HDFC Standard Life Insurance Project

ACKNOWLEDGEMENT

This project is an outcome of the support and encouragement provided by a number of people at HDFC STANDARD LIFE INSURANCE COMPANY that embodies some of the best aspect of Indian corporate world.

I would like to express my sense of gratitude to the company for giving me this valuable learning opportunity and for allowing me to conduct this summer project.

I

sincerely

thanks

my

project

guide Miss. Babita Tripathi &

Ms. Mamta Dhoundiyal, Sales Development Manager, HDFC STANDARD LIFE INSURANCE COMPANY for guiding me throughout the project and helpful in furnishing the required information.

1

2

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 

FUTURE OF INSURANCE INDUSTRY…………………39

3



RESEARCH METHODOLOGY…………………………..42



ANALYSIS & FINDINGS OF SURVEY…………………43



LIMITATIONS…………………………………………….52



CONCLUSION…………………………………………….53



RECOMMENDATIONS………………………………….54



ANNEXURE……………………………………………….55



BIBLIOGRAPHY………………………………………….58

4

INTRODUCTION

BRIEF IDEA ABOUT THE PROJECT

The outlook of the modern day investors has undergone a dramatic change. In the changed fiscal scenario with drastic fall in the interest for investment and the volatile capital market with limited investment options, ULIP comes to the rescue of the prudent investors. Investment in insurance has become the style of the day. The individual looks at buying an insurance policy more of an investment, which comes with the additional benefits of life cover and tax benefit also. Unit Linked plans provides one with not only an effective protection against individual investment risks and inflation but above all it brings along a long-term growth potential of financial means. Everyone decides on their own what is the right method of investment for them, which predetermines evaluation of deposited

5

money.

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

SCOPE OF THE STUDY

The scope of my project was to get an overall view of the Indian insurance market through comparative study and analysis.

7

COMPANY PROFILE HDFC STANDARD LIFE INSURANCE

HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s leading housing finance institution and one of the subsidiaries of Standard Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry – all-important factors to consider when choosing your insurer.

8

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

Standard Life Group (Standard Life plc and its subsidiaries)

• The Standard Life group has been looking after the financial needs of customers for over 180 years. • It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs. • Its investment manager currently administers £125 billion in assets. • It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's. • Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at

the Money Marketing Awards, and it was voted a 5 star

life and pensions provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star'

accolade has also been

awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was

awarded the 'Best Flexible Mortgage Lender' at the Mortgage

Magazine Awards in 2006.

Our key strengths 10

• 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.

Our Vision

11

'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'. Our 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 Accolades and Recognition • Rated by 'Business world' as 'India's Most Respected Private Life Insurance Company' in 2004. • Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India’s number 1 personal finance magazine. Form of Organisation

12

HDFC standard life insurance belongs to a life insurance sector in India. Life Insurance in India Introduction With such a large population and the untapped market area of this population, insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 percent annually. Together with banking services, it adds about 7 percent to the country’s GDP. In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of the Indian population is without life insurance cover and the health insurance. This is an indicator the growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation the government in 1993 to examine the various aspects of the industry constituted “Malhotra committee”. The key element of the reform process was participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the company was the main idea behind this reform.

Since then the insurance industry has gone through many sea changes. 13

The competition LIC started facing from these companies were threatening to the existence of the LIC. Since the liberalization of the industry, the insurance industry has never looked back and today stand as one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools have increased the scope of the industry in the longer run.

A Brief History The origin of insurance is very old. The time when we were not even born: 14

man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any risk and uncertainty led to the origin of insurance. The insurance came to India from UK: with the establishment of the Oriental Life Insurance Corporation in 1818.the Indian Life Insurance Company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breadth of the country. After the liberalization the entrance of foreign players has added to the competition in the market. The general insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. In 1957 General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. In 1972 The General Insurance Business (Nationalization) Act. 1972 nationalized the general insurance business in India with effect from 1st January 1973. it was after this that 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. Current Scenario of Insurance Industry

15

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

CUSTOMER SERVICE

16

Consumers remain the most important center of the insurance sector. After the entry of foreign players the industry is facing a lot of competition and thus improvement of the customer service in the industry. Computerization of operations and updating of technology has become imperative in the current scenario. Foreign players are bringing in international best practices in service through use of latest technologies. The one time monopoly of the LIC and its agents are now going through a thorough revision and training programmes to catch up with the other private players. Though lot is being done for the increased customer service and adding technology to it but there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels.

DISTIBUTION CHANNELS

17

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 skillful to know how to use these channels in a proper way. Bancassurance is one of the most upcoming channels of distribution. BANCASSURANCE

18

India has an extensive bank network established over the years. What insurance companies have to do is just take advantage of the customers’ long-standing trust and relationships with banks. This is a mutually beneficial situation as banks can also expand their range of products on offer to customers, while the insurance company will also earn profits from the exposure. Another, advantage ids that banjks, with their network in rural areas, help to fulfill rural and social obligations stipulated by the Insurance Regulatory Development Authority (IRDA) recently. Insurance companies should see bancassurance as a tool for increasing their market penetration in India. It is also good for the one who sees bancassurance in terms of reduced price, high quality product and delivery at doorsteps. Everybody is a winner here. The creation of bancassurance operations has made an important impact on the financial services industry at large. This is though a new concept but it has gained a lot of importance in the industry at present and has a great future.

PRODUCTS

19

At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need. We cater to both, individuals as well as to companies looking to provide benefits to their employees. This section gives you details of all our products. We have incorporated various downloadable forms and product details so that you can make an informed choice about buying a policy. For individuals, we have a range of protection, investment, pension and savings 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 from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable plans apart from providing long-term value to the employees 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

ENDOWMENT PLAN

20

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 options

In 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 added annually. At the end of the term an additional Terminal Bonus may be paid depending on the performance of the underlying investment.

WHOLE LIFE PLAN

21

HDFC Single Premium Whole Of Life Insurance Plan is a tailor-made plan well suited to meet your long-term investment needs. This participating plan 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 PLAN

HDFC PERSONAL PENSION PLAN We understand your need to build a secure future for yourself. Hence, the 22

HDFC Personal Pension Plan is an insurance policy that is designed to provide a post - retirement income for life with the freedom to choose your retirement 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 any attaching bonus, which will provide your post - retirement income. The HDFC Personal Pension Plan is an insurance policy, which can benefit you in the following ways: Provides a post retirement income in your golden years Gives you the flexibility to plan your retirement date Gives you tax benefits on your premiums The plan receives simple Reversionary Bonuses, which are usually added annually. At the end of the term an additional Terminal Bonus may be paid depending on the performance of the underlying investment. Don’t compromise on your self-respect, ever. Go ahead, hold your head high and enjoy life with the HDFC Personal Pension Plan.

CHILDREN’S PLAN

The HDFC Children's Plan gives you: Invaluable financial support to your child Helps you customize an ideal plan for your child Provides you multiple options for multiple benefits The HDFC Children’s Plan is designed to secure your child’s future by giving your child (the beneficiary) a guaranteed lump sum, on maturity or 23

in case of your unfortunate demise, early in the policy term. The company to give you good long-term returns invests the premiums, paid by you. The plan receives simple Reversionary Bonuses, which are usually added annually. At the end of the term an additional Terminal Bonus may be paid depending on the performance of the underlying investment (See ‘Bonuses’ for more details).

MONEY BACK PLAN

The 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 5year 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 payouts

24

Making the right kind of investment will enable you to achieve your objectives – be it your immediate expenses or else securing your future financial needs. Our Money Back Plan gives you a wide range of terms and cash benefit schedule to choose from. A summary of Key Benefits including the cash lump sum payments, expressed as a percentage of Sum Assured is shown below:

Key Benefits Total Policy Term

10

Death Benefit

Survival Benefit 5 Yrs.

10 Yrs.

15 Yrs.

20 Yrs.

25 Yrs.

30 Yrs.

40%

60% + Attaching Bonuses

-

-

-

-

-

-

-

-

-

20% + Attaching Bonuses

-

15

30%

30%

40% + Attaching Bonuses

20

25%

25%

25%

25% + Attaching Bonuses

25

20%

20%

20%

20%

25

Within Policy Term 100% Sum Assured + attaching bonuses (Over and above the earlier payouts).

30

15%

15%

15%

15%

15%

25% + Attaching Bonuses

Maturity Value On maturity you receive survival benefit due at that point of time along with attaching bonuses for the full Sum Assured calculated for the full term. You can ensure your financial independence. And be able to live life on your own terms. Always.

BARRIERS TO ENTRY

 Capital requirements  High gestation period  Access to distribution channels  Brand equity

26

 Indian consumer psychology  Tax avoidance

Capital Requirements The huge capital requirements pose a major barrier to entry in the insurance sector . These requirements can be attributed to the costs incurred

in

setting

up

your

distribution

network. To achieve

economies of scale you would require a nationwide presence, unless you want to cater to a niche group, which would involve setting up a huge sales force.

High Gestation Period

27

On an average a player in the insurance sector would require around 7-10 years to break-even. This comparatively long gestation period would entail the player to have sufficiently deep pockets to bear the losses till the time he breaks even.

Access to Distributional Channels Given the poor reach of the insurance companies amongst the Indian public especially in the rural sector the distribution channels adopted will determine the future growth of the industry. For the insurance industry to take off in a big way in India companies will have to adopt new and innovative distribution channels to be able to cover the vast majority of the Indian population which is still not covered by the insurance companies.

Brand equity Customer loyalty in the insurance sector is very high, thus benefiting players 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 it generates are essential criteria on which the customer makes his judgement. Thus a brand, which has been there for a long period of time and has managed to serve it customers well , would be in a position to leverage its brand equity.

Indian Consumer Psychology The Indian customer, liken his global counterpart , buys policies for 28

tax benefits and to ensure secure savings for the future. Although he is price sensitive , he still deserves value and sound services for his money. Insurance as savings: There is reluctance amongst Indians to use insurance

policies as a means of investment

of their savings.

Traditionally Indians have invested the bulk of their savings in bank fixed deposits followed by the capital markets in spite of the low returns offered by the banks and the large risk involved in trading in stocks. The changing mindset of the Indian public will be a key driver for growth in the liberalized era.

Insurance for Tax Avoidance:

The urban educated class of Indians traditionally looked at insurance as a tax avoidance tool. Mindsets are now changing, but purchase patterns are not. The months of February and March still are the busiest at LIC. The traditional hook of tax incentives and savings will take a long time to change. Private players need to step up their selling in terms of need and protection. Due to low consumer awareness of the need for insurance and benefits attached to it, most of the insurance is still sold through agents. Other distribution channels like banc assurance are now being explored.

29

Growth potential of the Indian insurance market

India at a glance Population: 1 Billion Economy:

5th largest in the world in terms of Purchasing Power

Parity (PPP) GDP growth Rate: Over 6% per year on an average for the last decade Savings Rate: Around 26% of GDP

30

Estimated middle class population: 300 Million Insured population: 70 million only

Future Trends

The Insurance sector is set to see a whole lot of changes in the way business was traditionally done with new

and

innovative

products,

distribution networks , etc. Changes in the external environment for the life Insurance market will have to be suitably understood in order to avoid excessive selling and mis-selling out of over-enthusiasm.

New Products Most of the insurance products offered by the traditional Indian players

31

are outdated, as they are not suitable to the needs of the consumers. Hence, old as well as new insurers will be offering innovative products to the consumers. The consumers are particularly expecting good pension plans, health insurance, term insurance and Investment products like unit-linked insurance, from the life insurers. Similarly, the consumers expect innovative products from the general insurers for managing healthcare, property insurance, accident insurance and other products related to the personal line of insurance. The consumers also expect reduction in the premium of the insurance products as the mortality rate in India has come down by three times in the last 50 years.

Consumer Education

Very soon the market will be flooded with a large number of products by a fairly large number of insurers operating in the Indian market. Even with the limited range of traditional insurance products , the consumers are confused. Their confusion will further increase in the face of a large number of products in the market. The existing level of awareness of the consumers for insurance products is very low. This is because only 65 percent of the Indian population is literate. Even the educated consumers are ignorant about the various products of insurance. Moreover , there is a shortage of trained agents and brokers. It is necessary that all the insurers should undertake extensive plans 32

for educating the consumers.

UNIT LINKED INSURANCE PLAN

Now One should know what it means… Unit Linked Insurance Imagine an ideal combination of insurance and life savings that will help One in the future to finance lofty plans, whether referring to purchase of a car, contribution to education of children or grandchildren or just some extra income when retired. Unit

Linked provides you with not only an effective protection

against individual investment risks and inflation but above all it brings along a

long-term growth potential of financial means. Everyone

decides on their own what is the right method of investment for them,

33

which predetermines evaluation of deposited money. Financial means invested into Unit Linked are evaluated in the course of insurance period through four financial funds. It is one oneself that decide on division of the invested means. One can at any time reallocate One’s

money

among

the

funds. The

four

funds

for

investments are :Balancer, Maximizer, Protector, Preserver.

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 child

How can a person draw the saved money After the insurance period is over, One will be paid out the invested sum increased by evaluation, this as a lump-sum payment or regular annuity.

34

In case of death in the course of insurance period, the sum assured agreed upon or the fund value is immediately paid out to a beneficiary (beneficiaries). The investment value is paid out if it is higher than the sum assured agreed upon. How to pay premium

Premium

can

be paid

in

regular

monthly

installments: monthly,

quarterly, semi-annually, and annually. In the course of insurance period, it is possible to invest other financial means in the form of top-ups, thus reinforcing the investment part of insurance.

The three in one option - Unit-linked policies:

The outlook of the modern day investors has undergone a dramatic change. In the changed fiscal scenario with drastic fall in the interest for investment and the volatile capital market with limited investment options, ULIP comes to the rescue of the prudent investors. Investment in insurance has become the style of the day. The individual looks at buying an insurance policy more of an investment, which comes with the additional benefits of life cover and tax benefit also. ULIP - Unit Linked Insurance Policy - ULIP is a unique, multiple benefits Plan which combines the basic benefit of life insurance, tax

35

benefits and accident insurance cover. The plan offers tax deductions on the amount invested under Section 80C of the Income Tax Act within the overall limit of Rs. 1,00,000/-. With the Insurance industry booming up in the Indian economy following liberalized regulations from the IRDA, the ULIPs have regained their strength. This was further boosted by the private insurance companies with foreign partners. . Under ULIPs, the premiums are invested after deducting the charges and fees in a fund similar to that of a mutual fund along with a life insurance cover.

The IRDA regulates that a unit-linked plan must be offered to the investor with an option to select among debt, balanced and equity funds. For example, if an investor opts for a unit-linked endowment policy, he can choose to invest his premiums in debt, balance or equity funds. If he selects a debt fund, the majority of his premium will be invested in debt securities like gilts and bonds. If the option is equity, a major portion of the premium is invested in the equity market. The selection of policy depends upon its risk profile and the Investment needs. Higher the risk, higher would be the returns and vice versa..

36

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 maturity

You can choose your premium and the investment fund or funds. We will 37

then invest your premium, net of premium allocation charges in your chosen funds in the proportion you specify. At the end of the policy term, you will receive the accumulated value of your funds. In case of your unfortunate demise during the policy term, we will pay the greater of your Sum Assured (less any withdrawals you have made in the two years before your claim) and your total fund value to your family. Use HDFC Standard Life’s excellent investment options to maximize your savings & secure your and your family’s future. We will provide financial security for your family in your absence.

THE FUTURE OF THE INSURANCE INDUSTRY

The

insurance

transformation

industry from

its

is

today

earlier

witness

days. From

to

a

massive

a humble beginning

made in 1956 since the nationalization of the industry and the birth of the Life Insurance Corporation, the industry today sees a deluge of multinational insurers all charging in to set up shop here considering the existent vast unexploited potential.

Multinational partnerships: The winds of liberalisation have initiated vast changes in the functioning of the industry today. Increasing number of multinational partnerships with

38

private insurers have paved the way for a radical shift in insurance selling through a number of new distribution channels besides bringing about more awareness on the need for insurance and also stressing on the important role technology can play. With major trade barriers gone, the Indian insurance industry is slowly opening itself from a protected environment to e-business, incorporating newer technologies in insurance, thanks to competition, that will hopefully bring forth a marked improvement in customer service, insurance marketing, risk management, claim settlement, underwriting etc in comparison to its earlier days.

Faster decision making: Today, information dissemination is increasingly faster with the advent of information technology, which will largely help individuals gain access to every bit of information they would require, enabling faster decision-making. This is in stark contrast with the pre-liberalization era wherein information sourcing was virtually non-existent except from the recruited agents of the insurance company. Policy servicing, an area that has long remained neglected will now receive a major thrust with insurance companies redefining strategies to weed out sluggishness and provide the policyholder with prompt service. Online policy servicing too will soon become the norm thereby cutting down on the unnecessary delays. Information explosion: 39

The oncoming technological revolution is all set to totally revamp the very concept of Knowledge management. Automating knowledge management will become the sole aim to increase productivity. Large databases of raw information on individuals' investment patterns can be fed into computers to enable faster segregation of information as per required categories. Computerizing information can make a major difference to the general insurance industry wherein motor claim losses particularly have been hitting the roof. With an organized system of data collection and storage, data analysis and claim management system, keeping track of the claim applicants’ behavioral patterns becomes easy. Easier Claims settlement:

Claims settlement that was hitherto a time consuming affair will see a marked difference in operations. With competition building and improved customer service becoming the new mantra the time taken for claim settlements will reduce considerably. World over underwriting risks, claims management, risk surveys etc are far more simplified thanks to technology. Insurance companies are slowly realizing the mass difference information technology can make to business. Consider policy information being made available online. Tracking policy details, the premiums to be paid, premiums paid so far, the bonus percentage, maturity date of the policy and several such details can be accessed at the mere click of a mouse soon.

40

Improved customer service - the ultimate aim: The insurance industry, with competition hooting up is has woken up to ground realities and is in the process of implementing software solutions. Realizing the unlimited power information technology holds, insurance technology

companies for

have

integrating

realized office

that

strategic deployment

operations, and gaining

of

customer

confidence through improved customer service is the need of the hour.

RESEARCH METHODOLOGY

The

project is based on Insurance in India, Future of Insurance in India & unit linked insurance plan market in India for that , I prepared a questionnaire , based on which , I took personal interviews . I have also used information from different Websites, brochures

of

the

organizations

&

articles

from

various

newspapers. The topics are dealt with in a general manner. There would be details, which could vary from company to company. Overall, following tools were used to build this project:

Primary data:

41

a) Questionnaire. b) Personal interview. Secondary data: a) Websites. b) Brochures. c) Articles.

42

FINDINGS AND ANALYSIS OF SURVEY

The survey was taken from 54 persons & it showed following results:-

Q1. Well first foremost result that 87% of the people are looking for profitable opportunities to invest their money.

43

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.

44

Insurance 9% Investment 10%

Both 81%

Q3. Then it showed one of the most popular brand in the country is LIC it seems that about 40% of the people know about their products, than came the ICICI prudential, where only 25% of the people knew , although HDFC Standard Life Insurance as a starter have starting gaining some publicity but it is still not have came in focus, so is for the other brands .only

45

20% people knew about HDFC Standard Life Insurance products. BAJAAJ ALLIANZ accounts for 6% and BIRLA SUN LIFE accounts for 9%.

BIRLA SUN LIFE 9%

ICICI Prudential 25%

BAJAAJ Allianz 6%

HDFC Standard Life 20%

LIC 40%

Q4. It was also seen that still after 5 years of ULIP plans, a higher percentage of people are still not aware about them, only 15 % are aware of it. Most of people (about 46%) know about the traditional plan, 12% knows educational plan and 27% know about pension plan.

46

Educational Plan 12%

ULIP 15%

Traditional Plan 46%

Pension Plan 27%

Q5. It seem that the main criteria for selection of a plan was low premium, as round about 48% voted in favor of it, well 20% of the people also preferred tax savings, as well as short term time periods. There were persons who also liked to go for interest benefits; these accounts for 9% and a special 47

segment (i.e. 7%)of high income liked the criteria of long term time period as well as the good returns with it. 16% of people preferred insurance benefits

Interest 8% Insurance 13% Low Premium 39%

Tax Saving 17%

Long Time Period 6%

Short Time Period 17%

Q6. It has been observed that

most of the awareness about these brands have

been due to the internet which stands for 23% and because of the advertisements that are shown on television which accounts for 57% , though media’s old mediums such as 48

newspaper , magazines, which

accounts for 8%, have also equally made their presence felt. Proportion of people who came to know about these brands from friends are 12%.

Newspaper 8%

Friends 12%

Internet 23%

Television 57%

Q7. To be specific the range of amount to be invested varied from person to person. But to give an overview following view is prepared: 1). 2,000- 6,000 = about 15% 49

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 15%

2000- 6000 15%

11000-22000 25%

6000-11000 45%

Q8. It was also recorded that a large number that were ready to invest were business class, which stands at 68%. Yet the service men were not that much behind to invest. 24% investors are service people. Self employed accounts for 8%. 50

SelfEmployed 8%

Service 24%

Business 68%

LIMITATIONS

1. Time was the biggest constraint as many times it was not possible to meet senior officials to collect such information. 51

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.

CONCLUSION

From this comparative study one can say that everyone has his / her own perception, when it comes to their priorities regarding the different features. Well one can say that deciding factor mainly depends upon perceiving 52

criteria which is different for each and every person, it is also dependent upon buying capacity, risk taking ability, profession, age, dependability on members of the family, income and many more. So one can’t conclude the only plan which one feel the best. I have mainly compared and listed the features 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.

53

2. Boosting customer Base what has been seen from the analysis of data collected from the respondents is that there are a lot of people who are seriously thinking of buying a policy from HDFC SLIC but are tentative due to some reason. This is the target market, which the company should aim for. 3. Variety of Plans HDFC SLIC has a substantial variety of plans available but due to the fact that insurance market is getting competitive the company should keep re-inventing itself from time to time. 4. Availability of Riders Riders are extremely important for each and every plan as it gives an additional incentive to the customer and also offers him more flexibility. Thus it is recommended that the company strive to offer riders on all plans.

54

ANNEXURE

INVESTMENT TRENDS IN INDIAN MARKET Please spare few minutes with following survey Name

----------------

Address --------------------------------------------------------------------------------------------

55

-----------------------------------------------------------------------------------------------------------Contact no-----------------Gender ------------------------------

1) Are you looking for some options to invest your Money? a) Yes

b) No

2) Out of these which are the priority for you at the moment? a) Insurance b) Investment c) Both of the above 3). What are the various brands you are aware of: a) ICICI prudential e) BIRLA SUN LIFE

b) HDFC standard life

c) LIC d) BAJAAJ Allianz

f) Other …………

4). Which of these plans are YOU aware of? a) ULIP Plan b) Traditional Plan c) Educational Plan d) Pension Plan

e) Any other………………..

5). Which type of benefit you will see to invest your money in Insurance 56

Sector? a) Low Premium

b) Short Time period c) Long Time Period

d) Tax saving e) 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";

57

Edition I  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 Websites www.hdfcinsurance.com www.qooqle.com www.bimaquru.com www.insurance.com www.mibknowledge.com

58