.
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Accidental Death Benefit (ADB) provides an additional amount, equal tothe sum assured chosen under this optional benefit, in case of yourunfortunate death:- due to an accident, and- within 90 days of the accident..
Waiver Of Premium (WOP) Benefit waives the premium for you in caseyou become totally disabled. The waiver is applicable during the period of
total disability.
ELIGIBILITY:
Table no.5
Basic PolicyBasic Policy with optional benefits
CI ATB ADB WOP
Min. age at entry 12 18 18 18 18
Max. Age at entry 60 55 60 55 50Max. Age at expiry 75 70 75 65 60
Min. term: 10 years Max. Term: 30 years
UNIT LINKED ENDOWMENT ASSURANCE:
The unit linked endowment plan is an insurance policy that is designed to
pay a lump sum on maturity or on earlier death. The Unit Linked EndowmentPlan also gives the option of additional protection against the six common critical
illnesses, as well as additional protection if death is as the result of an accident.
Your premiums are invested in units of the investment fund of your choice,
based on the prevailing unit price. On maturity you receive the value of your
units. On death (or critical illness, if chosen) you receive the greater of the value
of your units and your selected basic sum assured.
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INVESTMENT OPTION :
The policy is fully unitised with a range of funds to match your needs and
approach to risk. (By risk we mean the likely volatility in the value of units in the
fund.)
Each investment fund is composed of units. All the units in a fund are
identical. You can choose from the following funds:
Liquid fund :
The Liquid fund invests 100% in bank deposits and high quality short-term
money market instruments. The fund is designed to be cash secure and has a
very low level of risk; however unit prices may occasionally go down due to the
use of short-term money market instruments.
Secure Managed :
The Secure Managed fund invests 100% in Government Securities and
Bonds issued by companies or other bodies with a high credit standing, however
a small amount of working capital may be invested in cash to facilitate the day-to-
day running of the fund. This fund has a low level of risk but unit prices may still
go up or down.
Defensive Managed:
15% to 30% of the Defensive Managed fund will be invested in high
quality Indian equities. The remainder will be invested in Government Securities
and Bonds issued by companies or other bodies with a high credit standing. In
addition, a small amount of working capital may be invested in cash to facilitate
the day-to-day running of the fund. The fund has a moderate level of risk with the
opportunity to earn higher returns in the long term from some equity investment.
Unit prices may go up or down.
Balanced Managed:
30% to 60% of the Balanced Managed fund will be invested in high quality
Indian equities. The remainder will be invested in Government Securities and
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Bonds issued by companies or other bodies with a high credit standing. In
addition a small amount of working capital may be invested in cash to facilitate
the day-to-day running of the fund. The fund has a higher level of risk with the
opportunity to earn higher returns in the long term from the higher proportion it
invests in equities. Unit prices may go up or down.
Growth fund :
The Growth fund invests 100% in high quality Indian equities. In addition a
small amount of working capital may be invested in cash to facilitate the day-to-
day running of the fund. The fund has a higher level of risk with the opportunity to
earn higher returns in the long term from the investment in equities. Unit prices
may go up or down.
The past performance of any of the funds is not necessarily an indication
of future performance.
There are no investment guarantees on the returns of unit linked funds.
None of the funds participate in the profits of HDFC Standard Life
Insurance Company Limited or any of its policyholder funds.
BENEFITS:
There are 4 different options available to choose from:Life Option
On death within the policy term, the greater of the Sum Assured and thevalue of the unit-linked fund will be paid to your nominee.
On survival to the end of the policy term the value of the unit linked fundwill be paid to you.
Life and Health Option
On death or earlier diagnosis of any one of six common critical illnesses
within the policy term, the greater of the Sum Assured and the value of the unit-
linked fund will be paid to your nominee.
On survival to the end of the policy term the value of the unit-linked fund
will be paid to you.
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The illnesses covered under this option are cancer, coronary artery by
pass graft surgery, heart attack, kidney failure, major organ transplant (as
recipient) and stroke.
Extra Life Option
This option pays the same benefits as the Life Option but, should death
occur within the policy term as the result of an accident, an extra benefit equal to
the Sum Assured will be paid.
Extra Life and Health Option
This option pays the same benefits as the Life and Health Option but,
should death occur within the policy term as the result of an accident, an extra
benefit equal to the Sum Assured will be paid.
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ELIGIBILITY:
Table no.6
The age and term limits for taking out a Unit Linked Endowment Plan are:
(years)
MinimumTerm
MaximumTerm
MinimumAge atEntry
MaximumAge atEntry
MaximumAge atExpiry
Life 10 30 18 60 75
Life andHealth
10 30 18 55 65
Extra Life 10 30 18 55 70
Extra Lifeand Health
10 30 18 55 65
:
The unit price each day will include a fund management charge. This
charge is 0.80% of the fund value per annum taken on a daily basis.
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CHILDREN'S PLAN:
Childrens 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 parents unfortunate death during the policy term. Childrens Planreceives 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.
ELIGIBILITY:
Table no. 7
The eligibility ages for the life assured under the plan are as follows:Minimum Age At Entry 18 yearsMaximum Age At Entry 60 yearsMaximum Age At Maturity 75 years
Minimum Term: 10 years Maximum Term: 25 years
PAYMENT OPTIONS :
You have the choice of paying the premium either in yearly, half-yearly or
quarterly modes, depending on your convenience.
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MONEY BACK PLAN :
It is a participating (with profits) insurance plan that offers the following features:
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.)
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.
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 overand above the earlier payouts.
This plan helps you plan for future anticipated expenses by paying
periodic cash lump sums to you at regular intervals. This plan also helps provide
for the needs of your family in your absence by paying them the basic sum
assured plus any bonus additions in the event of your unfortunate death during
the term of the policy.
BENEFITS:
You can add the following optional benefits to customise your policy to suit your
needs:
Critical Illness (CI) Benefit provides an amount, equal to the sum assured
chosen under this optional benefit, on diagnosis of any one of the 6 common
critical illnesses (1). The sum assured is payable if you survive for 30 days after
the date of the claim. Once such a claim has been met, no further Critical Illness
Benefit is payable. However, your basic policy continues even after we pay a
claim on this benefit.
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Additional Term Benefit (ATB) provides an additional amount, equal to the sum
assured chosen under this optional benefit, in case of your unfortunate death.
Accidental Death Benefit (ADB) provides an additional amount equal to the
basic sum assured in case you die:
- Due to an accident, and
- Within 90 days of the accident.
Waiver Of Premium (WOP) Benefit waives the premium for you in case you
become totally disabled. The waiver is applicable during the period of total
disability.
All optional benefits must be selected at the outset of your plan.
ELIGIBILITY
Table no.8
This plan can be taken on a single life basis or a joint life (first claim)
basis. The eligibility ages are as follows:
Basic Policy Basic Policy for optional benefits
CI ATB ADB WOP
Min. age at entry 12 18 18 18 18
Max. Age at entry 60 55 60 55 50
Max. Age at expiry 75 70 75 65 60
Min. term: 10 years Max. Term: 30 years
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SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN :
Single Premium Whole Of Life Insurance Plan is well suited to meet your
long-term investment needs. This participating (with profits) plan offers you the
following
benefits:
A sound investment: Your money will be invested in our With Profits fund. The
fund aims to provide secure and stable long-term growth. Normally, we will
declare a compound reversionary bonus for your policy every year and add it to
your policy on its anniversary. In addition, on death, surrender or on the
guaranteed dates, a terminal bonus might be payable. You pay a single premium
and the policywill pay you a lump sum.
Flexibility of term: Even after choosing your policy, you can decide on the policy
term. For 4 weeks after any one of the 10th, 15th, 20th and subsequent five-year
anniversaries, you can choose to receive the sum assured plus any attaching
bonuses, in full. Once the money has been received, your policy will cease.
Surrender value: You can terminate the policy any time, after it has been in
force for at least 6 months, and receive a surrender value.
In case of unfortunate death: Your nominee gets the sum assured secured by
your premium, plus any attaching bonuses.
No medical requirements : We do not require you to undergo any medical test
for this plan.
ELIGIBILITY:
Table no.9
The eligibility ages are as follows:
Minimum age at entry : 18 yearsMaximum age at entry : 70 years
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TERM ASSURANCEPLAN :
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 lump sum 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.
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.
BENEFITS:
You can add the following optional benefit to customise your policy to suit your
needs:
1. Critical Illness (CI) Benefit provides an amount, equal to the sum assured
chosen under this optional benefit, on diagnosis of any one of the 6 common
critical illnesses (1). The sum assured is payable if you survive for 30 days after
the date of the claim. Once such a claim has been met, no further Critical Illness
Benefit is payable. However, your basic policy continues even after we pay a
claim on this benefit.
2. Accidental Death Benefit (ADB) provides an additional amount, equal to
the sum assured chosen under this optional benefit, in case of your unfortunatedeath:
- due to an accident, and
- Within 90 days of the accident.
3. Accelerated Sum Assured (ASA) Benefit provides, on diagnosis of any one
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Loan Cover Term Assurance Plan :
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.
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.
ELIGIBILITY: Table no.11
This plan can be taken on a single life basis or a joint life (first claim) basis. Theeligibility ages are as follows:
Basic PolicyPolicy with optionalbenefit
Minimum age at entry 18 18Maximum age at entry 55* 55
Maximum age at expiry 65 65
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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
decisionto 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.
ELIGIBILITY:
Table no.12
The age and term limits for taking out a Personal Pension Plan are:
MinimumTerm3
MaximumTerm
MinimumAge atEntry
MaximumAge atEntry
MinimumAge atRetirement
MaximumAge atRetirement
RP1 SP2 RP SP RP SP60 50 7010 5 40 15 18 35
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UNIT LINKED PENSION PLAN :
The unit linked pension plan is basically an insurance contract, which is
designed to provide a retirement income for life.
Your premiums are invested in units of the investment fund of your choice,
based on the prevailing unit price. On vesting the value of your units will be used
to buy your retirement benefits.
On earlier death, the beneficiary receives the value of your units plus a
cash lump sum of Rs. 1,000.
INVESTMENT OPTIONS :
The policy is fully unitised with a range of funds to match your needs and
approach to risk. (By risk we mean the likely volatility in the value of units in the
fund.) Each investment fund is composed of units. All the units in a fund are
identical. You can choose from the following funds:
Liquid fund :
The Liquid fund invests 100% in bank deposits and high quality short-term
money market instruments. The fund is designed to be cash secure and has a
very low level of risk; however unit prices may occasionally go down due to the
use of short-term money market instruments.
Secure Managed:
The Secure Managed fund invests 100% in Government Securities and
Bonds issued by companies or other bodies with a high credit standing, however
a small amount of working capital may be invested in cash to facilitate the day-to-
day running of the fund. This fund has a low level of risk but unit prices may still
go up or down.
Defensive Managed :
15% to 30% of the Defensive Managed fund will be invested in high
quality Indian equities. The remainder will be invested in Government Securities
and Bonds issued by companies or other bodies with a high credit standing. In
addition, a small amount of working capital may be invested in cash to facilitate
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the day-to-day running of the fund. The fund has a moderate level of risk with the
opportunity to earn higher returns in the long term from some equity investment.
Unit prices may go up or down.
Balanced Managed :
30% to 60% of the Balanced Managed fund will be invested in high quality
Indian equities. The remainder will be invested in Government Securities and
Bonds issued by companies or other bodies with a high credit standing. In
addition a small amount of working capital may be invested in cash to facilitate
the day-to-day running of the fund. The fund has a higher level of risk with the
opportunity to earn higher returns in the long term from the higher proportion it
invests in equities. Unit prices may go up or down.
Growth Fund:
The Growth fund invests 100% in high quality Indian equities. In addition a
small amount of working capital may be invested in cash to facilitate the day-to-
day running of the fund. The fund has a higher level of risk with the opportunity to
earn higher returns in the long term from the investment in equities. Unit prices
may go up or down.
The past performance of any of the funds is not necessarily an indication
of future performance.
There are no investment guarantees on the returns of unit linked funds.
None of the funds participate in the profits of HDFC Standard Life
Insurance Company Limited or any of its policyholder funds.
BENEFITS:
At the chosen vesting date, the unitised fund value will be available to
secure pension benefits. Subject to the prevailing regulations, part of this value
can be taken in the form of a cash lump sum 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 proceeds net of any cash lump sum can be used to
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buy an annuity with any other insurance company who will accept such business.
The current maximum limit for any cash lump sum is one-third of the unitised
fund value on vesting.
On death the unitised fund value will be paid along with a cash lump sum
of Rs. 1,000. The beneficiary may use the proceeds to purchase pension benefits
for the surviving spouse.
ELIGIBILITY
Table no.13
The age and term limits for taking out a Unit Linked Pension Plan are: (years)
MinimumTerm
MaximumTerm
MinimumAge atEntry
MaximumAge atEntry
MinimumAge atVesting
MaximumAge atVesting
RegularPremiumVersion
10 40 18 60 50 70
SinglePremiumVersion 5 40 18 65 50 70
The unit price each day will include a fund management charge. This
charge is 0.80% of the fund value per annum taken on a daily basis.
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5) CHANNEL OF DISTRIBUTION
To reach the target market you should have standardized channel of
distribution. First we have to understand distribution. Distribution means to
distribute companys products in the target market. Consumers can define
distribution channel.
In other words distribution channel consists of set of interdependent
organization involved in the process of sustaining a product or service from the
point of production to the user at the point of consumption.
Let us talk about the HDFC Standard Life Insurance Company, the
distribution channel is mainly depend and related with the financial consultants
they are the keys to get more business. Financial Consultants mainly come
under the ADM and BDM.
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6) PRICING POLICY
Generally this is not FMCG product where in short period price
changes take place. These products are called financial products, which does
not fluctuate in short period. HDFC Standard Life insurance has different prices
for different products. Company has different products like pension plan, unit
linked endowment plan, money back plan, term assurance plan, childrens plan
and so on all these products have different prices.
Every product has different benefits; rates and eligibility criteria
prices are decided on that basis.
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installment, contents etc. for promoting their sales. In very short period they
have done very good business and occupied good place in market.
8) MARKETING STRATEGY
Marketing strategy of the company is to penetrate more and more market
because company has been working since last five years before that private
players were not allowed to do the business of insurance. Today in this market
so many private players are existed. It is reality that the Life Insurance Compay
covers larger part of market but it is also reality that still large part of population
of India does not have insurance policy. So company is trying to penetrate more
market.
Among all private players HDFC Standard life Insurance working
efficiently and tries to reach on top place. HDFC Standard Life Insurance also
has financial consultants in the rural market.
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B) 0PERATIONS DEPARTMENT STUDY:
Operation department plays vital role in the successes of any
organization. To provide quality of services operation department is necessary.
Every operation in this department is carried out very smoothly. The main
objective of the operation department is to interface between clients and financial
consultant of the company, the branches and underwriters and so on. Operation
department manages all this things very smoothly.
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LOCATION OF THE COMPANY
Name : HDFC standard life insurance co. ltd.Address : Registered office
Roman house, H.T. Parekh Marg, 169, BackbayReclamation, Churchgate, MUMBAI 400 020.
Corporate office
The IL & FC Financial Center, 5th floor, Plot No.- 22,G Block, Bandra Kurla Complex, BANDRA (E),MUMBAI 400 051.
Tel. No. - 6533666
Fax - 22-6533655
E-mail - response@hdfcinsurance.com
Internet - www.hdfcinsurance.com
ESTD: : 14th August 2000
Form of Org. : Public Limited Company
Auditors : S. B. Billimoria & Company (C.A.)
Bankers : HDFC Bank
Board of Directors: Chairman - Mr. Deepak S. Parekh
MD & CEO - Mr. D. M. SatwalkarMr. A. R. Forbes
Mr. I. C. Lumsden
Mr. K. M. Mistry
Mr. M. R. Pai
Mr. A. M. Crombie
Promoters - HDFC & Standard Life Insurance Co
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C] FINANCE DEPARTMENT STUDY:
INTRODUCTION
1) ACQUISITION OF FUNDS
2) UTILIZATION OF FUNDS
3) FINANCIAL PERFORMANCE
4) INTEGRATED FINANCIAL SERVISES
5) FINANCIAL RATIO ANALYSIS
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INTRODUCTION
Finance is lifeblood of any institute or business. Finance is the
wheel to which one can generate and direct its business of the achievement of
the organization goals. Proper management of finance department forms the
base to increase the profitability. In business, cost to create and maintain a
product is in the hand of businessman. In competitive era sales and profit are not
in the hands of entrepreneur.
In every big organization responsibility is on the head of finance
manager. He has to take so many decisions related to the finance. The finance
manager has to the great care to deal with financial matter.
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1) ACQUISITION OF FUND
SHARE CAPITAL:
Table no. 15
Current Year Previous Year
(Rs. 000) (Rs. 000)
1. Authorized Capital
Equity shares of Rs 10 each 3,000,000 2,200,000
2. Issued Capital
Equity shares of Rs 10 each 2,555,000 2,180,0003. Subscribed Capital
Equity shares of Rs 10 each 2,555,000 2,180,000
4. Called-up Capital
Equity shares of Rs 10 each 2,555,000 2,180,000
In HDFC SLIC, it has subscribed only Equity share capital. It has
not issued any type of bonds or debentures. It has also not borrowed any amount
from any private financial institute. The banker of the firm is HDFC bank.
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33)) FFIINNAANNCCIIAALL PPEERRFFOORRMMAANNCCEE
PROFITANDLOSSACCOUNTOFTHERGANIZATION.Table no. 15
Profit and Loss Account for the year ended 31st March 2004
Shareholders Account (Non-technical Account)
Particulars Schedule Current Year Previous Year
(Rs. 000) (Rs. 000)
Amounts transferred from the Policyholders Account
(Technical Account)
Income from Investments
(a) Interest, Dividends & Rent - Gross 92,873 92368
(b) Profit on sale / redemption of investments 70,446 31,525
(c) (Loss on sale / redemption of investments) (5,092)
(d) Transfer / gain on revaluation
/ change in fair value
(e) Amortization (charge)/credit (8,304) (7,355)
Other Income 3,439 2,850
TOTAL 153,362 119,388
Expenses other than those directly related
to the insurance business 101,284 65,873
Bad debts written off
Provisions (other than taxation)
(a) For diminution in the value of Investments (net)
(b) Provision for doubtful debts
(c) Others
(d) Contribution to the Policyholders Fund 286,428 535,542
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TOTAL 387,712 601,415
Profit / (Loss) before tax (234,350) (482,027)
Provision for Taxation
Profit / (Loss) after tax (234,350) (482,027)
APPROPRIATIONS
(a) Balance at the beginning of the Period. (746,483) (264,456)
(b) Interim dividends paid during the Period
(c) Proposed final dividend
(d) Dividend distribution on tax
(e) Transfer to reserves /other accounts
Profit / (Loss) carried forward to the Balance Sheet (980,833) (746,483)
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BALANCESHEET OFTHEORGANIZATION
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4)INTEGRATEDFINANCIALSERVICES
Particulars Current Year(Rs.000)
Previous year(Rs.000)
SOURCES OF FUNDS
SHAREHOLDERS FUND:
Share Capital 2,533,078 2,167,257Reserves & Surplus - -Credit/Debit Fair Value Change A/C 2,862 (7,837)SUB-TOTAL 2,546,940 2,159,420
BORROWINGS - -
Policy Holders Fund
Credit (Debit) Fair valueChange A/C 34,377 -Policy Liabilities 3,336,424 1,437,497Insurance Reserves - -Provision for Linked Liabilities 1,65,527 -SUB TOTAL 3,536,328 1,437,497Funds For FutureAppropriationSurplus, Allocated to Share Holders - 2,489TOTAL 6,083,268 3,599,406APPLICATION OF FUNDS
INVESTMENTSShare Holders 6,39,526 8,80,002Policy Holders 3,399,977 1,310,374Assets held to Cover Linked Liabilities 1,65,527 -Loan 5,840 6,464FIXEDASSETS 5,02,783 4,23,352CURRENT ASSETSCash & Bank Balance 5,82,644 3,72,618Advances & Other Assets 2,34,368 1,63,931Sub-total (A) 8,17,012 5,36,549
CURRENT LIABILITIES 4,09,390 2,94,628PROVISION 18,340 9,190Sub-total (B) 4,27,730 3,03,818Net Current Assets(C) = (A B) 3,89,282 2,32,731Miscellaneous Expenditure - -DEBIT BALANCE IN P & L A/C(Share Holders A/C) 9,80,833 7,46,483TOTAL 60,83,268 35