A project report on hdfc standard life insurance

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A project report on hdfc standard life insurance

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A project report on hdfc standard life insurance

  1. 1. 1
  2. 2. ACKNOWLEDGEMENTThis project is an outcome of the support and encouragement providedby a number of people at HDFC STANDARD LIFE INSURANCECOMPANY that embodies some of the best aspect of Indian corporateworld.I would like to express my sense of gratitude to the company for givingme this valuable learning opportunity and for allowing me to conductthis summer project.I sincerely thanks my project guide ……………………………………………………………, Sales Development Manager,HDFC STANDARD LIFE INSURANCE COMPANY for guiding methroughout the project and helpful in furnishing the requiredinformation. 2
  3. 3. INDEX INTRODUCTION………………………………………...5 OBJECTIVES OF STUDY……………………………….6 SCOPE OF STUDY………………………………………7 COMPANY PROFILE……………………………………8 FORM OF ORGANISATION…………………………….13 HISTORY OF INSURANCE…………………………….15 CURRENT SCENARIO OF INSURANCE SECTOR….16 BANCASSURANCE……………………………………19 PRODUCTS OF HDFC STANDARD LIFE INSURANCE……………………………………………20. BARRIERS TO ENTRY…………………………………27 GROWTH POTENTIAL…………………………………31 FUTURE TRENDS………………………………………32 UNIT LINKED INSURANCE PLAN……………………34 3
  4. 4.  FUTURE OF INSURANCE INDUSTRY…………………39 RESEARCH METHODOLOGY…………………………..42 ANALYSIS & FINDINGS OF SURVEY…………………43 LIMITATIONS…………………………………………….52 CONCLUSION…………………………………………….53 RECOMMENDATIONS………………………………….54 ANNEXURE……………………………………………….55 BIBLIOGRAPHY………………………………………….58 4
  5. 5. INTRODUCTIONBRIEF IDEA ABOUT THE PROJECTThe outlook of the modern day investors has undergone a dramatic change.In the changed fiscal scenario with drastic fall in the interest forinvestment and the volatile capital market with limited investmentoptions, ULIP comes to the rescue of the prudent investors. Investmentin insurance has become the style of the day. The individual looks atbuying an insurance policy more of an investment, which comes withthe additional benefits of life cover and tax benefit also.Unit Linked plans provides one with not only an effective protectionagainst individual investment risks and inflation but above all it bringsalong a long-term growth potential of financial means. Everyonedecides on their own what is the right method of investment for them,which predetermines evaluation of deposited money. 5
  6. 6. OBJECTIVES OF STUDY• Exposure to financial Service sector particularly insurance and mutual funds sector.• The study of Insurance in India & Unit Linked Insurance Plans.• And gain the professional knowledge while working in corporate environment. 6
  7. 7. SCOPE OF THE STUDYThe scope of my project was to get an overall view of the Indianinsurance market through comparative study and analysis. 7
  8. 8. COMPANY PROFILEHDFC STANDARD LIFE INSURANCEHDFC Standard Life Insurance Company Ltd. is one of India’s leadingprivate life insurance companies, which offers a range of individual andgroup insurance solutions. It is a joint venture between HousingDevelopment Finance Corporation Limited (HDFC Ltd.), India’s leadinghousing finance institution and one of the subsidiaries of Standard Life plc,leading providers of financial services in the United Kingdom. Both thepromoters are well known for their ethical dealings and financial strengthand are thus committed to being a long-term player in the life insuranceindustry – all-important factors to consider when choosing your insurer. 8
  9. 9. HDFC Limited• HDFC is India’s leading housing finance institution and has helped build more than 23,00,000 houses since its incorporation in 1977.• In Financial Year 2003-04 its assets under management crossed Rs.36,000Cr.• As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors.• Rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive year• Stable and experienced management.• High service standards.• Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development.• Presented the ‘Dream Home’ award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards. 9
  10. 10. Standard Life Group (Standard Life plc and its subsidiaries) • The Standard Life group has been looking after the financial needs of customers for over 180 years. • It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs. • Its investment manager currently administers £125 billion in assets. • It is a leading pensions provider in the UK, and is rated by Standard & Poors as strong with a rating of A+ and as good with a rating of A1 by Moodys. • Standard Life was awarded the Best Pension Provider in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the last 10 years running. The 5 Star accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the Best Flexible Mortgage Lender at the Mortgage Magazine Awards in 2006. 10
  11. 11. Our key strengths• Financial Expertise As a joint venture of leading financial services groups, HDFC Standard Life has the financial expertise required to manage your long-term investments safely and efficiently.• Range of Solutions We have a range of individual and group solutions, which can be easily customized to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure.• Track Record so far Our cumulative premium income, including the first year premiums and renewal premiums is Rs. 1532.21 Crores Apr-Mar 2005 - 06. We have covered over 1.6 million individuals out of which over 5,00,000 lives have been covered through our group business tie-ups. 11
  12. 12. Our VisionThe most successful and admired life insurance company, which means thatwe are the most trusted company, the easiest to deal with, offer the bestvalue for money, and set the standards in the industry.The most obvious choice for all.Our ValuesValues that we observe while we work:: • Integrity • Innovation • Customer centric • People Care “One for all and all for one” • Team work • Joy and SimplicityAccolades and Recognition • Rated by Business world as Indias Most Respected Private Life Insurance Company in 2004. • Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India’s number 1 personal finance magazine. 12
  13. 13. Form of OrganisationHDFC standard life insurance belongs to a life insurance sector in India.Life Insurance in IndiaIntroductionWith such a large population and the untapped market area of thispopulation, insurance happens to be a very big opportunity in India.Today it stands as a business growing at the rate of 15-20 percent annually.Together with banking services, it adds about 7 percent to the country’sGDP. In spite of all this growth the statistics of the penetration of theinsurance in the country is very poor. Nearly 80% of the Indian population iswithout life insurance cover and the health insurance.This is an indicator the growth potential for the insurance sector is immensein India. It was due to this immense growth that the regulations wereintroduced in the insurance sector and in continuation the government in1993 to examine the various aspects of the industry constituted “Malhotracommittee”. The key element of the reform process was participation ofoverseas insurance companies with 26% capital. Creating a more efficientand competitive financial system suitable for the requirements of thecompany was the main idea behind this reform. 13
  14. 14. Since then the insurance industry has gone through many sea changes.The competition LIC started facing from these companies werethreatening to the existence of the LIC. Since the liberalization of theindustry, the insurance industry has never looked back and todaystand as one of the most competitive and exploring industry in India.The entry of the private players and the increased use of the newdistribution are in the limelight today. The use of new distributiontechniques and the IT tools have increased the scope of the industry inthe longer run. 14
  15. 15. A Brief HistoryThe 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 ofthe nature. The basic urge in man to secure himself against any risk anduncertainty led to the origin of insurance.The insurance came to India from UK: with the establishment of the OrientalLife Insurance Corporation in 1818.the Indian Life Insurance Company act1912 was the first statutory body that started to regulate the life insurancebusiness in India. By 1956 about 154 Indian, 16 foreign and 75 providentfirms were established in India. Then the central government took over thesecompanies and as a result the LIC was formed. Since then LIC has workedtowards spreading life insurance and building a wide network across thelength and the breadth of the country. After the liberalization the entrance offoreign players has added to the competition in the market.The general insurance business in India, on the other hand, can trace its rootsto the Triton Insurance Company Ltd., the first general insurance companyestablished in the year 1850 in Calcutta by the British. In 1957 GeneralInsurance Council, a wing of the Insurance Association of India, frames acode of conduct for ensuring fair conduct and sound business practices. In1972 The General Insurance Business (Nationalization) Act. 1972nationalized the general insurance business in India with effect from 1stJanuary 1973. it was after this that 107 insurers amalgamated and groupedinto four companies viz. the National Insurance Company Ltd., the NewIndia Assurance Company Ltd., the Oriental Insurance Company Ltd., andthe United India Insurance Company Ltd. 15
  16. 16. Current Scenario of Insurance IndustryIndia with about 200 million middle class household shows a huge untappedpotential for players in the insurance industry. Saturation of markets in manydeveloped economies has made the Indian market even more attractive forglobal insurance majors. The insurance sector in India has come to a veryhigh potential and competitiveness in the market.Innovative products and aggressive distribution have become the say of day.Indians have always seen life insurance as a tax saving device, are nowsuddenly turning to the private sector that are providing them new productsand variety for their choice.Life insurance industry is waiting for a big growth as many Indian andforeign companies are waiting in the line for the green signal to start theiroperations. The Indian consumer should be ready now because the market isgoing to give them an array of products different in price, features andbenefits. How the consumer is going to make his choice will determine thefuture of industry. 16
  17. 17. CUSTOMER SERVICE Consumers remain the most important center of the insurance sector. Afterthe entry of foreign players the industry is facing a lot of competition andthus improvement of the customer service in the industry. Computerizationof operations and updating of technology has become imperative in thecurrent scenario. Foreign players are bringing in international best practicesin service through use of latest technologies. The one time monopoly of theLIC and its agents are now going through a thorough revision and trainingprogrammes to catch up with the other private players. Though lot is beingdone for the increased customer service and adding technology to it but thereis a long way to go and various customer surveys indicate that the standardsare still below customer expectation levels. 17
  18. 18. DISTIBUTION 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 already has well established and 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 available are:• Direct selling• Corporate agents• Group selling• Brokers and cooperative societies• Bancassurance To make all these channels a success companies have to be very alert and skillfulto know how to use these channels in a proper way. Bancassurance is one of themost upcoming channels of distribution. 18
  19. 19. BANCASSURANCEIndia has an extensive bank network established over the years. Whatinsurance companies have to do is just take advantage of the customers’long-standing trust and relationships with banks. This is a mutuallybeneficial situation as banks can also expand their range of products on offerto customers, while the insurance company will also earn profits from theexposure. Another, advantage ids that banjks, with their network in ruralareas, help to fulfill rural and social obligations stipulated by the InsuranceRegulatory Development Authority (IRDA) recently. Insurance companiesshould see bancassurance as a tool for increasing their market penetration inIndia. It is also good for the one who sees bancassurance in terms of reducedprice, high quality product and delivery at doorsteps. Everybody is a winnerhere. The creation of bancassurance operations has made an importantimpact on the financial services industry at large. This is though a newconcept but it has gained a lot of importance in the industry at present andhas a great future. 19
  20. 20. PRODUCTSAt HDFC Standard Life, we offer a bouquet of insurance solutions to meetevery need. We cater to both, individuals as well as to companies looking toprovide benefits to their employees. This section gives you details of all ourproducts. We have incorporated various downloadable forms and productdetails so that you can make an informed choice about buying a policy.For individuals, we have a range of protection, investment, pension andsavings plans that assist and nurture dreams apart from providing protection.You can choose from a range of products to suit your life-stage and needs.For organizations we have a host of customized solutions that range fromGroup Term Insurance, Gratuity, Leave Encashment and SuperannuationProducts. These affordable plans apart from providing long-term value to theemployees help in enhancing goodwill of the company.Following are the major plans of HDFC: • Endowment plan. • Whole life plan • Pension plan • Children’s plan • Money back plan 20
  21. 21. ENDOWMENT PLAN The HDFCSL Endowment Assurance Plan gives you: An ideal way to secure your long-term financial goals Valuable protection to your family by way of lump sum payment in case of your unfortunate death within policy term Provides lump sum payment (basic Sum Assured plus any bonus additions) on survival up to maturity date Very flexible benefit options and payment optionsIn case of your unfortunate demise during the policy term, this participating(‘With Profits’) insurance plan will pay your family the Sum Assured(together with the attached bonuses) you had chosen.The plan receives simple Reversionary Bonuses, which are usually addedannually. At the end of the term an additional Terminal Bonus may be paiddepending on the performance of the underlying investment. WHOLE LIFE PLAN 21
  22. 22. HDFC Single Premium Whole Of Life Insurance Plan is a tailor-madeplan well suited to meet your long-term investment needs. This participatingplan offers you the following benefits: Whole of life plan aimed at providing long-term real growth of your money. Single premium investment plan In case of your unfortunate demise during the policy term, this participating (‘With Profits’) insurance plan will pay your family the Sum Assured and compound Reversionary Bonuses, which are usually added annually. An additional Terminal Bonus may be paid depending on the performance of the underlying investments. During Guaranteed Surrender Periods you get the Sum Assured and all bonuses vested as at the date of surrender. PENSION PLANHDFC PERSONAL PENSION PLAN 22
  23. 23. We understand your need to build a secure future for yourself. Hence, theHDFC Personal Pension Plan is an insurance policy that is designed toprovide a post - retirement income for life with the freedom to choose yourretirement date.You can choose your premium, the Sum Assured and your retirement date.At the end of the policy term, you will receive the Sum Assured plus anyattaching bonus, which will provide your post - retirement income.The HDFC Personal Pension Plan is an insurance policy, which can benefityou in the following ways: 23
  24. 24. ProvidesapostretirementincomeinyourgoldenyearsGive 24
  25. 25. The plan receives simple Reversionary Bonuses, which are usually addedannually. At the end of the term an additional Terminal Bonus may be paiddepending on the performance of the underlying investment.Don’t compromise on your self-respect, ever. Go ahead, hold your head highand enjoy life with the HDFC Personal Pension Plan. CHILDREN’S PLAN 25
  26. 26. The HDFC Childrens Plan gives you:Invaluable financial support to your childHelps you customize an ideal plan for your childProvides you multiple options for multiple benefitsThe HDFC Children’s Plan is designed to secure your child’s future bygiving your child (the beneficiary) a guaranteed lump sum, on maturity orin case of your unfortunate demise, early in the policy term. Thecompany to give you good long-term returns invests the premiums, paidby you.The plan receives simple Reversionary Bonuses, which are usually addedannually. At the end of the term an additional Terminal Bonus may bepaid depending on the performance of the underlying investment (See‘Bonuses’ for more details). 26
  27. 27. MONEY BACK PLANThe HDFC Money Back Plan is a ‘With Profit’ Plan that gives you: A proportion of the basic Sum Assured as cash lump sums at regular 5- year intervals within the policy term (see the table given below) – an ideal way to secure your long- term as well as short-term financial goals A lump sum payment on survival up to maturity date Valuable protection to your family by way of lump sum payment in case of your unfortunate death within the policy term. This is over and above any earlier payoutsMaking the right kind of investment will enable you to achieve yourobjectives – be it your immediate expenses or else securing your futurefinancial needs. Our Money Back Plan gives you a wide range of terms andcash benefit schedule to choose from. A summary of Key Benefits includingthe cash lump sum payments, expressed as a percentage of Sum Assured isshown below: 27
  28. 28. Key BenefitsTotal Policy Death Survival Benefit Term Benefit Within 5 Yrs. 10 Yrs. 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs. Policy Term 60% + 10 40% Attaching - - - - Bonuses 100% 40% + Sum 15 30% 30% Attaching - - - Assured Bonuses + attaching 25% + bonuses 20 25% 25% 25% Attaching - - (Over Bonuses and 20% + above 25 20% 20% 20% 20% Attaching - the Bonuses earlier 25% + payouts). 30 15% 15% 15% 15% 15% Attaching BonusesMaturity ValueOn maturity you receive survival benefit due at that point of time along withattaching bonuses for the full Sum Assured calculated for the full term.You can ensure your financial independence. And be able to live life on yourown terms. Always. 28
  29. 29. BARRIERS TO ENTRY Capital requirements High gestation period Access to distribution channels Brand equity Indian consumer psychology Tax avoidance 29
  30. 30. Capital RequirementsThe huge capital requirements pose a major barrier to entry in theinsurance sector . These requirements can be attributed to the costsincurred in setting up your distribution network. To achieveeconomies of scale you would require a nationwide presence, unlessyou want to cater to a niche group, which would involve setting up ahuge sales force.High Gestation PeriodOn an average a player in the insurance sector would require around7-10 years to break-even. This comparatively long gestation period wouldentail the player to have sufficiently deep pockets to bear the losses till thetime he breaks even.Access to Distributional ChannelsGiven the poor reach of the insurance companies amongst the Indianpublic especially in the rural sector the distribution channels adoptedwill determine the future growth of the industry. For the insuranceindustry to take off in a big way in India companies will have to adopt newand innovative distribution channels to be able to cover the vast 30
  31. 31. majority of the Indian population which is still not covered by theinsurance companies.Brand equityCustomer loyalty in the insurance sector is very high, thus benefitingplayers who’ve already been there in the market for a long time.While going in for an insurance policy, the brand and the trust that itgenerates are essential criteria on which the customer makes hisjudgement. Thus a brand, which has been there for a long period oftime and has managed to serve it customers well , would be in aposition to leverage its brand equity.Indian Consumer PsychologyThe Indian customer, liken his global counterpart , buys policies fortax benefits and to ensure secure savings for the future. Although heis price sensitive , he still deserves value and sound services for hismoney.Insurance as savings: There is reluctance amongst Indians to useinsurance policies as a means of investment of their savings.Traditionally Indians have invested the bulk of their savings in bankfixed deposits followed by the capital markets in spite of the lowreturns offered by the banks and the large risk involved in trading instocks. The changing mindset of the Indian public will be a key driverfor growth in the liberalized era. 31
  32. 32. Insurance for Tax Avoidance:The urban educated class of Indians traditionally looked at insurance asa tax avoidance tool. Mindsets are now changing, but purchase patternsare not. The months of February and March still are the busiest atLIC. The traditional hook of tax incentives and savings will take along time to change. Private players need to step up their selling interms of need and protection.Due to low consumer awareness of the need for insurance and benefitsattached to it, most of the insurance is still sold through agents. Otherdistribution channels like banc assurance are now being explored. 32
  33. 33. Growth potential of the Indian insurance marketIndia at a glancePopulation: 1 BillionEconomy: 5th largest in the world in terms of Purchasing PowerParity (PPP)GDP growth Rate: Over 6% per year on an average for the last decadeSavings Rate: Around 26% of GDPEstimated middle class population: 300 MillionInsured population: 70 million only 33
  34. 34. Future TrendsThe Insurance sector is set to see a whole lot of changes in the waybusiness was traditionally done with new and innovative products,distribution networks , etc. Changes in the external environment for thelife Insurance market will have to be suitably understood in order toavoid excessive selling and mis-selling out of over-enthusiasm.New ProductsMost of the insurance products offered by the traditional Indian playersare outdated, as they are not suitable to the needs of the consumers.Hence, old as well as new insurers will be offering innovativeproducts to the consumers. The consumers are particularly expectinggood pension plans, health insurance, term insurance and Investmentproducts like unit-linked insurance, from the life insurers. Similarly, theconsumers expect innovative products from the general insurers formanaging healthcare, property insurance, accident insurance and otherproducts related to the personal line of insurance. The consumers alsoexpect reduction in the premium of the insurance products as themortality rate in India has come down by three times in the last 50years. 34
  35. 35. Consumer EducationVery soon the market will be flooded with a large number of productsby a fairly large number of insurers operating in the Indian market.Even with the limited range of traditional insurance products , theconsumers are confused. Their confusion will further increase in theface of a large number of products in the market. The existing levelof awareness of the consumers for insurance products is very low. Thisis because only 65 percent of the Indian population is literate. Eventhe educated consumers are ignorant about the various products ofinsurance. Moreover , there is a shortage of trained agents and brokers.It is necessary that all the insurers should undertake extensive plansfor educating the consumers. 35
  36. 36. UNIT LINKED INSURANCE PLANNow One should know what it means… Unit Linked InsuranceImagine an ideal combination of insurance and life savings that willhelp One in the future to finance lofty plans, whether referring topurchase of a car, contribution to education of children or grandchildrenor just some extra income when retired.Unit Linked provides you with not only an effective protectionagainst individual investment risks and inflation but above all it bringsalong a long-term growth potential of financial means. Everyonedecides on their own what is the right method of investment for them,which predetermines evaluation of deposited money.Financial means invested into Unit Linked are evaluated in the courseof insurance period through four financial funds. It is one oneself thatdecide on division of the invested means. One can at any timereallocate One’s money among the funds. The four funds forinvestments are :- Balancer, Maximizer, Protector, Preserver. 36
  37. 37. Types of riders offered:  Waiver of premium  Accidental death rider  Accidental death and disability rider  Accidental full disability annuity rider  Specified accidents and accidental disability rider for a childHow can a person draw the saved moneyAfter the insurance period is over, One will be paid out the investedsum increased by evaluation, this as a lump-sum payment or regularannuity.In case of death in the course of insurance period, the sum assuredagreed upon or the fund value is immediately paid out to a beneficiary(beneficiaries). The investment value is paid out if it is higher thanthe sum assured agreed upon.How to pay premiumPremium can be paid in regular monthly installments: monthly,quarterly, semi-annually, and annually. In the course of insuranceperiod, it is possible to invest other financial means in the form oftop-ups, thus reinforcing the investment part of insurance. 37
  38. 38. The three in one option - Unit-linked policies:The outlook of the modern day investors has undergone a dramaticchange. In the changed fiscal scenario with drastic fall in the interestfor investment and the volatile capital market with limited investmentoptions, ULIP comes to the rescue of the prudent investors. Investmentin insurance has become the style of the day. The individual looks atbuying an insurance policy more of an investment, which comes withthe additional benefits of life cover and tax benefit also.ULIP - Unit Linked Insurance Policy - ULIP is a unique, multiplebenefits Plan which combines the basic benefit of life insurance, taxbenefits and accident insurance cover. The plan offers tax deductionson the amount invested under Section 80C of the Income Tax Actwithin the overall limit of Rs. 1,00,000/-.With the Insurance industry booming up in the Indian economyfollowing liberalized regulations from the IRDA, the ULIPs haveregained their strength. This was further boosted by the privateinsurance companies with foreign partners. .Under ULIPs, the premiums are invested after deducting the chargesand fees in a fund similar to that of a mutual fund along with a lifeinsurance cover. 38
  39. 39. The IRDA regulates that a unit-linked plan must be offered to theinvestor with an option to select among debt, balanced and equityfunds. For example, if an investor opts for a unit-linked endowmentpolicy, he can choose to invest his premiums in debt, balance orequity funds. If he selects a debt fund, the majority of his premiumwill be invested in debt securities like gilts and bonds. If the optionis equity, a major portion of the premium is invested in the equitymarket. The selection of policy depends upon its risk profile and theInvestment needs. Higher the risk, higher would be the returns andvice versa.. 39
  40. 40. The HDFC Unit Linked Endowment Plan gives you: An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments Valuable protection to your family in case you are not around Flexible benefit combinations and payment options Flexible additional benefit options such as critical illness cover Access to your accumulated fund before maturityYou can choose your premium and the investment fund or funds. We willthen invest your premium, net of premium allocation charges in your chosenfunds in the proportion you specify. At the end of the policy term, you willreceive the accumulated value of your funds. 40
  41. 41. In case of your unfortunate demise during the policy term, we will pay thegreater of your Sum Assured (less any withdrawals you have made in thetwo years before your claim) and your total fund value to your family.Use HDFC Standard Life’s excellent investment options to maximize yoursavings & secure your and your family’s future. We will provide financialsecurity for your family in your absence.THE FUTURE OF THE INSURANCE INDUSTRYThe insurance industry is today witness to a massivetransformation from its earlier days. From a humble beginning madein 1956 since the nationalization of the industry and the birth of the LifeInsurance Corporation, the industry today sees a deluge of multinationalinsurers all charging in to set up shop here considering the existent vastunexploited potential.Multinational partnerships:The winds of liberalisation have initiated vast changes in the functioning ofthe industry today. Increasing number of multinational partnerships withprivate insurers have paved the way for a radical shift in insurance selling -through a number of new distribution channels besides bringing about moreawareness on the need for insurance and also stressing on the important role 41
  42. 42. technology can play.With major trade barriers gone, the Indian insurance industry is slowlyopening itself from a protected environment to e-business, incorporatingnewer technologies in insurance, thanks to competition, that will hopefullybring forth a marked improvement in customer service, insurance marketing,risk management, claim settlement, underwriting etc in comparison to itsearlier days.Faster decision making:Today, information dissemination is increasingly faster with the adventof information technology, which will largely help individuals gainaccess to every bit of information they would require, enabling fasterdecision-making. This is in stark contrast with the pre-liberalization erawherein information sourcing was virtually non-existent except from therecruited agents of the insurance company.Policy servicing, an area that has long remained neglected will now receive amajor thrust with insurance companies redefining strategies to weed outsluggishness and provide the policyholder with prompt service. Onlinepolicy servicing too will soon become the norm thereby cutting down on theunnecessary delays.Information explosion:The oncoming technological revolution is all set to totally revamp the veryconcept of Knowledge management. Automating knowledge management 42
  43. 43. will become the sole aim to increase productivity. Large databases of rawinformation on individuals investment patterns can be fed into computers toenable faster segregation of information as per required categories.Computerizing information can make a major difference to the generalinsurance industry wherein motor claim losses particularly have been hittingthe roof. With an organized system of data collection and storage, dataanalysis and claim management system, keeping track of the claimapplicants’ behavioral patterns becomes easy.Easier Claims settlement:Claims settlement that was hitherto a time consuming affair will see amarked difference in operations. With competition building and improvedcustomer service becoming the new mantra the time taken for claimsettlements will reduce considerably. World over underwriting risks, claimsmanagement, risk surveys etc are far more simplified thanks to technology.Insurance companies are slowly realizing the mass difference informationtechnology can make to business. Consider policy information being madeavailable online. Tracking policy details, the premiums to be paid, premiumspaid so far, the bonus percentage, maturity date of the policy and severalsuch details can be accessed at the mere click of a mouse soon.Improved customer service - the ultimate aim:The insurance industry, with competition hooting up is has woken up 43
  44. 44. to ground realities and is in the process of implementing softwaresolutions. Realizing the unlimited power information technology holds,insurance companies have realized that strategic deployment oftechnology for integrating office operations, and gaining customerconfidence through improved customer service is the need of the hour. RESEARCH METHODOLOGYThe project is based on Insurance in India, Future of Insurance inIndia & unit linked insurance plan market in India for that , I prepared aquestionnaire , based on which , I took personal interviews . I have alsoused information from different Websites, brochures of theorganizations & articles from various newspapers.The topics are dealt with in a general manner. There would be details, whichcould vary from company to company. Overall, following tools were used to build this project: Primary data: a) Questionnaire. b) Personal interview. 44
  45. 45. Secondary data:a) Websites.b) Brochures.c) Articles. FINDINGS AND ANALYSIS OF SURVEY 45
  46. 46. The survey was taken from 54 persons & it showed following results:-Q1.Well first foremost result that 87% of the people are looking for profitableopportunities to invest their money. 46
  47. 47. Not Ready 23% Ready To Invest 77%Q2. From survey tit was clear that about 9 % of the persons that were surveyed said that they would like to go for insurance policy , 10% were in favor of investment only, and about 81% people were interested in both insurance as well as investment policy. 47
  48. 48. Insurance 9% Investment 10% Both 81%Q3. Then it showed one of the most popular brand in the country is LIC itseems that about 40% of the people know about their products, than camethe ICICI prudential, where only 25% of the people knew , althoughHDFC Standard Life Insurance as a starter have starting gaining somepublicity but it is still not have came in focus, so is for the other brands .only 48
  49. 49. 20% people knew about HDFC Standard Life Insurance products.BAJAAJ ALLIANZ accounts for 6% and BIRLA SUN LIFE accounts for9%. BIRLA SUN LIFE 9% ICICI Prudential BAJAAJ 25% Allianz 6% LIC HDFC 40% Standard Life 20%Q4.It was also seen that still after 5 years of ULIP plans, a higher percentageof people are still not aware about them, only 15 % are aware of it. Most ofpeople (about 46%) know about the traditional plan, 12% knows educationalplan and 27% know about pension plan. 49
  50. 50. Educational Plan 12% ULIP Traditional 15% Plan 46% Pension Plan 27%Q5.It seem that the main criteria for selection of a plan was low premium, asround about 48% voted in favor of it, well 20% of the people also preferredtax savings, as well as short term time periods. There were persons whoalso liked to go for interest benefits; these accounts for 9% and a special 50
  51. 51. segment (i.e. 7%)of high income liked the criteria of long term time periodas well as the good returns with it. 16% of people preferred insurancebenefits Interest 8% Insurance 13% Low Premium 39% Tax Saving 17% Long Time Period Short Time 6% Period 17%Q6.It has been observed that most of the awareness about these brands havebeen due to the internet which stands for 23% and because of theadvertisements that are shown on television which accounts for 57% ,though media’s old mediums such as newspaper , magazines, which 51
  52. 52. accounts for 8%, have also equally made their presence felt. Proportion ofpeople who came to know about these brands from friends are 12%. Newspaper Friends 8% 12% Internet 23% Television 57%Q7.To be specific the range of amount to be invested varied from person toperson. But to give an overview following view is prepared: -1). 2,000- 6,000 = about 15% 52
  53. 53. 2). 6,000-11,000 = about 45%3). 11, 000-22,000= about 25%4). 22,000 and above = about 15% (Amount dedicated is for per month scenarios not per annum) 22000 and above 2000- 6000 15% 15% 11000-22000 25% 6000-11000 45%Q8.It was also recorded that a large number that were ready to invest werebusiness class, which stands at 68%. Yet the service men were not thatmuch behind to invest. 24% investors are service people. Self employedaccounts for 8%. 53
  54. 54. Self- Employed 8% Service 24% Business 68% LIMITATIONS1. Time was the biggest constraint as many times it was not possible to meet senior officials to collect such information. 54
  55. 55. 2. There may be biases on the part of the Company Executive while providing the information 3. Respondents are not willing to provide information. 4. There are very limited latest information sources for such topic. 5. The information was collected in few offices only. CONCLUSIONFrom this comparative study one can say that everyone has his / her ownperception, when it comes to their priorities regarding the different features.Well one can say that deciding factor mainly depends upon perceiving 55
  56. 56. criteria which is different for each and every person, it is also dependentupon buying capacity, risk taking ability, profession, age, dependability onmembers of the family, income and many more. So one can’t conclude theonly plan which one feel the best. I have mainly compared and listed thefeatures may be better than the others. RECOMMENDATIONS 1. Promotion of Brand HDFC SLIC has a good reputation among the people. But to increase market share it needs to take some brand building measures such as advertising, brand promotion etc. 56
  57. 57. 2. Boosting customer Basewhat has been seen from the analysis of data collected from therespondents is that there are a lot of people who are seriouslythinking of buying a policy from HDFC SLIC but are tentativedue to some reason. This is the target market, which the companyshould aim for.3. Variety of PlansHDFC SLIC has a substantial variety of plans available but due tothe fact that insurance market is getting competitive the companyshould keep re-inventing itself from time to time.4. Availability of RidersRiders are extremely important for each and every plan as it givesan additional incentive to the customer and also offers him moreflexibility. Thus it is recommended that the company strive to offerriders on all plans. 57
  58. 58. ANNEXURE INVESTMENT TRENDS IN INDIAN MARKETPlease spare few minutes with following surveyName ----------------Address-------------------------------------------------------------------------------------------- 58
  59. 59. -------------------------------------------------------------------------------------------------------------Contact no------------------Gender ------------------------------1) Are you looking for some options to invest your Money?a) Yes b) No2) Out of these which are the priority for you at the moment? a) Insurance b) Investment c) Both of the above3). What are the various brands you are aware of:a) ICICI prudential b) HDFC standard life c) LIC d) BAJAAJ Allianze) BIRLA SUN LIFE f) Other …………4). Which of these plans are YOU aware of? a) ULIP Plan b) Traditional Plan c) Educational Pland) Pension Plan e) Any other………………..5). Which type of benefit you will see to invest your money in Insurance 59
  60. 60. Sector?a) Low Premium b) Short Time period c) Long Time Periodd) Tax savinge) Insurance f) Interest benefits g) any other ……………6). From where do you come to know about these brands? a) Internet b) News paper c) Friends d) TV e) Any other.7) How much do you plan to invest your money in a Investment Plan?8) What profession are you in: -a) Business b) Service c) self employed d) Any other……………… BIBLIOGRAPHY  William, Smith and Young 1998 Risk Management & Insurance; edition VII; Mc Graw Hill Publication  Vaughan & Vaughan, (1999), "Insurance & Risk Management"; Edition I 60
  61. 61.  Jha (1999); "Service Marketing" Ibh Publication.  Harrington, Scott. E & Niehaus, Gregory R.; (1999) "Risk Management and Insurance"; Irwin/McGraw -Hill.  Gustavson, Sandra G.t Trieschmannt James S. , Hoyt , Robert E.; (2001) edition XI; MRisk Management And Insurance;" South Western College Publishing.INTERNET Websiteswww.hdfcinsurance.comwww.qooqle.comwww.bimaquru.comwww.insurance.comwww.mibknowledge.com 61

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