PROJECT REPORT A COMPARISON OF MARKETING STRATEGIES OF HDFC LIFE INSURANCE COMPANY AND LIFE INSURANCE CORPORATION ( LIC) Summer

Training Report submitted towards partial fulfillment of two years MBA Degree program of Rajasthan Technical University, Kota

2011-13 Advent Institute of Management Studies Knowledge Park, Fernio ka Guda, Badi,Udaipur

Submitted to: Dr. Vineet Jain (Assistant professor)

Submitted by: Digvijay Singh Chouhan MBA PART II

Contents

Company Certification Acknowledgement Preface Executive Summary 1. 2. Introduction of the Title Objective of the study Introduction of Industry and Company Industry Profile Company Profile Introduction of Company Companys Product ( Plan ) 3. Conceptual Framework & Research methodology Marketing Research Objective

Research Objective Scope of the Conclusions and Findings study

4.

Conclusions and Findings

5. 6.

Appendixes Bibliography

ACKNOWLEDGMENT It gives me immense pleasure and a sense of honor to express my feeling of gratitude to all those who have helped me in the successful competition of the present project. First and foremost I express my deep sense of thankfulness to Mr. Sanjay Singh, Regional Manager and Mr. Anupam Agarwal (Senior Territory Manager) of HDFC Life Insurance Co. Ltd. Udaipur. I am also thankful to Mr. Ravindra Kumavat, Ms Ranjana Kothari ( Sales Manager) in HDFC for his valuable co-operation and guidance in undertaking this work. My warm acknowledgment is also due to all staff members of HDFC Udaipur, who took keen interest in extending necessary cooperation at various stages during the study. I cant refrain my humble thanks to Dr. R.K.Balyan (Director, Advent Institute of Management Studies, Udaipur) and Dr.Dipin Mathur(Coordinator),MBA and to the Management of AIMS who gave me to continuous encouragement and instructions. I express my humble thanks to Dr.Vineet Jain Sir for their support. In end, I would like to thank to each of them who directly or indirectly helped in completion of the project. Digvijay Singh Chouhan MBA PART II

PREFACE

Success comes with knowledge & knowledge is comes with training. To excel in a any field practical training is an integral part to imply theoretical studies to a practical approach it makes the individual to the actual practical conditions. Which could have been impossible to be tough in a classroom ? A trainee learnt dealing with the worker and management- working environment along with operational skills. Insurance ranks as one of the most important industry in any part of the world. It is also an industry where competitors drive excellence. This is why the entry in India of foreign insurers, as minority partners in domestic joint ventures, has bought the hope that market will reach a new level. I have tried to do an analytical study on advisors perception towards life insurance market in Udaipur. In this study I tried to find out those facts, which do matter for a advisor for doing this job in insurance sector.

EXECUTIVE SUMMARY

LIFE INSURANCE IN INDIA

1. 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 per cent annually. Together with banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that 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 Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. 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 economy was the main idea behind his reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC.since the liberalization of the

industry the insurance industry has never looked back and today stand as the 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 has increased the scope of the industry in the longer run.

2. A BRIEF HISTORY The origin of insurance is very old .The time when we were not even born; man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of 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 been 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 breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market.

3. INSURANCE SECTOR REFORMS In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor was formed to evaluate the Indian insurance industry and give its recommendations. The committee came up with the following major provisions Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry Foreign companies may be allowed to enter the industry in collaboration with the domestic companies Only one State Level Life Insurance Company should be allowed to operate in each state It was after this committee came into affect the regulatory body for insurance sector was formed with the name of IRDA IRDA: The IRDA since its incorporation as a statutory body has been framing regulations and registering the private sector insurance companies. IRDA being an independent statutory body has put a framework of globally compatible regulations.

4. IMPACT OF LIBERALIZATION The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent

of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 81 %( 2004-05).The following companies has the rest of the market share of the insurance industry. 5. CURRENT SCENARIO OF THE INDUSTRY INSURANCE MARKET IN INDIA 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 position of very high potential and competitiveness in the market. Innovative products and aggressive distribution have become the say of the 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 customer is going to make his choice will determine the future of the industry. CUSTOMER SERVICE Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry. Computerisation 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 through 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.

DISTRIBUTION CHANNELS Till date insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of

other sources is imperative. It therefore makes sense to look at well balanced, alternative channels of distribution. LIC has already well established and have 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 that are available in the market are: Direct selling Corporate agents Group selling Brokers and cooperative societies Bancassurance RURAL MARKETING Rural India seems to have an appetite for mobile phones, computers, and cars and to add to it we have insurance. In India with the private players having entered into the insurance industry, the expected explosion in job opportunities may not actually happen but for them the catchments area is the opportunities in the rural India. In India the insurance business can be said to be "a marathon, not a sprint". This is because of the nature of the business being long term. With merely two years of the industry being opened, not surprisingly, the new comers are making losses. The public sector companies, notably the LIC, have gained in strength, thanks to the

deepening of the market consequent to the awareness created by the new companies. However this does not deterred the private sector, which knows know that the race is a marathon, not a sprint. However it seems that they if not anything, are only increasing their spending, though only out of the capital. Today, there are 18 insurance companies in India excluding the PSUs, with 12 in the life insurance business and the rest in non-life .As insurance companies go more and more rural in search of business, there will be opportunities in the rural sector. Those who understand rural India better will be in demand. INFORMATION TECHNOLOGY AND INSURANCE In the insurance industry today, there is a clear trend away from selling a broad range of products to a large volume of customers in a one size-fits-all manners. Instead of focusing on their different products lines as silos (i.e., life, property and casualty etc) insurers are looking for ways to offer highly targeted insurance products that are tailored to the individuals customers with the highest propensity to buy them. There is a evolutionary change in the technology that has revolutionized the entire insurance sector. Insurance industry is a data-rich industry, and thus, there is dire need to use the data for trend analysis and personalization. With increased competition among insurers, service has become a key issue. Moreover, customers are getting increasingly sophisticated and tech-savvy. People today dont want to accept the current value propositions, they want personalized

interactions and they look for more and more features and add ones and better service. The insurance companies today must meet the need of the hour for more and more personalized approach for handling the customer. Today managing the customer intelligently is very critical for the insurer especially in the very competitive environment. . However, to personalize interactions, insurers are required to capture customer information in an integrated system. The insurance sector remains a very competitive market and those companies that are able to best utilize their data and provide their customer with the most personalized options will have the distinct competitive advantage. The insurers that come up to the top will be those who leverage the appropriate technology solutions effectively in order to foster customer loyalty, attract new customers and improve operational efficiency by providing common information across their lines of business. MERGERS AND ACQUISITIONS This is an era of mergers and acquisitions. Private companies including MNCs are amalgamating the world over to get more competitive edge. The insurers are doing enough to raise the level of risk awareness or they merely content to compete in the markets organized and established. However sooner or later the private sector players will have to put in place strategies aimed not at winning the existing accounts of

the public players but at diversifying markets penetration as a whole. The private players in the future would have to turn their attention to working in the unorganized and under served markets. IMPACT OF BUDGET IN INSURANCE The 2005-06 Budget has dampened the spirit of insurance companies. Hardly any changes have been made in the general insurance sector. The change in the tax structure may have some impact on the life insurers. With the removal of the Section 88 relief there is not much for the insurance players to cheer for Winners dont do different things. They do things Differently

CHAPTER 1
Introduction & Objective Of Title

INTORDUCTION & OBJECTIVE OF TITLE

Introduction of Title : By entering of private insurers with an altogether new agency force, all ready to hawk freshly designed insurance policies. And the market scene - a government owned established insurance entity -the Life Insurance Corporation (LIC) with a field force of over 6,00,000 agents and more than 80 products to choose from. Its almost four year since private insurers began their operations. In a scenario where LIC called the shots all these years, how far have private insurers been able to make inroads after almost a year since the opening of the sector. And are their sales force (called life advisors or insurance consultants) successful in pushing their products inspite of the security factor -the government guarantee label attached to LIC products - Insuremagic makes an attempt to find out. In this changing scenario Initial apprehensions are bound to be. But slowly times are changing. People are open to tailor-made products Most of the individuals approached by private insurers were existing LIC customers. But ask them what made them buy insurance and the reply is for tax purposes. The need for insuring ones life after evaluating the growing requirements over a period of time was never felt.

Blame it on the lack of information available then or the agents who were more keen on higher commissions than educating prospects. Which is why not much thought was given to choosing the right risk cover. Today it is observed that either most of the prospects we have approached are under insured or the risk covers bought by them do not suit their needs . While it is difficult to match the number of products LIC has, private insurers have come up with products that allow mix n match and combinations that can be worked out to suit individual requirements. LIC products allowed little flexibility. Competition, no doubt is getting rife. Private insurers are concentrating on need based selling. Instead of pushing policies down the throat private insurers educate the customer and offer guidance on how much insurance the individual needs, an approach that is slowly paying off, The customer service - an hitherto neglected area by LIC and private insurers realized it is an area they could score over the behemoth easily. LIC with the entry of private insurers flagged off a mass computerization drive that would connect each of its branches across the country to facilitate among others premium payments online.

Considering the reputation LIC has built over a period of time attached with the most saleable tag of government guarantee, and the deeprooted loyalty reposed in it is comprehensible which manifests in its policy sales.

Private insurers have been able to make a dent in the market in the first year of their operations garnering a market share of a mere 0.02 per cent of the Rs 36,070.4 crore market. And four private life insurers together have sold 10,000 insurance policies during the first year. Comparatively LIC issued two crore risk covers during the said period inspite of the entry of private insurers, including 3.45 lakh new annuity policies For private insurers the first year has been well begun. The insurance sector claimed more newsprint than any other and with tailor made policies, riders/add-ons, publicity campaigns etc the interest has caught up considerably. The awareness building exercise undertaken by private insurers has paid off.

Objective of the Title : To Build Customer Loyalty To Innovate and Improve Distribution Channel To Enhance Post Sales Service

CHAPTER 2
Industry Profile

INDUSTRY POFILE Overview of Insurance Industry : Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the countrys GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population are without life insurance cover, health insurance and non-life insurance continue to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. Insurance companies not only provide risk cover to infrastructure projects, they also contribute long-term funds. In fact, insurance companies are an ideal source of long term debt and

equity for infrastructure projects. With long term liability, they get a good asset- liability match by investing their funds in such projects. IRDA regulations require insurance companies to invest not less than 15 percent of their funds in infrastructure and social sectors. International Insurance companies also invest their funds in such projects.

INSURANCE DEFINITION : From the viewpoint of the Individual : Insurance is an economic device whereby the individual can substitute a small relatively definite cost (premium) for a large uncertain financial loss that would have to be borne if insurance was not available. From the viewpoint of the Society : Insurance is a mechanism which relieves the individual citizens and the industry from the burden of carrying on themselves the various risks , they are likely to face from day to day.

(a)

(b)

THE RISK : There is risk insured against the policyholder . THE INSURED : is the person or company entering into insurance contract.

THE INSURER : is the insurance company which has contracted with the insured to provide cover for the risk insured against.

TYPES OF INSURANCE BUSINESS : LIFE INSURANCE NON-LIFE INSURANCE (GENERAL INSURANCE)

THE IRDA ACT,1999 : The IRDA Act was passed in 1999, providing for the establishment of the IRDA as a ten member body, with the Chairperson, and nine other members, of whom not more than five will be whole time members. The IRDA is the Authority to regulate the insurance industry in India and has the powers to issue registration certificates and licences, lay down codes of conduct, monitor the performance of insurers and other persons referred to in the Insurance Act and to make regulations to carry out its purposes. The IRDA is to be advised by the Insurance Advisory Committee, to consist of not more than 25 members. This committee is to be appointed by the IRDA and will represent the interests of commerce, industry, transport, agriculture, surveyors, agents, organizations

engaged in safety and loss prevention, research bodies and employees association in the insurance sector.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ( IRDA ) The Insurance Act, 1938 provided that the Government should appoint a Controller of Insurance, to ensure that insurance companies registered under the Act, comply with the various provisions of the Act. His duties included approval of the terms and conditions of various plans being offered by the companies, including the adequacy of the bases of premia, scrutiny of the various returns on investments, annual accounts, periodical actuarial valuations etc. are required to be submitted by the companies. The Insurance Regulatory And Development Authority Act,1999 came into being effective 19th April 2000 OBJECTIVE OF IRDA : An Act 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.

FUNCTIONS OF IRDA : To regulate , promote and ensure orderly growth of the insurance and reinsurance business Issue a certificate of registration, renew, modify, withdraw, suspend or cancel such registration to the applicant i.e. insurance company Prepare a code of conduct for the agents, surveyors and loss assessors or the intermediaries who take part in development of insurance business To exercise all powers and perform all functions of the Controller of Insurance under Insurance Act 1938 To promote efficiency in the conduct of insurance business To promote and regulate professional organizations connected with the insurance business Why Life Insurance Life Insurance has come a long way form the earlier days when it was originally conceived as a risk covering medium for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became established, it was realized what a useful tool it was for a number of situations including-

 Temporary needs / threats: The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc. Regular Savings: Providing for one's family and oneself, as a medium to long term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence for their family. Investment: The building up of savings while safeguarding it from the ravages inflation. Unlike regular saving products, investment products are traditionally lump sum investments, where the individual makes a one off payment. Retirement: Provision for later years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payment in one's old age. Tax Benefits: A two-fold objective of life insurance which the government will wish to encourage, is to make provision against untimely death of the wage-earner and also to effect saving for the future.

INDUSTRY PROFILE (LIFE INSURANCE)

WHAT IS INSURANCE Insurance is a sharing device. The losses to assets resulting natural calamities (Like fire, flood, earthquakes, accidents etc.) are met out of common pool contributed by large number of persons who are exposed to similar risks. Insurance is the method of spreading and transfer of risks The fortunate many who are exposed same or similar risks share loss for the unfortunate few. Assets (created in expectation of future need /benefits) have a value. Loss of assets deprives the owner of the expected benefits. Insurance in this context is mechanism that to reduce the adverse consequences due to loss of assets. Classification of insurance: Insurance business can be divided into basic categories. 1. life insurance

2. non-life insurance life insurance is concerned with making provision for a specific event happing to the individual non life insurance is commonly concerned with the provision for a specific. Event, which affect a property such as fire, flood, theft etc.

What is life insurance? Life insurance is an agreement between the person insured and the insurer. Under the term of a life insurance. Contract the insurer promises to pay a certain sum on the happing of the event insured against to a beneficiary in exchange for premium payments. Usually, the insurance contract provides for the payment of and amount on the date of maturity or at specified dates at periodic internals, or in the event of unfortunate death, if it occurs earlier. Life insurance is universally acknowledged as a tool to eliminate risk, replace uncertainty with certainty. And ensure timely aid for the civilized worlds partial solution to the financial problems caused by death. Why life insurance is required: Life insurance cannot be and should not be compared with any other form of investment. It provides a life long benefit, with returns when it is most required at right time. Replacement of income One prime reason for buying life insurance is to replace the income lost in the event of untimely death of the life insured. When this regular income stops, the proceeds from a life insurance policy can be used to support the family members. Maintenance of lifestyle:

In case of the death life insured, family members are often hard-pressed trying to arrange for funds those can maintain of living that they have grown. Accustomed to life insurance offers protection against such an unfortunate eventuality. Expenses due to pre-mature death: Life insurance can play a crucial role to pay off any debt left behind by the person insured. For example car loans, medical bill, mortgages, credit card payment, etc. are often left in case of sudden death. These obligation can be met with life insurance without any depletion in family assets. Planning for important event life childrens marriage etc. With the cost of living going up day by day prudent people would go for a life insurance as the most cost effective means to ensure that the important mile stone in their childrens lives are not hampered by the uncertainties of life. Investment: Life insurance can also be an investment instrument apart from ten benefits that are also allowable. By the government of India for investing to life insurance some life insurance policies offer returns on investment along with the cover for life. Life can help you with long-term financial goals. Charity: Life insurance is great avenue to help. A charitable cause, or people with philanthropic desire but short of means, life insurance provides the option to contributes much more than is possible by the life insurance, Benefits of life Insurance: Superior to any other saving plan:- life insurance policies offer protection against the risk of death which is nit available in any

other contemporary saving plan. In the event of death of a policies holders the insurance makes available the full sum assured to the policies holders near and dear ones. In comparison any other saving plan would amount to the total saving accustomed till date. If the death occur prematurely, such saving can be much lesser than the sum assured.

Encourage thrift:- .A saving deposits can easily be withdrawn. The payment of life insurance premiums, however is considered sacrosanct and is viewed with the same seriousness as the payment of interest on mortgage. Thus, a life insurance policy in fact brings about compulsory

Easy settlement and protection against creditors:- a life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditors of the assured by effecting a valid assignment. Administering the legacy for beneficiaries: - speculative or unwise expenses can quickly cause the squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sum amounts. Ready marketability and suitability for quick borrowing:- a life insurance policy can after a certain time period (generally three years) Most cost effective means to ensure that the important milestones in their childrens lives are not hampered by the uncertainties of life.

Investment: - life insurance also be an investment. Apart from the tax benefits that are also allowable by the government of India for investing in life insurance, some life insurance policies offer returns on investment along with the cover for life. This can help you with long-term financial goals.

 Charity:- life insurance is a great avenue to help a charitable cause. For people with philanthropic desire but short of means, life insurance provides the option to contribute much more than is possible by the life insured.

Critical illness benefit:- many policy can also provide for cover against critical illness.

Hospital cash benefit:- many policies can also provide for covering the hospitalization expenses, along with cover for life.

Tax benefit:- under the Indian income tax act, tax relief under section 88 is available for premium paid and section 1010D benefit are available for death/ maturity/surrender proceeds from a life insurance policy.

HDFC MUTUAL FUND HDFC Mutual Fund has been one of the best performing mutual funds in the last few years. HDFC Asset Management Company Limited (AMC) functions as an Asset Management company for the HDFC mutual fund. AMC is a joint venture between housing finance giant HDFC and British investment firm Standard Life Investments Limited. It conducts the operations of the Mutual Fund and manages assets of the schemes, including the schemes launched from time to time. As of Aug 2006, the fund has assets of Rs.25,892 crores under management. IN 2003, following a decision by the Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, to divest its asset management business in India, AMC had entered into an agreement with ZIC to acquire the asset management business. Consequently, all the schemes of Zurich Mutual Fund in India had been transferred to HDFC mutual fund and renamed as HDFC schemes. Here is a list of mutual funds of HDFC which includes Equity Funds, Balanced Funds and Debt Funds.

HDFC SECURITIES HDFC Securities, a trusted financial service provider promoted by HDFC Bank and JP Morgan Partners and their associates, is a leading stock broking company in the country, serving a diverse customer base of institutional and retail investors. HDFCsec.com provides investors a robust platform to trade in Equities in NSE and BSE , and derivatives in NSE. Our website will support you with the highest standards of service, convenience and hassle-free trading tools. Our research team tracks the economy, industries and companies to provide you the latest information and analysis. Our content offers financial information, analysis, investment guidance, news & views, and is designed to meet the requirements of everyone from a beginner to a savvy and well-informed trader.

HDFC REALITIES HDFC Realty is a wholly owned subsidiary of HDFC. We have assisted individuals in acquiring homes valued at 5000 million rupees. HDFC is a pioneer housing finance institution in India and with over 30 years in operations has provided finance to over a million families in India. We are a team of real estate professionals facilitating Buying, Selling or Leasing of Residential Commercial property.

At HDFC Realty, we provide personalized attention to the individuals and corporate in their process of identifying properties. From understanding the requirement to organizing the site visits to completion of transaction, we make every effort to make the process of acquiring a property, hassle free and convenient.

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

INTRODUCTION HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 119 Crores. The gross premium income for the year ending March 31, 2007 stood at Rs. 2,856 Crores and new business premium income at Rs. 1,624 Crores. The company has covered over 8,77,000 lives year ending March 31, 2007. HDFC operates through almost 450 locations throughout the country with its corporate head quarters in Mumbai, India. HDFC also has an International Office in Dubai, UAE with service associates in Kuwait, Oman and Qatar. HDFC is the largest housing company in India for the last 27 years. SNAPSHOT-I Incorporated in 1977 as the first specialized Mortgage Company in India.

 Almost 90% of initial shareholding in the hands of domestic institutes and retail investors. Current 77% of shares held by foreign institutional investors. Besides the core business of mortgage HDFC has evolved into a financial conglomerate with holdings In: HDFC Standard Life insurance Company- HDFC holds 78.07 %. HDFC Asset Management Company HDFC holds 50.1% HDFC Bank- HDFC holds 22.25%. Intel net Global (Business Process Outsourcing) HDFC holds 50%. HDFC Chubb General Insurance Company HDFC holds 74%.

SNAPSHOT-II Loan Approvals 18.30 bn.) (Up to Dec 2007) Loan Disbursements bn.) (Up to Dec. 2007) Housing Units Financed Distribution Offices Outreach Programs

Rs. 805 billion. (US $ Rs.669 billion (US $ 15.20 Rs.2.5 million. 181 90

GROUP COMPANIES HDFC Bank: World Class Indian Bank- among the top private banks in India. HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager. Intel net Global: BPO services for international customers.

 CIBIL: Credit Information Bureau India Limited. HDFC Chubb: Upcoming Private companies in the field of General Insurance. HDFC Mutual Fund HDFC reality.com: Helps to search properties in all major cities in India HDFC securities

STANDARD LIFE Standard Life is Europes largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 175 years is a modern company surviving quite a few changes since selling its first policy in 1825. The company expanded in the 19th century from kits original Edinburgh premises, opening offices in other towns and acquitting other similar businesses. Standard Life Currently has assets exceeding over 70 billion under its management and has the distinction of being accorded AAA rating consequently for the six years by Standard and Poor .SNAPSHOT Founded in 1875, company supporting generation for last 179 years. Currently over 5 million Policy holders benefiting from the services offered. Europes largest mutual life insurer.

PRODUCTS & SERVICES

The right investment strategies won't just help plan for a more comfortable tomorrow -- they will help you get Sar Utah ke Jiyo. At HDFC SLIC, life insurance plans are created keeping in mind the changing needs of family. Its life insurance plans are designed to provide you with flexible options that meet both protection and savings needs. It offers a full range of transparent, flexible and value for money products. HDFC SLIC products are modern and contemporary unitized products that offer unique customer benefits like flexibility to choose cover levels, indexation and partial withdrawals. History of The Joint Venture :

The Partnership discussions commenced - January 1995 Joint venture agreement signed - October 1995 Joint venture agreement renewed - October 1998 Life Insurance project team established - January 2000 (Mumbai) Company officially incorporated - 14th August 2000 First private sector Life Insurance company to be granted a certificate of registration 23 October 2000 Shareholding HDFC Standard Life 81.9 % 18.1 %

Vision and Values of HDFC Standard Life : VISION.. The most successful and admired life insurance company, which means that it is the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry In short, The most obvious choice for all

VALUES Values are the guideline or principal make to achieve the stated objectives : Values of HDFC Standard Life Insurance Company Limited are as follows: -Integrity -Innovation -Customer Centric Behavior -People Care -Team Work -Joy and Simplicity

Products offered by HDFC Standard Life

PROTECTION PLANS

INVESTMENT PLANS

PENSIONS PLANS

SAVING PLANS

Term Assurance Single Premium Plan Whole of Life plan Loan Cover Term Assurance Plan.

Personal Endowment Pension Assurance Plan, Plan Unit Linked Endowment Unit Linked Unit Linked Pension, Endowment Plus Unit Linked Unit Linked Pension Endowment Plus. Plus II Money Back Unit Linked Enhanced Life Protection II Children's Plan Unit Linked Young Star Unit Linked Young Star Plus II

PROTECTION PLANS A person can protect his family against the loss of his income or the burden of a loan in the event of his unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. Protection range includes our Term Assurance Plan & Loan Cover Term Assurance Plan. INVESTMENT PLANS

HDFC SLICs Single Premium Whole of Life plan is well suited to meet long term investment needs. This provides attractive long term returns through regular bonuses. PENSION PLANS Pension Plans help to secure financial independence even after retirement. Pension range includes Personal Pension Plan, Unit Linked Pension, Unit Linked Pension Plus. SAVINGS PLANS Savings Plans offer a flexible option to build savings for future needs such as buying a dream home or fulfilling your childrens immediate and future needs. Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus, Unit Linked Endowment Plus II, Money Back, Unit Linked Enhanced Life Protection II, Children's Plan, Unit Linked Young Star, Unit Linked Young Star Plus, Unit Linked Young Star Plus II. INCOME TAX SECTION Sec. 80C GROSS ANNUAL SALARY Across All income Slabs Across all income Slabs. Across all income Slabs HOW MUCH TAX CAN YOU SAVE? Up to Rs. 33,990 saved on investment of Rs. 1,00,000 Up to Rs. 33,990 saved on Investment of Rs.1, 00,000. Up to Rs. 3,399 saved on Investment of Rs. 10,000. HDFC STANDARD LIFE PLANS All the life insurance Plans. All the pension plans. All the health insurance riders available with the conventional

Sec. 80 CCC

Sec. 80 D

plans TOTAL SAVINGS Rs 37,389 POSSIBLE Rs. 33,990 under Sec. 80C and under Sec. 80 CCC, Rs.3, 399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10, 00,000. Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely Tax-free, subject to the conditions laid down therein.

PENSION CATEGORY PLANS: There are two plans in Pension Category: 1. Personal Pension Plan 2. Unit Linked Pension Plan 3. Unit linked pension II PENSION PLAN Today, we are busy climbing the ladder of success and realizing our dreams. Today, time is with us. Just take a moment and think. Will we be able to continue at the same pace? Will our income be the same forever? Will we be able to live life on our own terms even after we retire? This plan is an insurance policy that is designed to provide a retirement income for life with the freedom to maximum our investment returns. Stride into our golden years of retirement with dignity and pride.

P D e f e r r e

e d

s io pI m e

la

n s t e P e

n m s ie o d n i a

This plan helps to build a lump sum amount which will help to purchase a pension

This plan provides an income for life immediately on payment of a lump sum amount

How Annuity Works

Investment Investment Return Expenses

Premium

Insurance Company

Pension as defined at the time of the contract

Surplus/Deficit

Shareholders

D D e f e r m

f e e

r r e n Pt e P

s B

i o e

n n

P e

ne s r i i oo d n

The Premiums paid by the policyholder is accumulated with an intention to pay pensions

The accumulated amount is used to pay pensions to the policyholder

HDFC Standard Life Insurance Company Limited does not provide the immediate pension plans. It provides only deferred annuity. The Pension Plan of HDFC Standard Life Insurance Company Limited can be classified into the two groups : 1. Traditional Pension Plan 2. Unit Linked Pension Plan

Traditional Pension Plan of HDFC Standard Life Insurance Company Limited: 1. Personal Pension Plan Unit Linked Pension Plan of HDFC Standard Life Insurance Company Limited: 1. Unit Linked Pension 2. Unit Linked Pension Plus

1. PERSONAL PENSION PLAN Personal Pension Plan is a Traditional Pension Plan of HDFC Standard Life Insurance Company Limited. It provides guaranteed pension on the vesting age. It is good to start this pension plan in an earlier age to get the maximum benefit on the later age. Features of Personal Pension Plan of HDFC Standard Life: Benefits at Vesting Sum Assured plus reversionary bonus and terminal bonus (if any) is termed as Notional Cash value Portion of the Notional Cash Value can be taken in cash up to the extent allowed by the Regulations Balance converted into annuity with HDFC Standard Life Policyholder has the choice to opt for an annuity from any other insurer

Benefits on death during the term Regular premium In the first policy year Return of 80% of the premium paid

In subsequent policy years Lower of Return of premium with 8% interest Sum assured plus reversionary bonus Benefits on death during the term Single premium In the first policy year Return of 90% of the premium paid In subsequent policy years Sum assured plus reversionary bonus Benefits on surrender Surrender value available only after payment of three years premium Guaranteed surrender value to the extent of 50% of the premium paid excluding first year Premium Discretionary surrender values as decided by the company Paid up Benefits Available only when three years premium has been paid Minimum paid up value as per the Insurance Act Paid up policy does not participate in future bonuses Loans Loans are not available under this plan Riders Riders are not allowed with this plan Allowed to single lives only

The age and term limit in Personal Pension Plan is as follows:

M in im u m M a x im u m M in im u m M a x im u m M in im u m M a x im u m

S in g le P re m a g e a t e3n5tryye a rs la s t a g e a t e 0 tr y a rs la s t 6n ye T e r m 5 y e a rs T e r m 1 5 y e a rs a g e a t v5e0sti n a rs la s t yeg a g e a t v e stienag la s t 7 0 y rs

iuR e g u la r m b irt 8 dyaeya rs 1h b irt 0 dyaeya rs 6h 1 0 y e a rs 4 0 y e a rs b irt 0 dyaeya rs 5h b irt 0 dyaeya rs 7h

P re m iu m la s t b irt h d a y la s t b irt h d a y

la s t b irt h d a y la s t b irt h d a y

Minimum and Maximum Premium:

Minimum Single Rs 25,000 Yearly Rs 2,400 Half yearly Rs 1,300 Quarterly Rs 700

Maximum Rs 50,00,000 Rs 50,00,000 Rs 25,00,000 Rs 12,50,000

2. UNIT LINKED PENSION PLAN The HDFC Unit Linked Pension Plan gives us: - An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. - A post retirement income for life - Flexibility to plan our retirement date - Freedom to invest premiums as per our preference

3 easy steps to own this plan: Step 1: Choose the retirement age Step 2: Choose the premium we wish to invest, based on our retirement need Step 3: Choose the investment fund or funds we desire Step 1: Choose the retirement age We can select any age we wish to retire at (vesting age), between 50 years and 75 years. Step 2: Choose the Regular Premium This is the premium we will continue to pay each year of the policy. The minimum regular premium is Rs. 10,000 per year. We can pay monthly (using Standing Instructions or ECS Mandate), quarterly, half-yearly or annually. We may also choose to pay adhoc Single Premium top-up or additional regular premiums depending on the policy type we have chosen a convenience. Step 3: Choose the Investment Funds In this plan the investment risk in the chosen investment portfolio is borne by the policyholder. This means that the premiums we pay in this plan ae subject to investment risks associated with the capital markets. The unit prices of the und may go up or down, reflecting changes in the capital markets. So, to balance the level of risk and return, making the right investment choice is very important and we are responsible for the choices we make. There are six funds that give : ** The potential for higher but more variable returns over the term of our policy; ** More stable returns with lower long-term potential Our investment will buy units in any of the following six funds designed to meet our risk appetite. All units in a particular fund are identical.

Fund Liquid Fund

Details

*Extremely capital risk *Very stable returns Secure *More capital Managed stability than Fund equity funds *Higher potential return than liquid Fund Defensive *Access to better Managed long-term returns Fund through equities *Significant bond exposure keeps risk down Balance Managed Fund *Increased equity exposure gives better long-term return *Bond exposure provides some stability *Further increased exposure to equities to give a greater

Asset Class Bank Govt. Equity Risk & Return Deposits Securities Rating & Money & Bonds Market low 100% Low

100%

Low Moderate

70% 85%

to 15% to 30%

Moderate

40% 70%

to 30% to 60%

High

Equity Managed Fund

0 to 40%

60% to 100%

Very high

Growth Fund

long-term return *A smaller bond holding will aid diversification and provide a little stability *For those who wish to maximize their returns *100%investment in high quality Indian equities

100%

Very High

Note: These entire investment portfolios must follow IRDA regulations. ELIGIBILITY: The age and term limits for taking out a HDFC Unit Linked Pension Plan are as shown below: Term period (Yrs.) Minimum Maximum 10 40 Age At Entry (Yrs.) Minimum Maximum 18 65 Age At Vesting (yrs.) Minimum Maximum 50 75

ACCESSING MONEY A) On Vesting When the policy matures at the end of the policy term we have chosen and on our chosen retirement (vesting) date, we will get the value of the units in our policy. As per prevailing Government regulations: We can take up to 1/3rd of our fund value as a tax-free cash lump sum and the rest must be converted to an annuity. - We can buy the annuity from HDFC or any other insurer.
-

We are allowed to alter the vesting date subject to the above age at vesting and policy term limits. B) On Death In case of unfortunate demise of the policy holder before the end of policy term, the nominee will receive the unit fund value. The policy will terminate thereafter.

C) On Surrender or Partial Withdrawal In the first three years Insurance plans are long-term investments with significant tax advantages. They are not viewed by us or the IRDA as short-term plans. Therefore, for the first three years of the plan, we may not surrender the plan or withdraw any portion of the funds from it. If we stop the regular premium commitment before three years have passed, our funds will be held in suspense after deduction of surrender charges. These funds will be paid out to us only at the end of the third year or the end of the revival period of 2 years, whichever is later.

From the fourth year onwards We can choose to surrender the policy at any time and the surrender value will be the value of the units in the fund. We will enforce surrender only if you have stopped paying regular premiums and our fund value is less than our original annual regular premium amount. We may not withdraw any portion of our funds (other than in full) at any point of the term of the contract till the vesting date. Charges: The charges under this policy are deducted to provide for the cost of benefits and the administration provided by us. Our charges, when taken together, are structured to give us better returns and value for money over the long-term.

FUND MANAGEMENT CHARGE (FMC) In the long term, the key to build great maturity values is a low FMC. The daily nit price already includes the low fund management charge of only 0.80% per annum of the funds value. SURRENDER CHARGE This is the charge HDFC will apply when the policy is surrendered. It is equal to 25% of the difference between the regular premiums expected and those paid in the first two year of the contract. PREMIUM ALLOCATION CHARGE This is a premium based charge. After deducting this charge from our premiums, the remainder is invested to buy units. The table given below will help show how percentage of our premium is used to buy units. This percentage is called the Allocation Rate. The allocation rates are guaranteed for the entire duration of the policy term. PREMIUM PAID DURING YEAR ALLOCATION RATE (Rs.) Ist & IInd year IIIrd onwards Up to 1,99,999 75% 99% Regular From 2,00,000 to 82.5% 99% Premiums 4,99,999 From 5,00,000 to 87.5% 99% 9,99,999 From 10,00,000 to 92.5% 99% 19,99,999 From 20,00,000 and 95% 99% above Single Premium top-Up(s) 97.50% 99% OTHER CHRGES The Following is the set of other charges that HDFC will take from the policy.

year

CHARGES Policy Administration Charge Switching Charge Revival charge Miscellaneous Charge

EXPLANATION A charge of Rs. 20 per month is charged to cover regular administration costs. We take the charge by cancelling units proportionately from each of the funds the policyholder has chosen. 24 switches will be given free in a policy year and any additional switch will be charged at Rs. 100 per switch. A charge of Rs. 250 is charged for revival to cove for administrative expenses. This is a charge levied for any alternations within the contract like premium redirection or adhoc policy servicing. 12 premium redirection requests will be free in a policy year and any additional premium redirection request will be charged at Rs. 250 per request, 6 policy ser icing requests will be free in a policy year and any additional policy servicing request will be charged at Rs. 250 per request.

CHAPTER 3
Conceptual Explanation & Research Methodology

CONCEPTUAL EXPLANATION & RESEARCH METHODOLOGY Conceptual Explanation : Marketing Research in insurance industry : Marketing Research is the systematic , objective and exhaustive search for, and study of the facts relevant to any problem in the field of marketing

Objective of Marketing Research : To assess competitive strengths and policies To indicate the distribution methods best suited to product and

market To assess the probable volume of sales To understand why the customer buy the product To understand dimensions of the marketing problems

Scope of Marketing Research :

Market Analysis Customer Research Product Research Sales Research

RESEARCH METHODOLOGY : The research is a systematic or closed investigation . A careful critical inquiry or examination seeking facts or principles Research is basically a systematic inquiry and searching of new facts or interpret known facts in new light. Research may be describe in broad sense defining and redefining problems, formulating hypothesis or suggested solution, collecting, organising and evaluating data making deduction and reaching conclusion.

Objective Of The Study : 1. To Build Customer Loyalty :

Given the current levels of dissatisfaction experienced by customers, it is time insurance companies, both existing and new ones, concentrated on providing high-quality services for differentiating their offerings. Some areas on which they should anxieties. . 2. To Maintain Customer Relation Management ( CRM ) : While the insurance sector is seeking to maintain a balance between acquiring customers and developing existing ones, customer acquisition is vital, as no retention strategy will entirely stem customer defection. That said, insurance companies are experiencing unacceptable levels of customer churn, thanks to which they are focusing gkeeping the customers they already have in a bid to ensure a net growth in their customer base. Today, the focus is on selling more products to existing customers to improve profitability. Customer-focused strategies require CRM (customer relationship management) to help acquire customers thorough various touch points and translate operational data into actionable insights for proactively serving customers. 3. To Apply the Strategic Alternatives for Positioning of Products : If one analyses the history of growth of the insurance industry since reforms, it is marked by all-round growth of all players. More or less all players (including the market leader LIC) have Gear up pre-sale services, particularly those that will help in reducing customers

aggressively recruited and trained advisors, appointed agents, launched new products, improved customer service standards and revamped/expanded their distribution networks. If at all there was any major difference between players it was only in time lag in launching of services. Every player would like the customers to believe that its service standards are the best or that its agents are the most informed and ethical, but is debatable whether there are any significant differences. In other words, each company is trying to be everything to everybody. : Research Layout 1) Types of Data Collection : For the purpose of conducting this Project Report the following Statistical convenience 2) The findings of the study are based on questionnaire 3) Sample Size : 50 Policy Primary Data through Questionnaire from Policy Holders & Agents 4) Secondary Data from Publication and Reports of IRDA and Holder 4) Types of Sampling Method : Random 5) Findings & Data Analysis : RIL Methods has put into practice on the basis of

DATA ANALYSIS

1. Regarding age group who opt for life insurance :

Age Group Below 25 yrs 26 35 36 50

No. of Person 8 12 17

% 16 24 34

Above 51

13

26

20 15 10 5 0 No. of person Below 25 26-35 36-51 Above 51

1.

Regarding to Profession :

Profession Service

No. of Person 18

% 36

Business

32

64

2. Regarding to gross Income / Salary :

Gross Income Below 75,000 1,00,000-2,00,000

No. of Person 8 15

% 16 30

Above 2,00,000

27

54

30 25 20 15 10 5 0 No. of person Below 75000 100000-200000 Above 200000

3. Which type of insurance policy you have :

Type of Policy Children Plan Unit linked Plan

No. of person 20 15

% 40 30

Pension Plan

15

30

20 15 10 5 0 No. of person children Plan Unit linked Pension plan

4. Are you satisfied with the amount of premium you have paid :

Arguments Yes

No. of person 30

% 60

No

20

40

30 25 20 15 10 5 0 No. of person yes no

5. Whether your SDM / Agents provide prompt service whenever needed :

Arguments Yes

No. of person 28

% 70

No

12

30

30 25 20 15 10 5 0 No. of person yes no

6. Are you satisfied by the service of underwriting to get insurance :

Arguments Yes No

No. of person 32 18

% 80 20

35 30 25 20 15 10 5 0 No. of person yes no

7.Are you satisfied with the service of the company :

Arguments Due to early claim sattlement Due to effective service Due to goodwill of company

No. of person 10 28 12

% 20 70 10

Interpretation
30 25 20 15 10 5 0 No. of person early claim settlement effective service goodwil

1. The age group who opt for life insurance are 16% at the age below 25 yrs, which increase to 24% at the age of 26-35 yrs and 34% at the age of 36-50 whereas at the age 51yrs it start declines to 26%. 2. The number of person regarding gross salary below 75000 Rs is 16% and is 30%in gross income of 1-2 lakh which increase to 54% above 2 lakh. 3. The type of insurance policy of children plan is 40% and 30% of unlinked plan and pension plan. 4. The satisfaction with the amount paid is yes in 60% and no in 40% . 5. The prompt service provided by agent whenever needed is yes in 70% and no in 30% .

6. The satisfaction by the service of underwriting to get insurance is yes in 80% and no in 20% . 7. The satisfaction with the service of the company due to early claim settlement is 20% ,effective service is 70% and goodwill is 10%

CHAPTER 4
Conclusion & Suggestion

CONCLUSION & SUGGESTION Conclusion : The size of the market has grown and the size of the insurable population in India is indeed vast and the existing player has managed to cover about one-fourth of it. The opportunities before the players are therefore a plenty in terms of target audience. The falling interest rates, the collapse of many small-time financial institutions, the scope for entering related areas like banking and pensions in a bid for synergy and the promise of e-commerce are some of the other opportunities knocking at the doors of the insurance majors. There is a probability of a spurt in employment opportunities. A number of websites are coming up on insurance, a few financial magazines exclusively devoted to insurance and also a few training institutes being set up hurriedly. Many of the universities and management institutes have already started or are contemplating new courses in insurance. Health insurance, which is still in its infancy, is also likely to get a major boost, ultimately leading to improvement in the quality of medical treatment and facilities in the country.

Life insurance has today become a mainstay of any market economy since it offers plenty of scope for garnering large sums of money for long periods of time. A well-regulated life insurance industry which moves with the times by offering its customers tailor-made products to satisfy their financial needs is, therefore, essential if we desire to progress towards a worry-free future. Su ggestion : 1. By using analytical and operational CRM insurance companies can enhance: The choice between operational and analytical CRM as a starting point depends upon the insurers needs. Insurance companies with multiple financial products and a big customer base, such as integrated insurance solution providers, will leverage their customer base to cross- and up-sell different financial products, including insurance. Such providers will benefit from adopting analytical CRM. Market segmentation, campaign management and data mining applications will benefit them in many ways.

Call centre text mining: This tool can help improve the customer experience by resolving complaints rapidly. Insurers are using these tools to mine text from call centre transcripts to identify issues faced by customers. Text mining tools also help detect and capture other useful pieces of information around a customers life stage, financial needs and product interests. These can be used to generate leads and trigger cross-selling. However, to be fully

effective, customer service representatives must be trained to probe for information that will help in cross-selling during the text mining phase. Text mining tools are leading-edge today, but are predicted to take off quickly.

Event-triggering and profiling: Insurers can use event triggers to generate leads that can be acted upon quickly, usually within 24 hours, says Tikoo. Event-triggering tools monitor incoming transaction and contact data in near-real-time to recognize changes in a customers behavior or profile to trigger actions or alerts. Lead management gets sophisticated: Often the ability of an insurer to generate leads by means of event-triggering, reengineered touch points and cross line-of-business referral can outstrip their ability to manage said leads. In such a situation, though the number of leads generated rises, the conversion rate does not. It may even drop. CRM can help provide sales representatives with a mechanism to prioritize and manage leads. Pure insurance providers who do not have a large

customer base will derive the maximum value from operational improvements, especially in integrating customer information from multiple channels and sales force automation. Not all CRM deployments will involve packaged software. Apart from making agents more productive, it will let insurers keep in touch with customers, otherwise difficult in a primarily channel-driven business. Cross- and up-selling capability to provide market opportunities within an existing customer database.

 Predictive capability to determine customer behaviour. Information regarding customer retention or attrition helps determine the likelihood of policy lapses and helps identify customers worth targeting for retention campaigns. Customer segmentation that leverages data to create accurate categories for use in marketing strategies. Market automation that combines analytics with campaign management functionality to help drive a more effective and efficient marketing campaign. Broad CRM perspective CRM Areas where it can be applied : Collaborative CRM: Applying collaborative interfaces (such as e-mail, conferencing, chat, real-time) to facilitate interaction between customers and organizations, as well as between organizational entities dealing with customer information (customers to sales representatives, sales to marketing, agent to provider) Operational CRM: Automating horizontal integrated business processes involving front-office customer touch points-sales, marketing, and customer service-via multiple, interconnected delivery channeli and integration between front-office and back-office Analytical CRM : Analysing data created on the operational side of the CRM equation for the purpose of business performance management. Analytical CRM is

tied to a data warehouse architecture; it is most often evident in analytical applications that leverage data marts. 2. Maintain Proper Pre-Sale Service : Proper pre-sale service, which goes a long way in helping customers arrive at a decision on purchasing a product, is generally not given due importance by Indian insurers. Counselling of customers by the intermediaries of the insurance companies regarding the options available, the appropriate policy to be selected at the minimum premium, the pros and cons and nuances of the policy, the procedures to be followed in the event of claims etc. are generally not upto the satisfaction of customers. As a result, the latter dither in taking a decision or remain uncomfortable after purchasing insurance products. Quality of Documentation : Most proposals and policies tend to be long, complicated and sometimes inexplicit. For example, in case of individual health policies, certain guidelines which can affect the quantum of premium payable are not always made clear to the customers. Another frequent grievance aired by buyers of health insurance is the disputes regarding preexisting diseases and the fact that insurance companies dont take adequate care to explain what a pre-existing disease is and why no claim can be settled arising out of the same. This failure on the part of insurance companies leads to much heartburn among customers when their claims are rejected.n post-sale services too, Indian insurance companies have lagged behind.

The practice of sending reminders for renewals in time is not diligently followed by insurers. The most important feature of post-sale service, as far as insurance products are concerned, is the handling of claims. On an average, it takes insurance companies about one to three months to settle a claim. Further, too many documents and delay in settlement of claims, without payment of interest for the delay, add to the woes of the insurance holders. Indian insurance companies, for reasons well known, have not responded too well to the service aspects of their offerings. The good news is that they are now gearing up to improve their services in order to meet the impending new competition. 3. Strategies for building customer loyalty : Given the current levels of dissatisfaction experienced by customers, it is time insurance companies, both existing and new ones, concentrated on providing high-quality services for differentiating their offerings. Some areas on which they should concentrate immediately are: Gear up pre-sale services, particularly those that will help in reducing customers anxieties. Simplify documents, wherever necessary, without losing control Enhance post-sale services in such areas as sending all renewal notices in time, expeditious settlement of claims and refunds etc. Customize products to cater to the needs of each individual Empathise with the customers. Employees coming in contact with customers must show courtesy and good behaviour. Insurance companies will need to build a suitable

organisation with an appropriate management system, optimum physical infrastructure and a culture of innovation, productivity and customerorientation that will enable them to survive and grow in the exciting and fast-growing line of personal insurance. Bibliography: 1. Principles of Insurance 2. Business World magzines 3. Reliance and IRDA Books &journals Books: Research methodology( C.R. Kothari) News paper: Economic times - Insurance Institute Of India

Journals & Magazines: Nafa Nuksaan India today

Websites:

www.maxnewyorklife.com

www.reliancelife.co.in http://www.insure2bsecure.com/insure/information/ CompanyInfo/omkotak.asp