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Transcript of HDFC Insurance
Contact for more project 09413991847
SUMMER TRAINING PROJECT REPORTON
“HDFC STANDARD LIFE INSURANCE" Submitted to
RAJASTHAN UNIVERSITY, Jaipur In the partial fulfillment
Of the award of the degree of BBA (Bachelor of Business Administration)
Project guide:- Submitted by:- Ms. Mridula Mudgal Gauarv KhandelwalSr. Lecturer BBA Part III
Alwar Managemant Studies North extension road Alwar IET Groups of institutions
PREFACE
The liberalization of the Indian insurance sector has been the subject of
much heated debate for some years. The policy makers where in the catch
22 situation wherein for one they wanted competition, development and
growth of this insurance sector which is extremely essential for
channeling the investments in to the infrastructure sector. At the other end
the policy makers had the fears that the insurance premium, which are
substantial, would seep out of the country; and wanted to have a cautious
approach of opening for foreign participation in the sector.
As one of the rare occurrences the entire debate was put on the back
burner and the IRDA saw the day of the light thanks to the maturing
polity emerging consensus among factions of different political parties.
Though some changes and some restrictive clauses as regards to the
foreign participation were included the IRDA has opened the doors for the
private entry into insurance.
Whether the insurer is old or new, private or public, expanding the market
will present multitude of challenges and opportunities. But the key issues,
possible trends, opportunities and challenges that insurance sector will
1
have still remains under the realms of the possibilities and speculation.
What is the likely impact of opening up India’s insurance sector.
The large scale of operations, public sector bureaucracies and
cumbersome procedures hampers nationalized insurers. Therefore,
potential private entrants expect to score in the areas of customer service,
speed and flexibility. They point out that their entry will mean better
products and choice for the consumer. The critics counter that the benefit
will be slim, because new players will concentrate on affluent, urban
customers as foreign banks did until recently. This seems to be a logical
strategy. Start-up costs-such as those of setting up a conventional
distribution network-are large and high-end niches offer better returns.
However, the middle-market segment too has great potential. Since
insurance is a volumes game. Therefore, private insurers would be best
served by a middle-market approach, targeting customer segments that are
currently untapped.
2
ACKNOWLEDGMENT
I would like to thank my project guide Mr. Pradeep
choaduary, Sales Development Manager HDFC Standard
Life Insurance, Alwar for guiding me through my summer
internship and research project. His encouragement, time
and effort are greatly appreciated.
I would like to thank Ms. Mirdula Mudgal (Sr.LECTUR) for
supporting me during this project and providing me an
opportunity to learn outside the class room. It was a truly
wonderful learning experience.
I would like to dedicate this project to my parents. Without
their help and constant support this project would not
have been possible.
Lastly I would like to thank all the respondents who offered
their opinions and suggestions through the survey that
was conducted by me in Alwar.
DECLARAION
3
I hereby declare that this work entitled “Potential of Life
Insurance Industry in ALWAR Market” is my work carried out
under the guidance of my faculty guide Mr. Pradeep kumar and my
company guide Mr. Jignesh Madhavani. This report neither full
nor in past has ever been submitted for award of any other degree
of either this University or any other University.
Signature of Candidates
Gaurav Khandelwal
Executive Summary
4
In today’s corporate and competitive world, I find that insurance sector has
the maximum growth and potential as compared to the other sectors.
Insurance has the maximum growth rate of 70-80% while as FMCG sector
has maximum 12-15% of growth rate. This growth potential attracts me to
enter in this sector and ING Life Insurance Company Ltd has given me
the opportunity to work and get experience in highly competitive and
enhancing sector.
The success story of good market share of different market
organizations depends upon the availability of the product and
services near to the customer, which can be distributed through a
distribution channel. In Insurance sector, distribution channel includes
only agents or agency holders of the company. If a company like
RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have
adequate agents in the market they can capture big market as
compared to the other companies.
Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer.
CertificatePreface
5
AcknowledgementDeclarationExecutive Summary
Tables of Contents
Sr.No. Particulars Page No.
1 Introduction of insurance 06 2 Profile & Comparison of organizations 13 2.1 HDFC SLIC 14 2.2 Tata AIG LIC 31 2.3 Other Competitors 34 2.4 HDFC Policies 40 3 Objectives of the Study 43 4 Research Methodology 45 5 Result analysis & interpretation 51 6 Conclusions 73 7 Suggestions 75 8 Questionnaire 77 9 Bibliography 80 10 Glossary 82
6
7
CHAPTER I
INDIAN INSURANCE
INDUSTRY
“AN OVERVIEW”
8
THE INSURANCE INDUSTRY IN INDIA
AN OVERVIEW
With the largest number of life insurance policies in force
in the world, Insurance happens to be a mega opportunity
in India. It’s a business growing at the rate of 15-20 per
cent annually and presently is of the order of Rs 1560.41
billion (for the financial year 2006 – 2007). Together with
banking services, it adds about 7% to the country’s Gross
Domestic Product (GDP). The gross premium collection is
nearly 2% of GDP and funds available with LIC for
investments are 8% of the GDP.
Even so nearly 65% of the Indian population is without life
insurance cover while health insurance and non-life
insurance continues to be below international standards. A
large part of our population is also subject to weak social
security and pension systems with hardly any old age
income security. This in itself is an indicator that growth
potential for the insurance sector in India is immense.
A well-developed and evolved insurance sector is needed
for economic development as it provides long term funds
for infrastructure development and strengthens the risk
taking ability of individuals. It is estimated that over the
next ten years India would require investments of the
9
order of one trillion US dollars. The Insurance sector, to
some extent, can enable investments in infrastructure
development to sustain the economic growth of the
country. (Source: www.indiacore.com)
HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818
when it was conceived as a means to provide for English
Widows. Interestingly in those days a higher premium was
charged for Indian lives than the non - Indian lives, as
Indian lives were considered more risky to cover. The
Bombay Mutual Life Insurance Society started its business
in 1870. It was the first company to charge the same
premium for both Indian and non-Indian lives.
The Oriental Assurance Company was established in 1880.
The General insurance business in India, on the other
hand, can trace its roots to Triton Insurance Company
Limited, the first general insurance company established
in the year 1850 in Calcutta by the British. Till the end of
the nineteenth century insurance business was almost
entirely in the hands of overseas companies.
Insurance regulation formally began in India with the
passing of the Life Insurance Companies Act of 1912 and
the Provident Fund Act of 1912. Several frauds during the
10
1920's and 1930's sullied insurance business in India. By
1938 there were 176 insurance companies.
The first comprehensive legislation was introduced with
the Insurance Act of 1938 that provided strict State
Control over the insurance business. The insurance
business grew at a faster pace after independence. Indian
companies strengthened their hold on this business but
despite the growth that was witnessed, insurance
remained an urban phenomenon.
The Government of India in 1956, brought together over
240 private life insurers and provident societies under one
nationalized monopoly corporation and Life Insurance
Corporation (LIC) was born. Nationalization was justified on
the grounds that it would create the much needed funds
for rapid industrialization. This was in conformity with the
Government's chosen path of State led planning and
development.
The non-life insurance business continued to thrive with
the private sector till 1972. Their operations were
restricted to organized trade and industry in large cities.
The general insurance industry was nationalized in 1972.
With this, nearly 107 insurers were amalgamated and
grouped into four companies- National Insurance
Company, New India Assurance Company, Oriental
11
Insurance Company and United India Insurance Company.
These were subsidiaries of the General Insurance
Company (GIC).
KEY MILESTONES
1912: The Indian Life Assurance Companies Act enacted
as the first statute to regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to
enable the government to collect statistical information
about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended by the
Insurance Act with the objective of protecting the interests
of the insuring public.
1956: 245 Indian and foreign insurers along with
provident societies were taken over by the central
government and nationalized. LIC was formed by an Act of
Parliament- LIC Act 1956- with a capital contribution of Rs.
5 crore from the Government of India.
INDUSTRY REFORMS
12
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. Since being set up as an independent
statutory body the IRDA has put in a framework of globally
compatible regulations.
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 IRDA 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.
PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN
INDIA
The life insurance industry in India grew by an impressive
47.38%, with premium income at Rs. 1560.41 billion
13
during the fiscal year 2006-2007. Though the total volume
of LIC's business increased in the last fiscal year (2006-
2007) compared to the previous one, its market share
came down from 85.75% to 81.91%.
The 17 private insurers increased their market share from
about 15% to about 19% in a year's time. The figures for
the first two months of the fiscal year 2007-08 also speak
of the growing share of the private insurers. The share of
LIC for this period has further come down to 75 percent,
while the private players have grabbed over 24 percent.
With the opening up of the insurance industry in India
many foreign players have entered the market. The
restriction on these companies is that they are not allowed
to have more than a 26% stake in a company’s ownership.
Since the opening up of the insurance sector in 1999,
foreign investments of Rs. 8.7 billion have poured into the
Indian market and 19 private life insurance companies
have been granted licenses.
Innovative products, smart marketing, and aggressive
distribution have enabled fledgling private insurance
companies to sign up Indian customers faster than anyone
expected. Indians, who had always seen life insurance as a
tax saving device, are now suddenly turning to the private
14
sector and snapping up the new innovative products on
offer. Some of these products include investment plans
with insurance and good returns (unit linked plans), multi –
purpose insurance plans, pension plans, child plans and
money back plans. (www.wikipedia.com)
CHAPTER II
15
PROFILE OF ORGANIZATION
2.1 HDFC STANDARD LIFE INSURANCE COMPANY
LIMITED
INTRODUCTION
HDFC Incorporated in 1977 with a share capital of Rs 10
Crores, HDFC has since emerged as the largest residential
mortgage finance institution in the country. The
corporation has had a series of share issues raising its
capital to Rs. 119 Crores. The gross premium income for
the year ending March 31, 2007 stood at Rs. 2,856 Crores
and new business premium income at Rs. 1,624 Crores.
The company has covered over 8,77,000 lives year ending
March 31, 2007.
HDFC operates through almost 450 locations throughout
the country with its corporate head quarters in Mumbai,
16
India. HDFC also has an International Office in Dubai, UAE
with service associates in Kuwait, Oman and Qatar. HDFC
is the largest housing company in India for the last 27
years.
SNAPSHOT-I
Incorporated in 1977 as the first specialized Mortgage
Company in India.
Almost 90% of initial shareholding in the hands of
domestic institutes and retail investors. Current 77%
of shares held by foreign institutional investors.
Besides the core business of mortgage HDFC has
evolved into a financial conglomerate with holdings
In:
HDFC Standard Life insurance Company- HDFC
holds 78.07 %.
HDFC Asset Management Company – HDFC holds
50.1%
HDFC Bank- HDFC holds 22.25%.
Interline Global (Business Process Outsourcing) –
HDFC holds 50%.
HDFC Chubb General Insurance Company – HDFC
holds 74%.
SNAPSHOT-II
17
Loan Approvals Rs. 805 billion.
(up to Dec 2007) (US $ 18.30
bn.)
Loan Disbursements Rs.669
billion
(up to Dec. 2007) (US $ 15.20
bn)
Housing Units Financed 2.5 million.
Distribution
Offices 181
Outreach Programs 90
KEY PLAYERS
Mr. Deepak S Parekh is the Chairman of the Company.
He is also the Executive Chairman of Housing
Development Finance Corporation Limited (HDFC Limited).
He joined HDFC Limited in a senior management position
in 1978. He was inducted as a whole-time director of HDFC
Limited in 1985 and was appointed as its Executive
Chairman in 1993. He is the Chief Executive Officer of
HDFC Limited. Mr. Parekh is a Fellow of the Institute of
Chartered Accountants (England & Wales).
18
Mr. Deepak M Satwalekar is the Managing Director and
CEO of the Company since November, 2000. Prior to this,
he was the Managing Director of HDFC Limited since 1993.
Mr. Satwalekar obtained a Bachelors Degree in Technology
from the Indian Institute of Technology, Bombay and a
Masters Degree in Business Administration from The
American University, Washington DC.
GROUP COMPANIES
HDFC Bank: World Class Indian Bank- among the top
private banks in India.
HDFC AMC: One of the top 3 AMCs in India- Preferred
investment manager.
Intelenet Global: BPO services for international customers.
CIBIL: Credit Information Bureau India Limited.
19
HDFC Chubb: Upcoming Private companies in the field of
General Insurance.
HDFC Mutual Fund
HDFC reality.com: Helps to search properties in all major
cities in India
HDFC securities
STANDARD LIFE
Standard Life is Europe’s largest mutual life assurance
company. Standard Life, which has been in the life
insurance business for the past 175 years is a modern
company surviving quite a few changes since selling its
first policy in 1825. The company expanded in the 19th
century from kits original Edinburgh premises, opening
offices in other towns and acquitting other similar
businesses.
20
Standard Life Currently has assets exceeding over £ 70
billion under its management and has the distinction of
being accorded “AAA” rating consequently for the six
years by Standard and Poor.
SNAPSHOT
Founded in 1875, company supporting generation for
last 179 years.
Currently over 5 million Policy holders benefiting from
the services offered.
Europe’s largest mutual life insurer.
JOINT VENTURE
HDFC Standard 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, Standard
Life is rated ‘AAA’ both by Moody’s and Standard and
21
Poor’s. These reflect the efficiency with which HDFC and
Standard Life manage their asset base of Rs. 15,000 Cr
and Rs. 600,000 Cr. respectively.
HDFC Standard Life Insurance Company Ltd was
incorporated on 14th August 2000. HDFC is the majority
stakeholder in the insurance JV with 81.4% staple and
Standard of as a staple 18.6% Mr. Deepak Satwalekar is
the MD and CEO of the venture.
HDFC Standard Life Insurance Company Ltd. Is one of
India’s leading Private Life Insurance Companies, which
offers a range of individual and group insurance solutions.
It is a joint venture between Housing Development Finance
Corporation Limited (HDFC Ltd.) India’s leading housing
finance institution and the Standard Life Assurance
Company, a leading provider of financial services from the
United Kingdom. Both the promoters are will 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.
BUSINESS GROWTH
22
Track Record so far
The gross premium income of HDFC, for the year ending
March 31, 2007 stood at Rs. 2,856 crores and new
business premium income at Rs. 1,624 crores.
The company has covered over 8,77,000 lives year ending
March 31, 2007. Company also declared our 5th
consecutive bonus in as many years for our ‘with profit’
policyholders.
KEY STRENGTH
Financial Expertise
As a joint venture of leading financial services groups.
HDFC standard Life has the financial expertise required to
manage long-term investments safely and efficiently.
Range of Solutions
HDFC SLIC has a range of individual and group solutions,
which can be easily customized to specific needs. These
group solutions have been designed to offer complete
flexibility combined with a low charging structure.
Strong Ethical Values:
23
HDFC SLIC is an ethical and Cultural Organization. False
selling or false commitment with the customers is not
allowed.
Most respected Private Insurance Company
HDFC SLIC was awarded No-1 Private Insurance Company
in 2004 by the World Class Magazine Business World for
Integrity, Innovation and Customer Care.
CORPORATE OBJECTIVE
Vision 'The most successful and admired life insurance
company, which means that we are the most
trusted company, the easiest to deal with, offer the
best value for money, and set the standards in the
industry'.
'The most obvious choice for all'.
Values
.Integrity
.Innovation
.Customer centric
.People Care One for all
.Teamwork
.Joy and Simplicity
PRODUCTS & SERVICES
The right investment strategies won't just help plan for a
more comfortable tomorrow -- they will help you get “Sar
Utha ke Jiyo”. At HDFC SLIC, life insurance plans are
24
created keeping in mind the changing needs of family. Its
life insurance plans are designed to provide you with
flexible options that meet both protection and savings
needs. It offers a full range of transparent, flexible and
value for money products. HDFC SLIC products are modern
and contemporary unitized products that offer unique
customer benefits like flexibility to choose cover levels,
indexation and partial withdrawals. (Source:
www.hdfcslic.com)
PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE INSURANCE
Individual Products
Protection Plans
A person can protect his family against the loss of his
income or the burden of a loan in the event of his
unfortunate demise, disability or sickness. These plans
offer valuable peace of mind at a small price. Protection
range includes our Term Assurance Plan & Loan
Cover Term Assurance Plan.
Investment Plans
25
HDFC SLIC’s Single Premium Whole of Life plan is
well suited to meet long term investment needs. This
provides attractive long term returns through regular
bonuses.
Pension Plans
Pension Plans help to secure financial independence
even after retirement. Pension range includes Personal
Pension Plan, Unit Linked Pension , Unit Linked
Pension Plus.
Savings Plans
Savings Plans offer a flexible option to build savings for
future needs such as buying a dream home or fulfilling
your children’s immediate and future needs.
Savings range includes Endowment Assurance Plan,
Unit Linked Endowment, Unit Linked Endowment
Plus, Unit Linked Endowment Plus II, Money Back,
Unit Linked Enhanced Life Protection II, Children's
Plan, Unit Linked Young Star, Unit Linked Young
Star Plus, Unit Linked Young Star Plus II.
26
Group Products
One-stop shop for employee-benefit solutions
HDFC Standard Life has the most comprehensive list of
products for progressive employers who wish to provide
the best and most innovative employee benefit solutions
to their employees. It offers different products for
different needs of employers ranging from term
insurance plans for pure protection to voluntary plans
such as superannuation and leave encashment.
HDFC SLIC offers the following group products to
esteemed corporate clients:
Group Term Insurance
Group Variable Term Insurance
Group Unit-Linked Plan
An investment solution that provides funding vehicle
to manage corpuses with Gratuity, Defined Benefit
or Defined Contribution Superannuation or Leave
Encashment schemes of your company
Also suitable for other employee benefit schemes
such as salary saving schemes and wealth
management schemes
27
Social Product
Development Insurance Plan
Development Insurance plan is an insurance plan which provides life cover to members
of a Development Agency for a term of one year. On the death of any member of the
group insured during the year of cover, a lump sum is paid to those member
beneficiaries to help meet some of the immediate financial needs following their loss.
Eligibility
Members of the development agency and their
spouses with:
- Minimum age at the start of the policy 18 years last
birthday
- Maximum age at the start of policy 50 years last
birthday
Employees of the Development Agency are not eligible
to join the group. The group to be covered is only
eligible if it contains more than 500 members.
Premium Payments
The premium to be paid will be quoted per member in
the group and will be the same for all members of the
group.
The premium can only be paid by the Development
Agency as a single lump sum that includes all premiums
for the group to be covered. Cover will not start until the
28
premium and all the member information in our
specified format has been received.
Benefits On the death of each member covered by the policy
during the year of cover a lump sum equal to the sum
assured will be paid to their beneficiaries or legal heirs.
Where the death is as a result of an accident, an
additional lump sum will be paid equal to half the sum
assured. There are no benefits paid at the end of the
year of cover and there is no surrender value available
at any time.
The role of the Development Agency
Due to the nature of the groups covered, HDFC
Standard Life will be passing certain administrative
tasks onto the Development Agency. By passing on
these tasks the premium charged can be lower. These
tasks would include:
Submission of member data in a specified computer
format
Collection of premiums from group members
Recording changes in the details of group members
Disbursement of claim payments and the mortality
rebate (if any) to group members
29
These tasks would be in addition to the usual duties of a
policyholder such as:
Payment of premiums
Reporting of claims
Keeping policy holder information up to date
Training and support will be available to give guidance
on how to complete the tasks appropriately. Since these
additional tasks will impose a burden on the
Development Agency, the Development Agency may
charge a Rs. 10 administration fee to their members.
Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
No person shall allow or offer to allow, either directly or
indirectly, as an inducement to any person to take out
or renew or continue an insurance in respect of any
kind of risk relating to lives or property in India, any
rebate of the whole or part of the commission payable
or any rebate of the premium shown on the policy, nor
shall any person taking out or renewing or continuing a
policy accept any rebate, except such rebate as may
be allowed in accordance with the published
prospectus or tables of the insurer
If any person fails to comply with sub regulation
30
(previous point) above, he shall be liable to payment of
a fine which may extend to rupees five hundred
INTROUCTION TO UNIT LINKED FUNDS
Unit linked plans are based on the component of the
premium or the contribution of the customer towards
the plan. This contribution can be in different modes
like yearly, half yearly, quarterly and monthly. Unit
linked plans have multiple benefits like life protection,
rider protection, savings, transparency, investment
choices, liquidity and planning for taxes. These plans
work like mutual funds.
The premium is collected from the policy holder. He is
allotted a certain number of units based of his
contribution. The Net Asset Value is the value of each
unit of the fund. It is found by subtracting the charges
and current liabilities from the current assets and
investments and dividing this number by the total
31
number of outstanding units.
Let us take an example. There are 100 investors and each invests Rs. 10 in a fund. The
total value of the fund is Rs. 1000 and each person is allotted 1 unit of Rs 10. Now the
money (Rs. 1000) is invested in the debt or equity market. Suppose the fund value
increased by 20%. As a result the Rs. 1000 invested became Rs. 1200. Hence the value
of every investor is now Rs. 12 and not Rs. 10.
UNIT LINKED VERSUS OTHER FINANCIAL INSTRUMENTS
Paramete
rs
RBI
Bonds
Fixed
Deposits
Mutual
Funds
Unit
linked
Safety High High Medium High
Liquidity None High High High
Returns Low Low High High
Life Cover 1 time
amount
1 time
amount
1 time
amount
10 times
Tax
benefits
Tax free Taxed Taxed Tax free
32
We find that life insurance unit linked plans is a good
area to invest money in as it provides liquidity, safety,
high returns, life cover and tax benefits in a single
plan. HDFC SLIC offers the option of indexation to beat
inflation. Risk is reduced to a large extent as the
company invests in a diversified portfolio of stocks.
Tax Benefits
INCOME TAX
SECTION
GROSS
ANNUAL
SALARY
HOW MUCH
TAX CAN YOU
SAVE?
HDFC STANDARD
LIFE PLANS
Sec. 80C Across All
income Slabs
Upto Rs. 33,990
saved on
investment of
Rs. 1,00,000.
All the life
insurance plans.
Sec. 80 CCC Across all
income slabs.
Upto Rs. 33,990
saved on
Investment of
Rs.1,00,000.
All the pension
plans.
33
Sec. 80 D Across all
income slabs
Upto Rs. 3,399
saved on
Investment of
Rs. 10,000.
All the health
insurance riders
available with the
conventional plans.
TOTAL SAVINGS
POSSIBLE
Rs37,389
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10,00,000.
2.2 TATA AIG
TATA AIG LIFE INSURANCE COMPANY LIMITED
Introduction
Tata AIG Life Insurance Company Limited (Tata AIG Life) is
a joint venture company, formed by the Tata Group and
American International Group, Inc. (AIG). Tata AIG Life
combines the Tata Group’s pre-eminent leadership
position in India and AIG’s global presence as the world’s
leading international insurance and financial services
organization. The Tata Group holds 74 per cent stake in
the insurance venture with AIG holding the balance 26
percent. Tata AIG Life provides insurance solutions to
individuals and corporate. Tata AIG Life Insurance
34
Company was licensed to operate in India on February 12,
2001 and started operations on April 1, 2001.
THE TATA GROUP
The Tata Group is one of India's largest and most
respected business conglomerates, with revenues in 2004-
05 of $17.8 billion (Rs. 799,118 million), the equivalent of
about 2.8 per cent of the country's GDP. Tata companies
together employ some 215,000 people. The Group's 32
publicly listed enterprises - among them standout names
such as Tata Steel, Tata Consultancy Services, Tata Motors
and Tata Tea - have a combined market capitalization that
is the highest among Indian business houses in the private
sector, and a shareholder base of over 2 million. The Tata
Group has operations in more than 40 countries across six
continents, and its companies export products and
services to 140 nations.
AIG
American International Group, Inc. (AIG), world leaders in
insurance and financial services, is the leading
international insurance organization with operations in
more than 130 countries and jurisdictions. AIG companies
serve commercial, institutional and individual customers
through the most extensive worldwide property-casualty
35
and life insurance networks of any insurer. In addition, AIG
companies are leading providers of retirement services,
financial services and asset management around the
world. AIG's common stock is listed on the New York Stock
Exchange as well as the stock exchanges in London, Paris,
Switzerland and Tokyo.
Tata AIG has strong brand name and recall factor which
most of its competitors lack in. Other than the public
behemoth Life Insurance Corporation (LIC) of India which
has a major hold in the market share (of approximately
79%), the private players too are having more and more
opportunities to tighten their hold of the market. Of the
private players, ICICI Prudential comes first with an almost
4.50% of the market share followed by Tata AIG with about
2.10% of the pie. The private players have everything to
work for, especially with LIC not meeting the needs of its
clientele with respect to the services they need. This
provides a prospect for the private sector players to
increase their share of the market. Companies with a
familiarity such as Tata AIG can especially achieve their
targets due to the brand image that the Tata group has.
(Source: www.tata-aig-life.com)
A recent survey conducted by the Voluntary Organization
in Interest of Consumer Education (VOICE) revealed Tata
36
AIG Life Insurance Company (Tata AIG Life) as the clear
winner in terms of customer satisfaction in the life
insurance category. This is India's first-ever customer
satisfaction study for the insurance sector.
The survey also revealed that Tata AIG Life had a high
recall as a reputed brand name. The ability to provide
innovative and customer-focused service such as allowing
the maximum grace period for premium payment has not
only further distinguished Tata AIG Life from other life
insurance companies but also appealed to consumers.
2.3 OTHER COMPETITORS
LIFE INSURANCE CORPORATION OF INDIA (LIC)
LIC has an excellent money back policy which provides for
periodic payments of partial survival benefits as long as
the policy holder is alive. 20% of the sum assured is
payable after 5, 10, 15 and 20 years and the balance 40%
is payable at the 20th year along with accrued bonus.
(www.lic.com)
37
For a 25 years term , 15% of the sum assured becomes
payable after 5,10,15 and 20 years and the balance 40%
plus the accrued bonus becomes payable at the 25th year.
An important feature of these types of policies is that in
the event of the death of the policy holder at any time
within the policy term the death claim comprises of full
sum assured without deducting any of the survival benefit
amounts which have already been paid. The bonus is also
calculated on the full sum assured.
HDFC SLIC does not have a money back policy. It could
offer a money back plan and capture some portion of this
market. While marketing insurance products I found that
many customers wanted to purchase these plans.
LIC offers 66 different plans; plans are formulated for
specific occasions – whole life plans, term assurance plans,
money back plan for women, child plans, plans for the
handicapped individuals, endowment assurance plans,
plans for high worth individuals, pension plans, unit linked
plans, special plans, social security schemes – diversified
portfolio of products. HDFC SLIC could diversify its product
portfolio. It could add more plans for high worth individuals
and women.
38
ICICI PRUDENTIAL
ICICI Prudential is a stiff competitor for HDFC SLIC. The
company is a merger between ICICI Bank which is the
biggest private bank in India and Prudential Plc which is a
global life insurance company.
The company has an investment plan which is market
related – Invest Shield Life. In this plan even if the market
falls, the premium will be returned to investors. It is a
guaranteed plan which ensures the company carefully
invests your money. The stock market performance of
ICICI Prudential is much better than HDFC SLIC. The
returns on the growth fund were 46.28% compared to the
42.70% offered by HDFC SLIC. Customers are attracted by
higher returns and this is a plus point for Prudential.
The company is very well advertised. The advertisements
are showcased in movies, television, newspapers,
magazines, bill boards, radio etc. The company has an
excellent brand ambassador – Mr. Amitabh Bacchan. His
promotion of the company builds trust and faith in the
minds of our people.
However the charges are very high in the plans offered by
ICICI Prudential. It is 35% during the first year, 15% in the
39
next year and 3% from the third year onwards. Also a
higher minimum premium of Rs. 8000 is charged. Hence
the policies are not accessible to the lower strata of the
society. (Source: www.iciciprulife.com)
BIRLA SUN LIFE
Birla Sun Life Insurance Company Limited is a joint venture
between The Aditya Birla Group, one of the largest
business houses in India and Sun Life Financial Inc., a
leading international financial services organization. The
local knowledge of the Aditya Birla Group combined with
the expertise of Sun Life Financial Inc., offers a formidable
protection for your future. (Source: www.birlasunlife.com)
The Aditya Birla Group has a turnover close to Rs. 33000
crores with a market capitalization of Rs. 53400 crores (as
on 31st March 2007). It has over 72000 employees across
all its units worldwide. It is led by its Chairman - Mr. Kumar
Mangalam Birla. Some of the key organizations within the
group are Hindalco and Grasim.
Sun Life Financial Inc. and its partners today have
operations in key markets worldwide, including Canada,
40
the United States, the United Kingdom, Hong Kong, the
Philippines, Japan, Indonesia, India, China and Bermuda. It
had assets under management of over US$343 billion, as
on 31st March 2007. The company is a leading player in
the life insurance market in Canada.
Being a customer centric company, BSLI has invested
heavily in technology to build world class processing
capabilities. BSLI has covered more than a million lives
since inception and its customer base is spread across
more than 1000 towns and cities in India. All this has
assisted the company in cementing its place amongst the
leaders in the industry in terms of new business premium
income. The company has a capital base of 520 crores as
on 31st July, 2007.
Its Flexi Life Line Plan offers life long insurance cover till
the policy holder is 100 years of age. There are
guaranteed returns of 3% p.a. net of policy charges after
every 5 years from the eleventh policy year onwards.
However the charges are very high. The initial charges for
the first year are 65%. Hence the fund value is greatly
reduced.
BAJAJ ALLIANZ
41
Bajaj Allianz is a joint venture between Allianz AG with
over 110 years of experience in over 70 countries and
Bajaj Auto, a trusted automobile manufacturer for over 55
years in the Indian market. Together they are committed
to offering you financial solutions that provide all the
security you need for your family and yourself. Bajaj
Allianz is the number one private life insurer for the year
2005 – 2006. It is leading by 78 crores. It has experienced
a whopping growth of 216% in the last financial year.
The company has sold 13, 00,000 policies and is backed
by 550 offices across India. It offers travel insurance,
motor insurance, home insurance, health and corporate
insurance. The mortality charges are lower than HDFC
SLIC. The entry age could be zero years which allow even
new born babies to be insured. (Source:
www.bajajallianz.com)
TATA AIG
Tata Aig is a joint venture between the Tata group and
American International Group Inc. In one of the plans the
company offers hospital cash benefit wherein it will pay
Rs. 2500 per day in case of hospitalization and Rs.12.5
lakhs in case the person suffers from any critical illness.
Annual premium is much less (about Rs. 6712) to avail
42
such a good benefit. Charges are relatively low compared
to HDFC SLIC for some policies.
The company offers high coverage plans at low cost. There
is a plan even for a policy term of 1 year. Your family can
continue to enjoy their current lifestyle even in the case of
something happening to you. These plans are very flexible
and HDFC SLIC could adopt this idea of insuring individuals
for short periods of time. For example; there is a family of
four. The only earning member is the father.
He has just taken a loan from a bank of 20 lakhs to
purchase a new home. He is able to repay the loan with his
current salary in 15 years. The problem arises if something
were to happen to him within these fifteen years. Not only
will the family face the emotional and financial loss of their
father but they will also have to repay the home loan or
risk being homeless. (Source: www.tataaig.com)
2.4 HDFC Policies
43
HDFC Children PlansAs a parent, your priority is your child's future and being able to meet your child's dreams and aspirations. Today, providing a good education, establishing a professional career or even a modest wedding is expensive. Costs are increasing fast. Just imagine how much you'll need when your child takes these important steps in life!
The HDFC CHILDREN'S PLAN :
Gives valuable protection and invaluable financial support to the child.
Works on Beneficiary concept, where beneficiary is the sole person to receive the benefit under the policy.
Provides you multiple options for multiple benefits.
Plan OptionDeath Benefit(on death of insured parent during the policy term)
Maturity Benefit
Accelerated Benefit Plan
Sum Assured + Bonuses Declared.
The policy terminates immediately.
Sum Assured + Bonuses Declared
Maturity Benefit Plan
Your family need not pay any further premiums and the policy continues.
Sum Assured + Bonuses Declared
Double Benefit Plan
Sum Assured.
Your family need not pay any further premiums.
Sum Assured + Bonuses Declared
HDFC Young star Champion PlansToday, providing a good education, establishing a professional career or even a modest wedding is expensive. Costs are increasing fast. Just imagine how much you will need when your children take these important steps in life.
44
Plan today to ensure a bright future for your children. Start building savings today with our HDFC Unit Linked YoungStar Champion so that your child is able to lead a life of respect and dignity with a secured financial future.
Feature The HDFC Unit Linked YoungStar Champion gives you
Valuable protection to your child in case you are not around
An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments
Bumper Addition to the fund value at maturity
Flexible premium payment options
No need to go for medicals. Just filling the Short Medical Questionnaire will do
BenefitThe HDFC Unit Linked YoungStar Champion gives you
In case of unfortunate demise of the parent, HDFC Standard Life will: Pay the Sum Assured you had chosen to your child.
Continue to pay 50% of the original regular premium towards the policy
HDFC Pension Plan
The HDFC Unit Linked Pension II is an insurance policy that is designed to provide a retirement income for life with the freedom to maximise your investment returns. Stride into your golden years of retirement with dignity and pride.
45
Features-
The HDFC Unit Linked Pension II gives you
An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments
Freedom from tracking the market with Asset Allocation Option
Bumper Addition of 50% of original annualized premium at vesting and on death
Provides a post retirement income for life
Gives you the flexibility to plan your retirement date
You can choose your premium and the investment strategy. We will then invest your premium, net of premium allocation charges according to your chosen investment strategy. At the end of the policy term, you will receive the accumulated value of your funds, which will be used to provide your pension income.
The HDFC Unit Linked Pension II benefits you in the following ways:
Take 1/3rd of the fund value as tax-free cash lump sum and purchase annuity with the balance amount.
Purchase annuity from HDFC Standard Life or any other insurer
46
CHAPTER III
OBJECTIVES OF STUDY
The main of the present study of is accomplishing the following objective.
Proper understanding and analysis of life insurance industry.
To know about brand awareness of HDFC Life Insurance and
customer’s preference about HDFC Life Insurance.
47
Conduct market survey on a sample selected from the entire
population and derived opinion on that research.
According the market survey come know about how much
potential of insurance market in our city.
Training aims at recruiting maximum number of Life
Advisors and to Sell the maximum policies for the company
and bring the business for the company which ever is going at
the particular point of time.
Along with it I will be gaining the thorough knowledge of
insurance sector. This will give me in more confidence in
marketing products given to me.
As the HDFC Life Insurance well reputed company in India
it’s great chance for me to observed different products launch
by other competitor companies like ICICI prudential, Bajaj
alliance ,LIC, Max New York life etc. In all, it is to
understand the overall working of the Life insurance sector.
The objective behind the project is as follows:
To find the right candidate.
To about their family background, occupation, social relation,
Qualification, Age.
Finalize candidates for the IRDA training
48
CHAPTER IV
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY
49
TITLE:
To determine customer-buying behavior with a focus on market
segmentation for HDFC Standard Life Insurance.
TITLE JUSTIFICATION :
The above title is self explanatory. The study deals mainly with
studying the buying pattern in the insurance industry with a special
focus on HDFC Standard Life Insurance. The various segments of the
markets divided in terms of Insurance Needs, Age groups , Satisfaction
levels etc will also studied.
OBJECTIVE
Objective One
To determine reasons behind opting for an insurance.
To provide the company with information of customer's Insurance
policy if they have any and reasons for opting for that particular
policies.
To know the most preferred policy.
Objective Two
50
To determine customers perception towards private insurance
companies and their expectation form private insurance companies.
To determine the feedback on services provided by any other
insurance agent.
To study the types of benefits provided by insurance services.
To determine the use of Internet for valuable information and
decision-making process.
SCOPE OF THE STUDY
A big boom has been witnessed in Insurance Industry in recent times. A
large number of new players have entered the market and are vying to
gain market share in this rapidly improving market. The study deals with
HDFC Standard Life in focus and the various segments that it caters to.
The study then goes on to evaluate and analyze the findings so as to
present a clear picture of trends in the Insurance sector.
SIGNIFICANCE TO THE INDUSTRY :
51
This is a limited study which takes into consideration the responses of 100
people. This data can be explorated to take in the trends across the
industry. The significance for the industry lies in studying these trends
that emerge from the study. It is a rapiddly changing and evolving sector.
People are only beginning to wake up to it’s vast possibilities. A study
like this can attempt to guide the future of the industry based on current
trends.
SIGNIFICANE FOR THE RESEARCHER :
To facilitate and provide all the useful informtaion of the studt, the
company, the insurance industry and also provide marketing ways,
methods of HDFC Standard Life insurance.
RESEARCH DESIGN
NON-PROBABILITY
EXPLORATORY & DISCRIPTIVE EXPERIMENTAL
RESEARCH
52
The research is primarily both exploratory as well as descriptive in nature.
The sources of information are both primary & secondary.
A well-structured questionnaire was prepared and personal interviews
were conducted to collect the customer’s perception and buying behavior,
through this questionnaire.
SAMPLING METHODOLOGY
SamplingTechnique: Initially, a rough draft was prepared keeping in
mind the objective of the research. A pilot study was done in order to
know the accuracy of the Questionnaire. The final Questionnaire was
arrived only after certain important changes were done. Thus my
sampling came out to be judgmental and continent
Sampling Unit:
The respondents who were asked to fill out questionnaires are the
sampling units. These comprise of employees of MNCs, Govt.
Employees, Self Employed etc.
Sample size:
53
The sample size was restricted to only 100, which comprised of mainly
peoples from different regions of Chennai due to time constraints.
Sampling Area :
The area of the research was CHENNAI,TAMILNADU, INDIA.
LIMITATIONS OF THE RESEARCH
1. The research is confined to a certain parts of CHENNAI
(MADRAS) and does not necessarily shows a pattern applicable to all
of Country.
2. Some respondents were reluctant to divulge personal information
which can affect the validity of all responses.
3. In a rapidly changing industry, analysis on one day or in one
segment can change very quickly. The environmental changes are vital
to be considered in order to assimilate the findings.
54
CHAPTER V
RESULT ANALYSIS &
INTERPRETATION
55
ANALYSIS & INTERPRETATION
“A SURVEY ON THE LIFE INSURANCE INDUSTRY IN INDIA”
AGE GROUP OF SURVEYED RESPONDENTS
TABLE 1:
Age group No. of Respondents18 - 25 years 12726 - 35 years 6736 - 49 years 4650 - 60 years 24More than 60 years 6
CHART 1:
Analysis:
56
From the chart above we find that 47% of the respondents fall in the
age group of 18 – 25 years, 25% fall in the age group of 26 – 35 years
and 17% fall in the age group of 36 – 49 years.
Therefore most of the respondents are relatively young (below 26
years of age). These individuals could be induced to purchase
insurance plans on the basis of its tax saving nature and as an
investment opportunity with high returns.
Individuals at this age are trying to buy a house or a car. Insurance
could help them with this and this fact has to be conveyed to the
consumer. As of now many consumers have a false perception that
insurance is only meant for people above the age of 50. Contrary to
popular belief the younger you are the more insurance you need as
your loss will mean a great financial loss to your family, spouse and
children who are financially dependent on you.
GENDER CLASSIFICATION OF SURVEYED RESPONDENTS
TABLE 2: Particulars No. of Respondents
Male 193Female 77
CHART 2:
57
CUSTOMER PROFILE OF SURVEYED RESPONDENTS
TABLE 3:
Customer profile No. of respondentsStudent 62Housewife 5Working Professional 116Business 49Self Employed 24Government service employee 14
CHART 3:
58
Analysis:
From the chart above it can clearly be seen that 43% of
the respondents are working professionals, 23% are
students and 18% are into business. Therefore the target
market would be working individuals in the age group of
18 – 25 years having surplus income, interested in good
returns on their investment and saving income tax.
NO. OF RESPONDENTS WHO HAVE LIFE INSURANCE
POLICY IN THEIR NAME
TABLE 4:
Person who have life insurance policy
Yes 103No 167
CHART 4:
ANALYSIS :
59
This graph shows that out of total 270 respondents only
103 or 38% respondents have life insurance policy in their
name. Rest all don’t have a single policy in their name. So
there is a very big scope for life insurance companies to
cover these people. So in future business of life insurace
will gro further.
MARKET SHARE OF LIFE INSURANCE COMPANIES
TABLE 5:
LIFE INSURER NUMBER OF POLICIES
HDFC STANDARD LIFE 4
BIRLA SUN LIFE 3
AVIVA LIFE INSURANCE 6
BAJAJ ALLIANZ 7
LIC 55
TATA AIG 6
ICICI PRUDENTIAL 12
ING VYSYA 6
BHARTI AXA 2
OTHERS 2CHART 5:
60
Analysis:
In India, the largest life insurance company is Life
Insurance Corporation of India. It has been in existence in
India since 1956 and is completely owned by the
Government of India. Today the organization has grown to
2048 offices serving 18 crore policies and has a corpus of
over 340000 crore INR.
61
ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE
TABLE 6:
Premium paid (p.a.) No. of respondents
Rs. 5000 - Rs. 10000 40
Rs. 10001 - Rs. 15000 26
Rs. 15001 - Rs. 24900 18
Rs. 25000 - Rs. 50000 10
Rs. 50001 - Rs. 60000 4
Rs.60001 - Rs. 80000 2
Rs. 80001 - Rs. 100000 3
CHART 6: ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE
62
Analysis:
From the chart above we find that, 39% of the respondents
surveyed pay an annual premium less than Rs. 10001
towards life insurance. 25% of the respondents pay an
annual premium less than Rs. 15001 and 17% pay an
annual premium less than Rs. 25000. Hence we can safely
say that HDFC SLIC would be able to capture the market
better if it introduced products/plans where the minimum
premium starts at Rs. 5000 per annum.
Only 19% of the respondents pay more than Rs. 25000 as
premium and most products sold by HDFC SLIC have
Rs.12000 as the minimum annual premium amount. They
should introduce more products like Easy Life Plus and
Safe Guard where the minimum premium is Rs.6000 p.a.
and Rs. 12000 p.a. respectively. This would definitely
increase their market share as more individuals would be
able to afford the policies/plans offered.
63
POPULAR LIFE INSURANCE PLANS
TABLE 7:
Type of Plan No. of Respondents
Term Insurance Plans 105
Endowment Plans 122
Pension Plans 16
Child Plans 8
Tax Saving Plans 19CHART 7:
POPULAR LIFE INSURANCE PLANS
64
Analysis:
From the chart given above we can clearly see that 45% of
the respondents hold endowment plans and 39% of the
respondents hold term insurance plans. Endowment plans
are very popular and serve two purposes – life cover and
savings.
If the policy holder dies during the policy term the
nominee gets the death benefit that is, sum assured and
accumulated bonus. On survival the policy holder receives
the survival benefit with a bonus.
A term plan is a pure risk cover plan wherein the insured
pays a lower premium for a higher sum assured. Term
insurance is the cheapest form of insurance and helps the
policy holder insure himself for a relatively low premium.
For the returns sensitive investor term plans do not find
favor as they do not offer a return in case the individual
does not die during the policy term.
65
AWARENESS OF UNIT LINKED INSURANCE PLANS
TABLE 8:
Awareness of Unit Linked Plans No. of RespondentsYes 154No 116
CHART 8:
AWARENESS OF UNIT LINKED INSURANCE PLANS
Analysis:
From the chart given above we find that 57% of the
respondents are aware of unit linked life insurance plans
and 43% are not aware of such plans. These plans should
be promoted through advertising. The company can
advertise through television, radio, newspapers, bill boards
66
and pamphlets. This would increase awareness and arouse
curiosity in the minds of the consumer which would enable
the company to market its products more effectively.
Unit – linked plans are those where the benefits are
expressed in terms of number of units and unit price. They
can be viewed as a combination of insurance and mutual
funds. The number of units a customer would get would
depend on the unit price when they pay the premium.
When the policy matures the individual gets his fund
value. The value of his fund is calculated by multiplying
the net asset value and number of units held by them on
that day.
CONSUMER WILLINGNESS TO SPEND ON LIFE
INSURANCE PREMIUM
TABLE 9:
Willingness to spend on premium
No. of respondents Percentage
Less than Rs. 6,000 41 15%
Rs. 6,001 - Rs. 10,000 73 27%
Rs. 10,001 - Rs. 25,000 110 41%
Rs. 25,001 - Rs. 50,000 41 15%
67
Rs. 50,001 - Rs. 1,00,000 5 2%
CHART 9:
CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM
Analysis:
From the graph above, we can clearly see that 41% of the
respondents would be willing to spend between Rs. 10001
– Rs. 25000 for life insurance. 27 % would be willing to
spend between Rs. 6001 – Rs. 10000 per annum. Only
15% would be willing to spend more than Rs. 25000 per
annum as life insurance premium.
We could say that the maximum premium payable by
most consumers is less than Rs. 25000 p.a. This is further
68
reduced as most customers have already invested with
LIC, ICICI Prudential, Birla Sun Life, Bajaj Allianz etc.
HDFC SLIC is faced with a large amount of competition.
There are 18 insurance companies in India inclusive of LIC.
Hence to capture a larger part of the market the company
could introduce more reasonable plans with lesser
premium payable per annum.
CHART SHOWING IDEAL POLICY TERM
TABLE 10:
Ideal policy term No. of respondents
3 - 5 years 51
6 - 9 years 41
10 - 15 years 95
16 - 20 years 38
21 - 25 years 24
26 - 30 years 5
More than 30 years 3
69
Whole life Policy 13
CHART 10:
CHART SHOWING IDEAL POLICY TERM
Analysis:
From the chart given above it can be seen that 35% of the
respondents prefer a policy term of 10 – 15 years, 19%
prefer a term of 3 – 5 years and 15% prefer a term of 6 – 9
years. This means that HDFC SLIC could introduce more
plans wherein the premium paying term is less than 15
years.
70
The outlook of insurance as a product should be changed
from something which you pay for your whole life (whole
life policy) and do not receive any benefit (the nominee
only receives the benefit in case of your death) to an
extremely useful investment opportunity with the
prospects of good returns on savings, tax saving
opportunities as well as providing for every milestone in
your life like marriage, education, children and retirement.
FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE INSURANCE
TABLE 11:
Parameter No. of RespondentsAdvertisements 35High returns 84Advice from friends 46Family responsibilities 89Others 16
CHART 11:
71
Analysis:
From the chart above it can be seen that 33% of the
respondents purchase life insurance to secure their
families, 33% take life insurance to get high returns, 17%
purchase insurance on the advice of their friends and 13%
purchase insurance because of the influence of
advertisements.
The main purpose of insurance is to cover the financial or
economic loss that occurs to the family in case of the
uncertain death of the policy holder. But now a days this
trend is changing. Along with protection (life cover), a
savings element is being added to insurance.
72
With the introduction of the new unit linked plans in the
market, policy holders get the option to choose where
their money will be invested. They can invest their money
in the equity market, debt market, money market or a
combination of these. The debt and money markets
usually have low risk attached whereas the equity market
is a high risk investment option.
PREFERRED COMPANY TYPE OF THE RESPONDENTS
TABLE 12:
Type of CompanyNo. of
Respondents PercentageGovernment Owned Company 127 47%Public Limited Company 62 23%
Private Company 49 18%
Foreign Company 32 12%
CHART 12:PREFERRED COMPANY TYPE OF THE RESPONDENTS
73
Analysis:
From the graph above we find that 60% of the
respondents preferred to purchase insurance from a
government owned company, 29% of the respondents
preferred to purchase insurance from a public limited
company and only 4% of the respondents preferred a
foreign based company. Heavy advertising through
television, newspapers, magazines and radio is required.
MINIMUM EXPECTED RETURN ON INVESTMENT
TABLE 13:
Expected Returns No. of respondents
74
Less than 5% 5
5% - 10% 39
11% - 15% 46
16% - 20% 49
21% - 25% 46
26% - 30% 27
31% - 40% 22
41% - 50% 14
More than 50% 22
CHART 13:
Analysis:
From the chart above it can clearly been seen that 18% of
the respondents would like 16 – 20% returns, 17% would
75
like returns between 21 – 25% and 17% would like returns
of 11 – 15% on their investments. Therefore the average
return on investment should be at least 16 – 20 %.
Most consumers are willing to adapt to some amount of
risk but still want some guaranteed returns. Therefore the
bulk of investment should be made in the balanced fund
with 50% debt and 50% equity. The returns on the Secure
Fund are guaranteed as these involve investment is
government securities and the debt market. But the
returns on these instruments are low (8 – 10%). If the
company invests in shares, returns are higher (39%) but
correspondingly risk borne by the policy holder is also
higher. Therefore a good combination of the two
instruments is often a wise choice.
76
CHAPTER VI CONCLUSION
77
CONCLUSION
HDFC standard life insurance is first life insurance Company in
India. It has businesses spread out across the globe. It was
registered on 23rd December 2000. It currently ranks number 4
amongst the insurers in India.
The company faces a large amount of competition. To sustain
itself it must promote its products through advertising and
improve its selling techniques. Consumers must be aware of the
new plans available at HDFC SLIC. The medium of advertising
used could be television since most of its competitors use this
tool to promote their products. The company must be promoted
as an Indian company since consumers seem to have more trust
in investing in Indian firms.
The unit linked concept must be specifically promoted. The
general perception of life insurance has to change in India before
78
progress is made in this field. People should not be afraid to
invest money in insurance and must use it as an effective tool for
tax planning and long term savings.
HDFC SLIC could tap the rural markets with cheaper products and
smaller policy terms. There are individuals who are willing to pay
small amounts as premium but the plans do not accept premiums
below a certain amount. It was usually found that a large number
of males were insured compared to females. Individuals below
the age of 30 (mostly male) were interested in investment plans.
This was a general conclusion drawn during prospecting clients.
CHAPTER VII
SUGGESTION
79
Finding and Suggestion
According the survey only 42% people are insured in Alwar
so reaming other part is potential for insurance sector.
Among that 42% people who having insurance, they have
insurance 40% for self 28%for spouse 21% for children and
18% for their parents and 11% for all family member, also its
very help full for insurance sector so they should take
necessary step for capture this potential.
Only 42% people having insurance in Alwar in that 42%
there are 82 % people are under insured and other 18%
people are fully insured according to their income so that is
also plus point for insurance sector to capture the market.
80
81
CHAPTER VIII
QUESTIONNAIRE
82
83
84
Chapter IX
Bibliography
85
By the help of Books
Marketing Management written BY
“Phillip Kotlar” (12 edition, page No 99)
By the Help of Manuals
HDFC Report of 2008 & Internet.
By the help of Other Sources
By the head’s and the consultant of the HDFC SLIC.
By the help of Websites
1. www. IRDAIndia.org.
2. www.insure2bsecure.com
3. www.google.com
4. www. Wikkipedia.com
5. www.hdfcinsurance.com/
86
Chapter X
GLOSSARY
Accident Benefit An add-on with a life policy. It compensates a policyholder in the event of death or injury by accident.
Budget It is a tool used to monitor and control expenditures and purchases.
Cover Another word for insurance; it also refers to the amount of insurance.
Disability rider A rider that provides for additional cover in the event of disability, or dismemberment, of the policy holder due to an accident.
87
Financial planning It covers the essential elements of a person’s financial affairs and is aimed at achieving a person’s financial goals.
Hospital cash benefit rider A rider that provides cover for hospitalization.
IRDA Insurance regulatory development Authority. To ensure the equal development of in country.
Liquidity The quality of assets that can be easily and quickly converted into cash without any, or significant, loss in value.
Market value The monetary value an asset will fetch if sold in the market today.
Nominee The person(s) nominated by the policyholder to receive the policy benefits in the event of his death.
Policyholder The person who buys an insurance policy. Also referred to as the ‘insured’.
Riders Additional covers that can be added to a life policy, for a cost.
Sum assured The amount of cover taken under a life insurance policy, it is the minimum amount that will be paid on death of the policyholder during the policy term.
Terminal bonus A one-time bonus paid on maturity of a with-profit plan.
Whole-life plans Class of life insurance policies that provide cover through your lifetime.
88