INTERNATIONAL INSTITUTE OF PLANNING

AND MANAGEMENT
CHENNAI – 08

INTERNSHIP REPORT
HDFC STANDARD LIFE

SUBMITTED BY
Aarthy. K.E
Roll No: 01
PGP/FW/07-09
Section A
 ACKNOWLEDGEMENT

First of all I would like to thank GOD ALMIGHTY for bestowing upon his choicest
blessings that kept me in good spirits and enabled me to accomplish the task successfully.

I wish to express my profound gratitude to HDFC Standard Life (Chennai –

Mugappair Branch) for selecting me for the project and giving me a very informative
opportunity.

I feel a deep sense of gratitude to my beloved and highly esteemed institute INDIAN
INSTITUTE OF PLANNING AND MANAGEMENT for growing me into true business
management Student. It is my privilege to thank my Dean for his immense support throughout
my study.

I would like to thank my project guide Mr. Jagadish(Banch manager) and Mr. Mahesh
Sharma (SDM) who took his precious time to sit with me and guide me whenever I was in need
of assistance. His vast knowledge has always been a motivating factor for me to dwell deep into
the subject. Sir, I thank you from the bottom of my heart.

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 UNDERTAKING

I hereby declare that I have strictly adhered to the rules set by the Indian Institute of
Planning and Management for completing the project. The findings and recommendations made
in this report are based on data’s collected. I also state that the interpretation are true to most of
my knowledge and are not tampered with.

Aarthy K.E.
PGP/FW/07-09/Section A

EXECUTIVE SUMMARY

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HDFC Standard Life insurance is the oldest life insurance company in the world. It is the largest
insurer in the UK and is the 28th largest company in the world. In India, the company is
marketing life insurance products and unit linked investment plans. From my internship at
HDFC SLIC, I found that the company has a lot of competition from other private insurers like
ICICI, Aviva, Birla Sun Life and Tata AIG. It also faces competition from LIC. To compete
effectively HDFC SLIC could launch cheaper and more reasonable products with small
premiums and short policy terms. HDFC must advertise regularly and create brand value for its
products and services. Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use
television advertisements to promote their products.

The Indian consumer has a false perception about insurance they feel that it would not benefit
them if they do not live through the policy term. Nowadays however, most policies are unit
linked plans where a customer is benefited even if their death does not occur during the policy
term. This message should be conveyed to potential customers so that they readily invest in
insurance. On the whole HDFC standard life insurance is a good place to work at. Every new
recruit is provided with extensive training on unit linked funds, financial instruments and the
products of HDFC. This training enables an advisor/sales manager to market the policies better.
HDFC was ranked 13 in the Best Places to Work survey. The company should try to create
awareness about itself in India. In the global market it is already very popular.

With an improvement in the sales techniques used, a fair bit of advertising and modifications to
the existing product portfolio, HDFC would be all set to capture the insurance market in India as
it has around the globe.

OBJECTIVES

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 To know about insurance industry.

 To know how an insurance company operates.

 To get the feeling and learning of corporate work on daily basis.

 To know how IRDA regulates the insurance industry.

 To learn and understand the types of insurance products exists in the market.

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WHAT IS INSURANCE

Insurance, in law and economics, is a form of risk management primarily used to hedge against
the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss,
from one entity to another, in exchange for a premium. An insurer is a company selling the
insurance. The insurance rate is a factor used to determine the amount, called the premium, to be
charged for a certain amount of insurance coverage.

The act, system, or business of insuring property, life etc., against loss or harm arising in
specified contingencies, as fire, accident, death, disablement in consideration of a payment
proportionate to the risk involved is called Insurance. Insurance may be described as a social
device to reduce or eliminate risk of life and property. Under the plan of insurance, a large
number of people associate themselves by sharing risk.

Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in
exchange for a fixed sum called premium to pay the other party happening of a certain event.
Insurance is a contract whereby, in return for the payment of premium by the insured, the
insurers pay the financial losses suffered by the insured as a result of the occurrence of
unforeseen events. With the help of Insurance, large number of people exposed to a similar risk
make contributions to a common fund out of which the losses suffered by the unfortunate few,
due to accidental events, are made good

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 THE INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With largest number of life insurance policies in force in the world, Insurance happens to be a
mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and
presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per
cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds
available with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards and this part of
the population is also subject to weak social security and pension systems with hardly any old
age income security. This itself is an indicator that growth potential for the insurance sector is
immense.

A well-developed and evolved insurance sector is needed for economic development as it

provides long term funds for infrastructure development and at the same time strengthens the
risk taking ability. It is estimated that over the next ten years India would require investments of
the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments
in infrastructure development to sustain economic growth of the country.

Insurance is a federal subject in India. There are two legislations that govern the sector- The
Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has come a full
circle from being an open competitive market to nationalization and back to a liberalized market
again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn
witnessed over a period of almost two centuries.

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Historical Perspective

The history of life insurance in India dates back to 1818 when it was conceived as a means to
provide for English Widows. Interestingly in those days a higher premium was charged for
Indian lives than the non-Indian lives as Indian lives were considered more riskier for coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company
to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company
was established in 1880. The General insurance business in India, on the other hand, can trace its
roots to the Triton (Tital) Insurance Company Limited, the first general insurance company
established in the year 1850 in Calcutta by the British. Till the end of nineteenth century
insurance business was almost entirely in the hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance Companies
Act of 1912 and the provident fund Act of 1912. By 1938 there were 176 insurance companies.
The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided
strict State Control over insurance business. The insurance business grew at a faster pace after
independence. Indian companies strengthened their hold on this business but despite the growth
that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and provident
societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC)
was born. Nationalization was justified on the grounds that it would create much needed funds
for rapid industrialization. This was in conformity with the Government's chosen path of State
lead planning and development.

The (non-life) insurance business continued to thrive with the private sector till 1972. Their
operations were restricted to organized trade and industry in large cities. The general insurance
industry was nationalized in 1972.nearly 107 insurers were amalgamated and grouped into four
companies- National Insurance Company, New India Assurance Company, Oriental Insurance
Company and United India Insurance Company. These were subsidiaries of the GIC.

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FUNCTIONS OF INSURANCE

Provides Protection –

The function of insurance is to provide protection against future risk, accidents d uncertainty.
Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk.
Insurance is actually a protection against economic loss, by sharing the risk with others.

Collective bearing of risk –

Insurance is a device to share the financial loss of few among many others. Insurance is a mean
by which few losses are shared among larger number of people. All the insured contribute the
premiums towards a fund and out of which the persons exposed to a particular risk is paid.

Assessment of risk –

Insurance determines the probable volume of risk by evaluating various factors that give rise to
risk. Risk is the basis for determining the premium rate also

Provide Certainty –

Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device
whereby the uncertain risks may be made more certain.

Prevention of Losses -

Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate
consequences of risk by observing safety instructions; installation of automatic sparkler or alarm
systems, etc. Prevention of losses causes lesser payment to the assured by the insurer and this
will encourage for more savings by way of premium. Reduced rate of premiums stimulate for
more business and better protection to the insured.

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Small capital to cover larger risks –

Insurance relieves the businessmen from security investments, by paying small amount of
premium against larger risks and uncertainty.

Contributes towards the development of larger industries –

Insurance provides development opportunity to those larger industries having more risks in their
setting up. Even the financial institutions may be prepared to give credit to sick industrial units
which have insured their assets including plant and machinery.

Means of savings and investment –

Insurance serves as savings and investment, insurance is a compulsory way of savings and it
restricts the unnecessary expenses by the insured's For the purpose of availing income-tax
exemptions also, people invest in insurance.

Source of earning foreign exchange –

Insurance is an international business. The country can earn foreign exchange by way of issue of
marine insurance policies and various other ways.

Risk Free trade –

Insurance promotes exports insurance, which makes the foreign trade risk free with the help of
different types of policies under marine insurance cover.

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 PRINCIPLES OF INSURANCE

Insurance contracts are based on certain fundamental principles. These principles are common to
all types of insurance – life, fire, marine and miscellaneous insurance contracts, with the
exception of the principle of indemnity which is not applicable in case of life insurance contract
because of it being a contingent contract.

These principles are:

• Utmost good faith

• Insurable interest
• Indemnity
• Contribution
• Causa proxima
• Mitigation

Principle of Utmost good faith:

Since insurance shifts risk from one party to another, it is essential that there must be utmost
good faith and mutual confidence between the insured and the insurer. In a contract of insurance
the insured knows more about the subject matter of the contract than the insurer. Consequently,
he is duty bound to disclose accurately all material facts and nothing should be withheld or
concealed. Any fact is material, which goes to the root of the contract of insurance and has a
bearing on the risk involved. It is only when the insurer knows the whole truth that he is in a
position to judge (a) whether he should accept the risk and (b) what premium he should charge.
If that were so, the insured might be tempted to bring about the event insured against in order to
get money.

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Principle of Insurable interest:

For an insurance contract to be valid, the insured should have an insurable interest in the subject
matter of insurance. A contract of insurance affected without insurable interest is void. It means
that the insured must have an actual pecuniary interest and not a mere anxiety or sentimental
interest in the subject matter of the insurance. The insured must be so situated with regard to the
thing insured that he would have benefit by its existence and loss from its destruction. The owner
of a ship run a risk of losing his ship, the charterer of the ship runs a risk of losing his freight and
the owner of the cargo incurs the risk of losing his goods and profit. So, all these persons have
something at stake and all of them have insurable interest. It is the existence of insurable interest
in a contract of insurance, which distinguishes it from a mere watering agreement.

Principle of Indemnity:

The term ‘Indemnity’ means making up the loss. A contract of insurance contained in a fire,
marine, burglary or any other policy (excepting life assurance and personal accident and sickness
insurance) is a contract of indemnity. This means that the insured, in case of loss against which
the policy has been issued, shall be paid the actual amount of loss not exceeding the amount of
the policy, i.e. he shall be fully indemnified. The object of every contract of insurance is to place
the insured in the same financial position, as nearly as possible, after the loss, as if his loss had
not taken place at all. It would be against public policy to allow an insured to make a profit out
of his loss or damage.

Principle of Contribution:

Contribution is also a corollary of the principle of indemnity. This principle applies where there
are two or more insurance on one risk; the principle of contribution comes into play. The aim of
contribution is to distribute the actual amount of loss among the different insurers who are liable
for the same risk under different policies in respect of the same subject matter. Any one insurer
may pay to the insured the full amount of the loss covered by the policy and then become
entitled to contribution from his co-insurers in proportion to the amount which each has
undertaken to pay in case of loss of the same subject-matter.

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In other words, the right of contribution arises when (I) there are different policies which relate
to the same subject-matter (ii) the policies cover the same peril which caused the loss, and (iii)
all the policies are in force at the time of the loss, and (iv) one of the insurers has paid to the
insured more than his share of the loss.

Principle of Causa proxima:

The rule of causa proxima means that the cause of the loss must be proximate or immediate and
not remote. If the proximate cause of the loss is a peril insured against, the insured can recover.
When a loss has been brought about by two or more causes, the question arises as to which is the
causa proxima, although the result could not have happened without the remote cause. But if the
loss is brought about by any cause attributable to the misconduct of the insured, the insurer is not
liable.

Principle of Mitigation of Loss:

In the event of some mishap to the insured property, the insured must take all necessary steps to
mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he
does not do so, the insurer can avoid the payment of loss attributable to his negligence. But it
must be remembered that though the insured is bound to do his best for his insurer, he is, not
bound to do so at the risk of his life.

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 IMPORTANT MILESTONES IN LIFE INSURANCE BUSINESS IN INDIA

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament- LIC Act 1956- with a capital
contribution of Rs. 5 crore from the Government of India.

INDUSTRY REFORMS

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in
December 1999. The IRDA since its incorporation as a statutory body in April 2000 has
fastidiously stuck to its schedule of framing regulations and registering the private sector
insurance companies. Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. The other decision taken simultaneously to
provide the supporting systems to the insurance sector and in particular the life insurance
companies was the launch of the IRDA online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that the insurance
companies would have a trained workforce of insurance agents in place to sell their products.

PRESENT SCENERIO

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The Government of India liberalized the insurance sector in March 2000 with the passage of the
Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for
private players and allowing foreign players to enter the market with some limits on direct
foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign
partners in an insurance company. There is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in
India and this may also include restructuring and revitalizing of the public sector companies. In
the private sector 12 life insurance and 8 general insurance companies have been registered. A
host of private Insurance companies operating in both life and non-life segments have started
selling their insurance policies since 2001.

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 HDFC STANDARD LIFE INSURANCE

INTRODUCTION

HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since emerged as
the largest residential mortgage finance institution in the country. The corporation has had a
series of share issues raising its capital to Rs. 119 Crores. The gross premium income for the
year ending March 31, 2007 stood at Rs. 2,856 Crores and new business premium income at Rs.
1,624 Crores. The company has covered over 8,77,000 lives year ending March 31, 2007.HDFC
operates through almost 450 locations throughout the country with its corporate head quarters in
Mumbai, India. HDFC also has an International Office in Dubai, UAE with service associates in
Kuwait, Oman and Qatar. HDFC is the largest housing company in India for the last 27 years.

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.

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ORGANIZATIONAL STRUUCTURE OF HDFC STANDARD LIFE INSURANCE

CHAIRMAN

CEO/MD

GENERAL MANAGER

REGIONAL MANAGER

ZONAL MANAGER

TERITIARY MANAGER

BRANCH MANAGER

SALES DEVELOPMENT
MANAGER

FINANCIAL CONSULANT

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KEY PLAYERS

Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive Chairman of
Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited
in a senior management position in 1978. He was inducted as a whole-time director of HDFC
Limited in 1985 and was appointed as its Executive Chairman in 1993. He is the Chief Executive
Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants
(England & Wales).

Mr. Deepak M Satwalekar is the Managing Director and CEO of the Company since November,
2000. Prior to this, he was the Managing Director of HDFC Limited since 1993. Mr. Satwalekar
obtained a Bachelors Degree in Technology from the Indian Institute of Technology, Bombay
and a Masters Degree in Business Administration from The American University, Washington
DC.

GROUP COMPANIES

HDFC Bank: World Class Indian Bank- among the top private banks in India.

HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.

Intelenet Global: BPO services for international customers.

CIBIL: Credit Information Bureau India Limited.

HDFC Chubb: Upcoming Private companies in the field of General Insurance.

HDFC Mutual Fund

HDFC reality.com: Helps to search properties in all major cities in India

HDFC securities

STANDARD LIFE

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Standard Life is Europe’s largest mutual life assurance company. Standard Life, which has been
in the life insurance business for the past 175 years is a modern company surviving quite a few
changes since selling its first policy in 1825. The company expanded in the 19th century from
kits original Edinburgh premises, opening offices in other towns and acquitting other similar
businesses. Standard Life Currently has assets exceeding over £ 70 billion under its management
and has the distinction of being accorded “AAA” rating consequently for the six years by
Standard and Poor.

JOINT VENTURE

HDFC Standard Life Insurance Company Limited was one of the first companies to be granted
license by the IRDA to operate in life insurance sector. Reach of the JV player is highly rated
and been conferred with many awards. HDFC is rated ‘AAA ’ by both CRISIL and ICRA.
Similarly, Standard Life is rated ‘AAA’ both by Moody’s and Standard and Poor’s. These reflect
the efficiency with which HDFC and Standard Life manage their asset base of Rs. 15,000 Cr and
Rs. 600,000 Cr. respectively.HDFC Standard Life Insurance Company Ltd was incorporated on
14th August 2000. HDFC is the majority stakeholder in the insurance JV with 81.4% staple and
Standard of as a staple 18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture.
HDFC Standard Life Insurance Company Ltd. is one of India’s leading Private Life Insurance
Companies, which offers a range of individual and group insurance solutions. It is a joint venture
between Housing Development Finance Corporation Limited (HDFC Ltd.) India’s leading
housing finance institution and the Standard Life Assurance Company, a leading provider of
financial services from the United Kingdom. Both the promoters are well-known for their ethical
dealings and financial strength and are thus committed to being a long-term player in the life
insurance industry.

BUSINESS GROWTH

Track Record so far

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The gross premium income of HDFC, for the year ending March 31, 2007 stood at Rs. 2,856
crores and new business premium income at Rs. 1,624 crores.

The company has covered over 8,77,000 lives year ending March 31, 2007.

CORPORATE OBJECTIVE

Vision

The most successful and admired life insurance company, which means that we are the most
trusted company, the easiest to deal with, offer the best value for money, and set the standards in
the industry'

'The most obvious choice for all'.

Values

Integrity .

Innovation.

Customer centric.

People Care One for all .

Teamwork.

Joy and Simplicity

PRODUCTS & SERVICES

The right investment strategies won't just help plan for a more comfortable tomorrow, they will
help to get “Sar Utha ke Jiyo”. At HDFC SLIC, life insurance plans are created keeping in mind
the changing needs of family. Its life insurance plans are designed to provide you with flexible

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options that meet both protection and savings needs. It offers a full range of transparent, flexible
and value for money products. HDFC SLIC products are modern and contemporary unitized
products that offer unique customer benefits.

PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE INSURANCE

Individual Products

Protection Plans

A person can protect his family against the loss of his income or the burden of a loan in the
event of his unfortunate demise, disability or sickness. These plans offer valuable peace of mind
at a small price. Protection range includes our Term Assurance Plan & Loan Cover Term
Assurance Plan

Investment Plans

HDFC SLIC’s Single Premium Whole of Life plan is well suited to meet long term investment
needs. This provides attractive long term returns through regular bonuses.

Pension Plans

Pension Plans help to secure financial independence even after retirement. Pension range
includes Personal Pension Plan ,Unit Linked Pension, Unit Linked Pension Plus.

Savings Plans

Savings Plans offer a flexible option to build savings for future needs such as buying a dream
home or fulfilling your children’s immediate and future needs.

Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit Linked
Endowment Plus, Unit Linked Endowment Plus II, Money Back, Unit Linked Enhanced Life
Protection II,Children's Plan, Unit Linked Young Star,Unit Linked Young Star Plus, Unit Linked
Young Star Plus II.

Group Products

One-stop shop for employee-benefit solutions

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HDFC Standard Life has the most comprehensive list of products for progressive employers who
wish to provide the best and most innovative employee benefit solutions to their employees. It
offers different products for different needs of employers ranging from term insurance plans for
pure protection to voluntary plans such as superannuation and leave encashment.HDFC SLIC
offers the following group products to esteemed corporate clients:

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.

COMPETITIVE ANALYSIS

LIFE INSURANCE CORPORATION OF INDIA (LIC)

LIC has an excellent money back policy which provides for periodic payments of partial survival
benefits as long as the policy holder is alive. An important feature of these types of policies is
that in the event of the death of the policy holder at any time within the policy term the death

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claim comprises of full sum assured without deducting any of the survival benefit amounts
which have already been paid. The bonus is also calculated on the full sum assured. HDFC SLIC
does not have a money back policy. It could offer a money back plan and capture some portion
of this market. While marketing insurance products I found that many customers wanted to
purchase these plans. LIC offers 66 different plans, plans are formulated for specific occasions ,
whole life plans, term assurance plans, money back plan for women, child plans, plans for the
handicapped individuals, endowment assurance plans, plans for high worth individuals, pension
plans, unit linked plans, special plans, social security schemes diversified portfolio of products.
HDFC SLIC could diversify its product portfolio. It could add more plans for high worth
individuals and women.

ICICI PRUDENTIAL

ICICI Prudential is a stiff competitor for HDFC SLIC. The company is a merger between ICICI
Bank which is the biggest private bank in India and Prudential Plc which is a global life
insurance company. The company has an investment plan which is market related – Invest
Shield Life. In this plan even if the market falls, the premium will be returned to investors. It is a
guaranteed plan which ensures the company carefully invests your money. The stock market
performance of ICICI Prudential is much better than HDFC SLIC. The returns on the growth
fund were 46.28% compared to the 42.70% offered by HDFC SLIC. Customers are attracted by
higher returns and this is a plus point for Prudential. The company is very well advertised. The
advertisements are showcased in movies, television, newspapers, magazines, bill boards, radio
etc. The company has an excellent brand ambassador Mr. Amitabh Bachan. His promotion of the
company builds trust and faith in the minds of our people. However the charges are very high in
the plans offered by ICICI Prudential. Hence the policies are not accessible to the lower strata of
the society.

BIRLA SUN LIFE

Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla Group,
one of the largest business houses in India and Sun Life Financial Inc., a leading international
financial services organization. The local knowledge of the Aditya Birla Group combined with
the expertise of Sun Life Financial Inc., offers a formidable protection for your future. The

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Aditya Birla Group has a turnover close to Rs. 33000 crores with a market capitalization of Rs.
53400 crores. It has over 72000 employees across all its units worldwide. It is led by its
Chairman - Mr. Kumar Mangalam Birla. Some of the key organizations within the group are
Hindalco and Grasim. Sun Life Financial Inc. and its partners today have operations in key
markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the
Philippines, Japan, Indonesia, India, China and Bermuda. It had assets under management of
over US$343 billion. The company is a leading player in the life insurance market in Canada.
Being a customer centric company, BSLI has invested heavily in technology to build world class
processing capabilities. BSLI has covered more than a million lives since inception and its
customer base is spread across more than 1000 towns and cities in India. All this has assisted the
company in cementing its place amongst the leaders in the industry in terms of new business
premium income. The company has a capital base of 520 crores. Its Flexi Life Line Plan offers
life long insurance cover till the policy holder is 100 years of age. However the charges are very
high.

BAJAJ ALLIANZ

Bajaj Allianz is a joint venture between Allianz AG with over 110 years of experience in over 70
countries and Bajaj Auto, a trusted automobile manufacturer for over 55 years in the Indian
market. Together they are committed to offering you financial solutions that provide all the
security you need for your family and yourself. Bajaj Allianz is the number one private life
insurer for the year 2005 – 2006. It is leading by 78 crores. It has experienced a whopping
growth of 216% in the last financial year. The company has sold 13, 00,000 policies and is
backed by 550 offices across India. It offers travel insurance, motor insurance, home insurance,
health and corporate insurance. The mortality charges are lower than HDFC SLIC. The entry age
could be zero years which allow even new born babies to be insured.

TATA AIG

Tata Aig is a joint venture between the Tata group and American International Group Inc. In one
of the plans the company offers hospital cash benefit wherein it will pay Rs. 2500 per day in case
of hospitalization and Rs.12.5 lakhs in case the person suffers from any critical illness. Annual
premium is much less (about Rs. 6712) to avail such a good benefit. Charges are relatively low

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compared to HDFC SLIC for some policies. The company offers high coverage plans at low
cost. There is a plan even for a policy term of 1 year. These plans are very flexible and HDFC
SLIC could adopt this idea of insuring individuals for short periods of time. For example; there
is a family of four. The only earning member is the father. He has just taken a loan from a bank
of 20 lakhs to purchase a new home. He is able to repay the loan with his current salary in 15
years. The problem arises if something were to happen to him within these fifteen years. Not
only will the family face the emotional and financial loss of their father but they will also have to
repay the home loan or risk being homeless.

SWOT ANALYSIS

STRENGTH

• Financial Expertise-As a joint venture of leading financial services groups. HDFC

standard Life has the financial expertise required to manage long-term investments safely
and efficiently.

• Range of Solutions-HDFC SLIC has a range of individual and group solutions, which can
be easily customized to specific needs. These group solutions have been designed to offer
complete flexibility combined with a low charging structure.

• Strong Ethical Values: HDFC SLIC is an ethical and Cultural Organization. False selling
or false commitment with the customers is not allowed.

• Most respected Private Insurance Company -HDFC SLIC was awarded No-1 Private
Insurance Company in 2004 by the World Class Magazine Business World for Integrity,
Innovation and Customer Care.

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WEAKNESS

• Old and outdated technique-The old and out dated technique of tele marketing is used to
prospect customers. More modern techniques must be adopted.

• Lack of innovative products.

• Short term plans are available only at large premium.

• Large amount of documentation.

• Lack of awareness about the unit linked funds in the market.

• No money back plan present in the product portfolio.

OPPURTUNITIES

• Huge uninsured market is available across the country to target.

• Large base of middle class growing with a faster rate creating lots of opportunities.

• Company can promote insurance in colleges and corporate houses.

THREAT

• Large amount of competition (20 players in the market)

• Other brands are well advertised and have higher recall value.

• LIC is considered a safer option.

• Face competition from banks and mutual funds

• Incorrect perception about insurance

• Customers do not have risk appetite to invest in shares

• Some prospects have already invested and are not interested in further investments.

• Customers do not like their money locked up for many years

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 The Market Share of Life Insurance Companies

Life Insurance Market Share in %

HDFC Standard Life Insurance 4
Birla Sun Life 3
Aviva Life Insurance 6
Bajaj Allianz 7
LIC 55
TATA AIG 6
ICICI Prudential 12
ING Vysya 6
Bharti AXA 2
Others 2

60
50
40
Market Share in %

30
20
10
0
LIC
Aviva Life
Insurance
Standard

Prudential

Bharti
HDFC

ICICI

AXA

Popular Life Insurance Plans

Life Insurance

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 Types of Plans in %

Term Insurance Plan 39

Endowment Plan 45

Pension Plan 6

Child Plan 3

Tax saving Plan 7

TermInsurance
Plan
3% 7%
6% Endowment Plan
Rol Rol
Rol 39%
PensionPlan
45% %
ChildrenPlan
Role
Tax savingPlan

FUNCTION OF FINANCIAL CONSULTANT

The financial consultant’s main function is to solicit and procure life insurance business for the
insurance, which has appointed him for that purpose at the same time, he is trusted by the
prospect to advice him suitably, keeping his circumstances and needs in mind .He is thus in the
unique role of person trusted by both party to the transaction .His function would require him to

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 • Understand the prospect’s needs and persuade him to buy a plan of life insurance that
suits his interest best.

• Complete the formality (paper work, medical examination) necessary to get the policy
expeditiously.

• Keep in touch to ensure that changing circumstance are reflected in the arrangement
related to the premium payment ,nomination ,and other necessary alteration

• Facilitate quick settlement of claims

• Be totally honest with both the prospect and the insurer.

RESPONSIBILITY OF FINANCIAL CONSULTANT

A Financial consultant , individual or corporate ,is the main component of distribution channel
for the life insurance business .He would be required to solicit and procure new life insurance

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business, in a manner that is consistent with the interest of the policy holder and of the insurance
company .For this purpose ,he would have to do the following

• Contact prospect for life insurance ,study their needs and pursued them to buy .

• Complete all related formality ,including filling up of proposal forms ,collecting

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

RECOMMENDATION

HDFC SLIC should advertise more about the company and its products .it motivates individuals
to purchase insurance.

Customers/Prospects have negative mindset about insurance. Company should try to create a
positive perception about insurance.

HDFC SLIC has to be more innovative in bringing up the product. Company should speak about
the good features a plan offers like high returns, life cover, tax benefits, and accident cover.

Company should try to sell the product/plan which the consumer requires and not the plan where
the advisors benefit is higher.

Company should bring out policies with small premiums payable for short periods of time

Attract the youth of India with higher returns on investment as returns are the motivating factor
which influence purchase of insurance

Company can promote insurance in colleges and corporate houses

Company should promote HDFC SLIC as an Indian Company to build trust in the mind of
people.

HDFC SLIC could have a brand ambassador or a mascot to promote its services.

HDFC SLIC can tap the rural market where there is large potential.

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Company can try to diversify product portfolio and through which they can also reduce the risk.

CONCLUSION

HDFC standard life insurance is first private life insurance company in India. It has businesses
spread out across the globe. It was registered on 23rd December 2000. It currently ranks number
4 amongst the insurers in India (Source: annual premium provided by the company).The
company faces a large amount of competition. To sustain itself it must promote its products
through advertising and improve its selling techniques. Consumers must be aware of the new
plans available at HDFC SLIC. The medium of advertising used could be television since most
of its competitors use this tool to promote their products. The company must be promoted as an
Indian company since consumers seem to have more trust in investing in Indian firms.

The unit linked concept must be specifically promoted. The general perception of life insurance
has to change in India before progress is made in this field. People should not be afraid to invest
money in insurance and must use it as an effective tool for tax planning and long term savings.
HDFC SLIC could tap the rural markets with cheaper products and smaller policy terms. There
are individuals who are willing to pay small amounts as premium but the plans do not accept
premiums below a certain amount. It was usually found that a large number of males were
insured compared to females. Individuals below the age of 30 (mostly male) were interested in
investment plans. This was a general conclusion drawn during prospecting clients.

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REFERENCES

www.hdfcslic.com

www.tata-aig-life.com

www.irdaindia.com

www.lic.com

www.moneycontrol.com

www.bajajallianz.com

www.icici.prulife.com

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