Comparative Study of Hdfc With Other Insurance Companies

A Summer Internship Report On “A Comparative Study of Insurance Services of HDFC Life & other Companies Products” At

Submitted In Partial Fulfillment for the Degree of Master of Business Administration (Financial Management) BUNDELKHAND UNIVERSITY, JHANSI

Submitted to: SubmittedBy: Institute of Economics & Finance Harshika Sharma

Bundelkhand University, Jhansi MBA(FM) 2nd Year

DECLARATION

I hereby declare that this project entitled “A COMPARITIVE STUDY OF INSURANCE SERVICES OF HDFC LIFE & OTHER COMPANIES

PRODUCTS”

submitted

to

Bundelkhand

University, JHANSI in partial fulfillment of the requirements for the award of degree of Master of Business Administration (Financial Management) is a bonafide record of work done by myself under the guidance of Vivek Dwivedi.

(Harshika Sharma)

2

ACKNOWLEDGEMENT

The

Summer

Training

at

HDFC

Life,

JHANSI

is

my

professional experience with the insurance sector which enriched my knowledge about the fundamental concepts of the sector. The numbers of people who have influenced, supported and guided me through this project are numerous to mention, but some merit special attention. I would like to take this opportunity to express my gratitude towards Mr. Vivek Dwivedi, Circle Head, HDFC Life, JHANSI for giving me an opportunity to work as a summer trainee. I also express my sincere thanks to Mr. Sanjeev Singh, Sales Development Manager, my project guide, for their individual help and guidance without which this project wouldn’t have been successful. I would like to dedicate the project to my parents, brother and my friends without their help and constant support this project would have not been possible. I would also like to thank all the respondents of the survey for their cooperation in providing me with the required information. At last I would like to express my deepest sense of gratitude for the people who have guided me and constantly been. Without their involvement, this project would not have been accomplished with me throughout my training tenure. 3

Harshika Sharma

TABLE OF CONTENTS

1. 5 2. 6

EXECUTIVE STATEMENT

SUMMARY

OF

PURPOSE

3.OBJECTIVES 6 6.INSURANCE 11-22 7.COMPARISON 23-24

INDUSTRY OF

“A

UNIT

N

OVERVIEW”

LINKED

INSURANCE

PLANS AND MUTUAL FUNDS 8.COMPETITIVE 25-28 9.COMPANY 29-39 10.COMPANY 40-47

ANALYSIS PROFILE

OF

PROFILE

4

HDFC OF

LIFE LIC

11.ANALYSIS 48-60 12.SUMMARY 61

AND

INTERPRETATIONS OF

FINDINGS

13.CONCLUSION 61 14. 62

SUGGESTIONS

AND

RECOMMENDATIONS

15.BIBLIOGRAPHY 63 14.ANNEXURES 64-65

EXECUTIVE SUMMARY HDFC Life insurance is the oldest life insurance company in the world. The company is marketing life insurance product and unit linked investment plans. From my research at HDFC Life, I found that the company faces lot of competition from other private insurance companies like ICICI, Aviva, Birla Sun Life and Tata AIG. It also faces tough competition from LIC. To compete effectively HDFC Life could launch cheaper and more reasonable products with small premiums and short policy terms. The ideal premium 5

would be between Rs 5000-Rs 25000 and the ideal policy term would be 10-20 years. The project is divided into the following parts:  Profile of the competitors- Competitive analysis

 Competitive analysis of HDFC Life with ICICI Prudential  Market study on customer perception towards insurance sector and arising job opportunities in the area. HDFC Life must advertise regularly and create brand value of its product and services. The market survey deals with the customer perception towards the insurance sector, their willingness to supplement the income by doing any extra activity, the motivation behind their work at place. The report contains company profile of HDFC Life and the basic concepts of insurance which includes scope, need and types of insurance. The report also illustrates the comparison between insurance and mutual funds. STATEMENT OF PURPOSE  Increase awareness about insurance  Make people aware about financial activity  Mode to supplement income  Factors leading to motivation

 Level of competition in market OBJECTIVES OF THE STUDY  To analyze the product details of HDFC Life Insurance company limited and ICICI Prudential. 6

 To find out whether customer will supplement their income by doing any extra activity.  To find out whether customer would supplement their income by providing financial advice/service.  Factors that motivates employees behind their work at place  To find out the time that a prospect can spare to do an additional activity.

7

INSURANCE INDUSTRY “AN OVERVIEW”

8

INTRODUCTION Insurance is

a risk

management technique

primarily

used

to hedge against the risk of a contingent, uncertain loss that may be suffered by those individuals or entities who have an insurable interest in scarce resources, by transferring the possibility of this loss from one interested person, persons, or entity to another. The scarce resources referred to here fall into three divisions: human resources, financial resources, and capital, or tangible resources. In the context of insurance, scarce resources are also known as "exposures," because they are "exposed" to perils, those things, or forces, which cause destruction or reduction, in the usefulness, or value, of an exposed resource. Human resources are thus exposed to perils such as illness or death; financial resources to legal judgments that may result from negligent acts, and capital resources to physical perils such as fire, theft, windstorm, and vandalism, to name but a few. A hazard is the cause of a peril. It is that thing or condition which increases the likelihood of a peril. Thus perils and hazards are identified by the exposure that they threaten. In the context of commercial trade, insurance is further defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for consideration, payment, in the form of a risk premium. The insurance premium develops at an actuarially-determined rate. This rate is a factor used to determine the amount of premium to charge for a certain limit, and type, of insurance on the scarce resource. The premium can further be viewed as a guaranteed, known, relatively small financial loss to the insured, paid to the insurer, in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a loss to the insured resource(s). The insured receives a contract,

9

called the insurance policy, which details the conditions and circumstances under which the insured will be indemnified. The business of insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefit may be an income or in some other form. It is a benefit because it meets some of his needs. The benefit may be an income or in some other form. In the case of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor car, it provides comfort and convenience in transportation. There is no direct income. Both are assets and provide benefits. Every asset is expected to last for a certain period of time during which it will period of time during which it will provide the benefits. After that, the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it incapable of giving the benefits. We can classify insurance in these termsIt is a system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. SCOPE OF INSURANCE: We all know that assets are insured, because they are likely to be destroyed or made nonfunctional before the expected life time, 10

through accident occurrences. Such possible occurrences are called perils. Perils are the events. Risks are the consequential losses or damages. The risk to an owner of a building may be a few lakhs or a few crores of rupees, depending on the cost of building, the contents in it and the extent of damage. The risk only means that there is a possibility of loss or damage. Insurance is done against the possibility that the damage may happen. There has to be an uncertainty about the risk. The word “possibility” implies uncertainty. Insurance is relevant only if there are uncertainties. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The risk can sometimes be avoided, through better safety and damage control measures. It only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. They are the ones who benefit from the asset and therefore, would lose, when the asset is damaged. Insurance compensates for the losses- and that too, not fully. In conclusion we can say that the scope of insurance is very broad and specific because it reduces the losses and risk of owner of the assets due to perils. It also gives supports to the person in the period of adverse situation. It insured economic consequences. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in past, plus interest. Insurance has no substitute and one more thing about the insurance is that this is not similar to a hire purchase scheme. In the event of death, the balance installments are not excused. They have to be paid by the surviving family. There is a tax benefits, both in income tax and in capital gins. Marketability and liquidity are better. Life insurance is

11

not only the best possible way for family protection there is no other way. The term of life is hard but the terms of insurance are easy.

 HISTORY OF INSURANCE:

The first insurance company in the United States underwrote fire insurance and was formed in Charles Town , South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the

form

of

perpetual

insurance.

In

1752,

he

founded

the Philadelphia Contribution ship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden

houses.

insurance

industry

responsibility departments. centralized

In

the is

United

highly Balkanized,

assumed Whereas

nationally

States, regulation of

by

insurance and

with

the

primary

individual state insurance markets

internationally,

have state

become insurance

commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional federal charter (OFC)) for insurance similar to that which oversees state banks and national banks. 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. The General insurance business in India, on the other hand, can trace its roots to the 12

Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. INDIAN INSURANCE MARKET-HISTORY: Insurance has a long history in India. Life Insurance in its current form was introduced in 1818

when Oriental Life

Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalization b) Nationalization and c) Post Nationalization. Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991. For This purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001.  MILESTONES:

Year

Milestones in the life insurance business in India 13

1912 1928 1938 1956

The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and nonlife insurance businesses Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 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.

Year

Milestones in the general insurance business in India

1907

The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

1957 1968 1972

 NEED FOR INSURANCE: • Funding future goals through insurance A wide range of vehicles are available to fund future financial goals. These could be low risk-low return instruments like bank deposits and small savings, or higher risk products such 14

as

equity,

which

can

offer

potentially

higher

returns.

Insurance scores over other investment vehicles in the following aspects: Certainty Once a goal has been identified and a value for it has been crystallized, an insurance policy is an excellent vehicle to fund the goal. This is because one can rest assured that even in the unfortunate event of death or even critical illness, the sum assured will fund a future goal of the policyholder. Tax efficient Maturity benefits of most insurance policies are tax free under Section 10 (10D) and the premium paid is eligible for deduction under Section 80C of the Income Tax Act, 1961.

Flexibility Insurance products, especially Unit Linked Plans, provide flexibility in terms of asset allocation to suit specific risk appetites, policy durations, premium payment terms and fund switching options. Wider options Depending on the time horizon of the goal, the return required and the investor's risk

appetite, a broad spectrum of asset

allocations between equity and debt is possible in a

Unit

Linked Plan. An investor may tailor his policy to suit his requirement. 15

Liquidity Most Insurance products offer good liquidity after the lock-in period to take care of any emergency requirement of funds. But they do have inherent deterrents in the form of charges to discourage unnecessary encashment. Earmarking Very often an insurance policy is taken for a specific goal. This therefore can become a deterrent against utilizing these funds for any other purpose and also encourages continued contributions. • Planning for unforeseen events Insurance helps you to provide for contingent liabilities like hospitalization, critical illness, debt redemption etc, in a cost efficient manner. Term insurance Term insurance is the simplest and cheapest form of life cover, which pays the sum assured on death. This is useful to simply provide for a family's survival in the unfortunate event of demise of the bread winner. This can also be used to cover repayment of any debt of a policy holder by simply assigning the policy to the creditor. Upon maturity or claim on the policy, the proceeds are paid to the creditor. Loan Cover policies are a variant where the sum assured keeps reducing in line with the loan balance. Health covers

16

These policies provide cover against major health care expenses like hospitalization, surgery, critical illness etc. The benefits could be in the form of fixed pay outs on hospitalization or a lump sum on diagnosis against some specified critical illnesses. Accident benefit This is usually an add-on cover over a basic policy and pays an additional sum assured to the beneficiary in case of death due to accident. Since accidental death is sudden and unforeseen, the family could be faced with issues like relocation, debt servicing and other requirement for funds. • Planning for retirement Indian life expectancy has improved dramatically over the years due to availability of advanced medical facilities. However, a longer working life may not really be possible due to occurrences of life-style induced illness and high burn-out rate. The evolving demographic balance with plenty of young talent becoming continuously available may also be a deterring factor to a longer working life unless one is self employed. Consequently, our retirement life span could well be as long as our active working life span. This means that we have to build a solid corpus during our active life to maintain our life style for the long post retirement life if we are to enjoy the true meaning of the word "retirement". Pension Plans help us build up our savings during our earning years and provide us a lump sum on retirement. This lump sum can then provide us a retirement income by investing in an annuity. 17

• Provide post retirement income The worst situation that a retiree can face is to run out of funds late into retirement. Such a situation may force him to seek help from friends / relatives or liquidate his fixed assets which essentially are a compromise of self respect. This is where insurance offers the best solution in the form of an annuity. Annuities bought from the retirement corpus can either be used to provide regular post retirement income for a fixed term or also for the entire life. • Insurance as an inflation shield Inflation lowers the purchasing power of money and makes a dramatic cumulative impact over the long term. It reduces your real income year after year as your cost of living keeps increasing. So, it must be taken into account while framing financial goals. Insurance products such as Unit Linked Plans help us combat the impact of inflation on our financial goals by providing the option to invest in equity, which is known to deliver one of the best returns from all asset classes, over the long term. Ignoring inflation would result in our savings falling short of the estimated value of future goals, especially over the long term.

 TYPES OF INSURANCE :

Comparison between Unit Linked Plans and Conventional Plans

18

nit Linked

U Conventional plans Insuranc

e Plan Type Unit Linked Description Insurance Plans offered by insurance companies allow policy holders to direct part of their premiums into different types of funds (equity, debt, money market, hybrid etc.) Here the risk of investment is borne by the policyholder. Key Unit Linked Plans Features of give you Flexibility flexibility to Investment invest as per your risk profile, financial commitments and convenience. You can choose to invest either in equity, or in debt or in hybrid fund and even change your investment strategy. Transparen Most Unit Linked cy Plans allow you to track your portfolio. They also regularly intimate regarding the

19

Conventional Plans are traditional insurance plans. They usually invest in low risk return options and offer guaranteed maturity proceeds along with declared bonuses.

These plans do not allow you to choose investment avenues. Your funds are invested as per the strategy and discretion of the company.

Your premiums are invested in a common 'with profits' fund and therefore you cannot track your individual

Maturity benefits payout

Partial withdrawal

Switching options

Charges

percentage of the premium that is invested along with the charges levied. You are also kept informed about the value and number of fund units that you hold. At the time of maturity you redeem the units collected at the then prevailing unit prices. Some plans also offer you loyalty or additional units annually or at the time of maturity. Unit Linked Plans allow you to make withdrawals from your fund, provided the fund does not fall below the minimum fund value and subject to other conditions. Available. You can change your investment fund decision by switching between the funds as being offered by the policy. Unit Linked Plans 20

portfolio.

At the time of maturity you get the sum assured plus bonuses, if applicable in the plan.

Conventional plans do not allow you to withdraw part of your fund. Instead, some policies offer you the facility to take a loan against your investment.

Not available since the the investment decision is taken by the insurance company.

These plans do not

structure Single premium Top-up

Benefit Snapshot

specify the charges. under various heads. Available. The single premium top-up facility allows you to invest an extra amount over and above your regular premiums in your unit linked plan. • Unit Linked Plans give you flexibility of investment • They allow you to track your portfolio. • Unit Linked Plans offer the benefit of a single premium top up which allows you to invest ad hoc additional amounts • Unit Linked Plans allow partial withdrawals, subject to conditions and switching between funds by paying some charges, if necessary. • Unit Linked Plans give you the option of a 21

specify the charges involved. The top-up facility is not available.

•

•

Conventional plans offer fixed premiums linked to the sum assured. The maturity benefits for these plans include the sum assured plus bonuses,

• if applicable

premium vacation.

 COMPARISON OF UNIT LINKED INSURANCE PLANS AND

MUTUAL FUNDS Unit Linked Insurance Plan Type Unit Linked Plans refer to Descriptio Unit Linked Insurance Plans n offered by insurance companies. These plans allow investors to direct part of their premiums into different types of funds (equity, debt, money market, hybrid etc.) Key Unit Linked Plans are long Features term plans offering you a Objective dual benefit of insurance and investment. Tax All Unit Linked Plans offer Benefit tax benefits under section 80C. Switching Options

Unit Linked Plans allow you to switch your investment between the funds linked to the plan. This enables you to change the risk return.

Additional Some of the Unit Linked Benefits Plans give you an additional benefit or loyalty benefit by issuing extra fund units. Liquidity Unit Linked Plans have limited liquidity. One needs to stay invested for a 22

Mutual funds A mutual fund pools the money from investors and uses it to invest in various securities according to a pre-specified investment objective. Mutual funds are ideal investment tool for the short to medium term. Only investments in tax saving funds are eligible for section 80C benefits. No switching option is available. If you are not satisfied with the performance of the fund you can exit completely from the same by paying exit charges, if applicable There are no additional benefits issued by mutual funds. You can easily sell mutual fund units (except for ELSS and

Charges Structure

Benefit Snapshot

minimum period of time as specified in the policy before redeeming the units. Charges in a unit linked plan include mortality charges for the life insurance provided. In addition, premium allocation charge, fund management charge and administration charges are applicable. • Dual benefit of investment and insurance • Suitable for the long term • Option to switch between the funds is permitted. • Offers tax benefits

23

funds that have a minimum lock-in period) Mutual fund charges include an entry load, the annual fund management charge and an exit load, if applicable

•

•

Investment tool suitable for short to medium term. Easy exit possible.

Tax benefit available only on tax saving funds

COMPETITIVE ANALYSIS PROFILE OF COMPETITORS

24

Life Insurance Corporation of India LIC has an excellent money back policy which provides for periodic payments of partial survival benefits as long as the policy holder is alive. 20% of the sum assured is payable after 5, 10, 15 and 20 years and the balance 40% is payable at the 20th year along with accrued bonus. For a 25 years term, 15% of the sum assured becomes payable after 5,10,15and 20 years and the balance 40% plus the accrued bonus becomes payable at the 25th year. An important feature of these types of policies is that in the event of the death of the policy holder at any time within the policy term the death claim comprises of full sum assured without deducting any of the survival benefit amounts which have already been paid. The bonus is also calculated on the full sum assured. HDFC SLIC does not have a money back policy. It could offer a money back plan and capture some portion of this market. While marketing insurance products I found that many customers wanted to purchase these plans. LIC offers 66 different plans; plans are formulated for specific occasions –whole life plans, term assurance plans, money back plan for women, child plans, plans for the handicapped individuals, endowment assurance plans, plans for high worth individuals, pension plans, unit linked plans, special plans, social security schemes – diversified portfolio of products. HDFC SLIC could diversify its product portfolio. It could add more plans for high worth individuals and women.  Birla Sun Life A US $30 billion corporation, the Aditya Birla Group is in the league

of

Fortune

500

worldwide. 25

It

is

anchored

by

an

extraordinary

force

of130,000 employees,

belonging

to 40 different nationalities. The group operates in 27 countries across six continents – truly India's first multinational corporation. Aditya Birla Group through Aditya Birla Financial Services Group (ABFSG), has a strong presence across various financial services verticals that include life insurance, fund management, distribution & wealth management, security based lending, insurance broking, private

equity

and

retail

broking

The

seven

companies

representing Aditya Birla Financial Services Group are Birla Sun Life Insurance Company Ltd., Birla Sun Life Asset Management Company Ltd., Aditya Birla Finance Ltd., Aditya Birla Capital Advisors Pvt. Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd, and Aditya Birla Insurance Brokers Ltd. In FY 2009-10, ABFSG reported consolidated revenue from these businesses at Rs. 5871 Cr., registering a growth of 43%. ICICI Prudential ICICI Prudential is a stiff competitor for HDFC SLIC. The company is a merger between ICICI Bank which is the biggest private bank in India and Prudential Plc which is a global life insurance company. The company has an investment plan which is market related – Invest ShieldLife. In this plan even if the market falls, the premium will be returned to investors. It is a guaranteed plan which ensures the company carefully nvests your money. The stock market performance of ICICI Prudential is much better than HDFC SLIC. The returns on the growth fund were 46.28%compared to the 42.70% offered by HDFC SLIC. Customers are attracted by higher returns and this is a plus point for Prudential. The company is very well advertised. The advertisements are showcased in movies, television, newspapers, magazines, bill boards,

radio

etc.

The

company 26

has

an

excellent

brand

ambassador – Mr. Amitabh Bacchan. His promotion of the company builds trust and faith in the minds of our people.  Bajaj Allianz Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration on 2nd May, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26% is held by Allianz, SE. As on 31st March 2010, Bajaj Allianz General Insurance maintained its premier position in the industry by achieving growth as well as profitability. Bajaj Allianz has made a profit before tax of Rs. 180 crores and has become the only private insurer to cross the Rs.100 crore mark in profit before tax in the last four years. The profit after tax was Rs. 121 crores, 27% higher than the previous year. 

Max New York Life Insurance Company Ltd

Max New York Life Insurance Company Ltd. is a joint venture between Max India Limited, one of India's leading multi-business corporations and New York Life International, the international arm of New York Life, a Fortune 100 company. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core 27

values of excellence, honesty, knowledge, caring, integrity and teamwork. Incorporated in 2000, Max New York Life started commercial operation in April 2001. In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. The Company's paid up capital as on 31 st August, 2010 is Rs 1,973 crore. 

Tata AIG Life Insurance Company Limited (Tata AIG Life)

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tata’s pre-eminent leadership position in India and AIA’s presence as the largest, independent listed pan-Asia life insurance group in the world spanning 15 markets in Asia Pacific. Tata Sons holds a majority stake (74%) in the company and AIA holds 26% through an AIA Group company. Tata AIG Life Insurance Company Limited was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.

28

COMPANY PROFILEOF HDFC LIFE INSURANCE COMPANY LTD.

29

HDFC LIFE INSURANCE COMPANY LIMITED  Introduction : HDFC Life, one of India's leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India's leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom. HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. HDFC Life's product portfolio comprises solutions,

which

Protection,

meet various

Pension,

Savings,

customer

needs

Investment

and

such

as

Health.

Customers have the added advantage of customizing the plans, by adding optional benefits called riders, at a nominal price. The company currently has 29 retail and 5 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers. HDFC Life continues to have one of the widest reaches among new

insurance

companies

with

more

than

500branches

servicing customer needs in over 700 cities and towns. The company has a strong base of Financial Consultants.  Parentage: HDFC Limited HDFC Limited, India's premier housing finance institution has assisted more than 3.8 million families own a home, since its 30

inception in 1977 across 2400 cities and towns through its network of over 289 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to own a home back in India. As of March 2011, the total asset size has crossed more than Rs. 1,32,727crores including the mortgage loan assets of more than Rs.1,17,126 crores. The corporation has a deposit base of over Rs. 24,625 crores, earning the trust of nearly one million depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, Mauritius, Bangladesh in the setting up of housing finance companies. Standard Life Plc. Established in 1825, Standard Life Plc. is a leading provider of long term savings and investments to around 6 million customers worldwide.  Headquartered in Edinburgh, Standard Life has around 9,000 employees across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. The Standard Life group includes savings and investments businesses, which operate across its UK, Canadian and European markets; corporate pensions and benefits businesses in the UK and Canada; Standard Life Investments, a global investment manager, which manages assets of over £157bn globally; and its Chinese and Indian Joint Venture businesses.  At the end of April 2011 the Group had total assets under administration of £198.4bn. Standard Life plc is 31

listed on the London Stock Exchange and has approximately 1.5 million individual shareholders in over 50 countries around the world.  Visions and Values: Vision 'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. 'The most obvious choice for all'. Values Values that we observe while we work: •

Integrity

•

Innovation

•

Customer centric

•

People Care "One for all and all for one"

•

Team work

•

Joy and Simplicity

 Associated Companies

HDFC Limited

HDFC Bank

32

HDFC Mutual Fund

HDFC Sales

HDFC ERGO General Insurance

HDB Financial Services

HDFC Securities Other Companies • • • • • • • • • •

HDFC Trustee Company Ltd. GRUH Finance Ltd. HDFC Developers Ltd. HDFC Property Ventures Ltd. HDFC Ventures Trustee Company Ltd. HDFC Investments Ltd. HDFC Holdings Ltd. Credit Information Bureau (India) Ltd HDFC Securities HDB Financial Services

PRODUCT RANGE  Savings Plans: Under the Savings Plans following plans are

available. Endowment Assurance (EA) Plan: It is a participating (with profits) insurance plans that offers the following features: Provides financial support to the family by way of lump sum payment in case of the unfortunate death of the life assured with in the term of the policy. 33

Provide a lump sum payment to the life assured on survival up to the maturity. The lump sum mentioned is the basic sum assured plus any bonus additions. 

Children’s Plan: It is designed to provide a lump sum to the child at maturity. It also provides a financial security to the child in future, even in case of insured parent’s unfortunate death during the policy term. Children’s Plan receives simple reversionary bonuses, which are usually added annually. This is flexible plan with three options to choose from, depending on one’s requirement.

 MONEY Back (MB) Plan:

It is participating (with profits) insurance plan that offers the following features: Payment of cash lump sum, each of which is proportion of basic sum assured, at 5-year interval during the term of policy. On survival up to the maturity, a payment equal to the basic sum assured plus any bonus addition less the cash lump sum paid earlier is provided. In cash of the unfortunate death of the life assured within the term of the policy, the basic sum assured plus any bonus addition is provided. This is over the above the earlier payouts.  Protection Plans: Under the protection plan the following are available:  Term Assurance (TA) Plan: It is a plan under which the term assured is payable in case of the life assured during the term of the contract. One can choose the 34

lump sum that would replace the income lost to one’s family in the unfortunate event of one’s death. Since this non-participating (without profit) plan is a pure risk cover plan, no benefits are payable on survival to the end of the term of the policy.  Loan Cover Term Assured (LCTA) Plan:This provides a lump

sum on the unfortunate death of the life assured during the term of the plan. The lump sum will be decreasing percentage of the initial sum assured. As the outstanding loan decrease as per the loan schedule, the cover under the policy decrease as per the policy schedule. Since this is non-participating (without profits) pure risk cover plan, no benefits are payable on survival to the end of the term of the policy.  Retirement Plan: Under the retirement plan the following plan is available:  Personal Pension Plan: This plan is participating (with profit) plan which is basically a saving contract, designed to provide an income for life after retirement. It provides a notional lump sum on retirement, comprising of the sum assured plus any attaching bonus. Subject to the prevailing regulations, part of this lump sum can be taken in the form of cash and the rest converted to an annuity at the rate then offered by HDFC Standard Life Insurance or with any other insurance company who will accept such business.  Health Plans: HDFC critical care plan HDFC surgical plan

35

GROUP TERM INSURANCE PLAN Whatever the business “ It's the people who make it a success. Everybody requires some type of life insurance, especially when others depend on them financially The Group Term Insurance (GTI) plan meets this need and serves as an ideal way for companies to reinforce their bond with their employees. The sort of needs, you, as an employer need to cater to could be in form of: Employee benefits Cover for housing or vehicle loans given by you to your employees A GTI cover for future service gratuity liability to be taken along with the HDFC Group Unit Linked Plan The HDFC Group Term Insurance is a cost-effective plan that addresses these needs. In addition you have the choice to opt for a GTI with an experience discount feature , where a discount is given on future premiums in case of favorable claim experience (subject to group size). The HDFC group term insurance plan will have the following structure: One year renewable term insurance plan One master policy issued covering all members of the group Sum assured is payable on death (either due to natural causes or accidents) The plan covers death due to any cause; accidental or natural, and hence is more comprehensive than Group Personal Accident Insurance.

Several

multinational 36

corporations,

large

Indian

companies, foreign banks and software companies have already chosen the HDFC Group Term Insurance, an innovative product from HDFC Standard Life Insurance, to protect their employees. Optional Rider Benefits • Accidental Death Benefit • Total Permanent Disability •

Total Permanent and Partial Disability Benefit

• Critical Illness Benefit • Terminal Illness Benefit GROUP VARIABLE TERM INSURANCE The Group Variable Term Insurance is a tailor made insurance policy for third party institutions. HDFC Standard Life Insurance Company will offer life insurance to customers of one or more of the third party's specific products in order that in the event of their death, there will be a lump sum available. The Group Variable Term Insurance: On death, will pay a lump sum known as a sum assured. The sum assured varies over time in order that the customer receives the cover that they need Is a group policy Has no lengthy underwriting procedure Is simple to administer The policy is without any participation in the insurer's profits.

37

GROUP UNIT LINKED PLAN Gratuity Schemes Most employers have a statutory obligation to pay a gratuity to its employees on termination of employment. This gratuity is in the form of a one-off payment made on termination of employment. It depends on salary and number of years of service, so will therefore increase with time. The HDFC Group Unit Linked plan is a new and innovative unit-linked plan, which offer employers and gratuity scheme trustees a flexible and cost effective way to fund this gratuity liability. The plan helps a corporate by: Building a fund systematically, which will be used to meet your future gratuity liability Providing the opportunity to maximize investment returns and thus provide the benefit in a cost-effective manner GROUP UNIT LINKED PLAN Leave Encashment Schemes Many employers provide their employees with the option of encashing their leave to their credit at the time of retirement or resignation. Accounting Standard 15 requires that an actuarial valuation of a company leave encashment liability be carried out and reflected in the books of accounts. The HDFC Group Unit Linked Plan is an innovative plan, which offers employers a flexible and cost effective way to fund this Leave Encashment liability. The plan helps an organization by: Creating a fund that can be built up to meet your future leave encashment liability. Providing the opportunity to maximize investment returns and thus provide the benefit in a cost-effective manner 38

One factor that helps maximize investment returns is low charges. Our fund management charges are the lowest in the industry today and therefore can improve your long-term returns. HDFC SL GROUP SAVINGS PLAN As a company or an affinity group, you want to express to your group members that you care for them, and want them to have stronger financial future. HDFC SL GROUP SAVINGS PLAN is a simple conventional group plan wherein the company/affinity group is the policyholder & the group members /employees/depositors are the scheme members. This 'with profits' group plan would enable your scheme members to Provide financial protection to their loved ones Build savings in a simple & systematic manner Pay premiums only for a limited period of 5 years is simple to administer COMPANY PROFILE OF LIC  Introduction LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the 39

branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satellite offices and the Corporate office. LIC’s Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from online Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future.  Objectives • Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. •

Maximize

mobilization

of

people's

savings

insurance-linked savings adequately attractive. 40

by

making

•

Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return.

•

Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders.

•

Act as trustees of the insured public in their individual and collective capacities.

•

Meet the various life insurance needs of the community that would

arise

in

the

changing

social

and

economic

environment. •

Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy.

•

Promote

amongst

Corporation

a

all

sense

agents of

and

employees

participation,

pride

of

the

and

job

satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective.  Product and services • Insurance Plan The Whole Life Policy This plan is mainly devised to create an estate for the heirs of the policyholder as the plan basically provides for payment of sum assured plus bonuses on the death of the policyholder. However, considering the increased longevity of the Indian 41

population, the Corporation has amended the above provision, thereby providing for payment of sum assured plus bonuses in the form of maturity claim on completion of age 80 years or on expiry of term of 40 years from date of commencement of the policy

whichever

is

later.

The premiums under the policy are payable up to age 80 years of the policyholder or for a term of 35 years whichever is later. If the payment of premium ceases after 3 years, a paid-up policy for such reduced sum assured will be automatically secured provided the reduced sum assured exclusive of any attached bonus is not less than Rs.250/-. Such reduced paid-up policy is not entitled to participate in the bonus declared thereafter but the bonuses already declared on the policy will remain attach, provided the policy is converted in to a paid-up policy

after

the

premiums

are

paid

for

5

years.

The Whole Life Policy- Limited Payment This is the best form of life assurance for family provision since it enables the Life Assured to pay all the premiums during the ordinarily vigorous and most productive years of life. He need not pay any premium in the later stages of life if and when his conditions might become adverse. With Profits Limited Payments Policies do not cease to participate in profits after completion of the premium paying period but continue to share in the periodical Bonus Distribution until the death

of

the

Life

Assured.

If the policyholder pays at least 3 years' premiums and then discontinues paying any more premium, a reduced paid-up assurance

policy

comes 42

into

force.

Such a reduced paid-up Policy will not be entitled to participate in the profits declared thereafter, but such Bonus as has already been declared on the Policy will remain attached thereto. The premium paying term under this plan is five years minimum and 55 years maximum. The Whole Life Policy- Single Premium This is the best form of life assurance for family provision since it enables the Life Assured to pay the premium during the ordinarily vigorous and most productive years of life, relieving him from the necessity of making payments later in life when they might become a burden. With Profits Single Premium policies do not cease to participate in profits after completion of the period for which premium has been paid ,but continue to share in the periodical Bonus Distribution until the death of the Life Assured.  Jeevan Anand This plan is a combination of Endowment Assurance and Whole Life plans. It provides financial protection against death throughout the lifetime of the life assured with the provision of payment of a lump sum at the end of the selected term in case of his survival. Premium: Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the selected term of the policy or till earlier death.

43

Bonuses: This is a with-profit plan and participates in the profits of the Corporation’s life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Bonuses will be added during the selected term or till death, if it occurs earlier. Final (Additional) Bonus may also be payable provided the policy has run for certain minimum period. Jeevan Tarang 5½ % of the Sum Assured after the chosen Accumulation Period. The vested bonuses in a lump sum are payable on survival to the end of the Accumulation Period or on earlier death. Further, the Sum Assured, along with Loyalty Additions, if any, is payable on survival to age 100 years or on earlier death. The plan offers three Accumulation periods – 10, 15 and 20 years. A proposer may choose any of them. Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly intervals or through salary deductions over the Accumulation Period. Alternatively, a Single Premium can be paid on commencement of a policy. Two Year Temporary Assurance Policy  The Convertible Term Assurance Policy This plan of assurance is designed to meet the needs of those who are initially unable to pay the larger premium required for a Whole Life or Endowment Assurance Policy, but hope to be able to

pay

for

such

a

policy

in

the

near

future.

This plan would be found useful also in cases where it is desired 44

to leave the final decision as to the plan to a later date when, perhaps

a

better

choice

could

be

made.

Policy holders get an option of converting an policy into endowment assurance or limited payment whole life assurance.  Anmol Jeevan-I On Death during the Term of the Policy

Sum Assured

On Maturity

Nil

Amulya Jeevan-I On Death during the Term of the Policy

Sum Assured

On Maturity

Nil

 Jeevan Saathi This is an Endowment Assurance Plan issued on the lives of husband and wife. The plan provides financial protection against death of both the lives. It pays the maturity amount on survival of one or both the lives to the end of the policy term. Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the term of the policy or till the first death of the lives covered, whichever is earlier.  Bima account plans

45

As the name explains “LIC’s Bima Account – I ” is a simple nonlinked plan under which you can be covered without undergoing any

medical

examination

subject

to

certain

conditions.

This plan offers you everything you think of an insurance plan should provide: 1. Simplicity 2. Liquidity 3. Guaranteed minimum return 4. No medical examination 5. Transparent charges 6. Risk cover Under this plan, the premiums paid by you, after deduction of charges, will be credited to the Policyholder’s Account maintained separately for each policyholder. The risk cover will be provided by deduction of mortality charges from the Policyholder’s Account. If

all

due

premiums

are

paid,

the

amount

held

in

your

Policyholder’s Account will earn an annual interest rate of 6% p.a. which will be guaranteed for whole of the policy term. In addition to this guaranteed return, if all due premiums are paid, your account may earn an additional return depending upon the experience under this plan. You will also have an option to pay additional (Top-up) premiums without any increase in risk cover. Loan facility will also be available immediately after first policy anniversary.

46

Endowment plans This is a unit linked Endowment plan which offers investment cum insurance cover during the term of the policy. You can choose the level of insurance cover within the limits, which will depend on the mode and level of premium you agree to pay. You have a choice of investing your premiums in one of the four types

of

investment

funds

available.

Premiums

paid

after

deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).

Childrens plan This

plan

is

specially

designed

to

meet

the

increasing

educational, marriage and other needs of growing children. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end of the specified

durations.

Plans for handicapped dependent Plans for high worth individual Money back plan

• Pension plans

47

LIC’s Pension Plus is a unit linked deferred pension plan, which provides you a minimum guarantee on the gross premiums paid. The plan is without any life cover. You have a choice of investing your premiums in one of the two types

of

investment

funds

available.

Premiums

paid

after

deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV). • Unit plans LIC’s Pension Plus is a unit linked deferred pension plan, which provides you a minimum guarantee on the gross premiums paid. The plan is without any life cover. You have a choice of investing your premiums in one of the two types

of

investment

funds

available.

Premiums

paid

after

deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV). • Special plans Health plus plan Golden jubilee plan Micro insurance plan • Group schemes Group (term) Insurance Scheme is meant to provide life insurance protection to groups of people. Administration of the scheme is on group basis and cost is

low. Under Group (Term) Insurance 48

Scheme, life insurance cover is allowed to all the members of a group subject to some simple insurability conditions without insisting upon any medical evidence. Scheme offers covers only on death and there is no maturity value at the end of the term.

ANALYSIS 49

AND INTERPRETATION

Demographic Variables

• AGE GROUP OF THE RESPONDENTS 50

Age Group

No. of Responden ts 20 39 25 19 than 7

Percentage

18-25 26-35 36-45 46-55 More 55 Grand total 110

18 35 24 17 6 100

Analysis: Out of the total 110 samples taken highest were in the age group of 46-55(39,36%), 25 in the age group of 36-45, 20 in the age group of 18-25 and 19 in the age group of46-55 and only 7 in the age group of more than 55 respectively. This shows that mostly people in the age group of 25-55 should be targeted.

51

GENDER OF THE RESPONDENTS

Sex Male Female Grand Total

No. of Responden ts 93 17 110

Percentage 85 15 100

• HIGEST QUALIFICTION OF THE RESPONDENTS

Qualificati on

No. of Responden ts 5 7 61 37

10th 12th Graduation Post graduation Grand total 110

Percentage 5 6 55 34 100

52

Analysis: Out of the total 110 samples taken highest were in the group of graduation (61,55%), followed by post graduation 37, and only 5,7 in 10th ,12th standard respectively This shows that most of them had highest qualification as graduation.

• OCCUPATION OF THE RESPONDENTS

Occupation No. of Responden ts Service 50 Self 39 employed Student 6 Professional 11 House wife 4 Grand total 110

53

Percentage 45 36 5 10 4 100

Analysis: Out of the total 110 samples taken highest were in the service group (50, 45%), 39 in the self employed group, 11 in the professional group, 6 were students and only 4 in the house wife respectively. This shows that mostly people in the service group should be targeted primarily followed by self employed.

Main Questions

Q1) For how long you are residing in this town? No. Years

of No. of Responden ts Less than 1 15 1-2 18 2-3 4 3 yrs above 73 Grand total 110

54

Percentage 14 16 3 67 100

Analysis: Out of the total 110 samples taken highest were in the group of more than 3 years(73,67%), 18 in the group of 1-2 years, 15 in the group of less than 1 years and only 4 in the group of 23 years respectively. This shows that mostly people surveyed are residing in the town for more than 3 years and therefore can be targeted easily. Q 2) How many people do you know well in the city? No. of people known in the city Below 25 25-50 50-100 More than 100 Grand total

No. of Percentage Responden ts 17 10 12 71

15 9 11 65

110

100

Analysis: Out of the total 110 samples taken highest were in the group of more than 100(71,65%), 17 in the group of below 25, 12 55

in the group of 50-100 and only 10

in the group of

25-50

respectively. This shows that mostly people surveyed know more than 100 people well in the town and therefore more customers can be targeted easily. Q3) What is your average monthly income? Average monthly income Less than 5000 500010000 1000020000 2000025000 2500030000 3000040000 4000050000 More than 50000 Grand total

No. of Percentag Responde e nts 7 6 13

12

34

31

14

13

8

7

8

7

10

9

16

15

110

100

56

Analysis: Out of the total 110 samples taken highest were in the group of 10000-20000(34,31%), 16 in the group of more than 50000,14 in the group of 20000-25000, 13 in the group of 500010000,10 in the group of 40000-50000,8 in the group 25000-3000 and 30000-40000 respectively, and only 7 in the group of less than 5000 respectively. This shows that people with average monthly income between 10000-50000 can be targeted and will be interested in doing any extra activity to supplement their income and in investments with good returns and saving income tax. Q4) Do you need to support anyone financially?

Yes No Grand Total

Analysis:

No. of Responden ts 45 65 110

Percentage 41 59 100

Out of the total 110 samples taken only 45 or 41%

respondents have to support anyone financially. Rest all 65 respondents don’t have to support anyone financially. Therefore those who need to support anyone financially would like to supplement their income by doing any extra activity.

57

Q5) Do you know any of your family members or friends, who is working as Agent or Advisor for any insurance company?

Yes No Grand Total

Analysis:

No. of Responden ts 48 62 110

Percentage 44 56 100

Out of the total 110 samples taken only 48 or 44%

respondents know whether their family member or friend is working for insurance company as agent or advisor. Rest all 62 respondents don’t know. Q6) If ’yes’ do you know any idea about his /her role as an “Agent”/”Advisor”?

Yes No Grand Total

No. of Responden ts 45 65 110

58

Percentage 41 59 100

Analysis:

Out of the total 110 sample taken only 45 or 41%

respondents know the role of their family member or friend as an agent or advisor in the insurance company.

Q7) Would you like to supplement your income by doing any activity?

Yes No Grand Total

No. of Responden ts 42 68 110

59

Percentage 38 62 100

Analysis:

Out of the total 110 samples taken only 42 or 38%

respondents would like to supplement their income by doing any extra activity. Rest all 68 respondents do not want to earn extra besides their present income. Therefore there is a scope of about 38% for the recruitment of respondents as an agent or advisor for the insurance company.

Q8) If you get an opportunity to supplement your income by providing financial Advice/Service, would you go for it?

Yes

No. of Percentage Responden ts 43 39

No

67

61

Grand Total 110

Analysis:

100

Out of the total 110 samples taken only 39%

respondents would like to supplement their income by doing any financial advice/service. Rest all 67 respondents do not want to supplement income by providing financial services. Therefore there is a scope of about 39% for the recruitment of respondents as an agent or advisor for the insurance company. 60

Q9) How much time do you think that you can spare for doing this additional activity that will fetch you an extra income?

Average monthly income 2 hrs per day 2-5 hrs per day More than 5 hrs per day Less than 5 hrs per week 5-10 hrs per week More than 10 hrs per week Grand total

Analysis:

No. of Percentage Responden ts 94 85 11

10

1

1

0

0

0

0

4

4

110

100

Out of the total 110 samples taken 94 or 85%

respondents would be able to give 2 hours for an additional 61

activity followed by 2-5 hrs per day, 4respondents will be able to give more than 10 hours per week. Therefore most suitable time assigned to do an additional activity will 2-5 hours. Q10) What motivates you at your work place?

Average monthly income Appreciation Service Money Comfort Others Grand total

Analysis:

No. of Responden ts 18 16 27 30 19 110

Percentage 16 15 25 27 17 100

Out of the total 110 samples taken

30 or 27%

respondents are mostly motivated by comfort at their workplace, 27 by money, 19 due to other reasons ,18 by appreciation, and only16 by service. Therefore comfort is the prime factor for employee’s motivation at workplace followed by money. SUMMARY OF FIDINGS 62

On the overall basis of various parameters considered it can be found that: • People with high turnover would likely to take up investment plans. • People with monthly turn over 10000-25000 are most interested to supplement their income by doing a financial activity. • Respondents are not well aware of the role played by their friends or family member working in insurance industry; which shows a lack of insurance awareness amongst people. • Lack of information about income opportunity in financial sector. • 2 hrs would be the best suitable time to do a financial activity to supplement income. • Employees are highly motivated by comfort and money at workplace.

CONCLUSION With the largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually . Together with banking services, it adds about 7% to the country’s Gross Domestic Product (GDP).The gross premium collection is nearly 2% of GDP and funds available with LIC for investments are 8% of the GDP. Even so nearly 65% of the Indian population is without life insurance cover while health insurance and non-life insurance 63

continues to be below international standards. A large part of our population is also subject to weak social security and pension systems with hardly any old age income security. This in itself is an indicator that growth potential for the insurance sector in India is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and strengthens the risk taking ability of individuals. It is estimated that over the next ten years India would require investments of the order of one trillionUS dollars. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain the economic growth of the country. SUGGESTIONS AND RECOMMENDATIONS

• Advertise about company and its product • Motivates individuals to purchase products • Create positive perception about insurance • Promote insurance at college level and corporate houses • Improve efficiency in operations • Diversify product portfolio • Bring out policies with small premium • Attract youth of India to insurance sector • Provide peaceful environment at workplace

64

• Provide high return investment plans • Deliver good customer services

BIBLIOGRAPHY

1. www.hdfclife.com 2. www.licindia.com 3. www.birlasunlife.com 4. www.icicipulife.com 5. www.bajajallianz.com 6. www.moneycontrol.com 7. www.irdaindia.com 8. www.google.com

65

66

ANNEXURE  QUESTIONNAIRE

Name of the person contacted:

Sex: Male/Female

Age: Address Status: Single/Married

Contact no. :

Educational qualification: 10th std/12thstd /Graduation/Post Graduation Occupation: Service/ Self employed/Student/Professional/House wife

Q1. For how long you are residing in this town? Less than a yr/1-2 yrs/2-3 yrs/3yrs & above Q2.How many people do you know well in the city? Below 25/25-50/50-100/100 & above Q3. What are your hobbies and interests? Q4. What is your average monthly income? Less than 5000/5000-10000/10000-20000/2000025000/ 25000-30000/30000-40000/40000-50000/50000 & above Q5.Do you need to support anyone financially?

[Yes/No]

Q6. If ‘yes’ please help us with details of family members who need to be financially supported? Q7. Do you know any of your family members or friends, who is working as Agent or Advisor for any insurance company?

[Yes/No]

Q8. If ’yes’ do you know any idea about his /her role as an “Agent”/”Advisor”?

[Yes/No]

Q9. Would [Yes/No]

activity?

you

like

to

supplement

your

income

Q10. If ‘no’ please help us with the reason for saying so?

67

by

doing

any

Q11. If you get an opportunity to supplement your income by providing financial Advice/Service, would you go for it? [Yes/No] Q12. How much time do you think that you can spare for doing this additional activity that will fetch you an extra income? 2hrs per day/2-5 hrs per day/More than 5 hrs per day/ Less than 5 hrs per week/5-10 hrs per week/ More than 10 hrs per week Q13. What motivates you at your work place? Appreciation/Service/Money/Comforts in life/ Others (Please specify) Name of the surveyor: Location: Date:

68