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A REPORT ON

PERCEPTION OF SALARIED PEOPLE TOWARDS PENSION PLANS

A REPORT ON PERCEPTION OF SALARIED PEOPLE TOWARDS PENSION PLANS SUBMITTED BY MILAN H. RAJYAGURU (MBA

SUBMITTED BY

MILAN H. RAJYAGURU (MBA Sem-III)

Guided by

PROF. VIJAY VYAS

ACADEMIC YEAR

2005-2006

SUBMITTED TO

JAYSUKHLAL VADHAR INSTUTUTE OF MANAGEMENT STUDIES (JVIMS) BIPIN T. VADHAR COLLEGE OF MANAGEMENT JAMNAGAR

AFFILIATED TO

SAURASHTRA UNIVERSITY RAJKOT

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CERTIFICATE

This is to certify that Mr .________________________________________ has completed his project study as a partial fulfillment of MBA program satisfactorily.

The student has shown immense interest in the subject and the study was carried out with total devotion.

___________________

Project Guide PROF. VIJAY VYAS

Mr. Vijay H. Vyas (Dy. Director)

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CERTIFICATE

This is to certify that Mr. /

_____________________________________ MBA- Program 2004-2006, student of JVIMS from Jamnagar has successfully

,

completed his/her Project from (date to be Inserted)

During his/her tenure of two months project at our organization he/she was found to be sincere, enthusiastic, hard working, and very much dedicated to his/her work.

We wish him/her all the best in his/her future endeavors.

(Sign of person under whom you have worked)

(Note: - This certificate is indicative only, and is to be obtained from the company on their letterhead)

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DECLARATION

I undersigned Milan H. rajyaguru a student of MBA 3 rd semester declare that I have prepared this project report on PERCEPTION OF ORGANISATIONAL STUDY OF HDFC Standard Life Insurance Company (SLIC) under Mr. MILAP AMBAVI and by Prof. Vijay Vyas of JVIMS.

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

(Signature)

___________ Student's Name: MILAN H. RAJYAGURU

Roll No.:

43

(Note: - This declaration is to be signed by student)

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ACKNOWLEDGEMENT

To dear God, whose external blessings and divine presence helps us to fulfill all our goals.

When emotions are profound words sometimes are not sufficient to express our thanks and gratitude. With this few words, I am trying to express my extreme gratitude and sincere thanks to all those people who have helped and provided the very much needed enthusiasm and consistent encouragement required to convert this idea in my dream into project.

I will always remain grateful and obliged to Prof. Vijay Vyas –JVIMS, Jamnagar for his never ending inspiration, meticulous guidance,

I would also like to express my gratitude to Mr. MILAP AMBAVI (Sales Development Manager) for his practical guidance and consistent support in making this project.

The last but not least I gratefully acknowledge all my friends and relatives for their physical presence and sentimental support.

MILAN H. RAJYAGURU

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CONTENTS

Table no. 1

Sr.

 

Particulars

Page

1

Executive Summary

7

2

Introduction

   
 
  • (a) Company Details

2

 
  • (b) Industry Details

17

 
  • (c) Competitors details

21

 
  • (d) Regulatory Environment details

 

3

Organizational Study

34

 
  • a) Marketing Department study

35

 
  • b) Operations Department Study

62

 
  • c) Financial Department Study

64

 
  • d) Human Resource Department Study

73

4

Research

 

78

 
  • a) Research Objectives

 
 
  • b) Research Methodology

 

1) Research Design Unit of Analysis

2)

 

3)

Sampling Design

4)

Data Collection Methods)

5)

Data Analysis

 
  • c) Data Analysis & Findings

80

 
  • d) Conclusions

 

90

 
  • e) Limitations of the Study

91

 
  • f) Recommendations

92

 
  • g) Appendixes:

   

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

5

Bibliography

 

105

 

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EXECUTIVE SUMMARY

I have taken training in Baroda dairy. As per my view it is working superbly. I have gone deep in the study of the organization; every department of the company is working very effectively.

Baroda dairy is having financial background from Nation anal Dairy development board. The bank gives totally financial support. Every financial transaction carried out by the effective way so company does not face any problem related with the finance. Marketing department is now in a progress some advertisement also released recently before that this type of activity was not carried out.

Operation department and HR department both are working effectively. Human Resource is taken care most in the organization.

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Definition Of Life Insurance

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

“Life insurance provides a sum of money if the person who is insured dies whilst the policy is in effect.”

In other words, surely this is far too brief an explanation for a financial service that provides a very sophisticated range of savings and investment products, as well as mere compensation for death.

Other Definitions:

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

associate and individuals.”

transfer

to

the

shoulders

of

all,

risks

that

attach

to

  • - John Magee

“Life insurance accumulated contributions of all parties participating in the scheme.”

  • - D.S.Hansell

“Life insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency.”

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  • - Justice Tindall

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A) COMPANY DETAILS

HDFC STANDARD LIFE INSURANCE

 
 

2. INCORPORA

TION

OF

HDFC

 

STANDARD

LIFE

 

INSURANCE

COMPANY

 

LIMITED

3.

HDFC STANDARD LIFE TO BE FIRST LIFE INSURANCE COMPANY IN PRIVATE SECTOR

 

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

 

COLLOBORATION OF HDFC AND STANDARD LIFE

 

MISSION OF HDFC STANDARD LIFE INSURANCE

 

VALUES OF HDFC STANDARD LIFE INSURANCE

 

HDFC STANDARD LIFE DECLARES RESULTS FOR FY 2004-05

 

NATIONAL LEVEL HIERARCHY

BRANCH LEVEL HIERARCHY

 
 

SWOT ANALYSIS

 

FUTURE PLAN

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1) HDFC STANDARD LIFE INSURANCE :

HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3-year joint venture agreement.

Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.

In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai.

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

In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.

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2) INCORPORATION OF HDFC STANDARD LIFE INSURANCE COMPANY LIMITED :

The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited.

Our ambition from as far back as October 1995 was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured.

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3) HDFC STANDARD LIFE TO BE THE FIRST LIFE INSURANCE COMPANY IN PRIVATE SECTOR

Our Economic Bureau

New Delhi, Oct 23: The Housing Development Finance Corporation has received a new lease of life. The Insurance Regulatory and Development Authority (IRDA) has granted registration to HDFC Standard Life Insurance, as the first private sector life insurance company in India. Reliance Fire and General Insurance and Royal Sundaram Alliance Insurance have been given certificates of registration for underwriting non-life insurance business in the country.

The IRDA board, which met here on Monday under the chairmanship of NI Rangachari, has decided to grant licenses to these three companies under Sec 3 of the Insurance Act 1938.

The IRDA board also considered the applications of ICICI Prudential Life Insurance Company, Iffco Tokyo Marine Insurance and Max India New York Life Insurance and decided to grant in-principle registration to these companies.

However, these three will be required to furnish more details about their respective financial strengths and business plans to the IRDA before getting registration. Talking to The Financial Express, HDFC chairman Deepak Parekh said the joint venture would have a total equity of Rs 168 crore. HDFC would hold 81.4 per cent of the equity and foreign partner Standard Life would contribute the remaining 18.6 per cent.

The HDFC Standard Life proposes to go in for what is described as a "soft launch" in December 2000 and officially open the business in January 2001 with offices in 12 cities.

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Expressing delight at being awarded an operating license, Royal Sundaram Alliance Insurance chairman GK Raman said: "We will serve the Indian consumers with a portfolio of insurance products suited to their interests. Service and customization will be the defining features of our new venture." Mr. Micky Brigg, managing director of the joint venture company, said: "India is a high priority on Royal Sun Alliance Group's strategic business map. We will support the Indian venture with world-class underwriting, risk management and claim-handling techniques."

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4) HDFC STANDARD LIFE INSURANCE COMPANY

HDFC Standard Life Insurance Company Limited is the First Private Sector Life Insurance Company to be granted a license by the IRDA. As a part of the ongoing liberalization of the Insurance Sector, the Insurance Regulatory and Development Authority (IRDA) has granted the first set of licenses on 23rd Oct

00.

The Company is a joint venture with Standard Life, UK. Founded in 1825, Standard Life has been at the forefront of the UK insurance industry for 175 years by combining sound financial judgment with integrity and reliability. It is the Largest Mutual Life company in Europe and has total assets of Rs.5, 50,000 crore.

Standard Life is one of the insurance companies in the world to have received 'AAA' rating from two of the leading international credit rating agencies, Moody's and Standard & Poor's. The Independent Brokers called IFAs recently voted ‘Company of the Decade’ standard Life in U.K.

Number of branches:

United kingdom

31 branches

Canada

11 branches

Ireland

7 branches

Spain

31 branches

Germany

1 branches

Austria

2 sales office

Hong Kong

3 representative office

China

2 representative office

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5) COLLOBORATION DETAIL

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

In 1995, HDFC LIMITED and standard life assurance Company entered into a joint venture relationship. Values were shared, beliefs merged through the hurdle-race of time, and the two partners stood by each other. And emerged at the forefront. On 23 rd October 2000, HDFC SLIC limited was the first private life insurance company to be granted the certificate of registration by the IRDA.

HDFC and standard life are companies with tremendous financial strength as endorsed by credit rating agencies. Both enjoy an excellent reputation in terms of goodwill and efficient customer service.

Certificate of registration

:

23 rd October 2000 by IRDA

Discussion started with SL

:

1995, January

Joint venture agreement between HDFC and SL

:

1995, October

Company officially incorporated

:

14 th August 2000

Share of HDFC in equity

:

81.4%

Share of SL in equity

:

18.6%

First policy

:

2000, DecemberHDFC

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6)

MISSION OF HDFC STANDARD LIFE INSURANCE:

We aim to be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market; rather it is a combination of several things like-

Customer service of the highest order

 

Value for money for customers

Professionalism in carrying out business

Innovative

products

to

cater

to

different

needs

of

different

customers Use of technology to improve service standards

 

Increasing market share

 
 

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7)VALUES OF HDFC STANDARD LIFE INSURANCE :

SECURITY: Providing long term financial security to our policy holders will be our constant endeavor. We will be do this by offering life insurance and pension products.

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

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

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

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

Premium Income grows by 132%

HDFC Standard Life Insurance Company Limited declared its annual results for the financial year ending March 31st, 2005. The company generated New Business Premium Income of Rs. 486 Crore in 2004-05 registering a year- on-year growth of 132%. The growth was primarily driven by the success of the company's initiative on structured sales processes based on customer needs and their assessments.

Mr. Deepak Satwalekar, Managing Director & CEO, and HDFC Standard Life attributed this growth to the quality of life insurance solutions offered by the company. Speaking on the occasion he said, "We are equipped to offer some of the best solutions to our customers given our wide range of products and the quality of advice offered by our Financial Consultants and Corporate Consultants. Training was one of the biggest initiatives we had undertaken last year. Clearly, this initiative has started giving us good results."

Highlights of Financial Year 2004-05

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

Total Premium Income of Rs.687 Crores as against Rs. 298 Crores in FY

03-04.

Alternate Channels including bancassurance have recorded an impressive growth of over 400% to contribute 37% to the Effective Premium Income (EPI).

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

The average premium doubled to Rs 17,000

Company products and services available in 444 locations across

the country.

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

HDFC Standard Life tracks its New Business Premium on the basis of Effective Premium Income (EPI). EPI is calculated by giving only a 10% value to a Single Premium policy and is an internationally accepted indicator of an insurance company's performance. While the company recorded New Business Premium Income of Rs. 486 Crores, the EPI figure was lower at Rs. 436 Crores. The total premium income (including renewal premium) grew by 130% to touch a figure of Rs. 687 Crores. High levels of persistency have resulted in a higher level of renewal premiums. High persistency is an important contributor to future profitability. The cumulative sum assured for all policies issued up to March 31, 2005 crossed Rs. 30,000 Crores.

In the first full year of offering unit linked products, the structured sales process adopted by the company has paid rich dividends. HDFC Standard Life offers, both, life insurance policies as well as pension products on a unit linked platform. Unit linked products accounted for over 50% of the new business premium. Given the nature of the unit linked product, the company provided specialized training to a limited number of its Financial Consultants who were then tested for their understanding of the products and separately licensed. HDFC Standard Life is unique in stipulating this requirement for its sales force.

The company's national relationships with HDFC Limited, HDFC Bank, Union Bank of India, Indian Bank and Saraswat Bank have also helped it reach out to a larger number of customers across the country. The alternate channel business grew by over 400% to contribute 37% of the premium income. The company plans to further strengthen these relationships through the introduction of products specially designed for this channel.

HDFC Standard Life continues to have one of the widest reaches among new insurance companies. The company doubled the number of offices to 104 across the country. Through these offices, the company today services customer needs

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in over 440 towns. The company also increased its depth in existing markets by increasing its Financial Consultant strength from 17,000 as on 31st March 2004 to over 23,000 as on 31st March 2005. There has been a huge jump, of over 220%, in the number of its Financial Consultants who have qualified to become members of the prestigious Million Dollar Round Table (MDRT). From 38 members as on 31st December 2003, the number has increased to 124 members as on 31st December 2004. During the year, the company expanded its portfolio of products by launching plans to cover Superannuating and Leave Encashment needs, thereby offering a wide range of employee benefit solutions to its corporate clients. Consequently, HDFC Standard Life's Group Business saw a huge growth over the previous financial year. The New Business Premium grew to Rs. 49 Crore to cover over 200,000 lives for a sum assured of over Rs.10,000 Crores.

Given its parentage and its financial expertise, the company is confident of offering good long-term returns to its policyholders. Speaking on this Mr. Satwalekar said, "Our investment philosophy and cost consciousness together will help us in providing good long term growth to policyholders on their investments with us. This is evident in the performance of our equity based unit linked funds which have outperformed most indices over the last one year".

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9) NATIONAL LEVEL HIERARCHY OF THE ORGANIZATION

Managing director

9) NATIONAL LEVEL HIERARCHY OF THE ORGANIZATION Managing director General Manager Sales & customer services _______________________________________

General Manager Sales & customer services

9) NATIONAL LEVEL HIERARCHY OF THE ORGANIZATION Managing director General Manager Sales & customer services _______________________________________

_______________________________________

 
_______________________________________ Head of group sales central Retail sales distribution Branch manager sales remuneration Contract licenser __________________________________
_______________________________________ Head of group sales central Retail sales distribution Branch manager sales remuneration Contract licenser __________________________________

Head of

group sales

 

central

Retail sales

distribution

 
_______________________________________ Head of group sales central Retail sales distribution Branch manager sales remuneration Contract licenser __________________________________
 

Branch manager

   

sales remuneration

 
Contract licenser

Contract licenser

__________________________________

 
_______________________________________ Head of group sales central Retail sales distribution Branch manager sales remuneration Contract licenser __________________________________
_______________________________________ Head of group sales central Retail sales distribution Branch manager sales remuneration Contract licenser __________________________________
_______________________________________ Head of group sales central Retail sales distribution Branch manager sales remuneration Contract licenser __________________________________

Representative office

BDM

Representative office BDM

corporate

 

sales training

 

Resident manager

agent

 
 

Team of

FC

Sales management Information

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10) BRANCH HIERARCHY

REGIONAL MANAGER

10) BRANCH HIERARCHY REGIONAL MANAGER ASSISTANT SALES MANAGER BUSINESS DEVELOPMENT MANAGER SALES DEVELOPMENT MANAGER FINANCIAL CONSULTANT

ASSISTANT SALES MANAGER

10) BRANCH HIERARCHY REGIONAL MANAGER ASSISTANT SALES MANAGER BUSINESS DEVELOPMENT MANAGER SALES DEVELOPMENT MANAGER FINANCIAL CONSULTANT

BUSINESS DEVELOPMENT MANAGER

10) BRANCH HIERARCHY REGIONAL MANAGER ASSISTANT SALES MANAGER BUSINESS DEVELOPMENT MANAGER SALES DEVELOPMENT MANAGER FINANCIAL CONSULTANT

SALES DEVELOPMENT MANAGER

10) BRANCH HIERARCHY REGIONAL MANAGER ASSISTANT SALES MANAGER BUSINESS DEVELOPMENT MANAGER SALES DEVELOPMENT MANAGER FINANCIAL CONSULTANT

FINANCIAL CONSULTANT

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11) SWOT ANALYSIS

SRENGTH

HDFC Standard LIFE insurance Company (HDFC SLIC) is having a good market reputation HDFC SLIC believe to do business by the ethical way Service of the HDFC SLIC is excellent. Stable and experienced management HDFC SLIC’S main strength is depending upon financial consultant. Asset base of Rs. 27,000 crores which indicates high financial strength Strength of foreign partner which has total asset of Rs. 5, 81,000 crores Deposits and bonds are ‘AAA” rated by Standard and Poor’s, FAAA and MAAA by CRISIL and ICRA.

WEAKNESS

Need identification of the customer took a back seat and this, in turn, is largely responsible for the high lapsation ratio.

One issue that is being hotly debated presently is whether we should go for total detarrification or not.

The tendency not to Share information or data’s to other insurers in one company as data plays major role in the insurance business.

HDFC SLIC have been spending very less in advertising.

Recently they

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

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OPPORTUNITY

HDFC SLIC can open branches in the small cities also. HDFC SLIC can expand more and more branches in the rural sector. HDFC SLIC has been doing business since last five years still they have so many opportunities to expand business. There is a golden opportunity for the HDFC SLIC if it uses its brand name effectively and advertises it effectively. Opportunity to capture more market share if it increases its strength of financial consultant.

THREAT

From the other private players.

Large distribution network of LIC

Decades of experience and brand name of LIC

12 % service tax on investment

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12) FUTURE PLAN

HDFC Standard Life Insurance has been doing business since last five years because before that any private companies were not allowed to do business of insurance. Company has been continuously trying to increase workforce and number of branches. Company has doubled number of branches it is about 104 in the country and also increased number of financial consultants it is about 23000 in 2005 compare to 17000 in 2004. Future plan of the company is still to increase workforce and number of branches in all over India. Today company provides services in about 440 towns.

For future company has plan To increase more products in its portfolio To increase more benefits for its financial consultants and customers To capture more market

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BOARD OF DIRECTORS

HDFC standard life insurance company limited

Chairman

Mr. Deepak Parekh

Directors

Mr. I.c. lumsden Mr. K.m.mistry Mr. A.m.crombie Mr. M.r.pai Mr. A.R. Forbes Mr. P.d.robertson Alternate to Mr. I.c. lumsden Mr. P.d.inman Alternate to Mr. A.m. crombie

Managing director and CEO

Mr. D.m.satwalekar

Author’s

Mr. S.b.billimoria and company Chartered accountants Mr. B.k kher & company Chartered accountants

Bankers

HDFC bank ltd.

Registered office

Ramon house, H.t.parekh marg, 169, Back Bay Reciamation, Church gate Mumbai 400 020

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Corporate office

The IL&FS financial centre

5 th floor, plot no. c-22, g block Bandra kurla complex, Bandra (e), Mumbai 400 051. Tele no. 2653 3666

Fax.

22-2653 3655

E-mail

Internet

www Hdfcinsurance.com

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(B) INDUSTRY PROFILE

Insurance constitutes one of the major segments of the financial market. Insurance services play predominant role in the process of financial intermediary. Today insurance industry is one of the most growing sectors in India. There is lot of potential in the Indian Insurance Industry.

There are many issues, which require study. The scope of the study of insurance industry of India would be very great as there are ongoing developments in the industry after the opening of the sector.

The major issue right now is the hike in FDI (Foreign Direct Investment) limit from 26% to 49% in the insurance sector. Government may in near future allow 49% FDI in Insurance. This would lead to more capital inflow by foreign partners.

Another major issue is the effects on LIC after the entry of private players in the market. Though market share of LIC has been affected, it has improved in terms of efficiency.

There are number of other hot topics like penetration of Health Insurance, Rural marketing of insurance, new distribution channels, new product ranges, insurance brokers’ regulation, incentive scheme of development officers of LIC etc. So it offers lot of scope for studying the insurance industry.

Right now the insurance industry has great opportunities in a country like India or China which huge population. Also the penetration of insurance in India is very low in both life and non-life segment so there is lot potential to be tapped. Before starting the discussion on insurance industry and related issues, we have to start with the basics of insurance. So first we understand what is insurance? How the word ‘insurance’ is different from the word ‘assurance’? etc.

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History of Insurance

The roots of insurance might be traced to Babylonian and that is only for goods. In the middle of 14 th century as evidenced by earliest known insurance contract, marine insurance was practically universal among maritime nations of Europe.

By

the

end

of

the 18 th century, Lloyd’s coffeehouse,

in London,

had

progressed into one of the first modern insurance companies. Insurance developed rapidly with the growth of British commerce in the 17 th and 18 th century. After 1840, with the decline of religious prejudice against the practice, life insurance entered a boom period. In the 1830s the practice of classifying risk began.

The workman’s compensation act of 1897 in Britain requires employers to insure their employees against industrial accidents.

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Time line in insurance history

Major Landmarks

1818

British introduced the life insurance to India with the establishment of the Oriental Life Insurance Company in Calcutta.

1850

Non life insurance started with Triton Insurance Company.

 

1870

Bombay Mutual Life Assurance Society is the first India

 

Owned life

insurer.

1912

The Indian Life Assurance Company Act enacted to Life Insurance Business.

regulate the

1938

The Insurance Act was enacted. Nationalization took place. Government took over 245 Indian and foreign insurers and provident societies.

1972

Non-life business nationalized, General Insurance

 
 

Corporation

(GIC) came into being.

1993

Malhotra committee was constituted under the

 

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

a blue print for insurance

sector reforms.

1994

Malhotra committee recommended reentry of private Players.

 

1997

IRDA (Insurance Regulatory and Development

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Authority) was set Market in India.

up

as a regulator of the insurance.

2000

IRDA started giving license to private insurers. ICICI Prudential, HDFC were first private players to sell Insurance Policies.

2001

Royal Sundaram was the first non-life private player to Sell an insurance policy.

2002

Bank allowed to sell insurance plans as TPAs enter the scene, insurers start setting non-life claims in the cashless

mode.

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(C) COMPETITORS DETAIL

At present there are total 14 players in Indian life insurance sector. There is only one player in the government sector and it is the Life Insurance Corporation of India. Rest of the players is in the private.

Now let’s look at these players and their market share TABLE NO.2

No.

Name of the Company

Market

Share in

%

1

Life Insurance Corporation (PSU)

82.30

2

ICICI Prudential Life Insurance Company

5.63

3

Birla Sunlife Insurance Company

2.56

4

Bajaj Allianz Life Insurance Company

2.03

5

SBI Life Insurance Company

1.80

6

HDFC Standard Life Insurance Company

1.36

7

Tata AIG

1.29

8

Max New York Life Insurance Company

0.90

9

Aviva

0,79

10

Kotak Mahindra Life Insurance Company

0.51

11

ING Vysya

0.37

12

AMP Sanmar

0.26

13

Met Life Insurance Compnay

0.21

14

Guardian Life Insurance Co Ltd.

 

Now let’s depict the market share of these players on diagram

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

Company

Foreign

Major

local

Business of local

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shareholder

shareholder

shareholder

 
 

Allianz

Bajaj Auto

Auto manufacturer

Allianz Bajaj life Birla sun life

Sun life of Canada

Birla

global

Diversified

 

finance

conglomerate

Dabur CGU

 

CGNU

Dabur

Medical

&

 

consumer

products

HDFC

standard

Standard life

HDFC

Investment

&

life

finance

ICICI

Prudential

Prudential(UK)

ICICI

Investment

&

life

finance

ING Vysya life

 

ING

Vysya bank

Bank

&

other

investors

Max

New

York

New York Life

Max India

Diversified

 

Life

 

MetLife India

 

MetLife

Jammu & Kashmir

conglomerate Bank & diversified

 

Pallonji

bank:

conglomerate

 

OM

Kotak

Old Mutual

group Kotak Mahindra

Investment

&

Mahindra

finance

SBI Life

 

Cardiff

SBI

Bank

TATA-AIG Life

AIG

TATA

Diversified cong.

Source: The Hindu survey of the Indian industry, 2003

Graph No.1

MARKET SHARE OF THE COMPETITORS

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LIC SBI Life Insurance Company Birla Sunlife Insurance Company Bajaj Allianz Life Insurance Company ICICI
LIC
SBI Life Insurance Company
Birla Sunlife Insurance Company
Bajaj Allianz Life Insurance Company
ICICI P rudential Life Insurance Company
HDFC Standard Life Insurance Company
Market Share
Tata AIG
Max New York Life Insurance Company
Aviva
Kotak Mahindra Life Insurance Company
ING Vysya
AMP Sanmar
  • Met Life Insurance Compnay

Here we can see from the diagram that LIC is the market leader and it commands the major part of the total life insurance market. Its market share was approximately 98% before 2000 but after the entry of private players it has significantly decreased.

Among private players ICICI Prudential stands first. It has the market share of approximately 5.7% in the total market and it constitutes 40% of the market share among private players.

Birla Sun life Insurance Company comes third. Bajaj Allianz is also one of the fastest growing life insurance companies in India.

Rest of the players has market share below 2%.

LIFE INSURANCE CORPORATION

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The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance.

Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six-lakh agency force.

LIC has hundred divisional offices and has established extensive training facilities at all levels. At the apex, is the Management Development Institute, seven Zonal Training Centres and 35 Sales Training Centres.

At the industry level, along with the Government and the GIC, it has helped establish the National Insurance Academy. It presently transacts individual life insurance businesses, group insurance businesses, social security schemes and pensions, grants housing loans through its subsidiary; and markets savings and investment products through its mutual fund. It pays off about Rs 6,000 crore annually to 5.6 million policyholders.

BIRLA SUN LIFE INSURANCE

Birla Sun Life Insurance Company Limited, a joint venture between Sun Life Assurance Company of Canada and Aditya Birla Management Corporation Limited, recently completed a successful first year of operations. The company emerged as a strong private sector insurance player in the newly opened insurance market in India with its pioneering efforts in the area of Unit Linked insurance plans. The company sold over 20,000 policies covering more than 33,000 lives in its first year of operations. It achieved an annualised premium income of Rs.350 million with a total sum assured of Rs.16,000 million.

The company has more than 2,700 insurance advisors who sell company products across the country. The company offers an array of products in the individual and group life segments.

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The company established a strong presence in India with 22 branches and two development centres across 17 cities.

ICICI Prudential Life Insurance Company

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).

ICICI Prudential equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

Bajaj Allianz Life Insurance Company

Bajaj Allianz General Insurance a joint venture non-life company promoted jointly by Bajaj Auto and the German insurer- Allianz. Indian auto major holds 74% while Allainz holds 26% in the Joint Venture, and has an authorized and paid up capital of Rs. 110 crores. Mr. Graham Norris is the CEO of the company.

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Bajaj Allianz General Insurance will leverage the customer base and expertise of Bajaj Auto Ltd and Allianz AG Incorporated in September 2000, Bajaj Allianz General Insurance received the certificate of registration from Insurance Regulatory and Development Authority in May 2001.

SBI Life Insurance Company

SBI Life Insurance Co. Ltd. is a registed Life Insurance Company which has been licenced by Insurance Regulatory and Development Authority of India. It belongs to State Bank of India (SBI) group. State Bank of India has joined hands with Cardif of France to form a Life Insurance Company:

SBI - The Largest bank in India Cardif - A wholly owned subsidiary of BNP PARIBAS (one of the top 10 banks in the world), is a leading Insurance Company in France operating in 27 countries all over the world.

Tata AIG

Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance Company Ltd. (collectively "Tata AIG") are joint venture companies, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake

Tata AIG Life Insurance Company Ltd. provides insurance solutions to individuals and corporates. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.

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Tata AIG Life offers a broad array of life insurance coverage to both individuals and groups, with various types of add-ons and options available on basic life products to give consumers flexibility and choice

The non-life insurance arm, Tata AIG General Insurance Company, which started its operations in India on January 22, 2001 offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines.

ING Vysya

ING Vysya (a group terminology) has 3 businesses in India, ING Vysya Life Insurance, ING Vysya Bank and ING Vysya Mutual Fund. ING Vysya Bank is a premier private sector bank with a 70-year heritage and 1.5 million satisfied customers. ING Vysya Mutual Fund is a mid sized asset management company with a retail investor focus.

Kotak Mahindra Life Insurance Company

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance, we aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent. Jeene Ki Azaadi ...

AMP Sanmar

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

Indian Business Expertise.

The Life Insurance joint venture company between AMP of Australia and the Sanmar Group of Chennai will create a better future for you and your family, by helping you build and manage your wealth.

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AMP Sanmar offers a comprehensive range of life insurance Products that will enhance your savings and provide financial security to people who need your support. AMP is a leading international financial services group with over 150 years with core business in Insurance, Asset Management and Financial Planning.

The Sanmar Group is a leading industrial group in South India and one of the top corporations in the country that helped pioneer industrialization in India for over six decades. Both AMP and Sanmar are deeply committed to this Life Insurance joint venture and to create a long-term relationship with the customer

Aviva Life Insurance Company India Pvt. Ltd.

In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional healthcare products.

Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank.

Aviva has 34 Branches (including rural branches) in India supporting its distribution network. Through its Branches and its Bancassurance partner locations, Aviva products are available in 165 towns and cities across India. Aviva has also opened four rural branches in Faridkot, Udaipur, Nasik and Nagpur.

Max New York Life Insurance

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Max New York Life Insurance Company Limited is a joint venture between Max India Limited, a multi-business corporation focusing on life insurance, health care and information technology, and New York Life, a Fortune 100 company with over 150 years of experience in the life insurance business.

In 2000, Max New York Life became the first Indo-American insurance joint venture registered and granted a license to conduct business in India. Since that time, Max New York Life has acquired a national presence, establishing a wide distribution network with 35 offices located across 27 cities in India, which are staffed by over 1,500 employees and over 7,700 highly competent life insurance Agent Advisors.

In 2003, Max New York Life became the first life insurance company in India to receive the ISO 9001:9002 certification for its commitment to quality. All of Max New York Life’s offices are supported by state-of-the-art technology designed to enhance its goal of providing excellent service to customers. It has also set up a Centre for Operational Excellence at its head office in Gurgaon, Haryana, just outside of New Delhi.

(D) REGULATORY ENVIRONMENT DETAILS

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REGULATORY FRAMEWORK (INSURANCE ACT & IRDA)

Insurance Act, 1938

The Insurance Act was enacted

in

1938

with

a

view

to control

the

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

insurance companies to do insurance business.

The Insurance Act prescribes rules for Assignment or transfer of policies and nominations, commission and rebates and licensing for agents, amalgamation or transfer of insurance business, setting up of the Tariff Advisory Committee, solvency margins, insurance cooperative societies, reinsurance, registration etc.

The Insurance Act, 1938 allows for only Indian Insurance companies registered under the Companies Act, to transact insurance business in India

Amendment in 2001

For smooth functioning of the market, certain amendments were made in the Act. The amendments contain entry of insurance co-operative societies, provisions relating to payment of commission and fee for insurance intermediaries, allowing flexibility in the eligibility qualifications for corporate agents., allowing a more flexible mode of payment of premium through credit cards, smart cards, internet, etc.

Insurance Regulatory and Development Authority (IRDA)

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The Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and
The Insurance Regulatory and Development Authority (IRDA) was
constituted as an autonomous body to regulate and develop the business of
insurance and re-insurance in India. The Authority was constituted on April 19,
2000; vide Government of India’s notification No. 277.
The Insurance Regulatory and Development Authority Act, 1999, was
enacted by Parliament in the fiftieth year of the Republic of India to provide for
the establishment of an Authority to protect the interests of holders of insurance
policies, to regulate, promote and ensure orderly growth of the insurance industry
and for matters connected therewith or incidental thereto and further to amend
the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the
General Insurance Business Act, 1972. IRDA was constituted in terms of the
Insurance Regulatory and Development Authority Act, 1999, as the regulator of
the Indian Insurance industry.
IRDA was setup in 1996 but it was formally constituted as a regulator of
the insurance industry in April 2000. The regulator was initially known as the
Insurance Regulatory Authority but was subsequently rechristened as Insurance
Regulatory and Development Authority as it was provided that it had broader role
to perform in the Indian insurance market. It has not only to frame and issue
statutory and regulatory stipulations, guidelines, and clarification but it has also to
perform a developmental and promotional role. The developmental and
promotional role of the regulator include facilitating the growth of the market by
attracting large number of players, integrating of the insurance market with the
domestic financial services market, and synchronizing the Indian Insurance
market with that of global insurance market.
Thus, the objectives of IRDA are two fold: policyholder protection and
healthy growth of the insurance market.
IRDA
has
till
2001
issued
seventeen
regulations
in
the
areas
of
registration of insurers, their conduct of business, solvency margins, conduct of
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reinsurance business, licensing, and code of conduct intermediaries. It follows the practice of prior consultation and discussion with various interest groups before issuing regulations and guidelines.

Operations of IRDA

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

  • 2. IRDA is the sole authority for awarding licenses. There is no restriction in the number of licenses it can issue, but licenses for life and non-life business are to be issued separately. Licenses are issued only on a national basis. The new players should commence business within 15-18 months of getting the license.

  • 3. All insurance intermediaries, such as agents and corporate agents, have to undergo compulsory training prior to their obtaining a license. IRDA also specified the minimum educational qualifications for these intermediaries. IRDA conducts examinations and then issues licenses to these agents,. IRDA believes that well trained and informed intermediaries can service the consumers better. IRDA insured or renewed. 1, 18,154 agents licenses by the end of March 2001.

  • 4. IRDA has come out with the Insurance Advertisement and Disclosure Regulations to ensure that the insurance companies adhere to fair trade practices and transparent disclosure norms while addressing the policyholders or the prospects.

Potentiality in the Insurance Sector .

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Scope of Insurance Business in India

The Malhotra Committee estimated that the insurance penetration in India is to the extent of about 25% of the insurable population. As of 1999- 2000, LIC’s Insurance Premium Income was approximately Rs. 32,000/- carores. It is observed that currently LIC has about 10 Crore policies in force, which contributed a premium of about 6% of the GDS (Gross Domestic Savings) of household in India.

Based on a report by the Confederation of Indian Industries (CII), it is anticipated that this figure of 10 carore policies in force is likely to double in the next decade. By the year 2010, the premium income is expected to account for 18% of the GDS, amounting to Rs. 5,12,000 carore.

0 80 60 40 20 180 160 140 120 100 2006 2010 2002 1999
0
80
60
40
20
180
160
140
120
100
2006
2010
2002
1999

Policies in Forces (million)

Policies in Forces (million)

YEAR Chart 1-: Number Policies In Forces

International Presence of IRDA

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IRDA is a member of the International Association of Insurance Supervisors, (IAIS) headquartered at Basel, Switzerland. The IAIS is an organization set up by regulators and supervisors of insurance industry. The aims and objectives of the IAIS are to bring in prudential regulations, to prescribe guidelines for the insurance supervisors to observe the industry, to promote international co-operation and understanding among the supervisors, and to represent before world forums the cause of the insurance industry and the matter of its functioning and regulation. IRDA is a member of the Emerging Markets and Technical Committees. Its Chairman is also a member of the Accounting Sub- Committee and the Insurance Frauds Committee, IRDA is putting in efforts to bring the Indian insurance market to international standards in areas of financial viability, competence, technology and prudential regulations.

Table no.3

KEY MARKET INDICATORS

Life and non-life Market in India

Rs. 83,645.11 crore

Global insurance market (as on 31st December, 2003)

US $2940.67 billion Nominal growth: 11.71 per cent Inflation adjusted: 2.0 per cent

Growth in premium underwritten in India and abroad in 2003-04

Life: 18.91 per cent Non-life : 11.16 per cent

Geographical restriction for

None

New players Equity restriction

Foreign promoter can hold up to 26 per cent of the equity

Registration restriction

Composite registration not Available

   

Table no.5

NUMBER OF REGISTERED INSURERS IN INDIA

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Type of business Total

Public sector

Private sector

 

Life Insurance

01

13

14

General Insurance

06

 

08

 

14

Reinsurance

01

 

0

01

Total

08

21

29

ORGANIZATION STUDY

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  • A) MARKETING DEPARTMENT

  • B) OPERATIONS DEPARTMENT

C) FINANCE DEPARTMENT

  • D) HUMAN RESOURCE DEPARTMENT

A) MARKETING DEPARTMENT STUDY

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1) Marketing scenario – Segmentation

2) Target Market – Customers profile

3) Positioning strategy

4) Product details & Product Portfolio

5) Channel of Distribution

6) Pricing Policy

7) Promotional Tools employed, etc.

8) Marketing Strategy etc.

INRODUCTION

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Broadly defined the term ‘Market’ is “whenever and wherever there is a potential demand for the product is known as ‘Market’. The concept of market brings full circle to the concept of marketing. ‘Marketing means working with market actualize potential exchange for the purpose of satisfying human needs and wants”. Marketing has been originated from distribution function, due to the centralized production function.

According to the guru of modern marketing concept, Fillip Kotler, “Marketing is a set of human activity directed at facilitating change. Their element must be present to define a marketing situation. Two or more party who are potentially interested in exchange. Each possessing thing or valued to other. Each capable of communication and delivery.”

Marketing management looks after the marketing system of the enterprise. So we can say that marketing is the process of discovering and transferring consumers needs and wants into product and service involving purchasing power so as to achieve the profit target as other objective set by the company.

In HDFC Standard Life Insurance Company, generally higher expenditure on marketing and advertisement is not made. Aggressive marketing strategy has not been adopted by the company like the some competitors have been.

1) MARKET SCENARIO –SEGMENTATION

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Market segment is the division of the market into different subjects to customers where any subject may consciously be selected as target market to be reach with different marketing mix. Basically market segment is process of desegregating total market into number of sub markets. In other words market segment means division of total market with view of serving and attaining market.

HDFC Standard Life Insurance Company has divided target market into various segments. For example they have different segment for children, youngster, middle-aged people, old age people and so on.

They have market segment basis on four types

Age wise: children, middle age, and old age Gender wise: Male and Female Income wise: High income, middle income and lower income Geographical: East, West, North, South

2) TARGET MARKET

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Targeting means then products which company are producing is for which segment, whether it is for youth, children, middle age, old age. They become your target markets and the process is called targeting. Target market could be any one that depends upon the company that for which segment it is producing the products and the segment becomes its target market.

HDFC SLIC has products for all type of people. But as its most selling policy is Personal pension plan, they are trying to target aged/retired people.

3) POSITINING STRATEGY

Positioning is most important. First you have to select target segment, once target segment is selected, company should identify positioning concept for that segment. Selected positioning should be developed and communicated well. HDFC Standard Life Insurance has strong position in the market. Respect your self is the positioning strategy of the company.

4) PRODUCT DETAIL AND PRODUCT PORTFOLIO:

First we have to understand that what is product planning. A product can be defined as bundle of utilities having tangible or intangible attributes offered with a motive of satisfying customer’s need for an exchange value. Products, which exactly match with need of the wants of customers, can be succeeding in

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this global market. We should keep in mind that “Great ideas need landing gear as well as wings”.

We know that everybody is having his/her own life or we can say that each of us leads a unique life and own needs. HDFC standard life offers a range of products or we can say different products that invite to choose the one that suits best. Following are the individual product.

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The letters “PIPS” can be used to remember the classification. Let us now look at the features of the various categories of the life insurance plans.

Life insurance products

Protection products

  • 1. Pure life insurance

  • 2. Low premium with high covers

  • 3. No maturity values

risks.

  • 4. Cover for income earning capacity.

  • 5. Riders fall in this category.

investment products

  • 1. To be sold to investors

  • 2. The aim is to get long term real growth

  • 3. The risks covered are investment

Pension products

Savings products

  • 1. Provide income

  • 1. Helps a person to save for an event.

  • 2. Protection of the income.

  • 2. Protection of the savings.

  • 3. The risk covered is the risk of living long.

  • 3. The risk covered is the inability to save due to death.

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

PRODUCTS FOR INDIVIDUAL:

  • 1. Protection products

  • 2. Savings plan

  • 3. Investment plans

1.Term assurance 2 Loan cover term assurance plan.

1.Endowment assurance plan

  • 2. Money back plans

  • 3. Children’s plan

(With profits)

  • 4. Unit linked endowment plan.

1.Single premium whole of life plan.

  • 4. Pension plans

1.Personal pension plan (With Profits) 2. Unit linked pension plan.

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GROUP PRODUCTS:

Group term insurance:

A group insurance scheme called ‘group term insurance’ is offered by HDFC standard life insurance. The key features of these plans are convenient medical procedures, flexibility for members to join or leave premium options, flexible cover, globally valid, and no limit on the size of the group.

GRATUITY PLAN

The HDFC gratuity plan is an insurance policy which offers an employer a new and flexible way to fund his gratuity liability. The contributions that he decides to invest in this policy will assist him in meeting his gratuity obligations in an organized way.

LEAVE ENCASHMENT PLAN

This plan is a flexible insurance policy which helps employers and leave encashment scheme trustees in funding leave encashment obligations without the employer’s profit and loss account being unexpectedly affected.

DEVELOPMENT ASSURANCE PLAN

The development assurance plan is designed for the economically weaker sections of the society to satisfy their needs. It makes available life cover for a period of one year top a specific group, and in case of the death of any member

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of the group insured during the year of cover, a lump sum amount is paid to that member’s beneficiaries to help meet some of the immediate financial needs following their loss.

ENDOWMENT ASSURANCE PLAN:

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

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

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

The lump sum mentioned is the basic sum assured plus any bonus additions.

This plan is a with profits saving plan and is well suited for saving money for your long-term financial goals. This plan also helps provide for the needs of your family in your absence by paying out a lump sum in the event of your unfortunate death during the term of the policy.

BENEFITS OF THIS PLAN :

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

Critical Illness (CI) Benefit provides an amount, equal to the sum assured chosen under this optional benefit, on diagnosis of any one of the 6 common critical illnesses (1). The sum assured is payable if you survive for 30 days after the date of the claim. Once such a claim has been met, no further Critical Illness Benefit is payable. However, your basic policy continues even after we pay a claim on this benefit.

Additional Term Benefit (ATB) provides an additional amount equal to the sum assured chosen under this optional benefit, in case of your

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unfortunate death.

Accidental Death Benefit (ADB) provides an additional amount, equal to the sum assured chosen under this optional benefit, in case of your unfortunate death:

  • - due to an accident, and

  • - within 90 days of the accident ..

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

Table no.5

ELIGIBILITY:

Max. Age at entry

ATB ADB CI WOP 18 18 18 18 55 55 60 50 70 65 60 75
ATB
ADB
CI
WOP
18 18
18
18
55 55
60
50
70 65
60
75

Basic Policy with optional benefits

Min. age at entry

Max. Age at expiry

75
75
12
12
60
60
Basic Policy
Basic Policy
Max. Age at entry ATB ADB CI WOP 18 18 18 18 55 55 60 50

Min. term: 10 years

Max. Term: 30 years

UNIT LINKED ENDOWMENT ASSURANCE:

The unit linked endowment plan is an insurance policy that is designed to pay a lump sum on maturity or on earlier death. The Unit Linked Endowment Plan also gives the option of additional protection against the six common critical illnesses, as well as additional protection if death is as the result of an accident.

Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On maturity you receive the value of your units. On death (or critical illness, if chosen) you receive the greater of the value of your units and your selected basic sum assured.

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INVESTMENT OPTION :

The policy is fully unitised with a range of funds to match your needs and approach to risk. (By risk we mean the likely volatility in the value of units in the fund.)

Each investment fund is composed

of units. All the units in a fund are

identical. You can choose from the following funds:

Liquid fund :

The Liquid fund invests 100% in bank deposits and high quality short-term money market instruments. The fund is designed to be cash secure and has a very low level of risk; however unit prices may occasionally go down due to the use of short-term money market instruments.

Secure Managed :

The Secure Managed fund invests 100% in Government Securities and Bonds issued by companies or other bodies with a high credit standing, however a small amount of working capital may be invested in cash to facilitate the day-to- day running of the fund. This fund has a low level of risk but unit prices may still go up or down.

Defensive Managed:

15% to

30% of

the Defensive

Managed fund will be invested in high

quality Indian equities. The remainder will be invested in Government Securities and Bonds issued by companies or other bodies with a high credit standing. In addition, a small amount of working capital may be invested in cash to facilitate the day-to-day running of the fund. The fund has a moderate level of risk with the opportunity to earn higher returns in the long term from some equity investment. Unit prices may go up or down.

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Balanced Managed:

30% to 60% of the Balanced Managed fund will be invested in high quality Indian equities. The remainder will be invested in Government Securities and Bonds issued by companies or other bodies with a high credit standing. In addition a small amount of working capital may be invested in cash to facilitate the day-to-day running of the fund. The fund has a higher level of risk with the opportunity to earn higher returns in the long term from the higher proportion it invests in equities. Unit prices may go up or down.

Growth fund :

The Growth fund invests 100% in high quality Indian equities. In addition a small amount of working capital may be invested in cash to facilitate the day-to- day running of the fund. The fund has a higher level of risk with the opportunity to earn higher returns in the long term from the investment in equities. Unit prices may go up or down.

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

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

None of the funds participate in the profits of HDFC Standard Life Insurance Company Limited or any of its policyholder funds.

BENEFITS:

There are 4 different options available to choose from:

Life Option On death within the policy term, the greater of the Sum Assured and the value of the unit-linked fund will be paid to your nominee. On survival to the end of the policy term the value of the unit linked fund will be paid to you. Life and Health Option On death or earlier diagnosis of any one of six common critical illnesses within the policy term, the greater of the Sum Assured and the value of the unit-

linked fund will be paid to your nominee.

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On survival to the end of the policy term the value of the unit-linked fund will be paid to you.

The illnesses covered under this option are cancer, coronary artery by pass graft surgery, heart attack, kidney failure, major organ transplant (as recipient) and stroke.

Extra Life Option This option pays the same benefits as the Life Option but, should death occur within the policy term as the result of an accident, an extra benefit equal to the Sum Assured will be paid.

Extra Life and Health Option This option pays the same benefits as the Life and Health Option but, should death occur within the policy term as the result of an accident, an extra benefit equal to the Sum Assured will be paid.

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ELIGIBILITY:

Table no.6

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

Plan are: (years)

10 Maximum Term Minimum Term Maximum Age at Expiry Maximum Age at Entry Minimum Age at
10
Maximum
Term
Minimum
Term
Maximum
Age at
Expiry
Maximum
Age at
Entry
Minimum
Age at
Entry
10
10
and Health
10
18 75
18 65
18 70
18 65
30 60
30 55
30 55
30 55
Life
:
Life and
Health
Extra Life
Extra Life

The unit price each day will include a fund management charge. This charge is 0.80% of the fund value per annum taken on a daily basis.

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CHILDREN'S PLAN:

Children’s Plan is designed to provide a lump sum to the child at maturity. It also provides financial security to the child in the future, even in case of the insured parents unfortunate death during the policy term. Children’s Plan receives simple reversionary bonuses, which are usually added annually. This is a flexible plan with three options for you to choose from, depending on your requirements. The details of these options are explained in the next section.

ELIGIBILITY:

Table no. 7

The eligibility ages for the life assured under the plan are as follows:

Minimum Age At Entry

18 years

Maximum Age At Entry

60 years

Maximum Age At Maturity

75 years

Minimum Term: 10 years

Maximum Term: 25 years

PAYMENT OPTIONS :

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

quarterly modes, depending on your convenience.

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MONEY BACK PLAN :

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

Payment of cash lump sums, each of which is a proportion of the basic sum assured, at 5-year intervals during the term of the policy. (Please refer to the table given below.) On survival up to maturity, a payment equal to the basic sum assured plus any bonus additions less the cash lump sums paid earlier is provided.

In case of the unfortunate death of the life assured within the term of the policy, the basic sum assured plus any bonus additions is provided. This is over and above the earlier payouts.

This plan helps you plan for future anticipated expenses by paying periodic cash lump sums to you at regular intervals. This plan also helps provide for the needs of your family in your absence by paying them the basic sum assured plus any bonus additions in the event of your unfortunate death during the term of the policy.

BENEFITS:

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

Critical Illness (CI) Benefit provides an amount, equal to the sum assured chosen under this optional benefit, on diagnosis of any one of the 6 common critical illnesses (1). The sum assured is payable if you survive for 30 days after the date of the claim. Once such a claim has been met, no further Critical Illness Benefit is payable. However, your basic policy continues even after we pay a claim on this benefit.

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

Accidental Death Benefit (ADB) provides an additional amount equal to the basic sum assured in case you die:

  • - Due to an accident, and

  • - Within 90 days of the accident.

Waiver Of Premium (WOP) Benefit waives the premium for you in case you become totally disabled. The waiver is applicable during the period of total disability. All optional benefits must be selected at the outset of your plan.

ELIGIBILITY

Table no.8

This plan

can be taken

on a single life basis or

a joint life (first claim)

basis. The eligibility ages are as follows:

Min. age at entry

12

  • 18 18

18

18

60

  • 55 50

55

60

75

  • 70 60

65

75

WOP ADB CI ATB
WOP
ADB
CI ATB

Basic Policy for optional benefits

Max. Age at entry

Max. Age at expiry

Min. age at entry 12 18 18 18 18 60 55 50 55 60 75 70
Basic Policy
Basic Policy

Min. term: 10 years

Max. Term: 30 years

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SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN :

Single Premium Whole Of Life Insurance Plan is well suited to meet your long-term investment needs. This participating (with profits) plan offers you the following

benefits:

A sound investment: Your money will be invested in our With Profits fund. The fund aims to provide secure and stable long-term growth. Normally, we will declare a compound reversionary bonus for your policy every year and add it to your policy on its anniversary. In addition, on death, surrender or on the guaranteed dates, a terminal bonus might be payable. You pay a single premium and the policywill pay you a lump sum.

Flexibility of term: Even after choosing your policy, you can decide on the policy term. For 4 weeks after any one of the 10th, 15th, 20th and subsequent five-year anniversaries, you can choose to receive the sum assured plus any attaching bonuses, in full. Once the money has been received, your policy will cease.

Surrender value: You can terminate the policy any time, after it has been in force for at least 6 months, and receive a surrender value.

In case of unfortunate death: Your nominee gets the sum assured secured by your premium, plus any attaching bonuses. No medical requirements : We do not require you to undergo any medical test for this plan.

ELIGIBILITY:

Table no.9

The eligibility ages are as follows:

Minimum age at entry Maximum age at entry

: 18 years : 70 years

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TERM ASSURANCE PLAN :

Under this plan, a sum assured is payable in case of death of the life assured during the term of the contract. One can choose the lump sum that would replace the income lost to one's family in the unfortunate event of one's death. Since this non-participating (without profits) plan is a pure risk cover plan, no benefits are payable on survival to the end of the term of the policy.

If you have a family that you care for, you should consider what would happen in case of your unfortunate death. The emotional void cannot be filled, but financial insecurity can be avoided. By taking this affordable life insurance plan, you can provide for the well being of your family in case of your unfortunate death. This plan comes to you at a minimal cost and is well suited for the value- conscious customer.

BENEFITS:

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

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

chosen under this optional benefit, on diagnosis of any one of the 6 common critical illnesses (1). The sum assured is payable if you survive for 30 days after

the date of the claim. Once such a claim has been met, no further Critical Illness Benefit is payable. However, your basic policy continues even after we pay a claim on this benefit.

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

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

- due to an accident, and

  • - Within 90 days of the accident.

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

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of the 6 common critical illnesses (1), an amount equal to the basic sum assured on the Term Assurance Plan. As soon as we accept your claim:

  • - We pay out the sum assured.

  • - Your basic policy immediately terminates without value.

The benefit accelerates or advances the date on which the benefit would be payable. It becomes payable on death or critical illness, whichever occurs earlier. Once a claim has been met, either on death or critical illness, no further benefit is payable on your policy.

CI

and

ASA are

not

simultaneously

available

on

a single policy.

All

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

Since some of the benefits are subject to maximum limits, please contact your Financial Consultant for more details.

ELIGIBILITY:

Table no.10

Minimum age at entry

  • 18 18

 

Maximum age at entry

  • 60 55

 

Maximum age at expiry

  • 65 65

 

optional benefit

Policy with any

Basic Policy
Basic Policy
Minimum age at entry 18 18 Maximum age at entry 60 55 Maximum age at expiry

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Loan Cover Term Assurance Plan :

This plan provides a lump sum on the unfortunate death of the life assured during the term of the plan. The lump sum will be a decreasing percentage of the initial sum assured. As the outstanding loan decreases as per the loan schedule, the cover under the policy decreases as per the policy schedule. Since this is a non-participating (without profits) pure risk cover plan, no benefits are payable on survival to the end of the term of the policy.

If you are taking a loan to buy a house for your family, this plan can help you ensure that life's uncertainties do not affect their shelter. It is an affordable plan that has been designed to help your family repay the outstanding loan in case of your unfortunate death.

ELIGIBILITY:

Table no.11

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

 

Basic Policy

Policy with optional benefit

Minimum age at entry

18

18

Maximum age at entry

55*

55

Maximum age at expiry

65

65

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Personal Pension Plan:

into any financial contract,

Before you enter

it

is

important that

you

understand what the product is, how it works,

the risks involved and what

a

decision to buy could mean for you. We recommend that you read this document before you purchase a policy from HDFC Standard Life Insurance Company.

Purpose: The policy is basically a savings contract, which is designed to provide an income for life from retirement, with an option to take the lump sum elsewhere to buy the annuity, provided it is permitted by the prevailing regulations.

Your commitment: You agree to pay a single premium or level premiums with installments due every quarter, half-year or year throughout the deferment period of the policy, after which you will start receiving your pension.

ELIGIBILITY:

Table no.12

Maximum Minimum 35 18 15 40 5 10 SP RP SP RP1 SP2 RP Entry Age
Maximum Minimum
35
18
15
40
5
10
SP
RP
SP
RP1 SP2 RP
Entry
Age at
Term
Term3
The age and term limits for taking out a Personal Pension Plan are:
Minimum
70
50
60
Retirement
Retirement
Entry
Age at
Age at
Age at
Maximum
Minimum
Maximum

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UNIT LINKED PENSION PLAN :

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

designed to provide a retirement income for life.

Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On vesting the value of your units will be used to buy your retirement benefits.

On earlier death, the beneficiary receives the value of your units plus a cash lump sum of Rs. 1,000.

INVESTMENT OPTIONS :

The policy is fully unitised with a range of funds to match your needs and approach to risk. (By risk we mean the likely volatility in the value of units in the

fund.) Each investment fund is composed of units. All the units in a fund are identical. You can choose from the following funds:

Liquid fund :

The Liquid fund invests 100% in bank deposits and high quality short-term money market instruments. The fund is designed to be cash secure and has a very low level of risk; however unit prices may occasionally go down due to the use of short-term money market instruments.

Secure Managed:

The Secure Managed fund invests 100% in Government Securities and Bonds issued by companies or other bodies with a high credit standing, however a small amount of working capital may be invested in cash to facilitate the day-to- day running of the fund. This fund has a low level of risk but unit prices may still go up or down.

Defensive Managed :

15% to

30% of

the Defensive

Managed fund will be invested in high

quality Indian equities. The remainder will be invested in Government Securities and Bonds issued by companies or other bodies with a high credit standing. In addition, a small amount of working capital may be invested in cash to facilitate

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the day-to-day running of the fund. The fund has a moderate level of risk with the opportunity to earn higher returns in the long term from some equity investment. Unit prices may go up or down.

Balanced Managed :

30% to 60% of the Balanced Managed fund will be invested in high quality Indian equities. The remainder will be invested in Government Securities and Bonds issued by companies or other bodies with a high credit standing. In addition a small amount of working capital may be invested in cash to facilitate the day-to-day running of the fund. The fund has a higher level of risk with the opportunity to earn higher returns in the long term from the higher proportion it invests in equities. Unit prices may go up or down.

Growth Fund:

The Growth fund invests 100% in high quality Indian equities. In addition a small amount of working capital may be invested in cash to facilitate the day-to- day running of the fund. The fund has a higher level of risk with the opportunity to earn higher returns in the long term from the investment in equities. Unit prices may go up or down.

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

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

None of the funds participate

in

the profits

of HDFC Standard

Life

Insurance Company Limited or any of its policyholder funds.

BENEFITS:

At the chosen vesting date, the unitised fund value will be available to secure pension benefits. Subject to the prevailing regulations, part of this value can be taken in the form of a cash lump sum and the rest converted to an annuity

at the rate then offered by HDFC Standard Life. Alternatively, if it is permitted by the prevailing regulations, the proceeds net of any cash lump sum can be used to

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buy an annuity with any other insurance company who will accept such business. The current maximum limit for any cash lump sum is one-third of the unitised fund value on vesting.

On death the unitised fund value will be paid along with a cash lump sum of Rs. 1,000. The beneficiary may use the proceeds to purchase pension benefits for the surviving spouse.

ELIGIBILITY

Table no.13

Minimum Term Term Maximum Minimum Vesting Vesting Entry Entry Age at Age at Age at Age
Minimum
Term
Term
Maximum
Minimum
Vesting
Vesting
Entry
Entry
Age at
Age at
Age at
Age at
Maximum
Minimum
Maximum
The age and term limits for taking out a Unit Linked Pension Plan are: (years)
Version
50 70
18 65
40
5
Premium
Single
Version
50 70
18 60
40
10
Premium
Regular

The unit price each day will include a fund management charge. This charge is 0.80% of the fund value per annum taken on a daily basis.

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5) CHANNEL OF DISTRIBUTION

To reach the target market you should have standardized channel of

distribution. First we have to understand distribution. distribute company’s products in the target market. distribution channel.

Distribution means to Consumers can define

In other words distribution channel consists of set of interdependent organization involved in the process of sustaining a product or service from the point of production to the user at the point of consumption.

Let us talk about the HDFC Standard Life Insurance Company, the distribution channel is mainly depend and related with the financial consultants they are the keys to get more business. Financial Consultants mainly come under the ADM and BDM.

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6) PRICING POLICY

Generally this is not FMCG product where in short period price changes take place. These products are called financial products, which does not fluctuate in short period. HDFC Standard Life insurance has different prices for different products. Company has different products like pension plan, unit linked endowment plan, money back plan, term assurance plan, children’s plan and so on all these products have different prices.

Every product has different benefits; rates and eligibility criteria prices are decided on that basis.

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7) PROMOTION TOOLS :

Sales promotion is most important in the marketing, this the one of the important elements of marketing promotion viz., advertisement, Personal selling and publicity. Sales promotion can be defined as process of marketing communication involving information, persuasion and influence.

Pillip Kotler has rightly defined sales promotion as “it consist of diverse collection of incentive tools, mostly short term, design to stimulate, quicker and or / greater purchase of products or services by the consumers or the trade.

Advertisement offers reason to buy and SP offers an incentive to buy. The use of SP tools has increased greatly because of demanding customers, competition globalization etc.

For sales promotion there various techniques which are applied viz.; Sales promotion letters

Point of purchase promotion

Catalogue

Gifts

Contest

Free sample

Discount

Coupons

Installment offer

Premiums and free offer

Trade fare and exhibition

Demonstration

If we talk about the HDFC SLI, they use trade fair and exhibition,

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installment, contents etc. for promoting their sales. In very short period they have done very good business and occupied good place in market.

8) MARKETING STRATEGY

Marketing strategy of the company is to penetrate more and more market because company has been working since last five years before that private players were not allowed to do the business of insurance. Today in this market so many private players are existed. It is reality that the Life Insurance Compay covers larger part of market but it is also reality that still large part of population of India does not have insurance policy. So company is trying to penetrate more market.

Among all private players HDFC Standard life Insurance working efficiently and tries to reach on top place. HDFC Standard Life Insurance also has financial consultants in the rural market.

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B) 0PERATIONS DEPARTMENT STUDY: Operation department plays vital role in the successes of any organization. To
B) 0PERATIONS DEPARTMENT STUDY:
Operation
department
plays
vital
role
in
the
successes
of any
organization. To provide quality of services operation department is necessary.
Every operation in this department is carried out very smoothly. The main
objective of the operation department is to interface between clients and financial
consultant of the company, the branches and underwriters and so on. Operation
department manages all this things very smoothly.
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LOCATION OF THE COMPANY

Name

:

HDFC standard life insurance co. ltd.

Address

:

Registered office

 
 

Roman house, H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate, MUMBAI – 400 020.

Corporate office

 

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

Tel. No.

-

6533666

Fax

-

22-6533655

E-mail

-

Internet

-

ESTD:

:

14 th August 2000

Form of Org.

:

Public Limited Company

Auditors

:

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

Bankers

:

HDFC Bank

Board of Directors: Chairman

-

Mr. Deepak S. Parekh

MD & CEO

-

Mr. D. M. Satwalkar

Promoters

-

Mr. A. R. Forbes Mr. I. C. Lumsden Mr. K. M. Mistry Mr. M. R. Pai Mr. A. M. Crombie HDFC & Standard Life Insurance Co

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C] FINANCE DEPARTMENT STUDY:

INTRODUCTION

1) ACQUISITION OF FUNDS

2) UTILIZATION OF FUNDS

3) FINANCIAL PERFORMANCE

4) INTEGRATED FINANCIAL SERVISES

5) FINANCIAL RATIO ANALYSIS

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INTRODUCTION

Finance is lifeblood of any institute or business. Finance is the wheel to which one can generate and direct its business of the achievement of the organization goals. Proper management of finance department forms the base to increase the profitability. In business, cost to create and maintain a product is in the hand of businessman. In competitive era sales and profit are not in the hands of entrepreneur.

In every big organization responsibility is on the head of finance manager. He has to take so many decisions related to the finance. The finance manager has to the great care to deal with financial matter.

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1) ACQUISITION OF FUND

Table no. 15

SHARE CAPITAL:

Current Year Previous Year

   

(Rs. ’000)

(Rs. ’000)

  • 1. Authorized Capital

Equity shares of Rs 10 each

3,000,000

2,200,000

  • 2. Issued Capital

Equity shares of Rs 10 each

2,555,000

2,180,000

  • 3. Subscribed Capital

Equity shares of Rs 10 each

2,555,000

2,180,000

  • 4. Called-up Capital

Equity shares of Rs 10 each

2,555,000

2,180,000

     

In HDFC SLIC, it has subscribed only Equity share capital. It has not issued any type of bonds or debentures. It has also not borrowed any amount from any private financial institute. The banker of the firm is HDFC bank.

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2) UTILISATION OF FUNDS

They utilize funds for the development of new branches. When new branch is opened fund is utilized. They also utilize fund for the development of financial consultant they suffer huge cost for one financial consultant, training of the financial consultant they have approached new program DISHA. In the DISHA program financial consultant are given training for four to five days.

Generally, fund is utilized to maintain the branches offices, maintaining financial consultant, development of officers and so on.

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33)) FINANCIAL

FINANCIAL PERFORMANCE

PERFORMANCE

PROFIT AND LOSS ACCOUNT OF THE RGANIZATION.

Table no. 15

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

 

Shareholders’ Account (Non-technical Account)

   

Particulars Schedule

Current Year

 

Previous

Year

 

(Rs. ’000)

 

(Rs.

’000)

 

Amounts transferred from the Policyholders’ Account

(Technical Account)

Income from Investments

(a)

Interest, Dividends & Rent - Gross

92,873

 

92368

(b)

Profit on sale / redemption of investments

70,446

31,525

(c)

(Loss on sale / redemption of investments)

(5,092)

(d)

Transfer / gain on revaluation

 

/ change in fair value

 

(e)

Amortization (charge)/credit

(8,304)

(7,355)

Other Income

3,439

2,850

 

TOTAL

153,362

119,388

Expenses other than those directly related

 

to the insurance business

101,284

 

65,873

Bad debts written off

Provisions (other than taxation)

 

(a)

For diminution in the value of Investments (net)

 

(b)

Provision for doubtful debts

(c)

Others

(d)

Contribution to the Policyholders’ Fund

286,428

535,542

TOTAL

387,712

601,415

     
 

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Profit / (Loss) before tax

(234,350)

(482,027)

Provision for Taxation

Profit / (Loss) after tax

(234,350)

(482,027)

APPROPRIATIONS

  • (a) Balance at the beginning of the Period.

(746,483)

(264,456)

  • (b) Interim dividends paid during the Period

  • (c) Proposed final dividend

  • (d) Dividend distribution on tax

  • (e) Transfer to reserves /other accounts

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

(746,483)

     

BALANCESHEET OF THE ORGANIZATION

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4 ) INTEGRATED FINANCIAL SERVICES

Particulars

Current Year

Previous year

(Rs.’000)

(Rs.’000)

SOURCES OF FUNDS

   

SHAREHOLDERS FUND:

   

Share Capital

2,533,078

2,167,257

Reserves & Surplus

-

-

Credit/Debit Fair Value Change A/C

2,862

(7,837)

SUB-TOTAL

2,546,940

2,159,420

     

BORROWINGS

-

-

Policy Holder’s Fund

   

Credit (Debit) Fair value

   

Change A/C

34,377

-

Policy Liabilities

3,336,424

1,437,497

Insurance Reserves

-

-

Provision for Linked Liabilities

1,65,527

-

SUB TOTAL

3,536,328

1,437,497

Funds For Future

   

Appropriation

   

Surplus, Allocated to Share Holders

-

2,489

TOTAL

6,083,268

3,599,406

APPLICATION OF FUNDS

   

INVESTMENTS

   

Share Holders

6,39,526

8,80,002

Policy Holders

3,399,977

1,310,374

Assets held to Cover Linked Liabilities

1,65,527

-

Loan

5,840

6,464

FIXEDASSETS

5,02,783

4,23,352

CURRENT ASSETS

   

Cash & Bank Balance

5,82,644

3,72,618

Advances & Other Assets

2,34,368

1,63,931

Sub-total (A)

8,17,012

5,36,549

CURRENT LIABILITIES

4,09,390

2,94,628

PROVISION

18,340

9,190

Sub-total (B)

4,27,730

3,03,818

Net Current Assets

   

(C) = (A – B)

3,89,282

2,32,731

Miscellaneous Expenditure

-

-

DEBIT BALANCE IN P & L A/C

   

(Share Holders’ A/C)

9,80,833

7,46,483

TOTAL

60,83,268

35,99,406

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SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION

SECURITISATION

SECURITISATION
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
Future Activities

Future Activities

Future Activities
DISTRIBUTION

DISTRIBUTION

SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS
SECURITISATION Future Activities DISTRIBUTION HDFC CHUBB GENERAL INSURANCE CO. LTD. 5) FINANCIAL RATIO ANALYSIS 86 JVIMS

HDFC CHUBB GENERAL INSURANCE CO. LTD.

5) FINANCIAL RATIO ANALYSIS

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Accounting ratios are relationship expressed in mathematical terms

between figures, which are connected with each other in some manner.

Obviously, no purpose will be served by comparing two sets of figures, which are

not at all connected with each other. Moreover, absolute figures are also unfit for

comparison.

Traditional classification is based on financial statement to which

determines the ratio belongs.

Profit and loss account ratios are based on profit and loss account

only.

Balance sheet ratios are based on the figures of the balance sheet.

Composite or inter-statement ratios are based on both that is the

profit and loss account and balance sheet.

Current ratio =

Current assets

Current liabilities

=

817012

427730

=

1.91

Fixed assets to current assets ratio

PBIT ratio

=

PBIT

Net sales

 

=

Fixed assets

 

Current assets

 

=

502713

 

817012

 

=

0.615

x

100

=

234350

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153362 = 1.528 Fixed assets turnover ratio = Sales Fixed assets 153362 502713 = 0.305 Ratio
153362
=
1.528
Fixed assets turnover ratio =
Sales
Fixed assets
153362
502713
=
0.305
Ratio analysis
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Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the

systematic use of the ratio to interpret the financial statement so that the strength

and weaknesses of a firm as well as its historical performance and current

financial condition can be determined. Also it can be said as “the indicated

quotient of two mathematical expressions and as “the relationship between two

or more things”. In financial analysis ratio is used as the benchmark for

evaluating the financial position and performance of the firm. The relationship

between two accounting figures expressed mathematically is known as a

financial ratio.

CLASSIFICATION OF RATIOS

1. revenue statement ratio

a) gross profit ratio

b)operating ratio

  • c) expenses ratio

d)net profit ratio

e)stock turnover

2.balance sheet ratio

  • a) current ratio

  • b) liquid ratio

  • c) quick ratio

  • d) proprietary ratio