A1 ANALYSIS OF INDIAN INSURANCE COMPANY

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SUMMER TRAINING REPORTON

An analysis of Indian Insurance industrywith special reference to HDFC STANDARD

Life Insurance Company.

GURU NANAK DEV UNIVERSITY

AMRITSAR

SUBMITTED TO : SUBMITTED BY:

Mr. Abhishek Mahajan Jatin Bhargav

(S.D.M) MBA 3RD SEM.

HDFC SLIC 890817


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TABLE OF CONTENTS

I. AcknowledgementII. Abstract

Chapter 1: Introduction1.1 Objectives of the project1.2 Limitations of the project1.3 Scope of the study

Chapter 2: Introduction to insurance industry2.1 Insurance industry in India2.2 Evolution of Insurance in India

2.3 Insurance Regulatory Development Authority2.4 Capital Requirements and Foreign Participation

Chapter 3: HDFC STANDARD Life Insurance Co. Ltd.3.1 Management Team3.2 Types of Plan3.3 Michael Porter model

Chapter 4: Comparative study4.1 Comparison of various companys products4.2 Market share of various companies

4.3 SWOT Analysis

Chapter 5: Research Methodology

Chapter6: Micro Analysis


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6.1 Finding, analysis and Interpretation

Chapter7: Macro analysis

7.1 Conclusion7.2 Recommendation

Bibliography Annexure

ACKNOWLEDGEMENT

There is always a sense of gratitude which one express to other for the helpful so needyservices they render during all phases of life. I would like to express my gratitudetowards all those who have been helpful to me in getting this mighty task of training to a

successful end.

First of all, I consider it a pleasant duty to express my heart felt appreciation, gratitudeand indebtedness to Mrs. Kaveri Sehgal(Branch Trainer) for his keen interest,invaluable pain taking & excellent guidance, patience, endurance, encouragement &thoughtful advice throughout the project work duration at HDFC SL INDIA.

I am also thankful to Prof. Shivali Dingra without whose keen interest this projectwould not have been in existence.

I would also like to be thankful to Mr. Abhishek Mahajan (SDM) who has given methe right way to prepare my project report.

I would take this opportunity to thank all my family members for their helps &suggestions during the course of project work. I am also thankful to all my friends whogave me constant & continuous inspiration to complete this project.


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(Jatin Bhargav)

ABSTRACT

onopoly of LIC has been broken to make Indian Insurance to change its face

and pace to tap the market and to make the new challenges in it. Insurance in

MIndia is not about MIndia only; it is an open sector for the private players.

The name which you would see in Indian insurance market is something like: - HDFC

(Indian company) + Standard life (foreign player), BAJAJ (Indian company) + Allianz

(foreign player), TATA (Indian company) + Aig (foreign player) , and so many like

them. HDFC has its joint venture with standard life. It is a private sector company. The

company was registered on M23/10/2000.

M

Companies now are tapping a lot of ways to capture the market and hence adoptingdifferent ways to hold the large portion of the market.


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My project was to understand the different marketing strategies adopted by thecompanies to increase their market share and along with it meeting their own targets toachieve the position of no.1 in respective field or segment of the market.

My summer training learning helped me a lot to complete my project in order tolearn a lot of things of the corporate. As a project trainee the first task given to me was tounderstand the basic behavior of the consumer in order to manipulate the marketaccording to the target competition. For this I developed a questionnaire and I did mysurvey in Chandigarh Sector 17.

From this database I was asked to do the telle calling to the prospect customers inorder to make strengthen the agency channel and I learnt how to develop this channel

and how to create the business opportunities besides grabbing them. This made me toknow issues of competitive market in a better manner and it also gave me a lot of ideasto enhance my communication and convincing skills.

CHAPTER - 1

Insurance An Introduction

Insurance may be described as a social device to ensure protection of economic value of

life and other assets. Under the plan of insurance, a large number of people associate

themselves by sharing risks attached to individuals. The risks, which can be insured

against, include fire, the perils of sea, death and accidents and burglary. Any risk

contingent upon these, may be insured against at a premium commensurate with the risk

involved. Thus collective bearing of risk is insurance.


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Insurance is a contract whereby, in return for the payment of premium by the insured, theinsurers pay the financial losses suffered by the insured as a result of the occurrence of

unforeseen events. The term "risk" is used to describe the possibility of adverse results

flowing from any occurrence or the accidental happenings, which produce a monetary

loss.

Insurance is a pool in which a large number of people exposed to a similar risk make

contributions to a common fund out of which the losses suffered by the unfortunate few,

due to accidental events, are made good. The sharing of risk among large groups of

people is the basis of insurance. The losses of an individual are distributed over a group

of individuals.

Definitions:

General definition:

In the words of John Magee, Insurance is a plan by themselves which large number of

people associate and transfer to the shoulders of all, risks that attach to individuals.

Fundamental definition:


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In the words of D.S. Hansell, Insurance accumulated contributions of all partiesparticipating in the scheme.

Contractual definition: In the words of justice Tindall, Insurance is a contract in

which a sum of money is paid to the assured as consideration of insurers incurring the

risk of paying a large sum upon a given contingency.

Characteristics of Insurance

Sharing of risks

Cooperative device

Evaluation of risk

Payment on happening of a special event

The amount of payment depends on the nature of losses incurred.

The success of insurance business depends on the large number of people insured

against similar risk.

Insurance is a plan, which spreads the risk and losses of few people among a large

number of people.

The insurance is a plan in which the insured transfers his risk on the insurer.

Insurance is a legal contract which is based upon certain principles of insurance

which includes, utmost good faith, insurable interest, contribution, indemnity,

subrogation, etc.

The scope of insurance is much wider and extensive.

Functions of Insurance:


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Primary functions:

1. Provide protection:- Insurance cannot check the happening of the risk, but can

provide for the losses of risk.

2. Collective bearing of risk: - Insurance is a device to share the financial losses of few

among many others.

3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating

various factors that give rise to risk.

4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to

certainty.

5. Tax benefit :- Insurance is a source which reduce tax.

Secondary functions :

1. Prevention of losses: - Insurance cautions businessman and individuals to adopt

suitable device to prevent unfortunate consequences of risk by observing safety

instructions.

2. Small capital to cover large risks: - Insurance relives the businessman from security

investment, by paying small amount of insurance against larger risks and uncertainty.

3. Contributes towards development of larger industries.


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The evolution of Insurance in India can be summarized as:

Year Changes

1818 Oriental Insurance Company. The first Insurance company in India

1870 Bombay Mutual Life Assurance Company. First Indian Insurance company.

1912 The Indian Life Assurance Company enacted the first law to regulate the life

insurance business in India

1926 The Indian Assurance company act enacted to enable the government to collect

the statistical information about the insurance.

1938 The earlier legislation consolidated and amended the life insurance act with

the objective of protecting the interest of insurance in the public.

1956 245 Indian and foreign players and prudent societies are taken once by Central

govt. And nationalized

2000 FDIs are allowed to come and entered into the insurance business.

2002 There are total 16 insurance companies are available out of which two are

Government companies.

2009 There are total 22 companies are available in the market out of which 3 are wholly

Indian companies.


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1.5 RELATED ACTS

The insurance sector went through a full circle of phases from being unregulated to

completely regulated and then currently being partly deregulated. It is governed by a

number of acts, with the first one being the Insurance Act, 1938.

1.5.1The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of insurance to

provide strict state control over insurance business.

1.5.2 Life Insurance Corporation Act, 1956

In 19 January 1956, 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-alia, form LIFE INSURANCE

CORPORATION after nationalization of the 245 companies (both Indian and foreign

origin) into one entity. The Life Insurance Corporation of India was created on 1st

September, 1956.


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1.5.3 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. With more and more private players in the sector this scenario

may change at a rapid pace.

INSURANCE IN INDIA:

It is a means of savings and investment apart from it its share in the GDP counts veryimportant. In India it is in a growing stage in compare of the other countries lets have alookon it:-

United Kingdom 8.9%Japan 8.3%Korea 7.3%

United States 4.1%Malaysia 3.6%India 3.0%China 1.8%Brazil 1.3%


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If we talk in terms of India only then the result will be something like this:


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Working of Life Insurance: - Risk has to be assessed in order to decide tithepremium or to decide that subject is insurable or not.

Pure Risk vs. Speculative Risk:

Event representing there will be possibility of loss or no loss is called pure risk. Theserisks are insurable in nature.

Speculative risk is the one which truly resembles gamble. There is the possibility of lossor gain and wherever there is a chance of making profit there insurance cannot exist.Therefore these risks are not insurable in nature.


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Approaches to Risk Management:Risk Management is the process of minimizing the risk due to unforeseen events. StepsInvolved in selecting the Risk Management are:

To identify all the things that can be possibly wrong. To consider possibility that an event can occur.

Techniques toward the Risk Management;

1. Avoiding the Risk: - Risk can be managed by avoiding it as when the perils will come

then it will be managed.2. Eliminate the Risk: - Risk can be managed by eliminating the cause of the loss.3. Reducing the Risk: - Risk can be reduced by handling them in a systematic manner.4. Transfer of Risk: - Risk can be minimized by transferring the risk of loss to anyother

Person which is a true form of the INSURANCE.


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CHAPTER 2

HOUSING DEVELOPMENT FINANCIAL CORPORATION

HOUSING DEVELOPMENT FINANCE CORPORATION ( HDFC )

Mumbai based Housing Development Finance Corporation was incorporated in 1977 by

H.T. Parekh, founder chairman of ICICI which has grown to be India's leading housing

finance company.

Its services are aimed at individuals as well as companies availing loans for housing

purposes. It also provides lease finance to companies and to development authorities for

financing infrastructure and other assets along with its property related services.


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2.1 Vision and Mission of the organization

"HDFC is an organization that strives for excellence, with the twin objectives of

enhancing customer satisfaction and shareholder value"

2.1.1 Vision of HDFC

1. To enhance residential housing stock in the country through the provision of housing

finance in a systematic and professional manner, and to promote home ownership.

2. To increase the flow of resources to the housing sector by integrating the housing

finance sector with the overall domestic financial markets.

2.1.2 Mission of HDFC

a. Develop close relationships with individual households.

b. Maintain its position as the premier housing finance institution in

the country

c. Transform ideas into viable and creative solutions

d. Provide consistently high returns to shareholders

e. To grow through diversification by leveraging off the existing client

base.


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HDFC HOLDINGS

Figure 1: Share Holding Pattern of HDFC

Figure 2: Loans Approved & Disbursed by HDFC

HDFC

80.5% HDFC Ventures

100% HDFC Properties23.22% HDFC Bank

74% HDFC Standard Life

60% HDFC Asset Mgt

23.27% HDFC Bank


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2.4 STANDARD LIFE INSURANCE COMPANY

Founded in 1825, Standard life has been at the forefront of the UK insurance industry for

176 years by combining sound financial judgment with integrity and reliability.

One of its successes was the launch of Standard Life Bank on 1st January, 1998. It is one

of the few insurance companies in the world to receive AAA rating from two of the

leading international credit rating agencies. Moodys and Standard & Poors. The later

described Standard Lifes ability to meet its claims obligations as overwhelming under a

variety of economic conditions.

2.5 THE PARTNERSHIP

HDFC and 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. Around this time Standard Life purchased a 5% stake in HDFC,

further strengthening the relationship.


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In October 1998, the joint venture agreement was renewed and additional resource made

available. Standard Life also started to use the services of the HDFC Treasury

department to advise them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both

companies agreed the time was right to move the operation to the next level. Therefore,

in January 2000, an expert team from the UK joined a hand picked team from HDFC to

form the core project team, based in Mumbai.

The company was incorporated on 14th August 2000 under the name of HDFC- Standard

Life Insurance Company Limited. On the 23rd of October 2000, HDFC-Standard Life

was the only life company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life Insurance , with 74%, while

Standard Life owns 26%.

Figure 3: Total AUM of HDFC


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\

Our Core Values

We lead through Innovation to offer world class and competitive products to ourcustomers

We build Long Term Relationships with our customers by creating a world class

service experience through operational excellence and the innovative use oftechnology

We create a Customer Centered and Result Focused Vision that inspires each oneof our Associates and has their buy-in

We are committed to creating a High Performance Organization by creating anenvironment that allows each one of our Associates to perform at their peak. As aresult we will also be recognized as an Employer of Choice

We are committed to Partnering with our internal and external Customers formutual success

We work with Integrity, Fairness and Financial Prudence in all our dealings

keeping the interests of our Shareholders, Customers and Associates paramount

OBJECTIVE

1. To study and learn about the various Insurance plans of HDFC Standard Life.


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2. To study about the various insurance companies and the products offered bythem.

3. To study the customers perception about the Insurance.

LIMITATIONS

1. Difference in the opinion of the customers and the company..

2. Company is not willing to disclose full information.

3. Biased behavior of the respondents.

4. Sample size being small, may not reflect the opinion of major segment.

5. Time frame is limited.

6. Difficulty in analyzing the data because of multiple responses given by the

respondents.


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SCOPE OF STUDY

n todays emerging Indian economy the role and scope of Insurance

companies has increased manifold and hence this sector has seen tremendous

growth and competition over the years. Through my project I am trying to

give an in depth analysis on the same harping on the growth and emergence of

new companies in the turf which was predominated by government backed

companies. his study relates to evaluate various insurance companies in terms

of products, revenue, sales, and human resources. It also covers emergence and

growth of new insurance companies in IIndia. In this study I will gothrough the products of various insurance companies and

evaluate all the products and compare those products with

HDFCSLIC products so that company can easily improve their

productivity and boost their sales. In this study a research will be

conducted by using a structured questionnaire to compare the products and

market share of various insurance companies. It also helps in knowing customers

needs which is very beneficial for company to increase productivity and boost

sales. It is also helpful to understand various marketing strategies adopted by

various insurance companies so that company can increase their market share by

modifying marketing strategies and can better serve the customers needs. I am

also collecting information from the company, websites, journals, magazines and

unpublished data available at company to compare various insurance companies.

I have also done a certification of IRDA to get a financial advisor license. I have

also gone through compliance sales training (CST) so that I can get better

knowledge of existing products of HDFCSLIC and it is also helpful in comparing

with other companies products. A sample of 100 people will be taken to collect

data by using structured and unbiased questionnaire and probability sampling

technique will be used to select sample of 100 people from whole population and

a random sample will be selected

I


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IRDA ACT 1999

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and DevelopmentAuthority (IRDA, which was constituted by an act of parliament) specify thecomposition of AuthorityThe Authority is a ten member team consisting of(a) a Chairman;(b) five whole-time members;(c) four part-time members,

(all appointed by the Government of India)

Duties, Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions ofIRDA..(1) Subject to the provisions of this Act and any other law for the time being inforce, the Authority shall have the duty to regulate, promote and ensure orderly growthof the insurance business and re-insurance business.

Without prejudice to the generality of the provisions contained in sub-section (1), thepowers and functions of the Authority shall include

(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspendor cancel such registration;

(b) protection of the interests of the policy holders in matters concerning assigning ofpolicy, nomination by policy holders, insurable interest, settlement of insurance claim,surrender value of policy and other terms and conditions of contracts of insurance;


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(c) Specifying requisite qualifications, code of conduct and practical training forintermediary or insurance intermediaries and agents;

CAPITAL REQUIREMENT FOREIGN PARTICIPATION

The government of India is planning to increase the equity limit for foreign directinvestment from the current 26 per cent to 49 per cent in the insurance sector.Liberalization of the FDI policy, including the Budget proposals for raising the sectoralcaps in insurance is one of the main factors for the higher FDI inflows during the currentyear. In 2003-04 the total FDI inflows in the country touched $3.4 billion. Indianinsurance companies have been pushing for the FDI limit to be raised. The current paid-up requirement of Rs 1 billion for general insurance and Rs 2 billion for life insurance

have become difficult targets to achieve for the companies. The companies feel thatinjection of additional foreign equity would reduce their costs. The sector was liberalizedfor private players towards the end of 1999. Currently, there are 14 insurance companies,including the key public sector company Life Insurance Corporation, in the life insurancesector and 13 general insurance companies.1. HDFC Standard Life Insurance Co. Ltd

2. Birla Sun Life Insurance Co. Ltd

3 Bajaj Allianz Life Insurance Company Limited

4. ICICI Prudential Life Insurance Co. Ltd.

5. ING Vysya Life Insurance Company Ltd.

6. Life Insurance Corporation of India

7. Max New York Life Insurance Co. Ltd

8. Kotak Mahindra Old Mutual Life Insurance Limited

9.SBI Life Insurance Co. Ltd
http://en.wikipedia.org/w/index.php?title=HDFC_Standard_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Birla_Sun_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bajaj_Allianz_Life_Insurance_Company_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=ICICI_Prudential_Life_Insurance_Co._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=ING_Vysya_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_Indiahttp://en.wikipedia.org/w/index.php?title=Max_New_York_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Kotak_Mahindra_Old_Mutual_Life_Insurance_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=SBI_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Birla_Sun_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bajaj_Allianz_Life_Insurance_Company_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=ICICI_Prudential_Life_Insurance_Co._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=ING_Vysya_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_Indiahttp://en.wikipedia.org/w/index.php?title=Max_New_York_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Kotak_Mahindra_Old_Mutual_Life_Insurance_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=SBI_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=HDFC_Standard_Life_Insurance_Co._Ltd&action=edit&redlink=1


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10.Tata AIG Life Insurance Company Limited11.Reliance Life Insurance Company Limited.

12.Aviva Life Insurance Co. India Pvt. Ltd.

13.Sahara India Life Insurance Co, Ltd.

14.Shriram Life Insurance Co, Ltd.

15.Bharti AXA Life Insurance Company Ltd.

16.Future General Life Insurance Company Ltd.

17.IDBI Fortis Life Insurance Company Ltd.

18.Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd19.AEGON Religare Life Insurance Company Limited.

20.DLF Pramerica Life Insurance Co. Ltd.

21.Star Union Dai-ichi Life Insurance Comp. Ltd.

22,Met life insurance co . Ltd

2.2 HDFC Board Of Directors

SNO NAME CATEGORY

1 Mr. Deepak S. Parekh Executive Chairman

2 Mr. Keshub Mahindra Independent3 Mr. Shirish B. Patel Independent4 Mr. B. S. Mehta Independent

5 Mr. D. M. Sukthankar Independent6 Mr. D. N. Ghosh Independent7 Dr. S. A. Dave Independent

8 Mr. S. Venkitaramanan Independent9 Dr. Ram S. Tarneja Independent

10 Mr. N. M. Munjee Independent

11 Dr. Bimal JalanMember of Parliament

(Rajya Sabha)12 Mr. D. M. Satwalekar Non-Executive13 Dr. Jamshed J Irani+ Special Director++
http://en.wikipedia.org/w/index.php?title=Tata_AIG_Life_Insurance_Company_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Reliance_Life_Insurance_Company_Limited.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Aviva_Life_Insurance_Co._India_Pvt._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Sahara_India_Life_Insurance_Co,_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Shriram_Life_Insurance_Co,_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bharti_AXA_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Future_Generali_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IDBI_Fortis_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Canara_HSBC_Oriental_Bank_of_Commerce_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=AEGON_Religare_Life_Insurance_Company_Limited.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=DLF_Pramerica_Life_Insurance_Co._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Star_Union_Dai-ichi_Life_Insurance_Comp._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Tata_AIG_Life_Insurance_Company_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Reliance_Life_Insurance_Company_Limited.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Aviva_Life_Insurance_Co._India_Pvt._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Sahara_India_Life_Insurance_Co,_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Shriram_Life_Insurance_Co,_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bharti_AXA_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Future_Generali_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IDBI_Fortis_Life_Insurance_Company_Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Canara_HSBC_Oriental_Bank_of_Commerce_Life_Insurance_Co._Ltd&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=AEGON_Religare_Life_Insurance_Company_Limited.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=DLF_Pramerica_Life_Insurance_Co._Ltd.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Star_Union_Dai-ichi_Life_Insurance_Comp._Ltd.&action=edit&redlink=1


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14 Ms. Renu Sud Karnad Joint Managing Director

15 Mr. K. M. MistryVice Chairman &

Managing Director

MARKETING TEAM STRUCTURE


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KEY BENEFITS OF LIFE INSURANCE

Need for Life InsuranceToday, there is no shortage of investment options for a person to choose from. Modernday investments include gold, property, fixed income instruments, mutual funds and ofcourse, life insurance. Given the plethora of choices, it becomes imperative to make theright choice when investing your hard-earned money. Life insurance is a uniqueinvestment that helps you to meet your dual needs - saving for life's important goals, andprotecting your assets.

Let us look at these unique benefits of life insurance in detail.Asset Protection

From an investor's point of view, an investment can play two roles - asset appreciation orasset protection. While most financial instruments have the underlying benefit of assetappreciation, life insurance is unique in that it gives the customer the reassurance of assetprotection, along with a strong element of asset appreciation.The core benefit of life insurance is that the financial interests of ones family remainprotected from circumstances such as loss of income due to critical illness or death of thepolicyholder. Simultaneously, insurance products also have a strong inbuilt wealthcreation proposition. The customer therefore benefits on two counts and life insurance

occupies a unique space in the landscape of investment options available to a customer.

Goal based savings

Each of us has some goals in life for which we need to save. For a young, newly marriedcouple, it could be buying a house. Once, they decide to start a family, the goal changesto planning for the education or marriage of their children. As one grows older, planningfor one's retirement will begin to take precedence.

Clearly, as your life stage and therefore your financial goals change, the instrument inwhich you invest should offer corresponding benefits pertinent to the new life stage.

Life insurance is the only investment option that offers specific products tailormade fordifferent life stages. It thus ensures that the benefits offered to the customer reflect theneeds of the customer at that particular life stage, and hence ensures that the financialgoals of that life stage are met.


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The table below gives a general guide to the plans that are appropriate for different lifestages.

Life StagePrimary

NeedLife Insurance

Product

Young &Single

Assetcreation

Wealth creation plans

Young & Justmarried

Assetcreation &protection

Wealth creation andmortgage protectionplans

Married withkids

Children'seducation,Assetcreationandprotection

Education insurance,mortgage protection &wealth creation plans

Middle agedwith grown

up kids

Planningforretirement

& assetprotection

Retirement solutions &

mortgage protection

Across alllife-stages

Healthplans

Health Insurance

Life Stage Profiler

All through your life, several significant events the birth of your child, moving to a larger

home, his or her education and wedding, buying a new car, retiring from work will occurat various stages and demand your financial commitment. If you plan in advance forthese events, you will quite naturally be prepared when they occur.Life insurance is an effective tool that assists you to plan for your future such that you


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are financially equipped to meet all your goals.

Which important goals should you plan for in advance?

1) Your family's protection - so that your loved ones are secure should anunfortunate event happen to you. Life insurance can guarantee that your family receivesa lumpsum that safely tides them over any financial crises that might occur in yourabsence.

2) Child's education: As parent, your primary responsibility is to guarantee yourchildren's future. Our Education Insurance plans ensure your child receives money at keystages of his or her education even in your absence.

3) Savings: Savings plans allow you to steadily save towards a pre-decided goal in asecure manner. These plans provide you with a host of benefits. You can choose thepremium, the underlying fund in which you want to invest your money, the ratio betweenprotection and investment as per your requirements.

4) Retirement : Retirement plans help you secure guaranteed income for your retiredlife. During the Accumulation phase, you systematically save while you are working.When you retire, the Payout stage of the plan begins. You then purchase an annuity,which will serve as a steady stream of income, for the rest of your life.

5) Health: An integral part for financial planning is protecting oneself against anymedical emergencies as well. Hence, a very prudent decision would be to choose a

combination of plans that look after your finances and offer you a protective health coverto ensure your financial planning is in track despite any major illnesses.


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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, lifeinsurance plans are 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)


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Products of the company

1. 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.

Plan Overview

HDFC OFFERS -the hdfc Term Assurance plan (TAP)', a non

participating term assurance plan which provides you life cover at a

nominal cost. To put it simply, it is a life insurance plan that givesyou complete protection to enjoy life to the fullest. You can further

customize your plan with two riders Accidental Death Benefit

and Critical Illness.

Plan at a glance

Minimum Entry Age 18 years

Maximum Entry Age 60 years

Maximum Maturity Age 65 years

Minimum Sum Assured Rs. 50,000Maximum Sum Assured No Limit

Policy Term 5, 10, 15, 20, 25 years and Term to age60

Premium Paying Terms Single Pay, Limited Pay (3 years),
http://www.hdfcinsurance.com/products/indi_tap.aspxhttp://www.hdfcinsurance.com/products/indi_lcta.aspxhttp://www.hdfcinsurance.com/products/indi_lcta.aspxhttp://www.hdfcinsurance.com/products/indi_tap.aspxhttp://www.hdfcinsurance.com/products/indi_lcta.aspxhttp://www.hdfcinsurance.com/products/indi_lcta.aspx


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Regular Pay

RidersAccidental Death Benefit RiderCritical Illness Rider

Products Benefits

Riders

2.Retirement Plans:

Retirement Plans provide you with financial security so that whenyour professional income starts to ebb, you can still live with pridewithout compromising on your living standards. By providing you atool to accumulate and invest your savings, these plans give you a

lump sum on retirement, which is then used to get regular incomethrough an annuity plan. Given the high cost of living and risinginflation, employer pensions alone are not sufficient. Pensionplanning has therefore

Retirement plans

HDFC Personal Pension Plan
http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Accident_Death_Benefit.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Critical_Illness.aspx')http://www.hdfcinsurance.com/Products/PensionPlans/Pension.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/Pension.aspxhttp://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Accident_Death_Benefit.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Critical_Illness.aspx')http://www.hdfcinsurance.com/Products/PensionPlans/Pension.aspx


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HDFC Unit Linked Pension II HDFC Unit Linked Pension Maximiser II HDFC Immediate Annuity

.

Plan at a glance

Entry Age (in completed years) Min 20 yearsMax 55 years

Minimum Term 10 years

Minimum Vesting Age 45 years

Maximum Vesting Age 65 years

Minimum Premiums Single Pay: Rs. 1,00,000Regular Premium: Rs. 10,000

Premium Paying Term Single Pay & Regular Pay

Products Benefits

RidersNot Available

Death BenefitIn case of death during the accumulation period, the death benefitpayable is:Under Option A: A guaranteed amount of 110% of the Fund Valueis payable to the nominee.Under Option B: 100% of the Fund Value is payable to thenominee.
http://www.hdfcinsurance.com/Products/PensionPlans/Pension2.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/Pension2.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/PensionMaximiser.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/PensionMaximiser.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/Annuity.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/Annuity.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/Pension2.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/PensionMaximiser.aspxhttp://www.hdfcinsurance.com/Products/PensionPlans/Annuity.aspx


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Vesting BenefitOn the vesting date, i.e. at the end of the accumulation term,youcan take one-third of your retirement kitty as a tax-free lump sumand utilize the balance to buy annuities. Or you can use the entireretirement kitty to buy annuities.

Annuity OptionsYou can choose from a wide variety of eight immediate annuityoptions at the time of retirement to match your pensionrequirement.

Reasons to buy

1. Advantage of six diverse market linked funds to potentiallyenhance your savings for retirement.

2. Get upto 1/3 rd of your retirement kitty as a tax-free lump sumon retirement.

3. Opportunity to get tax benefits under Sec 80C on yourcontribution.

4. Choice from amongst eight annuity options at the time ofretirement.

5. Get the benefit of protection while you are saving for retirement.

3. Savings plan:

Plan over

Savings Plans offer a flexible option to build savings for future

needs such as buying a dream home or fulfilling your

childrens immediate and future needs.


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Savings & Investment Plans

HDFC Unit Linked Endowment Plus II

HDFC SimpliLife

HDFC Unit Linked Endowment II

HDFC Unit Linked Enhanced Life Protection II

HDFC Unit Linked Wealth Maximiser Plus

HDFC Unit Linked Wealth Multiplier

HDFC Unit Linked Endowment Winner

HDFC Endowment Assurance Plan

HDFC Money Back Plan

HDFC Single Premium Whole of Life Insurance Plan

HDFC Assurance Plan

HDFC Savings Assurance Plan

HDFC Unit Linked Endowment Plus II

With our HDFC Unit Linked Endowment Plus II, you can start buildingyour savings today and ensure that your family remains financially

independent, even when you are not around. This Unit Linked plan provides

valuable protection to your family in case you are not around and gives you

with an outstanding investment opportunity to maximise your savings by


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providing you a choice of thoroughly researched and selected investments.This plan also gives regularLoyalty Units to boost your fund value each

year..

HDFC SimpliLife

With our HDFC SimpliLife Plan, you can plan now to maximise your

savings and secure your and your familys future. It is a convenient plan,

which saves you from the need of going for Medicals. This Unit Linked Plan

gives you with an outstanding investment opportunity to maximise your

savings by providing you a choice of thoroughly researched and selectedinvestments.

HDFC Unit Linked Endowment I

With our HDFC Unit Linked Endowment II, you can start buildingyour savings today and ensure that your family remains financiallyindependent, even when you are not around. This Unit Linked Plan alsogives you with an outstanding investment opportunity to maximise yoursavings by providing you a choice of thoroughly researched and selectedinvestments.

HDFC Unit Linked Enhanced Life Protection II

With our HDFC Unit Linked Enhanced Life Protection II, you can startbuilding your savings today and ensure that your family remainsfinancially independent, even when you are not around. This UnitLinked Plan also gives you with an outstanding investment opportunityto maximise your savings by providing you a choice of thoroughlyresearched and selected investments. In this plan, the original SumAssured chosen by you will be automatically increased by 5% each yeargiving your family benefit of enhanced protection.

HDFC Unit Linked Wealth Maximiser Plus

Ideally, just how spending comes to you, so must saving and investing.You are able to finance your expenses and take care of your familysneeds in present times. However, to ensure that family is able to


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maintain the same standard of living in the future, you need to make theright kind of investment today. HDFC Unit Linked Wealth MaximiserPlus, a uniqueSingle Premium investment cum protection plan is a tailormade plan well suited to meet your long-term investment needs and helpyou maintain your familys financial independence. This plan also givesregular Loyalty Units to boost your fund value each year.

HDFC Money Back PlanWith our HDFC Money Back Plan, you can plan now to ensure that you have

the necessary funds to have the necessary funds to secure your long-term as

well as short-term financial goals. This With Profits plan gives you a proportion

of the basis Sum Assured as Cash lump sums at regular 5-year intervals within

the policy term.

Plan Overview

Hdfc money back plan - a guaranteed money back plan that paysout funds to help you meet the education and career milestones ofyour children. With this plan, the Life Insured is that of the parent.The plan also has inbuilt guaranteed additions to add value to thepolicy over its term.

There are two options to choose from and fixed term benefits,periodic additions & terminal additions are payable based on theoption that you select. The policy is suitable for parents with

children between the ages 0-12 and parents in the age group of 20-50 years old.

Plan at a glance


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Coverage TermOption A Option B

Minimum Entry Age of theChild

0 years 0 years

Maximum Entry Age of theChild

8 years 12 years

Minimum Entry Age of theparent

20 years 20 years

Maximum Entry Age of theParent

50 years50 years

Policy Term 21 years - Age atEntry

25 years - Age atEntry

Minimum Sum Assured Rs 1,00,000 Rs 1,00,000

Maximum Sum Assured No Limit No Limit

RidersAccidental Death Benefit RiderCritical Illness Rider

Waiver of Premium RiderTerm Rider

Products Benefits

Death BenefitIn the event of death of the Person Insured (the parent), the familywill receive a lump sum payment of Sum Assured. The fixed termpayment and maturity benefits will continue irrespective of thedeath of the Life Insured and all future premiums on the policy

would be waived.Maturity BenefitOn maturity of the policy, the plan offers Guaranteed PeriodicAdditions and Terminal Additions:1. Guaranteed Periodic Additions of 5% of the Sum Assured for
http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Accident_Death_Benefit.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Critical_Illness.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Waiver_Premium.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Term_Rider.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Accident_Death_Benefit.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Critical_Illness.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Waiver_Premium.aspx')http://tmp/sv35g.tmp/javascript:showDetail1('MetLifeRider_Term_Rider.aspx')


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every completed year.2. Terminal additions of 20% of the total Guaranteed PeriodicAdditions.

Guaranteed PayoutsOption A: Policy matures at age 21 of the child.

Age of the Child Percentage of Payout Assumed Milestone

15 years 20% of Sum Assured Class X

17 years 30% of Sum Assured Class XII

20 years 50% of Sum Assured College

21 years Guaranteed Additions Higher Education

Option B: Policy matures at age 25 of the child.

Age of the Child Percentage of Payout Assumed Milestone

17 years 20% of Sum Assured Class XII

21 years 30% of Sum Assured College

23 years 50% of Sum Assured Higher Education

25 years Guaranteed Additions Wedding

Reasons to buy

1. Guaranteed payouts at critical milestones of the childs life.

2. Guarantee of policy continuance in case of the untimely demiseof parent.

3. Guaranteed payouts of 250%* of the chosen Sum Assured.

4. Income Tax benefits.

* When the term of the plan is 25 years.


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4.Children Plan:

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.

Children's Plans

HDFC Children's PlanHDFC Unit Linked Young Star II

HDFC Unit Linked Young Star Plus II

HDFC Unit Linked YoungStar Champion

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

Health Plans

HDFC Critical Care Plan HDFC SurgiCare Plan
http://www.hdfcinsurance.com/Products/HealthPlans/CriticalCare.aspxhttp://www.hdfcinsurance.com/Products/HealthPlans/CriticalCare.aspxhttp://www.hdfcinsurance.com/Products/HealthPlans/SurgiCare.aspxhttp://www.hdfcinsurance.com/Products/HealthPlans/SurgiCare.aspxhttp://www.hdfcinsurance.com/Products/HealthPlans/CriticalCare.aspxhttp://www.hdfcinsurance.com/Products/HealthPlans/SurgiCare.aspx


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Marketing strategy of all the companies is different besides the lot ofsimilarity in the products.

If we see the data then we will find that HDFC STANDARD LIFE Insurance has

number of branches according to the latest data in annual report of 2007-2008 by IRDA,hdfcslic has730 branches, but the premium that they offer to Insurance Industry is 1410cores, and the number of life advisors are much if we compare it to other companies sofrom where does this Premium is amounting this much, it shows that HDFCSTANDARD Life focuses on big business houses, i.e. they are much desperate for theirbusiness with elephant then humming birds.

If we see the things in a different fashion then we will find that theHDFCSTANDARDLife is having the shield of Guaranteed Maturity Value. No doubtthe company is having a long list of the product with them. Variety is there as in therange of the product varies from Child product to retirement solutions, but their focus isin ULIP PLANS was a huge success.

Market Share of all Insurance Companies in India:


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Market share of Private Players in India:

COMPARISON OF PREMIUM OF MONEY BACK POLICIES

AGE 30YEARS

POLICY TERM 20 YEARS AGE 30 YEARS POLICY TERM 15 YEARS


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PREMIUM PREMIUM

COMPANY SUMASSURED:1LAC

SUMASSURED:2 LACS

COMPANY SUMASSURED:1LAC

SUMASSURED:2LACS

LIC 6280 12559 LIC 7953 15906

ICICI PRU 6592 12884 ICICI PRU 9094 17888

ALLIANZBAJAJ

6158 11836 ALLIANZBAJAJ

8362 16244

TATA AIG 9099 17698 TATA AIG NA NA

HDFC 7585 15020 HDFC 9102 18054

OM KOTAK 7120 14240 OM KOTAK 8890 16480

MAXNEWYORK

NA NA MAXNEWYORK

NA NA

MET LIFE 5856 11412 MET LIFE 7572 14844


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AGE 35YEARS

POLICY TERM 20 YEARS AGE 35 YEARS POLICY TERM 15 YEARS

PREMIUM PREMIUM

COMPANY SUMASSURED:1

LACS

SUMASSURED:

2 LACS

COMPANY SUMASSURED:1

LACS

SUMASSURED:2

LACSLIC 6464 12928 LIC 8089 16177

ICICI PRU 6683 13067 ICICI PRU 9160 18019

ALLIANZBAJAJ

6252 12024 ALLIANZBAJAJ

8432 16384

TATA AIG 9219 17938 TATA AIG NA NA

HDFC 7719 15270 HDFC 9184 18218

OM KOTAK 7330 14660 OM KOTAK 9010 16700

MAXNEWYORK

NA NA MAXNEWYORK

NA NA

MET LIFE 6000 11700 MET LIFE 7668 15036


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AN ANALYSIS ON

GUARANTEES ON INSURANCE AND PENSION

PRODUCTS

AS ON MARCH 2008

IRRS/GURANTEES

COMPANY INSURANCE PENSION

ALLIANZ BAJAJ 2.14% NA

AVIVA -1.80% NA

AMP SANMAR NA NA

BIRLA SUNLIFE 0.70-1.50% 1-1.5%

HDFC STANDARD 0.73% 1.7-1.9%

ICICI PRUDENTIAL 1.70-4.95% 3.06%

ING VYSYA 0.70% NA

LIC 4-6% 1.3-2%

MAX NEWYORK LIFE 3.05% 1.4-1.9%

MET LIFE 5.5-5.7% 2.3-2.7%


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OM KOTAK -0.04% 2.10%

SBI LIFE 0.73%-4.7% 4%

TATA AIG -2-4.4% 1.30%

Comparative Premium Chart (Sum Assured: Rs 1,000,000)

Life Insurer Age(Yrs)

Tenure (Yrs)

5 10 15 20 25 30 35 40

HDFC [Get Quote] STANDARD LIFE(TERM ASSURANCE)

25 2,570 2,620 2,670 2,720 2,770 2,820 NA NA

30 2,770 2,820 2,870 2,920 3,050 3,430 NA NA

35 3,000 3,050 3,160 3,580 4,120 4,750 NA NA

40 3,710 3,840 4,380 5,110 5,970 NA NA NA

45 5,000 5,520 6,460 7,620 NA NA NA NA

50 7,430 8,320 9,830 NA NA NA NA NA

55 10,960 12,600 NA NA NA NA NA NA

60 16,540 NA NA NA NA NA NA NA

ICICI [Get Quote] PRUDENTIAL(LIFEGUARD)

25 2,933 2,933 2,933 2,933 2,933 3,064 NA NA

30 3,032 3,032 3,032 3,032 3,334 3,905 NA NA

35 3,172 3,172 3,248 3,798 4,067 4,564 NA NA

40 4,317 4,317 4,738 5,525 6,681 NA NA NA

45 5,267 5,807 6,875 8,258 NA NA NA NA

50 7,739 8,776 10,439 NA NA NA NA NA

55 11,423 13,258 NA NA NA NA NA NA

60 NA NA NA NA NA NA NA NA

LIC [Get Quote](ANMOL JEEVAN I)

25 2,356 2,356 2,356 2,544 2,861 NA NA NA

30 2,564 2,564 2,812 3,227 3,821 NA NA NA

35 3,128 3,277 3,841 4,613 5,534 NA NA NA

40 4,287 4,703 5,752 6,940 8,306 NA NA NA

45 6,247 7,247 8,860 10,623 NA NA NA NA

50 9,860 11,335 13,741 NA NA NA NA NA

55 15,068 17,384 NA NA NA NA NA NA


SBI [Get Quote] LIFE(SHIELD)

25 1,954 1,954 1,954 1,954 2,180 NA NA NA

30 2,043 2,043 2,150 2,454 2,964 NA NA NA35 2,454 2,552 2,895 3,542 4,375 NA NA NA

40 3,189 3,542 4,346 5,384 6,649 NA NA NA

45 4,561 5,541 6,796 8,354 NA NA NA NA

50 7,344 8,814 10,657 NA NA NA NA NA

55 11,215 13,538 NA NA NA NA NA NA
http://money.rediff.com/money/jsp/quote_process.jsp?query=hdfc%20bank%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=icicihttp://money.rediff.com/money/jsp/quote_process.jsp?query=lic%20housing%20finance%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=state%20bank%20of%20indiahttp://money.rediff.com/money/jsp/quote_process.jsp?query=hdfc%20bank%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=icicihttp://money.rediff.com/money/jsp/quote_process.jsp?query=lic%20housing%20finance%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=state%20bank%20of%20india


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KOTAK MAHINDRA OLD MUTUAL(PREFERRED TERM PLAN)

25 NA 2,424 2,424 2,424 2,535 2,755 NA NA

30 NA 2,645 2,645 2,755 3,086 3,416 NA NA

35 NA 3,196 3,306 3,747 4,188 4,739 NA NA

40 NA 4,298 4,739 5,400 6,187 6,960 NA NA

45 NA 6,077 6,761 7,797 8,970 NA NA NA

50 NA 9,180 10,351 11,988 NA NA NA NA

55 NA 13,593 15,679 NA NA NA NA NA

60 NA 21,668 NA NA NA NA NA NA

MAX NEW YORK LIFE 25 2,100 2,110 2,120 2,210 2,410 NA 2,670 NA

30 2,160 2,280 2,430 2,700 3,050 3,220 NA NA

35 2,570 2,910 3,270 3,770 4,330 NA NA NA

40 3,480 4,150 4,840 5,650 NA NA NA NA

45 5,040 6,360 7,450 NA NA NA NA NA50 7,940 9,990 NA NA NA NA NA NA



AVIVA [Get Quote] LIFE INSURANCE(LIFESHIELD)

25 2,5 80 2,5 80 2 ,600 2 ,69 0 2,8 80 3,190 3 ,61 0 4 ,100

30 2,650 2,660 2,890 3,120 3,530 4,060 4,700 NA

35 3,110 3,240 3,620 4,120 4,800 5,620 NA NA

40 3,940 4,220 4,980 5,840 6,880 NA NA NA

45 5,170 6,010 7,280 8,620 NA NA NA NA

50 7,840 9,230 11,140 NA NA NA NA NA

55 11,910 14,110 NA NA NA NA NA NA


TATA-AIG LIFE

(ASSURE LIFELINE)

25 3,100 3,160 3,340 3,640 4,080 NA 5,040 NA

30 3,480 3,510 3,970 4,550 5,280 6,130 NA NA

35 4,650 4,670 5,520 6,580 7,820 NA NA NA

40 6,830 6,870 8,400 10,200 NA NA NA NA

45 9,880 10,190 13,380 NA NA NA NA NA

50 15,800 16,240 NA NA NA NA NA NA



METLIFE(SURAKSHA- TERM ASSURANCE)

25 2,600 2,500 2,500 2,700 2,700 NA 3,200 NA

30 2,700 2,600 2,800 3,100 3,300 3,600 NA NA

35 3,300 3,200 3,600 4,000 4,400 NA NA NA

40 4,500 4,300 5,000 5,700 6,300 NA NA NA

45 6,600 6,400 7,400 8,400 NA NA NA NA

50 9,900 9,700 11,200 NA NA NA NA NA

55 15,000 14,700 NA NA NA NA NA NA


BIRLA SUN LIFE(TERM PLAN)

25 2,890 2,890 2,890 2,890 2,890 NA NA NA

30 2,950 2,950 2,950 3,010 3,160 NA NA NA

35 3,290 3,310 3,510 3,720 4,030 NA NA NA
http://money.rediff.com/money/jsp/quote_process.jsp?query=aviva%20industries%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=aviva%20industries%20ltd


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40 4,080 4,310 4,690 5,150 5,860 NA NA NA

45 5,380 5,990 6,720 7,670 8,930 NA NA NA

50 7,710 8,790 10,180 11,960 NA NA NA NA

55 11,080 13,100 15,680 NA NA NA NA NA


AMP SANMAR(RAKSHA SHREE)

25 2,180 2,180 2,180 2,180 2,350 2,700 NA NA

30 2,230 2,230 2,290 2,600 3,070 3,640 NA NA

35 2,580 2,640 3,020 3,630 4,380 5,260 NA NA

40 3,350 3,650 4,420 5,400 6,540 NA NA NA

45 4,680 5,520 6,750 8,220 NA NA NA NA

50 7,200 8,550 10,400 NA NA NA NA NA

55 10,900 13,050 NA NA NA NA NA NA


BAJAJ ALLIANZ(RISK CARE) 25 3,1 40 3,2 00 3 ,420 3 ,82 0 4,4 90 5,560 7 ,09 0 9 ,32030 3,2 60 3,5 60 4 ,050 4 ,83 0 6,0 50 7,750 10 ,20 0 NA

35 3,850 4,450 5,350 6,750 8,650 11,350 NA NA

40 5,040 6,100 7,710 9,850 12,850 NA NA NA

45 7,160 9,050 11,460 14,810 NA NA NA NA

50 10,940 13,610 17,360 NA NA NA NA NA



Michael Porters Model

The model originated from Michael.E.Porters book Competitive strategy:Techniquesfor analyzing Industries and competitors in 1980. Since then, it has become a frequentlyused tool for analyzing a companys industry structure and their corporate strategy.


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In his book, porter identified five competitive forces that shape every single industry andmarket. These forces help us to analyze everything from the intensity of competition tothe profitability and attractiveness of an industry. The following image shows therelationship between the different competitive forces.

Threats of new entrants-HighIt is easier for new companies to enter into the industry and there will be more cut throatcompetition. Factors that can limit the threat of new entrants are known as barriers toentry.

So in an insurance industry the average entrepreneur cant come along

and start a new large insurance company. The threat of new entrants lies within theinsurance industry itself. Some companies have carved out niche areas in which theyunderwrite insurance. So HDFC is fearful of being squeezed out by the big players.Another threat for it is other financial services companies entering into the market. Whatwould it take for a bank or investment bank to start offering insurance products? In some


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countries, only regulations that prevent banks and other financial firms from entering theindustry. If those barriers were ever broken down, like they were in the U.S with theGramm-Leach-Bliley Act of 1999.

Power Of Suppliers-lowThis is how much pressure suppliers can place on a business. If one supplier has a largeenough impact to affect a companys margins and volumes, then they hold substantialpower.

So in insurance industry, the suppliers of capital might not pose a bigthreat, but the threat of suppliers luring away human capital does. If a talented insuranceunderwriter is working for HDFCSLIC Insurance company(or one in a niche industry),there is a chance that person will be enticed away by larger companies looking to move

into a particular market.

Power of Buyers-lowThis is how much pressure customers can place on a business. If one customer has alarge enough impact to affect a companys margins and volumes, then they holdsubstantial power.

So for Metlife, the individual doesnt pose much of threat to the company.Large corporate clients have a lot more bargaining power with insurance companies.Large corporate clients like airlines and pharmaceutical companies pay millions ofdollars in premium annually. Insurance companies try extremely hard to get high margincorporate clients.

Availability of Substitutes-HighWhat is the likelihood that someone will switch to a competitive product or service? Ifthe cost of switching is low, then this poses to be a serious threat.

This one is pretty straight forward, for there are plenty of substitutes inthe insurance industry. Most large insurance companies offer similar suites of services.Whether it is auto, home, commercial, health or life insurance. In some areas ofinsurance, however, the availability of substitutes are far and few between. Metlife

focusing on niche areas usually have a competitive advantage, but this advantagedepends entirely on the size of the niche and on whether or not there are any barrierspreventing other firms from entering.


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Competitive Rivalry-HighAnd last but not the least, this describes the intensity of competition between existingfirms in an industry. Highly competitive industries generally earn low returns becausethe cost of competition is high.

The insurance industry is becoming highly competitive. The difference

between one insurance company and another is usually not that great. As a resultinsurance has become more like a commodity, an area in which the insurance companywith the low cost structure, great efficiency and better customer service will beat outcompetitors. HDFCSLIC also use higher investment returns and a variety of insuranceinvestment products to try to lure in customers. In the long run, were likely to see moreconsolidation in the insurance industry. Larger companies prefer to takeover or mergewith another rather than spend the money to market and advertise the people.


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S.W.O.T ANALYSIS OF HDFC SLIC INDIA INSURANCE

STRENGTHS

Brand Image , Business Experience and Innovative products..

Large number of young workforce .The 40Kagents which are very selectively

chosen .

Service quality which is the crux of their mission.

Has tie up with banks like HDFC BANK. Paidup capital ofRS 1900 cr as on 2008 which shows company dependability.

Very less charges on ULIP plans as compare to other insurance players .

1153.6 cr AFYP on 2008.

WEAKNESS

Many competitors in the market ofsame products by the title and difference in

premium and offerings.

Sustainable to riskassociated with investments in money market.

Very less network branches due to which its difficult for customer to make

payment easily.

Not focusing on consumer awareness mainly concentrating on personal

selling .


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More focusing in urban areas not touching rural area which has a very goodpotential market for insurance sector.

Lacking in advertistment due to which they are not able to cover a large

area or large no of customer.

OPPORTUNITY

Huge market is literally untapped.out of estimated 320 millions insurable

markets only 20% of the population is insured.

Health insurance and pension schemes, an estimated marketpotential of

approximately $ 15 billion.

Nearly 70% of the Indian population is without Life , Health , and Non-Life

insurance.

Per Capita life insurance premium in India in 2004 was $16 as compared to the

world average of $ 292.

Strong economic growth with increase in affluence and rising risk awareness

leading to rapid growth in the Insurance sector.

THREATS

Players like ICICI and birla sunlife offersame plans with low premiums.

Entry of many other private companies with equally strongexperience and

financial strength of foreign partners making the competition difficult and


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saturating the urban markets (example ; idbi fortis insurance , bharti axa insuranceand more.)

Current govt. policies do not encourage gross domestic savings. if the tax

liability of the sevice class rises, the customer will have little money to invest.

LIC has woken up from sleep and is following competitive strategies. its huge

surplus in life fund gives a capability to lodge price war.

RESEARCH METHODOLOGY

5.1 DESCRIPTIVE RESEARCH DESIGN

The research design adopted in this study is DESCRIPTIVE RESEARCH DESIGN. Adescriptive research design is the one which is description of the state of affairs as itexists at present. It includes survey and fact finding enquiries of different kinds. Theresearcher has no control over the variables. The researcher used this research design tofind out the respondents attitude and opinion about products offered.

5.2 SAMPLING DESIGN

A sample design is a definite plan for obtaining a sample from a given population. Itrefers to the techniques or procedures the researcher would adopt in selecting items forthe sample.


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SAMPLING

The researcher adopted convenience sampling. It is the non probability sampling is thatsampling procedures does not any basis for estimating the probability that each item inthe population has of included in the sample. The researcher selects the people accordingto their convenient.

SAMPLE SIZE

A sample of 150 people will be taken for the survey. The required data collected through

questionnaire.

5.3 SAMPLING AREA

The sampling unit may be a Geographical one such as state, District, Village etc., The

geographical sampling unit under study has covered the area of Chandigarh.

DATA COLLECTION

The information required for our project was collect mainly from the primary sources

and even from secondary sources. The primary source consists of the data analyzed from

questionnaire and interaction with the user at that time only. And internet is used assecondary source.


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5.4 DATA COLLECTION METHODData is collected through questionnaire schedule method.

5.5 CONTACT METHOD

Face to Face

Findings , Analysis and Interpretation


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Q1. How important it is to take a insurance policy? a. Very Important b. Important c. Not Important d. Dont Know

INTERPRETATION

48 % of the total respondents suryed think that Life Insurance policy is important forthem and 28.8% respondent think that it is very important and only 16% think that Lifeinsurance is not impotant for them.

Q2. Sources which helps you in making the investment decisions: a. Financial journal / business magazines11 b. Reference groups 21 c. Television 45 d. General / business newspapers 16 e. Brokers / agents / professional consultant 23 f. Word of mouth/ influencer 34

INTERPRETATIONTelevision is major source which helps in making the investment decision its theperception of 30% respondent suryed and 22% respondent make there decision on word

of mouth and only 7% respondents takes the help of Finacial Journals/businessmagazines.


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Q3. What is the purpose of taking an insurance policy?

a. Investment b. Tax Saving c. Old Age Saving d. For Your Family Needs e. For Certain Mishappening f. Security

INTERPRETATION28% respondents think that Investment is the main purpose for taking an insurancepolicy and only 14% respondent think that there purpose of insurance policy is for

Certain Mishappening which is ultimately the main purpose of the Insurance.

Q4. According to you which among the following Life insurancecompanies would you? LIFE INSURANCE CORPORATION AVIVA LIFE INSURANCE ICICI PRUDENTIAL HDFCSLIC


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BIRLA SUN LIFE OTHERS

INTERPRETATION40% of the respondent surveyed perception is that LIC is best among all the Insuranceplayers and 14% respondent think that HDFCSLIC is the best among other insurance

players .

Q5. Are you aware of the allocation charges of different insurancecompanies? a. Yes b. No

INTERPRETATION


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70% of the total respondents surveyed dont aware of different charges charged byInsurance companies and only 29% respondent surveyed aware about different charges .

Q6. Factors that influence your investment decisions in a particularcompany:

RankingResponse

1 2 3 4 5 6 7

8

Brand 39 29 29 17 14 9 8 5

Promotion 28 27 31 19 16 12 9 8Relation withAgent

22 31 26 21 19 15 7 9

Rate of Return 16 15 21 24 27 19 20 8Life Insurance

Cover

13 11 15 23 25 21 24 18

Tax Benefits 9 13 14 22 18 23 25 26BetterServices

15 15 8 13 15 25 29 30

Allocation 8 9 6 11 16 26 28 46


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Charges

INTERPRETATION26% of total people surveyed have ranked Brand as #1 for influence them for taking aninvestment decision and 18% respondent ranked Promotions # 1 for there investmentdecision and 14% people ranked relation with agent as #1 for their decision and 31%

respondent ranked Allocation charges as #8 for their investment decisions.

Q7. Which Companys Insurance do you have? LIC

ICICI Prudential

Bajaj Allianz

HDFC

Birla Sun Life

Others Pls Specify..

INTERPRETATION49% of total respondent surveyed have LICs Insurance Policy, 18% have ICICIPrudential & only 5% respondents have Insurance policy of companies like Metlife,Bharti AXA, IDBI Fortis etc.


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Q8. Are you satisfied with the return, which you are getting from yourcurrent policies? a. Very Satisfied

b. Satisfied

c. Not Much Satisfied

d. Dissatisfied

INTERPRETATION38% respondent surveyed are satisfied with the return they are getting from their currentpolicies and only 46% respondent are not much satisfied & dissatisfied from the returnthey are getting from their current policies.

Q9. Which type of fund will you prefer for investment ? a. Whole Life Policy (5 to 6 % low risk)

b. Endowment (9% moderate) c. ULIP (>15% high risk) d. Equity (very high risk)


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INTERPRETATION34% of the respondent surveyed are willing to invest in ULIP plans which has high riskand 31% people surveyed are willing in Equity which has very high risk and only 12%respondent surveyed willing to investment in whole life policy because of low rate ofreturn.

Q10. Where do you generally like to invest your money?

Rating response1 2 3 4 5

Insurance 35 38 36 27 14

Stock Market 49 35 31 29 6

Mutual fund 32 29 32 31 26

Bank / Fixed Deposits / PostOffice savings

24 27 29 32 38

Others (Real estate, Gold etc.) 10 21 22 31 66

INTERPRETATION32% of the respondent surveyed are like to invest their money in stock market , 23% ofrespondent are like to invest in insurance and 21% people surveyed like to invest in

Mutual fund it shows that insurance has tough competition from other investmentinstruments like stock and mutual funds.


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Q11. What attracts you more to buy insurance? a. Lower Premium Allocation Charges b. Guaranteed Return c. Return Depend on Market

d. Any other ( please specify).

INTERPRETATION33% of respondent surveyed thinks that Return depend on market condition attracts themmore to buy an insurance policy (example- ULIPS) and 27% respondent think thatguaranteed return on an insurance policy attracts them more to buy an insurance policyand only 19% respondents have a perception that low allocation charges attracts themfor buying an insurance policy.

Q12. Which factor will you give preference while buying an insurancepolicy? a. Brand b. Policy Scheme c. Relationship (agent)

d. Service

INTERPRETATION


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35% respondent surveyed give preference to Brand image for buying an insurancepolicy and only 13% respondent surveyed give preference to the Service provided by thecompany for buying an insurance policy.

Q13. Which mode would you prefer to pay premium? a. Single Premium b. Annually c. Half Yearly d. Monthly

INTERPRETATION51% of the respondent surveyed willing to choose the annually premium pay andonly17% respondent choose monthly mode for paying a premium.


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RECOMMENDATIONS

The HDFC SLIC should now try to identify the gap between current level of customerservice and customer expectations. Some of the strategies being recommended are asfollows:

Brand Building: STANDARD LIFE is a very huge Brand in UK in Insurance

but in India it is not known as a Insurance brand. So HDFC SLIC need to focus

on Brand building Activities which can be done through Advertising, Road

shows, Knops, Sponsoring Events in rural & Urban Areas.

Educating the Consumers: As per the survey Conducted it is found that most

of the respondents dont know the core function of the insurance & they are

taking it only as an investment instrument & also they are not aware of the nitty-

gritty like different allocation charges. So HDFC SLIC should take initiative to

educate the consumers regarding all these aspects & take competitive Advantage

on this front as its Allocation charges are competitive in the whole Indian

Insurance Industry.

Need to Increase Market Presence: As per the survey conducted it is foundthat HDFC SLIC has only 10% market share, it is because its presence in market

is very less. It should make more channel partners & do business tie ups with

more broking houses & should hire marketing agencies for aggressive marketing

purpose. It can also increase its Business Units.


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Concentration More On Rural Areas : HDFC SLIC need to concentrate moretowards the rural areas as 60-70% of India population is living in rural areas andmost of the people in rural areas are not insured so there is a huge potential inthe rural sector.

Product Differentiation : Offering a product that is distinctly different fromother products available in the market by other insurance players.

More Guaranteed Plans to be Introduced : As we know today the stockmarket is giving very less return even in last year the return comes Negative sothe company need to introduce some more guaranteed plans so that customer caninvest in them and have assured return on them which ultimately is an edge incompetition in insurance sector.

Need to commence Medical claim Products and General Insurance :There are very less which are having Medical claim products and also very lesscompanies providing General Insurance with Life Insurance for example ICICI ,Reliance and Bajaj Allianz so HDFC SLIC also need to come in GeneralInsurance business so that they can compete with these players.

Flexibility: The companies should make their products flexible for theconvenience of their customer.

Hassle Free Service: All bureaucracy in customer interactions should beeliminated.

Proper Policy Documentation: Wrong interpretations/ non-awareness of policy

document by the customer may have serious implications in the long term andthe possibility of the same should be alleviated by the company which leads to.


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CONCLUSION

The various conclusions drawn from the project are: -

There has been tremendous change in the insurance history. And with it there has been

continuous growth in this sector both in Indian as well as world context.

The opening up of the insurance sector has changed the whole look of the industry.

While the LIC in order to face the competition is coming with new strategies. New

players like HDFC SLIC , ICICI , Birla Sunlife are leading the sector due to their

strategic management and tailored made projects.


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From our research also we conclude that though the awareness and people opting for LICplans are more as compare to HDFC SLIC but the later are gaining momentum in the

market day by day.

The primary reasons for buying an insurance policy, whether life or non-life is to protect

us from vagaries of life. We do not invest in insurance for returns; rather we invest in it

for regrettable necessities. Though a large proportion of policies available in the country

provide for returns, but nobody is looking for returns to the inflation rate. So what does

insurance offer, perhaps peace of mind, but even that takes time, due to poor claim

performance

The demand for insurance is likely to increase with rising per-capita incomes, rising

literacy rates and increase of the service sector, as has been seen from the example of

several other developing countries. In fact, opening up of the insurance sector is an

integral part of the liberalization process being pursued by many developing countries

Insurance is a Rs.400 billion business in India and yet its spread in the country is

relatively thin. Insurance as a concept has not been able to make headway in India. There

has been a strong fall in insurance business in recent years. Furthermore, it can be

observed that non-life business is not increasing as strongly as life business. On the other

hand, growth fluctuations have been relatively small with growth rates varying between

1% and 5%. Life insurance business by contrast achieved average growth rates of 6%,

although the actual rates ranged from 0% to 13%. This shows on the one hand the

increasing significance of life insurance as an instrument for old age provisions and on

the other hand indicates the sensitivity of life insurance to changes in the institutional

and economic environment.

References

IRDA Annual Report, 2007-08

Principles of Life Assurance, IC-23


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Business Research Method by ICFAI Center for Management and Research Business Research Method by Donald R. Cooper and Pamela S. Shchindler

Websites:

www.hdfcslic.co.in www.irdaindia.org www.insuranceworld.com www.findarticles.com
http://www.hdfcslic.co.in/http://www.hdfcslic.co.in/http://www.irdaindia.org/http://www.irdaindia.org/http://www.insuranceworld.com/http://www.insuranceworld.com/http://www.findarticles.com/http://www.findarticles.com/http://www.hdfcslic.co.in/http://www.irdaindia.org/http://www.insuranceworld.com/http://www.findarticles.com/


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ANNEXURE


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QUESTIONNAIRE

Q1. How important it is to take a insurance policy? a. Very Important b. Important

c. Not Important d. Dont Know

Q2. Sources which helps you in making the investment decisions: a. Financial journal / business magazines11 b. Reference groups 21 c. Television 45 d. General / business newspapers 16 e. Brokers / agents / professional consultant 23 f. Word of mouth/ influencer 34

Q3. What is the purpose of taking an insurance policy? a. Investment b. Tax Saving c. Old Age Saving d. For Your Family Needs e. For Certain Mishappening f. Security

Q4. According to you which among the following Life insurance companies would youprefer? LIFE INSURANCE CORPORATION AVIVA LIFE INSURANCE

ICICI PRUDENTIAL HDFCSLIC

BIRLA SUN LIFE OTHERS


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Q5. Are you aware of the allocation charges of different insurance companies? a. Yes b. No

Q6. Factors that influence your investment decisions in a particular company:

RankingResponse

1 2 3 4 5 6 7 8

BrandPromotionRelation withAgent

Rate of ReturnLife InsuranceCoverTax BenefitsBetter ServicesAllocationCharges

Q7. Which Companys Insurance do you have? LIC

ICICI Prudential

Bajaj Allianz

HDFC

Birla Sun Life

Others Pls Specify..


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Q8. Are you satisfied with the return, which you are getting from your current policies? a. Very Satisfied

b. Satisfied

c. Not Much Satisfied

d. Dissatisfied

Q9. Which type of fund will you prefer for investment ? a. Whole Life Policy (5 to 6 % low risk) b. Endowment (9% moderate) c. ULIP (>15% high risk) d. Equity (very high risk)

Q10. Where do you generally like to invest your money?

Rating response1 2 3 4 5

Insurance

Stock Market

Mutual fund

Bank / Fixed Deposits / PostOffice savingsOthers (Real estate, Gold etc.)

Q11. What attracts you more to buy insurance? a. Lower Premium Allocation Charges b. Guaranteed Return c. Return Depend on Market d. Any other ( please specify).

Q12. Which factor will you give preference while buying an insurance policy? a. Brand

b. Policy Scheme c. Relationship (agent) d. Service

Q13. Which mode would you prefer to pay premium?


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a. Single Premium b. Annually c. Half Yearly d. Monthly

PERSONAL INFORMATION :

Name:

Age:

Occupation: a. Service b. Business c. Self employed d. Retired

Income Level (per annum): a. Below 2 Lac b. 2 to 3 Lac . c. 3 to 5 Lac d. 5 to 7 Lac

e. 7 to 10 Lac f. Above 10 Lac

A1 ANALYSIS OF INDIAN INSURANCE COMPANY

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