CHAPTER 1 INTRODUCTION

INTRODUCTION:
WHAT IS INSURANCE?
The business of insurance is relate to the !rotection of the econo"ic #alues of assets$ E#er% asset has a #alue$ The asset &oul ha#e been creates throu'h the efforts of the o&ner$ The asset is #aluable to the o&ner( because he e)!ects to 'et so"e benefits( fro" it$ The benefit "a% be an inco"e or so"ethin'else$ It is a benefit because it "eets so"e of his nee s$ In the case of a factor% or a co&( the !ro uct 'enerate b% is sol an inco"e 'enerates$ In the case of a "otor car( it !rofices co"fort an con#enience in trans!ort$ There is no irect inco"e$ E#er% asset is e)!ecte to last for a certain !erio of ti"e urin' &hich it &ill !erfor"$ After that( the benefit "a% not be a#ailable$ There is a life*ti"e for a "achine in a factor% or a co& or a "otor car$ None of the" &ill last fore#er$ The o&ner is a&are of an so he can "ana'e his affairs that b% the en of that !erio or life*ti"e( a substitute is "a e a#ailable$ Thus( he "a+es sure that the #alue or inco"e is not lost$ Ho&e#er( the asset "a% 'et lost earlier$ An acci ent or so"e other unfortunate e#ent "a% estro% it or "a+e it non*functional$ In that case( the o&ner an those e!ri#in' benefits an the !lanne substitute &oul not ha#e been rea %$ There is an a #erse or un!leasant situation$ Insurance is a "echanis" that hel!s to re uce the effect of such a #erse situations$

DEFINITION:
A !ro"ise of co"!ensation for s!ecific !otential future losses in e)chan'e for a !erio ic !a%"ent$ Insurance is esi'ne to !rotect the financial &ell*bein' of an in i#i ual( co"!an% or other entit% in the case of une)!ecte loss$ So"e for"s of insurance are re,uire b% la&( &hile others are o!tional$ A'reein' to the ter"s of an insurance are re,uire b% la&( &hile others are o!tional$ A'reein' to the ter"s of an insurance !olic% creates a contract bet&een the insure an the insurer$ In e)chan'e for !a%"ents fro" the insure -calle !re"iu"s.( the insurer a'rees to !a% the !olic% hol er a su" of "one% u!on the occurrence of a s!ecific e#ent$ In "ost cases( the !olic% hol er !a%s !art of the loss -calle the e ucible.( an the insurer !a%s the rest$ E)a"!les inclu e car insurance( health insurance( insurance$ isabilit% insurance( life insurance( an business

NEED FOR THE STUDY:

We are not sa%in' that life an

e)istence are constantl% frau'ht &ith

an'er an

uncertaint%$ /ut then it is essential that %ou !lan for the future$ The chances for a fatalit% or an in0ur% to occur to the a#era'e in i#i ual "a% not be !articularl% hi'h but then no one can reall% affor to co"!letel% isre'ar his or her future an &hat it hol s$Peo!le 'enerall% re'ar insurance as a sche"e &hen an &here %ou ha#e to lose a lot to 'ain a little$ Ne#ertheless( insurance is still the "ost reliable tool an in i#i ual ca use to !lan for his future$

The "ain !ur!ose of

oin' the !ro0ect &as to +no& about !rocesses in#ol#e

in

recruit"ent of financial consultants an the #arious !ro ucts associate &ith it an it1s functionain'$ This hel!s to +no& in etail about insurance in ustr% ri'ht fro" its ince!tion( 'ro&th an future !ros!ects$ It also hel!s in un erstan in' ifferent sche"es of insurances$ Therefore HD2C Stan ar 3ife Insurance is one of the !ioneer co"!anies in the In ian "ar+et an that1s &h% it &as chosen to learn "ore about the insurance sector an the ris+ an return associate &ith it$ The !ro0ect stu % &as one an esti"ate future !ro0ections affectin' in#est"ents$ Ulti"atel%( this &oul hel! in un erstan in' the benefits( the a&areness a"on' #arious e)istin' an !otential in#estors$

3ife insurance lea#es "one% for %our fa"il% if %ou shoul

ie earl%$ So"e life insurance

!lans ha#e sa#in's features$ Re"e"ber( !rotectin' %our e!en ents-those &ho ount on %ou financial su!!ort. in case of %our eath is the "ain reason for life insurance$

4ost !eo!le on1t ha#e enou'h life insurance$ In 1567( the a#era'e A"erican fa"il% &ith insurance ha 89:(;<< of life insurance$ This a"ount &as less than =; "onths of a#era'e ta+e* ho"e !a% for the fa"il%$ In Alaba"a( the a#era'e a"ount !er fa"il% in 1567 &as onl% 8;:(><<$ An a'ent sellin' life insurance "a% tell %ou to ?bu% no&@ because %our !re"iu" -insurance cost. &ill cost "ore later$ Others ar'ue that if %ou on1t nee insurance no&( sa#in' %our "one% an in#estin' it is better$ This "a% be true$ It e!en s on %our abilit% to sa#e an %our health$ /efore %ou eci e to !ut off bu%in' no&( consi er %our chances of 'ettin' an illness or in0ur% later in life that coul "a+e %ou uninsurable$ Chil ren on1t nee life insurance unless the% are fa"il% &a'e earners$ Aou( as hea of the househol ( shoul bu% insurance on %our life to !rotect %our chil ren in case of %our earl% eath$ A'ain( there is one e)ce!tion$ If %ou 'et su!!ort !a%"ents for a chil an these are i"!ortant to %our fa"il%1s inco"e( %ou "a% &ant to bu% life insurance for that chil $

CONCEPT OF THE STUDY:

On the one han ( hu"an life is sub0ect to #arious ris+s*ris+ of eath or isabilit% ue to natural or acci ental causes$ Hu"ans are also !rone to iseases( the treat"ent of &hich "a% in#ol#e hu'e e)!en iture$ On the other han ( !ro!ert% o&ne b% "an is e)!ose to #arious haBar s( natural an "an*"a e$ When hu"an life is lost or a !erson is isable !er"anentl% or te"!oraril%( there is a loss of inco"e to the househol $ The fa"il% is !ut to har shi!$ So"eti"es sur#i#al itself is at stale for the e!en ants$ When it co"es to !ro!ert%( loss or a"a'e to !ro!ert% results in either &hole or !artial loss in inco"e to the !erson or entit% Ris+ has the ele"ent of un!re ictabilit%$ DeathC isabilit% or lossC a"a'e coul occur at an%ti"e$ 3osses can be "iti'ate throu'h insurance$ Insurance is a co""o it% &hich offers !rotection a'ainst #arious contin'encies$ Insurance !ro ucts a#ailable for life an non*life are "an%$ In non*life( a!art fro" !ersonal co#ers such as acci ent co#ers an health insurance( there are !ro ucts co#erin' liabilities un er a !articular la& an or co""on la&$ The #arious !ro ucts are esi'ne to cater to ifferent nee s of an in i#i ual or in ustr% such as fire insurance !olic% on "ulti*storie househol er1s !olic%$ buil in'(

An insurance contract !ro"ises to "a+e 'oo to the insure a certain u" in consi eration for a !a%"ent in the for" of !re"iu" fro" the insure $ Hu"an life cannot be #alue $ Hence the su" assure -or the a"ount 'uarantee to be !ai in the e#ent of a loss. is b% &a% of a Dbenefit1 in the case of life insurance$ 3ife insurance !ro ucts !ro#i e a efinite a"ount of "one% to the

e!en ents of the insure in case the life insure

ies urin' his acti#e inco"e earnin' !erio or

beco"es isable on account of an acci ent causin' re uctionCco"!lete loss in his inco"e earnin's$ An in i#i ual can also !rotect his ol a'e &hen he ceases to earn an has no other "eans of inco"e b% !urchasin' an annuit% !ro uct$ A !ersonal Acci ent co#er is also for !rotection$ In the e#ent of eath or isabilit%( !er"anent or te"!orar%( of the insure ( it !ro#i es for co"!ensation &hich is either the &hole or a !ercenta'e of the Ca!ital Su" Insure the Su" Insure o!te for b% the insure $ In res!ect of insurance relatin' to !ro!ert%( there are "an% !ro ucts a#ailable$ Pro!ert% "a% be co#ere a'ainst fire an !erils of nature inclu in' floo ( earth,ua+e etc$ 4achiner% "a% be insure for brea+ o&n$ Eoo s in transit can be insure un er a "arine car'o insurena e co#er$ Insurance co#ers are also a#ailable for shi!s an other #essels$ A "otor insurance !olic% co#ers thir !art% a"a'e as &ell as a"a'e to the #ehicle$ Insurance of !ro!ert% is base on the !rinci!le of in e"nit%$ The i ea is to brin' the insure to the sa"e financial !osition as heCshe &as before the loss occurre $ It safe'uar s the in#est"ent in the !ro!ert%$ Where there is no insurance( losses can "ar a !ro0ect or an in ustr%$ Eeneral Insurance offers stabilit% to the econo"% an to the societ%$ Insurane offers securit% an so !eace of "in to the in i#i ual$ The conce!t of insurance is that the losses of a fe& are "a e 'oo b% contribution fro" "an%$ It is base on the la& of lar'e nu"bers$ It ste""e fro" the nee of "an to fin a solution for "iti'ation of losses$ It also reflects the nature of "an to fin a solution collecti#el%$ It is i"!ortant for all to un erstan the #arious !ro ucts that life an 'eneral insurance co"!anies offer before the% "a+e a choice as to the !ro uct the% &ant to bu%$ As !er re'ulations( insures ha#e to 'i#e the #arious features of the !ro ucts at the !oint of sale$ The insure shoul also 'o throu'h the #arious ter"s an con itions of the !ro ucts an un erstan &hat the% ha#e bou'ht an "et their insurance nee s$ e!en in' on the +in of loss$ In the case of Health Insurance( the !olic% see+s to co#er e)!enses to&ar s of treat"ent of iseases an or in0ur% u!to

OBJECTIVIES OF THE STUDY:

The ai" of the !resent stu % &as to achie#e the follo&in' ob0ecti#esF To !ro"ote the 3ife Insurance business$ To fin out the #arious co"!etitors in the Insurance sector$

To i entif% the in#est"ent !attern of the in#estors in Gisa+ha!atna"$ To anal%sis the !ro uct etails of HD2C Stan ar life Insurance Co"!an% li"ite $

To fin DPoints of Parit%1 an DPoints of Difference1 of HD2C Stan ar 3ife Insurance Co"!an% 3i"ite To fin out factors that influence custo"ers to !urchase insurance !olicies an 'i#e su''estions for further i"!ro#e"ent$

SCOPE OF THE STUDY:

The total in#est"ent !ortfolio of the insurers in In ia as at the en of 4arch( =<<6 &as Rs$ 5( ;7(6;: crore$ The total !re"iu" collecte b% the insurers both life an non*life in =<<:*<7 &as Rs$>( <<(>>7 crore$ The "a0or contribution ca"e fro" life insurance$ The insurance !enetration i$e$( !re"ia as !ercenta'e of EDP &as 7$19 !ercent in =<<6$ While this ratio is stea il% the #ast !otential that e)ists$

INSURANCE AND GROWTH:

Insurance an econo"ic 'ro&th "utuall% influences each other$ As the econo"% 'ro&s( the li#in' stan ar s of !eo!le increase$ As a conse,uence( the e"an for life insurance increases$ As the assets of !eo!le an of business enter!rises increases in the 'ro&th !rocess( the e"an for 'eneral insurance also increases$ In fact( as the econo"% &i ens the e"an for Ne& t%!es of insurance !ro ucts e"er'e$ Insurance is no lon'er confine to !ro uct "ar+etsH the% also co#er ser#ice in ustries$ It is e,uall% true that Ero&th itself is facilitates b% insurance$ A &ell I e#elo!e insurance sector !ro"otes econo"ic 'ro&th b% encoura'in' ris+*ta+in'$ Ris+ is inherent in all econo"ic acti#ities$ Without so"e +in of co#er a'ainst ris+( so"e of these acti#ities &ill not be carrie out at all$ Also insurance an "ore !articularl% life insurance is a "obiliBe of lon' ter" sa#in's an life insurance co"!anies are thus able to su!!ort infrastructure !ro0ects &hich re,uire lon' ter" fun s$ There is thus a "utuall% beneficial interaction bet&een insurance an econo"ic 'ro&th$ The lo& inco"e le#el of the #ast "a0orit% of !o!ulation has been one of the factors inhibitin' a faster 'ro&th of insurance in In ia$ To so"e e)tent this is also co"!oun e but certain attitu es to life$ The econo"% has "o#e on to a hi'her 'ro&th !ath$ The a#era'e rate of 'ro&th of the econo"% in the last three %ears &as 6$1 !ercent$ This stron' 'ro&th &ill brin' about si'nificant chan'es in the insurance in ustr%$

At this !oint( it is i"!ortant to note that not all acti#ities can be insure $ If that &ere !ossible( it &oul co"!letel% ne'ate entre!reneurshi!$ Professor 2ran+ Jni'ht in his celebrate boo+ ?Ris+ Uncertaint% an Profit@ e"!hasiBe that !rofit is a conse,uence of uncertaint%$ He "a e a istinction bet&een ,uantifiable ris+ an non*,uantifiable ris+$ Accor in' to hi"( it is non*,uantifiable ris+ that lea s to !rofit$ He &rote ?It is a &orl of chan'e in &hich &e li#e( an a &orl of uncertaint%$ We li#e onl% b% +no&in' so"ethin' about the futureH &hile the !roble"s of life or of con uct at least( arise fro" the fact that &e +no& so little$ This is as true of business as of other s!heres of acti#it%@$ The real "ana'e"ent challen'es are uninsurable ris+s$ In the case of insurable ris+s( ris+ is a#oi e at a cost$ The Insurance In ustr% has 'ot a 'reat future since the inflation at !resent is lo& in our countr% it &ill surel% 'ro& in "ere future

METHODOLOGY
TYPE OF DATA COLLECTED There are t&o t%!es of ata use $ The% are !ri"ar% an secon ar% ata$ Pri"ar% ata is efine as ata that is collecte fro" ori'inal sources for a s!ecific !ur!ose$ Secon ar% ata is ata collecte fro" in irect sources$ -SourceF Research 4etho olo'%( /% C$ R$ Jothari.

PRIMARY SOURCES
These inclu e the sur#e% or ,uestionnaire "etho ( tele!honic inter#ie& as &ell as the !ersonal inter#ie& "etho s of ata collection$

SECONDARY SOURCES
These inclu e boo+s( the internet( co"!an% brochures( !ro uct brochures( the co"!an% &ebsite( co"!etitor1s &ebsites etc( ne&s!a!er articles etc$ Profile of the co"!an% an its ob0ecti#es &ere 'athere fro" the 4e"oran u" of Association of the Co"!an% an other &or+in' !a!ers !ro#i e b% the co"!an%$

LIMITATIONS

The stu % is li"ite to onl% fi#e co"!anies$

Ser#ices to !olic% hol er so"e of the res!on ents i not ha#e that "uch i ea about !ro ucts an their ser#ices$

so"e res!on ents ue to ti"e constraint coul not e)!ress their #ie&s co"!letel%$

Sensible ata can not obtaine for so"eti"e$

This sur#e% &as li"ite to GISAJHAPATNA4 onl%$

CHAPTER 2 INDUSTRY PROFILE

HISTORY AND BACKGROUND:

INSURANCE IN INDIA:
The insurance sector in In ia has co"e a full circle fro" bein' an o!en co"!etiti#e "ar+et to nationaliBation an bac+ to a liberaliBe "ar+et a'ain$ Tracin' the e#elo!"ent in the In ian insurance sector re#eals the >;< e'ree turn &itnesse o#er a !erio of al"ost t&o centuries$

A brief history of the Insurance sector:

The business of life insurance in In ia in its e)istin' for" starte in In ia in the %ear 1616 &ith the establish"ent of the Oriental 3ife Insurance Co"!an% in Calcutta$ Some of t e !m"o#t$%t m!&e'to%e' !% t e &!fe !%'(#$%)e *('!%e'' !% I%+!$ !': ,-,2F* The In ian 3ife Assurance Co"!anies Act enacte as the first statue to re'ulate the

life insurance business$

,-2.: *

The In ian Insurance Co"!anies Act enacte to enable the 'o#ern"ent to collect

statistical infor"ation about both life an non*life insurance businesses$ ,-/.:0 Earlier le'islation consoli ate an a"en e to b% the Insurance Act &ith the

ob0ecti#es of !rotectin' the interests of the insurin' !ublic$

,-12:0

=:7 In ian an forei'n insurers an !ro#i ent societies ta+en o#er b% the central

'o#ern"ent an nationaliBe $ 3IC for"e b% an Act of Parlia"ent( #iB$ 3IC Act(

,-12:0

&ith a ca!ital contribution of Rs$7 crore fro" the Eo#ern"ent of In ia$

The Eeneral insurance business in In ia( on the other han ( can trace its roots to the Triton Insurance Co"!an% 3t $( the first 'eneral insurance co"!an% establishe in the %ear 167< in Calcutta b% the /ritish$ So"e of the i"!ortant "ilestones in the 'eneral insurance business in In ia areF ,-34:0 The In ian 4ercantile Insurance 3t $ Set u!( the co"!an% to transact all classes

of 'eneral insurance business ,-14:0 Eeneral Insurance Council( a &in' of the Insurance Association of In ia( fra"es a

co e of con uct for ensurin' fair con uct an soun business !ractices$ ,-2.:0 The insurance Act a"en e to re'ulate in#est"ents an set "ini"u" sol#enc%

"ar'ins an the Tariff A #isor% Co""ittee set u!$ ,-42: The Eeneral Insurance /usiness -NationaliBation. Act( 159= nationaliBe the

'eneral insurance business in In ia &ith effect fro" 1st Kanuar% 159>$ 1<9 insurers a"al'a"ate an 'rou!e into four co"!anies #iB( the National Insurance Co"!an% 3t $( the Ne& In ia Assurance Co"!an% 3t $( the Oriental Insurance Co"!an% 3t $( an the Unite In ia Insurance Co"!an% 3t $( EIC incor!orate as a co"!an%$

I%'(#$%)e 'e)to# #efo#m'

In 155>( 4alhotra Co""ittee( hea e b% for"er 2inance Secretar% an R/I Eo#ernor R$N$ 4alhotra( &as for"e irection$ The 4alhotra co""ittee &as set u! &ith the ob0ecti#e of co"!le"entin' the refor"s initiate in the financial sector$ The refor"s &ere ai"e at ?creatin' a "ore efficient an co"!etiti#e financial s%ste" suitable for the re,uire"ents of the econo"% +ee!in' in "in the structural chan'es currentl% un er&a% an reco'niBin' that insurance is an i"!ortant !art of the o#erall financial s%ste" &here it &as necessar% to a ress the nee for si"ilar refor"sL@ In 155:( the co""ittee sub"itte the re!ort an so"e of the +e% reco""en ations inclu e F to e#aluate the In ian insurance in ustr% an reco""en its future

i)

Structure Eo#ern"ent sta+e in the insurance Co"!anies to be brou'ht o&n to 7<M Eo#ern"ent shoul ta+e o#er the hol in's of EIC an its subsi iaries so that these subsi iaries can act as in e!en ent cor!orations All the insurance co"!anies shoul be 'i#en 'reater free o" to o!erate

ii)

Competition

Pri#ate Co"!anies &ith a "ini"u" !ai u! ca!ital of Rs$1 bn shoul be allo&e to enter the in ustr%$ No co"!an% shoul entit% eal in both 3ife an Eeneral Insurance throu'h a sin'le

2orei'n co"!anies "a% be allo&e to enter the in ustr% in collaboration &ith the o"estic co"!anies$ Postal 3ife Insurance shoul be allo&e to o!erate in the rural "ar+et Onl% one State 3e#el 3ife Insurance Co"!an% shoul be allo&e to o!erate in each state$

!!!5

Re6(&$to#7 Bo+7 The Insurance Act shoul be chan'e An Insurance Re'ulator% bo % shoul be set u! Controller of Insurance -Currentl% a !art fro" the 2inance 4inistr%. shoul be "a e in e!en ent$

!85

I%8e'tme%t' 4an ator% In#est"ents of 3IC 3ife 2un in 'o#ern"ent securities to be re uce fro" 97M to 7<M EIC an its subsi iaries are not to hol "ore than 7M in an% co"!an% -There current hol in's to be brou'ht o&n to this le#el o#er a !erio of ti"e.

85

C('tome# Se#8!)e 3IC shoul !a% interest on ela%s in !a%"ents be%on >< a%s Insurance co"!anies "ust be encoura'e to set u! unit lin+e !ension !lans

Co"!uteriBation of o!erations an u! atin' of technolo'% to be carrie out in the insurance in ustr%$ The co""ittee e"!hasiBe that in or er to i"!ro#e the custo"er ser#ices an increase the co#era'e of the insurance in ustr% shoul be o!ene u! to co"!etition$ /ut at the sa"e ti"e( the co""ittee felt the nee to e)ercise caution as an% failure on the !art of ne& !la%ers coul ruin the !ublic confi ence in the in ustr%

T e I%'(#$%)e Re6(&$to#7 $%+ De8e&o"me%t A(t o#!t7

Refor"s in the Insurance sector &ere initiate &ith the !assa'e of the IRDA /ill in Parlia"ent in Dece"ber 1555$ The IRDA since its incor!oration as a statutor% bo % in A!ril=<<< has fasti iousl% stuc+ to its sche ule of fra"in' re'ulations an insurance co"!anies$ The other re'isterin' the !ri#ate sector ecisions ta+en si"ultaneousl% to !ro#i e the su!!ortin'

s%ste"s to the insurance sector an in !articular the life insurance co"!anies &ere the launch of the IRDA1s online ser#ice for issue an rene&al of licenses to a'ents$ The a!!ro#al of institutions for i"!artin' trainin' to a'ents has also ensure that the insurance co"!anies &oul ha#e a traine &or+force of insurance a'ents in !lace to sell their !ro ucts( &hich are e)!ecte to be intro uce b% earl% ne)t %ear$ Since bein' set u! as an in e!en ent statutor% bo % the IRDA has !ut in a fra"e&or+ of 'loball% co"!atible re'ulations$ In the !ri#ate sector 1= life insurance an ; 'eneral insurance co"!anies ha#e been re'istere $ In 151:( the Eo#ern"ent of In ia starte !ublishin' returns of Insurance Co"!anies in In ia$ The In ian 3ife Assurance Co"!anies Act( 151= &as the first statutor% "easure to re'ulate life business$ In 15=6( the In ian Insurance Co"!anies Act &as enacte to enable the Eo#ern"ent to collect statistical infor"ation about both life an non*life business transacte in In ia b% In ian an forei'n insurers inclu in' !ro#i ent insurance societies$ In 15>6F &ith a #ie& to !rotectin' the interest of the Insurance !ublic( the earlier le'islation &as consoli ate an a"en e b% the Insurance Act( 15>6 &ith co"!rehensi#e !ro#isions for effecti#e control o#er the acti#ities of Insurers$ The Insurance A"en "ent Act of 157< abolishe Princi!al A'encies$ Ho&e#er( there &ere a

lar'e nu"ber of insurance co"!anies an the le#el of co"!etition &as hi'h$ There &ere also alle'ations of unfair tra e !ractices$

The Eo#ern"ent of In ia( therefore( eci e to nationaliBe insurance business$ An Or inance &as issue on 15th Kanuar%( 157; nationaliBin' the 3ife Insurance sector an 3ife Insurance Cor!oration ca"e into e)istence in the sa"e %ear$ The 3IC absorbe 17: In ian( 1; non*In ian insurers as also 97 !ro#i ent societies*=:7 In ian an forei'n insurers in all$ The 3IC ha "ono!ol% till the late 5<s &hen the Insurance sector &as reo!ene to the !ri#ate sector$ The !'to#7 of 6e%e#$& !%'(#$%)e +$te' bac+ to the In ustrial Re#olution in the &est an the conse,uent 'ro&th of sea*farin' tra e an co""erce in the 19th centur%$ It ca"e to In ia as a le'ac% of /ritish occu!ation$ Eeneral Insurance in In ia has its roots in the establish"ent of Triton Insurance Co"!an% 3t $( in the %ear 167< in Calcutta b% the /ritish$ In 15<9( the In ian 4ercantile Insurance 3t ( &as set u!$ This &as the first co"!an% to transact all classes of 'eneral insurance business$ 1579sa#C the for*"ation of the Eeneral Insurance Council( a &in' of the Insurance Associaton of In ia$ The Eeneral Insurance Council fra"e a co e of con uct for ensurin' fair con uct an soun business !ractices$ In 15;6( the Insurance Act &as a"en e to re'ulate in#est"ents an set "ini"u" sol#enc% "ar'ins$ The Tariff A #isor% Co""ittee &as also set u! then$ In 159= &ith the !assin' of the Eeneral Insurance /usiness -NationaliBation. Act( 'eneral insurance business &as nationaliBe &ith effect fro" 1st Kanuar%( 159>$ 1<9 insurers &ere a"al'a"ate an 'rou!e into four co"!anies( na"el% National Insurance Co"!an% 3t $( the Ne& In ia Assurance Co"!an% 3t $( the Oriental Insurance Co"!an% 3t an the Unite In ia Insurance Co"!an% 3t $ The Eeneral Insurance Cor!oration of

In ia &as incor!orate as a co"!an% in 1591 an it co""ence business on Kanuar% 1 sst 159>$

This "illenniu" has seen insurance co"e a full circle in a 0ourne% e)ten in' to nearl% =<< %ears$ The !rocess of #e0o"e%!%6 of t e 'e)to# ha be'un in the earl 155<s an the last eca e an "ore has seen it been o!ene u! substantiall%$ In 155> the Eo ern"ent set u! a co""ittee un er the chair"anshi! ofRN 4alhotra for"er Eo e"or of R/I( to !ro!ose reco""en ations for re for"s in the in uran e sector$ The ob0ecti e &as to co"!le"ent the refor"s initiate in the financial sector$ The co""ittee sub"itte its re!ort in 155: &herein( a"on' other thin's( it reco""en e that the !ri#ate sector be !er"itte to enter the insurance in ustr%$ The% state that forei'n co"!anies are allo&e to enter b% floatin' In ian co"!anies( !referabl% a 0oint #enture 2ollo&in' the reco""en ations of the 4alhotra Co""ittee re!ort( in 1555( the Insurance Re'ulator% an De#elo!"ent Authorit% -IRDA. &as Constitute as an autono"ous bo % to re'ulate an e#elo! the insurance in ustr%$ The lRDA &as incor!orate as a statutor% bo % in A!ril( =<<<$ The +e% ob0ecti#es of the IRDA inclu e !ro"otion of co"!etition so as to enhance custo"er satisfaction throu'h increase consu"er choice an lo&er !rerni UI11S( &hile ensurin' the financial securit% of the insurance "ar+et$ The IRDA o!ene u! the "ar+et in Au'ust =<<< &ith the in#itation for a!!lication for re'istrations$ 2orei'n c$o"!anies &ere allo&e o&nershi! of u! to =;M$ The Authorit% has the !o&er to fra"e re'ulations un er Section 114A of the Insurance Act( 15>6 an has fro" =<<< on&ar s fra"e #arious re'ulations ran'in' fro" re'istration of co"!anies for carr%in' on insurance business to !rotection of !olic%hol ersN interests$ In Dece"ber( =<<<( the subsi iaries of the Eeneral Insurance Cor!oration of In ia &ere restructure as in e!en ent co"!anies an at the sa"e ti"e EIC &as con#erte into a national re*insurer$ Parlia"ent !asse a bill elin+in' the four subsi iaries fro" EIC in Kul%( =<<=$To a% there are 1: 'eneral insurance co"!anies inclu in' the ECEC an A'riculture

Insurance Cor!oration of In ia an 1: life insurance co"!anies o!eratin' in the countr%$

HDFC STANDARD LIFE INSURANCE:

I*ID2C stan ar 3ife Insurance is a 0oint #enture bet&een HD2COan Stan ar l$i fe I nsurance of UJ$ HD2C is one of the lea in' financial institutions of In ia &hereas Stan ar 3ife is one the ol est Insurance co"!anies in the &orl $ ABOUT STANDARD LI E: The Stan ar 3ife Assurance Co"!an% CNStan ar 3ifeO. &as establishe in 16=7 an the first Stan ar 3ife Assurance Co"!an% Act &as !asse b% Parlia"ent in 16>=$ 3ife Stan ar 3ife &as reincor!orate as a "utual assurance co"!an% in 15=7$ The Stan ar Unite Jin' o" an certain other countries$ Its Cana ian branch &as foun e in 16>> an its Irish o!erations in 16>6$ This lar'el% re"aine the structure of the 'rou! until 155;( &hen it o!ene a branch in 2ran+furt( Eer"an% &ith the ai" of e)!ortin' its UJ life assurance an !ensions o!eratin' "o el to ca!italise on the o!!ortunities !resente b% EC Directi#e 5=C5;CEEC -the OThir 3ife Directi#eO. an offer a !ro uct ran'e in that "ar+et &ith features &hich local !ro#i ers &ere unable to offer$ In the 155<s( the 'rou! also sou'ht to i#ersif% its o!erations into areas &hich co"!le"ente its core life assurance an !ensions business( &ith the intention of !ositionin' itse!f as a broa ran'e financial ser#ices*!ro#i er

'rou! ori'inall% o!erate onl% throu'h branches or a'encies of the "utual co"!an% in the

Ban"in#$ %ea!thcare & In'est(ents:)

The 'rou! set u! Stan ar 3ife /an+( its UJ "ort'a'e an retail sa#in's ban+in' subsi iar%( in 1556 an Stan ar 3ife In#est"ents( &hich ha !re#iousl% been the in*house in#est"ent "ana'e"ent unit of the 'rou!Ns life assurance an !ensions business( &as se!arate into a istinct le'al entit% in the sa"e %ear( &ith the ai" of establishin' it as an in e!en ent

in#est"ent "ana'e"ent business !ro#i in' ser#ices to both the 'rou! an thir !art% retail an institutional clients$ The 'rou! ac,uire Pri"e Health 3i"ite -subse,uentl% rena"e Stan ar 3ife Healthcare. in the Unite Jin' o" in =<<<$ Stan ar 3ife Healthcare e)!an e in 4arch =<<; &ith the ac,uisition of the P4I business of 2irst Assist$

St$%+$#+ L!fe A'!$ L!%,!te+9Jo!%t 8e%t(#e'0

The 'rou!Ns Hon' Jon' subsi iar%( Stan ar 3ife Asia 3i"ite -OS3 AsiaO.( &as incor!orate in 1555 as a 0oint #enture an beca"e a &holl%o&ne subsi iar% of Stan ar 3ife in =<<=$ The 'rou!Ns o!erations in Hon' Jon' &ere establishe to 'i#e the 'rou! a !resence in the 2ar East fro" &hich it coul e)!an into China$ The 'rou!Ns 0oint #entures in In ia &ith Housin' De#elo!"ent 2inance Cor!oration 3i"ite -OHD2CO. &ere incor!orate in =<<< -in relation to the life assurance an !ensions 0oint #enture. an =<<> -in relation to the in#est"ent "ana'e"ent 0oint #enture.$ The 'rou!N 0oint #enture in China &ith Tian0in Econo"ic De#elo!"ent Area Eeneral Co"!an% -OTEDAO. beca"e o!erational in =<<>$

Standard Life International Limited

The 'rou! also incor!orate Stan ar 3ife International 3i"ite -OS3I3O. in =<<7 for the !ur!oses of !ro #i in' the 'rou! &ith an offshore #ehicle( base in Irelan ( throu'h &hich it coul sell ta)*efficient in#est"ent !ro ucts into the Unite Jin' o"$ Sales of these !ro ucts co""ence in =<<;$

Service Company2ollo&in' the 'rou!Ns strate'ic re#ie& in =<<:( the 'rou! establishe a ser#ice co"!an% structure for the !ro#ision of central cor!orate ser#ices to the 'rou!Ns business units$ Stan ar 3ife E"!lo%ee Ser#ices 3i"ite -OS3ES3O. su!!lies a &i e ran'eof central ser#ices to the rest of the 'rou!( inclu in' IT( facilities( le'al an hu"an resources ser#ices( an e"!lo%s staff &or+in' in the 'rou!Ns UJ an Irish o!erations -other than S3I( S3/ an S3H( &hich e"!lo% their staff irectl%.$ This ser#ice co"!an% structure &as create to enable Stan ar 3ife to

co"!l% &ith re'ulator% restrictions on the !ro#ision of non*insurance ser#ices an to e)!loit 'rou!*&i e s%ner'ies$

KEY STRENGTHS:
Financial Expertise
As a 0oint #enture of lea in' financial ser#ices 'rou!s( HD2C Stan ar 3ife has the financial e)!ertise re,uire to "ana'e %our lon'*ter" in#est"ents safel% an efficientl%$

Range of Solutions
The% ha#e a ran'e of in i#i ual an 'rou! solutions( &hich can be easil% custo"iBe to s!ecific nee s$ Our 'rou! solutions ha#e been esi'ne to offer %ou co"!lete fle)ibilit% co"bine &ith a lo& char'in' structure$

Trac Record so far

The 'ross !re"iu" inco"e( for the %ear en in' 4arch >1( =<<9 stoo at Rs$ =( 67; crores an ne& business !re"iu" inco"e at Rs$1(;=: crores$ The co"!an% has co#ere o#er 6(99(<<< li#es %ear en in' 4arch >1(=<<9

HD2C Stan ar 3i fe offers a bou,uet of insurance solutions to "eet e#er%oneNs nee $ The% cater to both( in i#i uals as &ell as to co"!anies loo+in' to !ro#i e benefits to their e"!lo%ees$ This section 'i#es %ou etails of all our !ro ucts$ The% ha#e incor!orate #arious

o&nloa able for"s an !ro uct etails so that %ou can "a+e an infor"e choice about bu%in' a !olic%

DIFFERENT PRODUCTS OF THE COMPANY:

HD2C Stan ar 3ife offers a bou,uet of insurance solutions to "eet e#er%oneNs nee $ The% cater to both( in i#i uals as &ell as to co"!anies loo+in' to !ro#i e benefits to their e"!lo%ees$ This section 'i#es %ou etails of all our !ro ucts$ The% ha#e incor!orate #arious o&nloa able for"s an !ro uct etails so that %ou can "a+e an infor"e choice about bu%in' a !olic%$ 2or in i#i uals( it has a ran'e of !rotection( in#est"ent( !ension an sa#in's !lans that assist an nurture rea"s a!art fro" !ro#i in' !rotection$ Aou can choose fro" a ran'e of !ro ucts to suit %our life*sta'e an nee s$ 2or or'anisations the% ha#e a host of custo"ise solutions that ran'e fro" Erou! Ter" Insurance( Eratuit%( 3ea#e Encash"ent an 'oo &ill of the co"!an% $ Su!erannuation Pro ucts$ These affor able !lans a!art fro" !ro#i in' lon' ter" #alue to the e"!lo%ees hel! in enhancin'

At HD2C Stan ar 3ife are co""itte to "aintainin' the hi'hest le#el of custo"er ser#ice$ Interactin' &ith %ou #ia this &ebsite is an e)tension of this co""it"ent$ The% ha#e esi'ne the NCusto"er Ser#iceN section +ee!in' in "in all the infor"ation %ou "a% &ant to see+ re'ar in' !roce ures such as !a%in' %our !re"iu"( #arious !olic% ser#icin' o!tions( !rocessin' a clai" an so on$ We ha#e also !ro#i e %our insurance !ortfolio an%ti"e an an%&here at the clic+ of "ouse$ rele#ant for"s that can be o&nloa e $ easil% for %our use$ Aou can no& access %our !olic% etails online an "ana'e

Individual !roducts"
At HD2C Stan ar 3ife realise that not e#er%one has the sa"e +in of nee s$ Jee!in' this in "in ( the% ha#e a #arie ran'e of Pro ucts that %ou can choose fro" to suit all %our nee s$ These &ill hel! secure %our future as &ell as the future of our fa"il%$

!rotection !lans"
We can !rotect %our fa"il% a'ainst the loss of our inco"e or the bur en of a loan in the e#ent of %our unfortunate e"ise( isabilit% or sic+ness$ These !lans offer #aluable !eace of "in at a s"all !rice$ Their Protection ran'e inclu es our Ter" Assurance PlanP 3oan Co#er Ter" Assurance Plan

Savings !lans"
Our Sa#in's Plans offer %ou fle)ible o!tions to buil sa#in's for %our future nee s such as bu%in' a rea" ho"e or fulfillin' %our chil ren1s i""e iate an future nee s$ Our Sa#in's ran'e inclu es En o&"ent Assurance Plan( Unit 3in+e En o&"ent( Unit 3in+e En o&"ent Plus( 4one% /ac+ Plan( Chil ren1s Plan( Unit 3in+e Aoun'star( Unit 3in+e Aoun'ster Plus$

Investment !lans"
Our Sin'le Pre"iu" Whole of 3ife !lan is &ell suite to "eet %our lon' ter" in#est"ent nee s$ We !ro#i e %ou &ith attracti#e lon' ter" returns throu'h re'ular bonuses$

!ension !lans"
Our Pension Plans hel! %ou secure %our financial in e!en ence e#en after retire"ent$ Our Pension ran'e inclu es our Personal Pension Plan( Unit 3in+e Pension Plus$ Pension( Unit 3in+e

#roup !roducts"
$ne-stop s%op for employee-&enefit solutions HD2C Stan ar 3ife has the "ost co"!rehensi#e list of !ro ucts for !ro'ressi#e e"!lo%ers &ho &ish to !ro#i e the best an "ost inno#ati#e e"!lo%ee benefit solutions to their e"!lo%ees$ We

offer ifferent !ro ucts for ifferent nee s of e"!lo%ers ran'in' fro" ter" insurance !lans for !ure !rotection to #oluntar% !lans such as su!erannuation an lea#e encash"ent

The% no& offer the follo&in' 'rou! !ro ucts to our estee"e cor!orate clients Erou! Ter" Insurance Erou! Gariable Ter" Insurance $ Erou! Unit*3in+e Plan

An in#est"ent solution that !ro#i es fun in' #ehicle to "ana'e cor!uses &ith Eratuit%( Define /enefit or Define Contribution Su!erannuation or 3ea#e Encash"ent sche"es of %our co"!an% An in#est"ent solution that !ro#i es fun in' #ehicle to "ana'e cor!uses &ith Eratuit%( Define /enefit or Define Contribution Su!erannuation or 3ea#e Encash"ent sche"es of %our co"!an%$

'evelopment Insurance !lan

De#elo!"ent Insurance !lan is an insurance !lan &hich !ro#i es life co#er to "e"bers of a De#elo!"ent A'enc% for a ter" of one %ear$ On the eath of an% "e"ber of the 'rou! insure urin' the %ear of co#er( a lu"! su" is !ai to that "e"berNs beneficiaries to hel! "eet so"e of the i""e iate financial nee s follo&in' their loss$

Eligi&ility
4e"bers of the e#elo!"ent a'enc% an their s!ouses &ith 4ini"u" a'e at the start of the !olic% 16 %ears last birth a%$ 4a)i"u" a'e at the start of !olic% 7< %ears last birth a%$

E"!lo%ees of the De#elo!"ent A'enc% are not eli'ible to 0oin the 'rou! $ The 'rou! to be co#ere is onl% eli'ible if !t contains "ore than 7<< "e"bers

(enefits"
On the eath of each "e"ber co#ere b% the !olic% urin' the %ear of co#er a lu"! su" e,ual to the su" assure &ill be !ai to their beneficiaries or le'al heirs$ Where the eath is as a result of an acci ent( an a itional lu"! SUIll &ill be !ai e,ual to half the su" assure $

There are no benefits !ai at the en of the %ear of co#er an there is no surren er #alue a#ailable at an% ti"e$ T)* (E+EFITS" INCO4E TAQ SECTION EROSS ANNUA3 SA3ARA HOW 4UCH TAQ CAN AOU SAGE? HD2C STANDARD 3I2E P3ANS

Sec$6<C

Across All U!to Rs$>>( 55< All the life insurance inco"e Slabs sa#e in#est"ent on !lans$ of

Sec$6< CCC

Across inco"e slabs

Rs$1(<<(<<<$ all U!to Rs$>>(55< All the !ension !lans sa#e In#est"ent on of

Sec$6<DR

Across inco"e slabs

Rs$1(<<(<<< all U!to Rs$>(>55 All the health insurance sa#e In#est"ent on ri ers a#ailable &ith the of con#entional !lans

TOTA3 SAGINES

Rs$1<(<<< Rs$>>(55< un er Sec$ 6<C an un er Sec$ 6< CCC( Rs$ >(>55 un er Sec$ 6<D( calculate for a "ale &ith 'ross

POSSI/3ERR annual inco"e e)cee in' Rs$1<(<<(<<<$ Sec$ 1<-1<.D Un er Sec$ 1<-1<D.( the benefits %ou recei#e are

co"!letel% ta)*free( sub0ect to the con itions lai therein$

o&n

RA!!licable to !re"iu"s !ai for Critical Illness /enefit( Accelerate Su" Assure an Wai#er of Pre"iu" /enefit$ RR These calculations are illustrati#e an base on our un erstan in' of current ta) le'islations( &hich are sub0ect to chan'e$ Please contact %our ta) consultant for e)act calculation of %our ta) liabilities$

$ur ,or Culture"

HD2C S3IC is +no&n for its sti"ulatin' en#iron"ent &ith hi'h le#els of "ou#auon( e"!o&er"ent an stron' learnin' an reco'nition$ We encoura'e an o!en an infor"al culture that #aluesS inte'rit%( co""it"ent( tea"&or+ an e)cellence In custo"er ser#ice$ We a o!t a !olic% of e#elo!"ent initiati#es( &hich !ro"otes a%*to* a% learnin' as &ell as ecision*"a+in'$ We belie#e our stren'th is our !eo!le( so &e en ea#or to sur!ass their e)!ectations an 'i#e the" the best !ossible &or+ en#iron"ent an benefits that rriatch the best in the in ustr%$ Aoun' !rofessionals o!tin' to "a+e a career &i th HD2C S3 can "a+e use of the 4ana'e"ent Trainee !ro'ra" to 'ro& &ith us$ Professional e#elo!"ent an inter!ersonal relationshi!s are accor e a hi'h !riorit% &hile creatin' a "ore con'enial an !eo!le oriente "ilieu across the or'aniBation( &hich sho&s In our contribution "ana'e"ent s%ste"$

Com"e%'$t!o% : Be%ef!t':
Well*bein' of our e"!lo%ees is our ut"ost ob0ecti#e$ The co"!ensation an benefits offere are best in the in ustr% an are ai"e at not onl% attractin' but also retainin' the best talent$ Re&ar s for each !osition are base on !erfor"ance( !otential( an "ar+et #alue$ We offer other benefits as &ell( such as !ro#i ent fun ( 'ratuit% an a hos!italisation insurance co#era'e !ro'ra" that co#ers not onl% the e"!lo%ee but hisCher fa"il% as &ell$ The e"!lo%ees( &ho co"!lete t&o %ears of ser#ice( can a#ail of housin' an e ucation loans facilit% at iscounte rate$ We encoura'e our e"!lo%ees to 'o for further e ucation$ 2or our e"!lo%eesN con#enience all co""on !rocesses li+e co"!ensation technolo'%$ etails( rei"burse"ent( lea#e a!!lications( tra#el !lannin'( u! atin' !ersonal infor"ation( etc $$ are auto"ate throu'h the e)tensi#e use of

GROWTH AND DEVELOPMENT:

The 'ains are ob#ious for an%one &ho has been closel% "onitorin' the In ian insurance scene$ The total !re"iu" collecte b% the insurers both life an non*life inF the %ear =<<>*=<<: is Rs$6=(:17 crores -Rs$;;( =66 crores in life an Rs$ 1;(1=9 crores in non*life. co"!are to Rs$ ::( 567 crores -Rs$>:(656 crores in life an Rs$ 1<(<69 crores in non*life. urin' the %ear =<<<* =<<1$ This re!resents an 6>M increase in the last three %ears o#er the base %ear =<<<*< I$ This is &hat &e ha#e &itnesse after the o!enin' u! of the sector$ If &e ta+e the three %ear bloc+ !rior to the o!enin' of the sector( &e fin that the total !re"iu" collecte in 1559*56 &as Rs$=9(<65 crores -lifeF Rs$ K 5>7: croresH non*life Rs$99>7 crores. &hich has 'ro&n to Rs$::(567 b% =<<<* =<<1 re!resentin' an increase of ;;M$ Insurance sector has ob#iousl% starte 'ro&in' at a ra!i !ace after the sector &as o!ene u!$ The !ri #alue sector accounts for nearl% 1>M of the first %ear !re"iu" "ar+et$

The "ar+et share of the !ri#ate !la%ers has to be seen in the conte)t of this enlar'e "ar+et$ There is also e#i ence to sho& that the rate of 'ro&th of !ublic sector un erta+in's ha not sho&n an% ecline after the entr% of the !ri#ate sector co"!anies$ All of the" are ob#iousl% ha#in' a share of a lar'er "ar+et$ The Cre it for enlar'in' the "ar+et shoul ho&e#er( 'o to the !ri#ate sector as the% ca"e u! &ith an a''ressi#e "ar+etin' strate'% to establish their !resence$ The Public Sector has( in its turn( re ra&n its !riorities( re#a"!e their "ar+etin' strate'%( an to'ether the !ublic an !ri#ate sectors ha#e enlar'e the "ar+et$ The e#i ence of the enlar'e"ent of the "ar+et can be seen in #arious other !ara"eters as &ell$ In ian insurance business( &hich re"aine un er e#elo!e &ith lo& le#els of insurance !enetration an insurance ensit% has sho&n si'ns of

i"!ro#e"ent$ The insurance !enetration i$e$ !re"ia as !ercenta'e of EDP has increase fro" =$>=M in =<<< to =$66M in =<<>$ The insurance ensit% i$e$ !re"iu" !er ca!ita has increase fro" USD 5$5< in =<<< to USD 1;$:< in =<<>$ The o#erall &orl ran+in's in ter"s of total !re"iu" #olu"es ha#e i"!ro#e fro" =>r in =<<< to 15th in =<<> an our sharein the &orl "ar+et has increase fro" <$:1 M to <$75M urin' the sa"e !erio $ The &orl ran+in' in ter"s of life insurance !re"iu" #olu"es has i"!ro#e 2ro" =<th in =<<< to 16th in =<<> an the share in &orl "ar+et has increase fro" <$7<M to <$61 M$ Si"ilarl% in non life insurance ran+in's in ter" of !re"iu" #olu"es has i"!ro#e fro" =5th in =<<< to =6th in =<<> an he share of &orl "ar+et has increase fro" <$=7M to <$=5M$ While the i"!ro#e"ents are not ra"atic( &e are reassure that &e are "o#in' in the $ ri'ht irection

As !er Assocharn( In iaNs !re"ier a!e) cha"ber of in ustries( the countr%Ns o"estic insurance "ar+et &oul touch US8 ;< /illion b% the %ear =<1<$ The o"estic insurance in ustr% in In ia &oul touch aroun US8 ;<$7 /illion b% the %ear =<1< fro" e)istin' siBe of about US8 1<$= /illion( sai ( GN Dhoot( Presi ent( Assocha" in a state"ent !ublishe b% The 2inancial E)!ress on Kune ==( =<<9$ Rural as &ell as se"i urban In ia &oul a US8 >7 /illion to the insurance in ustr% in

In ia b% the %ear =<1<$ US8 =< /illion &oul bein' ter"s of 3ife insurance &hereas( US8 17 /illion &oul be in ter"s of Non*life insurance !lans$ The insurance in the urban sector is e)!ecte to touch US8 =7 /illion( out of &hich US8 17 /illion &oul be fro" 3ife insurance an the rest fro"

No% 0 &!fe !%'(#$%)e;

Risin' !ublic e"an for bi''er insurance co#era'e as &ell as e"er'in' rural an se"i*urban "ar+et is ri#in' the in ustr%$ The insistent "ar+etin' strate'ies i"!le"ente b% the !ri#ate !la%ers &itness a stron' 'ro&th in the insurance in ustr%$ S"art "ar+etin'( Inno#ati#e !ro ucts as &ell as a''ressi#e istribution ha#e facilitate fle 'lin' !ri#ate insurance businesses to si'n u! custo"ers in In ia sooner than an%bo % esti"ate $ The Assocha" has reco""en e that the insurance cor!orations shoul concentrate on "anufacturin' area since it offer enor"ous o!!ortunities for 'ro&th$ The insurers shoul 'o into tie*u!s or un erstan in' &ith 'o#ern"ent or'aniBations to "a+e sure the acco"!lish"ent of the insurance sche"es$ A recent re!ort b% RNCOS on OIn ian Insurance In ustr% 2orecast -=<<9* =<<5.@

also esti"ate an increase in the countr%Ns insurance "ar+et in future$ As !er the re!ort( the In ian life insurance "ar+et is e)!ecte to reach the #alue of aroun Rs 1;6> /illion in the %ear =<<5 an the Non*life business is esti"ate to reach aroun Rs >66

/illion b% the sa"e !erio $ With an annual 'ro&th rate of 17*=<M an the lar'est nu"ber of life insurance !olicies &ith an annual 'ro&th rate of 17*=<M an the lar'est nu"ber of life insurance !olicies in force( the !otential of the In ian insurance in ustr% is hu'e$ Total #alue of the In ian insurance "ar+et -=<<6*<5. is esti"ate at Rs$ ;7< billion -US8l < billion.$ Accor in' to 'o#ern"ent sources( the insurance an contribution to the countr%Ns 'ross ban+in' ser#icesN o"estic !ro uct -EDP. is 9M out of &hich the 'ross

!re"iu" collection for"s a si'nificant !art$ The fun s a#ailable &ith the state*o&ne 3ife Insurance Cor!oration -3IC. for in#est"ents are 6M of EDP$ Till ate( onl% =<M of the total insurable !o!ulation of In ia is co#ere un er #arious life insurance sche"es( the !enetration rates of health an other non*life insurances in In ia is also &ell belo& the international le#el$ These facts in icate the of i""ense 'ro&th !otential of the insurance sector$ The %ear 1555 sa& a re#olution in the In ian insurance sector( as "a0or structural chan'es too+ !lace &ith the en in' of 'o#ern"ent "ono!ol% an the !assa'e of the Insurance Re'ulator% an De#elo!"ent Authorit% -IRDA. /ill( liftin' all entr% restrictions for !ri#ate !la%ers an allo&in' forei'n !la%ers to enter the "ar+et &ith so"e li"its on irect forei'n o&nershi!$ Thou'h( the e)istin' rule sa%s that a forei'n !artner can hol =;M e,uit% in an insurance co"!an%( a !ro!osal to increase this li"it to :5M is !en in' &ith the 'o#ern"ent$

Since o!enin' u! of the insurance sector in 1555( forei'n in#est"ents of Rs$ 6$9 billion ha#e !oure into the In ian "ar+et an =1 !ri#ate co"!anies ha#e been 'rante licenses$

Inno#ati#e !ro ucts( s"art "ar+etin'( an a''ressi#e istribution ha#e enable fle 'lin' !ri#ate insurance co"!anies to si'n u! In ian custo"ers faster than an%one e)!ecte $ In ians( &ho ha al&a%s seen life insurance as a ta) sa#in' e#ice( are no& su !ri#ate sector an sna!!in' u! the ne& inno#ati#e !ro ucts on offer$ enl% turnin' to the

The life insurance in ustr% in In ia 're& b% an i"!ressi#e >;M( &ith !re"iu" inco"e fro" ne& business at Rs$ a7>$:> billion urin' the fiscal %ear =<<6*<5 bra#in' stiff co"!etition fro" !ri#ate insurers$ RNCOSN s re!ort( OIn ian Insurance In ustr%F Ne& A#enues for Ero&th =<1=O( fin s that the "ar+et share of the state behe"oth( 3IC( has cloc+e =1$69M 'ro&th in business at Rs$159$ 6; billion b% sellin' =$: billion ne& !olicies in =<<:*<7$ /ut this &as still not enou'h to arrest the fall in its "ar+et share( as !ri#ate !la%ers 're& b% 1=5M to "o! u! Rs$ 77$79 billion in =<<6*<5 fro" Rs$ =:$=5 billion in =<<9*<6 Thou'h the total #olu"e of 3ICNs business increase in the last fiscal %ear -=<<6*=<<5. co"!are to the !re#ious one( its "ar+et share ca"e o&n fro" 69$<: to 96$<9M$ The 1: !ri#ate insurers increase their "ar+et share fro" about >>M to about:=M in a %earNs ti"e$ The fi'ures for the first t&o "onths of the fiscal %ear =<<5*1<.also s!ea+ of the 'ro&in' share of the !ri#ate insurers$ The share of 3IC for this !erio has further co"e o&n to 97 !ercent( &hile the !ri#ate !la%ers ha#e 'rabbe o#er =: !ercent$ There are !resentl% 1= 'eneral insurance co"!anies &ith four !ublic sector co"!anies an ei'ht !ri#ate insurers$ Accor in' to esti"ates( !ri#ate insurance co"!anies collecti#el% ha#e a 1<M share of the non*life insurance "ar+et$ Thou'h the focus of this "ar+et research re!ort is on the !otential 'ro&th on the In ian Insurance Sector( it also tal+s about the "ar+et siBe( "ar+et se'"entation( an +e% e#elo!"ents in the "ar+et after 1555$ The re!ort 'i#es an instant o#er#ie& of the In ian non*life insurance

"ar+et( an co#ers fire( "arine( an other non*life insurance$ The ata is su!!lie in both 'ra!hical an tabular for"at for ease of inter!retation an anal%sis$ This re!ort also !ro#i es co"!an% !rofiles of the "a0or !ri#ate insurance co"!anies$

REPORT HIGHLIGHTS
Eains of 3iberaliBation in In ian Insurance Sector In ian Insurance 4ar+et Se'"entation /% Pro ucts SiBe of the 4ar+et an 4ar+et Share Of 3ife Insurers( In INR -crore. 4ar+et Share of Non* life insurers 2orecast of 3ife Insurance Ero&th U! to =<1= 2orecast of Non*3ife Insurance Ero&th U! to =<1= 4ar+et Re#enue of /oth Public an Pri#ate Insurers Policies an 4easures Ta+en /% IRDA To De#elo! The Insurance 4ar+et Research an De#elo!"ent Acti#ities Re'ulation of insurance an reinsurance co"!anies 4a0or Challen'es That In ian Insurance Sector is 2acin' Profi les of the 4a0or Pla%ers in force( The !otential of the In ian insurance in ustr% is hu'e$ Total #alue of the In ian insurance "ar+et -=<<:*<7. is esti"ate at Rs$ :7< billion -US81< billion.$ Accor in' to 'o#ern"ent sources( the insurance an ban+in' ser#icesN contribution to the countr%Ns 'ross o"estic !ro uct -EDP. is 9M out of &hich the 'ross !re"iu" collection for"s a si'nificant !art$ The fun s a#ailable &ith the state*o&ne 3ife Insurance Cor!oration -3IC. for in#est"ents are 6M of EDP$

GROWTH IN HDFC SLIC:

I*ID2C Stan ar 3ife is one of the lea in' life insurance co"!anies ha#in' a trac+ recor of eclarin' bonuses e#er% %ear since ince!tion$ We attribute this success to our !eo!le( &ho are our "ost i"!ortant asset$ We belie#e the% are$a +e% facet of the co"!an% an it is their contribution that has enable us to achie#e our current status$ Since the% eser#e the best( our efforts ha#e been t? !ro#i e the" &ith the best en#iron"ent( best culture an best e#elo!"ent o!!ortunities !ossible The 'ross !re"iu" inco"e( for the %ear en in' 4arch >1( =<<9 stoo at Rs$ =(67; crores an ne& business !re"iu" inco"e at Rs$ 1(;=: crores$ The co"!an% has co#ere o#er 6( 99(<<< li#es %ear en in' 4arch >1( =<<9$ HD2C Stan ar 3ife offers a bou,uet of insurance solutions to "eet e#er%oneNs nee $ The% cater to both( in i#i uals as &ell as to co"!anies loo+in' to !ro#i e benefits to their e"!lo%ees$ This section 'i#es %ou etails of all our !ro ucts$ The% ha#e incor!orate #arious o&nloa able for"s an !ro uct etails so that %ou can "a+e an infor"e choice about bu%in' a !olic%$

CHAPTER *
CO4PANA PRO2I3E

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

INTRODUCTION
HD2C Incor!orate in 1599 &ith a share ca!ital of Rs 1< Crores( HD2C has since e"er'e as the lar'est resi ential "ort'a'e finance institution in the countr%$ The cor!oration has ha a series of share issues raisin' its ca!ital to Rs$ 115 Crores$ The 'ross !re"iu" inco"e for the %ear en in' 4arch >1( =<<9 stoo at Rs$ =(67; Crores an ne& business !re"iu" inco"e at Rs$ 1(;=: Crores$ The co"!an% has co#ere o#er 6(99(<<< li#es %ear en in' 4arch >1( =<<9$

HD2C o!erates throu'h al"ost :7< locations throu'hout the countr% &ith its cor!orate hea ,uarters in 4u"bai( In ia$ HD2C also has an International Office in Dubai( UAE &ith ser#ice associates in Ju&ait( O"an an Tatar$ HD2C is the lar'est housin' co"!an% in In ia for the last =9 %ears$

SNAPSHOT0I Incor!orate in 1599 as the first s!ecialiBe 4ort'a'e Co"!an% in In ia$ Al"ost 5<M of initial sharehol in' in the han s of o"estic institutes an retail

in#estors$ Current 99M of shares hel b% forei'n institutional in#estors$ /esi es the core business of "ort'a'e HD2C has e#ol#e into a financial con'lo"erate &ith hol in's InF HD2C Stan ar 3ife insurance Co"!an%* HD2C hol s 96$<9 M$ HD2C Asset 4ana'e"ent Co"!an% I HD2C hol s 7<$1M HD2C /an+* HD2C hol s ==$=7M$ Intelenet Elobal -/usiness Process Outsourcin'. I HD2C hol s 7<M$

 HD2C Chubb Eeneral Insurance Co"!an% I HD2C hol s 9:M$

SNAPSHOT0II 3oan A!!ro#als -u! to Dec =<<9. 3oan Disburse"ents -u! to Dec$ =<<9. Housin' Units 2inance Distribution Offices Outreach Pro'ra"s 161 5< Rs$ 6<7 billion$ -US 8 16$>< bn$. Rs$;;5 billion -US 8 17$=< bn. =$7 "illion$

KEY PLAYERS M#; Dee"$< S P$#e< is the Chair"an of the Co"!an%$ He is also the E)ecuti#e Chair"an of Housin' De#elo!"ent 2inance Cor!oration 3i"ite -HD2C 3i"ite .$ He 0oine HD2C 3i"ite in a senior "ana'e"ent !osition in 1596$ He &as in ucte as a &hole*ti"e irector of HD2C 3i"ite in 1567 an &as a!!ointe as its E)ecuti#e Chair"an in 155>$ He is the Chief E)ecuti#e Officer of HD2C 3i"ite $ 4r$ Pare+h is a 2ello& of the Institute of Chartere Accountants -En'lan P Wales.$

M#; Dee"$< M S$t=$&e<$# is the 4ana'in' Director an

CEO of the Co"!an% since

No#e"ber( =<<<$ Prior to this( he &as the 4ana'in' Director of HD2C 3i"ite since 155>$ 4r$ Sat&ale+ar obtaine a /achelors De'ree in Technolo'% fro" the In ian Institute of Technolo'%(

/o"ba% an a 4asters De'ree in /usiness A "inistration fro" The A"erican Uni#ersit%( Washin'ton DC$

GROUP COMPANIES
HD2C /an+F Worl Class In ian /an+* a"on' the to! !ri#ate ban+s in In ia$ HD2C A4CF One of the to! > A4Cs in In ia* Preferre in#est"ent "ana'er$ Intelenet ElobalF /PO ser#ices for international custo"ers$ CI/I3F Cre it Infor"ation /ureau In ia 3i"ite $ HD2C ChubbF U!co"in' Pri#ate co"!anies in the fiel of Eeneral Insurance$ HD2C 4utual 2un HD2C realit%$co"F Hel!s to search !ro!erties in all "a0or cities in In ia HD2C securities

STANDARD LIFE
Stan ar 3ife is Euro!e1s lar'est "utual life assurance co"!an%$ Stan ar 3ife( &hich has been in the life insurance business for the !ast 197 %ears is a "o ern co"!an% sur#i#in' ,uite a fe& chan'es since sellin' its first !olic% in 16=7$ The co"!an% e)!an e in the 15 th centur% fro" +its

ori'inal E inbur'h !re"ises( o!enin' offices in other to&ns an businesses$

ac,uittin' other si"ilar

Stan ar 3ife Currentl% has assets e)cee in' o#er U 9< billion un er its "ana'e"ent an has the istinction of bein' accor e ?AAA@ ratin' conse,uentl% for the si) %ears b% Stan ar an Poor$

SNAPSHOT
2oun e in 1697( co"!an% su!!ortin' 'eneration for last 195 %ears$ Currentl% o#er 7 "illion Polic% hol ers benefitin' fro" the ser#ices offere $ Euro!e1s lar'est "utual life insurer$ JOINT VENTURE

HD2C Stan ar 3ife Insurance Co"!an% 3i"ite &as one of the first co"!anies to be 'rante license b% the IRDA to o!erate in life insurance sector$ Reach of the KG !la%er is hi'hl% rate an been conferre &ith "an% a&ar s$ HD2C is rate DAAA 1 b% both CRISI3 an ICRA$ Si"ilarl%( Stan ar 3ife is rate DAAA1 both b% 4oo %1s an Stan ar an Poor1s$ These reflect the efficienc% &ith &hich HD2C an Stan ar 3ife "ana'e their asset base of Rs$ 17(<<< Cr an Rs$ ;<<(<<< Cr$ res!ecti#el%$ HD2C Stan ar 3ife Insurance Co"!an% 3t &as incor!orate on 1: th Au'ust =<<<$ HD2C is the "a0orit% sta+ehol er in the insurance KG &ith 61$:M sta!le an Stan ar of as a sta!le 16$;M 4r$ Dee!a+ Sat&ale+ar is the 4D an CEO of the #enture$ HD2C Stan ar 3ife Insurance Co"!an% 3t $ Is one of In ia1s lea in' Pri#ate 3ife Insurance Co"!anies( &hich offers a ran'e of in i#i ual an 'rou! insurance solutions$ It is a 0oint #enture bet&een Housin' De#elo!"ent 2inance Cor!oration 3i"ite -HD2C 3t $. In ia1s lea in'

housin' finance institution an the Stan ar 3ife Assurance Co"!an%( a lea in' !ro#i er of financial ser#ices fro" the Unite Jin' o"$ /oth the !ro"oters are &ill +no&n for their ethical ealin's an financial stren'th an are thus co""itte to bein' a lon'*ter" !la%er in the life insurance in ustr%* all i"!ortant factors to consi er &hen choosin' %our insurer$

BUSINESS GROWTH
T#$)< Re)o#+ 'o f$# The 'ross !re"iu" inco"e of HD2C( for the %ear en in' 4arch >1( =<<9 stoo at Rs$ =(67; crores an ne& business !re"iu" inco"e at Rs$ 1(;=: crores$ The co"!an% has co#ere o#er 6(99(<<< li#es %ear en in' 4arch >1( =<<9$ Co"!an% also eclare our 7th consecuti#e bonus in as "an% %ears for our D&ith !rofit1 !olic%hol ers$

KEY STRENGTH
F!%$%)!$& E>"e#t!'e
As a 0oint #enture of lea in' financial ser#ices 'rou!s$ HD2C stan ar 3ife has the financial e)!ertise re,uire to "ana'e lon'*ter" in#est"ents safel% an efficientl%$

R$%6e of So&(t!o%'
HD2C S3IC has a ran'e of in i#i ual an 'rou! solutions( &hich can be easil% custo"iBe to s!ecific nee s$ These 'rou! solutions ha#e been esi'ne to offer co"!lete fle)ibilit% co"bine &ith a lo& char'in' structure$

St#o%6 Et !)$& V$&(e':

HD2C S3IC is an ethical an Cultural Or'aniBation$ 2alse sellin' or false co""it"ent &ith the custo"ers is not allo&e $

Mo't #e'"e)te+ P#!8$te I%'(#$%)e Com"$%7

HD2C S3IC &as a&ar e No*1 Pri#ate Insurance Co"!an% in =<<: b% the Worl Class 4a'aBine /usiness Worl for Inte'rit%( Inno#ation an Custo"er Care$

CORPORATE OBJECTIVE
V!'!o%
NThe "ost successful an a "ire life insurance co"!an%( &hich "eans that &e are the "ost truste co"!an%( the easiest to eal &ith( offer the best #alue for "one%( an set the stan ar s in the in ustr%N; NThe "ost ob#ious choice for allN$

V$&(e'
$Inte'rit% $Inno#ation $Custo"er centric $Peo!le Care One for all $Tea"&or+ $Ko% an Si"!licit%

PRODUCTS : SERVICES
The ri'ht in#est"ent strate'ies &onNt 0ust hel! !lan for a "ore co"fortable to"orro& ** the% &ill hel! %ou 'et ?Sar Utha +e Ki%o@* At HD2C S3IC( life insurance !lans are create +ee!in' in "in the chan'in' nee s of fa"il%$ Its life insurance !lans are esi'ne to !ro#i e %ou &ith fle)ible o!tions that "eet both !rotection an sa#in's nee s$ It offers a full ran'e of trans!arent( fle)ible an #alue for "one% !ro ucts$ HD2C S3IC !ro ucts are "o ern an conte"!orar%

unitiBe !ro ucts that offer uni,ue custo"er benefits li+e fle)ibilit% to choose co#er le#els( in e)ation an !artial &ith ra&als$ -SourceF &&&$h fcslic$co".

PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE INSURANCE I%+!8!+($& P#o+()t' !rotection !lans A !erson can !rotect his fa"il% a'ainst the loss of his inco"e or the bur en of a loan in the e#ent of his unfortunate e"ise( isabilit% or sic+ness$ These !lans offer #aluable !eace of "in at a s"all !rice$ Protection ran'e inclu es our Te#m A''(#$%)e P&$% P Lo$% Co8e# Te#m A''(#$%)e P&$%$ Investment !lans HD2C S3IC1s S!%6&e P#em!(m W o&e of L!fe "&$% is &ell suite to "eet lon' ter" in#est"ent nee s$ This !ro#i es attracti#e lon' ter" returns throu'h re'ular bonuses$ !ension !lans Pension Plans hel! to secure financial in e!en ence e#en after retire"ent$ Pension ran'e inclu es Pe#'o%$& Pe%'!o% P&$%( U%!t L!%<e+ Pe%'!o%( U%!t L!%<e+ Pe%'!o% P&('$ Savings !lans Sa#in's Plans offer a fle)ible o!tion to buil sa#in's for future nee s such as bu%in' a rea" ho"e or fulfillin' %our chil ren1s i""e iate an future nee s$ Sa#in's ran'e inclu es E%+o=me%t A''(#$%)e P&$%( U%!t L!%<e+ E%+o=me%t( U%!t

L!%<e+ E%+o=me%t P&('( U%!t L!%<e+ E%+o=me%t P&(' II( Mo%e7 B$)<( U%!t L!%<e+ E% $%)e+ L!fe P#ote)t!o% II( C !&+#e%?' P&$%@ U%!t L!%<e+ Yo(%6 St$#( U%!t L!%<e+ Yo(%6 St$# P&('( U%!t L!%<e+ Yo(%6 St$# P&(' II$

G#o(" P#o+()t'

$ne-stop s%op for employee-&enefit solutions HD2C Stan ar 3ife has the "ost co"!rehensi#e list of !ro ucts for !ro'ressi#e e"!lo%ers &ho &ish to !ro#i e the best an "ost inno#ati#e e"!lo%ee benefit solutions to their e"!lo%ees$ It offers ifferent !ro ucts for ifferent nee s of e"!lo%ers ran'in' fro" ter" insurance !lans for !ure !rotection to #oluntar% !lans such as su!erannuation an lea#e encash"ent$ HD2C S3IC offers the follo&in' 'rou! !ro ucts to estee"e cor!orate clientsF G#o(" Te#m I%'(#$%)e G#o(" V$#!$*&e Te#m I%'(#$%)e G#o(" U%!t0L!%<e+ P&$% An in#est"ent solution that !ro#i es fun in' #ehicle to "ana'e cor!uses &ith Eratuit%( Define /enefit or Define Contribution Su!erannuation or 3ea#e Encash"ent sche"es of %our co"!an% Also suitable for other e"!lo%ee benefit sche"es such as salar% sa#in' sche"es an &ealth "ana'e"ent sche"es

So)!$& P#o+()t

De8e&o"me%t I%'(#$%)e P&$%

De#elo!"ent Insurance !lan is an insurance !lan &hich !ro#i es life co#er to "e"bers of a De#elo!"ent A'enc% for a ter" of one %ear$ On the eath of an% "e"ber of the 'rou! insure urin' the %ear of co#er( a lu"! su" is !ai to those "e"ber beneficiaries to hel! "eet so"e of the i""e iate financial nee s follo&in' their loss$

E&!6!*!&!t7
4e"bers of the e#elo!"ent a'enc% an their s!ouses &ithF * 4ini"u" a'e at the start of the !olic% 16 %ears last birth a% * 4a)i"u" a'e at the start of !olic% 7< %ears last birth a% E"!lo%ees of the De#elo!"ent A'enc% are not eli'ible to 0oin the 'rou!$ The 'rou! to be co#ere is onl% eli'ible if it contains "ore than 7<< "e"bers$

P#em!(m P$7me%t'
The !re"iu" to be !ai &ill be ,uote !er "e"ber in the 'rou! an &ill be the sa"e for all "e"bers of the 'rou!$ The !re"iu" can onl% be !ai b% the De#elo!"ent A'enc% as a sin'le lu"! su" that inclu es all !re"iu"s for the 'rou! to be co#ere $ Co#er &ill not start until the !re"iu" an all the "e"ber infor"ation in our s!ecifie for"at has been recei#e $

Be%ef!t'
On the eath of each "e"ber co#ere b% the !olic% urin' the %ear of co#er a lu"! su" e,ual to the su" assure &ill be !ai to their beneficiaries or le'al heirs$ Where the eath is as a result of an acci ent( an a itional lu"! su" &ill be !ai e,ual to half the su" assure $ There are no benefits !ai at the en of the %ear of co#er an there is no surren er #alue a#ailable at an% ti"e$ T e #o&e of t e De8e&o"me%t A6e%)7 Due to the nature of the 'rou!s co#ere ( HD2C Stan ar char'e can be lo&er$ These tas+s &oul inclu eF 3ife &ill be !assin' certain

a "inistrati#e tas+s onto the De#elo!"ent A'enc%$ /% !assin' on these tas+s the !re"iu"

Sub"ission of "e"ber ata in a s!ecifie co"!uter for"at Collection of !re"iu"s fro" 'rou! "e"bers Recor in' chan'es in the etails of 'rou! "e"bers Disburse"ent of clai" !a%"ents an the "ortalit% rebate -if an%. to 'rou! "e"bers These tas+s &oul be in a ition to the usual uties of a !olic%hol er such asF Pa%"ent of !re"iu"s Re!ortin' of clai"s Jee!in' !olic% hol er infor"ation u! to ate Trainin' an su!!ort &ill be a#ailable to 'i#e 'ui ance on ho& to co"!lete the tas+s

a!!ro!riatel%$ Since these a itional tas+s &ill i"!ose a bur en on the De#elo!"ent A'enc%( the De#elo!"ent A'enc% "a% char'e a Rs$ 1< a "inistration fee to their "e"bers$ P#o !*!t!o% of #e*$te' Section :1 of the Insurance Act( 15>6 states

No !erson shall allo& or offer to allo&( either irectl% or in irectl%( as an in uce"ent to an% !erson to ta+e out or rene& or continue an insurance in res!ect of an% +in of ris+ relatin' to li#es or !ro!ert% in In ia( an% rebate of the &hole or !art of the co""ission !a%able or an% rebate of the !re"iu" sho&n on the !olic%( nor shall an% !erson ta+in' out or rene&in' or continuin' a !olic% acce!t an% rebate( e)ce!t such rebate as "a% be allo&e in accor ance &ith the !ublishe !ros!ectus or tables of the insurer If an% !erson fails to co"!l% &ith sub re'ulation -!re#ious !oint. abo#e( he shall be liable to !a%"ent of a fine &hich "a% e)ten to ru!ees fi#e hun re

INTROUCTION TO UNIT LINKED FUNDS Unit lin+e !lans are base on the co"!onent of the !re"iu" or the contribution of the custo"er to&ar s the !lan$ This contribution can be in ifferent "o es li+e %earl%( half %earl%( ,uarterl% an "onthl%$ Unit lin+e !lans ha#e "ulti!le benefits li+e life !rotection( ri er !rotection( sa#in's( trans!arenc%( in#est"ent choices( li,ui it% an !lannin' for ta)es$ These !lans &or+ li+e "utual fun s$ The !re"iu" is collecte fro" the !olic% hol er$ He is allotte a certain nu"ber of units base of his contribution$ The Net Asset Galue is the #alue of each unit of the fun $ It is foun b% subtractin' the char'es an current liabilities fro" the current assets an in#est"ents an i#i in' this nu"ber b% the total nu"ber of outstan in' units$ 3et us ta+e an e)a"!le$ There are 1<< in#estors an each in#ests Rs$ 1< in a fun $ The total #alue of the fun is Rs$ 1<<< an each !erson is allotte 1 unit of Rs 1<$ No& the "one% -Rs$ 1<<<. is in#este in the ebt or e,uit% "ar+et$ Su!!ose the fun #alue increase b% =<M$ As a result the Rs$ 1<<< in#este beca"e Rs$ 1=<<$ Hence the #alue of e#er% in#estor is no& Rs$ 1= an not Rs$ 1<$

UNIT LINKED VERSUS OTHER FINANCIAL INSTRUMENTS

P$#$mete#' S$fet7 L!A(!+!t7 Ret(#%' L!fe Co8e# T$> *e%ef!t'

RBI Bo%+' H!6 No%e Lo= , t!me $mo(%t T$> f#ee

F!>e+ De"o'!t' H!6 H!6 Lo= , t!me $mo(%t T$>e+

M(t($& F(%+' Me+!(m H!6 H!6 , t!me $mo(%t T$>e+

U%!t &!%<e+ H!6 H!6 H!6 ,3 t!me' T$> f#ee

We fin that life insurance unit lin+e !lans is a 'oo area to in#est "one% in as it !ro#i es li,ui it%( safet%( hi'h returns( life co#er an ta) benefits in a sin'le !lan$ HD2C S3IC offers the o!tion of in e)ation to beat inflation$ Ris+ is re uce to a lar'e e)tent as the co"!an% in#ests in a i#ersifie !ortfolio of stoc+s$

T$> Be%ef!t' INCOME TAB GROSS ANNUAL HOW MUCH HDFC STANDARD

TAB CAN YOU

SECTION

SALARY

SAVEC

LIFE PLANS

Sec$ 6<C

Across All inco"e U!to Slabs sa#e

Rs$

>>(55< All the life insurance on !lans$ of

in#est"ent Rs$ 1(<<(<<<$ Sec$ 6< CCC Across all inco"e U!to slabs$ sa#e In#est"ent Rs$1(<<(<<<$ Sec$ 6< D Across all inco"e U!to slabs sa#e In#est"ent Rs$ 1<(<<<$ TOTA3 SAGINES POSSI/3E Rs$ Rs$

>>(55< All the !ension !lans$ on of

>(>55 All the health insurance on ri ers a#ailable &ith the of con#entional !lans$

R'/4@/.Rs$ >>(55< un er Sec$ 6<C an un er Sec$ 6< CCC ( Rs$>(>55 un er Sec$ 6< D( calculate for a "ale &ith 'ross annual inco"e e)cee in' Rs$ 1<(<<(<<<$

Sec$ 1< -1<.D

Un er Sec$ 1<-1<D.( the benefits %ou recei#e are co"!letel% ta)*free( sub0ect to the con itions lai o&n therein$

Com"$%7 IT 't#$te67
HD2C Stan ar 3ife Insurance Co"!an% 3i"ite Ns IT an business strate'% allo&s a lot of

sco!e for the or'aniBation to in#est an

e!lo% IT infrastructure to further business$

OWe belie#e that &e "ust ali'n current IT efforts to the future business roa "a!$ We "ust create a for&ar *loo+in' technolo'% strate'% so that &e are !rotecte obsolescence for at least fi#e %ear(@ Sai Ra&lani The co"!an% ai"s toF I entif% an i"!le"ent solutions to increase the s!ee of issuin' a !olic% an clai"s !rocessin'$ 3e#era'e teleco"( net&or+in'( an IT to create a #irtual &or+!lace$ Not uti I iBe technolo'% for the sa+e of Ntechnolo'% a o!tionN$ De#elo! Jno&le 'e 4ana'e"ent ca!abilit%$ fro" technolo'%

BACKGROUND OF THE VARIOUS

'E!)RT-E+TS $F T.E C$-!)+/"

Accountin' e!art"ent C accounts e!art"ent EDP tea" -EDP V electronic ata !rocessin'. Sales e!art"ent A "inistrati#e accountin' Research an 4ana'e"ent IT e!art"ent -IT V infor"ation technolo'%. Custo"er ser#ice C ser#ice tea" 3o'istics 4ar+etin' Personnel e!art"ent C staff e!art"ent C hu"an resources e#elo!"ent tea"

 Public relations tea" C !ublic relations e!art"ent Technical su!!ort tea"$ ORGANISATION SET0UP: Or'aniBational set*u! of a life Insurance co"!an% !la%s an i"!ortant !art in its o#erall efficient &or+in' $ The #arious e!art"ents of an or'aniBation nee to co""unicate interact an &or+ in cohesion to achie#e the or'aniBationNs ob0ecti#e $ Po&erW an res!onsibilities of each e!art"ent &or+ in s"ooth "anner lea in' to an o#erall i"!ro#e !erfor"ance$ The e!art"ents can be car#e out on the basis of functionalit% or acti#ities of the co"!an%$ Re#enue*'eneratin' acti#ities shoul be 'i#en "ore i"!ortance than non* re#enue 'eneratin' acti#ities$ Ho&e#er( this "a% not be al&a%s true$ 2or instance( fun "ana'e"ent is not a re#enue 'eneratin' acti#it%F si"ilarl% custo"er ser#ice an technolo'% i"!le"entation are not in the"sel#es re#enue 'eneratin' acti#itiesF but these are #er% crucial for the co"!an% to succee in the "ar+et$ In an Insurance co"!an%( the #arious offices( e!art"ents an $ sections are create +ee!in' in #ie& the co"!an%Ns i"!ortant functions an acti#ities $ These acti#ities can be or'aniBe in ifferent &a%s$ 2or e)a"!leF the acti#ities "a% be centraliBe at one !lace or "a% be ecentraliBe at ifferent !laces$

CHAPTER0 THEORITICAL ASPECT OF THE STUDY

CONCEPT: On the one han ( hu"an life is sub0ect to #arious ris+s*ris+ of eath or isabilit% ue to natural

or acci ental causes$ Hu"ans are also !rone to iseases( the treat"ent of &hich "a% in#ol#e hu'e e)!en iture$ On the other han ( !ro!ert% o&ne b% "an is e)!ose to #arious haBar s( natural an "an*"a e$ When hu"an life is lost or a !erson is isable !er"anentl% or te"!oraril%( there is a loss of inco"e to the househol $ The fa"il% is !ut to har shi!$ So"eti"es sur#i#al itself is at sta+e for the e!en ants$ When it co"es to !ro!ert%( loss or a"a'e to !ro!ert% results in either &hole or !artial loss in inco"e to the !erson or entit%$ Ris+ has the ele"ent of un!re ictabilit%$ DeathC isabilit% or lossC a"a'e coul an%ti"e$ 3osses can be "iti'ate throu'h insurance$ occur at

Insurance is a co""o it% &hich offers !rotection a'ainst #arious contin'encies$ Insurance !ro ucts a#ailable for life an non*life are "an%$ In non*life( a!art for" !ersonal co#ers such as acci ent co#ers an health insurance( there are !ro ucts co#erin' liabilities un er a !articular la& an or co""on la&$ The #arious !ro ucts are esi'ne to cater to ifferent nee s of an in i#i ual or in ustr% such as fire insurance !olic% on "ulti*store%e buil in'( househol erNs !olic%$ An insurance contract !ro"ises to "a+e 'oo to the insure a certain su" in consi eration for a !a%"ent in the for" of !re"iu" fro" the insure $ Hu"an life cannot be #alue $ Hence the su" assure - or the a"ount 'uarantee to be !ai in the e#ent of a loss. is b% &a% of a NbenefitN in the Case of life insurance$ 3ife insurance !ro ucts !ro#i e a efinite a"ount of "one% to the e!en ants of the insure in case the life insure ies

urin' his$ acti#e inco"e earnin' !erio $ or beco"es isable on account of$ an acci ent causin' re uctionCco"!lete loss in his inco"e earnin's$ An in i#i ual can also !rotect his ol a'e &hen he ceases to earn an has no other "eans of inco"e b% !urchasin' an annuit% !ro uct$ A Personal Acci ent co#er is also for !rotection$ In Nthe e#ent of eath or isabilit%( !er"anent or te"!orar%( of the insure ( it !ro#i es for co"!ensation &hich is either the &hole or a !ercenta'e of the Ca!ital Su" Insure e!en in' on the +in of loss$ insurance( losses can "ar a !ro0ect or an in ustr%$ Eeneral Insurance offers stabilit% to the econo"% an to the societ%$ Insurance offers securit% an so !eace of "in to the in i#i ual$ The conce!t of* insurance is$ that the losses of a fe& are"a e 'oo b% contribution fro" "an%$ It is base on the la& of lar'e nu"bers$ It ste""e fro" the nee of "an to fin a solution for "iti'ation of losses$ It also reflects the nature of "an to fin a solution collecti#el%$ It is i"!ortant for all to un erstan the #arious !ro ucts that life an 'eneral insurance co"!anies offer before the% "a+e a choice as to the !ro uct the% &ant to bu%$ As !er re'ulations( insurers ha#e to 'i#e the #arious features of the !ro ucts at the !oint of sale$ The insure shoul also 'o throu'h the #arious ter"s an cun itions of the !ro ucts an un erstan &hat the% ha#e bou'ht an "et their insurance nee s$ The% ou'ht to un erstan the clai" !roce ures so that the% +no& &hat to o in the e#ent of a loss$ FINANCIAL CONSULTANTF As !er !ro#isions of Section 16: of the In ian Contract Act( bet&een the !rinci!al an the thir !erson an% !erson can beco"e an a'ent$ If a "inor is e"!lo%e as an a'ent( the !rinci!al &oul be boun b% his acts$ /ut his "inor hi"self &ill not be liable to his !rinci!al$

An Insurance a'ent can be F* o An% in i#i ualH or o An% co"!an% or a fir"or ban+ or co*o!erati#e societ% as Cor!orate A'ent$ WHY AGENTS ARE NECESSARY X Intan'ible nature of !ro ucts X Nee to e)!lain benefits X /enefit in future*#a'ue X Hu"an habit of !ost!one"ent X A'ent as the basic un er&riter is a useful entit% for the insurer$ He is he hu"an face of the insurer in the "ar+et$

AGENTS REGULATION: IRDA -3icensin' ofInsurance A'ents. Re'ulations =<<< re'ulate the "atter of issuin' license as re,uire b% sec$:= of Insurance Act 15>6$

The sai ORe'ulationsO &ere issue b% the OInsurance Re'ulator% an De#elo!"ent Authorit%O constitute b% the IRDA Act( 1555$

These Re'ulations s!ecif% ,ualifications as also is,ualifications for issue of a license$ 3ater( in October =<<=( IRDA notifie ne& re'ulations( IRDA Re'ulations =<<=$ These

Re'ulations eal &ith issue of license an other "atters relatin' to cor!orate a'ents$ PROCEDURE FOR BECOMING AGENT: A can i ate "a% be see+ license to act as* X An a'ent for a life insurance( i$e$ a life insurance a'ent$ X An a'ent for a 'eneral Insurer$ X An a'ent for both life as &ell as 'eneral insurance$ E%)&o'(#e' fo# A""&!)$t!o%F The A!!lication for issue to license is to be "a e in the !rescribe for" to the esi'nate !erson$ A Desi'nate !erson is an official no"inate b% the insurer an a!!ro#e b% the Authorit% -IRDA. to issue license$ Such an official is nor"all% in char'e of "ar+etin' o!erations of the insurer$ The A!!lication shoul be acco"!anie b% !roofs ofF 2ee ha#in' been !ai A'e Tualification Co"!letion of Practical trainin' Passin' the Prescribe E)a"ination$

The #ali it% for the license is for > %ears fro" the ate of issue$ It can be rene&e &ith a fee of Rs$l <<C* The trainin' is for at least 1<< hours of trainin' for the 3ife Insurance$ SELLING LIFE INSURANCE: There is a sa%in'( Olife insurance is sol not brou'htO$ It is a interestin' note( in this conte)t( that the !erson co"in' to a life insurance office( or a a'ent( an as+in' for a life Insurance( is consi ere Nli+el% to be a case of "oral haBar N an is loo+e at "ore carefull% for un er&ritin'$ The follo&in' factors !la% si'nificant role in a !erson not realiBin' the nee orlirNe insurance* There is a #er% little co"!ulsion*or no co"!ulsion at all*for life insurance un er la& Possibilit% of eath is either i'nore or not consi ere to be in the offin' $ To a%Ns re,uire"ent !re#ails u!on to"orro&Ns re,uire"ents Su!erstitious beliefs an cultural or reli'ious bac+'roun s Ten enc% to lea#e e#er%thin' to fate Notion that in#est"ent in 3ife Insurance lea s to Nno 'oo returns$N The abo#e factors result into a !erson +ee!in' on ef%in' his 'enuine nee for life insurance co#er thereb% en%in' hi"self( an his e!en ents( its benefits EVALUATION: Insurance in In ia in its e)istin' for" &as starte in the %ear in 1616 an fro" there it has 'ro&n a lot$ No& there are "ore than 1= 3ife Insurance Co"!anies In In ia$ 3ife Insurance no& has "ore bu%ers &ith "ore a&areness an &i e ran'e of !ro ucts$ In ian Insurance Co"!an% &ill 'et "ore affor able to all sections$ Insurance to EDP has increase &ith :$6M co"!are to >$:M a %ear a'o$ The 3ife Insurance Council see+s to !la%a si'nificant an co"!le"entar% role In transfor"in'

In iaNs life Insurance in ustr% into a #ibrant( trust&orth% an !rofitable ser#ice( hel!in' the !eo!le of In ia on their 0ourne% to !ros!erit%$ It' m!''!o%: X To function as an acti#e foru" to ai ( a #ise an assist insurers in "aintainin' hi'h stan ar s$ of con uct an ser#ice to !olic%hol ers$ X A #ise the su!er#isor% authorit% in the "atter of controllin' e)!enses$ X Interact &ith the Eo#ern"ent an other bo ies on !olic% "atters X Acti#el% !artici!ate in s!rea in' insurance a&areness in In ia$ X Ta+e ste!s to e#elo! e ucation an research insurance$

X Hel! brin' to In ia the benefit of the best !ractices in the &orl $ Thou'h it has co"e a lon' &a% itstill has a lon' &a% to 'o$

COMPETITIVE ANALYSIS
LIFE INSURANCE CORPORATION OF INDIA (LIC)

LIC has an excellent money back policy which provides for periodic payments of partial survival benefits as long as the policy holder is alive. 20 assured is payable after !" #0" #! and 20 years and the balance $0 the 20th year along with accrued bonus. %www.lic.com& 'or a 2! years term " #! of the sum assured becomes payable after !"#0"#! and plus the accrued bonus becomes payable at the 2! th of the sum is payable at

20 years and the balance $0

year. (n important feature of these types of policies is that in the event of the death of the policy holder at any time within the policy term the death claim comprises of full sum assured without deducting any of the survival benefit amounts which have already been paid. )he bonus is also calculated on the full sum assured. *+'C ,LIC does not have a money back policy. It could offer a money back plan and capture some portion of this market. -hile marketing insurance products I found that many customers wanted to purchase these plans. LIC offers .. different plans/ plans are formulated for specific occasions 0 whole life plans" term assurance plans" money back plan for women" child plans" plans for the handicapped individuals" endowment assurance plans" plans for high worth individuals" pension plans" unit linked plans" special plans" social security schemes 0 diversified portfolio of products. *+'C ,LIC could diversify its product portfolio. It could add more plans for high worth individuals and women.

ICICI PRUDENTIAL

ICICI 1rudential is a stiff competitor for *+'C ,LIC. )he company is a merger between ICICI 2ank which is the biggest private bank in India and 1rudential 1lc which is a global life insurance company. )he company has an investment plan which is market related 0 Invest ,hield Life. In this plan even if the market falls" the premium will be returned to investors. It is a guaranteed plan which ensures the company carefully invests your money. )he stock market performance of ICICI 1rudential is much better than *+'C ,LIC. )he returns on the growth fund were $..23 1rudential. )he company is very well advertised. )he advertisements are showcased in movies" television" newspapers" maga5ines" bill boards" radio etc. )he company has an excellent brand ambassador 0 6r. (mitabh 2acchan. *is promotion of the company builds trust and faith in the minds of our people. *owever the charges are very high in the plans offered by ICICI 1rudential. It is 7! during the first year" #! in the next year and 7 from the third year onwards. (lso a higher minimum premium of 8s. 3000 is charged. *ence the policies are not accessible to the lower strata of the society. %,ource9 www.iciciprulife.com& compared to the $2.40 offered by *+'C ,LIC. Customers are attracted by higher returns and this is a plus point for

BIRLA SUN LIFE

2irla ,un Life Insurance Company Limited is a :oint venture between )he (ditya 2irla ;roup" one of the largest business houses in India and ,un Life 'inancial Inc." a leading international financial services organi5ation. )he local knowledge of the (ditya 2irla ;roup combined with the expertise of ,un Life 'inancial Inc." offers a formidable protection for your future. %,ource9 www.birlasunlife.com&

)he (ditya 2irla ;roup has a turnover close to 8s. 77000 crores with a market capitali5ation of 8s. !7$00 crores %as on 7#st 6arch 2004&. It has over 42000 employees across all its units worldwide. It is led by its Chairman < 6r. =umar 6angalam 2irla. ,ome of the key organi5ations within the group are *indalco and ;rasim. ,un Life 'inancial Inc. and its partners today have operations in key markets worldwide" including Canada" the >nited ,tates" the >nited =ingdom" *ong =ong" the 1hilippines" ?apan" Indonesia" India" China and 2ermuda. It had assets under management of over >,@7$7 billion" as on 7#st 6arch 2004. )he company is a leading player in the life insurance market in Canada. 2eing a customer centric company" 2,LI has invested heavily in technology to build world class processing capabilities. 2,LI has covered more than a million lives since inception and its customer base is spread across more than #000 towns and cities in India. (ll this has assisted the company in cementing its place amongst the leaders in the industry in terms of new business premium income. )he company has a capital base of !20 crores as on 7#st ?uly" 2004. Its 'lexi Life Line 1lan offers life long insurance cover till the policy holder is #00 years of age. )here are guaranteed returns of 7 p.a. net of policy charges after every ! years from the eleventh policy year onwards. *owever the charges are very high. )he initial charges for the first year are .! . *ence the fund value is greatly reduced.

BAJAJ ALLIANZ
2a:a: (llian5 is a :oint venture between (llian5 (; with over ##0 years of experience in over 40 countries and 2a:a: (uto" a trusted automobile manufacturer for over !! years in the Indian market. )ogether they are committed to offering you financial solutions that provide all the security you need for your family and yourself. 2a:a: (llian5 is the number one private life insurer for the year 200! 0 200.. It is leading

by 43 crores. It has experienced a whopping growth of 2#. year.

in the last financial

)he company has sold #7" 00"000 policies and is backed by !!0 offices across India. It offers travel insurance" motor insurance" home insurance" health and corporate insurance. )he mortality charges are lower than *+'C ,LIC. )he entry age could be 5ero years which allow even new born babies to be insured. %,ource9 www.ba:a:allian5.com&

TATA AIG
)ata (ig is a :oint venture between the )ata group and (merican International ;roup Inc. In one of the plans the company offers hospital cash benefit wherein it will pay 8s. 2!00 per day in case of hospitali5ation and 8s.#2.! lakhs in case the person suffers from any critical illness. (nnual premium is much less %about 8s. .4#2& to avail such a good benefit. Charges are relatively low compared to *+'C ,LIC for some policies. )he company offers high coverage plans at low cost. )here is a plan even for a policy term of # year. Aour family can continue to en:oy their current lifestyle even in the case of something happening to you. )hese plans are very flexible and *+'C ,LIC could adopt this idea of insuring individuals for short periods of time. 'or example/ there is a family of four. )he only earning member is the father. *e has :ust taken a loan from a bank of 20 lakhs to purchase a new home. *e is able to repay the loan with his current salary in #! years. )he problem arises if something were to happen to him within these fifteen years. Bot only will the family face the emotional and financial loss of their father but they will also have to repay the home loan or risk being homeless. %,ource9 www.tataaig.com&

SUMMARY:
l*ID2C Stan ar 3ife Insurance Co"!an% 3i"ite ( one of the first !ri#ate life insurance

co"!anies in In ia( &as for"e in =<<<( an ha a nu"ber of business nee s$ It &ante to e#ol#e custo"er*centric !rocesses an use su!erior custo"er ser#ice to ifferentiate its bran fro" the others$ The co"!an% +ne& it ha to "a+e strate'ic use of IT( an ali'n it &ith the business ob0ecti#es in or er to fulfill these nee s$ In October =<<>( it e!lo%e a i'itiBe &or+flo& solution co"!risin' an Enter!rise Content 4ana'e"ent -EC4. solution fro" 2ileNet( an a /usiness Process 4ana'e"ent -/P4. solution fro" Staff&are( to achie#e these ob0ecti#es$ The solutions ha#e allo&e the or'aniBation to share an access businesss!eci fie content an infor"ation( an auto"ate an strea"line !rocessin' of ne& business$ These benefits &ill "a+e it si"!ler for the co"!an% to han le Ero&th fro" its e)istin' 77 nation&i e branches to 7< ne& ones( o#er the ne)t fe& "onths$ HD2C Stan ar 3ife lnsurance Co"!an% 3i"ite Ns IT an business strate'% allo&sa Iot of sco!e for the or'aniBation to in#estan e!lo%$IT infrastructure to further business$

OWe belie#e that &e "ust ali'n current IT efforts to the future business roa "a!$ +tie "ust create a for&ar *loo+in' technolo'% strate'% so that &e arc !rotecte technolo'% obsolescence for at least fi#e %ears(O sai Ra&lani$ Irorn

CHAPTER *C ANA3ASIS AND INTERPRETATION

ANALYSIS & INTERPRETATION

AEE EROUP O2 SURGEAED RESPONDENTS

TABLE ,:
Age group 18 - 25 years 26 - 35 years 36 - 49 years 50 - 60 years More than 60 years No. of Respondents 127 67 46 24 6

A%$&7'!': 2ro" the chart abo#e &e fin that :9M of the res!on ents fall in the a'e 'rou! of 16 I =7 %ears( =7M fall in the a'e 'rou! of =; I >7 %ears an 19M fall in the a'e 'rou! of >; I :5 %ears$ Therefore "ost of the res!on ents are relati#el% %oun' -belo& =; %ears of a'e.$ These in i#i uals coul be in uce to !urchase insurance !lans on the basis of its ta) sa#in' nature an as an in#est"ent o!!ortunit% &ith hi'h returns$ Therefore "ost of the res!on ents are relati#el% %oun' -belo& =; %ears of a'e.$ These in i#i uals coul be in uce to !urchase insurance !lans on the basis of its ta) sa#in' nature an as an in#est"ent o!!ortunit% &ith hi'h returns$ In i#i uals at this a'e are tr%in' to bu% a house or a car$ Insurance coul hel! the" &ith this an this fact has to be con#e%e to the consu"er$ As of no& "an% consu"ers ha#e a false !erce!tion that insurance is onl% "eant for !eo!le abo#e the a'e of 7<$ Contrar% to !o!ular belief the %oun'er %ou are the "ore insurance %ou nee as %our loss &ill "ean a 'reat financial loss to

%our fa"il%( s!ouse an e!en ent on %ou$

chil ren -in case the in i#i ual is "arrie . &ho are financiall%

G#$" !)$& #e"#e'e%t$t!o%

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

TABLE 2: Particulars Ma e !e"a e CHART 2: No. of Respondents
193 77

I%te#"#et$t!o%D

The abo#e table sho&s the sur#e% &as con ucte on insurance custo"ers in that "ost of res!on ents are "ales an 99 res!on ents are fe"ale custo"ers $the "ost of the "ale are feelin' res!onsibilit% to o the insurance for his future !ur!ose$ An also the% thin+ that it &ill "ore hel! full at their ol a'e $

CUSTOMER PROFILE OF SURVEYED RESPONDENTS TABLE 3: #usto"er prof$ e

%tudent &ouse'$fe (or)$ng *rofess$ona +us$ness %e f ,"p oyed -o.ern"ent ser.$/e e"p oyee

No. of respondents
62 5 116 49 24 14

CHART 3:

An !"#$#: 'rom the chart above it can clearly be seen that $7 working professionals" 27 are students and #3 of the respondents are are into business. )herefore the

target market would be working individuals in the age group of #3 0 2! years having

surplus income" interested in good returns on their investment and saving income tax. NO% OF RESPONDENTS &HO HAVE LIFE INSURANCE POLICY IN THEIR NAME

TABLE ': P()#*n +,* , -( !$.( $n#/) n0( 1*!$0" Aes 103 Bo 167

CHART ':

ANALYSIS: This 'ra!h sho&s that out of total =9< res!on ents onl% 1<> or >6M res!on ents ha#e life insurance !olic% in their na"e$ Rest all on1t ha#e a sin'le !olic% in their na"e$ So there is a #er% bi' sco!e for life insurance co"!anies to co#er these !eo!le$ So in future business of life insurace &ill 'ro further$

MAR2ET SHARE OF LIFE INSURANCE COMPANIES TABLE 3: 01!, 1N%2R,R &4!# %5AN4AR4 01!, +1R0A %2N 01!, A616A 01!, 1N%2RAN#, +A7A7 A001AN8 01# 5A5A A11#1#1 *R24,N51A0 1N- 69%9A +&AR51 A:A 35&,R%
CHART 3:

N2M+,R 3! *301#1,% 4 3 6 7 55 6 12 6 2 2

A%$&7'!': In In ia( the lar'est life insurance co"!an% is 3ife Insurance Cor!oration of In ia$ It has been in e)istence in In ia since 157; an is co"!letel% o&ne b% the Eo#ern"ent of In ia$ To a% the

or'aniBation has 'ro&n to =<:6 offices ser#in' 16 crore !olicies an has a cor!us of o#er >:<<<< crore INR$
ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE TABLE 4: *re"$u" pa$d ;p.a.< Rs. 5000 - Rs. 10000 Rs. 10001 - Rs. 15000 Rs. 15001 - Rs. 24900 Rs. 25000 - Rs. 50000 Rs. 50001 - Rs. 60000 Rs.60001 - Rs. 80000 Rs. 80001 - Rs. 100000 CHART 4: No. of respondents 40 26 18 10 4 2 3

A%$&7'!': 2ro" the chart abo#e &e fin that( >5M of the res!on ents sur#e%e !a% an annual !re"iu" less than Rs$ 1<<<1 to&ar s life insurance$ =7M of the res!on ents !a% an annual !re"iu" less than Rs$ 17<<1 an 19M !a% an annual !re"iu" less than Rs$ =7<<<$ Hence &e can safel% sa% that HD2C S3IC &oul be able to ca!ture the "ar+et better if it intro uce !ro uctsC!lans &here the "ini"u" !re"iu" starts at Rs$ 7<<< !er annu"$

Onl% 15M of the res!on ents !a% "ore than Rs$ =7<<< as !re"iu" an "ost !ro ucts sol b% HD2C S3IC ha#e Rs$1=<<< as the "ini"u" annual !re"iu" a"ount$
POPULAR LIFE INSURANCE PLANS TABLE 5:
5ype of * an 5er" 1nsuran/e * ans ,ndo'"ent * ans *ens$on * ans #h$ d * ans 5a= %a.$ng * ans No. of Respondents 105 122 16 8 19

CHART 5:

POPULAR LIFE INSURANCE PLANS

A%$&7'!': 2ro" the chart 'i#en abo#e &e can clearl% see that :7M of the res!on ents hol en o&"ent !lans an >5M of the res!on ents hol ter" insurance !lans$ En o&"ent !lans are #er% !o!ular an ser#e t&o !ur!oses I life co#er an sa#in's$ If the !olic% hol er ies urin' the !olic% ter" the no"inee 'ets the eath benefit that is( su" assure an accu"ulate bonus$ On sur#i#al the !olic% hol er recei#es the sur#i#al benefit &ith a bonus$A ter" !lan is a !ure ris+ co#er !lan &herein the insure !a%s a lo&er !re"iu" for a hi'her su" assure $ Ter" insurance is the chea!est for" of insurance an hel!s the !olic% hol er

insure hi"self for a relati#el% lo& !re"iu"$ 2or the returns sensiti#e in#estor ter" !lans o not fin fa#or as the% o not offer a return in case the in i#i ual oes not ie urin' the !olic% ter"$
A&ARENESS OF UNIT LIN2ED INSURANCE PLANS TABLE 6:
A'areness of 2n$t 0$n)ed * ans 9es No No. of Respondents 154 116

CHART 6: A&ARENESS OF UNIT LIN2ED INSURANCE PLANS

An !"#$#:

2ro" the chart 'i#en abo#e &e fin that 79M of the res!on ents are a&are of unit lin+e life insurance !lans an :>M are not a&are of such !lans$ These !lans shoul be !ro"ote throu'h a #ertisin'$ The co"!an% can a #ertise throu'h tele#ision( ra io( ne&s!a!ers( bill boar s an !a"!hlets$ This &oul increase a&areness an arouse curiosit% in the "in s of the consu"er &hich &oul enable the co"!an% to "ar+et its !ro ucts "ore effecti#el%$

CONSUMER &ILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM TABLE 7:

($ $ngness to spend on pre"$u" 0ess than Rs. 6>000 Rs. 6>001 - Rs. 10>000 Rs. 10>001 - Rs. 25>000 Rs. 25>001 - Rs. 50>000 Rs. 50>001 - Rs. 1>00>000

No. of respondents 41 73 110 41 5

*er/entage 15? 27? 41? 15? 2?

CHART 7: CONSUMER &ILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM

An !"#$#: 'rom the graph above" we can clearly see that $# of the respondents would be would be would be willing to spend between 8s. #000# 0 8s. 2!000 for life insurance. 24 willing to spend between 8s. .00# 0 8s. #0000 per annum. Dnly #!

willing to spend more than 8s. 2!000 per annum as life insurance premium

CHART SHO&ING IDEAL POLICY TERM TABLE 89:

1dea po $/y ter" 3 - 5 years 6 - 9 years 10 - 15 years 16 - 20 years 21 - 25 years 26 - 30 years More than 30 years (ho e $fe *o $/y No. of respondents 51 41 95 38 24 5 3 13

CHART 89: CHART SHO&ING IDEAL POLICY TERM

A%$&7'!': 2ro" the chart 'i#en abo#e it can be seen that >7M of the res!on ents !refer a !olic% ter" of 1< I 17 %ears( 15M !refer a ter" of > I 7 %ears an 17M !refer a ter" of ; I 5 %ears$ This "eans that HD2C S3IC coul intro uce "ore !lans &herein the !re"iu" !a%in' ter" is less than 17 %ears$The outloo+ of insurance as a !ro uct shoul be chan'e fro" so"ethin' &hich %ou !a% for %our &hole life an o not recei#e an% benefit to an e)tre"el% useful in#est"ent o!!ortunit% &ith the !ros!ects of 'oo returns on sa#in's( ta) sa#in' o!!ortunities as &ell as !ro#i in' for e#er% "ilestone in %our life li+e "arria'e( e ucation( chil ren an retire"ent$

FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE INSURANCE TABLE 88:

*ara"eter Ad.ert$se"ents &$gh returns Ad.$/e fro" fr$ends !a"$ y respons$@$ $t$es 3thers No. of Respondents 35 84 46 89 16

CHART 88:

A%$&7'!': 2ro" the chart abo#e it can be seen that >>M of the res!on ents !urchase life insurance to secure their fa"ilies( >>M ta+e life insurance to 'et hi'h returns( 19M !urchase insurance on the a #ice of their frien s an 1>M !urchase insurance because of the influence of a #ertise"ents$ The "ain !ur!ose of insurance is to co#er the financial or econo"ic loss that occurs to the fa"il% in case of the uncertain eath of the !olic% hol er$ /ut no& a a%s this tren is chan'in'$ Alon' &ith !rotection -life co#er.( a sa#in's ele"ent is bein' a e to insurance$

PREFERRED COMPANY TYPE OF THE RESPONDENTS TABLE 82:

5ype of #o"pany -o.ern"ent 3'ned #o"pany *u@ $/ 0$"$ted #o"pany *r$.ate #o"pany !ore$gn #o"pany No. of Respondents 127 62 49 32 *er/entage 47? 23? 18? 12?

CHART 82: PREFERRED COMPANY TYPE OF THE RESPONDENTS

A%$&7'!': 2ro" the 'ra!h abo#e &e fin that ;<M of the res!on ents !referre to !urchase insurance fro" a 'o#ern"ent o&ne co"!an%( =5M of the res!on ents !referre to !urchase insurance fro" a !ublic li"ite co"!an% an onl% :M of the res!on ents !referre a forei'n base co"!an%$ Hea#% a #ertisin' throu'h tele#ision( ne&s!a!ers( "a'aBines an ra io is re,uire $

MINIMUM E:PECTED RETURN ON INVESTMENT TABLE 83:

,=pe/ted Returns 0ess than 5? 5? - 10? 11? - 15? 16? - 20? 21? - 25? 26? - 30? 31? - 40? 41? - 50? More than 50? No. of respondents 5 39 46 49 46 27 22 14 22

CHART 83:

A%$&7'!': 2ro" the chart abo#e it can clearl% been seen that 16M of the res!on ents &oul li+e 1; I =<M returns( 19M &oul li+e returns bet&een =1 I =7M an 19M &oul li+e returns of 11 I 17M on their in#est"ents$ Therefore the a#era'e return on in#est"ent shoul be at least 1; I =< M$ 4ost consu"ers are &illin' to a a!t to so"e a"ount of ris+ but still &ant so"e 'uarantee returns$

CHAPTER*E 2INDINES AND SUEEESTIONS

FINDINGS

 3ar'e a"ount of co"!etition -16 !la%ers in the "ar+et. Other bran s are &ell a #ertise an ha#e hi'her recall #alue 3IC is consi ere a safer o!tion 2ace co"!etition fro" ban+s an "utual fun s Hi'h !re"iu" !olicies are ifficult to "ar+et Incorrect !erce!tion about insurance Intereste !ros!ects "i'ht ha#e a lac+ of ti"e an !ost!one in#est"ents Custo"ers 'et efensi#e if %ou col call Short ter" !lans are a#ailable onl% at lar'e !re"iu" Custo"ers o not ha#e ris+ a!!etite to in#est in shares So"e !ros!ects ha#e alrea % in#este an are not intereste in further in#est"ents Consu"ers on1t &ant to un erta+e "e ical e)a"inations 3ar'e a"ount of ocu"entation Custo"ers o not li+e their "one% loc+e u! for "an% %ears 3ac+ of a&areness about the unit lin+e fun s in the "ar+et No "one% bac+ !lan !resent in the !ro uct !ortfolio

SUGGESTIONS:
A #ertise about the co"!an% an its !ro ucts I it "oti#ates in i#i uals to !urchase insurance Create a !ositi#e !erce!tion about insurance S!ea+ about the 'oo features a !lan offers li+e hi'h returns( life co#er( ta) benefits( in e)ation( acci ent co#er &hile !ros!ectin' custo"ers Tr% to sell the !ro uctC!lan &hich the consu"er re,uires an not the !lan &here the a #isors benefit is hi'her I"!ro#e the efficienc% in o!erations /rin' out !olicies &ith s"all !re"iu"s !a%able for short !erio s of ti"e I Rs$ 7<<< I Rs$ 1<<<< !er annu" for 1< %ears Attract the %outh of In ia &ith hi'her returns on in#est"ent as returns are the "oti#atin' factor &hich influence !urchase of insurance Pro"ote insurance in colle'es an cor!orate houses Pro"ote HD2C S3IC as an In ian Co"!an% to buil trust HD2C S3IC coul ha#e a bran a"bassa or or a "ascot to !ro"ote its ser#ices Shoul ha#e !artial &ith ra&als fro" the first %ear on&ar s Ta! the rural "ar+et &here there is lar'e !otential Di#ersif% !ro uct !ortfolio 4a+e !ro ucts "ore strai'ht for&ar I re uce co"!le)ities

CONCLUSION
HD2C stan ar life insurance is first life insurance co"!an% in In ia$ It has businesses s!rea out across the 'lobe$ It &as re'istere on =>r Dece"ber =<<<$ It currentl% ran+s nu"ber : a"on'st the insurers in In ia -SourceF annual !re"iu" !ro#i e b% the co"!an%. The co"!an% faces a lar'e a"ount of co"!etition$ To sustain itself it "ust !ro"ote its !ro ucts throu'h a #ertisin' an i"!ro#e its sellin' techni,ues$ Consu"ers "ust be a&are of the ne& !lans a#ailable at HD2C S3IC$ The "e iu" of a #ertisin' use coul be tele#ision since "ost of its co"!etitors use this tool to !ro"ote their !ro ucts$ The co"!an% "ust be !ro"ote as an In ian co"!an% since consu"ers see" to ha#e "ore trust in in#estin' in In ian fir"s$ The unit lin+e conce!t "ust be s!ecificall% !ro"ote $ The 'eneral !erce!tion of life insurance has to chan'e in In ia before !ro'ress is "a e in this fiel $ Peo!le shoul not be afrai to in#est "one% in insurance an "ust use it as an effecti#e tool for ta) !lannin' an lon' ter" sa#in's$ HD2C S3IC coul ta! the rural "ar+ets &ith chea!er !ro ucts an s"aller !olic% ter"s$ There are in i#i uals &ho are &illin' to !a% s"all a"ounts as !re"iu" but the !lans o not acce!t !re"iu"s belo& a certain a"ount$ It &as usuall% foun that a lar'e nu"ber of "ales &ere insure co"!are to fe"ales$ In i#i uals belo& the a'e of >< -"ostl% "ale. &ere intereste in in#est"ent !lans$ This &as a 'eneral conclusion ra&n urin' !ros!ectin' clients$

CHAPTER*F
/I/3IOERAPHA TUESTIONNAIRE

A FINANCIALSURVEY ON EINSURANCE INDUSTRYF

,; Do 7o( $8e $ &!fe !%'(#$%)e "o&!)79!%8e'tme%t "&$% !% 7o(# %$meC o Aes o No o&+C A#i#a 3ife Insurance /a0a0 AllianB 3ife Insurance 3IC INE G%s%a 3ife Insurance /harti A)a 3ife Insurance

2; If 7e' = !) )om"$%7F' !%'(#$%)e "o&!)!e' +o 7o( o o HD2C Stan ar 3ife Insurance o o /irla Sun 3ife Insurance o o Tata AIE 3ife Insurance o o ICICI Pru ential 3ife Insurance o o Others -s!ecif% na"e.

/; W $t !' t e $""#o>!m$te "#em!(m "$!+ *7 7o( $%%($&&7 G!% R("ee'5C o o o o o Rs$ 7(<<< I Rs$ 1<(<<< o Rs$ 7<(<<1 I Rs$ ;<(<<< Rs$ 1<(<<1 I Rs$ 17(<<< o Rs$ ;<(<<1 I Rs$ 6<(<<< Rs$ 17(<<1 I Rs$ =7(<<< o Rs$ 6<(<<1 I Rs$ 1(<<(<<< Rs$ =7(<<1 I Rs$ 7<(<<< 4ore than Rs$ 1(<<(<<< -s!ecif% !re"iu".

H; W $t <!%+ of !%'(#$%)e "o&!)7 =o(&+ '(!t 7o( *e't !% 7o(# )(##e%t 't$6e of &!feC o 3ife Insurance o 3ife Insurance an Plans o Ta) sa#in' !lans In#est"ent o Pension Plans o Chil Plans

1; A#e 7o( $=$#e of t e %e= (%!t &!%<e+ !%'(#$%)e "&$%' !% t e m$#<etC o Aes o No

2; Ho= m() =o(&+ 7o( *e =!&&!%6 to '"e%+ "e# $%%(m !f 7o( =e#e to 6o fo# $% !%8e'tme%t9!%'(#$%)e "&$%C o o o o o o 3ess than Rs$ ;(<<< Rs$ ;(<<1 I Rs$ 1<(<<< Rs$ 1<(<<1 I Rs$ =7(<<< Rs$ =7(<<1 I Rs$ 7<(<<< Rs$ 7<(<<< I Rs$ 1(<<(<<< 4ore than Rs$ 1(<<(<<<

4; W !) $))o#+!%6 to 7o( !' $% !+e$& "o&!)7 te#mC GN(m*e# of 7e$#' 7o( =o(&+ *e =!&&!%6 to "$7 "#em!(m5 o o o o > to 7 %ears ; to 5 %ears 1< to 17 %ears 1; to =< %ears o o o o =1 to =7 %ears =; to >< %ears 4ore than >< %ears Whole life !olic%

.; W $t mot!8$te' 7o( to "(#) $'e !%'(#$%)e9!%8e'tme%t "&$%'C o A #ertise"ents o Hi'h Returns o Others -s!ecif%. o A #ice fro" frien s o 2a"il% res!onsibilities

-; I% = !) <!%+ of )om"$%7 =o(&+ 7o( "#efe# to m$<e $ "(#) $'e of !%'(#$%)eC o Eo#ern"ent o&ne co"!an% o Public 3i"ite Co"!an% o Pri#ate Co"!an% o 2orei'n base co"!an%

,3; T7"!)$&&7 = $t <!%+ of #et(#%' =o(&+ 7o( &oo< $t f#om 7o(# !%8e'tme%t'C GP&e$'e %ote: H!6 e# #et(#%' !%8o&8e 6#e$te# #!'<5 o o o o o 3ess than 7M ;M * 1< M 11M * 17 M 1;M * =< M =1M * =7M o o o o =;M * ><M >1M * :<M :1M * 7<M 4ore than 7<M

,,; WHICH FACTORS ARE MOTIVATE RESPONDENTS TO PURCHASEINSURANCEC

o o o o ADVERTISEMENTS ADVISE FROM FRIENDS HIGHER RETURNS FAMILY RESPONCIBULITYS

OTHERS

,2; t e t7"e of t e )om"$%7 +o 7o( "#efe# fo# +o!%6 !%'(#$%)e "o&!)7 C o Go8e#%me%t o=%e+ )om"$%7 o P(*&!) &!m!te+ )om"$%7 o P#!8$te )om"$%7 o Fo#e!6% )om"$%7 ,/; o= m() +o 7o( e>"e)t t e #et(#% o% 7o(# !%8e'tme%tC o o o o o o 10,3 I ,,0,1I ,2023I 2,021I Mo#e t $% /3I Mo#e t $% 13I

Pe#'o%$& Det$!&': N$me: A++#e'': A6e: P#of!&e of #e'"o%+e%t: Stu ent House&ife Wor+in' Professional Co%t$)t No; : /usiness Self I E"!lo%e Eo#ern"ent Ser#ice E"!lo%ee

BIBLILOGRAPHY
===; +f)'&!);)om ===;t$t$0$!60&!fe;)om ===;!#+$!%+!$;)om ===;&!);)om ===;mo%e7 )o%t#o&;)om ===;*$J$J$&&!$%K;)om ===;!)!)!;"#(&!fe;)om M$6$K!%e L I%'(#$%)e Wo#&+ T e O(t&oo< Mo%e7 Se)#et' of S())e''f(& I%'(#$%)e S$&e' *7 M#; J$)< K!%+e#