A SUMMER TRAINING REPORT

PRODUCT ANALYSIS OF
HDFC STANDARD LIFE INSURANCE
COMPANY LIMITED
AND ITS COMPETITORS

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF

BACHELOR OF BUSINESS ADMINISTRATION (BBA)
GURU JAMBHESHWAR UNIVERSITY, HISAR

TRAINING SUPERVISOR SUBMITTED BY

MR. CHANDAN JYOTI ARCHANA NAGPAL
(CHANNEL DEVELOPMENT MANAGER,
PLACEMENT INCHARGE-
SUMMER INTERNSHIPS) ENROLLMENT NO.

SESSION 2006-2009

GURU NANAK DEV UNIVERSITY

AMRITSAR
 PREFACE

It was my privilege to have my research project at HDFC have got the opportunity to
work on “Concept of mutual fund with special reference to HDFC Mutual Fund”.

The subject of my study was PRODUCT ANALYSIS for HDFC STANDARD LIFE
INSURANCE, AND ITS COMPETITORS I have done by applying various tools like
Tele calling and through direct interaction with customer’s .I have also done a market
survey with the use of a questionnaire to know the clients interest towards the part time
business opportunity of Insurance Advisor.

The report contains first of all brief introduction about the company. Then it contains the
complete description of the job done and in the last the growth opportunities and
suggestions.

2
 ACKNOWLEDGEMENT

The present work is an effort to throw some light on “Product Analysis of

HDFC SLIC and Its Competitors”. The work would not have been possible to come to
the present shape without the able guidance, supervision and help to me by number of
people.

With deep sense of gratitude I acknowledge the encouragement and guidance

received by my organizational guide Mr. Chandan Jyoti (Channel Development
Manager, Placement Incharge- summer internships ) and other staff members of
HDFC SLIC.

I convey my heartful affection to all those people who helped and supported me
during the course, for completion of my Project Report.

ARCHANA NAGPAL

3
 CONTENTS

S.NO. TITLE PAGE NO.

1. INTRODUCTION 1

1.1 OVERVIEW OF THE INDUSTRY

1.2 PROFILE OF THE ORGANIZATION
1.3 PROBLEMS OF THE ORGANIZATION
1.4 COMPETITION INFORMATION
1.5 S.W.O.T. ANLYSIS

2. RESEARCH METHODOLOGY 41
2.1 SIGNIFICANCE
2.2 MARGINAL USEFULNESS OF THE STUDY
2.3 OBJECTIVE OF THE STUDY
2.4 SCOPE OF THE STUDY
2.5 METHODOLOGY

3. CONCEPTUAL DISCUSSION 50
4. DATA ANALYSIS 64
5. CONCLUSION AND RECOMMENDATIONS 88
ANNEXURES 94
BIBLIOGRAPHY 98

4
 CHAPTER 1: INTRODUCTION

1.1 Overview of the Insurance Industry

1.2 Profile of the organization
1.3 Problems of HDFC SLIC
1.4 Competitor information
1.5 S.W.O.T Analysis

5
 1.1 OVERVIEW OF THE INDUSTRY – INSURANCE INDUSTRY

The insurance sector in India has come a full circle from being an open competitive
market to nationalisation and back to a liberalised market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost two centuries.

With such a large population and the untapped market area of this population Insurance
happens to be a very big opportunity in India. Today it stands as a business growing at
the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per
cent to the country’s GDP .In spite of all this growth the statistics of the penetration of
the insurance in the country is very poor. Nearly 80% of Indian populations are without
Life insurance cover and the Health insurance. This is an indicator that growth potential
for the insurance sector is immense in India. It was due to this immense growth that the
regulations were introduced in the insurance sector and in continuation “Malhotra
Committee” was constituted by the government in 1993 to examine the various aspects of
the industry. The key element of the reform process was Participation of overseas
insurance companies with 26% capital. Creating a more efficient and competitive
financial system suitable for the requirements of the economy was the main idea behind
this reform.
Since then the insurance industry has gone through many sea changes .The competition
LIC started facing from these companies were threatening to the existence of LIC. Since
the liberalization of the industry the insurance industry has never looked back and today
stand as the one of the most competitive and exploring industry in India. The entry of the
private players and the increased use of the new distribution are in the limelight today.
The use of new distribution techniques and the IT tools has increased the scope of the
industry in the longer run.

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A BRIEF HISTORY

The origin of insurance is very old .The time when we were not even born; man has
sought some sort of protection from the unpredictable calamities of the nature. The basic
urge in man to secure himself against any form of risk and uncertainty led to the origin of
insurance.

The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

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

1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the
Triton Insurance Company Ltd., the first general insurance company established in the
year 1850 in Calcutta by the British.

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.

7
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 (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz.
1. National Insurance Company Ltd. 2. Oriental Insurance Company Ltd.
3. New India Assurance Company Ltd. 4. United India Insurance Company Ltd.
GIC incorporated as a company.

INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor
R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction.
The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector.
The reforms were aimed at “creating a more efficient and competitive financial system
suitable for the requirements of the economy keeping in mind the structural changes
currently underway and recognising that insurance is an important part of the overall
financial system where it was necessary to address the need for similar reforms…”

In 1994, the committee submitted the report and some of the key recommendations
included:

i) Structure
• Government stake in the insurance Companies to be brought down to 50%
• Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations
• All the insurance companies should be given greater freedom to operate

8
ii) Competition
• Private Companies with a minimum paid up capital of Rs.1bn should be allowed
to enter the industry.
• No Company should deal in both Life and General Insurance through a single
entity.
• Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
• Postal Life Insurance should be allowed to operate in the rural market.
• Only one State Level Life Insurance Company should be allowed to operate in
each state.

iii) Regulatory Body

• The Insurance Act should be changed.
• An Insurance Regulatory body should be set up.
• Controller of Insurance (Currently a part from the Finance Ministry) should be
made independent.

iv) Investments
• Mandatory Investments of LIC Life Fund in government securities to be reduced
from 75% to 50%
• GIC and its subsidiaries are not to hold more than 5% in any company (There
current holdings to be brought down to this level over a period of time)

v) Customer Service
• LIC should pay interest on delays in payments beyond 30 days.
• Insurance companies must be encouraged to set up unit linked pension plans.
• Computerization of operations and updating of technology to be carried out in the
insurance industry.

9
The committee emphasized that in order to improve the customer services and increase
the coverage of the insurance industry, it should be opened up to competition. But at the
same time, the committee felt the need to exercise caution as any failure on the part of
new players could ruin the public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirement of Rs.100 crores. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their performance and enable them
to act as independent companies with economic motives. For this purpose, it had
proposed setting up an independent regulatory body.
The Insurance Regulatory and Development Authority
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.

The other decisions taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of the
IRDA’s 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, which are expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations. In the private sector 12 life insurance and 6 general
insurance companies have been registered.

IMPACT OF LIBERALIZATION
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

10
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 81 %( 2004-05). The following companies has the rest of the market
share of the insurance industry.

CURRENT SCENARIO OF THE INDUSTRY

INSURANCE MARKET IN INDIA
India with about 200 million middle class household shows a huge untapped potential for
players in the insurance industry. Saturation of markets in many developed economies
has made the Indian market even more attractive for global insurance majors. The
insurance sector in India has come to a position of very high potential and
competitiveness in the market.
Innovative products and aggressive distribution have become the say of the day. Indians,
have always seen life insurance as a tax saving device, are now suddenly turning to the
private sector that are providing them new products and variety for their choice.
Life insurance industry is waiting for a big growth as many Indian and foreign companies
are waiting in the line for the green signal to start their operations. The Indian consumer
should be ready now because the market is going to give them an array of products,
different in price, features and benefits. How the customer is going to make his choice
will determine the future of the industry.

1. CUSTOMER SERVICE

Consumers remain the most important centre of the insurance sector. After the entry of
the foreign players the industry is seeing a lot of competition and thus improvement of
the customer service in the industry. Computerisation of operations and updating of
technology has become imperative in the current scenario. Foreign players are bringing in

11
international best practices in service through use of latest technologies. The one time
monopoly of the LIC and its agents are now going through a through revision and
training programmes to catch up with the other private players. Though lot is being done
for the increased customer service and adding technology to it but there is a long way to
go and various customer surveys indicate that the standards are still below customer
expectation levels.

2. DISTRIBUTION CHANNELS

Till date insurance agents still remain the main source through which insurance products
are sold. The concept is very well established in the country like India but still the
increasing use of other sources is imperative. It therefore makes sense to look at well-
balanced, alternative channels of distribution.
LIC has already well established and have an extensive distribution channel and
presence. New players may find it expensive and time consuming to bring up a
distribution network to such standards. Therefore they are looking to the diverse areas of
distribution channel to have an advantage. At present the distribution channels that are
available in the market are:
 Direct selling
Corporate agents
Group selling
Brokers and cooperative societies
Banc assurance

BANCASURANCE - India has an extensive bank network established over the years.
What Insurance companies have to do is to just take advantage of the customers' long-
standing trust and relationships with banks. This is a mutually beneficial situation as
banks can also expand their range of products on offer to customers, while the insurance
company will also earn profits from the exposure. Another advantage is that banks, with
their network in rural

12
areas, help to fulfill rural and social obligations stipulated by the Insurance Regulatory
and Development Authority (IRDA) recently. Insurance companies should see banc
assurance as a tool for increasing their market penetration in India. It is also good for the
one who sees banc assurance in terms of reduced price, high quality product and delivery
at doorsteps. Everybody is a winner here. The creation of banc assurance operations has
made an important impact on the financial services industry at large. This is though a new
concept but it has gained a lot of importance in the industry at present and has a great
future.

3. PRODUCT INNOVATION

There has been a plethora of new and innovative products offered by the new players.
Customers have tremendous choice from a large variety of products from pure term (risk)
insurance to unit-linked investment products. Customers are offered unbundled products
with a variety of benefits as riders from which they can choose. More customers are
buying products and services based on their true needs and not just traditional money-
back policies, which is not considered very appropriate for long-term protection and
savings. There is lots of saving and investment plans in the market. However, there are
still some key new products yet to be introduced - e.g. health products.

4. RURAL MARKETING

Rural India seems to have an appetite for mobile phones, computers, and cars and to add
to it we have insurance. In India with the private players having entered into the
insurance industry, the expected explosion in job opportunities may not actually happen
but for them the catchments area is the opportunities in the rural India. In India the
insurance business can be said to be "a marathon, not a sprint". This is because of the
nature of the business being long term. With merely two years of the industry being
opened, not surprisingly, the new comers are making losses. The public sector
companies, notably the LIC, have gained in strength, thanks to the deepening of the
market consequent to the awareness created by the new companies. However this does

13
not deterred the private sector, which knows know that the race is a marathon, not a
sprint. However it seems that they if not anything, are only increasing their spending,
though only out of the capital. Today, there are 18 insurance companies in India
excluding the PSU’s, with 12 in the life insurance business and the rest in non-life .As
insurance companies go more and more rural in search of business, there will be
opportunities in the rural sector. A research conducted exhibited that the rural consumers
are willing to dole out anything between Rs 3,500 and Rs 2,900 as premium each year. In
the insurance the awareness level for life insurance is the highest in rural India, but the
consumers are also aware about motor, accidents and cattle insurance. In a study
conducted by MART the results
showed that nearly one third said that they had purchased some kind of insurance with
the maximum penetration skewed in favor of life insurance. The study also pointed out
the private companies have huge task to play in creating awareness and credibility among
the rural populace. The perceived benefits of buying a life policy range from security of
income bulk return in future, daughter's marriage, children's education and good return on
savings, in that order, the study adds.
Regulatory and Development Authority (IRDA) have set stiff rural targets for insurance
companies. For the life sector, in the first year, 5 per cent of the total policies written
should come from the rural sector. This will go up to 15 per cent in five years. Similarly,
for the non-life sector, two per cent of the total gross premium income should come from
the rural sector going up to 5 per cent in five years, according to the regulation. All these
moves will make the investment the rural area a big start.

5. INFORMATION TECHNOLOGY AND INSURANCE

In the insurance industry today, there is a clear trend away from selling a broad range of
products to a large volume of customers in a one –size-fits-all manners. Instead of
focusing on their different products lines as silos (i.e., life, property and casualty etc)
insurers are looking for ways to offer highly targeted insurance products that are tailored
to the individuals customers with the highest propensity to buy them.

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There is a evolutionary change in the technology that has revolutionized the entire
insurance sector. Insurance industry is a data-rich industry, and thus, there is dire need to
use the data for trend analysis and personalization.
With increased competition among insurers, service has become a key issue. Moreover,
customers are getting increasingly sophisticated and tech-savvy. People today don’t want
to accept the current value propositions, they want personalized interactions and they
look for more and more features and add ones and better service The insurance
companies today must meet the need of the hour for more and more personalized
approach for handling the customer. Today managing the customer intelligently is very
critical for the insurer especially in the very competitive environment. Companies need to
apply different set of rules and treatment strategies to different customer segments.
However, to personalize interactions, insurers are required to capture customer
information in an integrated system.

With the explosion of Website and greater access to direct product or policy information,
there is a need to developing better techniques to give customers a truly personalized
experience. Personalization helps organizations to reach their customers with more
impact and to generate new revenue through cross selling and up selling activities. To
ensure that the customers are receiving personalized information, many organizations are
incorporating knowledge database-repositories of content that typically include a search
engine and lets the customers locate the all document and information related to their
queries of request for services. Customers can hereby use the knowledge database to
mange their products or the company information and invoices, claim records, and
histories of the service inquiry. These products also may be able to learn from the
customer’s previous knowledge database and to use their information when determining
the relevance to the customers search request.
The insurance sector remains a very competitive market and those companies that are
able to best utilize their data and provide their customer with the most personalized
options will have the distinct competitive advantage. The insurers that come up to the top
will be those who leverage the appropriate technology solutions effectively in order to

15
foster customer loyalty, attract new customers and improve operational efficiency by
providing common information across their lines of business.

6. MERGERS AND AQUISITIONS

This is an era of mergers and acquisitions. Private companies including MNC’s are
amalgamating the world over to get more competitive edge. Currently, the general
insurance industry has been opened up. The question here is that for over two years, eight
private companies have operated and has the size of the cake expanded. The insurers are
doing enough to raise the level of risk awareness or are they merely content to compete in
the markets organized and established. However sooner or later the private sector players
will have to put in place strategies aimed not at winning the existing accounts of the
public players but at diversifying markets penetration as a whole. The private players in
the future would have to turn their attention to working in the unorganized and under
served markets.
What is likely to happen is that the private players would continue to skim the profitable
segments of the already organized business in the urban areas? The time has already
come for the government of India to evaluate the performance of private companies’ vis-
à-vis their declared objective of opening up the industry.
However it is high time for the government to realize that importance of merging the
public sector general insurance companies into single entity. The resent scenario calls for
a better performance from part of each of the public sector insurance companies against
each other; or in other words a competition to be the best. The result what we see is the
undercutting of premium to retain or wrest business and quoting an uneconomical rate of
premium. While this allows one of the Public Sectors Company to win a business form
another in this manner. The others suffer a loss and the resultant effect is a
cannibalization with a fall in the average premium of the public sector itself. This at
many times brings advantage to the private players who grab the business because of the
unethical competition among the public players.
The purpose of having four companies all subsidiaries of General Insurance Corporation
of India (GIC)– National Insurance Company, New India Assurance Company, Oriental

16
Insurance Company, And The United India Insurance Company; at the time of
nationalization was to have competition among themselves –in service and products at
the same price. The service provided by them was also equally good or bad depending on
the experience of the customers.
Now with real competition coming in with most of the global insurance players setting
footprints here, it is felt that the time for merger has come and to enjoy the benefits if the
size. It is to be sated that size does matter in insurance business. All over the world’s
mergers and acquisitions in the risk-underwriting sector is common. The benefits if the
four insurance companies merge will be enormous. The merged entity will enjoy higher
underwriting and risk retention capacity; increase in reinsurance premium, reduction in
reinsurance outflow, healthy solvency margins, setting right the asset –liability mismatch
and reduction in cost. The insurance market thus becomes a gambling place. Had the
public sector companies made into a single entity, perhaps the total premium of the four
public sector companies in the year 2003-04 would have gone up but 25 percent. But the
public sector alone is forced to underwrite the loss making motor third party liability
(TPL) insurance. The public insurance companies insured a loss of Rs 1943 crore on this
portfolio on just one year (03-04). The cumulative loss under this portfolio is
astronomical. The loss of profitable business in view of undeserved competition among
the public sector companies is hampering the subsidization of social insurance including
the motor TPL.

It is thus clear that it is good for the public sector companies to merge immediately when
they are still strong, lest a merger becomes inevitable later after the independent public
sector companies fail one after another. This does not bid well for the public sector, nor
fort he insuring public and not for the economic development either. For a progress me
require merger of strong public sector companies. Else it would render public sector
companies weak and destroy them.

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NAME OF THE PLAYER MARKET SHARE (%)

LIC 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJA ALLIANZ 2.03

SBI LIFE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YORK 0.90

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYASA 0.37

AMP SANMAR 0.26

METLIFE 0.21

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POTENTIAL OF INSURANCE INDUSTRY IN INDIA :

• Only ONE out of FIVE insurable population in India have insurance coverage.
• In terms of Insurance premium per capita and premium per GDP, India ranks as
one of the lowest in the world.
• Life insurance premium constitutes only 9% of domestic savings.
• By 2010, hundred million elderly look to planning for old age pension and
annuities.
• More than 325 million labor forces have no social security.

With an annual growth rate of 15-20% and the largest number of life insurance policies in
force, the potential of the Indian insurance industry is huge. Total value of the Indian
insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to
government sources, the insurance and banking services' contribution to the country's
gross domestic product (GDP) is 7% out of which the gross premium collection forms a
significant part. The funds available with the state-owned Life Insurance Corporation
(LIC) for investments are 8% of GDP.

Till date, only 20% of the total insurable population of India is covered under various life
insurance schemes, the penetration rates of health and other non-life insurances in India is
also well below the international level. These facts indicate the of immense growth
potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector, as major structural
changes took place with the ending of government monopoly and the passage of the
Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry
restrictions for private players and allowing foreign players to enter the market with some
limits on direct foreign ownership.

19
Though, the existing rule says that a foreign partner can hold 26% equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have
poured into the Indian market and 21 private companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected.
Indians, who had always seen life insurance as a tax saving device, are now suddenly
turning to the private sector and snapping up the new innovative products on offer.

The life insurance industry in India grew by an impressive 36%, with premium income
from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff
competition from private insurers. Though the total volume of LIC's business increased in
the last fiscal year (2004-2005) compared to the previous one, its market share came
down from 87.04 to 78.07%. The 14 private insurers increased their market share from
about 13% to about 22% in a year's time. The figures for the first two months of the fiscal
year 2005-06 also speak of the growing share of the private insurers. The share of LIC for
this period has further come down to 75 percent, while the private players have grabbed
over 24 percent.

There are presently 12 general insurance companies with four public sector companies
and eight private insurers. According to estimates, private insurance companies
collectively have a 10% share of the non-life insurance market.

1.2. PROFILE OF THE ORGANISATION—HDFC STANDARD

LIFE INSURANCE CO. LTD

HDFC i.e HOUSING DEVELOPMENT AND HOUSING CORPORATION.

HDFC Standard Life is a joint venture between HDFC of India and Standard Life of UK.
The new company, Hdfc Standard Life, was one of the first to be awarded a license in the

20
recently deregulated Indian market and one of the first to open its doors for business and
issue policies.

Founded in 1977, HDFC id India’s market leader in housing finance, providing finance
for more than 1.5mn homes. They have 83 offices in India, one international office in
Dubai and three service associates in Kuwait, Qatar and the Sultanate of Oman.

Like Standard Life, HDFC is strongly committed to providing quality products and
excellent customer service and has won a number of important awards : in Jan 2001
Asiamoney named them as second ‘Best managed company in India’.

HDFC is also financially very strong and for the last six years has enjoyed the highest
financial strength ratings from India’s two leading rating agencies.
The HDFC group includes:
 HDFC Bank
 HDFC Asset Management
 HDFC Realty Ltd.
 HDFC Securities Limited

Over the period of operations, HDFC group has been felicitated with various rewards.
Some of them are as follows:

 United Nations Scroll of Honor –1991

 India’s best managed company by Asiamoney magazine – 1995 and 1996
 Most competitive Indian company by Euromoney –1997
 One of the 5 best Indian Boards by Business Today – 1997
 Rated as one of the best companies in India for strategy & management and
investor relations by Asiamoney –1998.
 Excellence in service industry by the Indian Institute of Marketing Management
& Top Management Club (Pune) –1998

21
  Shield for the best presented accounts for banks and financial institutions – over
11 times (last 8 years in a row)
 1999 IMC Ramakrishna Bajaj National Quality Award in the service category.
 CII-Exim Bank Commendation Certificate for commitment to Total Quality
Management – 2000.

HISTORY OF THE JOINT VENTURE

Discussions commenced -- January 1995
Joint Venture agreement signed – October 1995
Joint venture agreement renewed – October 1998
Life insurance project team established – January 2000 (Mumbai)
Company officially incorporated - 14th August 2000
First Private Sector Life Insurance company to be granted a certificate of registration –
23rd October 2000
Shareholding – HDFC 81.4%
Standard Life 18.6%

MISSION STATEMENT OF HDFCSLIC :

 We aim to be the top new life insurance company in the market.

 This does not just mean being the largest or the most productive company in the
market, rather it is a combination of several things like –
 Customer service of the highest order
 Value for money for customers
 Professionalism in carrying out business
 Innovative products to cater to different needs of different
customers
 Use of technology to improve service standards
 Increasing market share.

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VISION STATEMENT

“ The most succesful 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. In short, “the most obvious choice for all”.

VALUES THAT WILL BE OBSERVED IN HDFCSL :

 Integrity
 Innovation
 Customer Centric
 People Care
 Team Work – One for all & all for one
 Joy & Simplicity

23
INTEGRATED FINANCIAL SERVICES

REF NO:1.0

HDFC HOME HDFC

LOANS DEPOSITS

HDFC
HDFC SLIC
realty.com

CENTRE
FOR
HDFC HDFC
MUTUAL
HOUSING FUNDS
FINANCE

HDFC SECURITISATION
BANK FUTURE ACTIVITIES

HDFC INTELNET
SECURITIES

CIBIL i.e CREDIT

INFORMATION
DISTRIBUTION BUREAU LTD. HDFC CHUBB
GENERAL
INSURANCE CO.
LTD

24
1.3 PROBLEMS OF HDFC SLIC

 Since HDFC SLIC is a private player in the insurance industry, it has not yet
reached break-even. Hence, it has high cost due to which its premiums are high as
compared to LIC.

 It has to create credibility in the public.

 It has to compete with the wide range of products that its competitors offer.

 It has to focus towards rural segment also which has a great scope of growth.

 It has to decide on the strategies to be adopted which will help to counter

competition.

 It has to increase its no. of branches and also enhance its network of agents so that
it can compete with LIC.

 It has to focus on providing effective training to its agents so that the customer
base can be increased and moreover customer satisfaction can be ensured.

1.4 COMPETETIVE INFORMATION

 LIFE INSURANCE CORPORATION – MARKET LEADER

INTRODUCTION

The Life Insurance Corporation of India (LIC), a public sector enterprise, is the largest
insurance company in India, selling insurance products and related services. In March
2001, LIC had a total asset base of Rs.1936.2 billion and a total premium income of

25
Rs.342.07 billion. By April 2002, the total sum assured under 23.2 million policies stood
at Rs.1925.7 billion.

LIC had a variety of insurance plans to cater to various categories of people and their
diverse needs. The company offered life insurance and group insurance. It also provided
social security schemes and pension schemes. Each of its business products offered a
variety of different plans to suit different customers and situations. Investment in LIC
was considered by a majority of its customers to be reliable and secure. Housing loans
were granted through its subsidiary and LIC sold its market savings and investment
products through its mutual fund subsidiary, LIC Mutual Fund Ltd. To serve its 140
million policyholders (2001 end), the insurance giant had 1.25 lakh employees and 6.51
lakh agents across the country.

The company, which was based in Mumbai, had seven zonal offices, 100 divisional
offices, and 2,048 branch offices that spanned the country. LIC's penetration in rural
areas was very high; 18% of its total business came from rural areas.

Since LIC enjoyed monopoly status for over four decades, it emerged as one of the key
public fundraisers in India. However, things began changing in the mid-1990s, when the
Government of India decided to privatize the insurance sector. The Malhotra committee's
(formed to explore the possibility/feasibility? of privatizing the Indian insurance industry)
recommendations in 1994 brought about a sea change in the industry.

LIC found itself in a difficult situation when the newly formed Insurance Regulatory
Development Authority (IRDA) issued licenses to many private insurance companies
(starting November 2000).
To sustain its growth in an intensely competitive environment, the company, on the
recommendations of Booze, Allen and Hamilton, started initiated organizational changes
and became more customer-focused initiatives. The company's attitude towards the
changing insurance scenario was summarized by its Managing Director, N C Sharma,
"The element of competition will bring out the best (in us)."

26
HISTORY

The concept of life insurance came to India when two British insurance companies were
established in the country - the Oriental Life Insurance Company (in Calcutta in 1818)
and Bombay Life Assurance Company (in Bombay in 1823).
Over the next few decades, the life insurance business, which grew in an unregulated
environment, concentrated on urban areas and catered primarily to the higher strata of
society. In 1912, the Indian Life Assurance Companies Act was passed to regulate the life
insurance business.

Later, in 1928, the Indian Insurance Companies Act was enacted to enable the
government to collect statistical information on both life and non-life insurance business
transacted in India by Indian and foreign insurers, including provident insurance
societies. In 1938, the earlier legislation was consolidated and amended by the Insurance
Act, 1938, to protect the interests of the insuring public. The Insurance Act of 1938 was
amended in 1950, and brought about far-reaching changes in the insurance sector. These
included a statutory requirement of equity capital for companies carrying on life
insurance business, a ceiling on share holdings in such companies, stricter control on
investments, and submission of periodical returns relating to investments and other such
information to the controller. The controller could also call for the appointment of
administrators and could put a ceiling on the expenses of management and agency
commission for mismanaged companies.

By 1956, there were 154 life insurance companies in India. Malpractices and
mismanagement had crept into the management of several of these companies. More than
50 private insurance companies had been liquidated or swindled the policyholders. There
were complaints of different types of malpractices by many insurance companies. These
included falsification and denial of claims, and inter-locking of funds.

To protect the public, the government nationalized the insurance industry. On January 19,
1956, the management of the life insurance business of 245 Indian and foreign insurers

27
and provident insurance societies then operating in India were taken over by the central
government. The main objective of the nationalization of life insurance was to channel
insurance funds for the benefit of the community at large.

VISION :
"A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India" .

MISSION
"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering
resources for economic development."

TYPES OF PLANS OFFERED:

1. INDIVIDUAL PLANS
2. GROUP SCHEMES
3. PENSION PLANS

INDIVIDUAL PLANS

1. WHOLE LIFE SCHEMES

a. WHOLE LIFE WITH PROFITS

b. LIMITED PAYMENT WHOLE LIFE

c. Single Premium Plan

2. ENDOWMENT SCHEMES

a. Endowment plan with profit

28
 b. Limited payment endowment

c. Jeevan Mitra (Double cover)

d. Jeevan Mitra (Triple cover)

e. Jeevan Anand

f. New Janaraksha

3. TERM ASSURANCE PLAN

a. Jeevan Anurag

b. Komal Jeevan

c. Jeevan Kishore

d. Jeevan Chhaya

e. Marriage/endowment annuity

f. Deferred endowment

4. PERIODIC MONEY BACK PLAN

a. Bima Gold

b. Jeevan Rekha Plan

c. Money Back Plan

d. Jeevan surabhi

e. Jeevan Bharati

29
6. FOR BENEFIT OF HANDICAPPED

a. Jeevan Aadhar

b. Jeevan Vishwas

7. JOINT LIFE PLAN

a. Jeevan Saathi

8. PLAN FOR HIGH-WORTH INDIVIDUAL

a. Jeevan Shree-I

b. Jeevan Pramukh

9.CAPITAL MARKET LINKED PLAN

a. Bima plus

10. SPECIAL PLAN

a. Jeevan Saral

b. Future Plus
11. INVESTMENT PLAN

a. Bima nivesh ‘05

30
GROUP SCHEMES

1. Group Term Insurance Scheme

2. Group Gratuity Scheme

3. Group Superannuation Scheme

4. Group Savings Link Insurance Scheme

5. Group Mortgage Redemption Assurance Scheme

Social Security Schemes

 Janashree Prima Yojana

 Krishi Shramik Samajik Yojana

 Samajik Suraksha Yojana

 Shiksha Sahayog Yojana

Pension Plans

a. Jeevan Nidhi

b. Jeevan Akshay III

c. New Jeevan Dhara I

d. New Jeevan Suraksha I

31
 e. Future Plus

 ICICI PRUDENTIAL

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).

ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential
plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005,
the company garnered Rs 1584 crore of new business premium for a total sum assured of
Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about
56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups. For the past
four years, ICICI Prudential has retained its position as the No. 1 private life insurer in
the country, with a wide range of flexible products that meet the needs of the Indian
customer at every step in life.
ICICI Pru offers a complete range of insurance products.

1. Protection Plans
2. Savings Plans
3. Child Plans
4. Investment Plans
5. Retirement Plans
6. Group Plans
7. Rural Plans
8. Plans for NRIs
9. Keyman Plans

32
Protection Plans

a. Life guard
b. Investshield life
c. Investshield cash
d. Investshield gold
e. Premier life
f. Life Time & Life Time II
g. SecurePlus
h. CashPlus
i. Save’n’Protect
j. CashBak

Child Plans
a. SmartKid regular premium
b. SmartKid unit-linked regular premium
c. SmartKid unit-linked regular premium II
d. SmartKid unit-linked single premium II

Investment Plans
a. LifeLink II

Retirement Plans

a. Golden Years
b. InvestShield Pension
c. LifeTime Pension II
d. LifeLink Pension II
e. SecurePlus Pension
f. Forever Life

33
 ICICI Prudential offers 2 specially designed rural plans.

a. ICICI Pru Mitr – endowment plan

b. ICICI Pru Suraksha – regular premium

 TATA AIG
Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance Company Ltd.
(collectively "Tata AIG") are joint venture companies, 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 Life Insurance Company Ltd. provides insurance solutions to individuals and
corporates. Tata AIG Life Insurance Company was licensed to operate in India on
February 12, 2001 and started operations on April 1, 2001. Tata AIG Life offers a broad
array of life insurance coverage to both individuals and groups, with various types of
add-ons and options available on basic life products to give consumers flexibility and
choice.
The non-life insurance arm, 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.

THE AIG GROUP

American International Group, Inc. (AIG) is the world's leading international insurance
and financial services organization, with operations in approximately 130 countries and
jurisdictions.

34
AIG member companies serve commercial, institutional and individual customers
through the most extensive worldwide property-casualty and life insurance networks of
any insurer.
In the United States, AIG is the largest underwriter of commercial and industrial
insurance and is one of the top three life insurers. AIG's global businesses also include
financial services, retirement savings and asset management. AIG's financial services
businesses include aircraft leasing, financial products, trading and market making.
AIG's growing global consumer finance business is led in the United States by American
General Finance. AIG also has one of the largest U.S. retirement savings businesses
through AIG SunAmerica and AIG VALIC, and is a leader in asset management for the
individual and institutional markets, with specialized investment management capabilities
in equities, fixed income, alternative investments and real estate. AIG's common stock is
listed in the New York Stock Exchange, as well as the stock exchanges in London, Paris,
Switzerland and Tokyo.

Products:

1. CHILDREN PLANS

2. ADULT PLANS

3. RETIREMENT PLANS

4. LIFE PLANS

CHILDREN PLANS
a. ASSURE EDUCARE
b. ASSURE CAREER BUILDER
c. MAHALIFE GOLD
d. ASSURE 21YEARS MONEY SAVER

35
ADULT PLANS
a. TATA AIG INVEST ASSURE
b. ASSURE LIFELINE
c. LIFEPLUS
d. ASSURE 21YEARS MONEY SAVER
e. ASSURE SECURITY AND GROWTH
f. TATA AIG HEALTH FIRST
g. MAHALIFE GOLD

RETIREMENT PLANS
a. ASSURE GOLDEN YEARS
b. MAHALIFE GOLD
c. NIRVANA
d. NIRVANA PLUS

 BIRLA SUN

Birla Sun Life Insurance is the coming together of the Aditya Birla group and Sun Life
Financial of Canada to enter the Indian insurance sector. The Aditya Birla Group, a
multinational conglomerate has over 75 business units in India and overseas with
operations in Canada, USA, UK, Thailand, Indonesia, Philippines, Malaysia and Egypt to
name a few.

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, coupled with the expertise of Sun Life Financial Inc., offers a formidable for your
future.

36
Aditya Birla Group
The Aditya Birla Group is India's first truly multinational corporation. Global in vision,
rooted in Indian values, the Group is driven by a performance ethic pegged on value
creation for its multiple stakeholders. A US$ 7.59 billion conglomerate, with a market
capitalization of US$ 7 billion, it is anchored by an extraordinary force of 72,000
employees belonging to over 20 different nationalities. Over 30 per cent of its revenues
flow from its operations across the world. The Group's products and services offer
distinctive customer solutions. Its 66 state-of-the-art manufacturing units and sectoral
services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia
and China.

A premium conglomerate, the Aditya Birla Group is a dominant player in all of the
sectors in which it operates. Such as viscose staple fibre, non-ferrous metals, cement,
viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, sponge iron,
insulators and financial services. It is:

 The world no. 1 in viscose staple fiber

 The world's largest single location palm oil producer
 Asia's largest integrated aluminum producer
 A globally competitive, fast-growing copper producer
 The world's third largest producer of insulators
 Globally, the fourth largest producer of carbon black
 The world's eighth largest producer of cement, and the largest in a single
geography
 India's premier branded garments player
 Among India's most energy efficient private sector fertilizer plants
 India's second largest producer of viscose filament yarn
 The no. 2 private sector insurance company, and the fourth largest asset
management company in India

The Group has also made successful forays into the IT and BPO sectors.

37
 Sun Life Financial

Sun Life Financial is a leading international financial services organization. With a

history that dates back to 1871, Sun Life Financial has evolved from a single mutual life
insurance to one of the most highly rated insurance and wealth management institutions
in the world. Sun Life Financial knows its value lies in more than assets and history. It
also lies in the culture of integrity and the pursuit of excellence that have marked all of
the organization’s endeavors. Today, the Sun Life Financial Group of companies and
partners are represented globally in Canada, the United States, the Philippines, Japan,
Indonesia, India and Bermuda.

Boundless Expansion

In March of 2000, Sun Life Financial Services of Canada, Inc., Sun Life Financials
parent company, listed its shares on stock markets in Toronto, New York, London and
the Philippines. This new access to shareholder equity provides Sun Life Financial with
even greater opportunities to grow around the world.

Innovation
The Sun Life Financial group of companies around the world, offer innovative and
practical financial solutions to individuals and corporations.

Products:

1. PRIME LIFE
2. LIFE COMPANION
3. FLEXI LIFE LINE PLAN
4. FLEXI CASH FLOW MONEY BACK PLAN
5. FLEXI SAVE PLUS ENDOWMENT PLAN
6. FLEXI SECURELIFE RETIREMENT PLAN

38
 7. CLASSIC LIFE
8. CLASSIC LIFE PREMIER
9. BIRLA SUN LIFE TERM PLAN
10. SINGLE PREMIUM BOND
11. PREMIUM BACK TERM PLAN
12. FLEXI LONG TERM SAVINGS
13. FLEXI ACCESS MONEY
14. WOMAN FIRST PLAN
15. MY CHILD PLAN
16.BIMA KAVACH YOJANA

1.5 S.W.O.T ANALYSIS OF HDFCSL

STRENGTHS

 Premiums are increasing and so are commissions.

 The variety of products is increasing.

 Transparency in working is followed.

 Fund charges are less i.e 0.8%

 Stronger financial base.

 Employee centric organization.

WEAKNESS

 Strong competitors like LIC, ICICI Pru, Birla Sun Life etc.

39
 Premium is priced high as compared top the market leader.

 Infrastructure cost is high.

 Less expenditure on promotion.

 Products not customized for lower segment.

OPPORTUNITIES

 The ability to cross sell financial services barely being tapped.

 Technology is improving to the point that paperless transactions are available.

 The client's increasing need for an "insurance consultant" can open new ways to
service the client and generate income.

THREATS

 Government regulations on issues like health care, mold and terrorism can
quickly change the direction of insurance.

 The increasing expenses and lower profit margins.

 Intense competition from LIC.

40
CHAPTER2: RESEARCH METHODOLOGY

2.1 Significance
2.2 Managerial Usefulness
2.3 Objectives of the Study
2.4 Scope of the Study
2.5 Research Methodology Used

41
2.1 SIGNIFICANCE
The main significance of the project is to study the products of HDFC SLIC and its

competitive markets. Agent advisors play a vital role in the growth of company with

respect of company’s earnings as well as they create value for the organization after

achieving some milestones. Agent advisors are an integral part of the team and sales

manager assigned to them help them to groom in terms of personality development,

selling skills and handling objections of customers. Different products are provided to the

customers that help to gain customer satisfaction. Also competitors play a vital role to

make a dynamic environment.

2.2 MANAGERIAL USEFELNESS OF THE STUDY

A thorough research and a detailed study of the market is very important for the
management to take the right strategy suiting the market condition.
The study gives the information regarding the market competition, innovative products
offered by competitors, present demand of the products in the market etc.

The main usefulness of the study on the managerial level is:

 Market survey will help to know the prevailing market condition and also help in
framing the policies accordingly.

 The study will help the management to understand the customer mindset and also
estimating the present and future market demand for the products.

 It will help to estimate the level of awareness established in the market and in
deciding the extent of promotion required.

42
  It will help in finding out the customers expectations about the product and also
help to know the customer physiology.

 It will help to know the class on which HDFC SLIC must concentrate.

2.3 OBJECTIVES OF THE STUDY

 To find the preferences of products and companies among the wide range
available in the insurance industry.
• To study the range of product offerings of the different insurance players.
• To study the level of awareness about HDFC SLIC’s products.

SUB-OBJECTIVE:

To conduct market research about how people perceive HDFC SLIC as a brand and what
are their expectations from the current insurance industry.

2.4 SCOPE OF THE STUDY

The study helped in assessing the customer’s attitude towards HDFC SLIC. The findings
can be generalized from regional level. The product offerings of different companies in
insurance industry to create awareness and to increase market share were studied. The
awareness of endowment policies in particular was also studied. This provided scope for
understanding the consumer preferences and retaining present customers while adding
new ones.

The study helped to understand the customer expectations, the potential customers
requirement and customers problems and has helped to keep customers highly satisfied.

43
2.5 RESEARCH METHODOLOGY USED

After specifying the objective of research it becomes essential to make an efficient plan
for gathering the needed information.

Market research involves the following steps:

Step 1: Define the problem and research objectives.

Step 2: Developing the research plan
 Selection method
 Questionnaire method
 Sampling method
 Contact method
Step 3: Collect the information
Step 4: Analyze the information.
Step 5: Present the findings.

Step 1: Define the research objective

After discussing with the external project guide the topic for the project was selected as:
“Product analysis of HDFC SLIC and its different competitors in insurance industry”

Step 2: Developing the research plan

• Questionnaire method

Marketing researchers have the best instrument in collecting primary data i.e. a
questionnaire to collect the data and to establish the view of the people from all the
sectors of the society.

44
 Questionnaires are designed to elicit information that meets the studies requirements.

Questions should be:

o clear
o easy to understand
o directed towards meeting an objective.

Need to define objectives before designing the questionnaire. Must maintain

impartiality and be very careful with personal data. Four basic types of questions
are:

o Open ended
o Dichotomous
o Multiple choice.
o Scaled (lickert)

The questionnaire designed for this project contains open-ended questions. All the
questions are clearly defined. The questions are framed keeping in mind the objective of
research and kind of information required .Sampling method

To select representative units from a total population. A population "universe", all

elements, units or individuals that are of interest to researchers for a specific study. IE all
registered voters for an election. Sampling procedures are used in studying the likelihood
of events based on assumptions about the future.

o Random sampling, equal chance for each member of the population

o Stratified sampling, population divided into groups re: a common
characteristic, random sample each group
o Area sampling, as above using areas
o Quota sampling, judgmental, sampling error cannot be measured
statistically, mainly used in exploratory studies to develop a hypotheses,
non-probablistic.

45
Random sampling is selected as the sampling method for this project.

• Selection Method

o Mail-wide area, limited funds, need incentive to return the questionnaire

Mail panels, consumer purchase diaries. Must include a cover letter to
explain survey!!

o Telephone-speed, immediate reaction is negative, WATS, computer

assisted telephone interviewing.

o Personal interviews-flexibilty, increased information, non-response can be

explored. Most favored method among those surveyed. Can be conducted
in shopping malls.

o In home (door-to-door) interview, get more information but it is costly and

getting harder to accomplish.

o Mall intercepts-interview a % of people passing a certain point. Almost

half of major consumer goods and services orgs. use this technique as a
major expenditure. Can use demonstration, gauge visual reactions.
Regarding social behavior, mall surveys get a more honest response than
telephone surveys. There is a bias toward those that spend a lot of time in
malls. Need to weight for this. On site computer interviewing, respondents
complete self administered questionnaires conducted in shopping malls.
Questions can be adaptive depending on the responses.

o Focus groups-observe group interaction when members are exposed to an

idea or concept, informal, less structured. Consumer attitudes, behaviors,
lifestyles, needs and desires can be explored in a flexible and creative
manner. Questions are open ended. Cadillac used this method to determine
that they should be promoting safety features.

46
 A sample of 200 people was taken and judgement was done to select the right
prospects to secure accurate information. The sample consisted of people like
businessman, doctors, pvt. Company employees.

• Contact/Observation method

Record overt behavior, note physical conditions and events. Can be combined with
interviews, i.e. get demographic variables.

Mechanical observation devices, IE cameras, eye movement recorders, scanner

technology, Nielsen techniques for media.

Observation avoids the central problem of survey methods, motivating respondents to

state their true feelings or opinions. If this is the only method, then there is no data
indicating the causal relationships.

Step 3: Collection of information

The information of the project was gathered in 2 forms:

 Primary data

In primary data collection, you collect the data yourself using methods such as interviews
and questionnaires. The key point here is that the data you collect is unique to you and
your research and, until you publish, no one else has access to it.

There are many methods of collecting primary data and the main methods include:

• Questionnaires

• Interviews

• Focus Group Interviews

• Observation

47
• Case-Studies

• Diaries

• Critical Incidents

• Portfolios.

 Secondary data

Secondary data - collected by others to be "re-used" by the researcher

• What Form Does Secondary Data Take?

o Qualitative Sources
o Sources for Qualitative Research:
 Biographies - subjective interpretation involved
 Diaries - more spontaneous, less distorted by memory lapses
 Memoirs - benefit/problem of hindsight
 Letters - reveal interactions
 Newspapers - public interest & opinion
 Novels & Literature In General Handbooks, Policy Statements,
Planning Documents, Reports, Historical & Official Documents
(Hansard, Royal Commission reports)


o Quantitative Sources
 Published Statistics:
 National Government Sources
 Local Government Sources
 Other Sources
 Non-Published / Electronic Sources
 Data Archives eg the Data Archive At Essex
 On-Line Access To National Computing Centres

48
  International Sources on Internet & Web

For this project the secondary sources used are:

 Journals
 Company product brouchers
 Internet

Step 4: Data Analysis

The analysis was conducted by editing and coding the data. Coding was done in the form
of tabulation and editing was done by reviewing the questions.
Step 5: Present the findings

The findings of the project are the presented along with the recommendations.

Market Research Design

Research : Descriptive type

Data Source
Research approach
Research instrument
Type of questions
Sample sizes
Mode of collecting data
collection
: Primary & secondary
: Survey method
: Questionnaire
: Closed ended
: 200 samples
: Respondents to be
chosen randomly.

49
CHAPTER 3: CONCEPTUAL DISCUSSION

50
 CONCEPT

HISTORY OF HDFC STANDARD LIFE INSURANCE COMPANY

The Partnership :

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 the IRDA (Insurance Regulatory and Development authority)
Act passed in parliament. Despite this both companies remained firmly committed to the
venture.
In October 1998, the joint venture agreement was renewed and additional resource made
available. Around this time Standard Life purchased 2% of Infrastructure Development
Finance Company Ltd. (IDFC). Standard Life also started to use the services of the
HDFC Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising and both
companies agreed the time was right to move the operation to the next level. Therefore,
in January 2000 an expert team from the UK joined a hand picked team from HDFC to
form the core project team, based in Mumbai.
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.

51
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.

Our 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
realised 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 81.4%, while Standard
Life owns 18.6%. Given Standard Life's 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 be the yardstick by which all other insurance company's in India are
measured.

Our Mission:

We aim to be the top new life insurance company in the market.

This does not just mean being the largest or the most productive company in the market,
rather it is a combination of several things like-
• Customer service of the highest order
• Value for money for customers
• Professionalism in carrying out business
• Innovative products to cater to different needs of different customers
• Use of technology to improve service standards
• Increasing market share

52
Our Values:

• SECURITY: Providing long term financial security to our policy holders will be
our constant endeavour. We will be do this by offering life insurance and pension
products.
• TRUST: We appreciate the trust placed by our policy holders in us. Hence, we
will aim to manage their investments very carefully and live up to this trust.
• INNOVATION: Recognising the different needs of our customers, we will be
offering a range of innovative products to meet these needs.
• Our mission: is to be the best new life insurance company in India and these are
the values that will guide us in this.

What is an Endowment Assurance Plan?

 It is a participating (with profits) insurance plan that offers the following

 Provides financial support to the family by way of a lump sum payment in case
of the unfortunate death of the life assured within the term of the policy.
 provides a lump sum payment to the life assured on survival up to maturity.
 The lump sum mentioned is the basic sum assured plus any bonus additions.

Why should you buy this product?

This plan is a with profits saving plan and is well suited for saving money for your long-
term financial goals. This plan also helps provide for the needs of your family in your
absence by paying out a lump sum in the event of your unfortunate death during the term
of the policy.

What optional benefits are available with this plan?

53
You can add the following optional benefits to customise your policy to suit your needs:
 Critical Illness (CI) Benefit provides an amount, equal to the sum assured chosen
under this optional benefit, on diagnosis of any one of the 6 common critical
illnesses (1). The sum assured is payable if you survive for 30 days after the date
of the claim. Once such a claim has been met, no further Critical Illness Benefit is
payable. However, your basic policy continues even after we pay a claim on this
benefit.
 Additional Term Benefit (ATB) provides an additional amount equal to the sum
assured chosen under this optional benefit, in case of your unfortunate death.

 Accidental Death Benefit (ADB) provides an additional amount, equal to the sum
assured chosen under this optional benefit, in case of your unfortunate death:
- due to an accident, and
- within 90 days of the accident..
 Waiver Of Premium (WOP) Benefit waives the premium for you in case you
become totally disabled. The waiver is applicable during the period of total
disability.
All optional benefits must be selected at the outset of your plan..
(1) Cancer, coronary artery bypass graft surgery, heart attack, kidney / renal
failure, major organ transplant (as recipient) and stroke.

Does Endowment Assurance Plan offer you Tax Benefits?

Tax benefits described in Section 88, Section 80D** and Section 10 (10D) of the Income
Tax Act are applicable.
** Applicable to premiums paid for CI and WOP.

Are you eligible?

This plan can be taken on a single life basis or a joint life (first claim) basis. The
eligibility ages are as follows:

Basic Policy with optional benefits

54
 Basic Policy CI ATB ADB WOP

Min. age at entry 12 18 18 18 18

Max. Age at entry 60 55 60 55 50

Max. Age at expiry 75 70 75 65 60

Min. term: 10 years Max. Term: 30 years

What are the payment options?

You have the choice of paying your premium either in yearly, half-yearly or quarterly
modes, depending on your convenience.

Indicative Premium*

Age Basic Policy Additional Premium

(yrs.) Premium (Rs.) for optional benefits (Rs.)
CI ATB ADB WOP
20 4771 304 322 136 236
30 4835 442 388 144 300
40 5098 925 641 156 475
Not Not Not
50 5813 1357
Available Available Available
* The above quoted premium is for a male life assured for a period of 20 years and a sum
assured of Rs. 1lakh. The premium quoted above may vary as a result of underwriting.
The premium relatable to all the optional benefits put together should not exceed 30% of
the premium of the basic policy.

Unit Linked Endowment Plan

55
Our unit linked endowment plan can greatly help you to meet your financial needs both
now and in the future. It can help you build up a cash sum for the future and during that
time, give you the knowledge that your family will receive a cash lump sum to provide
for them in the event of your unfortunate demise.
It is important that you understand what the HDFC Unit Linked Endowment Plan is, how
it works, the risks involved and what a decision to buy could mean for you. We
recommend that you read this document before you purchase a policy from HDFC
Standard Life Insurance Company

What is the Unit Linked Endowment Assurance?

The unit linked endowment plan is an insurance policy that is designed to pay a lump
sum on maturity or on earlier death. The Unit Linked Endowment Plan also gives the
option of additional protection against the six common critical illnesses, as well as
additional protection if death is as the result of an accident.

Your premiums are invested in units of the investment fund of your choice, based on the
prevailing unit price. On maturity you receive the value of your units. On death (or
critical illness, if chosen) you receive the greater of the value of your units and your
selected basic sum assured.

What are my Premiums?

You agree to pay a level premium regularly, either quarterly, half-yearly or annually,
throughout the term of the policy. The minimum premium amount is Rs. 10,000 each
year.

To facilitate increased investment, we allow additional single premium top-ups at any

time. The minimum single premium top-up is Rs. 5,000
Premiums can be paid by cash, cheque or demand draft.

56
What investment funds can I invest in?

The policy is fully unitised with a range of funds to match your needs and approach to
risk. (By risk we mean the likely volatility in the value of units in the fund.)
Each investment fund is composed of units. All the units in a fund are identical. You can
choose from the following funds:

Liquid fund

The Liquid fund invests 100% in bank deposits and high quality short-term money
market instruments. The fund is designed to be cash secure and has a very low level of
risk; however unit prices may occasionally go down due to the use of short-term money
market instruments.

Secure Managed

The Secure Managed fund invests 100% in Government Securities and Bonds issued by
companies or other bodies with a high credit standing, however a small amount of
working capital may be invested in cash to facilitate the day-to-day running of the fund.
This fund has a low level of risk but unit prices may still go up or down.

Defensive Managed

15% to 30% of the Defensive Managed fund will be invested in high quality Indian
equities. The remainder will be invested in Government Securities and Bonds issued by
companies or other bodies with a high credit standing. In addition, a small amount of
working capital may be invested in cash to facilitate the day-to-day running of the fund.
The fund has a moderate level of risk with the opportunity to earn higher returns in the
long term from some equity investment. Unit prices may go up or down.

Balanced Managed

57
30% to 60% of the Balanced Managed fund will be invested in high quality Indian
equities. The remainder will be invested in Government Securities and Bonds issued by
companies or other bodies with a high credit standing. In addition a small amount of
working capital may be invested in cash to facilitate the day-to-day running of the fund.
The fund has a higher level of risk with the opportunity to earn higher returns in the long
term from the higher proportion it invests in equities. Unit prices may go up or down.

Growth fund

The Growth fund invests 100% in high quality Indian equities. In addition a small
amount of working capital may be invested in cash to facilitate the day-to-day running of
the fund. The fund has a higher level of risk with the opportunity to earn higher returns in
the long term from the investment in equities. Unit prices may go up or down.

The past performance of any of the funds is not necessarily an indication of future
performance.

There are no investment guarantees on the returns of unit linked funds.

None of the funds participate in the profits of HDFC Standard Life Insurance Company
Limited or any of its policyholder funds.

Can I switch my monies to any fund?

You can switch your existing investments from any endowment unit linked fund to
another endowment unit linked fund. You can also give us a premium redirection
instruction to redirect future premiums to different endowment unit linked funds.

What are the Benefits?

There are 4 different options available to choose from:

58
Life Option

On death within the policy term, the greater of the Sum Assured and the value of the unit-
linked fund will be paid to your nominee.
On survival to the end of the policy term the value of the unit linked fund will be paid to
you.

Life and Health Option

On death or earlier diagnosis of any one of six common critical illnesses within the policy
term, the greater of the Sum Assured and the value of the unit-linked fund will be paid to
your nominee.

On survival to the end of the policy term the value of the unit-linked fund will be paid to
you.
The illnesses covered under this option are cancer, coronary artery by pass graft surgery,
heart attack, kidney failure, major organ transplant (as recipient) and stroke.

Extra Life Option

This option pays the same benefits as the Life Option but, should death occur within the
policy term as the result of an accident, an extra benefit equal to the Sum Assured will be
paid.

59
Extra Life and Health Option

This option pays the same benefits as the Life and Health Option but, should death occur
within the policy term as the result of an accident, an extra benefit equal to the Sum
Assured will be paid.

What levels of protection are available?

Depending on your age at entry, you may choose between 3 levels of cover – Low,
Medium or High. For each level the Sum Assured is based on the amount of premium
you pay each year.

Age Levels of Cover

At
Low Medium High
Entry

18 to 40 5 x Premium 10 x Premium 20 x Premium

41 to 50 5 x Premium 10 x Premium

Over 51 5 x Premium

The Sum Assured cannot be changed during the term of the contract.

How are my benefits paid?

Your basic benefits will be paid by cheque.

Am I eligible?

The age and term limits for taking out a Unit Linked Endowment Plan are: (years)

Minimum Maximum Minimum Maximum Maximum

60
 Age at Age at Age at
Term Term
Entry Entry Expiry

Life 10 30 18 60 75

Life and
10 30 18 55 65
Health

Extra Life 10 30 18 55 70

Extra Life and

10 30 18 55 65
Health

Can I alter the level of my premiums?

Regular premiums can be increased at any time. If needed, the policyholder can reduce
the regular premium levels (even to zero ie the policy is converted to paid up status)
provided:

• 3 years of regular premiums have been paid

• The monetary value of the unit holding across all funds is at least Rs
15,000.

What happens if I surrender the policy?

The policyholder can surrender the policy at any point of time during the contract term.
The amount payable will be the unitised fund value after applying additional surrender
charges mentioned below.

61
WHEN CAN I ACCESS MY MONEY?

You can make lump sum withdrawals from you funds provided the fund balance after
withdrawal and charges does not fall below the Sum Assured. The minimum withdrawal
amount is Rs. 10,000.

WHAT HAPPENS IF I STOP PAYING PREMIUMS?

This product has a grace period of 15 days for the payment of each premium after the
initial premium.

If you stop paying premiums, before you have paid 3 years of annual premiums, we will
cancel you policy and return to you the value of your unitised fund, less cancellation
charges
.
If, after three years, you are unable to pay the premiums, you have the option to make the
policy paid-up, provided the policy has accumulated sufficient policy value. Currently,
this amount will be Rs. 15,000.

If you make your policy paid up you will continue to be protected according to the
benefits you selected. To provide this cover, we will continue to collect our usual charges
on each monthly charge date. It is important to note that if no further premiums are paid,
this may reduce the value of your fund over time, or even exhaust it completely.

A paid-up policy can be reinstated to premium paying status at any point of time in the
future.

If the fund value of a paid-up policy falls below Rs. 15,000 we will cancel the policy and
return to you the fund value, less cancellation charges.

DOES THIS PLAN OFFER ME TAX BENEFITS?

62
Premiums paid under this plan are eligible for tax benefits under Section 88 of the
Income Tax Act, 1961.

63
CHAPTER 4: DATA ANALYSIS

64
 Q1. WHAT IS YOUR PROFESSION ?

Ref no. 2 Fig out of 200

17% 14%

Doctor
Pvt. Emp
32% 37% Self employed
Others

This question was asked to see the class of people who purchase insurance policies the
most and the least.
INTERPRETATION
1) 32% of the self employed people purchase insurance policies.
2) 37% of the private employed people purchase insurance policies.
3) 14% of the doctors are there who purchase insurance policies from HDFC
SLIC.

65
66
Q2. WHAT AGE GROUP YOU FALL INTO ?

Ref no.3 fig.out of 200

5%
24%
29% 18-25 yrs
25-40yrs
40-55yrs
above 55yrs

42%

This question was asked to determine that people of which age group are insurance policy
holders and which age group the co. must target on i.e the potential group.
INTERPRETATION
THERE ARE 42% PEOPLE THAT FALL INTO THE AGE GROUP OF 25-40 YEARS
ARE INSURANCE HOLDERS. 29% OF AGE GROUP 40-55 YEARS ARE
INSURANCE HOLDERS. 24% OF INSURANCE HOLDERS ARE OF AGE 18-25
YEARS.

67
Q3. WHICH INCOME GROUP YOU FALL INTO ?

Ref no.4 fig out of 200

14% 24%
< 2 lacs
2-2.5 lacs
2.5-3.5 lacs
27%
> 3.5 lacs
35%

This question was asked to determine the income bracket class which is more responsive
to insurance policies.
INTERPRETATION
1) The persons whose income group is 2-2.5 lacs are more responsive towards the
insurance cover.
2) 27% of the people whose income group is 2.5-3.5 lacs are interested in insurance
policies.
3) 24% of the people whose income group is less than 2 lacs are interested in insurance
policies.
4) 14% of the people whose income group is more than 3.5 lacs are interested in
insurance policies.

68
69
Q4. DO YOU KNOW ABOUT IRDA ?

Ref no.5 fig out of 200

83
Yes
No
117

This question was asked to determine the prevailing level of awareness of IRDA.
INTERPRETETION
1) Out of 200 people 117 of them do not know about IRDA.
2) Out of 200 people 87 of them knows about the IRDA.

70
Q5. DO YOU HAVE INSURANCE POLICIES?

Ref no.6 fig out of 200

63

Yes
No

137

This question was asked to determine the potential customers and present customers.
INTERPRETATION
Out of 200 people 137 are insured and 63 of them are not insured or do not have any
insurance policy.

71
Q6. WHICH INSURANCE COMPANIES ARE YOU AWARE OF
THAT ARE TRUSTED BODIES ?

Ref no.7

180 169
160
140 123
120
100 83 78 79
80 68
60 41
40 27 19
20
0

A
N
J

FE
SL

RK
RU

VA
JA

AS
SU
TA

LI
IP

YO
C

VI
BA

VY
KO
DF

LA

ET
A
IC

EW
Z
H

G
IR

M
IC

IN
B
O

N
IA

X
LL

A
A

This question was asked to determine the competitor of HDFC SLIC in terms of creating
greater reliability in the minds of customers.
INTERPRETATION
After the survey it was found that 169 out of 200 rely on ICICI
Prudential. 2nd best insurance company is HDFC SLIC which holds 123 out 200. Third
position is hold by OM Kotak Mahindra with 83 of the share. Least reliability is of Met
Life that is 19.

Q7.WHICH OF THE FOLLOWING YOU PREFER ?

72
 Ref no.8 fig out of 200

79

121

Single premium Regular premium

This question was asked to determine the type of policy that is most preferred in terms of
payment period.
INTERPRETATION
121 out of 200 of the people prefer Regular Premium type of policy. And 79 out of 200
prefer single premium type of the policy.

73
Q8. WHAT IS YOUR OBJECTIVE OF INSURANCE ?

Ref no.9 fig out of 200

13 22
26 Protection
32 Savings
Investment
Pension
Taxation
47 Education
36 Others
24

This question was asked to determine the driving factor of purchasing insurance covers
so that the product that has the greatest potential can be found out and offered.
INTERPRETATION
1) 47% of the people purchase insurance for tax saving.
2) 24% of the people purchase insurance getting pensions.
3) 36% of them have the objective of investment for purchasing the insurance policies.
4) 32% of the people purchase insurance for saving purpose.
5) Only 22% of the people purchase insurance for protection.

74
Q9. FOR WHAT TERM DO YOU GENERALLY INVEST ?

Ref no.10 fig out of 200

17

<=10yrs
10-15yrs
74 109 >15yrs

This question was asked to determine the most preferred term of investment while going
for insurance covers.
INTERPRATATION
1) Generally 109 out of 200 invest in less than 10 year of the plan term.
2) Out of 200, 74 of the people invest for term 10-15 years.
3) 17 out of 200 invest in more than 15 years of term plan.

75
Q10. DO YOU HAVE ANY UNIT LINKED PLANS?

Ref no.11 fig out of 200

77
Yes
No
123

This question was asked to determine the present and potential market for ULIP – HDFC
SLIC’s premier product.
INTERPRETATION
123 out of 200 do not have Unit Linked Plans and 77 of them have Unit Linked Plans.

76
Q11. WHAT TYPE OF UNIT LINKED PLANS DO YOU INVEST IN ?

Ref no.12 fig out of 200

49
86

65

ChildrenPlan Endowment Plan Pension Plan

This question was asked to determine the type of ULIP that is most preferred and the one
which needs greater attention by the company.
INTERPRATATION
1) 86% of the people invest for children plans in Unit Linked plans.
2) 65% of the people invest in Unit Linked Endowment Plans.
3) 49% of the people invest in pension plans.

77
78
 Q12. WHAT BENEFITS YOU LOOK FOR BEFORE PURCHASING
INSURANCE PRODUCTS?

Ref no.13 fig. out of 200

73
89

38

Withdrawal facility Switching funds Inc/Dec of premiums

This question was asked to determine the benefit that is most seeked by the customers at
the time of choosing the insurance products.
INTERPRETATION
89% of the people who look for inc/dec of premiums before purchasing the insurance
products. 73% of the people who look for withdrawal facilities before investing in the insurance
products. 38% of the people who look for switching funds before investing.

79
Q13. HOW MANY INSURANCE COVERS HAVE YOU TAKEN ?
Ref no.14 fig. out of 200

44

86

70

One Two Three or more

This question was asked to determine the volume of purchase per customer.
INTERPRETATION
1) 86 out of 200 have more than 3 insurance covers.
2) 70 out of 200 have 2 insurance covers.
3) Out of 200, 44 have 1 insurance cover.

80
Q14. WHAT FACTORS YOU CONSIDER BEFORE PURCHASING
INSURANCE POLICIES AND HOW WOULD YOU RATE
THEM ON A SCALE OF 1-5?

Let X1=No. of people who rated as 1(least preferable)

X2= No. of people who rated as 2
X3=No. of people who rated as 3
X4=No. of people who rated as 4
X5=No. of people who rated as 5 (most preferable)

1. Company Name

Ref no.15 Ratings for Company name

37 18
26

70 49

Score:1 Score: 2 Score:3 Score:4 Score:5

Ratings for Company name(Y):

Y=X1+2(X2)+3(X3)+4(X4)+5(X5)
Y=18+2(26)+3(49)+4(70)+5(37)
Y= 682

81
2. Charges
Ref no.16 Rating for charges

12
47
46

58 37

Score:1 Score:2 Score:3 Score:4 Score:5

Ratings for Charges(Y2):

Y2= X1+2(X2)+3(X3)+4(X4)+5(X5)
Y2=12+2(46)+3(37)+4(58)+5(47)
Y2= 682

82
3.Benefits

Ref no.17 Ratings for benefits

25 21
39
47

68

Score:1 Score:2 Score:3 Score:4 Score:5

Ratings for Benefits (Y3):

Y3= X1+2(X2)+3(X3)+4(X4)+5(X5)
Y3=21+2(39)+3(68)+4(47)+5(25)
Y3= 820

83
 4. Growth

Ref no.18 Ratings for Growth

9 25
83

34

49

Score:1 Score:2 Score:3 Score:4 Score:5

Ratings for Benefits (Y4):
Y4= X1+2(X2)+3(X3)+4(X4)+5(X5)
Y4=9+2(25)+3(34)+4(49)+5(83)
Y4=772

84
 Ratings of HDFC SLIC on all factors

Ref no.19 Ratings for all factors

900
820
800 772
700 682 682
600
500
400
300
200
100
0
Co. Name Charges Benefits Growth

INTERPRETATION
1) people rated 682 for company name.
2) 682 was rated for company charges by the people on the grades 1-5
3) 820 was rated for company benefits by the people.
4) 772 was rated for company growth.

85
Q15. HOW WOULD RATE HDFC SLIC ON THE FOLLOWING FACTORS ?
(TICK)

1. HDFC SLIC

Ref no.20 Ratings of HDFC SLIC

100
80
60
40
20
0
Score:1 Score:2 Score:3 Score:4

Product Variety Creating Awareness Accesibility Quality of Service

2. ICICI PRUDENTIAL

Ref no.21 Ratings for ICICI PRUDENTIAL

120
100
80
60
40
20
0
Score:1 Score:2 Score:3 Score:4

Product Variety Creating Awareness Accesibility Quality of Service

3. TATA AIG

86
 Ref no.21 Ratings for TATA AIG

100
80
60
40
20
0
Score:1 Score:2 Score:3 Score:4

Product Variety Creating Awareness Accesibility Quality of Service

4.BIRLA SUN LIFE

Ref no.22 Ratings for BIRLA SUN LIFE

100

80

60
40

20

0
Score:1 Score:2 Score:3 Score:4

Product Variety Creating Awareness Accesibility Quality of Service

INTERPRETATION
1) Maximum people rated HDFC SLIC score-1 for Quality of Service, score-2 for
Creating Awareness, and score 3 for Product Variety.

87
2) ICICI Prudential was rated score 1 for Quality of Service, score 2 for Product Variety,
score 1 for Accessibility and for Creating Awareness it was scored 2
3) TATA AIG is scored 4 for Product Variety, Creating Awareness and Accessibility. It
is scored 3 for Quality of Service.
4) Birla Sun Life is scored 3 for Creating Awareness, Product Variety. It is scored 4 for
Accessibility and Quality of Service.

88
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS

• Conclusions
• Recommendation

LIMITATIONS

89
1. The time for which the research was conducted was just two months.
Hence the sample size was restricted to 200 only.

2. The scope of study was also restricted to the study of awareness about the
HDFC SLIC policies and consumer preferences. It could be widened to cover
various others aspects of insurance product demand.

3. As there are many competitors of HDFC SLIC in the pvt. Insurance sector.
Only 3 of its competitors products were analyzed in detail. A detailed study of all
the competitors of HDFC SLIC would have given more reliable and accurate
results.

4. The area from where the sample population was selected was Delhi only.
Other cities and moreover rural area was not covered under the study.

5. The primary data was collected form present and potential customers of
insurance products to evaluate their preferences. But the preferences of financial
agents was not considered which would have helped to evaluate the preferable
commission sale which helps to boost product sale.

RECOMMENDATIONS

90
• The co. should focus on producing greater product variety and more
customization.
• Greater awareness about IRDA and the organization has to be created through
advertisements.
• Investment as an objective of insurance has yet to be established . Greater focus
should be paid on this.
• ICICI Prudential is the greatest competitor of HDFC SLIC. Therfore the
performance of HDFC in terms of product variety, growth rate, accessibility and
greater awareness should be monitored and enhanced.
• The potential target customer id of the age group 18-25 years and income bracket
2-3.5 lacs. Customized products for this class should be devised and offered.

CONCLUSION

91
1) 37% of the policy holders are employed in pvt. sector and 32% are self employed.
Only 17% of policy holders are employed in govt. sector.
2) HDFC ‘s insurance products are devised for customers of age group 18-25 and
25-40 yrs. But only 24% of customers are of group 18-25 yrs.
3) 35% of the sample population belongs to the income bracket of 2-2.5 lacs and
27% belong to 2.5-3.5 lacs. Therefore products suitable to this class of customers
must be developed.
4) Only 42% of the sample population is aware of IRDA. Therefore attempts have to
be made to create greater awareness about IRDA which help to increase the
reliability.
5) ICICI Prudential is considered to be the most reliable organization in the minds of
sample population followed by HDFC SLIC and then Om Kotak. Therefore
HDFC SLIC has to increase the level of reliability to beat its strongest competitor.
6) 39.5% of population prefers single premium covers. Therefore more of regular
premium products have to be produced.
7) 54.5% of the population prefers to invest for a term of less than 10years and 37%
of them prefer to invest for a term of 10-15 years.
8) Only 38.5% of the population has taken Unit linked plans. This implies there is a
large market that is available for this product.
9) 43% of the population purchase children plans, 32.5% purchase endowment and
24.5% purchase pension plans.
10) 43% of the population has only one insurance cover, 35% have two covers and
only 22% have three or more covers.
11) HDFC SLIC has to focus on lower charges and providing greater benefits to
create a greater customer base.
12) ICICI Prudential is the biggest competitor of HDFC SLIC in terms of product
variety, creating awareness, accessibility, quality of service.

Market share of various insurance organizations in Apr-Jun’05

Name of organization Market share

92
 LIC 74.87%
ICICI PRUDENTIAL 7.53%
BAJAJ ALLIANZ 4.18%
HDFC SLIC 3.2%
TATA AIG 1.93%
BIRLA SUN LIFE 1.84%
SBI LIFE 1.69%
MAX NEW YORK 1.44%

93
BCG Matrix

94
ANNEXURES

95
 QUESTIONAIRE

PERSONAL DETAILS

NAME :_______________________________________________

ADDRESS :_______________________________________________

SEX : M F

TEL NO :______________________________________________
F C:\WINDOWS\hinhem.scr
EMAIL :______________________________________________

Q1. WHAT IS YOUR PROFESSION ?

PVT. EMPLOYEE
BUSINESSMAN
DOCTOR

Q2. WHAT AGE GROUP YOU FALL INTO ?

18-25 25-35 35-50 ABOVE 50

Q3. WHICH INCOME GROUP YOU FALL INTO ?

> 2 Lac 2 – 2.5 Lac 2.5 – 3.5 Lac >3.5 Lac

96
Q4. DO YOU KNOW ABOUT IRDA ?

YES NO
Q5. DO YOU HAVE INSURANCE POLICIES ?

YES NO

Q6. WHICH INSURANCE COMPANIES ARE YOU AWARE OF THAT ARE

TRUSTED BODIES ?

HDFC STANDARD LIFE ALLIANZ BAJAJ AVIVA

ICICI PRUDENTIAL MAX NEW YORK ING VYASA
OM KOTAK BIRLA SUN LIFE MET LIFE

Q7.WHICH OF THE FOLLOWING YOU PREFER ?

SINGLE PREMIUM POLICIES

REGULAR PREMIUM POLICIES

Q8. WHAT IS YOUR OBJECTIVE OF INSURANCE ?

PROTECTION SAVINGS INVESTMENT

PENSION TAXATION EDUCATION OTHERS

Q9. FOR WHAT TERM DO YOU GENERALLY INVEST ?

LESS THAN 10 YRS 10-15 YRS MORE THAN 15 YRS

97
 Q10. ARE YOU AWARE OF UNIT LINKED PLANS ?

YES NO

Q11. WHAT TYPE OF UNIT LINKED PLANS DO YOU INVEST IN ?

CHILDRENS PLAN ENDOWMENT PENSION

Q12. WHAT BENEFITS YOU LOOK FOR BEFORE PURCHASING INSURANCE

POLICIES/PLANS ?

WITHDRAWALS SWITHCHING FUNDS INC/ DEC OF PREMIUMS

Q13. HOW MANY INSURANCE COVERS HAVE YOU TAKEN ?

ONE TWO THREE OR MORE

Q14. WHAT FACTORS YOU CONSIDER BEFORE PURCHASING INSURANCE

POLICIES AND HOW WOULD YOU RATE THEM ON A SCALE OF 1-5?
COMPANY NAME ____________
CHARGES ____________
MATURITY AMT ____________
BENEFITS ____________

Q15. HOW WOULD RATE HDFCSLIC ON THE FOLLOWING FACTORS ? (TICK)

EXCELLENT VERY GOOD GOOD AVERAGE

PRODUCT VARIETY
CREATING AWARENESS
ACCESIBILITY
QUALITY OF SERVICE

98
BIBLIOGRAPHY

99
 BIBILIOGRAPHY

• Marketing Management – Philips Kotler

• Service Marketing - Zeithal
• Insurance Post Asia –Apr ’05, Jun ‘05
• Marketing Mastermind –May ‘05
• Case Folio – Insurance marketing
• C R Kothari, Research Methodology

Websites:
• www.lic.com
• www.hdfcsl.com
• www.icicipru.com

100