EXECUTIVE SUMMARY

HDFC Standard Life insurance is the oldest life insurance company in the world.
It is the largest insurer in the UK and is the 28th largest company in the world.
In India, the company is marketing life insurance products and unit linked
investment plans. From my research at HDFC SLIC, I found that the company
has a lot of competition from other private insurers like ICICI, Aviva, Birla Sun
Life and Tata AIG. It also faces competition from LIC. To compete effectively
HDFC SLIC could launch cheaper and more reasonable products with small
premiums and short policy terms (the number of years premium is to be paid).
The ideal premium would be between Rs. 5000 Rs. 25000 and an ideal policy
term would be 10 20 years.
HDFC must advertise regularly and create brand value for its products and
services. Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use
television advertisements to promote their products. The Indian consumer has a
false perception about insurance they feel that it would not benefit them if
they do not live through the policy term. Nowadays however, most policies are
unit linked plans where a customer is benefited even if their death does not
occur during the policy term. This message should be conveyed to potential
customers so that they readily invest in insurance.
Family responsibilities and high returns are the two main reasons people invest
in insurance. Optimum returns of 16 20 % must be provided to consumers to
keep them interested in purchasing insurance.
On the whole HDFC standard life insurance is a good place to work at. Every new
recruit is provided with extensive training on unit linked funds, financial
instruments and the products of HDFC. This training enables an advisor/sales
manager to market the policies better. HDFC was ranked 13 in the Best Places to
Work survey. The company should try to create awareness about itself in India.
In the global market it is already very popular. With an improvement in the sales
techniques used, a fair bit of advertising and modifications to the existing
product portfolio, HDFC would be all set to capture the insurance market in India
as it has around the globe.

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CHAPTER 1

Introduction Of Insurance

History Of Insurance Sector

Milestones

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INTRODUCTION OF INSURANCE
Insurance

or

assurance,

device

for

indemnifying

or

guaranteeing an individual against loss. Reimbursement is made from a fund to

which many individuals exposed to the same risk have contributed certain
specified amounts, called premiums. Payment for an individual loss, divided
among many, does not fall heavily upon the actual loser. The essence of the
contract of insurance, called a policy, is mutuality. The major operations of an
insurance company are underwriting, the determination of which risks the
insurer can take on; and rate making, the decisions regarding necessary prices
for such risks. The underwriter is responsible for guarding against adverse
selection, wherein there is excessive coverage of high risk candidates in
proportion to the coverage of low risk candidates. In preventing adverse
selection, the underwriter must consider physical, psychological, and moral
hazards in relation to applicants. Physical hazards include those dangers which
surround the individual or property, jeopardizing the well-being of the insured.
The amount of the premium is determined by the operation of the law of
averages as calculated by actuaries. By investing premium payments in a wide
range of revenue-producing projects, insurance companies have become major
suppliers of capital, and they rank among the nation's largest institutional
investors.
In simple terms, insurance allows someone who suffers a
loss or accident to be compensated for the effects of their misfortune. It lets you
protect yourself against everyday risks to your health, home and financial
situation.

The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of
insurance to provide strict state control over insurance business. You can
download the act by clicking here

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Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19
January 1956, that life insurance in India was completely nationalized,
through a Government ordinance; the Life Insurance Corporation Act, 1956
effective from 1.9.1956 was enacted in the same year to, inter-alias, form
LIFE INSURANCE CORPORATION after nationalization of the 245 companies
into one entity. There were 245 insurance companies of both Indian and
foreign origin in 1956. Nationalization was accomplished by the govt.
acquisition of the management of the companies. The Life Insurance
Corporation of India was created on 1st September, 1956, as a result and
has grown to be the largest insurance company in India as of 2006.

Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian
insurance sector. The Govt. of India then introduced the Insurance
Regulatory and Development Authority Act in 1999, thereby de-regulating
the insurance sector and allowing private companies into the insurance.
Further, foreign investment was also allowed and capped at 26% holding in
the Indian insurance companies. In recent years many private players
entered in the Insurance sector of India. Companies with equal strength
competing in the Indian insurance market. Currently, in India only 2 million
people

(0.2 % of total population of 1 billion), are covered under

Mediclaim, whereas in developed nations like USA about 75 % of the total

population are covered under some insurance scheme. With more and more
private players in the sector this scenario may change at a rapid pace.

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HISTORY OF INSURANCE SECTOR

The insurance sector in India has completed all the facets of competition from
being an open competitive market to being nationalized and then getting back to
the form of a liberalized market once again. The history of the insurance sector
in India reveals that it has witnessed complete dynamism for the past two
centuries approximately.
With the establishment of the Oriental Life Insurance Company in Kolkata, the
business of Indian life insurance started in the year 1818

SOME OF THE IMPORTANT MILESTONES IN THE LIFE INSURANCE

BUSINESS IN INDIA ARE:

1912 - The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928 - The Indian Insurance Companies Act enacted to enable the government
to collect statistical information about both life and non-life insurance
businesses.
1938 - Earlier legislation consolidated and amended to by the Insurance Act
with the objective of protecting the interests of the insuring public.
1956 - 245 Indian and foreign insurers and provident societies taken over by
the central government and nationalized. LIC formed by an Act of Parliament,
viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the
Government of India.

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Chapter 2
What Is Life Insurance
Life Insurance In India
Life Insurance Market
Types Of Life Insurance Policies

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WHAT IS LIFE INSURANCE

Life Insurance is the key to good financial planning. On one hand, it safeguards
your money and on the other, ensures its growth, thus providing you with
complete financial well being. Life Insurance can be termed as an agreement
between the policy owner and the insurer, where the insurer for a consideration
agrees to pay a sum of money upon the occurrence of the insured individual's or
individuals' death or other event, such as terminal illness, critical illness or
maturity of the policy.
Life insurance plans, unlike mutual funds, are beneficial when you look at them
as a long term avenue of investment which also offers protection through life
cover. Life insurance policies are broadly categorized into 2 types; Traditional
Plans and Unit Linked Insurance Plans (ULIPs)
Traditional policies offer in-built guarantees and define maturity benefits through
variety of products such as guaranteed maturity value. The investment risk in
traditional life insurance policies is borne by life insurance companies.
Additionally, the investment decisions are regulated to a large extent by IRDA
rules and regulations, ensuring stable returns with minimal risk. Investment
income is distributed amongst the policy holders through annual bonus. These
policies are ideal for policy holders who are not market savvy and do not wish to
take investment risks.
ULIPs, on the other hand provide a combination of risk cover and investment.
More importantly they offer a flexibility to decide your risk taking profile.

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LIFE INSURANCE IN INDIA

Life Insurance is the fastest growing sector in India since 2000 as
Government allowed Private players and FDI up to 26%. Life Insurance in India
was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All
private life insurance companies at that time were taken over by LIC.
In 1993 the Government of Republic of India appointed RN Malhotra Committee
to lay down a road map for privatisation of the life insurance sector.
While the committee submitted its report in 1994, it took another six years
before the enabling legislation was passed in the year 2000, legislation
amending the Insurance Act of 1938 and legislating the Insurance Regulatory
and Development Authority Act of 2000. The same year that the newly
appointed insurance regulator - Insurance Regulatory and Development
Authority IRDA --started issuing licenses to private life insurers.

LIFE INSURANCE MARKET

The Life Insurance market in India is an underdeveloped
market that was only tapped by the state owned LIC till the entry of private
insurers. The penetration of life insurance products was 19 percent of the total
400 million of the insurable population. The state owned LIC sold insurance as a
tax instrument, not as a product giving protection. Most customers were underinsured with no flexibility or transparency in the products. With the entry of the
private insurers the rules of the game have changed.
Most customers were under- insured with no flexibility or
transparency in the products. With the entry of the private insurers the rules of
the game have changed.
The private insurers in the life insurance market have
already grabbed nearly 9 percent of the market in terms of premium income.
The new business premiums of the private players have tripled to Rs 1000 crore
Innovative products, smart marketing and aggressive distribution. That's the
triple whammy combination that has enabled fledgling private insurance
companies to sign up Indian customers faster than anyone ever expected.

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Indians, who have always seen life insurance as a tax saving device, are now
suddenly turning to the private sector and snapping up the new innovative
products on offer.
The growing popularity of the private insurers shows in
other ways. They are coining money in new niches that they have introduced.
The state owned companies still dominate segments like endowments and
money back policies. But in the annuity or pension products business, the
private insurers have already wrested over 33 percent of the market. And in the
popular unit-linked insurance schemes they have a virtual monopoly, with over
90 percent of the customers.
With an annual growth rate of 15-20% and the largest
number of life insurance policies in force, the potential of the Indian insurance
industry is huge. According to government sources, the insurance and banking
services' contribution to the country's gross domestic product (GDP) is approx
7% out of which the gross premium collection forms a significant part. The funds
available with the state-owned Life Insurance Corporation (LIC) for investments
are 8% of GDP.
The year 1999 saw a revolution in the Indian insurance
sector, as major structural changes took place with the ending of government
monopoly and the passage of the Insurance Regulatory and Development
Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing
foreign players to enter the market with some limits on direct foreign ownership.
The private insurers also seem to be scoring big in other
ways- they are persuading people to take out bigger policies. For instance, the
average size of a life insurance policy before privatization was around Rs 50,000.
That has risen to about Rs 80,000. But the private insurers are ahead in this
game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakhway bigger than the industry average.

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TYPES OF LIFE INSURANCE POLICIES:

A. ENDOWMENT POLICY :

Endowment policies cover the risk for a specified period at the end of
which the sum assured is paid back to the policyholder along with all the
bonus accumulated during the term of the policy.

It is this feature that the payment of the endowment to the policyholder

depends upon the completion of the policys term which rightly accounts
for the popularity of endowment policies.

Typically, ones responsibility for the financial protection of the family

reduces significantly once the children are grown up and independently
settled.

The focus then shifts to managing a smaller family - perhaps only oneself
and ones spouse - after retirement.

This is where the endowment - the original sum assured and the
accumulated bonus - received back come handy.

You can either use the endowment amount for buying an annuity policy to
generate a monthly pension for the whole life,

It can also be put it in any other suitable investment of your choice. This
is the major benefit of an endowment policy over a whole life one.

B. WHOLE LIFE POLICY:

A typical whole life policy runs as long as the policyholder is alive.

In other words, the risk is covered for the entire life of the policyholder,
which is why they are know as whole life policies.

The policy money and the bonus are payable only to the nominee of the
beneficiary upon the death of the policyholder.

The policyholder is not entitled to any money during his or her own
lifetime, i.e. there is no survival benefit. In this sense whole life policies
are fairly rigid and inflexible and are suitable only in a few, very specific
cases.

On the whole, whole life policies may be best considered after the age of
45 either for the purpose of leaving behind an estate for ones heirs or for

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covering the possibility of premature stoppage of pension income in the

case of relatively early death after retirement.
C. TERM LIFE POLICY :

Term life insurance policy covers risk only during the selected term period.

If the policyholder survives the term, the risk cover comes to an end.

Term life policies are primarily designed to meet the needs of those
people who are initially unable to pay the larger premium required for a
whole life or an endowment assurance policy.

No surrender, loan or paid-up values are granted under term life policies
because reserves are not accumulated.

If the premium is not paid within the grace period, the policy lapses
without acquiring any paid-up value. A lapsed policy can be revived during
the

lifetime of the life assured but before the expiry of the period of two years
from the due date of the first unpaid premium on the usual terms.

Accident and / or Disability benefits are not granted on policies under the
Term plan.

Term life policies are the cheapest form of insurance

D. MONEY-BACK POLICY :

Unlike ordinary endowment insurance plans where the survival benefits

are payable only at the end of the endowment period, money back policies
provide for periodic payments of partial survival benefits during the term
of the policy, of course so long as the policy holder is alive.

An important feature of this type of policies is that in the event of death at

any time within the policy term, the death claim comprises full sum
assured without deducting any of the survival benefit amounts, which may
have already been paid as money-back components. Similarly, the bonus
is also calculated on the full sum assured.

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E. JOINT LIFE POLICY:

Joint life policies are similar to endowment policies in as much as these

policies also offer maturity benefits to the policyholders, apart form
covering the risks as all life insurance policies.

But these are categorized separately as these cover two lives together
thus offering a unique advantage in some cases; notable, for a married
couple or for partners in a business firm.

F. GROUP INSURANCE POLICY :

Group Insurance offers life insurance protection under group policies to

various groups such as employer-employee, professionals, co-operatives,
weaker sections of society etc.

It also provides insurance coverage to people under certain approved

occupations at the lowest possible premium cost. Besides providing
insurance coverage.

It also offers group schemes to employers, which provide funding of

gratuity and pension liabilities of the employers

H. PENSION PLAN OR ANNUITIES:

A pension plan or an annuity is an investment that is made either in a

single lump sum payment or through installments paid over a certain
number of years, in return for a specific sum that is received every year,
every half-year or every month, either for life or for a fixed number of
years.

Annuities differ from all the other forms of life insurance in that an annuity
does not provide any life insurance cover but, instead, offers a guaranteed
income either for life or a certain period.

Typically annuities are bought to generate income during one's retired life,
which is why they are also called pension plans. By buying an annuity or a
pension plan the annuitant receives guaranteed income throughout his
life.

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A person also receives lump sum benefits for the annuitant's estate in
addition to the payments during the annuitant's lifetime.

Pension plans are perfect investment instrument for a person who after
retiring from service has received a large sum as superannuation benefit.

One can invest the proceeds in a pension plan as it is safest way of

secured income for the rest of his life.

One can pay for a pension plan either through an annuity or through
installments that are annual in most cases.

I. UNIT LINKED INSURANCE PLAN:

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
number of outstanding units.

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Chapter 3
COMPANY PROFILE
HDFC Standard Life Insurance
HDFC Bank
Standard Life
Associate Companies Of HDFC
Standard Life Insurance
Bank Assurance Partners
Companys Features

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COMPANY PROFILE
HDFC STANDARD LIFE INSURANCE

INTRODUCTION

HDFC Standard Life first came together for a possible joint venture, to
enter the Life Insurance market, in January 1995

In October 1995 the companies signed a 3 year joint venture agreement.

It is a joint venture between Housing Development Finance Corporation

Limited (HDFC), Indias leading housing finance institution and Standard
Life ,the leading provider of financial services in United Kingdom

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

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.

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.

The company was then incorporated on 14th August 2000 under the name
of HDFC Standard Life Insurance Company Limited.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while
Standard Life owns 18.6%.

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In India, the company is marketing life insurance products and unit linked
Investment plans.

HDFC operates through almost 450 locations throughout the country with
its Corporate head quarters in Mumbai, India

HDFC Standard Life, one of Indias leading private life insurance

companies, has revamped its corporate website
((www.hdfcinsurance.com) in line with its communication philosophy.

HDFC BANK

HDFC Limited, Indias premier housing finance institution has assisted more
than 3.3 million families own a home, since its inception in 1977 across 2400
cities and towns through its network of over 250 offices. It has international
offices in Dubai, London and Singapore with service associates in Saudi Arabia,
Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India.
As of December 2008, the total asset size has crossed more than Rs. 95,000
crores including the mortgage loan assets of more than Rs. 82,800 crores. The
corporation has a deposit base of Rs. 17,551 crores, earning the trust of more
than 9, 00,000 depositors. Customer Service and satisfaction has been the
mainstay of the organization. HDFC has set benchmarks for the Indian housing
finance industry. Recognition for the service to the sector has come from several
national and international entities including the World Bank that has lauded
HDFC as a model housing finance company for the developing countries. HDFC
has undertaken a lot of consultancies abroad assisting different countries
including Egypt, Maldives, and Bangladesh in the setting up of housing finance
companies

SNAPSHOT:

Incorporated in 1977 as the first specialized Mortgage Company in India.

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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%.
Intel net Global (Business Process Outsourcing) HDFC holds 50%.
HDFC Chubb General Insurance Company HDFC holds 74%.

STANDARD LIFE

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

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years running. The '5 Star' accolade has also been awarded to Standard Life
Investments for the last 10 years, and to Standard Life Bank since its inception
in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at
the Mortgage Magazine Awards in 2006.

SNAPSHOT

Founded in 1875, company supporting generation for last 179 years.

Currently over 5 million Policy holders benefiting from the services

offered. & Europes largest mutual life insurer.

ASSOCIATE COMPANIES OF HDFC STANDARD LIFE INSURANCE

HDFC LIMITED

HDFC BANK

HDFC MUTUAL FUNDS

HDFC SALES

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Other Companies:

HDFC Trustee Company Ltd.

GRUH Finance Ltd.

HDFC Developers Ltd.

HDFC Property Ventures Ltd.

HDFC Ventures Trustee Company Ltd.

HDFC Investments Ltd.

HDFC Holdings Ltd.

Credit Information Bureau (India) Ltd

HDFC Securities

BANK ASSURANCE PARTNERS

It is partnership between a bank and an insurance company whereby the
insurance company uses the bank sales channel in order to sell insurance
products. In case of HDFC standard life insurance the following are the
Bancassurance partners:

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COMPANYS FEATURES
Strong promoter :
HDFC Standard Life is a strong, financially secure business supported by
two strong and secure promoters HDFC Ltd and Standard Life. HDFC Ltds
excellent brand strength emerges from its unrelenting focus on corporate
governance, high standards of ethics and clarity of vision. Standard Life is a
strong, financially secure business and a market leader in the UK Life &
Pensions sector.
Preferred & trusted brand:
It has managed to set a new standard in the Indian life insurance
communication space. We were the first private life insurer to break the ice
using the idea of self-respect instead of death to convey our brand
proposition

(Sar Utha Ke Jiyo). Today, we are one of the few brands that

customers recognize, like and prefer to do business. Moreover, our brand

thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.
Investment policy:
It follows a conservative investment management philosophy to ensure that
our customers money is looked after well. The investment policies and
actions are regularly monitored by a formal Investment Committee
comprising non-executive directors and the Principal Officer & Executive
Director. As a life insurance company, we understand that customers have
invested their savings with us for the long term, with specific objectives in
mind. Thus, our investment focus is based on the primary objective of
protecting and generating good, consistent, and stable investment returns
to match the investors long-term objective and return expectations,
irrespective of the market condition.
Need based selling approach:
Despite the criticality of life insurance, sales in the industry have been
characterized by over reliance on tax benefits and limited advice-based

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selling. Our eight-step structured sales process Disha however, helps

customers understand their latent needs at the first instance itself
without focusing on product features or tax benefits. Need-based selling
process, 'Disha', the first of its kinds in the industry, looks at the whole
financial picture. Customers see a plan not piecemeal product selling.
Risk control framework:
HDFC Standard Life has fully implemented a risk control framework to
ensure that all types of risks (not just financial) are identified and
measured. These are regularly reported to the board and this ensures that
the company management and board members are fully aware of any risks
and the actions taken to ensure they are mitigated.
Focus on training:
Training is an integral part of our business strategy. Almost all employees
have undergone training to enhance their technical skills or the softer
behavioral skills to be able to deliver the service standards that our
company has set for itself. Besides the mandatory training that Financial
Consultants have to undergo prior to being licensed, we have developed
and implemented various training modules covering various aspects
including product knowledge, selling skills, objection handling skills and so
on.
Focus on long term value:
HDFC Standard Life do not focus in the business of ramping up the top line
only, but to create maximization of stakeholder's value. Today, we are
extremely satisfied with the base that we have created for the long-term
success of this company.
Transparent dealing:
One of the few companies whose product details, pricing, clauses are clearly
communicated to help customers take the right decision.

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Strict compliance with rules & regulation:

They have initiated and implemented many new processes, some of which
were found useful by the IRDA and later made mandatory for the entire
industry. The agents who successfully completed this training only, were
authorized by the company to sell ULIPs. This has now been made
compulsory by IRDA for all insurance companies under the new Unit Linked
Guidelines.
Diversified product profile:
HDFC Standard Lifes wide and diversified product portfolio help individuals
meet their various needs, be it:

Protection: Need for a sound income protection in case of your

unfortunate demise

Investment: Need to ensure long-term real growth of your money

Savings: Save for the milestones and protect your savings too

Pension: Need to save for a comfortable life post retirement

Health: Cover for health related exigencies.

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Chapter 4
MARKET STUDY OF HDFC STANDARD
LIFE INSURANCE
SWOT Analysis
Marketing Objectives Of HDFC
Standard Life
Cost Analysis
Sales Analysis

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MARKET STUDY OF HDFC STANDARD LIFE INSURANCE

SWOT ANALYSIS
STRENGTH

Domestic image of HDFC supported by Standard Lifes international image

is strength of the company.

Strong and well spread network of qualified intermediaries and sales

person.

Strong capital and reserve base.

The company provides customer service of the highest order .

Huge basket of product range which are suitable to all age and income
groups.

Large pool of technically skilled manpower with in depth knowledge and

under standing of the market.

The company also provides innovative products to cater to different needs

of different customers.

WEAKNESS

Heavy management expenses and administrative costs.

Low customer confidence on the private players.

Vertical hierarchical reporting structure with many designations and

cadres leading to power politics at all levels without any exception.

Poor retention percentage

OPPORTUNITIES

Insurable population: According to IRD A only 10% of the population is

insured which represents around 30% of the insurable population. This
suggests more than 300m people, with the potential to buy insurance,
remain uninsured.

There will be in flow of managerial and financial expertise from the world
s leading insurance markets.

Further the bur den of educating consumers will also be shared among
many players. International companies will help in building world class
expertise in local market by introducing the best global practices

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International companies will help in building world class expertise in local

market by introducing the best global practices.

THREATS

Other private insurance companies also targeting for the same uninsured
population.

Big public sector insurance companies like Life Insurance Corporation

(L IC) of India, National Insurance Company Limited, Oriental Insurance
Limited, New India Assurance Company Limited and United India
Insurance Company Limited. People trust and go to them more.

Poaching of customer base by other companies.

Most people dont understand the need or are not willing to take insurance
policies in general.

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MARKETING OBJECTIVES OF HDFC STANDARD LIFE

Marketing deals with product. A product can be a good, service or an idea. Here
as HDFC STANDARD LIFE is an insurance company so the product here is
SERVICE.
The following are the marketing objectives of HDFC STANDARD LIFE

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

stressing on the quality of proposals

Quick roll out of Products

Efficiency of Operations

Meet Social & Rural sector obligations

Increase/improvement in all the key growth parameters

KEY GROWTH PARAMETERS:

Number of Financial Consultants

Number of Policies

Gross Premium

Productivity - policies per month per consultant

Physical points of presence

VISION STATEMENT:
'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 of all

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COST ANALYSIS

REVENUE OF PAST 3 YEARS OF HDFC STANDARD LIFE

HDFC Standard Life is a coalition company between HDFC and Standard

Life Plc.

HDFC Standard Life insurances revenue has come down from

Rs 33.07 crore in the financial year 2007-08 to Rs 27.77 crore in financial
year 2008-09

The company produced sum premium revenue of Rs.5, 564.69 crore as

opposed to Rs.4,858.56 crore last year, posting a y-on-y increase of
15%.its revitalization premium also witnessed an increase of 34% for the
economic year as opposed to Rs.2,173.19 crore in the last year.

The companys EPI in regards to retail business grew by 5%.

HDFC Standard Life monitors its latest business premium due to EPI,
which is estimated by giving only a 10% value to a sole premium
strategy.

The economic downturn has hit the insurance industry. HDFC Standard
Life, one of the largest private insurers in the country, has seen mark-to
market losses of Rs 1,800 crore in their revenue account.

PARTICULARS

MARCH 2006

MARCH 2007 MARCH 2008

REVENUE

RS 27.77

RS. 33.07

RS. 25.75

CRORE

CRORE

CRORE

Due to the economic downturn which had hit the insurance industry.
HDFC Standard Life, one of the largest private insurers in the country, has
seen mark-to-market losses of Rs 1,800 crore in their revenue account during
the year.

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SALES ANALYSIS
The HDFC STANDARD LIFE generated Total Premium
Income of Rs.7005.10 crores in FY2009-10 registering a year-on-year growth of
26%. The growth was primarily driven by the companys structured sales
processes based on customer needs and their assessments, wide range of
product portfolio and diverse distribution network.
The financial year 2009-10 was a defining year with the
unfolding of several unexpected events - sharp correction in financial markets
and a spread of recessionary trends. These events also had an impact on the
Indian life insurance industry. HDFCs new policies issued grew by 26% over the
last year. However, given the uncertainty in the overall scenario, customers
have reduced their annual premium commitment on new policies. At the same
time, existing policies continued to be in force reflected in our renewal premium,
which posted a healthy growth of 34%

PARTICULARS

NET SALES

MARCH

MARCH

MARCH

MARCH

MARCH

MARCH

2004

2005

2006

2007

2008

2009

10.81

25.43

36.97

39.95

79

30689.30

34006.04

42655.38

58425.12

81763.46

GROWTH (%)
SALES

The Sales of HDFC standard life is increasing year by year due to the companys
structured sales processes based on customer needs and their assessments,
wide range of product portfolio and diverse distribution network.

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Chapter 5

Product Portfolio

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PRODUCT PORTFOLIO
PROTECTION PLAN
Protection Plans help you shield your family from
uncertainties in life due to financial losses in terms of loss of income that may
dawn upon them incase of your untimely demise or critical illness. Securing the
future of ones family is one of the most important goals of life. Protection Plans
go a long way in ensuring your familys financial independence in the event of
your unfortunate demise or critical illness. They are all the more important if you
are the chief wage earner in your family.
For instance, consider the example of Amit who is a healthy
25 year old guy with a income of Rs. 1,00,000/- per annum. Let's assume his
income increases at a rate of 10% per annum, while the inflation rate is around
4%; this is how his income chart will look like, until he retires at the age of 60
years. At 50 years of age, Amits real income would have been around Rs.
10,00,000/- per annum. However, in case of Amits unfortunate demise at an
early age of 42 years, the loss of income to his family would be nearly Rs.
5,00,000/- per annum.
Features of protection plan

Safeguard your familys financial independence

Security against uncertainties

Financial cushion in case of an eventuality

It is better explained below with help of graph

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However, with a Protection Plan, a mere sum of Rs. 2,280/- annually (exclusive
of service tax & educational cess) can help Amit provide a financial cushion of up
to Rs. 10, 00,000/- for his family over a period of 25 years.

Types of protection plan:

CHILDRENS PLANS:
Childrens Plans helps you save so that you can fulfill your
childs dreams and aspirations. These plans go a long way in securing your
childs future by financing the key milestones in their lives even if you are no
longer around to oversee them. As a parent, you wish to provide your child with
the very best that life offers, the best possible education, marriage and life style.
Most of these goals have a price tag attached and unless you
plan your finances carefully, you may not be able to provide the required
economic support to your child when you need it the most.
For example, with the high and rising costs of education, if you are not
financially prepared, your child may miss an opportunity of a lifetime.
Today, a 2-year MBA course at a premiere management institute would cost you
nearly Rs. 3,00,000/- At a assumed 6% rate of inflation per annum, 20 years
later, you would need almost Rs. 9,07,680/- to finance your child's MBA degree.
An illustration of how education expenses could rise with passing time due to
inflation:

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Childrens Plans help you save steadily over the long term
so that you can secure your childs future needs, be it higher education,
marriage or anything else. A small sum invested by you regularly can help you
build a decent corpus over a period of time and go a long way in providing your
child a secured financial future along with

Types of Childrens Plans:-

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RETIREMENT PLANS:
Retirement Plans provide you with financial security so that
when your professional income starts to ebb, you can still live with pride without
compromising on your living standards. By providing you a tool to accumulate
and invest your savings, these plans give you a lump sum on retirement, which
is then used to get regular income through an annuity plan. Given the high cost
of living and rising inflation, employer pensions alone are not sufficient. Pension
planning has therefore become critical today.
Indias average life expectancy is slated to increase to over
75years by 2050 from the present level of close to 65 years. Life spans have
been increasing due to better health and sanitation conditions in the country.
However, the average number of years of employment has not been rising
commensurately. The result is an increase in the number of post-retirement
years. Accordingly, it has become necessary to ensure regular income for life
after retirement, so that you can live with pride and enjoy your twilight years.

Priorities at different stages of life:-

However, skyrocketing costs can throw even a well-laid plan off balance.
With costs rising every day, you can just imagine how high they will be
when you are ready to hang up your boots. So, what should you do to
counter this? Its time to plan your retirement and that too sooner than
later.

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The above illustration shows how with each passing year your annual savings
requirement would increase. For instance, if you are 30 years old and plan to
retire at 60, then, with a current annual expenditure of Rs. 3,00,000/- , you
would need a corpus in excess of Rs. 2,00,00,000/- to maintain your living
standards, assuming you live till 85 years and the inflation rate is 4%. To build
this retirement corpus, you need to invest Rs 3,60,000/- per annum in a
retirement plan that offers 8% returns per annum. In case you delay planning
your retirement by 5 years then the investment amount would increase to Rs
6,90,000/- per annum.

Types of Retirement Plans:-

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SAVINGS & INVESTMENT PLANS:

You have always given your family the very best. And there
is no reason why they shouldnt get the very best in the future too. As a
judicious family man, your priority is to secure the well-being of those who
depend on you. Not just for today, but also in the long term. More importantly,
you have to ensure that your familys future expenses are taken care, even if
something unfortunate were to happen to you.
A big factor that you need to consider while building your
wealth is inflation. It has a dual impact on your hard-earned savings. Inflation
not only erodes your current purchasing power but also magnifies your monetary
requirements for the future. Sample this: An 35 Year individual needs to invest
Rs. 36,000/- per year with 8% returns to build a corpus of Rs. 10,00,000/- by
the age of 50 Years.

However, Rs. 10, 00,000/- after 15 years would be worth roughly around half of
what it is today once adjusted for inflation at the rate of 4%. Therefore, an
individual will need to save nearer to Rs 50,000/- annually to reach your
targeted savings at the age of 50 Years, if you consider inflation.
The

Savings

&

Investment

Plans

provides

you

the

assurance of lump sum funds for your and your familys future expenses. While
providing an excellent savings tool for your short term and long term financial
goals, these plans also assure your family a certain sum by way of an insurance

35 | P a g e

cover. With HDFC Standard Lifes range of Saving & Investment Plans, you can
therefore ensure that your family always remains financially independent, even if
you are not around.

Types of Savings & Investment Plans:

HEALTH PLANS:
Health plans give you the financial security to meet health
related contingencies. Due to changing lifestyles, health issues have acquired
completely new dimension overtime, becoming more complex in nature. It
becomes imperative then to have a health plan in place, which will ensure that
no matter how critical your illness is, it does not impact your financial
independence.
In the race to excel in our professional lives and provide the
best for our loved ones, we sometimes neglect the most important asset that we

36 | P a g e

have our health. With increasing levels of stress, negligible physical activity
and a deteriorating environment due to rapid urbanization, our vulnerability to
diseases has increased at an alarming rate.

Source: National Commission on Macroeconomics and Health Report.

As it can be seen in the chart given, lifestyle diseases are
set to spread at disturbing rates. The result

increased expenditure. In many

cases, people need to borrow money or sell assets to cover their medical
expenses. All it takes is a suitable plan to help you overcome the financial woes
related to your health by paying marginal amounts as premiums. For example, if
you are 30 years old, then a mere sum of approximately Rs 3500* annually
(exclusive of taxes) can provide you a health insurance plan of Rs 5 lakh over a
period of 20 years, and a worry-free future for you and your family.

Types of health plans:-

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Chapter 6
FIVE CS
Company
Customer
Competitors
Collaborators
Climate (Context)

38 | P a g e

FIVE CS
COMPANY
Name of the company

HDFC STANDARD LIFE

INSURANCE

Industry

Insurance

Market share

3.88%

Tag line

Sar utha ke jiyo

Founded

14 August 2000

Founder

Mr.Hasmukhbhai parekh

Key people

Mr. Deepak S Parekh (Chairman)

Mr. Deepak M Satwalekar (M.D
and CEO)

Competitors

LIC
ICICI PRUD LIFE INSURANCE
Bajaj Allianz
TATA AIG

Partners

HDFC, HDFC BANK INDIA LTD,

Union Bank of India, Indian Bank,
Bank of Baroda, Saraswat Bank,
Bajaj Capital

Products

individual
Group
Other

Head quarters

Mumbai, India

Branches

450 branches, almost 730

locations
throughout the country

GROSS PREMIUM INCOME

Rs. 5,565 Crores

OF
HDFC
NEW BUSINESS PREMIUM
INCOME

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Rs. 2,679.61 Crores

LIVES COVERED OVER YEAR

9,59,000 & 1.25 lakh

200809 & policies issued

Key strengths

Financial Expertise
Range of Solutions
Strong Ethical Values

Vision statement

The most obvious choice for all

CUSTOMER

Any person who is interested in investing his/her money for

protecting his/her future from an uncertain event is the customer of insurance
company.

Customer Profile:
In HDFC Standard Life customer profiles are maintained
through customer data base. The customer is eligible for the policy according to
his age and his /her investment option. Minimum age is18 and maximum age is
65 years are to be considered.

Customer Segmentation:
Here segmenting can be done according to the age and Life
stages of the customer

Customer Buying Patterns:

Customers buy according to their convince through
online, or through the sales person. If the customer is well educated and he can
manage the things through online he will register Himself through online.

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COMPETITORS

There are total 22 insurance companies in India out of

which LIC is the only public Ltd Company & is also very good competitor to all
the insurance company.
The top ten companies are LIC, ICICI Prudential Life
Insurance Co Ltd, HDFC Standard Life Insurance Co Ltd, Bajaj Allianz Life
Insurance Co Ltd, SBI Life Insurance Co Ltd, Reliance Life Insurance Co Ltd,
Birla Sun Life Insurance Co Ltd, Max New York Life Insurance Co Ltd, Kotak
Mahindra Old Mutual Life Insurance Ltd, and Aviva Life Insurance Company India
Ltd.HDFC STANDARD LIFE faces a very stiff competitior with its other
players like LIC, ICICI, etc.
Some of the competitive features are as follows

Large amount of competition (22 players in the market)

Other brands are well advertised and have higher recall value

LIC is considered a safer option

Face competition from banks and mutual funds

High premium policies are difficult to market

Incorrect perception about private insurance company

Short term plans are available only at large premium

Lack of awareness about the unit linked funds in the market

The market share of HDFC is 3.88% & LIC is 64% as LIC is a public company it
is the major competitor for all the other 21 insurance company in India. Most of
the market concentration is occupied by LIC.

COLLABORATORS

Joint Collaboration of HDFC and standard life

Collaboration of HDFC with Manipal Education

HDFC Life insurance has evolved over the period with its start of 10
crores as the most massive mortgage institution of finance. With thrust
for standard life, HDFC is the joint collaboration of HDFC and Standard

41 | P a g e

Life, which are protagonists in this marketing platform from commendable

years of enriching experience.

Moreover to add to its reputation, HDFC Life Insurance was the first
company to attain the license to work in the insurance arena and the rest
is history. It has operation from more than 52 locations.

Its just not about the renowned name of the company but more of its
customer based applications and services that make it bond with the best
HDFC Standard Life, one of Indias leading private life insurance
companies, in collaboration with Manipal Education.

Indias premier Academic and education services provider, has

announced the launch a three month Certificate Programme in Insurance
and Management.

CLIMATE (context)

The climatic condition refers to basically the overall study of environment both
internal & external affecting it.
Some of the main problems in marketing the policies are:

Large amount of competition (22 players in the market)

Other brands are well advertised and have higher recall value

LIC is considered a safer option

Face competition from banks and mutual funds

High premium policies are difficult to market

Incorrect perception about insurance

Interested prospects might have a lack of time and postpone

investments

42 | P a g e

Customers get defensive if you cold call

Chapter 7

Experience & Learnings

Job Profile
Observation
Conclusion
Recommendations

43 | P a g e

EXPERIENCE & LEARNINGS

I was associated with HDFC Standard life Insurance as a
summer trainee. My job profile was of a financial consultant.
I was required to analyze customers financial needs along
with providing customized financial solutions to each customer individually. As a
Financial Consultant, I was being into conducting reviews on a regular basis to
keep customers on track record.
A financial consultant, according to IRDA (Insurance
Regulatory And Development Authority), is one who acts on the behalf of a
particular insurance company and who is remunerated by way of commission s
on the premium paid under policies procured through his efforts. He is the main
component of the distribution channel for the insurance business as a financial
consultant.
Job profile:

Contact prospects for life insurance, study their needs and persuade them
to buy.

Complete all related formalities, including filling up proposal for ms,

collecting premium, arranging medical examination, collecting proofs of
age and income, reports and other information required by the
underwriter.

Also I was required to decide upon a particular target audience to bring in

more financial consultants for the company

Eligibility criteria for becoming a financial consultant:

Minimum Eligibility Criteria (Any 3/5 Criteria required, first criteria being
mandatory)

Age : 20 and Above

Married.

Education: Graduate or higher.

Has spent > 3 years in the city of current residence.

Income > 3 Lakh per annum.

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Pre-requisites required to become a Financial Consultant

Should undergo IRDA Training for 50 hrs.

Should pass the pre-recruitment exam conducted by Insurance Institute

of India.
Licensing Process:

Registration

IRDA Training

IRDA Examination

Step 1 Registration:

Documentation Required for Acquiring a License

Forms

Agency Application form

Form VA

Exam Form

Agreement Copy ( all pages to be signed by the FC )

Know Your Customer ( KYC ) Addendum

Supporting Personal Documents required

9 Passport size photographs

Age Proof

Proof of Education

Proof of Identity

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Proof of Residence

PAN Card or PAN Application

Fee : Rs. 925 /- ( Off Line )

Fee : Rs. 775 /- ( On Line )

Step 2 IRDA Training:

All Candidates have to undergo and complete 50 hours of IRDA Training.
Types of Training:

Off Line (Class Room) Training

On Line Training

IRDA Refresher Classes are conducted for the FC before the IRDA Exam.

Step 3 IRDA Examination:

Pre Recruitment Examination can be done by 2 Modes,

On line

Off line [Exams are conducted by Insurance Institute of India (III)].

I had undergone offline training which was 7 days compulsory training

programme.
It was great learning experience in training programme as immense knowledge
about different insurance products available in the market was provided to us.
After the training programme IRDA exam is conducted then the task of targeting
the right person to be the financial consultant was assigned to me.

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The following is the market analysis with respect to the assigned job:
Target given: - To bring in minimum 3 prospective person who would become
companys financial consultant in one month
Objective: - to find out prospective person who would be willing to work as a
part time with HDFC Standard Life Insurance as financial consultant
Research methodology:

Telephonic interview

Personal interview

Data base collection:Since there was no client database ,data was collected through personally
visiting colleges, schools, classes & nearby residential areas
Target audience:Age: 20& above
Gender: - male & female
Occupation:

Housewife

Working person

Graduate

Any professional expert who wish to earn an extra income

47 | P a g e

Target area: - KANDIVALI TO VIRAR

Location

Schools/Colleges/Classes

Residential

Visited

Areas
Visited

Kandivali
vasai

Patel Nagar

St. Gonsalo Garcia College

Vasai (West)

Vatak College,

MG Road ,Nr.

A_1 T.Y B.Com Classes

Bus Stop

Topper Classes
Vasai Village

All the above mentioned areas were personally visited by me

Number of people approached: - 70
Number of people who agreed to become consultant: - 15
Number of people who became financial consultant: - 6
Finally, the project was concluded by me when people
became the financial consultant & thus expanding their scope of business

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OBSERVATION
The following are the observation which I found from my market study &
personal experience with HDFC Standard Life Insurance

A clear idea about how the market functions was understood during
my study

Very high level of competition exists in the market where LIC holds a
major market share

LIC is still considered a safer option inspite of many private players

in the market

Promotion done by the company is creating a lot of awareness about

the company giving it a brand recognition

In case of pricing customers are satisfied

People are not aware about different product portfolio available with
the company

No proper management in the organization & timely refund of the

policy given

Payment of commission takes long duration due to which other

process

i.e. licensing, conducting of IRDA exam gets delayed

Lots of internal conflicts within the employees

Low customer retention

Delay in licensing procedure for becoming a financial consultant

A lot of cartel formed within the employees themselves

Different opinion of customers for quality service provided by the

company

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CONCLUSION
Insurance was considered as unsought good which
require hard core selling, but in changing trend in income and people
becoming financially literate, the demand for insurance is increasing day
by day. Proper after sale service can help the advisors to generate more
business. Gradually people are realizing the fact that insurance is not a
necessary evil but means to attain worry free life.
HDFC Standard Life Insurance is a major private
player in the market. Inspite of LIC capturing a major market share HDFC
Standard Life has been able to maintain its position in the market. Its
major selling product is ULIP Plans which has created is strong market
position. A very good training programme is conducted explaining every
aspect of the products giving the insights of how actually products are
sold in the market. It also provides a good business opportunity to the
unemployed section in the society. The publicity done by the company
has a very good impact on the people. The company is committed to its
values & culture but lacks somewhere creating some sort of negative
image due to certain areas of concern being left unfocused.
However, the company has a wide scope of becoming
a successful & attaining top most position in the insurance market
because of the dedicated of the superiors & their support for the
subordinates

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RECOMMENDATIONS
The following are some of recommendation as per my market study &
personal experience with the company:

Create more awareness about the insights of the product as people

are aware only about the basic types of the product.

A strict control among the subordinates needs to maintained

Proper vigilance & obedience needs to be developed within the

employees for the given targets

Stringent action needs to taken against the employee for any delay
in the payment of funds to the customer.

Since people are just satisfied with the pricing strategy , more
schemes needs to be introduced keeping in mind the target
audience in India have low dispensable income

Promote more in colleges rather than website promotion as

personally promoting in colleges creates a greater impact amongst
the youth to motivate them to be a part of the company

More focus on after sales service would retain your customer as

human behavior cannot be predicted. So, as to hold on to your
customer treat them as king because in marketing your product
customer is the king

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BIBLIOGRAPHY
Books:

Life insurance (insurance institute of India

The New Life Insurance Investment Advisor (By Ben G Baldwin)

Web resource:

www.business-standard.com

www.banknet.com

www.economywatch.com

www. hdfcinsurance.com

www.icrmindia.com

www.irdaindia.com

www.netmba.com

www.researchconnect.com

www.researchandmarkets.com

www.wisegeek.com

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