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A REPORTON

PERCEPTION OF SALARIED PEOPLE TOWARDS

PENSION PLANS

MASTER OF BUSINESS ADMINISTRATION

Submitted To : Submitted By:

FMS, MAIET Priyanka Khatri

MBA 3rd Sem

Maharishi Arvind Institute of Engineering & Technology

Jaipur


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DECLARATION

I undersigned Priyanka khatri a student of MBA 4 th semester declare that I have

prepared this project report on PERCEPTION OF SALARIED

PEOPLE TOWARDS PENSION PLANS under Mr. MILAP AMBAVI

I also declare that this project report is my own preparation and not copied from

anywhere else.

Student's Name - Priyanka khatri


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ACKNOWLEDGEMENT

To dear God, whose external blessings and divine presence helps us to

fulfill all our goals.

When emotions are profound words sometimes are not sufficient to

express our thanks and gratitude. With this few words, I am trying to express my

extreme gratitude and sincere thanks to all those people who have helped and

provided the very much needed enthusiasm and consistent encouragement

required to convert this idea in my dream into project.

I would also like to express my gratitude to Mr. MILAP AMBAVI (Sales

Development Manager) for his practical guidance and consistent support in

making this project.

The last but not least I gratefully acknowledge all my friends and relatives

for their physical presence and sentimental support.

PRIYANKA KHATRI


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CONTENTSTable no. 1

Sr.No

Particulars Pageno

1 Executive Summary 72 Introduction

(a) Company Details 2(b) Industry Details 17(c) Competitors details 21(d) Regulatory Environment details

3 Organizational Study 34a) Marketing Department study 35b) Operations Department Study 62

c) Financial Department Study 64d) Human Resource Department Study 734 Research 78

a) Research Objectivesb) Research Methodology

1) Research Design2) Unit of Analysis3) Sampling Design4) Data Collection Methods)5) Data Analysis

c) Data Analysis & Findings 80

d) Conclusions 90e) Limitations of the Study 91f) Recommendations 92g) Appendixes:

(1) Questionnaire(2) Forms(3) List of Graphs(4) List of Tables(5) Glossary

5 Bibliography 125


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EXECUTIVE SUMMARY

I have taken training in Jaipur dairy. As per my view it is working superbly.

I have gone deep in the study of the organization; every department of the

company is working very effectively.

Jaipur dairy is having financial background from Nation anal Dairy development

board. The bank gives totally financial support. Every financial transaction carried

out by the effective way so company does not face any problem related with the

finance. Marketing department is now in a progress some advertisement also

released recently before that this type of activity was not carried out.

Operation department and HR department both are working effectively.

Human Resource is taken care most in the organization.


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Definition Of Life Insurance

According to the US Life Office Management Association Incorporation (LOMA),life insurance is defined as follows:

Life insurance provides a sum of money if the person who is insured dies

whilst the policy is in effect.

In other words, surely this is far too brief an explanation for a financial service

that provides a very sophisticated range of savings and investment products, as

well as mere compensation for death.

Other Definitions:

Life insurance is a plan by themselves which large number of people

associate and transfer to the shoulders of all, risks that attach to

individuals.

- John Magee

Life insurance accumulated contributions of all parties participating in the

scheme.

- D.S.Hansell

Life insurance is a contract in which a sum of money is paid to the

assured as consideration of insurers incurring the risk of paying a large

sum upon a given contingency.

- Justice Tindall


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A) COMPANY DETAILS

1. HDFC STANDARD LIFE INSURANCE

2. INCORPORATION OF HDFC STANDARD LIFE INSURANCE COMPANYLIMITED

3. HDFC STANDARD LIFE TO BE FIRST LIFE INSURANCE COMPANY INPRIVATE SECTOR

4. HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

5. COLLOBORATION OF HDFC AND STANDARD LIFE

6. MISSION OF HDFC STANDARD LIFE INSURANCE

7. VALUES OF HDFC STANDARD LIFE INSURANCE

8. HDFC STANDARD LIFE DECLARES RESULTS FOR FY 2004-05

9. NATIONAL LEVEL HIERARCHY

10. BRANCH LEVEL HIERARCHY11. SWOT ANALYSIS

12. FUTURE PLAN


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1) HDFC STANDARD LIFE INSURANCE:

HDFC and Standard Life first came together for a possible joint venture, to

enter the Life Insurance market, in January 1995. It was clear from the outset

that both companies shared similar values and beliefs and a strong relationship

quickly formed. In October 1995 the companies signed a 3-year joint venture

agreement.

Around this time Standard Life purchased a 5% stake in HDFC, further

strengthening the relationship.

The next three years were filled with uncertainty, due to changes in

government and ongoing delays in getting the IRDA (Insurance Regulatory and

Development authority) Act passed in parliament. Despite this both companies

remained firmly committed to the venture.

In October 1998, the joint venture agreement was renewed and additional

resource made available. Around this time Standard Life purchased 2% of

Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also

started to use the services of the HDFC Treasury department to advise them

upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising

and both companies agreed the time was right to move the operation to the next

level. Therefore, in January 2000 an expert team from the UK joined a hand

picked team from HDFC to form the core project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and

a 5% stake in HDFC Bank.

In a further development Standard Life agreed to participate in the Asset

Management Company promoted by HDFC to enter the mutual fund market. The

Mutual Fund was launched on 20th July 2000.


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2) INCORPORATION OF HDFC STANDARD LIFE INSURANCE COMPANYLIMITED:

The company was incorporated on 14th August 2000 under the name of

HDFC Standard Life Insurance Company Limited.

Our ambition from as far back as October 1995 was to be the first private

company to re-enter the life insurance market in India. On the 23rd of October

2000, this ambition was realized when HDFC Standard Life was the only life

company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%,

while Standard Life owns 18.6%. Given Standard Life's existing investment in the

HDFC Group, this is the maximum investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon

shared values and trust. The ambition of HDFC Standard Life is to mirror the

success of the parent companies and be the yardstick by which all other

insurance companies in India are measured.


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3) HDFC STANDARD LIFE TO BE THE FIRST LIFE INSURANCE COMPANY

IN PRIVATE SECTOR

Our Economic Bureau

New Delhi, Oct 23: The Housing Development Finance Corporation has

received a new lease of life. The Insurance Regulatory and Development

Authority (IRDA) has granted registration to HDFC Standard Life Insurance, as

the first private sector life insurance company in India. Reliance Fire and General

Insurance and Royal Sundaram Alliance Insurance have been given certificates

of registration for underwriting non-life insurance business in the country.

The IRDA board, which met here on Monday under the chairmanship of NI

Rangachari, has decided to grant licenses to these three companies under Sec 3

of the Insurance Act 1938.

The IRDA board also considered the applications of ICICI Prudential Life

Insurance Company, Iffco Tokyo Marine Insurance and Max India New York Life

Insurance and decided to grant in-principle registration to these companies.

However, these three will be required to furnish more details about their

respective financial strengths and business plans to the IRDA before getting

registration. Talking to The Financial Express, HDFC chairman Deepak Parekh

said the joint venture would have a total equity of Rs 168 crore. HDFC would

hold 81.4 per cent of the equity and foreign partner Standard Life would

contribute the remaining 18.6 per cent.

The HDFC Standard Life proposes to go in for what is described as a "soft

launch" in December 2000 and officially open the business in January 2001 with

offices in 12 cities.


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Expressing delight at being awarded an operating license, Royal

Sundaram Alliance Insurance chairman GK Raman said: "We will serve the

Indian consumers with a portfolio of insurance products suited to their interests.

Service and customization will be the defining features of our new venture." Mr.

Micky Brigg, managing director of the joint venture company, said: "India is a

high priority on Royal Sun Alliance Group's strategic business map. We will

support the Indian venture with world-class underwriting, risk management and

claim-handling techniques."


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4) HDFC STANDARD LIFE INSURANCE COMPANY

HDFC Standard Life Insurance Company Limited is the First Private

Sector Life Insurance Company to be granted a license by the IRDA. As a part of

the ongoing liberalization of the Insurance Sector, the Insurance Regulatory and

Development Authority (IRDA) has granted the first set of licenses on 23rd Oct

00.

The Company is a joint venture with Standard Life, UK. Founded in 1825,

Standard Life has been at the forefront of the UK insurance industry for 175

years by combining sound financial judgment with integrity and reliability. It is the

Largest Mutual Life company in Europe and has total assets of Rs.5, 50,000

crore.

Standard Life is one of the insurance companies in the world to have

received 'AAA' rating from two of the leading international credit rating agencies,

Moody's and Standard & Poor's. The Independent Brokers called IFAs recently

voted Company of the Decade standard Life in U.K.

Number of branches:

United kingdom 31 branches

Canada 11 branches

Ireland 7 branches

Spain 31 branches

Germany 1 branches

Austria 2 sales office

Hong Kong 3 representative office

China 2 representative office


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5) COLLOBORATION DETAIL

HDFC SLIC is a joint venture between Housing development FinanceCorporation limited, India and standard life assurance Company, UK.

In 1995, HDFC LIMITED and standard life assurance Company entered

into a joint venture relationship. Values were shared, beliefs merged through the

hurdle-race of time, and the two partners stood by each other. And emerged at

the forefront. On 23rd October 2000, HDFC SLIC limited was the first private life

insurance company to be granted the certificate of registration by the IRDA.

HDFC and standard life are companies with tremendous financial strengthas endorsed by credit rating agencies. Both enjoy an excellent reputation in

terms of goodwill and efficient customer service.

Certificate of registration : 23rd October 2000 by IRDA

Discussion started with SL : 1995, January

Joint venture agreement betweenHDFC and SL : 1995, October

Company officially incorporated : 14th August 2000

Share of HDFC in equity : 81.4%

Share of SL in equity : 18.6%

First policy : 2000, DecemberHDFC


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6) MISSION OF HDFC STANDARD LIFE INSURANCE:

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

This does not just mean being the largest or the most productive companyin the market; rather it is a combination of several things like-

Customer service of the highest order

Value for money for customers

Professionalism in carrying out business

Innovative products to cater to different needs of differentcustomers

Use of technology to improve service standards

Increasing market share


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7)VALUES OF HDFC STANDARD LIFE INSURANCE:

SECURITY: Providing long term financial security to our policyholders will be our constant endeavor. We will be do this by offering

life insurance and pension products.

TRUST: We appreciate the trust placed by our policyholders in us.Hence, we will aim to manage their investments very carefully andlive up to this trust.

INNOVATION: Recognizing the different needs of our customers,we will be offering a range of innovative products to meet theseneeds.

Our mission is to be the best new life insurance company in India andthese are the values that will guide us in this.


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8) HDFC STANDARD LIFE DECLARES RESULTS FOR FY 2004-05

Premium Income grows by 132%

HDFC Standard Life Insurance Company Limited declared its annual

results for the financial year ending March 31st, 2005. The company generated

New Business Premium Income of Rs. 486 Crore in 2004-05 registering a year-

on-year growth of 132%. The growth was primarily driven by the success of the

company's initiative on structured sales processes based on customer needs and

their assessments.

Mr. Deepak Satwalekar, Managing Director & CEO, and HDFC Standard

Life attributed this growth to the quality of life insurance solutions offered by the

company. Speaking on the occasion he said, "We are equipped to offer some of

the best solutions to our customers given our wide range of products and the

quality of advice offered by our Financial Consultants and Corporate Consultants.

Training was one of the biggest initiatives we had undertaken last year. Clearly,

this initiative has started giving us good results."

Highlights of Financial Year 2004-05

New Business Premium Income up by 132% to Rs. 486 Crores. Total

Premium Income of Rs.687 Crores as against Rs. 298 Crores in FY 03-04.

Alternate Channels including bancassurance have recorded an impressive

growth of over 400% to contribute 37% to the Effective Premium Income

(EPI).

Group business increased to Rs. 32 Crores on EPI basis.

The average premium doubled to Rs 17,000

Company products and services available in 444 locations across the

country.

Over 220% increase in MDRT numbers over the previous year.


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HDFC Standard Life tracks its New Business Premium on the basis of

Effective Premium Income (EPI). EPI is calculated by giving only a 10% value to

a Single Premium policy and is an internationally accepted indicator of an

insurance company's performance. While the company recorded New Business

Premium Income of Rs. 486 Crores, the EPI figure was lower at Rs. 436 Crores.

The total premium income (including renewal premium) grew by 130% to touch a

figure of Rs. 687 Crores. High levels of persistency have resulted in a higher

level of renewal premiums. High persistency is an important contributor to future

profitability. The cumulative sum assured for all policies issued up to March 31,

2005 crossed Rs. 30,000 Crores.

In the first full year of offering unit linked products, the structured sales

process adopted by the company has paid rich dividends. HDFC Standard Life

offers, both, life insurance policies as well as pension products on a unit linked

platform. Unit linked products accounted for over 50% of the new business

premium. Given the nature of the unit linked product, the company provided

specialized training to a limited number of its Financial Consultants who were

then tested for their understanding of the products and separately licensed.

HDFC Standard Life is unique in stipulating this requirement for its sales force.

The company's national relationships with HDFC Limited, HDFC Bank,

Union Bank of India, Indian Bank and Saraswat Bank have also helped it reach

out to a larger number of customers across the country. The alternate channel

business grew by over 400% to contribute 37% of the premium income. The

company plans to further strengthen these relationships through the introduction

of products specially designed for this channel.

HDFC Standard Life continues to have one of the widest reaches among new

insurance companies. The company doubled the number of offices to 104 across

the country. Through these offices, the company today services customer needs

in over 440 towns. The company also increased its depth in existing markets by


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increasing its Financial Consultant strength from 17,000 as on 31st March 2004

to over 23,000 as on 31st March 2005. There has been a huge jump, of over

220%, in the number of its Financial Consultants who have qualified to become

members of the prestigious Million Dollar Round Table (MDRT). From 38

members as on 31st December 2003, the number has increased to 124

members as on 31st December 2004.

During the year, the company expanded its portfolio of products by

launching plans to cover Superannuating and Leave Encashment needs, thereby

offering a wide range of employee benefit solutions to its corporate clients.

Consequently, HDFC Standard Life's Group Business saw a huge growth over

the previous financial year. The New Business Premium grew to Rs. 49 Crore to

cover over 200,000 lives for a sum assured of over Rs.10,000 Crores.

Given its parentage and its financial expertise, the company is confident of

offering good long-term returns to its policyholders. Speaking on this Mr.

Satwalekar said, "Our investment philosophy and cost consciousness together

will help us in providing good long term growth to policyholders on their

investments with us. This is evident in the performance of our equity based unit

linked funds which have outperformed most indices over the last one year".


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9) NATIONAL LEVEL HIERARCHY OF THE ORGANIZATION

Managing director

General Manager Sales & customer services

_______________________________________

Head of group sales centralRetail sales distribution

Branch manager sales remuneration

Contract licenser

__________________________________

Representative office BDM corporate sales training

Resident manager agent

Team of

FC Sales management

Information


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10) BRANCH HIERARCHY

REGIONAL MANAGER

ASSISTANT SALES MANAGER

BUSINESS DEVELOPMENT MANAGER

SALES DEVELOPMENT MANAGER

FINANCIAL CONSULTANT


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11) SWOT ANALYSIS

SRENGTH

HDFC Standard LIFE insurance Company (HDFC SLIC) is having a good

market reputation

HDFC SLIC believe to do business by the ethical way

Service of the HDFC SLIC is excellent.

Stable and experienced management

HDFC SLICS main strength is depending upon financial consultant.

Asset base of Rs. 27,000 crores which indicates high financial strength

Strength of foreign partner which has total asset of Rs. 5, 81,000 crores

Deposits and bonds are AAA rated by Standard and Poors, FAAA and

MAAA by CRISIL and ICRA.

WEAKNESS

Need identification of the customer took a back seat and this, in turn, is

largely responsible for the high lapsation ratio.

One issue that is being hotly debated presently is whether we should go

for total detarrification or not.

The tendency not to Share information or datas to other insurers in one

company as data plays major role in the insurance business.

HDFC SLIC have been spending very less in advertising. Recently they

have released advertisements but still it is not enough. HDFC SLIC does not have enough branches in rural market. Large part

of rural market is untouched.


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OPPORTUNITY

HDFC SLIC can open branches in the small cities also.

HDFC SLIC can expand more and more branches in the rural sector.

HDFC SLIC has been doing business since last five years still they have

so many opportunities to expand business.

There is a golden opportunity for the HDFC SLIC if it uses its brand name

effectively and advertises it effectively.

Opportunity to capture more market share if it increases its strength of

financial consultant.

THREAT

From the other private players.

Large distribution network of LIC

Decades of experience and brand name of LIC

12 % service tax on investment


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12) FUTURE PLAN

HDFC Standard Life Insurance has been doing business since last five

years because before that any private companies were not allowed to do

business of insurance. Company has been continuously trying to increase

workforce and number of branches. Company has doubled number of branches

it is about 104 in the country and also increased number of financial consultants

it is about 23000 in 2005 compare to 17000 in 2004. Future plan of the company

is still to increase workforce and number of branches in all over India. Today

company provides services in about 440 towns.

For future company has plan

To increase more products in its portfolio

To increase more benefits for its financial consultants and customers

To capture more market


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BOARD OF DIRECTORS

HDFC standard life insurance company limited

Chairman Mr. Deepak Parekh

Directors Mr. I.c. lumsden

Mr. K.m.mistry

Mr. A.m.crombie

Mr. M.r.pai

Mr. A.R. Forbes

Mr. P.d.robertson

Alternate to Mr. I.c. lumsden

Mr. P.d.inman

Alternate to Mr. A.m. crombie

Managing director and CEO Mr. D.m.satwalekar

Authors Mr. S.b.billimoria and company

Chartered accountantsMr. B.k kher & company

Chartered accountants

Bankers HDFC bank ltd.

Registered office Ramon house,

H.t.parekh marg,

169, Back Bay

Reciamation,

Church gate

Mumbai 400 020


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Corporate office The IL&FS financial centre

5th floor, plot no. c-22, g block

Bandra kurla complex,

Bandra (e), Mumbai

400 051.

Tele no. 2653 3666

Fax. 22-2653 3655

E-mail [email protected]

Internet www Hdfcinsurance.com
mailto:[email protected]:[email protected]:[email protected]


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(B) INDUSTRY PROFILE

Insurance constitutes one of the major segments of the financial market.

Insurance services play predominant role in the process of financial intermediary.

Today insurance industry is one of the most growing sectors in India. There is lot

of potential in the Indian Insurance Industry.

There are many issues, which require study. The scope of the study of

insurance industry of India would be very great as there are ongoing

developments in the industry after the opening of the sector.

The major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26% to 49% in the insurance sector. Government may in near future

allow 49% FDI in Insurance. This would lead to more capital inflow by foreign

partners.

Another major issue is the effects on LIC after the entry of private players

in the market. Though market share of LIC has been affected, it has improved in

terms of efficiency.

There are number of other hot topics like penetration of Health Insurance,

Rural marketing of insurance, new distribution channels, new product ranges,

insurance brokers regulation, incentive scheme of development officers of LIC

etc. So it offers lot of scope for studying the insurance industry.

Right now the insurance industry has great opportunities in a country like

India or China which huge population. Also the penetration of insurance in India

is very low in both life and non-life segment so there is lot potential to be tapped.

Before starting the discussion on insurance industry and related issues, we have

to start with the basics of insurance. So first we understand what is insurance?

How the wordinsurance is different from the wordassurance?etc.


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History of Insurance

The roots of insurance might be traced to Babylonian and that is only for

goods.

In the middle of 14th century as evidenced by earliest known insurance

contract, marine insurance was practically universal among maritime

nations of Europe.

By the end of the 18th century, Lloyds coffeehouse, in London, had

progressed into one of the first modern insurance companies.

Insurance developed rapidly with the growth of British commerce in the

17th and 18th century.

After 1840, with the decline of religious prejudice against the practice, life

insurance entered a boom period. In the 1830s the practice of classifying

risk began.

The workmans compensation act of 1897 in Britain requires employers to

insure their employees against industrial accidents.


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Time line in insurance history

Major Landmarks

1818 British introduced the life insurance to India with the

establishment of the Oriental Life Insurance Company in Calcutta.

1850 Non life insurance started with Triton Insurance

Company.

1870 Bombay Mutual Life Assurance Society is the first India

Owned life insurer.

1912 The Indian Life Assurance Company Act enacted to regulate the

Life Insurance Business.

1938 The Insurance Act was enacted. Nationalization took place.

Government took over 245 Indian and foreign insurers and

provident societies.

1972 Non-life business nationalized, General Insurance

Corporation (GIC) came into being.

1993 Malhotra committee was constituted under the

Chairmanship of former RBI chief R. N. Malhotra to draw

a blue print for insurance sector reforms.

1994 Malhotra committee recommended reentry of private

Players.

1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurance.


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Market in India.

2000 IRDA started giving license to private insurers. ICICI

Prudential, HDFC were first private players to sell

Insurance Policies.

2001 Royal Sundaram was the first non-life private player to

Sell an insurance policy.

2002 Bank allowed to sell insurance plans as TPAs enter the

scene, insurersstart setting non-life claims in the cashless mode.


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(C) COMPETITORS DETAIL

At present there are total 14 players in Indian life insurance sector.

There is only one player in the government sector and it is the Life Insurance

Corporation of India. Rest of the players is in the private.

Now lets look at these players and their market share

TABLE NO.2

8 Max New York Life Insurance Company 0.90

9 Aviva 0,79

10 Kotak Mahindra Life Insurance Company 0.51

11 ING Vysya 0.37

12 AMP Sanmar 0.26

13 Met Life Insurance Compnay 0.21

14 Guardian Life Insurance Co Ltd.

No. Name of the Company Market

Share in

%

1 Life Insurance Corporation (PSU) 82.30

2 ICICI Prudential Life Insurance Company 5.63

3 Birla Sunlife Insurance Company 2.56

4 Bajaj Allianz Life Insurance Company 2.03

5 SBI Life Insurance Company 1.80

6 HDFC Standard Life Insurance Company 1.36

7 Tata AIG 1.29


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Now lets depict the market share of these players on diagram

Table -1: insurers as on 31-3-2003

Company Foreign

shareholder

Major local

shareholder

Business of local

shareholder

Allianz Bajaj life Allianz Bajaj Auto Auto manufacturer

Birla sun life Sun life of Canada Birla global

finance

Diversified

conglomerate

Dabur CGU CGNU Dabur Medical &

consumer

productsHDFC standard

life

Standard life HDFC Investment &

finance

ICICI Prudential

life

Prudential(UK) ICICI Investment &

finance

ING Vysya life ING Vysya bank Bank & other

investors

Max New York

Life

New York Life Max India Diversified

conglomerate

MetLife India MetLife Jammu & Kashmir

bank: Pallonji

group

Bank & diversified

conglomerate

OM Kotak

Mahindra

Old Mutual Kotak Mahindra Investment &

finance

SBI Life Cardiff SBI Bank

TATA-AIG Life AIG TATA Diversified cong.

Source: The Hindu survey of the Indian industry, 2003


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Graph No.1 MARKET SHARE OF THE COMPETITORS

Here we can see from the diagram that LIC is the market leader and it

commands the major part of the total life insurance market. Its market share was

approximately 98% before 2000 but after the entry of private players it has

significantly decreased.

Among private players ICICI Prudential stands first. It has the market

share of approximately 5.7% in the total market and it constitutes 40% of themarket share among private players.

Birla Sun life Insurance Company comes third. Bajaj Allianz is also one of

the fastest growing life insurance companies in India.

Rest of the players has market share below 2%.

Market Share

LIC

ICICI Prudential Life Insurance Company

Birla Sunlife Insurance Company

Bajaj Allianz Life Insurance Company

SBI Life Insurance Company

HDFC Standard Life Insurance Company

Tata AIG

Max New York Life Insurance Company

Aviva

Kotak Mahindra Life Insurance Company


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LIFE INSURANCE CORPORATION

The Life Insurance Corporation (LIC) was established about 44 years ago

with a view to provide an insurance cover against various risks in life. A monolith

then, the corporation, enjoyed a monopoly status and became synonymous withlife insurance.

Its main asset is its staff strength of 1.24 lakh employees and 2,048

branches and over six-lakh agency force.

LIC has hundred divisional offices and has established extensive training

facilities at all levels. At the apex, is the Management Development Institute,

seven Zonal Training Centres and 35 Sales Training Centres.

At the industry level, along with the Government and the GIC, it has

helped establish the National Insurance Academy. It presently transacts

individual life insurance businesses, group insurance businesses, social security

schemes and pensions, grants housing loans through its subsidiary; and markets

savings and investment products through its mutual fund. It pays off about Rs

6,000 crore annually to 5.6 million policyholders.

BIRLA SUN LIFE INSURANCE

Birla Sun Life Insurance Company Limited, a joint venture between Sun

Life Assurance Company of Canada and Aditya Birla Management Corporation

Limited, recently completed a successful first year of operations. The company

emerged as a strong private sector insurance player in the newly opened

insurance market in India with its pioneering efforts in the area of Unit Linked

insurance plans. The company sold over 20,000 policies covering more than

33,000 lives in its first year of operations. It achieved an annualised premium

income of Rs.350 million with a total sum assured of Rs.16,000 million.

The company has more than 2,700 insurance advisors who sell company

products across the country. The company offers an array of products in the


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individual and group life segments.

The company established a strong presence in India with 22 branches and

two development centres across 17 cities.

ICICI Prudential Life Insurance Company

ICICI Prudential Life Insurance Company is a joint venture between ICICI

Bank, a premier financial powerhouse and prudential plc, a leading international

financial services group headquartered in the United Kingdom. ICICI Prudential

was amongst the first private sector insurance companies to begin operations in

December 2000 after receiving approval from Insurance Regulatory

Development Authority (IRDA).

ICICI Prudential equity base stands at Rs. 9.25 billion with ICICI Bank and

Prudential plc holding 74% and 26% stake respectively. In the financial year

ended March 31, 2005, the company garnered Rs 1584 crore of new business

premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000policies. The company has a network of about 56,000 advisors; as well as 7

bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI

Prudential has retained its position as the No. 1 private life insurer in the country,

with a wide range of flexible products that meet the needs of the Indian customer

at every step in life.

Bajaj Allianz Life Insurance Company

Bajaj Allianz General Insurance a joint venture non-life company promoted

jointly by Bajaj Auto and the German insurer- Allianz. Indian auto major holds

74% while Allainz holds 26% in the Joint Venture, and has an authorized and


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paid up capital of Rs. 110 crores. Mr. Graham Norris is the CEO of the company.

Bajaj Allianz General Insurance will leverage the customer base and expertise of

Bajaj Auto Ltd and Allianz AG

Incorporated in September 2000, Bajaj Allianz General Insurance received the

certificate of registration from Insurance Regulatory and Development Authority

in May 2001.

SBI Life Insurance Company

SBI Life Insurance Co. Ltd. is a registed Life Insurance Company which has

been licenced by Insurance Regulatory and Development Authority of India. Itbelongs to State Bank of India (SBI) group.

State Bank of India has joined hands with Cardif of France to form a Life

Insurance Company:

SBI - The Largest bank in India

Cardif - A wholly owned subsidiary of BNP PARIBAS (one of the top 10 banks in

the world), is a leading Insurance Company in France operating in 27 countries

all over the world.

Tata AIG

Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance

Company Ltd. (collectively "Tata AIG") are joint venture companies, formed from

the Tata Group and American International Group, Inc. (AIG). Tata AIG combines

the strength and integrity of the Tata Group with AIG's international expertise and

financial strength. The Tata Group holds 74 per cent stake in the two insuranceventures while AIG holds the balance 26 per cent stake

Tata AIG Life Insurance Company Ltd. provides insurance solutions to

individuals and corporates. Tata AIG Life Insurance Company was licensed to


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operate in India on February 12, 2001 and started operations on April 1, 2001.

Tata AIG Life offers a broad array of life insurance coverage to both individuals

and groups, with various types of add-ons and options available on basic life

products to give consumers flexibility and choice

The non-life insurance arm, Tata AIG General Insurance Company, which started

its operations in India on January 22, 2001 offers the complete range of

insurance for automobile, home, personal accident, travel, energy, marine,

property and casualty, as well as several specialized financial lines.

ING Vysya

ING Vysya (a group terminology) has 3 businesses in India, ING Vysya

Life Insurance, ING Vysya Bank and ING Vysya Mutual Fund. ING Vysya Bank is

a premier private sector bank with a 70-year heritage and 1.5 million satisfied

customers. ING Vysya Mutual Fund is a mid sized asset management company

with a retail investor focus.

Kotak Mahindra Life Insurance Company

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between

Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance,

we aim to help customers take important financial decisions at every stage in life

by offering them a wide range of innovative life insurance products, to make them

financially independent. Jeene Ki Azaadi...

AMP Sanmar

A Joint venture combining AMP's life Insurance expertise and Sanmar's

Indian Business Expertise.

The Life Insurance joint venture company between AMP of Australia and

the Sanmar Group of Chennai will create a better future for you and your family,


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by helping you build and manage your wealth.

AMP Sanmar offers a comprehensive range of life insurance Products

that will enhance your savings and provide financial security to people who need

your support. AMP is a leading international financial services group with over

150 years with core business in Insurance, Asset Management and Financial

Planning.

The Sanmar Group is a leading industrial group in South India and one of

the top corporations in the country that helped pioneer industrialization in India

for over six decades. Both AMP and Sanmar are deeply committed to this Life

Insurance joint venture and to create a long-term relationship with the customer

Aviva Life Insurance Company India Pvt. Ltd.

In India, Aviva has a joint venture with Dabur, one of India's oldest, and

largest Group of companies. A professionally managed company, Dabur is the

country's leading producer of traditional healthcare products.

Aviva pioneered the concept of Bancassurance in India, and has leveraged

its global expertise in Bancassurance successfully in India. Currently, Aviva has

Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara

Bank, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank.

Aviva has 34 Branches (including rural branches) in India supporting its

distribution network. Through its Branches and its Bancassurance partner

locations, Aviva products are available in 165 towns and cities across India.

Aviva has also opened four rural branches in Faridkot, Udaipur, Nasik and

Nagpur.


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Max New York Life Insurance

Max New York Life Insurance Company Limited is a joint venture

between Max India Limited, a multi-business corporation focusing on life

insurance, health care and information technology, and New York Life, a Fortune

100 company with over 150 years of experience in the life insurance business.

In 2000, Max New York Life became the first Indo-American insurance

joint venture registered and granted a license to conduct business in India. Since

that time, Max New York Life has acquired a national presence, establishing a

wide distribution network with 35 offices located across 27 cities in India, which

are staffed by over 1,500 employees and over 7,700 highly competent life

insurance Agent Advisors.

In 2003, Max New York Life became the first life insurance company in

India to receive the ISO 9001:9002 certification for its commitment to quality. All

of Max New York Lifes offices are supported by state-of-the-art technology

designed to enhance its goal of providing excellent service to customers. It has

also set up a Centre for Operational Excellence at its head office in Gurgaon,

Haryana, just outside of New Delhi.


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(D) REGULATORY ENVIRONMENT DETAILS

REGULATORY FRAMEWORK (INSURANCE ACT & IRDA)

Insurance Act, 1938

The Insurance Act was enacted in 1938 with a view to control the

insurance market in India. The Insurance Act provides major guidelines to

insurance companies to do insurance business.

The Insurance Act prescribes rules for Assignment or transfer of policies

and nominations, commission and rebates and licensing for agents,

amalgamation or transfer of insurance business, setting up of the Tariff Advisory

Committee, solvency margins, insurance cooperative societies, reinsurance,

registration etc.

The Insurance Act, 1938 allows for only Indian Insurance companies

registered under the Companies Act, to transact insurance business in India

Amendment in 2001

For smooth functioning of the market, certain amendments were made in

the Act. The amendments contain entry of insurance co-operative societies,

provisions relating to payment of commission and fee for insurance

intermediaries, allowing flexibility in the eligibility qualifications for corporate

agents., allowing a more flexible mode of payment of premium through credit

cards, smart cards, internet, etc.


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Insurance Regulatory and Development Authority(IRDA)

The Insurance Regulatory and Development Authority (IRDA) was

constituted as an autonomous body to regulate and develop the business of

insurance and re-insurance in India. The Authority was constituted on April 19,

2000; vide Government of Indias notification No. 277.

The Insurance Regulatory and Development Authority Act, 1999, was

enacted by Parliament in the fiftieth year of the Republic of India to provide for

the establishment of an Authority to protect the interests of holders of insurance

policies, to regulate, promote and ensure orderly growth of the insurance industry

and for matters connected therewith or incidental thereto and further to amend

the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the

General Insurance Business Act, 1972. IRDA was constituted in terms of the

Insurance Regulatory and Development Authority Act, 1999, as the regulator of

the Indian Insurance industry.

IRDA was setup in 1996 but it was formally constituted as a regulator of

the insurance industry in April 2000. The regulator was initially known as theInsurance Regulatory Authority but was subsequently rechristened as Insurance

Regulatory and Development Authority as it was provided that it had broader role

to perform in the Indian insurance market. It has not only to frame and issue

statutory and regulatory stipulations, guidelines, and clarification but it has also to

perform a developmental and promotional role. The developmental and

promotional role of the regulator include facilitating the growth of the market by

attracting large number of players, integrating of the insurance market with the

domestic financial services market, and synchronizing the Indian Insurance

market with that of global insurance market.

Thus, the objectives of IRDA are two fold: policyholder protection and

healthy growth of the insurance market.


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IRDA has till 2001 issued seventeen regulations in the areas of

registration of insurers, their conduct of business, solvency margins, conduct of

reinsurance business, licensing, and code of conduct intermediaries. It follows

the practice of prior consultation and discussion with various interest groups

before issuing regulations and guidelines.

Operations of IRDA

1. IRDA has developed its internal parameters to assess the promoters

credentials.

2. IRDA is the sole authority for awarding licenses. There is no restriction in the

number of licenses it can issue, but licenses for life and non-life business are

to be issued separately. Licenses are issued only on a national basis. The

new players should commence business within 15-18 months of getting the

license.

3. All insurance intermediaries, such as agents and corporate agents, have to

undergo compulsory training prior to their obtaining a license. IRDA also

specified the minimum educational qualifications for these intermediaries.

IRDA conducts examinations and then issues licenses to these agents,. IRDA

believes that well trained and informed intermediaries can service the

consumers better. IRDA insured or renewed. 1, 18,154 agents licenses by the

end of March 2001.

4. IRDA has come out with the Insurance Advertisement and Disclosure

Regulations to ensure that the insurance companies adhere to fair trade

practices and transparent disclosure norms while addressing the

policyholders or the prospects.


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Potentiality in the Insurance Sector.

Scope of Insurance Business in India

The Malhotra Committee estimated that the insurance penetration in India is to

the extent of about 25% of the insurable population. As of 1999-2000, LICs

Insurance Premium Income was approximately Rs. 32,000/- carores. It is

observed that currently LIC has about 10 Crore policies in force, which

contributed a premium of about 6% of the GDS (Gross Domestic Savings) of

household in India.

Based on a report by the Confederation of Indian Industries (CII), it is anticipated

that this figure of 10 carore policies in force is likely to double in the next decade.

By the year 2010, the premium income is expected to account for 18% of the

GDS, amounting to Rs. 5,12,000 carore.

YEAR

Chart 1-: Number Policies In Forces

0

20

40

60

80

100

120140

160

180

1999 2002 2006 2010

Policies inForces (million)


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International Presence of IRDA

IRDA is a member of the International Association of Insurance

Supervisors, (IAIS) headquartered at Basel, Switzerland. The IAIS is anorganization set up by regulators and supervisors of insurance industry. The

aims and objectives of the IAIS are to bring in prudential regulations, to prescribe

guidelines for the insurance supervisors to observe the industry, to promote

international co-operation and understanding among the supervisors, and to

represent before world forums the cause of the insurance industry and the matter

of its functioning and regulation. IRDA is a member of the Emerging Markets and

Technical Committees. Its Chairman is also a member of the Accounting Sub-

Committee and the Insurance Frauds Committee, IRDA is putting in efforts to

bring the Indian insurance market to international standards in areas of financial

viability, competence, technology and prudential regulations.

Table no.3 KEY MARKET INDICATORS

Life and non-life Market in India Rs. 83,645.11 crore

Global insurance market US $2940.67 billion

(as on 31st December, 2003) Nominal growth: 11.71 per cent

Inflation adjusted: 2.0 per cent

Growth in premium underwritten Life: 18.91 per cent

in India and abroad in 2003-04 Non-life : 11.16 per cent

Geographical restriction for None

New playersEquity restriction Foreign promoter can hold up to

26 per cent of the equity

Registration restriction Composite registration not

Available


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Table no.5 NUMBER OF REGISTERED INSURERS IN INDIA

Type of business Public sector Private sector

TotalLife Insurance 01 13 14

General Insurance 06 08 14

Reinsurance 01 0 01

Total 08 21 29


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ORGANIZATION STUDY

A) MARKETINGDEPARTMENT

B) OPERATIONS DEPARTMENT

C) FINANCE DEPARTMENT

D) HUMAN RESOURCE DEPARTMENT


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A) MARKETING DEPARTMENT STUDY

1) Marketing scenario Segmentation

2) Target Market Customers profile

3) Positioning strategy

4) Product details & Product Portfolio

5) Channel of Distribution

6) Pricing Policy

7) Promotional Tools employed, etc.

8) Marketing Strategy etc.


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INRODUCTION

Broadly defined the term Market is whenever and wherever there

is a potential demand for the product is known as Market. The concept of

market brings full circle to the concept of marketing. Marketing means working

with market actualize potential exchange for the purpose of satisfying human

needs and wants. Marketing has been originated from distribution function, due

to the centralized production function.

According to the guru of modern marketing concept, Fillip Kotler,

Marketing is a set of human activity directed at facilitating change. Their element

must be present to define a marketing situation.

Two or more party who are potentially interested in exchange.

Each possessing thing or valued to other.

Each capable of communication and delivery.

Marketing management looks after the marketing system of the

enterprise. So we can say that marketing is the process of discovering andtransferring consumers needs and wants into product and service involving

purchasing power so as to achieve the profit target as other objective set by the

company.

In HDFC Standard Life Insurance Company, generally higher

expenditure on marketing and advertisement is not made. Aggressive marketing

strategy has not been adopted by the company like the some competitors have

been.


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1) MARKET SCENARIOSEGMENTATION

Market segment is the division of the market into different subjects

to customers where any subject may consciously be selected as target market to

be reach with different marketing mix. Basically market segment is process of

desegregating total market into number of sub markets. In other words market

segment means division of total market with view of serving and attaining market.

HDFC Standard Life Insurance Company has divided target market into

various segments. For example they have different segment for children,

youngster, middle-aged people, old age people and so on.

They have market segment basis on four types

Age wise: children, middle age, and old age

Gender wise: Male and Female

Income wise: High income, middle income and lower income

Geographical: East, West, North, South


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this global market. We should keep in mind that Great ideas need landing gear

as well as wings.

We know that everybody is having his/her own life or we can say that each

of us leads a unique life and own needs. HDFC standard life offers a range of

products or we can say different products that invite to choose the one that suits

best. Following are the individual product.


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The letters PIPS can be used to remember the classification. Let us now look

at the features of the various categories of the life insurance plans.

Life insurance products

Protection products investment products

1. Pure life insurance 1. To be sold to investors

2. Low premium with high covers 2. The aim is to get long

term real growth

3. No maturity values 3. The risks covered

are investment risks.

4. Cover for income earning capacity.

5. Riders fall in this category.

Pension products Savings products

1. Provide income 1. Helps a person to save

for an event.

2. Protection of the income. 2. Protection of the

savings.

3. The risk covered is the risk of 3. The risk covered is the

living long. inability to save due to

death.


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The HDFC standard life offer plans in each of the above category.

PRODUCTS FOR INDIVIDUAL:

1. Protection products 1.Term assurance

2 Loan cover term assurance plan.

2. Savings plan 1.Endowment assurance plan

2. Money back plans

3. Childrens plan

(With profits)

4. Unit linked endowment plan.

3. Investment plans 1.Single premium whole of life plan.

4. Pension plans 1.Personal pension plan (With

Profits)

2. Unit linked pension plan.


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GROUP PRODUCTS:

Group term insurance:

A group insurance scheme called group term insurance is offered by HDFC

standard life insurance. The key features of these plans are convenient medical

procedures, flexibility for members to join or leave premium options, flexible

cover, globally valid, and no limit on the size of the group.

GRATUITY PLAN

The HDFC gratuity plan is an insurance policy which offers an employer a new

and flexible way to fund his gratuity liability. The contributions that he decides to

invest in this policy will assist him in meeting his gratuity obligations in an

organized way.

LEAVE ENCASHMENT PLAN

This plan is a flexible insurance policy which helps employers and leave

encashment scheme trustees in funding leave encashment obligations without

the employers profit and loss account being unexpectedly affected.

DEVELOPMENT ASSURANCE PLAN

The development assurance plan is designed for the economically weaker

sections of the society to satisfy their needs. It makes available life cover for a

period of one year top a specific group, and in case of the death of any member

of the group insured during the year of cover, a lump sum amount is paid to that


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members beneficiaries to help meet some of the immediate financial needs

following their loss.

ENDOWMENT ASSURANCEPLAN:

It is a participating (with profits) insurance plan that offers the followingfeatures:

Provides financial support to the family by way of a lump sum payment incase of the unfortunate death of the life assured within the term of thepolicy.

Provides a lump sum payment to the life assured on survival up tomaturity.

The lump sum mentioned is the basic sum assured plus any bonusadditions.

This plan is a with profits saving plan and is well suited for saving money

for your long-term financial goals. This plan also helps provide for the needs of

your family in your absence by paying out a lump sum in the event of your

unfortunate death during the term of the policy.

BENEFITS OF THIS PLAN :

You can add the following optional benefits to customise your policy to suityour needs:

Critical Illness (CI) Benefit provides an amount, equal to the sumassured chosen under this optional benefit, on diagnosis of any one of the6 common critical illnesses (1). The sum assured is payable if you survivefor 30 days after the date of the claim. Once such a claim has been met,

no further Critical Illness Benefit is payable. However, your basic policycontinues even after we pay a claim on this benefit.

Additional Term Benefit (ATB) provides an additional amount equal tothe sum assured chosen under this optional benefit, in case of yourunfortunate death.


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Accidental Death Benefit (ADB) provides an additional amount, equal tothe sum assured chosen under this optional benefit, in case of yourunfortunate death:- due to an accident, and- within 90 days of the accident..

Waiver Of Premium (WOP) Benefit waives the premium for you in caseyou become totally disabled. The waiver is applicable during the period of

total disability.

ELIGIBILITY:

Table no.5

Basic PolicyBasic Policy with optional benefits

CI ATB ADB WOP

Min. age at entry 12 18 18 18 18

Max. Age at entry 60 55 60 55 50Max. Age at expiry 75 70 75 65 60

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

UNIT LINKED ENDOWMENT ASSURANCE:

The unit linked endowment plan is an insurance policy that is designed to

pay a lump sum on maturity or on earlier death. The Unit Linked EndowmentPlan also gives the option of additional protection against the six common critical

illnesses, as well as additional protection if death is as the result of an accident.

Your premiums are invested in units of the investment fund of your choice,

based on the prevailing unit price. On maturity you receive the value of your

units. On death (or critical illness, if chosen) you receive the greater of the value

of your units and your selected basic sum assured.


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INVESTMENT OPTION :

The policy is fully unitised with a range of funds to match your needs and

approach to risk. (By risk we mean the likely volatility in the value of units in the

fund.)

Each investment fund is composed of units. All the units in a fund are

identical. You can choose from the following funds:

Liquid fund :

The Liquid fund invests 100% in bank deposits and high quality short-term

money market instruments. The fund is designed to be cash secure and has a

very low level of risk; however unit prices may occasionally go down due to the

use of short-term money market instruments.

Secure Managed :

The Secure Managed fund invests 100% in Government Securities and

Bonds issued by companies or other bodies with a high credit standing, however

a small amount of working capital may be invested in cash to facilitate the day-to-

day running of the fund. This fund has a low level of risk but unit prices may still

go up or down.

Defensive Managed:

15% to 30% of the Defensive Managed fund will be invested in high

quality Indian equities. The remainder will be invested in Government Securities

and Bonds issued by companies or other bodies with a high credit standing. In

addition, a small amount of working capital may be invested in cash to facilitate

the day-to-day running of the fund. The fund has a moderate level of risk with the

opportunity to earn higher returns in the long term from some equity investment.

Unit prices may go up or down.

Balanced Managed:

30% to 60% of the Balanced Managed fund will be invested in high quality

Indian equities. The remainder will be invested in Government Securities and


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Bonds issued by companies or other bodies with a high credit standing. In

addition a small amount of working capital may be invested in cash to facilitate

the day-to-day running of the fund. The fund has a higher level of risk with the

opportunity to earn higher returns in the long term from the higher proportion it

invests in equities. Unit prices may go up or down.

Growth fund :

The Growth fund invests 100% in high quality Indian equities. In addition a

small amount of working capital may be invested in cash to facilitate the day-to-

day running of the fund. The fund has a higher level of risk with the opportunity to

earn higher returns in the long term from the investment in equities. Unit prices

may go up or down.

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

of future performance.

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

None of the funds participate in the profits of HDFC Standard Life

Insurance Company Limited or any of its policyholder funds.

BENEFITS:

There are 4 different options available to choose from:Life Option

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

On survival to the end of the policy term the value of the unit linked fundwill be paid to you.

Life and Health Option

On death or earlier diagnosis of any one of six common critical illnesses

within the policy term, the greater of the Sum Assured and the value of the unit-

linked fund will be paid to your nominee.

On survival to the end of the policy term the value of the unit-linked fund

will be paid to you.


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The illnesses covered under this option are cancer, coronary artery by

pass graft surgery, heart attack, kidney failure, major organ transplant (as

recipient) and stroke.

Extra Life Option

This option pays the same benefits as the Life Option but, should death

occur within the policy term as the result of an accident, an extra benefit equal to

the Sum Assured will be paid.

Extra Life and Health Option

This option pays the same benefits as the Life and Health Option but,

should death occur within the policy term as the result of an accident, an extra

benefit equal to the Sum Assured will be paid.


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ELIGIBILITY:

Table no.6

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

(years)

MinimumTerm

MaximumTerm

MinimumAge atEntry

MaximumAge atEntry

MaximumAge atExpiry

Life 10 30 18 60 75

Life andHealth

10 30 18 55 65

Extra Life 10 30 18 55 70

Extra Lifeand Health

10 30 18 55 65

:

The unit price each day will include a fund management charge. This

charge is 0.80% of the fund value per annum taken on a daily basis.


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CHILDREN'S PLAN:

Childrens Plan is designed to provide a lump sum to the child at maturity.

It also provides financial security to the child in the future, even in case of the

insured parents unfortunate death during the policy term. Childrens Planreceives simple reversionary bonuses, which are usually added annually. This is

a flexible plan with three options for you to choose from, depending on your

requirements. The details of these options are explained in the next section.

ELIGIBILITY:

Table no. 7

The eligibility ages for the life assured under the plan are as follows:Minimum Age At Entry 18 yearsMaximum Age At Entry 60 yearsMaximum Age At Maturity 75 years

Minimum Term: 10 years Maximum Term: 25 years

PAYMENT OPTIONS :

You have the choice of paying the premium either in yearly, half-yearly or

quarterly modes, depending on your convenience.


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MONEY BACK PLAN :

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

Payment of cash lump sums, each of which is a proportion of the basic sum

assured, at 5-year intervals during the term of the policy. (Please refer to the

table given below.)

On survival up to maturity, a payment equal to the basic sum assured plus

any bonus additions less the cash lump sums paid earlier is provided.

In case of the unfortunate death of the life assured within the term of the

policy, the basic sum assured plus any bonus additions is provided. This is overand above the earlier payouts.

This plan helps you plan for future anticipated expenses by paying

periodic cash lump sums to you at regular intervals. This plan also helps provide

for the needs of your family in your absence by paying them the basic sum

assured plus any bonus additions in the event of your unfortunate death during

the term of the policy.

BENEFITS:

You can add the following optional benefits to customise your policy to suit your

needs:

Critical Illness (CI) Benefit provides an amount, equal to the sum assured

chosen under this optional benefit, on diagnosis of any one of the 6 common

critical illnesses (1). The sum assured is payable if you survive for 30 days after

the date of the claim. Once such a claim has been met, no further Critical Illness

Benefit is payable. However, your basic policy continues even after we pay a

claim on this benefit.


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Additional Term Benefit (ATB) provides an additional amount, equal to the sum

assured chosen under this optional benefit, in case of your unfortunate death.

Accidental Death Benefit (ADB) provides an additional amount equal to the

basic sum assured in case you die:

- Due to an accident, and

- Within 90 days of the accident.

Waiver Of Premium (WOP) Benefit waives the premium for you in case you

become totally disabled. The waiver is applicable during the period of total

disability.

All optional benefits must be selected at the outset of your plan.

ELIGIBILITY

Table no.8

This plan can be taken on a single life basis or a joint life (first claim)

basis. The eligibility ages are as follows:

Basic Policy Basic Policy for optional benefits

CI ATB ADB WOP

Min. age at entry 12 18 18 18 18

Max. Age at entry 60 55 60 55 50

Max. Age at expiry 75 70 75 65 60

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


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SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN :

Single Premium Whole Of Life Insurance Plan is well suited to meet your

long-term investment needs. This participating (with profits) plan offers you the

following

benefits:

A sound investment: Your money will be invested in our With Profits fund. The

fund aims to provide secure and stable long-term growth. Normally, we will

declare a compound reversionary bonus for your policy every year and add it to

your policy on its anniversary. In addition, on death, surrender or on the

guaranteed dates, a terminal bonus might be payable. You pay a single premium

and the policywill pay you a lump sum.

Flexibility of term: Even after choosing your policy, you can decide on the policy

term. For 4 weeks after any one of the 10th, 15th, 20th and subsequent five-year

anniversaries, you can choose to receive the sum assured plus any attaching

bonuses, in full. Once the money has been received, your policy will cease.

Surrender value: You can terminate the policy any time, after it has been in

force for at least 6 months, and receive a surrender value.

In case of unfortunate death: Your nominee gets the sum assured secured by

your premium, plus any attaching bonuses.

No medical requirements : We do not require you to undergo any medical test

for this plan.

ELIGIBILITY:

Table no.9

The eligibility ages are as follows:

Minimum age at entry : 18 yearsMaximum age at entry : 70 years


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TERM ASSURANCEPLAN :

Under this plan, a sum assured is payable in case of death of the life

assured during the term of the contract. One can choose the 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 profits) plan is a pure risk cover plan,

no benefits are payable on survival to the end of the term of the policy.

If you have a family that you care for, you should consider what would

happen in case of your unfortunate death. The emotional void cannot be filled,

but financial insecurity can be avoided. By taking this affordable life insurance

plan, you can provide for the well being of your family in case of your unfortunate

death. This plan comes to you at a minimal cost and is well suited for the value-

conscious customer.

BENEFITS:

You can add the following optional benefit to customise your policy to suit your

needs:

1. Critical Illness (CI) Benefit provides an amount, equal to the sum assured

chosen under this optional benefit, on diagnosis of any one of the 6 common

critical illnesses (1). The sum assured is payable if you survive for 30 days after

the date of the claim. Once such a claim has been met, no further Critical Illness

Benefit is payable. However, your basic policy continues even after we pay a

claim on this benefit.

2. Accidental Death Benefit (ADB) provides an additional amount, equal to

the sum assured chosen under this optional benefit, in case of your unfortunatedeath:

- due to an accident, and

- Within 90 days of the accident.

3. Accelerated Sum Assured (ASA) Benefit provides, on diagnosis of any one


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Loan Cover Term Assurance Plan :

This plan provides a lump sum on the unfortunate death of the life assured

during the term of the plan. The lump sum will be a decreasing percentage of the

initial sum assured. As the outstanding loan decreases as per the loan schedule,

the cover under the policy decreases as per the policy schedule. Since this is a

non-participating (without profits) pure risk cover plan, no benefits are payable on

survival to the end of the term of the policy.

If you are taking a loan to buy a house for your family, this plan can help

you ensure that life's uncertainties do not affect their shelter. It is an affordable

plan that has been designed to help your family repay the outstanding loan in

case of your unfortunate death.

ELIGIBILITY: Table no.11

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

Basic PolicyPolicy with optionalbenefit

Minimum age at entry 18 18Maximum age at entry 55* 55

Maximum age at expiry 65 65


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Personal Pension Plan:

Before you enter into any financial contract, it is important that you

understand what the product is, how it works, the risks involved and what a

decisionto buy could mean for you. We recommend that you read this document before

you purchase a policy from HDFC Standard Life Insurance Company.

Purpose:The policy is basically a savings contract, which is designed to provide

an income for life from retirement, with an option to take the lump sum elsewhere

to buy the annuity, provided it is permitted by the prevailing regulations.

Your commitment:You agree to pay a single premium or level premiums with

installments due every quarter, half-year or year throughout the deferment period

of the policy, after which you will start receiving your pension.

ELIGIBILITY:

Table no.12

The age and term limits for taking out a Personal Pension Plan are:

MinimumTerm3

MaximumTerm

MinimumAge atEntry

MaximumAge atEntry

MinimumAge atRetirement

MaximumAge atRetirement

RP1 SP2 RP SP RP SP60 50 7010 5 40 15 18 35


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UNIT LINKED PENSION PLAN :

The unit linked pension plan is basically an insurance contract, which is

designed to provide a retirement income for life.

Your premiums are invested in units of the investment fund of your choice,

based on the prevailing unit price. On vesting the value of your units will be used

to buy your retirement benefits.

On earlier death, the beneficiary receives the value of your units plus a

cash lump sum of Rs. 1,000.

INVESTMENT OPTIONS :

The policy is fully unitised with a range of funds to match your needs and

approach to risk. (By risk we mean the likely volatility in the value of units in the

fund.) Each investment fund is composed of units. All the units in a fund are

identical. You can choose from the following funds:

Liquid fund :

The Liquid fund invests 100% in bank deposits and high quality short-term

money market instruments. The fund is designed to be cash secure and has a

very low level of risk; however unit prices may occasionally go down due to the

use of short-term money market instruments.

Secure Managed:

The Secure Managed fund invests 100% in Government Securities and

Bonds issued by companies or other bodies with a high credit standing, however

a small amount of working capital may be invested in cash to facilitate the day-to-

day running of the fund. This fund has a low level of risk but unit prices may still

go up or down.

Defensive Managed :

15% to 30% of the Defensive Managed fund will be invested in high

quality Indian equities. The remainder will be invested in Government Securities

and Bonds issued by companies or other bodies with a high credit standing. In

addition, a small amount of working capital may be invested in cash to facilitate


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the day-to-day running of the fund. The fund has a moderate level of risk with the

opportunity to earn higher returns in the long term from some equity investment.

Unit prices may go up or down.

Balanced Managed :

30% to 60% of the Balanced Managed fund will be invested in high quality

Indian equities. The remainder will be invested in Government Securities and

Bonds issued by companies or other bodies with a high credit standing. In

addition a small amount of working capital may be invested in cash to facilitate

the day-to-day running of the fund. The fund has a higher level of risk with the

opportunity to earn higher returns in the long term from the higher proportion it

invests in equities. Unit prices may go up or down.

Growth Fund:

The Growth fund invests 100% in high quality Indian equities. In addition a

small amount of working capital may be invested in cash to facilitate the day-to-

day running of the fund. The fund has a higher level of risk with the opportunity to

earn higher returns in the long term from the investment in equities. Unit prices

may go up or down.

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

of future performance.

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

None of the funds participate in the profits of HDFC Standard Life

Insurance Company Limited or any of its policyholder funds.

BENEFITS:

At the chosen vesting date, the unitised fund value will be available to

secure pension benefits. Subject to the prevailing regulations, part of this value

can be taken in the form of a cash lump sum and the rest converted to an annuity

at the rate then offered by HDFC Standard Life. Alternatively, if it is permitted by

the prevailing regulations, the proceeds net of any cash lump sum can be used to


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buy an annuity with any other insurance company who will accept such business.

The current maximum limit for any cash lump sum is one-third of the unitised

fund value on vesting.

On death the unitised fund value will be paid along with a cash lump sum

of Rs. 1,000. The beneficiary may use the proceeds to purchase pension benefits

for the surviving spouse.

ELIGIBILITY

Table no.13

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

MinimumTerm

MaximumTerm

MinimumAge atEntry

MaximumAge atEntry

MinimumAge atVesting

MaximumAge atVesting

RegularPremiumVersion

10 40 18 60 50 70

SinglePremiumVersion 5 40 18 65 50 70

The unit price each day will include a fund management charge. This

charge is 0.80% of the fund value per annum taken on a daily basis.


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5) CHANNEL OF DISTRIBUTION

To reach the target market you should have standardized channel of

distribution. First we have to understand distribution. Distribution means to

distribute companys products in the target market. Consumers can define

distribution channel.

In other words distribution channel consists of set of interdependent

organization involved in the process of sustaining a product or service from the

point of production to the user at the point of consumption.

Let us talk about the HDFC Standard Life Insurance Company, the

distribution channel is mainly depend and related with the financial consultants

they are the keys to get more business. Financial Consultants mainly come

under the ADM and BDM.


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6) PRICING POLICY

Generally this is not FMCG product where in short period price

changes take place. These products are called financial products, which does

not fluctuate in short period. HDFC Standard Life insurance has different prices

for different products. Company has different products like pension plan, unit

linked endowment plan, money back plan, term assurance plan, childrens plan

and so on all these products have different prices.

Every product has different benefits; rates and eligibility criteria

prices are decided on that basis.


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installment, contents etc. for promoting their sales. In very short period they

have done very good business and occupied good place in market.

8) MARKETING STRATEGY

Marketing strategy of the company is to penetrate more and more market

because company has been working since last five years before that private

players were not allowed to do the business of insurance. Today in this market

so many private players are existed. It is reality that the Life Insurance Compay

covers larger part of market but it is also reality that still large part of population

of India does not have insurance policy. So company is trying to penetrate more

market.

Among all private players HDFC Standard life Insurance working

efficiently and tries to reach on top place. HDFC Standard Life Insurance also

has financial consultants in the rural market.


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B) 0PERATIONS DEPARTMENT STUDY:

Operation department plays vital role in the successes of any

organization. To provide quality of services operation department is necessary.

Every operation in this department is carried out very smoothly. The main

objective of the operation department is to interface between clients and financial

consultant of the company, the branches and underwriters and so on. Operation

department manages all this things very smoothly.


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LOCATION OF THE COMPANY

Name : HDFC standard life insurance co. ltd.Address : Registered office

Roman house, H.T. Parekh Marg, 169, BackbayReclamation, Churchgate, MUMBAI 400 020.

Corporate office

The IL & FC Financial Center, 5th floor, Plot No.- 22,G Block, Bandra Kurla Complex, BANDRA (E),MUMBAI 400 051.

Tel. No. - 6533666

Fax - 22-6533655

E-mail - [email protected]

Internet - www.hdfcinsurance.com

ESTD: : 14th August 2000

Form of Org. : Public Limited Company

Auditors : S. B. Billimoria & Company (C.A.)

Bankers : HDFC Bank

Board of Directors: Chairman - Mr. Deepak S. Parekh

MD & CEO - Mr. D. M. SatwalkarMr. A. R. Forbes

Mr. I. C. Lumsden

Mr. K. M. Mistry

Mr. M. R. Pai

Mr. A. M. Crombie

Promoters - HDFC & Standard Life Insurance Co
mailto:[email protected]://www.hdfcinsurance.com/http://www.hdfcinsurance.com/mailto:[email protected]


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C] FINANCE DEPARTMENT STUDY:

INTRODUCTION

1) ACQUISITION OF FUNDS

2) UTILIZATION OF FUNDS

3) FINANCIAL PERFORMANCE

4) INTEGRATED FINANCIAL SERVISES

5) FINANCIAL RATIO ANALYSIS


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INTRODUCTION

Finance is lifeblood of any institute or business. Finance is the

wheel to which one can generate and direct its business of the achievement of

the organization goals. Proper management of finance department forms the

base to increase the profitability. In business, cost to create and maintain a

product is in the hand of businessman. In competitive era sales and profit are not

in the hands of entrepreneur.

In every big organization responsibility is on the head of finance

manager. He has to take so many decisions related to the finance. The finance

manager has to the great care to deal with financial matter.


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1) ACQUISITION OF FUND

SHARE CAPITAL:

Table no. 15

Current Year Previous Year

(Rs. 000) (Rs. 000)

1. Authorized Capital

Equity shares of Rs 10 each 3,000,000 2,200,000

2. Issued Capital

Equity shares of Rs 10 each 2,555,000 2,180,0003. Subscribed Capital


4. Called-up Capital


In HDFC SLIC, it has subscribed only Equity share capital. It has

not issued any type of bonds or debentures. It has also not borrowed any amount

from any private financial institute. The banker of the firm is HDFC bank.


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33)) FFIINNAANNCCIIAALL PPEERRFFOORRMMAANNCCEE

PROFITANDLOSSACCOUNTOFTHERGANIZATION.Table no. 15

Profit and Loss Account for the year ended 31st March 2004

Shareholders Account (Non-technical Account)

Particulars Schedule Current Year Previous Year

(Rs. 000) (Rs. 000)

Amounts transferred from the Policyholders Account

(Technical Account)

Income from Investments

(a) Interest, Dividends & Rent - Gross 92,873 92368

(b) Profit on sale / redemption of investments 70,446 31,525

(c) (Loss on sale / redemption of investments) (5,092)

(d) Transfer / gain on revaluation

/ change in fair value

(e) Amortization (charge)/credit (8,304) (7,355)

Other Income 3,439 2,850

TOTAL 153,362 119,388

Expenses other than those directly related

to the insurance business 101,284 65,873

Bad debts written off

Provisions (other than taxation)

(a) For diminution in the value of Investments (net)

(b) Provision for doubtful debts

(c) Others

(d) Contribution to the Policyholders Fund 286,428 535,542


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TOTAL 387,712 601,415

Profit / (Loss) before tax (234,350) (482,027)

Provision for Taxation

Profit / (Loss) after tax (234,350) (482,027)

APPROPRIATIONS

(a) Balance at the beginning of the Period. (746,483) (264,456)

(b) Interim dividends paid during the Period

(c) Proposed final dividend

(d) Dividend distribution on tax

(e) Transfer to reserves /other accounts

Profit / (Loss) carried forward to the Balance Sheet (980,833) (746,483)


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BALANCESHEET OFTHEORGANIZATION


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4)INTEGRATEDFINANCIALSERVICES

Particulars Current Year(Rs.000)

Previous year(Rs.000)

SOURCES OF FUNDS

SHAREHOLDERS FUND:

Share Capital 2,533,078 2,167,257Reserves & Surplus - -Credit/Debit Fair Value Change A/C 2,862 (7,837)SUB-TOTAL 2,546,940 2,159,420

BORROWINGS - -

Policy Holders Fund

Credit (Debit) Fair valueChange A/C 34,377 -Policy Liabilities 3,336,424 1,437,497Insurance Reserves - -Provision for Linked Liabilities 1,65,527 -SUB TOTAL 3,536,328 1,437,497Funds For FutureAppropriationSurplus, Allocated to Share Holders - 2,489TOTAL 6,083,268 3,599,406APPLICATION OF FUNDS

INVESTMENTSShare Holders 6,39,526 8,80,002Policy Holders 3,399,977 1,310,374Assets held to Cover Linked Liabilities 1,65,527 -Loan 5,840 6,464FIXEDASSETS 5,02,783 4,23,352CURRENT ASSETSCash & Bank Balance 5,82,644 3,72,618Advances & Other Assets 2,34,368 1,63,931Sub-total (A) 8,17,012 5,36,549

CURRENT LIABILITIES 4,09,390 2,94,628PROVISION 18,340 9,190Sub-total (B) 4,27,730 3,03,818Net Current Assets(C) = (A B) 3,89,282 2,32,731Miscellaneous Expenditure - -DEBIT BALANCE IN P & L A/C(Share Holders A/C) 9,80,833 7,46,483TOTAL 60,83,268 35

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