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 money.

5
 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 5-

year intervals within the policy term (see the table given below) – an
ideal way to secure your long- term as well as short-term financial goals
A lump sum payment on survival up to maturity date
Valuable protection to your family by way of lump sum payment in case
of your unfortunate death within the policy term. This is over and above
any earlier 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 Death

Survival Benefit
Term Benefit
Within
5 Yrs. 10 Yrs. 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs. Policy
Term
60% + 100%
10 40% Attaching - - - - Sum
Bonuses Assured
40% + +
15 30% 30% Attaching - - - attaching
Bonuses bonuses
(Over
25% +
and
20 25% 25% 25% Attaching - -
above
Bonuses
the
25 20% 20% 20% 20% 20% + - earlier
Attaching payouts).
Bonuses

25
 25% +
30 15% 15% 15% 15% 15% 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 industry is today witness to a massive

transformation from its earlier days. From 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 companies have realized that strategic deployment of
technology for integrating office operations, and gaining 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:

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 a) Questionnaire.
b) Personal interview.

Secondary data:

a) Websites.
b) Brochures.
c) Articles.

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 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.

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 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.

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 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

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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
BAJAAJ
25%
Allianz
6%

LIC HDFC
40% Standard
Life
20%

Q4.
It was also seen that still after 5 years of ULIP plans, a higher 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.

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 Educational
Plan
12%

ULIP
Traditional 15%
Plan
46%

Pension
Plan
27%

Q5.
It seem that the main criteria for selection of a plan was low premium, 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 Short Time
6% 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 newspaper , magazines, which

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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 Friends
8% 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 2000- 6000
15% 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%.

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 Self-
Employed
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.

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 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.

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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.

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 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 b) HDFC standard life c) LIC d) BAJAAJ Allianz
e) BIRLA SUN LIFE 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

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