HDFC Project

SCHOOL OF FUTURE STUDIES AND PLANNING, D.A.V.V.

PROJECT TITTLE:

HDFC SL IN COMPARISON TO OTHER INSURANCE COMPANY

SUBMITTED TO :- Mrs. Ashima Joshi

SUBMITTED BY :- Nitish Kumar

Neha Gupta

Swati Gupta

Deobrat

Pankaj Kumar

ACKNOWLEGEMENT

A good Dissertation requires sound knowledge of the subject concerned and to make proper use of knowledge one has to be assisted under proper guidance.

We are really indebted to my mentor Mrs. ASHIMA JOSHI who imparted the right frame of mine and helped whenever in need.

A large number of individuals have contributed to this project. We are thankful to all for them for their help and encouragement. It was an unforgettable experience, which provided us an opportunity to gain various management skills under this period.

Exchange of ideas generates a new object to working a better way. Apart from the ability labour and time devotion, guidance and cooperation are the two pillars for the success of the project. Whenever a person is helped or cooperated by others his heart is bound to pay gratitude to them.

We are extremely grateful and obliged to the organization, HDFC Standard Life Insurance Co. Ltd for providing information, there by making and completion of the project.

TO WHOM SO EVER IT MAY CONCERN

This is to certify that…………………………………………………………………………………………………………………………………………………………….of School Of Future Studies And Planning has successfully completed the project titled “HDFC SL in Comparison to Other Insurance Companies”, under the guidance of Mrs. Ashima Joshi.

From: …………………

To: ……………………

SYNOPSIS

DISSERTATION TOPIC

“Comparative analysis of HDFC Standard Life Insurance Co. with LIC & ICICI Pro.Life.”

OBJECTIVE OF THE RESEARCH

The objective of the research is divided is divided into two folds:

1) To analyze the changing scenario of HDFC Standard Life Insurance Co.and do the comparative analysis with ICICI Prudential and LIC of India.

2) To devise the marketing strategies of HDFC so as to further increase its market share.

RESEARCH METHODOLOGY

The methodology that is being adopted is basically a descriptive research as it is based on the secondary data.

DATA COLLECTION

Secondary data is being collected from magazines, newspaper, book and internet.

TABLE OF CONTENT

CHAPTER-1

INTRODUCTION OF INDUSTRY AND COMPANY

CHAPTER-2

INTRODUCTION OF INSURANCE AND CHANGING SCENARIO OF LIFE INSURANCE

CHAPTER-3

OBJECTIVE OF RESEARCH

CHAPTER-4

RESEARCH METHODOLOGY

CHAPTER-5

DATA ANALYSIS AND FINDING

CHAPTER-6

LIMITATIONS

CHAPTER-7

SUGGESTIONS

CHAPTER-8

INTERPRETATION

CHAPTER-9

MARKETING STRATEGY OF HDFC STANDARD LIFE

CHAPTER-10

CONCLUSION

CHAPTER-11

QUESTIONNAIRE AND ANNEXURE

CHAPTER-12

BIBLIOGRAPHY

INTRODUCTION TO THE COMPANY

HDFC STANDARD LIFE INSURANCE COMPANY

HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement.

Around this time Standard life purchased a 5% stake in HDFC, further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to venture.

In October 1988, the joint venture agreement was renewed and additional resource made available. Around this time standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IRDA). Standard life also started to use the services of the HDFC Treasury department to advice them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai.

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

In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.

Incorporation of HDFC Standard life Insurance Company Limited:

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

Its ambition from as far back as October 1995 was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000,this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life, with 81.9%, while Standard life owns 18.1%. Given Standard Life existing investment in the HDFC group, this is the maximum investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and to be the yardstick by which all other insurance company’s in India are measured.

Vision:

The most successful & admired Life Insurance company, which means that we are the most trustful company, the easiest to deal with, offer the best value for money & set the standards in the industry.

Values:

Integrity, innovation, customer centric, people’s are “one for all & all for one”, team work, joy & simplicity.

Key strengths

Financial expertise

As a joint venture of leading financial services groups, HDFC Standard Life has the financial expertise required to manage yours long-term investments safely and efficiently.

Range of solutions

We have a range of individuals and group solutions, which can be easily customized to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure.

Track record so far

Our gross premium income, for the year ending March 31, 2009 stood at Rs 5564.69 crores. The company has covered over 27 lakh policies.

BOARD OF DIRECTORS

Mr. Amitabh Chaudhry Managing Director and Chief Executive Officer

Mr. Amitabh Chaudhry is the Managing Director and Chief Executive Officer of HDFC Standard Life.

Before joining HDFC Standard Life in January 2010, he was the Managing Director and CEO of Infosys BPO and was also heading an Independent Validation Services unit in Infosys Technologies. Mr. Chaudhry started his career with Bank of America delivering diverse roles ranging from Head of Technology Investment

Banking for Asia, Regional Finance Head for Wholesale Banking and Global Markets and Chief Finance Officer of Bank of America (India). He moved to

Credit Lyonnais Securities in 2001 in Singapore where he headed their investment banking franchise for South East Asia and structured finance practice for Asia

before joining Infosys BPO in 2005.

Mr. Chaudhry completed his Engineering in 1985 from Birla Institute of Technology and Science, Pilani and MBA in 1987 from IIM, Ahmedabad.

Mr. Paresh ParasnisExecutive Director and Chief Operating Officer

Mr. Paresh Parasnis is the Executive Director and Chief Operating Officer of HDFC Standard Life.

A fellow of the Institute of Chartered Accountants of India, he has been associated with the HDFC Group since 1984. During his 16-year tenure at HDFC Limited, he was responsible, for driving and spearheading several key initiatives. As one of the founding members of HDFC Standard life, Mr. Parasnis has been responsible for

setting up branches, driving sales and servicing strategy, leading recruitment, contributing to product launches and performance management system, overseeing

new business and claims settlement, customer interactions etc.

Ms. Vibha PadalkarChief Financial Officer

Ms.Vibha Padalkar is the Chief Financial Officer of HDFC Standard Life.

Ms. Padalkar joined HDFC Standard Life in August 2008 after a seven year stint as Executive Vice President-Finance at WNS Global Services, a NYSE listed leading global business process outsourcing company. Vibha’s key achievement during her tenure at WNS was to lead a team that successfully completed the Group’s IPO on the New York Stock Exchange in a short span of six months. Prior to WNS, Vibha

was with Colgate Palmolive India for 7 years, including a short posting to the Group's New York headquarters.

Ms.Padalkar became a member of the Institute of Chartered Accountants in England and Wales in 1992, after having completed the last part of her schooling

as well as college education in London.

Mr. Sharad GangalGeneral Manager, Human Resources and Administration

Mr. Sharad Gangal is the General Manager HR and heads the vertical in HDFC Standard Life.

Mr. Gangal joined HDFC Standard Life in July 2007 with rich experience of more than 25 years in spearheading various departments of

Human Resources arena in the FMCG and pharmaceutical industry. Before HDFC Standard Life, he was associated with Cadbury India for

11 years followed by a stint at Cadbury Australia, Asian Paints for 5 years and Boehringer Mannhein for seven years.

Mr. Gangal is a Post Graduate in Human Resources. Employee engagement and Change Management are his areas of specialization.

Mr. Vikram MehtaGeneral Manager, Sales and Marketing

Mr.Vikram Mehta heads the Sales and Marketing function for HDFC Standard Life.

Mr. Mehta joined HDFC Standard Life in February 2009. Before joining HDFC Standard Life, he was associated with Citibank for 16 years

serving various responsibilities including the Head for Direct Sales - Citibank Credit Cards division in Germany, Regional Director East -

Citibank NA, India, and Acquisitions Head – Credit Cards, Central and Eastern Europe cluster. Mr. Mehta started his career with Reckitt and Colman (now Reckitt Benckiser) in 1988, and was associated with the

company for 4 years. He has been a part of FMCG and banking industry for over 20 years.

Mr. Mehta has completed Chemical Engineering from the Indian Institute of Technology (IIT) Delhi and holds a PGDM from IIM

Calcutta.

Mr. Prasun Gajri Chief Investment Officer

Mr. Prasun Gajri is the Chief Investment Officer of HDFC Standard Life.

Mr. Gajri joined HDFC Standard Life in April 2009 with a rich experience of 14 years in investments and banking industry. He started his career in 1995 with Citibank and was associated with it for over 6

years delivering various roles. He joined Tata AIG Life Insurance Company in October 2001 to start the investment function and stayed there until April 2009, the last role being that of the Chief Investment

Officer.

He holds a PGDM from IIM Ahmedabad and is also a CFA Charterholder.

Associate Companies

HDFC Limited

HDFC Bank

HDFC Mutual Fund

HDFC Sales

HDFC ERGO General Insurance

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

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: The market contained 154 Indian and 16 foreign life insurance companies.

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on September 1956 to spread the message of life insurance in the country and mobilize people’s savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country and 220 million lines are part of LIC.

The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Kin-India Assurance Company Limited, Nairobi; United Oriented assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K.

LIC has even provided insurance cover to five million people living below the poverty line, with 50per cent subsidy in the premium rates. LIC’s claims settlement ratio at 95 per cent and GIC’s at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82% (2004-05).

1. HDFC Standard Life Insurance Company Ltd.

HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000

individuals out of which over 3,40,000 lives have been covered through our group business tie-ups.

2. Max New York Life Insurance CO. Ltd.

Max New York Life Insurance Company Limited is a joint venture that brings together two large forces – Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India.

3. ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 bank assurance and 150 corporate agent tie-ups.

4. Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

5. Birla Sun Life Insurance Company Ltd.

Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial services of Canada.

Tata AIG Life Insurance Company Ltd.

SBI Life Insurance Company Ltd.

ING Vysya Life Insurance Company Private Ltd.

Allianz Bajaj Life Insurance Company Ltd.

Metlife India Insurance Company Pvt. Ltd.

AMP SANMAR Assurance Company Ltd.

Dabur CGU Life Insurance Company Pvt. Ltd.

Marketing Mix Policies

Different companies can choose to position themselves differently and hence the marketing Mix is different. However, there are certain common characteristics that one can cull out from the possible strategies that companies adopt.

Product:

The development of flexible products to suit individual requirements is what sill differentiates the winners from the also-rans. The key to success is in providing insurance solutions, not standardized insurance products. The concept of riders/optional benefits has already been a huge innovation brought about by the new players, which has led to customization of products for individual needs. However, companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in.

Place:

Different companies may however choose different channels and different geographies to focus on. The channel options are – tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. Many companies like HDFC Standard Life are focusing on all channels whereas companies whereas companies tike Max New York Life are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of services set by the company and it will be imperative for any serious player to excel in all of these.

Price:

Price is a relevant differentiator only in two segments – pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long-term returns generated are more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good ling-term

maturity value for customers. Norms have been laid down on all of these by irda and adhering to these while delivering good returns will be a challenge.

Promotion and Advertising:

The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian People. Various communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these.

Process:

Cashless settlement: One of the most defining and customer-friendly changes that we’ve seen in recent years relates to the way claims settlements are made. The advent of the third-party administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless settlement of health and auto insurance claims. TPAs are entities who process claims on behalf of insurances: the IRDA licenses them after it is satisfied that they have the financial strength, the trained manpower, the infrastructure and the skills to undertake this activity. Likewise , with auto insurance, the TPA ties up with garages and authorized service centers for cashless settlement of auto insurance claims.

Lower premiums: The spirit of competition and the broadening of the risk experience of insurance companies have contributed to a fall in premiums over the years. That’s because, other things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the lives of, say, 100 people. Further, a broader base will provide greater efficiencies on costs such as distribution, management and claims. A broad basing of the mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to continue.

Premium payment flexibility: Insurers have imparted certain flexibility to premium payment options in order to address this concern. For instance, one now have the option to pay your premiums upfront, which is then carried forward for the tenure of the policy. The yearly premiums are drawn from the initial corpus. Insurers have also introduced the concept of ‘automatic cover maintenance’ to protect your policy from lapsing owing to your omission to pay your premium on

time. Under this, in the event of your not paying the premium, the insurer dips into your investment account to the extent of the premium. Of course, this comes with an in-built drawback: your investment portion diminishes year on year to the extent of the amount paid to cover your risk.

Physical Evidence:

This can play a significant role for marketing in the Indian scenario. Since Internet users are comparatively lesser than countries such as US, the offline mode will be preferred in India. Although the distribution model is largely agent-based, wherever the customer is in contact with the company, this factor can play a significant role in luring the customer.

People:

The most important factor that materializes sales and maintains customer relationships on a long-term basis is this factor. No matter what distribution strategy a company adopts, customer relationship has to be taken care of in order to maintain the customer base on a long-term basis.

PRODUCT PROFILE

PRODUCTS

We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, we have a varied range of Product that you can choose from to suit all your needs. These will help secure your future as well as the future of your family.

At HDFC Standard Life, we offer a bouquet of insurance solution to meet every need. We cater to both, individuals as well as to companies looking to provide benefits to their employees. This section gives you details of all our products. We have incorporated various downloadable forms and product details so that you can make an informed choice about buying a policy.

For Individuals, we have a range of protection, investment, pension and saving plans that assist and nature dreams a part from providing protection. You can choose from a range of product to suit your life- stage and needs.

For Organization we have a host of customized solutions that range from Group Term Insurance, Grauity, Leave Encasement and Superannuation Product. These affordable plans apart from providing long term values to the employees help in enhancing goodwill of the company.

Individual Products

Protection Plans

You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability. These plans offer valuable peace of mind at a small price,

Our Protection range includes our

Term Assurance Plan & Loan Cover Term Assurance Plan.

HDFC LOAN COVER TERM ASSURANCE PLAN

Secure your Family Financial independence and self-respect.

You have always ensured that your loved once keep living a respectable life with their heads held high. But life with their heads held high. But life can be uncertain. As a prudent family man, you need to secure your family future and protect your pride and your family’s self respect. You need to have a plan to take care of your family if something unfortunate were to happen to you.

With our protection plan, you can protect your family from uncertainty in life such as unfortunate death or critical illness. And ensure that your family lives a life of self- respect and dignity even in your absence.

Our Protection Plan gives you:

An ideal way to secure the financial future of your loved ones. High cover at a very nominal cost plus an option of adding optional

benefits to cover for other eventualities.A choice of two plans depending on your requirement:

HDFC Term Assurance Plan: A pure risk cover plan, which gives you

protection against the uncertainties of life.

HDFC Loan Cover Term Assurance Plan: An ideal way to cover your

home loan or other loan liabilities.

HDFC Loan Cover Term Assurance Plan:

This plan provides a lump sum on the unfortunate death of the life assured within policy term. If you are taking a loan to buy a house for your family, this plan can help you ensure that life’s uncertainties don’t affect their shelter. It is an affordable plan that has been designed to help your family repay the outstanding loan in case of your unfortunate death. The lump sum will be a decreasing percentage of the initial sum assured as the outstanding loan decreases as per the policy schedule.

HDFC Single Premium Whole of Life Insurance Plan is a Tailor-made plan well suited meets your long –term investment needs. This

participating plan offers you the following benefits:

Whole of life plan aimed at providing long term real growth of your money.

Pension Plans

Our Pension Plans help you financial independence even after retirement.

Our Pension range include: Personal Pension Plan, Unit Linked Pension, Unit Linked Pension Plus.

HDFC PERSONAL PENSION PLAN

Hold you’re high. Even after retirement.

It’s an insurance policy, which can benefit you in the following ways:

Provide a post retirement income in your golden years. Gives you the flexibility to plan your retirement date. Give you tax benefits on your premiums.

HDFC UNIT LINKED PENSION

Lead a life of respect and dignity. Even after Retirement.

The Hdfc Unit Linked Pension IS an Insurance policy that is designed to provide a Retirements income for life with freedom to maximize your investment return. Stride in to your golden year of retirement with dignity and pride. It gives you:

A post retirement income for life. Flexibility to plan your retirement date. Freedom to invest premium as per your performance.

HDFC UNIT LINKED PENSION PLUS

Lead a life of respect and dignity. Even after retirement.

It is designed to provide a retirements income for life with freedom to maximize your investment return. Stride in to your golden year of retirement with dignity and pride.

The HDFC Unit Linked Pension Plus Gives You:

An Outstanding investment opportunity by providing a choice of thoroughly researched and selected investment.

Regular Loyalty Unit to boost your fund value every year. A post retirement income for life. Flexibility to plan your retirements date. Freedom to invest premiums as per your preference

HDFC UNIT LINKED ENDOWMENT

Invest in financial security and self- respect for you and your family.

It gives you:

An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments.

Valuable protection to your family in case you are not around. Flexible benefits combination and payment option. Flexible addition benefit options such as critical illness cover. Access to your accumulated fund before maturity.

HDFC Money Back Plan

Secure your financial independence. Live life on your own terms

You have always believed in living life on your own terms. So why let the changing realities of everyday life overwhelm you and make your aspirations take a back seat?

You can plan now to ensure that you have the necessary funds to meet your future financial need.

LONG-TERM GOALS SHORT TERM GOALS

Saving for future Saving for your marriage

Critical illness Buying a car

Saving for big- Vacation abroad

Ticket assets like your

House

MATURITY VALUE

On Maturity you receive survival benefit due at that point of time along with attaching bonuses for the full Sum Assured calculated for the full term.

HDFC CHILDREN’S PLAN

Give your child perfect start in life

As a parent, your priority is your child's future and being able to meet your child's dreams and aspirations. Today, providing a good education, establishing a professional career or even a modest wedding is expensive. Costs are increasing fast. Just imagine how much you'll need when your child takes these important steps in life!

Plan today to ensure a bright future for your child. Start saving today with HDFC CHILDREN'S PLAN, so that your child is able to lead a life of respect and dignity with a secured financial future. 

It gives you:

Invaluable financial support to your child. A choice to customize an ideal plan for your child. Multiple option for multiple benefits.

HDFC UNIT LINKED YOUNG STAR PLUS

Plan today to ensure a bright future for your child. Start saving today with HDFC UNIT LINKED YOUNG STAR PLUS II, so that your child is able to lead a full life with a secured financial future.

Use HDFC Standard Life's excellent investment options to maximize your savings and maximize your child's achievements. We will provide security for your child and make those savings on your behalf, in your absence.

It gives you

An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments.

Regular Loyalty Units to boost your fund value every year.

Low fund management charge designed to give you great maturity values.

Beneficiary concept, where beneficiary is the sole person to receive the benefit under the policy.

Flexible benefit combinations and payment options.

Flexible additional benefit options such as critical illness cover.

Access to your accumulated fund before maturity

MEANING OF INSURANCE

The meaning of insurance: Insurance is a policy from a large financial institution that offers a person, company, or other entity reimbursement or financial protection against possible future losses or damages.

Insurance is bought in order to hedge the possible risks of the future which may or may not take place. This is a mode of financially insuring that if such a incident happens then the loss does not affect the present well-being of the person or the property insured. Thus, through insurance, a person buys security and protection.

A simple example will make the meaning of insurance easy to understand. A biker is always subjected to the risk of head injury. But it is not certain that the accident causing him the head injury would definitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases acts as insurance by protecting him/her from any possible danger. The price paid was the possible inconvenience or act of wearing the helmet; this i.e. equivalent to the insurance premiums paid.

Though loss of life or injuries incurred cannot be measured in financial   terms , insurance attempts to quantify such losses financially. Insurance can be defined as the process of reimbursing or protecting a person from contingent risk of losses through financial means, in return for relatively small, regular payments to the insuring body or insurance company.

Insurance can range from life to medical to general (residential, commercial property, natural incidents, burglary, etc).

Life   Insurance It insures the life of the person buying the Life Insurance Certificate. Once a Life Insurance is sold by a company then the company remains legally entitled to make payment to the beneficiary after the death of the   policy   holder .

Medical Insurance This is also known as mediclaim. Here, the policy holder is entitled to receive the amount spent for his health purposes from the insurance company.

General Insurance This insurance type involves insuring the risks associated with the general life such as automobiles, business related, natural incidents, commercial and residential properties, etc.

NEED FOR LIFE INSURANCE

Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting 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 or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation.

The core benefit of life insurance is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation 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 married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence.

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

Life insurance is the only investment option that offers specific products tailormade for different life stages. It thus ensures that the benefits offered to the

customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met.

WHY IS INSURANCE SUPERIOR TO OTHER FORM OF SAVING?

FINANCIAL PROTECTION:

Small & big savings through life insurance guarantees full protection against the risk of death of the person saving. In case of death, in Life insurance, the full sum assured is payable (with bonuses wherever applicable), whereas in other savings schemes, only the amount saved (with interest) is payable.

LIQUDITY:

Loans can be raised on the sole security of a policy which has acquired loan value. Also, a life insurance policy can be accepted as security for even a commercial loan.

TAX RELIEF:

Tax relief in Income Tax and Wealth Tax is available for those amounts that are paid by way of premium for life insurance (as per Income Tax rates that are in force). Thus, in effect, in such cases the assured is paying a lower premium for his insurance than he would have to pay otherwise.

MONEY WHEN YOU NEED IT:

A suitable single insurance plan or a combination of different plans can be taken out to meet the specific needs that are likely to arise in future.

COMPULSORY SAVING: It is a tendency of people, to save only for tax saving purpose, or for a shorter duration a lump sum amount. LIC policies are generally taken for a longer duration, which makes a compulsory habit for saving, every year, a sufficient amount, which otherwise is generally spent on non-investment activities.

FOR CERTAIN FUTURE NEEDS:

Policy returns can be arranged & planned in such a way, to be made available at the time of specific needs - such as for Children's marriage, their Education, Higher Education, New-start-up, purchase of a house, car, provision for old age, improved standard of living, or for other investments.

RETIREMEWNT PLANNING:

Every life has a limited time frame and age till which he can work and earn. Life insurance policies can be planned in such a way, so as to give returns periodically, every year, sufficiently, to cover all expenditures, and maintain the standard of living.(Lets you be independent and self-sufficient, whether you are working and earning or not.)

PROTECTION FROM CREDITORS:

The most worried thing that many do not take care of is protection from creditors, in case of any eventualities. In case of sudden death of the bread earner, if any loans against House, vehicle, business, education, etc have been taken - the life insurance policy amount (Sum assured and bonuses wherever applicable) helps the wife & children pay the creditors, if sufficient risk cover is taken (Insurance policy should be taken so much as to cover the worth, so that the family can live on.)

There are many more reasons for any person to realize that Life Insurance Policy is a superior form of investment, because nothing is more important to any person than his life. And as we all believe, "Life Insurance is not for the People who DIE, but it is for the People who LIVE". You Save, You Invest, and You reap benefits.

LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGE

The need for insurance changes as one’s life changes. When one is young, one typically has no need for life insurance, but this change as one take on more responsibility and as ones family grows. Then as responsibility once again begin to diminish, one need for life insurance drops off. Let’s look at how life insurance needs change throughout one lifetime.

School Days:

Providing life insurance money to a surviving spouse and children can give your family the needed security in order to live with the loss of a father or mother. In order to determine life insurance needs a variety of factors should be considered. The rule of thumb for needed life insurance is 5 to 8 times the annual salary of the person needing insurance. This rule of thumb does not always apply in all situations, particularly if the parent is a stay at home mom or dad. This article will help you to calculate the amount of life insurance you need by more accurately looking at specific expenses.

For growing family:

When one has young children, the life insurance needs reach a climax. In most situations, life insurance for both parents is approximate.

Single income families are completely dependent on the income of the breadwinner. If he or she dies without life insurance, the consequences could be disastrous. The death of the stay-at –home spouse would necessitate costly daycare expenses. Both spouses should carry enough life insurance to cover the expenses that would result from their death.

Moving up the ladder:

For many people, career advancement means starting a new job with a new company. At some point, you might even decide to be your own boss and start your own business. It's important to review your life insurance coverage any time you leave an employer.Keep in mind that when you leave your job, your employer-sponsored group life insurance coverage will usually end, so find out if you will be eligible for group coverage through your new employer, or look into purchasing life insurance coverage on your own. You may also have the option of converting your group coverage to an individual policy. This may cost significantly more, but may be wise if you have a pre-existing medical condition that may prevent you from buying life insurance coverage elsewhere. Make sure that the amount of your coverage is up-to-date, as well. The policy you purchased right after you got married might not be adequate anymore, especially if you have kids, a mortgage, and college expenses to consider. Business owners may also have business debt to consider. If your business is not incorporated, your family could be responsible for those bills if you die.

Single again

If you and your spouse divorce, you'll have to decide what to do about your life insurance. Divorce raises both beneficiary issues and coverage issues. And if you have children, these issues become even more complex.If you and your spouse have no children, it may be as simple as changing the beneficiary on your policy and adjusting your coverage to reflect your newly single status. However, if you have kids, you'll want to make sure that they, and not your former spouse, are provided for in the event of your death. This may involve purchasing a new policy if your spouse owns the existing policy, or simply changing the beneficiary from your spouse to your children. The custodial and no custodial parent will need to work out the details of this complicated situation. If you can't come to terms, the court will make the decisions for you.

The golden years:

Just like all other age groups, seniors have their own unique life insurance and financial planning needs. Below are some of the reasons it's important for seniors to carry adequate life insurance.

Settlement Costs:

 Unfortunately, the grief of a loved one's passing is not all a survivor has to deal with. There are also funeral costs and arrangements and other costs associated with death. You may have incurred hefty healthcare costs before you passed away, and the burden of paying for these may have passed to your survivors. Life insurance proceeds normally are not subject to probate, so survivors will have cash quickly to pay their bills and the costs of your passing.

Estate Taxes:

 Not only will your survivors have to pay for the funeral and other costs, they also may have to pay substantial estate taxes. Larger estates usually face fairly heavy estate taxes, and this may be a cost your survivors hadn't planned for. As discussed above, life insurance proceeds will be a quick and painless way to pay for these costs, so the survivors don't have to struggle financially.

Leaving Your Survivors Comfortable:

 If you have a surviving spouse, will he or she be able to live comfortably on one retirement income and/or pension or social security payment? Likewise, as discussed above, other survivors, such as children, may not have enough cash on hand to settle your estate and pay death costs. Life insurance can pay that quickly, and help your loved ones get through the loss of you with a little more ease. Often many survivors lose days of work or suffer emotionally or physically from your passing. A quick life insurance pay-off will help reimburse them for any costs incurred.

Other Things to Think About in Your Golden Years:

Besides life insurance, it is important to be prepared for any eventuality. For example, do you have an up-to-date and official will? Writing a will is a simple, thoughtful thing you can do for your loved ones. Although different states have different requirements, here are some general tips to make a will legally binding:

It must be typewritten or computer generated. Some states allow handwritten wills, but they're hard to validate, which can complicate things.

The document must clearly state that it's your will.

It must be dated and signed. It must be signed by at least two independent witnesses.

They must watch you sign the will, though they don't need to read it. Your witnesses should preferably be individuals who won't inherit anything in the will.

As always, be sure to consult with an attorney and/or tax professional before drafting or executing any estate planning document such as a will or trust.

Another thing to keep in mind is to be careful with your retirement savings. You need to factor in inflation; while living on a certain annual salary may have been comfortable for you back in your working days, the costs of living are always going up, and you may need more to live comfortably in your later years. Be sure to live on what you can afford, and not spend too much of your savings in the beginning of your retirement, but instead plan ahead to disperse the money evenly throughout a long life. You never know how long you and your spouse may live, and it's important to plan for a long (and healthy) life.

Distribution Scenario in the Indian market

In today's Indian insurance market, the challenge to insurers and intermediaries is

Two-pronged:

Building faith about the company in the mind of the client

Intermediaries being able to build personal credibility with the clients

Traditionally tied agents have been the primary channels for insurance distribution in the Indian market; the public sector insurance companies have their branches in almost all parts of the country and have attracted local people to become their agent.

The agents are from various segments in society and collectively cover the entire spectrum of society.

A person who has lived in the locality for many years sells the products of the insurance company with a local branch nearby.

This ensures the last mile touch point being closer to the customer. Of course, the profile of the people who acted as agents suggests they may not have been sufficiently knowledgeable about the different products offered, and may not have sold the best possible product to the client. Nonetheless, the customer trusted the agent and company. This arrangement worked adequately in the absence of competition.

In today's scenario agents continue as the prime channel for insurance distribution in India, as is the case in most markets, supported by call centers to a small extent.

Almost all the new players follow this model primarily because the regulations for other channels are yet to be put in place.

However there is great excitement in the industry over the impending broker regulations and companies are planning possible channels in their enthusiasm to increase volumes. The belief that all these channels will grow and seamlessly integrate to bring in business seems a fallacy.

What have emerged are a much more difficult and evolving market scene with existing players, more new players coming in, and global marketing practices and ideas being tested. But none of this has changed the fundamental character of the market, which we believe will take more time than expected.

What should the companies look at?

Basically companies have to take a look at the intermediaries they are using, whether it is optimal to use them, and what are the alternatives?

The new companies have attempted appealing only to the middle, upper middle and elite classes in the major cities. Contrasted with Public sector insurance companies, with their offices across the country, the new companies have miles to go before they reach anywhere. They must overcome the mindset of the customer that life insurance is Life Insurance Corporation of India (LIC) and general insurance is General Insurance Corporation of India (GIC) if they hope to grow in

the market. Meanwhile, the public sector companies are going to great lengths to revamp their image to look and feel more contemporary.

Both the public and new private sector companies are fighting their own battles from the perspective of customer perception management:

Public sector companies

Private sector companies

Identity is well established, but the perception of “poor service providers” is a stigma.

Have to build their identity in a market where the public does not distinguish them.

Products are not attractive and flexible enough but expensive.

Remove the perception that anything that looks good is expensive.

To retain their creamy layer clientele who are the most likely to be wooed by the new companies.

Work against the people mind set that they are not here for the long term.

Retain and attract good intermediaries.

Attract intermediaries especially agents with the requisite qualifications and attributes who can market the company and the product.

Match the aura created by the new companies in the urban market.

Run the risk of tapping an already insured market for repeat insurance instead of tapping new virgin pockets in the market.

In this process all are targeting the same market --the existing pie is being cut up further, but no attempt is being made to increase the size of the pie. For example, while attempts are made to complete the quota of rural insurance in percentage terms, the rural market potential is yet to be tapped, as the new insurers are not able to attract the right kind of talent into their distribution force to address this. Intelligent segmentation of distribution channels to match the market segmentation is what will help the companies to move in this direction.

Focus on multiple distribution channels

Though a multi-channel strategy is better suited for the Indian market as well, it is important to keep in mind that this market is really a conglomeration of multiple markets. Each of the markets within this conglomeration requires a different approach.

Apart from geographical spread the socio-cultural and economic segmentation of the market is very wide, exhibiting different traits and needs. Let us look at the various insurance distribution channels and the challenges faced by them from these perspectives.

Agents

Today's insurance agent has to know which product will appeal to the customer, and also know his competitor's products in the same space to be an effective salesman who can sell his company, the product, and himself to the customer. To the average customer, every new company is the same.

Perceptions about the public sector companies are also cemented in his mind.

The new companies are looking for educated, aware individuals with marketing flair, an elite group who can be attracted only with high remuneration and the lure of a fashionable job, all of which may not be possible in this business with its price pressures and the complexity of selling insurance. Unable to attract this segment, they have started easing recruitment conditions as against the stringent norms they had earlier, thereby diluting the process.

While the public sector companies are able to attract agents, they continue to suffer from high attrition rates due to indiscriminate agent appointment. The most successful of these companies' tied agents are hardly of the elite variety of salesman. They are still the neighborhood do goobers -- the postman, the schoolteacher, and the shopkeeper -- who know the people and are themselves known in the community. The challenge here is the lack of knowledge of the competitive market and the inability to do intelligent comparisons with the competitor's products. Educating and training these agents is a serious challenge for the insurance company.

The relevance of this kind of agent continues even today as agents are sought or contacted by families by word of mouth. Insurance companies are advised

not to follow the path of FMCG's/credit card companies, believing that a suited and booted customer care consultant or financial consultant will necessarily appeal to the average Indian customer.

Another social feature in the market is the considerable respect for age in Indian society and a belief that an older person knows better. A very young up-market agent who is a typical salesman may not appeal to a large segment of the middle class, which is looking for a solid trustworthy person from whom they can buy insurance.

In this context it might be a rewarding exercise to recruit some older people (who have taken VRS2 from banks and other financial institutions) to sell some lines of products like pension plans, annuities etc.

Gender of agents is another relevant feature in the rural context that makes a difference, especially for the female population. Women to whom the customers can relate --e.g., nurses, gram sevikas3 -- can target the female segment of the population more effectively. What is applicable for the rural women and children health programs and population control programs is equally applicable for insurance selling also. Max New York Life has adopted a version of this strategy by appointing gram sahayaks4 to sell and service the rural customers.

With this kind of segmentation of intermediaries the challenge for the insurance company lies in training and educating these people to become effective sales persons. But this in no way diminishes the benefits of intermediary segmentation.

Banks

Banks in India are all pervasive, especially the public sector banks. Can they also become the foremost channel for distribution of insurance? Perhaps in the future. The public sector banks, with their vast branch networks, are also plagued by a rigid unionized workforce and archaic systems, and lack vision of a broader service spectrum encompassing non-banking products. The newer banks are constrained by their lack of reach and meager branch strength. For banks to become a predominant channel for selling insurance will require a paradigm shift.

But the encouraging fact for insurance companies waiting for banc assurance to take off is that bank branches are here to stay, and customers do want them. A

customer survey by Deloitte Consulting5 in the western developed markets found that for banking activities, customers place high importance on having convenient branches in their banking relationships. This is good news for the

Indian banks with their many branches, and also makes a strong case for taking up banc assurance.

The major lines of business that can be sold through banc assurance successfully are term insurance, creditor insurance, and non-life products like Property, Motor and Personal accident, Homeowners comprehensive insurance etc.

An example is SBI Life, which is waiting for the broker regulation to be put in place in order to move ahead aggressively with the banc assurance model.

One of their major product lines is creditor insurance, and they have launched their first creditor insurance product, which covers the liabilities of the creditor in case of death of debtor. SBI Life is planning a similar product for home loan borrowers of State Bank of India. This model has high relevance in the Indian context with far-flung villages where the insurance potential is in volume and not in high per capita premiums. Some advantages and disadvantages are:

Advantages of banc assurance Disadvantages of

banc assurance

High credibility (as trustworthy

caretakers of money) with the

public.

Economic viability for the banks to take up as banc assurance is a volume business

A ready customer base. Training of people and lack of

vision and awareness

Low cost channel for selling

Simple vanilla products.

Useful for selling only certain

Lines of products.

Extensive reach including the

Rural pockets.

Initial investment in systems

and processes and people

training

The strategy should be to use multiple banks according to their presence in different regions. Success would come by using banc assurance where it will be most effective - i.e., selling simple, cheap products to the masses at a low cost. This awareness is growing and is evident from the fact that nearly every insurance company has partnered with one or many bank.

Work site marketing

This area needs to be tapped, as in any country one of the biggest markets is through the worksite. With changes in human resources management polices and compensation packages, group products or work site products do have a definite market that cannot be ignored.

Here the advantages would be:

O Captive customer base

O Potential to sell individual insurance and group insurance

O High trust factor

O High hit ratio for the intermediaries

The challenges would be the cost effectiveness, product customization and efficient post sales servicing, which would determine continued business. Technology has a key role to play in worksite marketing to ensure cost benefits. Banks and financial institutions have been successfully marketing credit cards and other financial products using this channel. If not an identical model a similar approach can be used for selling insurance.

Internet

Though India is joining the fast growing breed of net users, using net for transactions has not yet caught up. Though a few banks provide online banking, the usage is still a small fragment. The insecurity associated with transactions over the

net is still an inhibiting factor. At present most of the insurance companies have product information and/or illustrative tools on the web.

We do not see the web evolving into a means for direct selling of insurance in the current scenario. In the Indian market, where insurance is sold after considerable persuasion even after face-to-face selling, the selling over the net, which must be initiated by the client, would take some more time.

While the technology capability is there, improvements in bandwidth and infrastructure are needed. Also needed are simpler products where auto-underwriting is feasible. Automobile insurance, one of the segments of insurance purchased "off the shelf" in India, would be the ideal segment to start with. On the life side, term assurance for standard lives with simplified underwriting is a possibility.

These channels by themselves will not be able to overcome the mindset of the people, but rather can only be enablers for the human channels.

Invisible Insurer

In this model, the insurance company or its representative is not the entity marketing the products. The insurance cover is sold by an automobile /credit card company as an add-on product leveraging the brand of the retailer. The risk is carried by the insurance company, which underwrites it. . Products like creditor insurance, automobile insurance, and credit card related insurance could be distributed using this channel. This model can be adopted in all market segments for the lines of business mentioned. It is already prevalent in some areas like credit card insurance and crop insurance for agricultural loans.

Price considering, the huge, untapped market in India, many companies use price as a tool to penetrate the market, moreover, the tough competition them to do so.

The need for the life insurance comes from the need to safeguard our family. Today insurance has become even more important due to disintegration of the prevalent joint family system, a system in which a number of generation co-existed

in harmony, a system in which a sense of financial security was always there as there were more earning members. Times have changed and the nuclear family has emerged.

Therefore need to save a part of income for future become essential.

NEEDS OF LIFE INSURANCE

a) Temporary needs/ threats

The original of life insurance remains an important element, nearly providing for replacement of income on death etc.

b) Regular savings/ family protection

Providing family and oneself, as the medium to long term exercise through series of regular payment of premiums.

c) Investment

Put simply, the building up of savings while safeguarding it from the ravage of inflation.

d) Old age provision

Provision for later becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable policy, which will provide periodical payments in one’s old age.

e) Children benefits

Provision for education, marriage and start in life for children.

f) Special needs provision

Protection against loss arising out of accident, sickness, loan repayment on death.

WHY IS INSURANCE SUPERIOR TO OTHER SAVINGS?

An immediate estate is created in favor of the policyholder.

Protection in the case of death.

Liquidity in the case of need – easy loans are available.

Tax relief – income tax, wealth tax etc.

Policies can be offered as collateral security.

Policies can be taken under M.W.P. Act 1874, to protect against creditors.

OBJECTIVE OF RESEARCH

The objective of the research is divided into two folds:

1) To analyses the changing scenario of HDFC standard life insurance company and to do the comparative analysis of LIC with the ICICI prudential.

2) To devise the marketing strategy of HDFC standard life insurance company so as to further increase its market share.

3) To know the availability of resource of company and their best implementation for product benefit.

4) To find out appropriate market and time for launching.

RESEARCH METHODOLOGY

TITLE:

To determine customer-buying behavior with a focus on the market segmentation for HDFC standard life insurance.

Title justification

The above title is self explanatory. The study deals mainly with studying the buying patterns in the insurance with a special focus on HDFC standard life insurance needs, age groups, satisfaction levels etc will also studied.

OBJECTIVE

Objective one

To determine reason behind opting for an insurance.

To provide the company with the information of customer’s insurance policy if they have any and reasons for opting for that particular policies.

To know the most preferred policy.

Objective two

To determine customers perception toward private insurance companies and their expectation form private insurance companies.

To determine the feedback on the service provided by any other insurance agent.

To study the types of benefits provided by insurance services.

To determine the use of the internet for valuable information and decision-making process.

SCOPE OF THE STUDY

A big boom has been witnessed in insurance industry in recent times. The study deals with HDFC LIC in focus and various segments that it caters to study then goes on to evaluate and analyze the findings so as to present a clear picture of trend in the insurance sector.

SIGNIFICANCE OF THE STUDY

Significance to industry

This is a limited study of 60 people. This data can be explorated to take in the trend across the industry. It is a rapidly changing and evolving sector. People are only beginning to wake up to its vast possibilities. A study like thus can attempt to guide the future of the industry based on current trends.

Significance for the researcher

To facilitate and provide all the useful information of the student, company, the insurance industry and also provide marketing ways.

RESEARCH DESIGN

NON-PROBABLITY EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH

The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary& secondary.

A well structured questionnaire has been prepared interviews are conducted to collect the customer perception and behavior, through this questionnaire.

DATA COLLECTION

There are many methods of data collection –

Primary data- primary data collected through questionnaire (survey method).

Secondary data – company product literature, news, paper, magazines by questionnaire.

Sample planning and sample size: - sampling involved any procedure that uses small numbers of item or that uses parts of population to make a conclusion regarding the whole population. Samples are chosen on the random method.

SAMPLING METHODOLOGY

Sampling technique:

Initially a rough data prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the questionnaire. The final questionnaire was arrived only after certain important changes were done.

Sampling unit:

The respondents who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, and self Employed etc.

Sample size

The sample size was restricted to only 60, which comprised of mainly peoples from different regions of Indore due to time constraints.

Sampling Area

The area of the research is Indore, India.

DATA – ANALYSIS & FINDINGS

Each of us leads a unique life and so has unique needs. HDFC Standard life Insurance offers a range of products and invites you to choose the one that suits you best.

PLAN BENEFITS

1. SAVING PLAN

Endowment Assurance Plan Life insurance and savings with choice of investment funds.

Unit linked Endowment Plan Life insurance and saving with choice of investment funds.

Children’s Plan Financial security for your child.

Unit linked youngster Plan Financial security for your child with choice of investment funds.

Money Back Plan Life insurance with savings.

2. INVESTMENT PLAN

Single Premium Whole of life Investment with life insurance.

3. PROTECTION PLAN

Term Assurance Plan Life insurance at an affordable price.

Loan Cover Term Assurance Plan Life insurance customize for home loans.

4. RETIRMENT PLANS

Personal Pension Plan Saving for retirement.

Unit Link Pension Plan Retirement saving with choice of investment funds.

To which company you are connected?

Insurance Pvt. employees Govt. employees Business man

LIC 8 12 8

HDFC 7 4 7

ICICI 3 3 4

Others 2 1 1

After analyzing this data it is found that 47% respondents are in favour of LIC, 30% are in favour of HDFC, 17% are in favour of ICICI & 7% are in favour of other private companies.

According to you, which have played a major role in the field of life insurance?

Insurance Pvt. employees Govt. employees Business man

LIC 10 13 10

HDFC 5 3 5

ICICI 3 3 4

Others 2 1 1

After analyzing this data it is found that 55% respondents are in favour of LIC, 21.5% are in favour of HDFC, 16.5% are in favour of ICICI & 7% are in favour of other private companies.

Which insurance companies have been successful to make strong public base by advertisement?

Insurance Pvt. employees Govt. employees Business man

LIC 9 14 12

HDFC 6 2 4

ICICI 4 3 3

Others 1 1 1

After analyzing this data it is found that 58% respondents are in favour of LIC, 20% are in favour of HDFC, 16.5% are in favour of ICICI & 5% are in favour of other private companies.

Which insurance company has gained massive public support in the current fiscal year?

Insurance Pvt. employees Govt. employees Business man

LIC 12 14 10

HDFC 3 2 5

ICICI 3 2 4

Others 2 2 1

After analyzing this data it is found that 60% respondents are in favour of LIC, 16.5% are in favour of HDFC, 15% are in favour of ICICI & 8% are in favour of other private companies.

Do you think insurance policy is in the direction of public welfare?

Pvt. employees Govt. employees Business man

Yes 13 16 12

No 7 4 8

The table shows that from private sector 65%agree & 35% disagree, from government sector 80% agree but 12% disagree, from business man 60%

Agree but 40% disagree to the above statement.

Is retirement bond or pension policy launched by insurance companies is in the direction to secure old age?

Pvt. employees Govt. employees Business man

Yes 15 18 13

No 5 2 7

It is obvious from the table that 75% from private sector, 90% from government sector, & 65% from business man agree, but 25% from private sector, 10% from government sector, & 35% from business man don’t agree with the opinion of the majority.

Do you think that risk coverage factor included in insurance policy attracts general public towards the policy?

Pvt. employees Govt. employees Business man

Yes 12 16 11

No 8 4 9

It is obvious from the table that 60% from private sector, 80% from government sector, & 55% from business man agree, but 40% from private sector, 20% from government sector, & 45% from business man don’t agree.

Do you think that the arrival of so many private companies in the insurance sector envisage a lot of choice to policy holder?

Pvt. employees Govt. employees Business man

Yes 16 18 16

No 4 2 4

It is obvious from the table that 80% from private sector, 90% from government sector, & 80% from business man agree, but 20% from private sector, 10% from government sector, & 20% from business man don’t agree.

Do you agree that customer focus & transparency is the key for success in this industry?

Pvt. employees Govt. employees Business man

Yes 18 20 19

No 2 - 1

It is obvious from the table that 90% from private sector, 100% from government sector, & 95% from business man agree, but 10% from private sector, 00% from government sector, & 05% from business man don’t agree.

LIMITATIONS

It is very difficult to get an appointment from a finance manager or from a person who is working with big or repudiated organization because these are the months when they are busy. Since audits are going on & moreover it is the financial year closing therefore it becomes very difficult to get their appointments.

So, below were the limitations that I faced in the field:-

The premium amount higher that the competitors. There is the lack of quarterly mode of payments. Customers did not get there bond value on the time. Locking period has increased in most of the planes from three years to five

years which created problem to pitch the customer. No lead was provided. The people are not aware of insurance that these are not only insurance plans

but insurance plus investment plans. Unawareness in the rural area people towards HDFC SLIC, they only trust

on LIC. Our lack of knowledge about various locations in Indore. Less penetration in some areas. Sometimes customer responses are too late. Sometimes customers do not want to switch to another insurance company.

SUGGESTIONS AND RECOMMEDATIONS

As the people think that insurance is a tool to protect their family & a tax saving device. They are aware of the fact that & realize its importance. The company should try to expand & build up its infrastructure because there is a large potential for insurance in India.

Company should come up with its more branches in Indore. With the objective & goals to meet the demand & expectations of the public.

Since H.D.F.C standard life insurance is leading with several companies policies it should be easy for them to penetrate into the market & secure a good position if they pay greater attention to the service part provided to their customers & thereby forming long & trusted relationships.

As seen from the survey that at present 70% of the customers are having insurance policy out of which 87.5% of the customers are planning for new investments. The company should try to convince these customers & get them in its favour.

INTERPRETATION

It is no doubt that LIC is an established & market leader in life insurance industry in India.

But with the coming up of private life insurance companies as a passage of IRDA, its share is getting reduced.

Now the private companies have acquired 27% of the market share in just a small span of 10 years. This is because of the innovative products of the private life insurance companies.

The basic difference between LIC & private players- ICICI prudential & HDFC standard life is that LIC mainly focuses on standardized products where private companies caters to the needs of the customers & focuses on customized products.

The interpretation as a result of comparative analysis is as follows: -

Whole Life: - LIC plans are very simple to understand whereas the private players provide plans according to the changing needs of customers.

Endowment Policies: - LIC is quite simple & straight forward whereas ICICI pru & HDFC standard life are more concerned about saving & are categorized for the different section of people.

Money Back Plans: - LIC has provided various plans under it having different features. On the other hand, private players combine all the features in just one single plan.

Single Premium Policies: - The private player’s gives higher assured returns and various other benefits.

Term Insurance Plan: - The private players provide more flexible & stable return whereas LIC acts as safer plan taking care of family as a whole. LIC provides different plans under this category.

Children Policies: - LIC provide different plans for children as compared to private players, which gives only plans for kids.

Annuity Plans: - LIC is more stable for all age of people but the private players are focused one aged people.

Thus, the private players are making rapid strides with innovative products and aggressive marketing.

In a nutshell, it can be said that LIC should formulate its policies according to the needs & demands of the customer’s i.e. it should come up with innovative products.

MARKETING STRATEGY FOR HDFC

Different companies choose to position themselves differently & hence the marketing mix would be different. However, the possible strategy that HDFC Standard Life Insurance Co. can follow is as under: -

Products: - The development of flexible products to suit individual requirements is what will differentiate the winners from others.

The key to success would be in providing insurance solutions, not standardized insurance products.

Distribution: - Different companies may however choose different channels & different geographies to focus on. The channel options are – tied agency force, corporate agents & this is an area where different companies will make different choices. HDFC Standard Life are focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only.

Price: - Price is a relevant differentiator only in two segments – pure term insurance and in pure annuities. Here too, service delivery & financial strength will need to be present at a maximum acceptable level for price to be a relevant differentiator. In case of saving oriented products, long term returns generated will be more relevant than just the price of product.

Advertising & Promotion: - The level of demand is latent & will have to be activated considerably. The market needs to be developed. Greater awareness of insurance & the need to have it as a protection tool rather than as a tax saving plan needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing & road shows will contribute to all this.

Focus on customer products: - Their were times when LIC had a strong record of selling traditional policies like endowment & money back policies but now customer wants not only insurance cover but also a great return. So, there is a need that HDFC Standard Life should formulate its policies according to the needs of the customers.

Servicing of customers: - Another area where HDFC should look is in the servicing of customers. It is one of the major areas where HDFC is lagging. So, it is important to heavily invest on back-office work. The company can reduce this problem to a great extent by doing centralization of data.

Strategy for urban & rural market: - There is a need for the company to look into the urban market today where distribution & servicing of policies are quite easy. Company should must different strategy for urban & rural areas. So, HDFC with its strong brand name can dominate dominates both rural & urban markets.

CONCLUSION

The comparative analysis between the plans of these companies shows that they differ in their projection & outlook while they aim at same targets & provides similar kind of returns.

The LIC business is more about providing social security & financial safety net for the dependants. It ensures the life if the people providing life insurance products & services of high quality & providing resources for economic development.

On the other hand HDFC Standard Life has little different approach towards its business. They are more customers centric; provide quality circle, having superior risk management. They go for investment strategy to offer consistent, stable returns to policy holder. Their aggressive strategy & innovative products have led to capture a significant portion of the market share. Providing good customer service & exploring new distribution channels have paid them off.

LIC should also look in providing well servicing to the customers because it is major areas were it is lagging. Thus, coming up with innovative & aggressive marketing will help it to dominate both urban & rural areas.

QUESTIONERY

Name:-……………………………………….

Age:-………………………………………….

Service:

a) Government b) Private c) Business/Self employed

To which company you are related?

a) LIC b) HDFC c) ICICI d) Others

2. According to you, which have played a major role in the field of life insurance?

a) LIC b) HDFC c) ICICI d) Others

3. Which insurance companies have been successful to make strong public base by advertisement?

a) LIC b) HDFC c) ICICI d) Others

4. Which insurance company has gained massive public support in the current fiscal years?

a) LIC b) HDFC c) ICICI d) Others

5. Do you think insurance policy is in the direction of public welfare?a) Yes b) No

6. Do you think that the arrival of so many private companies in insurance sector provides a lot of choices to policy holder?

a) Yes b) No

7. Do you agree that customer focus & transparency is the key for success in this evolving industry?

a) Yes b) No

8. Is retirement bond or pension policy launched by insurance companies is in the direction to secure old age?

a) Yes b) No

9. Do you think that risk coverage factor included in insurance policy attracts general public towards the policy?

a) Yes b) No

10. What you want to suggest to company with whom you are attached.

……………………………………………………………….

……………………………………………………………….

BIBLIOGRAPHY

Marketing Management by Philip Kotler, pearson education 2nd Ed.

Consumer Behavior by Leon G.Schiffman, Prentice-Hall India 8th Ed.

IRDA Journal.

Newspapers & Business magazines.

WEBSITES: -

www.google.co.in/indian insurance industry

www.irdaindia.org

www.iciciprulife.com

www.hdfcinsurence.com