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Jayawant institute of computer applications Tathawade, pune. SUMMER PROJECT INDEX Chapter No. Executive summary 1. Introduction 1.1 Project introduction 1.2 Objectives of the study 1.3 Scope & limitations 2. Company profile 2.1 Name, address & location of company 2.2 Vision , mission 2.3 History 2.4 Different product profiles of the company 2.5 Awards 3. Theoretical background 3.1 Review of literature 3.2 Fundamental concepts 4. Research methodology 4.1 Research conceptual clarification 4.2 Sources of data collection 4.3 Sample description 5. 6. Data analysis Findings 6.1 Findings based on analysis 6.2 Recommendations / suggestions 6.3 Conclusion Bibliography Annexure Topics Page no.


History about HDFC

HDFC Standard Life is one of Indias 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), Indias leading housing finance institution, Standard Life policy provider and a leading provider of financial services in the United Kingdom. HDFC Standard Lifes product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment, and Health. Customers have the added advantage of customizing their Plans, by adding optional benefits called riders, at a nominal price. The company currently has 25 retail and 4 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers. HDFC Standard Life continues to have one of the widest reaches among new insurance companies through a network of 595 offices serving over 720 cities and towns across the country. The company has also increased its depth in existing markets with a strong base of more than 207,000 Financial Consultants.


HDFC Limited

HDFC Limited has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies. Customer Service and satisfaction has been the mainstay of the organization. HDFC Limited has assisted more than 3.3 million families to own a home, since its inception in 1977 across 2400 cities and towns through its network of over 250 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India. 2.3. Standard Life Group

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 healthcare needs. Its investment managers are currently administers 125 billion in

assets. It is a leading pensions provider in the UK, and is rated by Standard & Poor as strong with a rating of A+ and as good with a Rating of A1 by Moodys

Market Share HDFC Ltd. Holds 72.43% and Standard Life (UK Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others.

HDFCs 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.

HDFCs Values Values that they observe while working:

Integrity Innovation Customer centricity People Care One for all and all for one Team work Joy and Simplicity

History In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies 245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It

came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Association of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices. In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalization) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973. This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra,

former Governor of RBI, to propose recommendations for reforms in the insurance sector. The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies are allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002. Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country. The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the countrys GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country. Major players in insurance of India Insurance industry in India comprised mainly of only two state insurers as follows Life Insurers Life Insurance Corporation of India (LIC) General Insurers General Insurance Corporation of India (GIC)

GIC had four subsidiary companies, are as follows. 1. 2.


The Oriental Insurance Company Limited The New India Assurance Company Limited National Insurance Company Limited United India Insurance Company Limited


In addition to above the following companies have been entered into Insurance business. Life Insurers Public sector Life Insurance Corporation of India Private sector 1. 2. 3. 4. 5. 6.

Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co. Ltd HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited

8. 9. 10. 11. 12. 13.

Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited Reliance Life Insurance Co. Ltd. Aviva Life Insurance Co.

General Insurers Public Sector 1. 2. 3. 4. National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited

Private Sector 1. 2. 3. 4. 5. 6. Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited

7. 8. 9.

Cholamandalam General Insurance Co. Ltd Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd.

Reinsurer General Insurance Corporation of India

Ranking of HDFC Life Insurance in Indian insurance sector Life Insurance 1. Life Insurance Corporation of India (LIC) 2. HDFC Standard Life 3. ICICI Prudential 4. Bharti AXA Life Insurance 5. SBI Life Insurance 6. Aviva Life Insurance 7. IDBI Fortis Life Insurance General Insurance

1. Apollo Munich Health Insurance 2. ICICI Lombard General Insurance 3. Bharti AXA General Insurance 4. Reliance General Insurance 5. HDFC ERGO General Insurance 6. SBI General Insurance 7. L&T General Insurance

Departments A business is normally organized by its function and its aspects are divided into smaller departments in order to operate effectively. They have departments at HDFC Life that specialize and employ people with expertise in their areas. They communicate well with each other and with suppliers and customers, to operate effectively. The departments of company are as follows: Actuarial , ERP , Business & service Excellence, Agency Channel , Finance & Accounts , Medical, Audit & Risk Management, Group Sales , Operations, Banc assurance & Alliances, HR & Administration , RSBD, Business System &

Technology , Investment, Strategy & product, Channel Development, Legal & compliance, Underwriting, Claims, Marketing and Direct Channels.

Organization ChartChairperson C.E.O M.D. Agency Head Underwriter Operation Head Agency Team Operation ZM AVP TM BM Manager BM TM BM TM AVP HR Head Senior HR



The recent awards won by the company are: Best companies to work for in India 2010 'Young Star Super' Voted 'Product of the Year 2010' 'The Ingenious 100 2009' Award Diamond EDGE Award 2009.

Literature Review Insurance What is insurance? Insurance is a contract whereby, in returns for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term risk is used describe all the accidental happenings, which produce a monetary loss.

Insurance is the method in which large number of people exposed to a similar risk makes contribution to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basic of insurance. The losses of an individual are distributed over a group of individuals. The risk becomes insurable if the following requirements are complied with: The insured must suffer financial loss if the risk operates. The loss must be measurable in money. The objective of the insurance contract must be legal. The insurer should have sufficient knowledge about the risk he accepts.

Types of insurance

Life insurance: it covers individual only, to be more precise their death only.

Non life insurance (general insurance): it covers individuals as well as nonliving things. Except death it indemnifies a person for any damages to his health or to the property belonging to him.

Benefits of life insurance Replacement of income: life insurance products can provide support to the family and take care of the familys financial requirements. It provides a lump sum or periodic payments to help replace the income stream, in case of an unfortunate event or an untimely death of the bread earner.

Coasts of education: to support your child with a sound educational background, and to help him/ her to achieve his/her dreams, Life insurance products provide you with a solution, whether you are there or not.

Retirement expenses: retirement is an age when an individual has fulfilled almost all his responsibilities and looks forward to relaxing. Life insurance products can help you lead a secure and tension free retired life by assuring that you get guaranteed pension.

Mortgage and Debt protection: with increasing consuming and ever rising demands, loans and debts are now part of life. Life insurance products help you ensure that your family is not duly burdened with their repayments, in case of an unfortunate events or an untimely demise of the breadwinner.

Hardships protection: life insurance provides a sense of security to the income earner and to his/her family. Buying life insurance

frees the individual from various unnecessary financial burdens that can otherwise make one spend sleepless nights. Growth of HDFC Standard Life HDFC Life registers highest growth in individual new business in 2010-11; only company to register positive growth in new regime (H2, 2010-11). HDFC Life is continues to be the fastest growing company with 26% year on year growth and the only one among the top 5 private players to be on positive year on year growth; Strongest market share gain of 4.2% in private space in 2010-11. HDFC Life recorded 36% growth in renewal premium and 29% growth in total premium in the financial year 2010-11. HDFC Life is ranked 1st in FY2010- 11 in individual business in the industry and they are one of the very few private insurers to achieve positive growth in FY201011. Our consistent focus on creating awareness about life insurance as long-term financial instruments has resulted in our customers exhibiting renewed focus on life insurance reflected in our high conservation ratio of 81%.

Key Financial and Operational Highlights (2010-11): Robust growth of 29% in total premium income to Rs. 9004 crore from Rs. 7005 crore in 2009-10

26% growth in individual new business (regular and single) to Rs. 3488 crore from Rs. 2753 crore in 2009-10 High quality of existing policies & continuous focus on persistency lead to 36% increase in renewal premium of Rs. 4924 crore from Rs. 3627 crore last year Strongest market share gain of 4.2%* in private space in 2010-11 over same period last year; Market share increased to 12.9% in private space in 201011 from 8.7% in 2009-10; Overall market share increased to 5.9% in 201011 from 4.6% in 2009-10 With growth of 1.6%* in H2, 2010-11, stood first in the industry in

individual business; Stood 3rd in the private space in 2010-11 in total premium Conservation ratio (individual business) improved substantially to 81% in 2010-11 from 72% in 2009-10 31% growth in Assets Under Management over March 31, 2010 to Rs. 27,177 crore from Rs. 20,767 crore same period last year

Solvency ratio as on March 31st, 2011 was 172% as against regulatory requirement of 150%

Claim repudiation ratio for FY 2010-11 is 3.97%, which means we have settled 96.03% claims

Distribution mix - 66% from Banassurance, 31% from Agency and rest from others including Direct Sales

ULIP ULIP is a market-linked life insurance plan, which invests the premium money in various proportions in the equity and debt markets. In effect, this ensures that the returns on such plans are linked to the performance of the markets while also offering the individual an insurance cover at the same time. This also provides a handy instrument to the investor to save money as and when he wants. ULIP came into play in the 1960s and became very popular in Western Europe and Americas. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers. As time progressed the plans were also successfully mapped along with life insurance planning, financial needs, financial planning for childrens future and retirement planning. Features of ULIP ULIP is different from other insurance and investment plans as it offers the following distinguishing features:

Investment and savings Flexibility Investment options Transparency Option to take additional cover against Death due to accident Surgeries Liquidity Tax Planning How Unit- Linked Insurance Plans do against? Unit-linked insurance plans, ULIPs, are distinct from the more families with profits policies sold for decades by the Life Insurance Corporation. With profits policies are called so because investment gains are distributed to policyholders in the form of a bonus announced every year. ULIPs also serve the same function of providing insurance protection against death and provision of long-term savings, but they are structured differently. In with profits policies, the insurance company credits the premium to a common pool called the life fund after setting aside funds for the risk premium on life insurance and management expenses. Every year, the insurer calculates how much has to be paid to settle death and maturity

claims. The surplus in the life fund left after meeting these liabilities is credited to policyholder accounts in the form of a bonus. In a ULIP too, in a fund that invests money in stocks or bonds. The value of the unit is determined by the total value of all the investments made by the fund divided by the number of units. If the insurance company offers a range of funds, the insured can direct the company to invest in the fund of his choice. Insurance usually offer three choices- an equity fund, balanced fund and a fund which invests in bonds. In both with profits policies as well as unit- linked policies, a large part of the first year premium goes towards paying the agents commissions. How ULIP is different from term insurance? A term plan is a pure risk cover plan without any maturity benefits. This is because there is no savings element in the premium being charged to the individual; hence maturity benefits do not accrue. The insured gets the benefits only in case of death before maturity of policy. Also a term insurance plan does not give any option to the person insured for saving and earn returns as he pays the premium only sufficient for his life cover, and he does not get any returns on it. A term insurance plan also requires the premium to be paid for a particular term, which is to be fixed at the time of taking policy.

The investor keeps getting returns on compound basis according to the market movement along with an insurance cover. ULIP also provides flexibility of choosing the term of payment of premium and varying as per the requirement of the investor. Working of a Unit Linked insurance plan As an ULIP earns returns for investor on the money he has paid as premium and also provides life coverage; the premium paid is treated in the following ways;

Mortality charges: the insurance company to cover the risk of an eventuality to the individual incurs mortality charges. The mortality expenses differ depending on the age of the individual and the sum assured they are higher for a higher age and sum assured.

Sale and administration expenses: these expenses are incurred by the insurance company for operational purposes and recovered from the premium that the individual pays towards costs incurred to run the insurance business on a daily basis are example of such expenses.

Savings or investment component: this portion of the premium is invested by the life insurance company in various investment avenues like government securities, bonds, money market instrument and equities in varying proportions. The savings component is what helps generates the

returns which insurance companies pay to the policy holder by way of bonuses and the maturity amount. Tem plans are pure risk cover plans. The premium charged by term plans cover only the mortality charges, sales and administration expenses. This is no saving element in the premium; hence no maturity amount accrues. It is also due to this reason that term plans are the cheapest form of life cover available. NAV The net asset value of the fund or investment is the cumulative market value of the assets fund net of its liabilities. In the other words if fund is dissolved or liquidated, by selling off all the assets in the fund, this is the amount that the shareholders would collectively own. This gives rise to concept of net assets value per unit, which is the value, represented by the ownership of the unit in the fund. It calculated simply by dividing net assets value of fund by the numbers of the unit. Calculation of NAV The most important part of calculation is the valuation of the assets owned by the fund. Once it is calculated, the NAV is calculated simply by dividing the net assets value by the number of the unit outstanding. The detailed methodology for the calculation of the asset value is given below.

NAV= Market value of investment + Receivables + other accrued income +other assets accrued expenses- other payable other liabilities / no of units outstanding as on date. Formula for NAV NAV = Net Assets / No. of units outstanding The NAV will fluctuate from day to day: Due to changes in the value of the assets constituting the portfolio Due to income from the assets held by the fund

Due to expenses incurred by the fund.

Factors Affecting the NAV The NAV is affected by four sets of factors:

Purchase and sale of investment securities.

Valuation of the investment securities. Other assets and liabilities. Units sold or redeemed.

Product of HDFC Standard Life HDFC SL Crest

Any uncertainty should not affect your plans. Be it of life, or of markets. You want to secure happiness for yourself and your loved ones. We present HDFC SL Crest - Insurance cum investment plan that provides valuable financial protection to your family when needed the most along with an investment option for certainty of highest NAV along with a guarantee on returns. So that when you reap the returns of life, they are on crests not on lows. In this plan you can choose to invest in either of two investments options- highest NAV guarantee fund or free asset allocation option. Features

; Advantages

Choice of two investment options - highest NAV guarantee fund or free asset allocation option.

Benefit of minimum guaranteed NAV of Rs. 15 at maturity. On maturity you will receive the fund value as per the investment option selected.

This plan provides valuable protection to your family in case you are not around. In case of your unfortunate demise during the policy term, we will pay the amount higher of your sum assured (less partial withdrawals) or your total fund value to your family. Please refer to product brochure for details.

This plan can be taken by filling short medical questionnaire, which may not require you to go for medicals. Kindly refer to the product brochure for details.

Tax benefits are offered under section 80c and 10(10d) of the income tax

1. HDFC Life Sampoorn Samridhi Insurance Plan

Sukh aur Samridhi. Joy, happiness and prosperity are your ultimate desire, not only for yourself but also for your loved ones. Life insurance plans not only let you secure financial future of your loved ones, they also assist you in attaining prosperity. With HDFC Life Sampoorn Samridhi Insurance Plan, you can be financially prepared for the future and can fulfill your dreams & aspirations. This plan offers

financial protection to your loved ones when they need it the most, enabling you and your family live life with peace of mind and sar utha ke!


Financial protection to your loved ones by way of a lump sum payment in case of your unfortunate demise during the policy term. Sum assured plus attached bonuses will be paid to the nominee. In case of death due to

accident, an additional Sum Assured will be paid. The policy will terminate and no further benefits will be payable.

Choice of Maturity Benefit Option- on survival till maturity , you can choose maturity benefit option

Enhanced Cash Option Sum Assured + Reversionary Bonus +any interim bonus + any terminal bonus + Enhanced Terminal Bonus. Policy terminates and no further benefits are payable.

Enhanced Cover Option - Sum Assured + Reversionary Bonus + any Interim bonus + any Terminal Bonus payable on maturity + Additional Sum Assured on unfortunate death of life assured upto age of 99 years.

Tax benefits under sections 80C and 10(10D) of the Income Tax Act, 1961 subject to the provision contained therein

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision. 3. HDFC Endowment Assurance Plan As a judicious family man, your priority is to secure the well-being of those who depend on you. Not just for today, but also for the long term. With our HDFC Endowment Assurance Plan, you can start building your savings today and ensure

that your family remains financially independent, even when you are not around. This 'With Profits' plan is designed to secure your family's future by giving your family a guaranteed lump sum on maturity or in case of your unfortunate demise, early into the policy term.



Ideal way to secure your long-term financial goals and your family's financial independence by giving a lump sum payment (basic Sum Assured plus any Bonus Additions) on survival up to Maturity date

Provides invaluable protection to your family by way of lump sum payment in case of unfortunate demise within policy term

Gives you the flexibility to customize your policy according to your needs by adding any one of the 3benefit options available

You can choose to pay your premium as either Annually, Half-Yearly or Quarterly depending on your convenience. You also have a range of convenient auto premium payment options

Tax benefits under sections 80C, 80D and 10(10D) of Income Tax Act, 1961

The insurance companies had launched Innovative product in the market. Theyre called Highest NAV Guaranteed Plans .These products have come in, after the recent crash in the market. Investors are looking for some kind of a safe investment equity product. Hence, theyve launched these Highest NAV Return ULIPs which gives investors highest return from the Stock market in long run generally the tenure is 7 yrs, for these plans.

How Highest NAV Guarantee Policy Works?

These plans use strategies like Dynamic Hedging and CPPI (Constant proportion portfolio insurance), which are advanced strategies used in Derivatives world. A simplified version of the whole process of NAV Guarantee policy is as under with an example. Supposing a policy starts today and is guaranteed to give highest NAV in next 7 years and we can control how money moves to debt and equity. In the beginning, lets assume a NAV of Rs 10, and the Asset allocation is 100% in equity and 0% in debt. Now suppose, the market moves up and NAV goes up to Rs 15 by the end of the first year, at this point, what Insurance company has to provide is to make sure, that they provide at least Rs 15 as the return after 6 years. Now in order to achieve this, all they keep X amount in debt instruments which will mature in next 6 years and provide Rs 15 at the end of 6 years, so assuming the debt return at 7%, they need to put around Rs 10 in Bonds, so that the maturity of the bond is Rs 15 at the end of 6 years. => 10*(1.07)^6 => 15.007 They can now invest the rest Rs 5 in Equity as Rs 10 is allocated to Debt. So, now they make sure that whatever happens to the market, they get Rs 15 for sure at the end of 6 years. Now, there are two possibilities

Case 1: Market Goes down : If market goes down, the NAV will go down correspondingly, but as per the strategy, the maturity value will be at least Rs 15. Case 2: Market Goes up again : If market goes up at this point and the NAV rises above 15, for example say to Rs. 18, now again they pull out money from Equity and allocate such an amount to debt, that the maturity at the end of total 7 years would be Rs 18 and so on Note:

These highest guaranteed schemes do not provide wide range of product categories, such as equity-oriented growth funds, balance funds and debt funds.

Guarantee on highest NAV is available only if you survive the term. If you die during the term, your nominees will get the prevailing value of the fund. This is inferior to even a regular debt product because of the high cost structure involved.

CONTRIBUTION IN INDIAN ECONOMYInsurance is of Rs. 400 billion business in India, and together with banking services adds about 7% to Indias GDP.

Gross premium collection is about 2% of GDP and has been growing by 15-20% per annum. India also has the highest number of Life insurance policies in force in the world, and total investible funds with LIC are almost 8% of GDP.


Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for a consideration. A welldeveloped and evolved insurance sector is a backbone for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country. This study attempts to trace the growth of the Insurance sector in general and how to create wealth from insurance with HDFC Standard Life Ltd in particular.

Title of the study Wealth creation through insurance and study of trends in NAV of its major policies.


To study how does insurance helps in wealth creation

2. To study the growth of Insurance sector in general after liberalization of the Indian economy. 3. To understand growth of private insurance companies in India in last five years.

4. To understand the growth of HDFC Standard Life in the last five years. 5. To study the trend of NAVs of various Unit Linked policies of HDFC Standard Life. 6. To understand investor perception of HDFC Standard Life as an option for investment.

Hypothesis 1.

Life Insurance is one of the Taxes saving device in India.

Life Insurance is an Investment option in India

3. HDFC Standard Life is an insurance company with very good fundamentals. Limitations 1) 2) Limited time Lack of accurate data

Sources of data The study derives data both from primary data and secondary data. 1. Primary data regarding investors perception of Insurance shall be collected from a structured questionnaire administered to a randomly selected

population whose sample size will be 50 numbers from across different demographic background. 2. Secondary data for the study shall be collected from web sites of HDFC Standard Life and other competitor Insurance companies and IRDA. Besides, News paper articles and reference books related to insurance shall also be studied. Data collection method Sample size Sampling type Method used Scope of the study The project is related Insurance, Wherein investors can invest their money to get the good returns. An investment has to be planned according to their risk bearing capacity and as well as other factors like investment objectives, returns expected, taxation, age factor, etc. Project consists of case studies in the form of individual profile. Wherein the various aspects of the individuals current status are taken into consideration 50 exploratory questionnaire

and an effort is done to provide him with the best investment solution for his current state of finances.


Income Tax Section Sec. 80c Gross Annual Salary Across all income slabs Across all income slabs How Much Tax can You Save? HDFC Standard Life Plans

Up to Rs. 30,900/- saved on investment of Rs. 1,00,000/Up to Rs. 30,900/- saved on investment of Rs. 1,00,000/-

All our Life insurance Plans

Sec. 80CCC

All our Life insurance Plans

Sec. 80D

Across all income slabs

Up to Rs. 9,270/- saved on investment of Rs. 30,000/(inclusive of Rs. 15,000/- towards health insurance of parents)

All our Health insurance Plans

Upto Rs. 10,815/- saved on investment of Rs. 35,000/(inclusive of Rs. 20,000/- towards health insurance of parents who senior citizens)

All the Health insurance riders available with our Conventional Plans

Rs. 41,715/Total Savings Possible Rs.30,900/- under Sec. 80C and Sec.80CCC Rs.9,270/- or Rs.10,815/- under Sec.80D

Above figures calculated for a male with gross annual income exceeding Rs. 5,00,000/Sec.10 Under Sec.10(10D), the benefits received by you are completely tax-free

Applicable to premium paid for all Health insurance Plans, Critical illness Benefit, accelerated sum Assured and waiver of premium Benefit. ** These calculations are illustrative and based on our understanding of current tax legislations.

Source: http://www.hdfclife.com/KnowledgeCentre/TaxCenter.aspx Strong growth in total premiums and higher share of renewals

5 years CAGR: 59% Interpretation Rs. Cr. Regular premium New Renewal Single 2984 3748 273 2539 2861 165 2280 2173 405 1317 1210 332 818 530 225 382 200 104 51% 80% 21% 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 CAGR

Total Premium EPI

7005 2561

5565 2552

4858 2425

2859 1328

1573 854

686 403

59% 45%

Assets under management as on March 31, 2010 have nearly doubled

Total AUM 5 years CARG of 92%

Premiums are growing and average case size is high New business premiums (EPI)

5 years CARG: 45% Renewal premiums exceed new business premiums for the first time

Performance of financial products studied HDFC SL Crest

NAV trend of Crest policy since inception Interpretation: The continuous growth was recorded in NAV of Crest policy since its inception. Except the value of NAV fall in year 2007-09 due to inflation. The Balanced fund has recorded 242.85% growth in NAV since its inception.

Progrowth flexi

NAV trend of Progrowth Flexi policy since inception Interpretation: 6.25% decrease is recorded in NAV since its inception

Pension Plan

NAV trend of Pension Plan policy since inception Interpretation: The fund has recorded 2% growth in NAV since its inception

Young star plus balanced fund

NAV trend of Young star plus policy since inception Interpretation: The fund has recorded 147.61% growth in NAV since its inception.

Endowment plan

NAV trend of Endowment plan policy since inception Interpretation: The fund has recorded 136.36% growth in NAV since its inception


Findings 1. HDFC Life recorded 36% growth in renewal premium and 29% growth in total premium in the financial year 2010-11. 2. New ULIP regulations have impacted growth in H2 FY11 3. In H2 the HDFC Standard Life has grown 1.6%.

HDFC has adapted well post September 1, 2010 regime and ranked 1st in H2 FY11 amongst private insurance companies.

5. During the same period of last year the company had highest market share gain of 4.2% in private space in financial year 2011 6. The operating expense ratio reduced over the last 3 years from 29.1% in FY09 to 14.4% in FY11. Comparing with last year operating expenses have increased marginally by 4% against individual new business growth of 27%. 7. HDFC Standard Life Co. Ltd is company with good fundamental and a secure sector for investment.

Key Financial and Operational Highlights (2010-11): Robust growth of 29% in total premium income to Rs. 9004 crore from Rs. 7005 crore in 2009-10 26% growth in individual new business (regular and single) to Rs. 3488 crore from Rs. 2753 crore in 2009-10 High quality of existing policies & continuous focus on persistency lead to 36% increase in renewal premium of Rs. 4924 crore from Rs. 3627 crore last year.

NAV trends of HDFC Standard Life 1. There is continuous growth recorded in its policys since inception of its policy. 2. The Crest policy had recorded the highest growth among its leading policies. The growth is due to demand for the policy as an investment plan and guarantee of Rs. 15 was given by company. 3. The main factors that affected on NAV were demand and sales of the policy, changes in value of investment, up and down in the share market and inflation.


Provide and adopt such policies from which customers get maximum benefits Increase the distribution network Provide a proper training to the workforce Provide lower premium policies so that we could target middle class people and generate good cash flow for further growth Company should more oriented towards rural market

CONCLUSION HDFC Standard Life insurance company is performing well in insurance sector of India. The total premium collection of company has increased comparing with past years and it had contributed in to the growth of companies fundamentals, even the new ULIP regulation have impacted on it. Considering the fundamentals of the HDFC Standard life it is concluded that the company is fundamentally strong and it is growing rapidly in insurance sector. As well as taking into consideration the financial factors and its performance in its NAV throughout last few years it can be concluded that HDFC Standard life is secured company for investment with good returns.

Bibliography Books: Kothari C.R. Research Methodology & Techniques Insurance Principles and Practice

Websites: Hdfclife.com irda.com

SURVEY QUESTIONNAIRE INSURANCE AWARENESS Name of person: Age: Address: Status: Married/Unmarried: Education: Occupation: Sex: Male /Female

1) What is your average monthly income? Less than 5000 5000-15000 15000 30000

30000 50000

50000 & above.

2) Do you save regularly? Yes No Recurring

3) If Yes, which of the following pattern of savings do you use? Deposit Fixed Deposit Insurance PPF

Postal Savings

4) Do you have any Insurance on your life? Yes No

5) What are viewpoints on life insurance? Protection Tool Saving Option Tax Savings Instrument Others (please specify)

6) What plan you have taken & reasons of buying them?

7) Do you know that life insurance can protect your family against the burden of repayment of any outstanding loans? Yes No

8) Do you know that life insurance can help you to create wealth for yourself & your Family? Yes No

9) Do you know that the investment insurance can contribute in countrys economic development, which will indirectly help in your economic development? Yes 10) Yes No If you dont have any policy would you like to invest in insurance? No