Hdfc Standard Life Insurance

A SUMMER TRAINING PROJECT REPORTON

“CUSTOMER BUYING BEHAVIOUR WITH A

FOCUS ON MARKET SEGMENTATION”

SUBMITTED IN PARTIAL FUFILLMENT

FOR

THE AWARD OF THE

DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

(2012-2013)

SUBMITTED TO: SUBMITTED BY:MISS SAMA SHARMA MOHIT PAL PROJECT REPORT SUPERVISOR ROLL NO

RADHA GOVIND GROUP OF INSTITUTIONS, MEERUT M.M TECHNICAL UNIV.

1

Student Decleration

This is to certify that I Sumeer Sondhi have completed the Summer Training Project titled

“CUSTOMER BUYING BEHAVIOUR WITH A FOCUS ON MARKET SEGMENTATION”

in “HDFC STANDARD LIFE INSURANCE COMPANY LTD.” under the guidance of “

H.O.D ” in the partial fulfillment of the requirement for the award of Bachelor of Business

Administration of D.A.V College, Chandigarh . This is an original piece of work & I have not

submitted it earlier elsewhere.

2

ACKNOWLEDGEMENT

The Project Title “Customer Buying Behavior with a Focus on Market Segmentation In

HDFC Standard Life Insurance Company Ltd.” has been conducted by me, I have completed this project, based on the Primary research. To acknowledge all the people who played a greate roll for completion of project .

I will like to thank my family members for their consistant support and co-operation without there help the whole project would have been difficult to pursue.

I thank my family for encouragement and almighty god without whom i cannot take this challenege.

3

CONTENTS

TABLE OF CONTENTS

1. OUR VISION

2. OUR VALUES

3. INTRODUCTION TO THE INDUSTRY

4. OBJECTIVE OF STUDY

5. INTRODUCTION TO COMPANY

6. RESEARCH METHODOLOGY

Title

Title Justification

Significance of the Industry

Significance of the Research

Research Technique

Sampling Methodology

Sampling unit

Sampling Area

Sample Size

7. FACTS AND FINDINGS

8. DATA ANALYSIS AND INTERPRETATION

9. LIMITATIONS

10. RECOMMENDATIONS

11. CONCLUSION

12. BIBLIOGRAPHY

4

13. QUESTIONNAIRE

5

Our Vision

'The most successful and admired life insurance company, which means that we are the most

trusted company, the easiest to deal with, offer the best value for money, and set the standards in

the industry'..

6

Our Values

Values that we observe while we work:

.Integrity

.Innovation

.Customer centric

7

.People Care One for all and all for ones

.Teamwork

.Joy and Simplicity

INTRODUCTION TO THE INDUSTRY

8

THE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life

Insurance Company. First attempts at regulation of the industry were made with the introduction

of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were

made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the

power given to the Government to collect statistical information about the insured and the high

level of protection the Act gave to the public through regulation and control. When the Act was

changed in 1950, this meant far reaching changes in the industry. The extra requirements

included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in

such companies to prevent dominant control (to protect the public from any adversarial policies

from one single party), stricter control on investments and, generally, much tighter control. In

1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was

heavily concentrated in urban areas and targeted the higher echelons of society. “Unethical

practices adopted by some of the players against the interests of the consumers” then led the

Indian government to nationalize the industry. In September 1956, nationalization was

completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It

was felt that “nationalization has lent the industry fairness, solidity, growth and reach.”

9

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.

General Insurance

The General Insurance industry in India dates back to the Industrial Revolution and the

subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the

British brought General Insurance to India, and a similar path was followed in the development

of this industry. A number of private companies were in existence for years and years until, in

1971, the Indian Government decided that the public interest would be served by nationalizing

the industry, merging all the 107 companies into four companies, depending on the sort of

business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company

Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the

United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras 10

respectively. The General Insurance Corporation (GIC) was set up in 1972 as a ‘holding’

company, having these four companies as its subsidiaries.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of

general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code

of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins

and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general

insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and

grouped into four companies viz. the National Insurance Company Ltd., the New India

Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India

Insurance Company Ltd. GIC incorporated as a company.

11

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the

message of life insurance in the country and mobilise 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.

12

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, Ken-

India Assurance Company Limited, Nairobi; United Oriental 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.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC

recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy

average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per

cent in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below the poverty line, with

50 per 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

General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company known as

General Insurance Corporation of India (GIC) was formed by the Central Government in

November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers

which were operating in the country prior to nationalization, were grouped into four operating

13

companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance

Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance

Company Limited.  (However, with effect from Dec'2000, these subsidiaries have been de-linked

from the parent company and made as independent insurance companies). All the above four

subsidiaries of GIC operate all over the country competing with one another and underwriting

various classes of general insurance business except for aviation insurance of national airlines

and crop insurance which is handled by the GIC.

Besides the domestic market, the industry is presently operating in 17 countries directly through

branches or agencies and in 14 countries through subsidiary and associate companies.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN

PERMITTED TO ENTER INTO INSURANCE BUSINESS: -

The introduction of private players in the industry has added to the colors in the dull industry.

The initiatives taken by the private players are very competitive and have given immense

competition to the on time monopoly of the market LIC. Since the advent of the private players

in the market the industry has seen new and innovative steps taken by the players in this sector.

The new players have improved the service quality of the insurance. As a result LIC down the

years have seen the declining phase in its career. The market share was distributed among the

private players. 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).

14

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

15

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 banc 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 Limited

ING Vysya Life Insurance Company Private Limited

Allianz Bajaj Life Insurance Company Ltd.

Metlife India Insurance Company Pvt. Ltd.

AMP SANMAR Assurance Company Ltd.

Dabur CGU Life Insurance Company Pvt. Ltd.

16

1. Royal Sundaram Alliance Insurance Company Limited  

The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance

Limited started its operations from March 2001. The company is Head Quartered at Chennai, and

has two Regional Offices, one at Mumbai and another one at New Delhi.

2. Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited

and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength.

17

Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority

(IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business

(including Health Insurance business) in India. The Company has an authorized and paid up

capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG,

and Germany.

3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank

Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's

second largest bank, while Fairfax Financial Holdings is a diversified financial corporate

engaged in general insurance, reinsurance, insurance claims management and investment

management.

Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of

Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company

received regulatory approvals to commence general insurance business in August 2001.

4. Cholamandalam General Insurance Company Ltd.

18

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the

Murugappa Group & Mitsui Sumitomo. 

Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in

its first calendar year of operations. The company has a pan-Indian presence with offices in

Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmadabad, Delhi,

Chandigarh, Kolkata and Vizag.

5. TATA AIG General Insurance Company Ltd.

Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata

Group and American International Group, Inc. (AIG). Tata AIG combines the strength and

integrity of the Tata Group with AIG's international expertise and financial strength. The Tata

Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per

cent stake.

Tata AIG General Insurance Company, which started its operations in India on January 22, 2001,

offers the complete range of insurance for automobile, home, personal accident, travel, energy,

marine, property and casualty, as well as several specialized financial lines.

6. Reliance General Insurance Company Limited.

7. IFFCO Tokio General Insurance Co. Ltd

8. Export Credit Guarantee Corporation Ltd.

9. HDFC-Chubb General Insurance Co. Ltd.

19

Marketing of Insurance In India

Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a

sector, which leads to benefits across the full spectrum, from the individual who now have wider

choices, to the economy, which see increased savings, to the infrastructure sector, which can

look forward to long term funding being available. In an under-insured economy, newer channels

of distribution have to be utilized to intensify the reach of insurance both in urban and rural

markets. This will create huge employment opportunities not only within insurance companies

but also as agents and consultants of insurance companies.

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 will differentiate

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

20

individual needs. However, companies may differentiate themselves on the basis of product

segments that they choose to focus on and excel in.

21

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 like 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 service 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 long-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

22

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 insurers: 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.

23

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.

24

PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated debate for

some years. The policy makers where in the catch 22 situation wherein for one they wanted

competition, development and growth of this insurance sector which is extremely essential for

channeling the investments in to the infrastructure sector. At the other end the policy makers had

the fears that the insurance premia, which are substantial, would seep out of the country; and

wanted to have a cautious approach of opening for foreign participation in the sector.

As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw

the day of the light thanks to the maturing polity emerging consensus among factions of different

political parties. Though some changes and some restrictive clauses as regards to the foreign

participation were included the IRDA has opened the doors for the private entry into insurance.

Whether the insurer is old or new, private or public, expanding the market will present multitude

of challenges and opportunities. But the key issues, possible trends, opportunities and challenges

that insurance sector will have still remains under the realms of the possibilities and speculation.

What is the likely impact of opening up India’s insurance sector? The large scale of operations,

public sector bureaucracies and cumbersome procedures hampers nationalized insurers.

Therefore, potential private entrants expect to score in the areas of customer service, speed and

flexibility. They point out that their entry will mean better products and choice for the consumer.

The critics counter that the benefit will be slim, because new players will concentrate on affluent,

25

urban customers as foreign banks did until recently. This seems to be a logical strategy. Start-up

costs-such as those of setting up a conventional distribution network-are large and high-end

niches offer better returns. However, the middle-market segment too has great potential. Since

insurance is a volumes game. Therefore, private insurers would be best served by a middle-

market approach, targeting customer segments that are currently untapped.

26

CHAPTER 2

EXECUTIVE SUMMARY

27

EXECUTIVE SUMMARY

In today’s corporate and competitive world, I find that insurance sector has the maximum growth

and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-

80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts

me to enter in this sector and HDFC Standard Life Insurance Company Ltd has given me the

opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon

the availability of the product and services near to the customer, which can be distributed

through a distribution channel. In Insurance sector, distribution channel includes only

agents or agency holders of the company. If a company like RELIANCE LIFE

INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can

capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and

benefits of the company can be explained to the customer

28

INTRODUCTION

TO THE COMPANY

COMPANY PROFILE OF

HDFC STANDARD LIFE INSURANCE COMPANY LTD

ABOUT HDFC STANDARD LIFE INSURANCE

HDFC Standard Life Insurance Company Ltd. is one of India's leading private 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 a Group Company of the Standard Life, UK. HDFC as on

December 31, 2007 holds 72.38 per cent of equity in the joint venture.

29

HDFC STANDARD LIFE INSURANCE PARENTAGE

HDFC is India leading housing finance institution and has helped build more than   23, 00,000

houses since its incorporation in 1977.

In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr.

As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor   base now

stands at around 1 million depositors.

Rated AAA by CRISIL and ICRA for the 10th consecutive year

Stable and experienced management

High service standards

Awarded The Economic Times Corporate Citizen of the year Award for its

long-standing commitment to community development.

Presented the Dream Home award for the best housing finance provider in 2004 at   the third

Annual Outlook Money Awards.

30

Standard Life Group (Standard Life plc and its subsidiaries)

Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life group has been looking after the financial needs of customers for   over

180 years

It currently has a customer base of around 7 million people who rely on the company   for

their insurance, pension, investment, banking and health-care needs

Its investment manager currently administers £125 billion in assets

It is a leading pensions provider in the UK, and is rated by Standard & Poor's as   'strong'

with a rating of A+ and as 'good' with a rating of A1 by Moody's

Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money

Marketing Awards, and it was voted a 5 star life and pensions provider at    the Financial

Adviser Service Awards for the last 10 years running. The '5 Star'    accolade has also been

awarded to Standard Life Investments for the last 10 years,    and to Standard Life Bank since

its inception in 1998. Standard Life Bank was    awarded the 'Best Flexible Mortgage Lender'

at the Mortgage Magazine Awards in    2006

31

32

HDFC KEYS STRENGHS

FINANCIAL EXPERTISE

AS A JOINT VENTURE OF LEADING FINANCIAL SERVICES GROUPS, HDFC STANDARD LIFE HAS

THE FINANCIAL EXPERTISE REQUIRED TO MANAGE YOUR LONG-TERM INVESTMENTS SAFELY

AND EFFICIENTLY.

RANGE OF SOLUTIONS

WE HAVE A RANGE OF INDIVIDUAL AND GROUP SOLUTIONS, WHICH CAN BE EASILY

CUSTOMISED 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, 2008 STOOD AT RS. 4,859

CRORES AND NEW BUSINESS PREMIUM INCOME STOOD AT RS. 2,685 CRORES.

THE COMPANY HAS COVERED OVER 9,59,000 LIVES YEAR ENDING MARCH 31, 2008.

33

Accolades and Recognition

Rated by 'Business world' as 'India's Most Respected Private Life Insurance Company' in

2004.

Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India number 1

personal finance magazine

BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY HDFC STANDARDS

LIFE INSURANCE

INSURANCE PLANS AVAILABLE

Individual 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 Products that you can choose from to suit all your needs. These

will help secure your future as well as the future of your family.

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 or sickness. These plans offer valuable peace of

mind at a small price.

34

Our Protection range includes our Term Assurance Plan & Loan Cover Term Assurance

Plan.

Investment Plans

 Our Single Premium Whole Of Life plan is well suited to meet your long term investment

needs. We provide you with attractive long term returns through regular bonuses.

Pension Plans

Our Pension Plans help you secure your financial independence even after retirement.

Our Pension range includes our Personal Pension Plan, Unit Linked Pension, Unit Linked

Pension Plus

Savings Plans

  Our Savings Plans offer you flexible options to build savings for your future needs such as

buying a dream home or fulfilling your children immediate and future needs.

Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit

Linked Endowment Plus, Unit Linked Endowment Plus II, Money Back,

35

Unit Linked Enhanced Life Protection II, Children's Plan, Unit Linked Young Star,

Unit Linked Young Star Plus, Unit Linked Young Star Plus II.

Group Products

One-stop shop for employee-benefit solutions

HDFC Standard Life has the most comprehensive list of products for progressive employers

who wish to provide the best and most innovative employee benefit solutions to their

employees. We offer different products for different needs of employers ranging from term

insurance plans for pure protection to voluntary plans such as superannuation and leave

encashment.

We now offer the following group products to our esteemed corporate clients:

Group Term Insurance

Group Variable Term Insurance

Group Unit-Linked Plan

An investment solution that provides funding vehicle to manage corpuses with

Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave

Encashment schemes of your company

Also suitable for other employee benefit schemes such as salary saving schemes and

wealth management schemes

36

Social Product

Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover to members of a

Development Agency for a term of one year. On the death of any member of the group insured

during the year of cover, a lump sum is paid to those member beneficiaries to help meet some

of the immediate financial needs following their loss.

Eligibility

  Members of the development agency and their spouses with:

    - Minimum age at the start of the policy 18 years last birthday

    - Maximum age at the start of policy 50 years last birthday

Employees of the Development Agency are not eligible to join the group. The group to be

covered is only eligible if it contains more than 500 members.

Premium Payments

  The premium to be paid will be quoted per member in the group and will be the same for all

members of the group.

The premium can only be paid by the Development Agency as a single lump sum that

includes all premiums for the group to be covered. Cover will not start until the premium and

37

all the member information in our specified format has been received.

  The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.

Benefits

  On the death of each member covered by the policy during the year of cover a lump sum

equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is

as a result of an accident, an additional lump sum will be paid equal to half the sum assured.

There are no benefits paid at the end of the year of cover and there is no surrender value

available at any time.

The role of the Development Agency

  Due to the nature of the groups covered, HDFC Standard Life will be passing certain

administrative tasks onto the Development Agency. By passing on these tasks the premium

charged can be lower. These tasks would include:

  Submission of member data in a specified computer format

Collection of premiums from group members

Recording changes in the details of group members

Disbursement of claim payments and the mortality rebate (if any) to group members

These tasks would be in addition to the usual duties of a policyholder such as:

38

Payment of premiums

Reporting of claims

Keeping policy holder information up to date

  Training and support will be available to give guidance on how to complete the tasks

appropriately.

Since these additional tasks will impose a burden on the Development Agency, the

Development Agency may charge a Rs. 10 administration fee to their members.

Prohibition of rebates

  Section 41 of the Insurance Act, 1938 states

  No person shall allow or offer to allow, either directly or indirectly, as an inducement to

any person to take out or renew or continue an insurance in respect of any kind of risk

relating to lives or property in India, any rebate of the whole or part of the commission

payable or any rebate of the premium shown on the policy, nor shall any person taking

out or renewing or continuing a policy accept any rebate, except such rebate as may be

allowed in accordance with the published prospectus or tables of the insurer

If any person fails to comply with sub regulation (previous point) above, he shall be

liable to payment of a fine which may extend to rupees five hundred.

39

Tax Benefits

INCOME TAX

SECTION

GROSS ANNUAL

SALARY

HOW MUCH

TAX CAN YOU

SAVE?

HDFC STANDARD

LIFE PLANS

Sec. 80C Across All income

Slabs

Upto Rs. 33,990

saved on

investment of

Rs. 1,00,000.

All the life insurance

plans.

Sec. 80 CCC Across all income

slabs.

Upto Rs. 33,990

saved on

Investment of

Rs.1,00,000.

All the pension plans.

Sec. 80 D* Across all income

slabs

Upto Rs. 3,399

saved on

Investment of

Rs. 10,000.

All the health insurance

riders available with the

conventional plans.

TOTAL SAVINGS

POSSIBLE **

Rs37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10,00,000.

Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free,

subject to the conditions laid down therein.

40

RESEARCH METHODOLOGY

41

TITLE:

To determine customer-buying behavior with a focus on market segmentation for HDFC

Standard Life Insurance.

TITLE JUSTIFICATION:

The above title is self explanatory. The study deals mainly with studying the buying pattern in

the insurance industry with a special focus on HDFC Standard Life Insurance. The various

segments of the markets divided in terms of Insurance Needs, Age groups , Satisfaction levels

etc will also studied.

SIGNIFICANCE TO THE INDUSTRY :

This is a limited study which takes into consideration the responses of 100 people. This data can

be explorated to take in the trends across the industry. The significance for the industry lies in

studying these trends that emerge from the study. It is a rapidly changing and evolving sector.

People are only beginning to wake up to it’s vast possibilities. A study like this can attempt to

guide the future of the industry based on current trends.

SIGNIFICANE FOR THE RESEARCHER :

To facilitate and provide all the useful informtaion of the company, the insurance industry and

also provide marketing ways, methods of HDFC Standard Life insurance.

42

SAMPLING METHODOLOGY

SamplingTechnique:

Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study

was done in order to know the accuracy of the Questionnaire. The final Questionnaire was

arrived only after certain important changes were done. Thus the sampling came out to be

judgemental and convenient.

Sampling Unit:

The respondants who were asked to fill out questionnaires are the sampling units. These

comprise of employees of MNCs, Govt. Employees, Self Employeds etc.

Sample size:

The sample size was restricted to only 100, which comprised of mainly peoples from different

regions of Delhi,NCR due to time constraints.

Sampling Area :

The area of the research was Delhi,NCR.

43

LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of DELHI and does not necessarily shows a

pattern applicable to all of Country .A small number of 100 also does not show the pattern of

the whole city.

2. Some respondents were reluctant to divulge personal information which can affect the

validity of all responses.

3. In a rapidly changing industry, analysis on one day or in one segment can change very

quickly. The environmental changes are vital to be considered in order to assimilate the

findings.

4. The training period was very less.

44

CHAPTER 6

DATA ANALYSIS AND INTERPRETATION

45

DATA ANALYSIS & INTERPRETATION

DATA REPRESENTATION OF PEOPLE WHO ARE EMPLOYED

DATA GIVES EMPLOYMENT STATUS OF THE INSURED RESPONDENTS.

EMPLOYMENTNO.OF RESPONDENT

SHARE (%)

YES 92 92

NO 8 8

92%

8%

EMPLOYMENT

YESNO

INTERPRETATION

The data shows that the majority of respondents are employed which would depict the better

picture of the marker scenerio.

46

Table 1

DATA SHOWING ANNUAL INCOME OF RESPONDENTS

ANNUAL INCOMENO.OF RESPONDENTS

SHARE (%)

>5L 45 45

5L-10L 25 25

1OL-15L 20 20

15L-20L 10 10

45%

25%

20%

10%

INCOME

>5 LAKCS5-10LACS10-15 LACS15-20 LACS

INTERPRETATION

It can be noted that maximum amount of people (45%) fall in the category of > 5 lacks slot .

47

Table 2

DATA SHOWS PEOPLE HAVING INSURANCE

RESPONSE NO. OF RESPONDENTS

SHARE (%)

Yes 70 70%

No 30 30%

YES70%

NO30%

Fig 7.6

INTERPRETATION

Of the sample size of 400 surveyed respondents 70% of the respondents are having

Insurance policy.

30% of the respondents are either not having any Insurance policy at present or their policy

is already matured.

And at present 100% of the respondents are with the view that Insurance is a tool to protect

your family

48

Table 3

. DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS

BENEFITSNO.OF RESPONDENTS

SHARE (%)

Cover Future Uncertainty 55 55

Tax Deductions 20 20

Future Investment 25 25

TOTAL 100 100

Cover Future Uncertainty

55%Tax Deductions20%

Future In-vestment

25%

Fig7.2

INTERPRETATION

55% of the respondents believe that covering future uncertainty is the biggest benefit of

an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and

future investments respectively.

49

Table 4

DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED

RESPONDENTS

FEATURE NO.OF RESPONDENTS

SHARE (%)

Money Back Guarantee 15 15

Larger Risk Coverance 37 37

Easy Access to Agents 7 7

Low Premium 30 30

Company’s Reputation 11 11

TOTAL 100 100

Money Back Guarantee; 15

Larger Risk Coverance; 37

Easy Access to Agents; 7

Low Premium; 30

Company’s Reputation; 11

Fig 7.3

INTERPRETATION

Majority of the respondent (37%) found Larger risk coverance as the most attracted

feature of the all.

50

Table 5

DATA SHOWS PEOPLE PREFERENCE IN INSURANCE COMPANIES

Table 6

CATEGORY NO. OF RESPONDENTS

SHARE (%)

PRIVATE 55 55%

GOVERNMENT 45 45%

55%

45%

CATEGORY

PRIVATEGOVERNMENT

INTERPRETATION

There are more number of people employed in Private sector(55%) as compared to 45% of

people in govt. Sector.

51

DATA GIVES PREFERECE OF RESPONDENTS OF INSURANCE COMPANIES

COMPANY’S NAME NO.OF RESPONDENT

SHARE (%)

L.I.C. 78 78

HDFC 2 2

ICICI PRUDENTIAL 10 10

SBI LIFE 7 7

RELIANCE LIFE INSURANCE

3 3

TOTAL 100 100

LIC78%

HDFC2%

ICICI 10%

SBI7%

REL3%

Fig 7.1

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1

by that percent of respondents.

52

Table 7

DATA SHOWING THE REASON FOR PREFERENCE OF AN INSURANCE POLICY

TABLE 8

REASON NO.OF RESPONDENT

SHARE (%)

EASY ACCESSABILITY 40 40

MORE SECURITY 20 20

BETTER SECURITY 20 20

MORE INFORMATION & HELP

10 10

CUSTOMER ORIENTATION

10 10

TOTAL 100 100

40%

20%

20%

10% 10%

REASON

EASY ACCESSABILITYMORE SECURITYBETTER SECURITYMORE INFORMATIONCUST. ORT

INTERPRETATION

It can be noted that the reason for maximun people for prefering the policy is easy accessability followed by people who look for better & more security

DATA SHOWINGTHE TIME SPAN OF THE INSURANCE PLAN

53

NO. OF YEARSNO.OF RESPONDENTS

SHARE (%)

>5YRS 45 45

5YRS-10YRS 25 25

1OYRS-15YRS 20 20

15YRS-20YRS 10 10

45%

25%

20%

10%

NO. OF YEARS

>5 YRS5-10YRS10-15YRS15Yrs<

INTERPRETATION

It can be noted that maximum amount of people look for short term insurance as compared to

10% of those who go for long term.

54

Table 9

DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

RESPONSE NO. OF RESPONDENTS

SHARE (%)

Paying tax 100 100%

Not paying tax - 0%

Total 100 100%

Paying tax 100%

Fig 7.11

INTERPRETATION

Of the sample size of 100 respondents, all the respondents are paying tax

55

Table 10

DATA SHOWS RESPONDENT’S INVESTMENTS FOR TAX SAVING

INVESTMENTS NO. OF RESPONDENTS

SHARE (%)

LIC 51 51%

NSC 33 33%

Bonds 32 32%

PPF 25 25%

PF 21 21%

EPF 11 11%

LIC 29%

NSC19%

Bonds 18%

PPF14%

PF12%

EPF 6%

Fig7.12

INTERPRETATION

51% of the respondents save their tax by investing in LIC, which is the highest among all

Investment. This shows that most people for getting taxes benefits invest in LIC.

33.25% of the respondents do their tax saving by investing in NSC.

32.25% of the respondents to their tax saving by investing in bonds.

56

Table 11

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY

RESPONSE NO. OF RESPONDENTS

SHARE (%)

Satisfied 60 60%

Not satisfied 40 40%

Not Responded 0 0.0%

Total 100 100%

Satisfied 60%

Not satisfied 40%

Fig 7.9

INTERPRETATION

60% of the respondents are more or less satisfied with their existing policy.

40% of the respondents are not satisfied with their existing policy.

In this case all of those who have taken a policy have responded.

57

Table 12

DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS

POLICY TYPE NO. OF RESPONDENTS

SHARE (%)

LIFE POLICY 75 75

NON LIFE POLICY 25 25

BOTH 45 45

LIFE POLICY52%

NON LIFE POLICY17%

BOTH31%

Fig 7.4

INTERPRETATION

75% of the respondents have Life Insurance Policy while 45% have both. (The % is

calculated out of 280 positive response)

58

Table 13

CHAPTER 7

FACTS & FINDINGS

59

FACTS/FINDINGS

1.As the people think that insurance is a tool to protect their family & a tax saving device. They

are aware of the fact & realizing its, importance. The company should try to expand & build up

its infrastructure because there is a large potential for insurance in India.

2.Company should come up with more branches in Delhi with the objective and goals to meet

the demands & expectations of the public. Because the entrance of private players will increase

the competition and it would be a tough task to secure a good position in market.

3.Since HDFC STANDARD LIFE INSURANCE LTD is leading with several companies’

policies it should be easy for them to penetrate into the market and secure a good position if they

pay greater attention to the service part provided to their customer and thereby forming a long

and trusted relationship.

4.As seen from the survey that at present 70% of the customer are having insurance policy out of

which 87.5% of the customer are planning for new investments. So it can be a good potential for

the company and they should make an attempt to trap these customers.

5. 43% of the customer is even ready to go for insurance if a service provider away from their

home is providing it. But intend they should provide good products and services. The company

should try to convince these customers and get them in its favor.

60

RECOMMENDATIONS

61

RECOMMENDATIONS

To make people aware about the benefits of HDFC standard life insurance policy, following

activities promotional activities should be carried out:

.Printed media

. Hoardings & Banners

. continues telivision commercials.

Company should come up with more branches in Delhi with the objective and goals to meet

the demands & expectations of the public in order to provide people with better customer

satisfaction.

Since HDFC Standard Life Insurance Company Ltd is leading with several companies’

policies it should be easy for them to penetrate into the market and secure a good position if

they increase the number of branches and diversify their business to various other regions. .

As seen from the survey that at present 70% of the customer are having insurance policy out

of which 87.5% of the customer are planning for new investments. So it can be a good

potential for the company and they should make an attempt to tap these customers.

43% of the customer is even ready to go for insurance if a service provider away from their

home is providing it. But intend they should provide good products and services. The

company should try to convince these customers and get them in its favor.

62

CONCLUSION

63

CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some intresting trends which can

be seen in the above analysis. A general impression that we gathered during Data collection was

the immense awareness and knowledge among people about various companies and their

insurance products. People are beginning to look beyond LIC for their insurance needs and are

willing to trust private players with their hard earned money.

People in general have been impressioned by the marketing and advertising campaigns of

insurance companies. A high penetration of print , radio and Television ad campaigns over the

years is beginning to have it’s impact now.

Another heartning trend was in terms of people viewing insurance as a tax saving and investment

instrument as much as a protective one. A very high number of respondants have opted for

insurance for such purposes and it shows how insurance companies ahve been successful to

attract public money in recent times.

The general satisfaction levels among public with regards to policy and agents still requires

improvement. But therein lies the oppurtunity for a relative new comer like HDFC Standard Life

Insurance Company Ltd . LIC has never been known for prompt service or customer oriented

methods and HDFC Standard Life can build on these factors.

64

BIBLIOGRAPHY

65

BIBLIOGRAPHY

1. BOOKS/MAGAZINES REFFERED:

STUDY GUIDE- PRINCILES & PRACTICES OF LIFE / GENERALINSURANCE,

by AIMA.

Books published by INSURANCE INSTITUTE OF INDIA, by S.K. Desai

INSURANCE WATCH.

MONEY OUTLOOK.

2. WEBSITES REFFERED:

WWW.CIFAINSURANCE.COM

WWW.MONEYOUTLOOK.COM

WWW.INSURANCE.IND.COM

WWW.HDFCINURANCE.COM

3. REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY….

Dec2008.

BRIEF PROFILE OF LIC, INDIA…Dec 2008.

REPORT: COPING WITH COMPETITION…Mar 2009

66

ANNEXURES AND

QUESTIONNAIRE

67

QUESTIONNAIRE

1. ARE YOU EMPLOYED?YES NO

2. YOUR MONTHLY INCOME?

a)<5L b)5L-10L c)10L-15L d)15L<

3. DO YOU HAVE ANY INSURANCE POLICY?YES NO

4. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE BOTH

5. WHAT IS YOUR PURPOSE OF TAKING AN INSURANCE COVER? (RANK THEM)

a) COVER FUTURE UNCERTAINITY

b) TAX DEDUCTIONS c) FUTURE INVESTMENT

d) ANY OTHER _________ (Specify)

68

6. WHAT FACTORS AFFECT YOUR POLICY BUYING DECISION? (RANK THEM)

a) LOW PREMIUM

b) LARGER RISK COVERANCE

c) MONEY BACK GUARANTEE

d) REPUTATION OF COMPANY

e) EASY ACCESS TO AGENTS

f) ANY OTHER _________ (Specify)

7 DO YOU PREFER PRIVATE INSURANCE COMPANIES OVER GOVERNMENT COMPANIES ?

YES NO

8. WHICH CO’S INSURANCE POLICY YOU PREFER THE MOST?

(RANK THEM) a) LIC

b) ICICI PRUDENTIAL

c) SBI LIFE INSURANCE

d) ING VYSYA LIFE

e) RELIANCE LIFE INSURANCE

f) TATA AIG LIFE

g) ANY OTHER ________( Specify)

69

9. WHAT IS YOUR REASON FOR PREFERENCE OF AN INSURANCE POLICY ?

a) EASY ACCESSABILITY

b) MORE SECURITY

c) BETTER SECURITY

d) MORE INFORMATION & HELP

e) CUSTOMER ORIENTATION

10. YOUR INSURANCE PLAN INSURES YOU FOR HOW MANY YEARS ?

(Please Tick)

a) >5Yrs b) 5-10 Yrs c) 10-15 Yrs d) 15Yrs<

11. DO YOU PAY TAXES?

YES NO

12. WHERE HAVE YOU INVESTED FOR TAX SAVING? (RANK THEM)

a) LIC

b) NSC

c) BONDS

d) PPF

e) PF

f) EPF

70

13. ARE YOU SATISFIED WITH THE POLICY?

a) SATISFIED

b) NOT SATISFIED c) NO COMMENTS

14 . WOULD YOU BE INTERESTEDIN AVALING ANY OF THE FOLLOWING FINANCIAL PLANNING SERVICES?

a) WEALTH CREATION PLANS

b) INVESTMENT PLANS

c) CHILDREN FUTURE PLANS

d) TAX PLANNING

e) RETIREMENT PLANS

f) RISK MANAGEMENT & INSURANCE

71