A Study On Consumer Perception On Hdfc Life Insurance Product 4x3e5i

A SUMMER TRAINING PROJECT REPORT ON

‘A Study on consumer perception on HDFC Life Insurance Product’ Submitted in the partial fulfillment for the award of Degree of Bachelor in Business istration

UNDER THE GUIDANCE: ___________ __________________

SUBMITTED BY: ___________ ENROLLMENT No. _________ BATCH NO. _______

DECLARATION This is to certify that Report entitled “Consumer Perception on HDFC Life Insurance Product”which is submitted by me in partial fulfillment of the requirement for the award of degree BBA to GGSIP University, Dwarka, Delhi comprises only my original work and due acknowledgement has been made in the text to all other material used.

Date:

APPROVED BY

Name of Student

Name of Subject

Teacher/Guide

2

CERTIFICATE This is to certify that Report entitled “Consumer Perception On HDFC Life Insurance Product” which is submitted by ________ in partial fulfillment of the requirement for the award of degree B.B.A. to GGSIP University, Dwarka, Delhi is a record of the candidate own work carried out by him under my/our supervision. The matter embodied in this thesis is original and has not been submitted for the award of any other degree.

Date:

Supervisor Signature

3

ACKNOWLEDGEMENT I offer my sincere thanks and humble regards to ____________, GGSIP University, New Delhi for imparting us very valuable professional training in BBA. . I pay my gratitude and sincere regards to _____________ my project Guide for giving me the cream of his knowledge. I am thankful to him as he has been a constant source of advice, motivation and inspiration. I am also thankful to him for giving his suggestions and encouragement throughout the project work.

I take the opportunity to express my gratitude and thanks to our computer Lab staff and library staff for providing me opportunity to utilize their resources for the completion of the project.

I am also thankful to my family and friends for constantly motivating me to complete the project and providing me an environment which enhanced my knowledge

Student’s Signature

EXECUTIVE SUMMARY 4

The project “A study on Consumer Perception about Insurance Company” is undertaken under the guidance of _________ . It looks deep into the effectiveness at senior level. It also provides a comparative

study

of

HDFC

Life

Insurance

Company

Ltd. withsome national companies with similar profiles to discuss their working structure and suggest to organization .On the basis of through questionnaire, interview and observation method, we find out the perception view about the insurance company’s working style and services offered is quite effective, Management of HDFC LIFE is constantly making efforts to make the company the best place to work for level. As they are measures of individuals psychological makeup and personality and as such are extremely powerful instruments as find out from our comparative analysis results. “In order to make them proactive., it is required to provide them with such kind of environment, and equally have people oientation too in order to make a company best place to work for high performers and creating a congenial environment.”

Table of Contents 5

Student declaration……………………………………………………………………………i Certificate from Guide……………………...…………………………………....…....ii Acknowledgement.........................................................................................................iii Executive Summary………………………………………………………………..…..iv

CHAPTER- 1: INTRODUCTION 1.1 About the Industry 1.2 About Organization/ Company Profile………………………………

CHAPTER – 2: Literature Review 2.1 Literature Review ……………………………………………………………… 2. 2 About The Topic………………………………………………………………………

CHAPTER – 3: RESEARCH METHODOLOGY 3.1 Purpose of the study…………………………………………………..………...… 3.2 Research Objectives of the study………………………………………………….. 3.3 Research Methodology of the study…………………………………………. 3. 3.1 Research Design……………………………… …………………………...... 3.3.2 Data Collection Techniques ………………………………… 3.3.3 Sample design………………………………………………………………... 3.3.3.1 Population…………………………………………………………….. 3.3.3.2 Sample size…………………………………………………………… 3.3.3.3 Sampling method……………………………………………………... 3.3.4 Method of data collection…………………………………………………….. 3.3.4.1 Instrument for data collection……………………………………………………… 3.3.4.2 Drafting of a questionnaire……………………………………………. 3.3.5 Limitations……………………………………………………………………

CHAPTER – 4: ANALYSIS& INTERPRETATION 4.1 6

CHAPTER- 5: FINDINGS & SUGGESTIONS 5.1 Findings ………………………………………………………………………….. 5.2 Suggestions…………………..…………………..…………………..………………

CHAPTER- 6: CONCLUSION BIBLIOGRAPHY Bibliography……..………………..…………………..…………………..……………

ANNEXURES (if any) Annexures 1 Annexure 2

7

CHAPTER -1 INTRODUCTION

8

THE INSURANCE INDUSTRY IN INDIA 1.1 INSURANCE: Definition: Insurance is a contract providing for payment of a sum of money to the person assured or failing him to the person entitled to receive the same on the happening of certain event.Uncertainty of death is inherent in human life. It is this risk, which gives rise to thenecessity for some form of protection against the financial loss arising from death.Insurance substitutes this uncertainty by certainty.The objective of insurance is normally to provide: a)Family protection and / or b)Provision for old age. c)Protection against risks Why Insurance?   

Insurance cover is essential because it provides the following benefits: A lump sum payment to the nominees at the time of the death of the policy holder. A regular payment to the nominees in the event of the death of the policy holder. Tax



benefits, as s paid reduce the liability of tax. Relieves economic hardships in the family on the uneventful death of the sole income



holder. Inculcates the habit of savings.

1.2 NEED FOR INSURANCE: Who will take care of my family if tomorrow something unfortunate happens to me?” If this question

bothers

you,

then

Life

Insurance

is

the

answer.

Of course, under any circumstances, the loss of a loved one is a traumatic experience. But, if 9

your family is also left without sufficient money to meet basic living needs or prepare for future goals, they will have to cope with a financial crisis at the same time. A Life Insurance plan ensures that your family is financially secure even if tomorrow you are no longer around to care for them.Life insurance, especially tailored to meet your financial needs:

Need for Life Insurance Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. Let us look at these unique benefits of life insurance in detail. Asset Protection From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with

a

strong

element

of

asset

appreciation.

The core benefit of life insurance is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.

Goal based savings Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will 10

begin

to

take

precedence.

Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailor made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. The table below gives a general guide to the plans that are appropriate for different life stages. g Life Stage e Young & Single

Prim Primary Need ary Need Asset creation

Life Insurance Product Life Insurance Product Wealth creation plans

Young & Just married

Asset creation & protection

Wealth creation and mortgage protection plans

Married with kids

Education insurance, mortgage protection & wealth creation plans

Middle aged with grown up kids

Children's education, Asset creation and protection Planning for retirement & asset protection

Across all life-stages

Health plans

Health Insurance

Retirement solutions & mortgage protection

1.3 Characteristics of insurance      

Sharing of risks Cooperative device Evaluation of risk Payment on happening of a special event The amount of payment depends on the nature of losses incurred. The success of insurance business depends on the large number of people insured against



similar risk. Insurance is a plan, which spreads the risk and losses of few people among a large



number of people.13 The insurance is a plan in which the insured transfers his risk on the insurer. 11



Insurance is a legal contract which is based upon certain principles of insurance which includes utmost good faith, insurable interest, contribution, indemnity, causes proximal ,



subrogation, etc. The scope of insurance is much wider and extensive.

1.4 Functions of insurance: Primary functions: 1.Provide protection: - Insurance cannot check the happening of the risk, but can provide for the losses of risk. 2.Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others. 3.Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. 4.Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.

Secondary functions: 1.Prevention of losses: - Insurance cautions businessman and individuals to adoptsuitable device to prevent unfortunate consequences of risk by observing saf etyinstructions. 2.Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty. 3.Contributes towards development of larger industries.

Other Function: Means of savings and investment :Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their costs, which include payments to cover the losses of policyholders, as well as sales and istrative expenses, taxes and dividends.

12

1.5 .AN OVERVIEW: With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services’ contribution to the country's gross domestic product (GDP) is 7% out of which the gross collection forms a significant part. The funds available with the stateowned

Life

Insurance

Corporation

(LIC)

for

investments

are

8%

of

GDP.

Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the age of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The life insurance industry in India grew by an impressive 36%, with income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. This report, “Indian Insurance Industry: New Avenues for Growth 2012”, finds that the market share of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to 13

arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share

of

the

non-life

insurance

market.

Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies. The Indian Insurance Sector went through a full circle of phases from being unregulated to completely regulate and then being partly deregulated which is the present situation. A brief on how the events folded up is discussed as follows: The Insurance Act of 1938 was the first legislation governing all forms of insurance to provide strict state controls over insurance business. In 19th January, 1956, the life insurance in India was completely nationalized through the Life Insurance Corporation Act of 1956. At that time, there were 245 insurance companies of both Indian and foreign origin. Government accomplished its policy of nationalization by acquiring the management of the companies. Bearing this objective in mind, the Life Insurance Corporation (LIC) of India was created on 1st September, 1956 which has grown in leaps and bounds henceforth, to become the largest insurance company in India. The General Insurance Business

(Nationalization)

Act

of

1972

was

formulated

with

the

objective of nationalizing nearly 100 general insurance companies and subsequentlyamalgamatin g them into four basic companies namely National Insurance, New India Assurance, Oriental 14

Insurance and United India Insurance which have their head quarters in four metropolitan cities. The Insurance Regulatory and Development Authority (IRDA) Act of 1999 deregulated the insurance sector in India and allowed the entry of private companies into the insurance sector. Moreover, the flow of Foreign Direct Investment (FDI) was also restricted to 26 %of the total capital held by the Indian Insurance Companies.

1.6.IMPORTANT MILESTONES IN THE LIFE INSURANCE: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life 'Insurance Company started 'Its business, 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life 'Insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical 'Information about both life and non life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the 'Interests of the insuring pubic. 1956:

15

245 Indian and foreign insurance and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,1956, with a capital contribution of Rs. 5 chores from the Government of India.

1.7.Liberalization of Indian Insurance: 1994: Insurance sector invited private participation to induce a spirit of competitionamongst the various insurers and. to provide a choice to the consumers. 1997: Insurance regulator IRDA was set up as there felt the Feed: To set up an independent regulatory body, that provides greater autonomy to insurance companies in order to improve their performance, In the first year of insurance market liberalization (2001) as much as 16 private sector companies including t ventures with leading foreign insurance companies have entered the Indian insurance sector. Of this, 10were under the life insurance category and six under general insurance. Thus in all there are25 players (12-life insurance and l3-general insurance) in the Indian insurance industry till date.

1.8.ROLE OF IRDA IN INSURANCE SECTOR: IRDA plays an important role in insurance sector giving important guide lines to various companies in the area of insurance. The IRDA's green signal to insurance companies for investments in venture capital funds would provide a boost in growth pertaining to the infrastructure segment. The insurance companies would be allowed to invest about 5% of the total investment in the venture capital funds pertaining to infrastructure based projects. The total aggregate of the assets under the life insurance companies is Rs 699,375 crores. The proposed alterations in the regulations pertaining to investments of the insurance companies were settled by the Insurance Regulatory and Development Authority of India (IRDA), at the board meeting on the 25th of March 2008. Several other alterations were also done with the investment 16

norms.The other important norm is the expansion of the sanctioned investments category, which would also include the mortgaged securities and the initial public offerings unlike previously when these two were not included. The proposal would be submitted to the Insurance Regulatory and Development Authority of India (IRDA) board for approval. The final draft was published in the Gazette of the Central Government at the end of March 2008. The alterations would help in developing the instruments of investment and provide flexibility for insurers. The alterations would provide more margins pertaining to the investments in certificates of deposit issued by the banks and term deposits. At present the insurance companies may invest about 10% of its investment funds to a particular sector. The Insurance Regulatory and Development Authority of India (IRDA) constituted a working group in the year 2006 to probe the existing investment regulations and provide review on

the

present

statutory

advices

and

the

trends

of

investments

for

insurance

companies.According to the Insurance Regulatory and Development Authority (IRDA), the private insurers had collected income from new business of about Rs. 18,980 crores, in 2007.

1.9.ROLE OF INDIAN BANKS IN INSURANCE SECTOR: Many Indian banks are planning to enter the insurance sector due to the huge growth that is estimated to take place in this sector. Indian banks plan to foray into the insurance sector by setting up their own insurance companies. The Indian insurance sector collected a of 17

about Rs. 75,000 crores in the segments of non- life and life insurance, during the first nine months of 2007- 2008. Further, the business of insurance in the country is expected to increase due to the growth in the categories of semi- urban and rural insurance and is expected to be worth $ 60 billion by 2010. The major Indian Banks that are planning to enter the insurance sector of the country are Union Bank, Federal Bank, Allahabad Bank, Bank of India, Karnataka Bank, Indian Overseas Bank and Bank of Maharashtra. Further, there are a number of banks that are planning to set up their own companies for insurance such as Bank of Baroda, Punjab National Bank, and Dena Bank. Indian banks are planning to enter the insurance sector on their own, without partnering with insurance companies due to several reasons. One important reason is that they would get better dividends than the commission they would get by entering into partnerships with other insurance majors. Moreover, this would help them to diversify from the regular banking activity that they are involved in. The insurance companies have been affected with the planning of Indian banks to foray into the insurance sector of the country. This is due to the fact that the insurance companies are now unable to find banks with whom they can enter into partnerships for the distribution of their products.

1.10.ROLE OF PRIVATE INSURANCE COMPANIES IN INSURANCE SECTOR: Private sector also plays important role in this sector and tried to capture maximum shares in this sector. Max New York Life Insurance Company is the leading private life insurance company in India. Max New York Life Insurance Company Ltd. launched 'lifeline' a health insurance product on March 2008, across India. Now, the company can boast of offering complete health and life insurance products across 11 regions in India. This newly launched health insurance product of Max New York Life Insurance Company offers three groups of heath insurance solutions. The director marketing product management and corporate affairs of Max New York Life Insurance said that these three distinct heath insurance products are meant to cover eventualities like hospitalization, surgery and critical illness of the insured and these plans have been structured with features like coverage for a wide range of ailments, no claim discount on revised for a healthy life, a fixed for a five-year term, free second opinion from the best health 18

care institutions of India on detection of illness. Further, it also has provision for a free telephonic medical helpline across India. The hospitalization is covered by "Medicash Plan", which is meant to provide a fixed amount of cash benefit on a day-to-day basis during the entire period of hospitalization of the insured. The “Medicash Plan” would also cover expenses for ission in ICU, lump sum benefits against an unlimited number of surgeries and recuperation benefits. The second plan of the newly launched health insurance of Max New York Life Insurance, is the "Wellness Plan", which is a more attractive one and covers 'critical illness' like cancer, alzheimers, heart ailments, liver disease, deafness, permanent disability, etc. The “Wellness plan” covers thirty eight critical illnesses, which is the highest number of illness covered under one insurance plan in India by any insurance company. The third health insurance policy of Max New York Life Insurance is a term plus health protection plan known as "Safety Net". Max New York Life Insurance Company is one of the fastest growing life insurance companies in India and is the first life insurance company of India to be awarded with ISO 9001:2000 certification.

1.11.Players in Indian insurance industry Life insurers: Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers: •Life Insurance Corporation of India (LIC) General insurers: General Insurance Corporation of India (GIC) with effect from Dec'2000, a National Reinsure GIC had four subsidiary companies, namely with effect from Dec'2000, these subsidiaries have been de linked from the parent company and made as independent insurance companies. 1. The Oriental Insurance Company Limited 2. The New India Assurance Company Limited, 3. National Insurance Company Limited4. United India Insurance Company Limited. Yr: 2000-2007 19

: Insurance Industry in the year 2009-2010 had 15 new entrants, namely:

Life Insurers: 1. Max New York Life Insurance Co. Ltd. 2. HDFC Standard Life Insurance Company Ltd. 3. ICICI Prudential Life Insurance Company Ltd. 4. Om Kotak Mahindra Life Insurance Co. Ltd. 5. Birla Sun Life Insurance Company Ltd. 6. Tata AIG Life Insurance Company Ltd. 7. SBI Life Insurance Company Limited 8. ING Vyasa Life Insurance Company Private Limited 9. Allianz Bajaj Life Insurance Company Ltd. 10. MetLife India Insurance Company Pvt. Ltd. 11. Reliance Life Insurance Company Ltd. 12. Shriram Life Insurance Company Ltd. 13. Sahara India Life Insurance Company Ltd. 14. Bharti AXA Life Insurance Company Ltd. 15. Aviva Life Insurance Company Ltd.

COMPANY PROFILE: Incorporated in Aug, 2000 HDFC Standard life is one of the leading private life insurance companies in India. HDFC Standard Life is a t venture between HDFC- India’s housing finance company and Standard plc – United Kingdom’s savings and investment Company. HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26% of equity in the t venture while the rest is owned by others. When we talk about company profile then HDFC standard

life

insurance

company is targeting insurance sector. It is launching various type of insurance plan and product which is enticing people to buy its plan. As a insurance company it focus mainly in the 20

recruitment of financial consultant and the whole company based on it because the aim of company

is

toget business and sell lots number of policy and this work is done by

financial

consultant. HDFC Standard Life Vision and Values Vision of HDFCSL .The most successful and ired life insurance company, which mean that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, “The most obvious choice for all” For retention in the market and highest market share, we need trustof our customer. The customer should trust on our policies, services,employs

and

they

should be friendly with us. It wants to live in the eye and heart of the customer. It wants to give them the easiest deal so that they can be understood the and policies. As we know that profit is the main aim of any business but it think not only about his profit but also profit of the customer. It wants to be the choice of all people on the basis of trust of customer, delivering high value to the customer, and deliver Of best value of the money.

OFFICES IN INDIA: ---Extensive branch network –reach to customers —Dedicated Email team for resolution of email requests/queries —SMS Services for customers ‗On the Move‘ through SMS key words —Web based services enhanced for customers and channel partners —Constant evaluation and capture of ―Voice of Customer‖ through renowned research agencies for experience at various touch points —Drishti –Our exclusive Customer Center for customer queries

21

COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE: Corporate Governance is a process that aims to meet stakeholder’s aspirations and societal expectations. It is not a discipline imposed by a Regulator, rather is a culture that guides the Board, Management and Employees to function towards best interest of Stakeholders. At HDFCSL, Corporate Governance philosophy stems from the belief that corporate governance is a key element in improving efficiency and growth as well as enhancing investor confidence. Accordingly, the Corporate Governance philosophy has been scripted as under: “As a good corporate citizen, the Company is committed to sound corporate practices based on its vision, values & principles in building confidence of its various stakeholders, thereby paving the way for its long term success and sustenance.” At the core of its corporate governance practice is the Board, which oversees how the management serves and protects the long-term interests of all the stakeholders of the Company. 22

The Company believes that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance. The Company’s corporate governance practices are aimed at meeting the corporate governance requirements as per the IRDA Corporate Governance Guidelines, besides good practices either recommended by professional bodies or practised by leading companies in India. . The following Corporate Governance Policy has been adopted by the Board of Directors to assist the Board in the exercise of its responsibilities. This Policy is subject to future amendments or changes, as may be necessary, in the light of the amendments in various regulations in force for governance requirements.

OUR VISION AND VALUES HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a t venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance institution and Standard Life plc, a Group Company of the Standard Life, UK. HDFC, as on December 31, 2008, holds 72.26 per cent of the paid up equity in the t venture.

Our Vision 'The most successful and ired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. In short, 'The most obvious choice for all'. Our Values 23

Values that define how we work: Integrity Innovation Customer centric People Care Team work Joy and Simplicity Besides the above (which provides an insight into the Corporate Structure of the Company), the Committees appointed by the Board focus on specific areas and take informed decisions within the framework of delegated authority, and make specific recommendations to the Board on matters within their areas of purview. All decisions and recommendations of the Committees are placed before the Board for information or for approoval.

HDFC Life Product Portfolio: HDFC Standard Life has vast portfolio of retirement plans, children plans, term plans, savings investment plans and health plans. Retirement Plan: With rising inflation, it’s absolutely necessary to make provisions for the future which makes retirement plan an important financial decision. Better known as Pension plan, this plan takes care of financial needs after retirement by investing a part of your savings for limited period. Pension plan provides steady income after retirement and takes care of daily needs. The pension plans offered by HDFC Life are Personal Pension Plan, Immediate Annuity and Pension Maximus. Child Plan: Parenthood brings responsibilities and no one is better judge of that than you. Child Plan is a plan specifically designed to take care of financial needs of your child. Child plan provides with necessary funds that will take care of child’s education, marriage etc. By investing small portion of your savings you secure the financial end of your child. Child plan of HDFC Life are called SL Youngstar Super II, SL Youngstar Super and Children’s Plan. Term Plan: A risk plan which provides comprehensive cover for your family in the unfortunate event of untimely demise. A term life insurance plan provides good cover at relatively nominal cost and has no survival benefits. HDFC Life term plans are Term Assurance Plan, Guarantee Plan, Loan Cover Term Assurance Plan and Home Loan Protection Plan.

24

Investment Plan: Popularly known as ULIP, an investment plan invests part of your savings in equity or debt market as per your preference. The objective of investment plan is to give you returns which easily beat the rising costs since the usual returns in a bank are extremely low. ULIP’s offered by HDFC Life are Endowment Assurance Plan, SL Crest, SL ProGrowth Super II, SL ProGrowth Maximiser, SL New Money Back Plan and Single Whole of Life Insurance Plan. Health Plan: Slightly different from health insurance, health plan provides cover for surgery costs, critical illness. A lump sum is paid irrespective of actual hospital bill. Critical Care Plan and

SurgiCare

Plan

are

HDFC

health

plan.

Distribution Network: HDFC has wide distribution network with 568 branches and has over 200000 Financial Consultants. HDFC Standard Life also has bancassurance partners- HDFC Bank, Saraswat Bank and Indian Bank. HDFC products like HDFC SL Crest, HDFC SL Youngstar Super II, HDFC SL ProGrowth Super II, HDFC SL Youngstar Super and HDFC SL ProGrowth Maximiser are

also

availableonline.

Financial Information: The total earned for the half year ended September 30, 2010 was Rs 35,909 million. The profit after tax for the same period is Rs 646 million. There have been 1,298 death claims during the period out of which 1,045 claims were settled and 45 claims were rejected.

Marketing Campaigns: HDFC Standard Life Insurance has taken dynamic steps as part of changing brand identity. HDFC Standard life in order to connect to younger target market made a series of changes. HDFC Standard life dropped the “standard” word from their name to make it HDFC Life. HDFC Life also changed their logo depicting more energy, exuberance, vibrancy, dependability in their brand. HDFC Life also pushed their tagline “sar utha 25

ke jiyo” with television commercial, radio ads, print and other communication mediums. The tagline presents the idea of living life with dignity which can be achieved through being self dependent and insurance is part and parcel of the same.

Distinctions: 

HDFC Standard Life has been adjudged one of the Best Companies to Work for in India in 2010. The company participated in the Great Places to Work® study for the first time and ranked first in the insurance category.



HDFC Standard Life’s YoungStar Super has been voted ‘Product of the Year 2010’ in the 'Insurance' category by more than 30,000 consumers nationwide across 36 markets. The consumer study on product innovation in India was conducted by A C Nielsen, the leading global research firm.



HDFC Standard Life has received the CIO ‘The Ingenious 100 2009 Award,’ for ATLAS (Agency Training Licensing and Servicing System). Additionally, the company has received the CIO 100 ‘Security Award 2009’ for pioneering LANDesk Management and Security Suite security implementation and taking its security to a higher level of technological excellence.



HDFC Standard Life has received the Diamond EDGE Award 2009 for its mobile workforce portal - Consultant Corner. EDGE - Enterprises Driving Growth and Excellence (using IT) is an initiative by the ,Network Computing magazine to identify, recognize, and honor end- companies in India that have demonstrated the best use of technology to solve a business problem, improve business competitiveness, and deliver quantifiable ROI to stakeholders.

3.5.ASSOCIATE COMPANIES: 1. HDFC Limited 2. HDFC Bank 26

3. HDFC Asset Management Co. Limited 4. HDFC Securities Limited 5. HDFC Standard Life Insurance Company 6. Intel net Global 7. CIBIL – Credit Information Bureau Investigation Ltd 8. HDFC Chubb General Insurance

OTHER COMPANIES: 

HDFC Trustee Company Ltd.



GRUH Finance Ltd.



HDFC Developers Ltd.



HDFC Property Ventures Ltd.



HDFC Ventures Trustee Company Ltd.



HDFC Investments Ltd.



HDFC Holdings Ltd.



Credit Information Bureau (India) Ltd

PRODUCT OF HDFCSL: As we know that lots of insurance plan are playing in the market of differentcompanies. HDCFSL has launched various insurance plans which based onunit link plan. It invests the investment

of

his

consumer

in

deposits,Government securities and Bonds, and Equity. The percentage of theseinvestments

bank in

27

these plans depends upon the consumer whether he wants totake more risk and more return or less risk or less return. It has launchedseveral insurance plans which are thus in the table:1.Unit link pension plan 2.Unit linked pension plus 3.Unit linked enhanced life protection II 4. Unit linked young star plus II 5.Endowment assurance plan 6.Children plan 7.Money back plan 8.Single whole of life plan 9.Personal pension plan 10.Saving assurance plan 11.Assure plan

Products list: Retirement/Pension Plan

HDFC Personal Pension Plan

Retirement/Pension Plan

HDFC Immediate Annuity

Retirement/Pension Plan

HDFC SL Pension Maximus 28

Child Plan

HDFC Children’s Plan

Child Plan

HDFC SL Youngstar Super II

Child Plan

HDFC SL Youngstar Super

Term Plan

HDFC Term Assurance Plan

Term Plan

HDFC Guarantee Plan

Term Plan

HDFC Loan Cover Term Assurance Plan

Term Plan

HDFC Home Loan Protection Plan

Savings and Investment Plan

HDFC SL Crest

Savings and Investment Plan

HDFC Endowment Assurance Plan

Savings and Investment Plan

HDFC SL ProGrowth Super II

Savings and Investment Plan

HDFC SL ProGrowth Maximiser

Savings and Investment Plan

HDFC SL New Money Back Plan

Savings and Investment Plan

HDFC Single Whole of Life Insurance Plan

Savings and Investment Plan

HDFC Assurance Plan

Savings and Investment Plan

HDFC Savings Assurance Plan

Health Plan

HDFC Critical Care Plan

Health Plan

HDFC SurgiCare Plan

HDFC SL CREST: Guaranteed highest net asset value (NAV) plans are gaining prominence in the market. This is due to the fact that they satisfy customer needs and offer a new avenue for insurers to sell their

29

services especially after the implementation of the new guidelines. The new Ulip season has a number of such plans. HDFC SL CREST is a unique guaranteed highest NAV plan launched by HDFC Standard Life Insurance. This is a short-term plan leaning more towards investment than insurance. The payment term under the plan is limited to five years and the policy tenure is fixed for 10 years. The plan offers two investment strategies, namely, free asset allocation and highest NAV guaranteed option. The highest NAV fund guarantees a minimum of Rs 15 or highest NAV during the initial seven years of the fund or the NAV on the date of maturity (whichever is higher) to the policyholder. The free asset allocation strategy provides five investment options (funds) for policyholders. One can choose from equity, debt or balanced portfolio. For instance, blue chip and opportunity are equity based, whereas short term and income funds are debt based. Those looking for a balanced portfolio can opt for the balanced fund and highest NAV guaranteed fund.

HDFC CHILDREN PLAN: Children's Plans helps you save so that you can fulfill your child's dreams and aspirations. These plans go a long way in securing your child's future by financing the key milestones in their lives even if you are no longer around to oversee them. As a parent, you wish to provide your child with the very best that life offers, the best possible education, marriage and life style. Most of these goals have a price tag attached and unless you plan your finances carefully, you may not be able to provide the required economic to your child when you need it the most. For example, with the high and rising costs of education, if you are not financially prepared, your child may miss an opportunity of a lifetime.

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Today, a 2-year MBA course at a premiere management institute would cost you nearly Rs. 3,00,000/- At a assumed 6% rate of inflation per annum, 20 years later, you would need almost Rs. 9,07,680/- to finance your child's MBA degree. An illustration of how education expenses could rise with ing time due to inflation. So, how can you cope with these costs? Children's Plans help you save steadily over the long term so that you can secure your child's future needs, be it higher education, marriage or anything else. A small sum invested by you regularly can help you build a decent corpus over a period of time and go a long way in providing your child a secured financial future alongwith.

Source: HDFC Standard Life Survey 2008. Inflation assumed as 6% p.a. The plan can be taken by those in the 18-60 age group with the maximum age at maturity being 75. The minimum and maximum are 10 and 25 years respectively. Under this plan, the payer of the s is the life insured and the child is the beneficiary. The plan is available in three variants.

31

They are:

Maturity Benefit Plan – Should the life insured die during the term of the plan, the future s are waived and the policy continues till maturity. On maturity, the beneficiary will receive the sum assured and the accumulated bonuses. Bonuses under this plan are of reversionary nature and are on sum assured (non-compounded).

Accelerated Benefit Plan – If the life insured dies the beneficiary will receive the sum assured and the accumulated bonuses immediately, and the policy will terminate. Should the life assured survive up to maturity, the sum assured and the bonuses will be paid.

Double Benefit Plan – Under this plan, on the death of the life insured during the paying term, the beneficiary will receive the sum assured, and the future s are waived. On maturity, the beneficiary will receive an additional sum assured plus bonuses.

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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.

Advantages: 

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 customise your policy according to your needs by adding any one of the 3benefit options available

33



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



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

HDFC Life Smart Woman Plan: HDFC Life Smart Woman Plan, a unique insurance cum investment plan designed specifically for women. This plan ensures that your savings continue, while you adjust to the new stages of your life, and you remain confident to live life your way. The plan comes with comprehensive coverage options where we will cover you against pregnancy complications and congenital conditions or for malignant female-specific cancers. During these critical moments, we assure you the peace of mind by waiving and funding your s so that as you overcome and adjust to your life your investments continue to grow.

FEATURES:

34

Advantages: 

Choose plan options as per your needs i.e. Classic or Premier or Elite



Uninterrupted savings with Waiver & funding of s for next 3 years on the following events o

Pregnancy complications or birth of child with congenital disorder

o

Diagnosis of malignant cancer of female organs

o

Death of spouse (Only with Elite option)



Additional periodic cash payouts under Premier & Elite Options



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 greater of the Sum Assured or your total fund value to your nominee.



On maturity, you can take the Fund Value at the prevailing unit prices as lump sum or you can opt for settlement option. You can use the maturity benefit to fund your needs - be it for child's education, travel, upgrading your entrepreneurship venture etc.



You have flexibility to make partial withdrawals to meet any unplanned expenses

Unit Linked Enhanced Life Protection II The massage of this policy is “invest in financial security and self respectfor you and your family”. In this policy, the investment risk in investment portfolio is borne by the policyholder. In our life I try to give the very best toour family and there is no reason why they should not get the very best inthe future too. This plan gives financially independent, even if you are notaround.

Benefits of this planThe HDFC Unit Linked Enhanced Life Protection II gives 1) Valuable protection to your family in case you are not around

35

2) Increasing insurance cover every year. 3) An outstanding investment opportunity by providing a choice f thoroughly researched and sele ct investment. .4) Flexible payment options.

HDFC Life has a strong presence across India: • 481 branches • 5,000+ partner bank branches • Strong team of 3,000 Front Line Sales (FLS) serving partner bank branches.

AWARDS AND ACCOLADE OF HDFCSL AWARDSAPRAIL: “Product of the year 2010” award for HDFC Young Star Super —Global consumer recognition standard that recognizes the best innovations in retail products —A consumer verdict for best innovations –based on a survey of 30,000 Indian consumers by AC Nielsen —Innovative product features appreciated by customers –triple insurance benefit, –bumper additions, –low allocation charges, –low fund management charges; and –low policy istration charges CIO 100 – The Bold 100, 2008 for Mobile workforce Solution (Consultant Corner)

36

— CIO 100 – Special Award for IT Security, 2008 — CQUEST Best IT Implementation – Scale Of Deployment, 2008 for Workforce Mobility — ―Intelligent Enterprise‖ Award by the Express Computer Magazine – Part of the Indian Express Group, 2006 — HDFC Standard Life ranked 29th most trusted Indian Brands amongst the Top 50 Service Brands to a study conducted by the Brand Equity – Economic Times, 2008 — '4Ps Power Brand 2006', for being one of India's Top 25 'Most Innovative Companies' in an exclusive survey conducted by ICMR (Indian Council of Market Research) and 4Ps - Business and Marketing (a Business and Marketing magazine published by Planman Media 2008.

37

ORGANIZATION STRUCTURE:

38

COMPETITORS:

39

CHAPTER -2 CONSUMER PERCEPTION ON LIFE INSURANCE

40

2.1 INTRODUCTION Perception is the process by which organisms interpret and organize sensation to produce a meaningful experience of the world. Sensation usually refers to the immediate, relatively unprocessed result of stimulation of sensory receptors in the eyes, ears, nose, tongue, or skin. Perception, on the other hand, better

describes

one's

ultimate

experience

of

the

world

and

typically involves further processing of sensory input. In practice, sensation andperce ption are virtually impossible to separate, because they are part of one continuous process.Thus, perception in humans describes the process whereby sensory stimulation is translated into organized experience.

That

experience,

or

percept,

is

the

t

product

of t h e s t i m u l a t i o n a n d o f t h e p r o c e s s i t s e l f . R e l a t i o n s f o u n d b e t w e e n v a r i o u s t yp e s o f stimulation (e.g., light waves and sound waves) and their associated percepts suggest inferences that can be made about the properties of the perceptual process; theories of perceiving then can be developed on the basis of these inferences. Because

the perceptual process

is not itself publicor directly observable (except)to the perceiver himself, whose percepts are give n directly in experience), the validity of perceptual theories can bechecked only indirectly. Historically, systematic thought about perceiving was the province of philosophy. Philosophical interest in perception stems largely from questions about the sources and validity of what is called human knowledge (epistemology). Epistemologists ask whether areal, physical world exists independently of human experience and, if so, how its properties can be learned and how the truth or accuracy of that experience can be determined. They also ask whether there are innate ideas or whether all experience originates through with the physical world, mediated by the sense organs. As a scientific enterprise, however,the investigation of perception has especiallydeveloped as part of

the

larger

discipline

of

psychology.

For

the

most

part,

psychology byes the questions about perceiving raised by philosophy in favors of problems t hatcan be handled by its special methods. The remnants of such philosophical questions,h o w e v e r, d o r e m a i n ; r e s e a r c h e r s a r e s t i l l c o n c e r n e d , f o r e x a m p l e , w i t h t h e r e l a t i v e contributions of innate and learned factors to the perceptual process. Such fundamental philosophical assertions as the existence of a physical world, however are taken for granted among most scientific students of perceiving. Typically, researchers in perception simply 41

accept the apparent physical world particularly as it is described in those branches of physics concerned with electromagnetic energy, optics, and mechanics. The problems they consider relate to the process whereby percepts are formed from the interaction of physical energy (for example, light) with the perceiving organism. Of further interest is the degree of correspondence between percepts and the physical objects to which they ordinarily relate. In philosophy, psychology, and cognitive science, perception is the process of attaining awareness or understanding of sensory information. The word "perception"

comes

from

the

Latin words perceptio, percipio, and means "receiving, collecting, action o f t a k i n g possession,

apprehension

with

the

mind or senses.

P e r c e p t i o n i s o n e o f t h e o l d e s t f i e l d s i n p s yc h o l o g y. T h e o l d e s t q u a n t i t a t i v e l a w i n psychology is the Weber-Fetcher law, which quantifies the relationship between theintensity of physical stimuli and their perceptual effects. The study of perception gave rise to the Gestalt school of psychology, with its emphasis on holistic approach.

2.2 ABOUT CONSUMER PERCEPTION: Consumer behavior studies the behavior of individual or a group of people. The study of consumer behavior provides marketers to understand and predict the future market behavior. In this paper, role of IRDA, role of Indian banks, role of private insurance companies, function of insurance company, various factors influencing consumer behavior, factors influencing buying decision and model of consumer decisions making process have been considered. Also, the types of insurance policy taken by consumer, the total sum assured of life insurance, the total sum assured of life insurance for the spouse, the share of public insurance in insurance sector, share of LIC in life insurance in insurance sector and the reasons for invested in life insurance have been studied. The survey was conducted across 334 cities/towns in all the states and union territories. A sample of 1947 individuals has been selected by setting questionnaire. The online response system has self-checking and its validation system vetted the quality and veracity of the responses. Indicts Analytics then cross-checked and inputs with its databases on investors and their habits. The majorities of the respondents were from the top five metros and 10 major cities and 42

had at least 30 participants. The profile of the target respondents is typically matched. The target respondents are well educated, familiar with English, spread over major urban centers having a higher socioeconomic and income profile and spread across a range of occupations, professions and different age groups.

2.3.INTRODUCTION: Consumer behavior is the process where the individual decides what, when, how and from whom to purchase goods and services. Consumer behavior studies how individuals, groups and organization select, buy, use dispose off goods, services, ideas or experiences to satisfy their needs and desire. The study of consumer behavior enables marketers to understand and predict consumer behavior in the market place in advance and it is concerned not only with what consumers buy but also with why, when, where, how and how often they buy it. Consumer research is the methodology which is used to study consumer behavior and it takes place at every phase of the consumption process during before and after the purchase. Consumer behavior is inter disciplinary approach that is based on concepts and theories about people that have been developed by scientists in diverse disciplines such as psychology, sociology, social psychology, cultural anthropology and economics. Consumer behavior has become an integral part of strategic and social responsibility. It should also be an integral component of every marketing decision embodied in a revised marketing and the social marketing concept. It helps marketers to fulfill the needs of their target markets in such a way that it develops a society. The insurance sector in India come a full circle from being an open competitive market to nationalization and back to a liberalized market. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years. The business of life insurance started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate 43

themselves by sharing risk, attached to individual. The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a commensurate with the risk involved. Insurance is actually a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called to pay the other party on happening of a certain event. Insurance is a contract whereby, in return for the payment of by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The Indian insurance market is characterized by the presence of 'young pensioners', as per an article in the 'Times of India'.

44

CHAPTER 3 RESEARCH METHODOLOGY

3.1.RESEARCH METHODOLOGY: 45

Data collection: For data collection, I developed a well defined questionnaire as a research instrument, consisting questions aimed to measure the consumer perception about insurance company in India, their views and comments about Company’s structure. I conducted unstructured interviews (sample size) of 100 persons of different age group in time duration of three days. All the data generated was primary data that was generated from different people of age group under NCR region.

Primary data: Individual respondents, Chartered ants,Tax Consultants, Insurance Agents, Auto loan providers were personally visited andinterviewed. They were the main source of Primary data. The method of collection of primary data was direct personal interview through a structured questionnaire.

Secondary Data: It was collected from internal sources. The secondary data was collected on the basis of organizational file, official records, newspapers, magazines, management books, preserved information in the company’s database and website of the company.

3.2. RESEARCH OBJECTIVES: • To know about the types of insurance policy taken by consumer • To know about the total sum assured of life insurance • To know about the total sum assured of life insurance for the spouse • To know about the share of public insurance in insurance sector • To know about the share of LIC in life insurance in insurance sector • To know about the reasons for investment in life insurance

46

The main aim of the research was to explore consumers’ attitudes to allowing insurance companies to access results of genetic tests for the purpose of risk assessment and setting. More specifically, the objectives of the research were: •Proper understanding and analysis of life insurance industry. •To know about brand awareness of HDFC Life Insurance and customer’s preference HDFC Life Insurance. •Conduct market survey on a sample selected from the entire population and derive opinion on that research. •To help company in establishing a network of Life Insurance Advisors and to promote the benefits those are provided by HDFC Life Insurance. •To explore consumers’ understanding of life insurance companies’ use of different factors in assessing risk. •To understand consumers’ attitudes to life insurance companies’ use of different factors in assessing risk. These factors included sex, age, smoking status, current and past health, family history of cancer or heart disease, and genetic make-up. •To determine if the use of genetic test results by life insurance companies would deter consumers from having such tests. •To explore consumer attitudes to disclosure of information to insurance companies. 

Attitudes to voluntary and involuntary disclosure.

•To gain an understanding of why consumers hold particular attitudes.

47

3.3. Research design: Research was initiated by examining the secondary data to gain insight into the problem. The primary data is evaluated on the basis of the analysis of the secondary data.

Developing the research plan: The data for this research project has been collected through self istration. Due to time limitation and other constraints direct personal interview method is used. A structured questionnaire was framed as it is less time consuming, generates specific and to the point information, easier to tabulate and interpret. Moreover respondents prefer to give direct answers. In questionnaires open ended and closed ended, both the types of questions has been used.

Sampling plan Since it is not possible to study whole population, it is necessary to obtain representative samples from the population to understand its characteristics.

Sampling Units: Individual respondents for studying Customer Buying Behavior and Market Segmentation, selected randomly from different areas in NCR, like various shopping malls and markets, Government Offices. Chartered ants, Tax Consultants, Lawyers, Business Men, Professionals and House Wives of for recruitment of Life Insurance Advisors

•Sample Technique: Random Sampling

•Research Instrument: Structured Questionnaire

Method: Personal Interview

48

Sample size •Study of Customer Buying Behavior and Market Segmentation: 100Respondents

Data collection instrument development The mode of collection of data is based on Survey Method and Field Activity. Primary data collection is based on personal interview. I have prepared the questionnaire according to the necessity of the data to be collected.

3.4. Research limitations •The research is confined to certain parts of NCR and does not necessarily show a pattern applicable to all of country. •Some respondents were reluctant to divulge personal information which can affect the validity of all responses. In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

49

CHAPTER 4 FINDINGS & ANALYSIS

50

5.1. SWOT ANALYSIS OF HDFC STANDARD LIFE INSURANCE: Analysis of the industry’s environment: HDFC and Standard Life first came together for a possible t venture, to enter the life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995, the companies signed a 3-year t venture agreement. 5.1.1. STRENGTH: 1. Domestic image of HDFC ed by Prudential’s international image is strength of the company. 2. Strong and well spread network of qualified intermediaries and sales person. 3. Strong capital and reserve base. 4. The company provides customer service of the highest order. 5. Huge basket of product range which are suitable to all age and income groups. 6. Large pool of technically skilled manpower with in depth knowledge and understanding of the market. 7. The company also provides innovative products to cater to different needs of different customers. 5.1.2. WEAKNESS: 1. Heavy management expenses and istrative costs. 2. Low customer confidence on the private players. 3. Vertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any exception. 4. Poor retention percentage of tied up agents. 5.1.3. OPPORTUNITIES: 1. Insurable population –According to ING only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured. 2. There will be inflow of managerial and financial expertise from the world’s leading insurance markets. Further the burden of educating consumers will also be shared among many players. 51

3. International companies will help in building world class expertise in local market by introducing the best global practices. 4. Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers, such as fire, export credit. 5.1.4. THREATS : 1. Legislation could impact. 2. Great risk involved 3. Very high competition prevailing in the industry. 4. Vulnerable to reactive attack by major competitors. 5. Lack of infrastructure in rural areas could constrain investment. 6. High volume/low cost market is intensely competitive.

5.2 Findings-Graphs 1. Market share of the key players in the life insurance sector in India: Employed customers The question was asked to that the policy holder is job holder or not?

52

INTERPRETATION It was founded that 83% customers who have taken the policy are job oriented.

2.BENEFIT OF INSURANCE: What is the main cause of taking the life insurance policy?

53

Future Security--59% Tax Deductions--28% Future Investment--13% INTERPRETATION The majority of consumer find it as future security followed by tax saving.

3.Satisfied with the policy: The question was asked to know that what percentage of customers is satisfied with the policies.

54

INTERPRETATION It was founded that majority of customer are not satisfied with their current policy.

4.Which sector customer chose public or private?

55

INTERPRETATION After the survey it was found that still major portion of customers go for public insurancecompanies, but with the entry of more and more private companies the scenario is changingrapidly, people need of more and better returns are opting for private companies, and thiscan be justified by the increasing market share of private companies in the Indian insurancesector. There are various ways in which private companies are found much more lucrativethan public companies and the fact which this statement are as follows: 1.Versatility of products 2.Efficient fund managers 3.Better customer services 4.More returns 56

5.Regular follow up 6.Quicker settlement

5.Where do private life insurance companies need to improve? This question was asked to know where private companies are lacking. It might be in termof service, return, information, verity or easy claim.

57

INTERPRETATION From the research it was found that there is a need for the private player to improvement incertain sector to complete with the government sector companies, majority of the People think that people think that private companies need to improve in easy claim andinformation.

TOTAL SUM ASSURED OF LIFE INSURANCE:

58

Explains about the types of insurance taken by consumer. About 20.20 % respondents have taken vehicle insurance, 19.61 % respondents have taken term cover insurance, 14.6 % respondents have taken medical/health insurance, purchase, 11.1 % respondents have taken personal accident insurance, 10.60 % respondents have taken unit linked insurance plan and 7.13 % respondents have taken pension plan etc.

TOTAL SUM ASSURED OF LIFE INSURANCE FOR THE SPOUSE:

59

Explains about the total sum assured of life insurance for the spouses. About 695 respondents having sum assured of life insurance for the spouses less than Rs 10 lakh, 132 respondents having sum assured of life insurance for the spouses between Rs 10 lakh to Rs 20 lakh, 39 respondents having sum assured of life insurance for the spouses between Rs 20 lakh to Rs 50 lakh and 1067 respondents have not taken any sum assured life insurance for the spouses etc.

REASONS FOR INVESTING IN LIFE INSURANCE:

60

The figure explains about the reason for investing in life Insurance. About 35.70 % respondents have invested in life insurance due to higher risk coverage and 32.43% respondents have invested in life insurance for tax saving.

Explains about the reasons for investing in life Insurance. About 35.70 % respondents have invested in life insurance due to higher risk coverage, 32.43% respondents have invested in life insurance for tax saving and 19.65 % respondents have invested in life insurance due to easy way to invest.

61

CHAPTER -6 CONCLUSION

62

6.1.CONCLUSION: HDFCSLIC is the renounce industry in the insurance sector. It believes in quality not in quantity. HDFC have total 12 group companies. It is the first insurance company who has gotten the license of insurance in firstly. It has started its insurance industry with the t venture of U.K. based standard life insurance company .In the insurance sector main work is done by the financial consultant who brings business to the industry. It gives more priority for the recruitment of financial consultant that’s why it has setup 5-qscore. It gives priority that is professional like as MBA, CA, ENGINEERS, DOCTORS,LAYERS, AND OTHER PROFESSIONAL. During summer training I have given presentation in study centre of IGNOU and SIKKIM MANIPAL and phone call, and try to those person to whom I know and them for the purpose of financial consultant. In this process I have recruited 12 people who are either CA,MBA, SOFTWARE ENGINEER, STUDENT, OR EMPLOY OF THEORGANISATION.It gives more facilities to their employ and provides better opportunity to their employ for promotion because it has minimum target for fulfillment. FC have to give 36 policy or 360 lack with in six months which less in comparison to the other insurance industry and for Delhi region where the transaction of money is too high. FC has chances to become sales development manager with in six month months when he fulfills the target. The post of SDM is based on payroll. He will get package of 2.75 lack per year. India is one of the most lucrative financial services market in the world. The insurance market in India is estimated to be around 400Bn growing at an astounding rate of 30% p.a. Still the experts believe that the potential is largely untapped. The insurance market is dominated by the public sector giant LIC with a market share of around 71.4%. With the private players leading the growth story, this sector is witnessing more marketing actions than even the FMCG sector. Traditionally insurance are sold through direct selling The reason being purely the nature of product warrants direct communication with the consumer. Kilter categorizes Insurance as an "Unsought" product. Unsought products are those which are ranked lowest in of consumer interest .Consumers may not be even aware of either the need or existence of this product. Historically, Indian insurance products are sold for wrong reasons. People buy insurance to avail the tax benefit and not to ensure protection and LIC was happy to oblige. Hence most of the sales talks start with the question " How much do you pay tax?" . Little money was spent on brand building because 63

there was no competition for LIC. Things have now changed. With the increasing financial literacy, volatile economy and uncertain future are prompting Indians to look seriously at insurance as a means for protection rather than tax saving instrument. With more private players entering the domain, the issues of differentiation and branding became important. HDFC Standard Life Insurance (HDFCSL) is one of the major players in theinsurance market. One of the first private insurers to enter the market, HDFC SL entered the scene in 2000. It is a t venture between the housing finance major HDFC and the UK insurance giant Standard Life. Now a days we are seeing a lot of media action from this company.Although a slow starter HDFC SL was having a small share of the pie. It was eclipsed by ICICI prudential with its media and sales blitz making it second largest player in the Insurance market. 2006 saw a shake up in this market with Bajaj Allianz edging out ICICI from the second spot . Bajaj have a market share of around 8% and HDFC SL and ICICI fighting at 3rd place with around 7.5%.HDFC is currently focusing on The Pension Plan and the Child Plan aiming to cash in on the potential of these segments. The pension market in India is estimated to be around 1000 crore with a huge potential for growth in the future. The change in the demographics is going to drive the pension market in India. Traditionally in a t family, there was an inherent protection for elders. With the urbanization and the evolution of Nuclear Urban Family( NUF) , elders are often forgotten. Out of the 314 men workers in India only 11% has some sort of old age security. People earlier depend on social security products like EPF and PPF to build a corpus for their golden years. It is this potential that has encouraged HDFC to promote its pension plans. Introduced in 2002, this product has been well received by the consumers. The ads are well executed and revolve around the positioning of "Respect Yourself" The target segment being the 30 year old family man. The basic theme of the campaign is to appeal to the self respect of these men who are in their prime of their career. "Even after retirement let your hands give rather than receive" is one of the best themes for a pension plan. Since I am in that category, these ads strike a chord in me and remind me of the need to plan for my retirement. The same theme is carried to the Child plan also. Although these campaigns will help to invoke an interest in TG, the market is in its nascent stage and lot of convincing has to be done to crack this huge market. One of the stumbling block being the expensive annuity plans. For example, it takes a 2 lakh corpus to generate Rs 1000 per month pension. Also if you put 10000 per month in a pension plan if you are 30 yrs old,

64

what you will get after 20 years is a monthly pension of 10000. (Correct me if I am wrong). So it looks unattractive in the first look compared to MFs. HDFC Standard Life has correctly identified the pulse of the target market and is all set to reap the benefits. With increase in population and income there is a wide scope in insurance sector. Insurance sector provides some security to the consumer for any type of miss happening. In this sector, IRDA plays an important role and time to time gives important guide lines to various companies. Still, LIC plays an important role and has maximum share in this sector. Recently banking sector has also moved towards insurance sector since they would get better dividends than the commission they would get by entering into partnerships with other major insurance market players. Union Bank, Federal Bank, Allahabad Bank, Bank of India, Karnataka Bank, Indian Overseas Bank, Bank of Maharashtra, Bank of Baroda, Punjab National Bank, and Dena Bank are planning to enter in this sector. Among private sectors Max New York insurance company plays a vital role. There are various factors that affect the consumer buying decision and also influence consumer thinking when they are planning to invest in insurance scheme .Major respondents generally prefer insurance like vehicle insurance, term cover insurance, medical/health insurance and they also prefer sum assured of life insurance less than Rs 10 lakh. Most of the respondents show their interest in life insurance having higher risk coverage and also for tax saving purpose.

65

6.1.FACTORS INFLUENCING CONSUMER BEHAVIOUR: 1. Social factor: Social factor divides the society into a hierarchy of distinct classes. The of each class have relatively the same status and of other classes have either more or less status. It includes family, group, celebrity etc. 2. Cultural factor: It has potent influences that are brought up to follow the beliefs, values and customs of their society and to avoid behavior that is judged acceptable. Beliefs, values and customs set subculture apart from other of the same society. Thus sub-culture is a distinct cultural group that exists as an identifiable segment, within a larger, more complex society. 3. Personal factor: It is a very important factor. Personal factors also influence buyer’s behavior. They include age, income, occupation, life style. They simply direct our outer personality. 4. Psychology factor: The buying behavior of consumer is influenced by a number of psychological factors which includes motivation, perception, learning, beliefs and attitude and personality.

6.3.SUGGESTION: When we talk about suggestion I think I have small experience of this sector but whatever I have pointed out which are thus. In the recruitment of financial consultant I found that mostly person don’t want to give rs.925 or rs.825. I have faced some difficulties when they don’t agree to give this much amount. If the company willless this charge then it will get more FC.

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It should organize weakly meeting with FC for the business and give appraisal training to FC. It works as a performance appraisal of the FC. It should give monthly party to the FC for the attachment with the industry. It should give canopy facility to CDM or RC for the recruitment of FC and if it will give canopy facility to FC then they can give more facility. Generally we buy only that thing whatever we see. It means that its hould spend more on ment. Other insurance industry like LIC and ICICI mostly through banner on metro station, on road and in the cinema hall. Add more and more movie hall for the ment. The role of recruitment is not easy so it should increase commission or give salary instead of commission so that RC will take more interest in the recruitment on financial consultant. Regular

canopy

should

be

established

such

areas

like

metro

Stations,college campus, and malls, supermarket, and hypermarket for the purpose of recruitment FC and getting business form FC.

6.4. LIMITATIONS OF THE STUDY: The information given in the above part is based on market survey, meeting with the people, and phone calls, and the other medium like internet and browser of HDFCSL. My project is based upon the interaction with the people for the purpose of recruitment of Financial Consultant. My study is totally based on the perception of the people that what they think about the insurance when someone offer him to work in the insurance sector. I analyze that the person who is needy for

money,

greedy

about

fast

life

believesin speed insurance because this sector gives you a platform for unlimited

and earning

and life time earning like life time validity in mobile phone.

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7.QUESTIONNAIRE 7.Do You Own O House o Two Wheeler 68

o Car 8. Do you have a Life Insurance Policy with any Life Insurance Company? O Yes o No a)If yes, name the Company________________________________________________ b)Name the policy which you own___________________________________________ 9. What factors do you consider while selecting a life insurance company? O Outflow o Company Reputation o Service Quality o Product Quality o Return on Investment 10.What factors influenced to select a Life Insurance company? O Personal interest o Friends o Family o Agents o ments o Others 11. What is the value of your life insurance? o>10,000 o10,000-25,000 o25,000-50,000 o50,000-1,00,000 o>1,00,000 69

12. Do you prefer to invest your money in a Insurance company or in a Bank? oInsurance Company oBank 13. Are you satisfied with your current Life Insurance Company? oYes oNo If Yes Why? ____________________________________________________________ If No Why? _____________________________________________________________

14. How do you rate the service offered by your Life Insurance Company? oExcellent oVery Good oGood oAverage oPoor 15. Would you like to communicate the service offered by your Life Insurance Company toothers? oYes o No 16. How many Life insurance Companies do you know? o<5 o5-7 o8-10 o>10 17. How do you rate the following Life Insurance Companies? oLIC 70

oHDFC oING Vysya oMet life India insurance oBirla sun life oICICI Prudential oTATA AIG 18. Would you like to continue with the same Life Insurance Company? oYes oNo 19. Any suggestions for improving the service offered by life insurance companies ___________________________________________________________________ ___________________________________________________________________ __________ _________________________________________________________ ____________________ ___________________________________________

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