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SEMINAR ON Market Potential of ULIP In HDFC Standard Life Insurance
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SEMINAR ONMarket Potential of ULIP
In HDFC Standard Life
Insurance
Mukesh Verma3020070181
Contents:-•About insurance industry
•Major players
•About the organization
•Vision & Values
•Organization structure
•Board of directors
•Product range
•Awards and achievements
•About ULIP
•SWOT analysis of ULIP
•Objectives
•Research methodology
•Graphical representation
•Conclusion
•Market problems
•Suggestions
Cont…
About Insurance Industry1818 • 1st insurance company set up in India
named Oriental Life Insurance
1850 • 1st general insurance company set up in Kolkata named Triton Insurance Company
1956 • Life insurance nationalized with the formation Life Insurance Corporation
1973 • General insurance was nationalized and General Insurance Corporation was set up
1991 • The process of opening up the Insurance sector was initiated by Malhotra Committee
1999 • IRDA{ Insurance regulatory and development authority} act was passed
Market share of major players
• Stands for HOUSING DEVELOPMENT FINANCE CORPORATION.
• Incorporated in 1977 as the first specialized Mortgage Company
in India.
• It was started by Hasmukh Bhai Parekh .
•It has helped more than 23,00,000 houses since its incorporation.
•HDFC operates in almost 450 locations throughout the country.
•Rated AAA by CRISIL AND ICRA for ten consecutive years.
ABOUT HDFC
About Standard life• The company was founded in 1875.
• It has been looking after the financial needs of the customers for
over 180 years.
• It currently has a customer base of around 7 million people.
• It is a leading pension provider in UK and is rated A+ by Standards
And Poors for 6 consecutive years.
• The 5 star accolade has been awarded to standard life investment
for the last 10 years.
HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000
Mr. Deepak Satwalekar is the MD and CEO of the venture.
HDFC Standard Life Insurance Company Limited was the first company to be
granted license by the IRDA to operate in life insurance sector.
HDFC ltd holds 72.43 % and standard life holds 26% of equity in the joint venture,
while the rest is held by others.
Vision: ‘The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'.
'The most obvious choice for all‘.
Values:
• Integrity • Innovation • Customer centric • People Care “One for all and all for one” • Team work • Joy and Simplicity
Organization structure
Regional Manager
Zonal Manager
Managing Director
Chairman
Asstt. B. M.
Branch Manager
Territory Manager
Retail Marketing
Sales Dev. Mgr
Business Dev. Mgr
Channel Executive
Branch Manager
Territory Manager
Alternative Channel
Operation Manager
Team Manager
Operation Channel
HR Executive
Human Resource
Mr. Deepak S. Parekh, CEO of the HDFC ltd.
Sir Alexander M. Crombier, Chief executive of STANDARD GROUP
Mr. Keki M. Mistry ,Managing Director of HDFC LIMITED
Ms. Marcia D. Campbell, Operations Director in the Standard Life group
BOARD OF DIRECTORS
Product range
Traditional
Unit linked PIPS
Awards and accolades• Received 2008 CIO Bold 100 and CIO Security Awards
• Silver Award for Radio commercial at Goafest 2008
•Deepak M Satwalekar Awarded QIMPRO Gold
Standard Award 2007
• Unit Linked Savings Plan Tops Mint Beast TV
Ads Survey
• “Sar Utha Ke Jiyo” Among India’s Glorious Advertising
Moments
ABOUT ULIP ULIP - Unit Linked Insurance Policy
Long term plan that provides the dual benefit of insurance and
investment
Its a unique and multiple benefits Plan
Provides multiple benefits like life protection, rider protection,
savings, transparency, investment choices, liquidity and planning
for taxes.
ULIPs offer tax benefit under section 80(C)
STRENGTHS:
•Investment plus Insurance
•High Returns
•Transparent
•Flexibility
SWOT analysis of ULIP
WEAKNESSES :
• Lack of Awareness
• High administrative charges • High mortality charges
• High fixed annual charges
OPPORTUNITIES:
• Large Untapped Market
• Products for every age group and income level
• Benefits of both an investment and insurance product
THREATS :• Presence of very strong competitors
• Aggressive marketing by competitors
• Not considered reliable
• People prefer to invest in Fixed Deposits
My trip to organizati on
1. To conduct a comparative analysis of ULIP between the main players in
the current market scenario.
2. To make a Comparative Analysis between ULIP and other financial
instrument.
3. To conduct a research so as to know customers awareness and
preferences in choosing/not choosing ULIP as an investment option.
4. To estimate and analyze the MARKET POTENTIAL OF ULIP in Ranchi.
5. Trying to find out the various factors on which the company lags/leads.
Objecti ves
Research Design : Descriptive
Sample Size : 50
Sampling technique : Random
Sampling unit : Student, Housewife, Working Professional,Business people ,Government service employee
Sampling area : Ranchi
Data collection method: Primary : Personal interview, questionnaire Secondary : Internet, product brochures, company website, competitor’s websites .
RESEARCH METHODOLOGY
Parameters RBI Bonds Fixed Deposits Mutual Funds Unit linked
Safety High High Medium High
Liquidity None High High High
Returns Low Low High High
Life Cover 1 time amount 1 time amount 1 time amount 10 times
Tax benefits Tax free Taxed Taxed Tax free
Unit linked versus other financial instruments
GRAPHICAL REPRESENTATION
Awareness of Unit Linked Plans No. of Respondents
Yes 27
No 23
AWARENESS REGARDING ULIP
YES
NO
0
5
10
15
20
25
30
AWARENESS OF UNIT LINKED PLANS
AWARENESS OF UNIT LINKED ...
LIFE INSURER NO. OF POLICIES
HDFC STANDARD LIFE 3
ICICI PRU LIFE INSURANCE 6
RELIANCE LIFE INSURANCE 2
KOTAK LIFE INSURANCE 1
OTHERS 10
MARKET SHARE OF LIFE INSURANCE COMPANIES
HDFC ST
ANDARD LIFE
ICICI PRU LI
FE IN
SURANCE
RELIA
NCE LIFE
INSU
RANCE
KOTAK LI
FE IN
SURANCE
OTHER
S0
1
2
3
4
5
6
7
8
9
10
MARKET SHARE OF LIFE INSURANCE COMPANIES
MARKET SHARE OF LIFE INSURANCE COMPANIES
REASONS FOR INVESTMENT IN ULIP
Parameters No. of respondents
Child education 5
Child marriage 4
Pension 7
Income growth 12
Tax rebate 16
2 in 1 benefit 6
child
marri
age
child
education
pension
income gro
wth
tax benefits
2 in 1 benefit
0
2
4
6
8
10
12
14
16
Reason for investment
reason for investment
CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM
Willingness to spend on premium No. of respondents
Less than Rs. 6,000 13
Rs. 6,001 - Rs. 10,000 18
Rs. 10,001 - Rs. 25,000 14
Rs. 25,001 - Rs. 50,000 3
Rs. 50,001 - Rs. 1,00,000 2
less than Rs.6000 Rs.6001-
Rs.10000 Rs.10001-Rs.25000 Rs.25001-
Rs.50000 Rs.50001-Rs.100000
0
2
4
6
8
10
12
14
16
18
Consumer's willingness to spend on Life Insurance
PREFERENCE OF THE CUSTOMERS REGARDING POLICY TENURE
Ideal policy term No. of respondents
Up to 3 years 8
4-7 years 15
8 - 10 years 7
11 - 15 years 11
Over 15 years 9
up to 3 years 4-7 years 8-10 years 11-15 years over 15 years0
2
4
6
8
10
12
14
16
PREFERENCE OF CONSUMERS REGARDING POLICY TENURE
No. of respondents
PREFERENCE OF CUSTOMERS WHEN INVESTING IN ULIP
PARAMETRES NO. OF RESPONDENTS
a) Low Risk, Low Gain 13
b) Moderate Risk, Moderate Gain 18
c) High Risk, High Gain
15
d) No Risk 4
Low risk,low gain moderate risk,moderate gain
high risk, high gain no risk0
2
4
6
8
10
12
14
16
18
20
RISK APETITE OF CUSTOMERS
NO. OF RESPONDENTS
FINDINGS AND CONCLUSION• 54% of the sample population is aware about ULIP, while the remaining are not.
So a lack of public awareness was encountered
• That people give maximum importance to the tax benefit and then the income
growth that they receive after investing in the unit linked insurance plan
• ICICI in the private and LIC in public is a big threat to the company
• A large proportion of the sample was convenient with the time period of 4-7
years and then others were in favor of a period ranging between 11-15 years
which implies that it would be easier for the company to convince such
customers
CONT..• Maximum number of respondents were willing to spend on
insurance premium an amount ranging from Rs.6,000-Rs.10,000
• Approx 8% of the population are considering risk factor while others are not, hence the company can easily convince customers to invest in ULIP
WHY HDFC IS BETTER
because…
• HDFC Unit linked endowment plus II gives
additional units every year
• HDFC Unit linked endowment plus II has lower
premium allocation charges
• It has lowest FMC charge i.e. 1.25% across all
the funds
Market problems
• Existence of many players in the market which increases
competition.
• LIC is considered a safer option.
• Faces competition from banks and mutual funds.
• High premium policies are difficult to market
• Incorrect perception about insurance.
CONT..
• People do not have risk appetite to invest in shares.
• Customers don’t want to undertake medical examinations
• Large amount of documentation.
• Customers do not like their money locked up for many
years.
• Lack of awareness about the unit linked funds in the
market.
Suggestions• Advertise about the company and its products – it motivates
individuals to purchase insurance.
• Create a positive perception about insurance.
• Speak about the good features a plan offers like high returns, life
cover, tax benefits, accident cover while prospecting customers.
• Try to sell the product/plan which the consumer requires and not the
plan where the advisors benefit is higher .
• Bring out policies with small premiums payable for short periods of
time – Rs. 6000 – Rs. 10000 per annum for less than 10 years.
CONT...
• Attract the youth of India with higher returns on investment as
returns are the motivating factor which influence purchase of
insurance.
• Promote insurance in colleges and corporate houses.
• HDFC SLIC could have a brand ambassador or a mascot to
promote its services.
• Should have partial withdrawals from the first year onwards.
• Make products more straight forward – reduce complexities.
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