CHAPTER 1

PROFILE OF THE COMPANY

HDFC Standard Life Insurance

Name of The Firm : HDFC Life Insurance

Address : 131 / 140, Ansal Chamber 1,

Bhikaji Cama Place, South Delhi, Delhi-

110066

Tele Fax : 4027036

Telephone : 47579300, +91-11-47579300,

+91-11-47579300

Website : http://www.hdfcinsurance.com

E-Mail : LIFE@HDFClife.com

SERVICE@HDFClife.com 

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1.1 Nature Of the Organisation

Incorporation of HDFC Life (Insurance)

The company was incorporated on 14th August 2000 under the name of HDFC Standard

Life Insurance Company Limited. Their ambition from as far back as October 1995 was

to be the first private company to enter the life insurance market in India. On the 23rd of

October 2000, this ambition was realized when HDFC Life was the only life company to

be granted a certificate of registration.

HDFC Life, one of India's leading private life insurance companies, offers a range of

individual and group insurance solutions. It is a joint venture between Housing

Development Finance Corporation Limited (HDFC), India's leading housing finance

institution and Standard Life plc, the leading provider of financial services in the United

Kingdom.

HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of

equity in the joint venture, while the rest is held by others.

HDFC Life's product portfolio comprises solutions, which meet various customer needs

such as Protection, Pension, Savings, Investment and Health. Customers have the added

advantage of customizing the plans, by adding optional benefits called riders, at a

nominal price. The company currently has 28 retail and 9 group products in its portfolio,

along with ten optional rider benefits catering to the savings, investment, protection and

retirement needs of customers.

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HDFC Life continues to have one of the widest reaches among new insurance companies

with more than 500branches servicing customer needs in over 700 cities and towns. The

company has a strong base of Financial Consultants.

HDFC Life offers a range of individual and group insurance solutions in India. The

company provides a line of protection, retirement, savings and investment, health,

children, and group plans. It also offers various products, such as Gramin Bima Kalyan

Yojana, Gramin Bima Mitra Yojana, and Bima Bachat Yojana for rural customers; and

development insurance plan for members of development agencies. The company was

founded in 2000 and is based in Mumbai, India. HDFC Life operates as a subsidiary of

Housing Development Finance Corporation Limited.

HDFC Life believes that establishing a strong and ethical foundation is an essential

prerequisite for long-term sustainable growth. To ensure this, they have concentrated

their focus on expansion of branch network, organizing an efficient and well trained sales

force, and setting up appropriate systems and processes with optimum use of technology.

As all these areas form the basic infrastructure for establishing the highest possible

customer service standards.

1.12 HDFC (Housing Development Finance Corporation Ltd.)

a) Founded in 1977, HDFC is today the market leader in housing finance in India

and extended financial assistance for more than 19 lakhs homes.

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b) HDFC has 120 offices in India presently. It also has one international office in

Dubai and service associate in Bahrain, Kuwait, Qatar, Saudi Arabia and

Sultanate of Oman.

c) HDFC’s asset based amount of over Rs 21450crore. Its financial strength is

reflected in highest safety rating of FAAA and MAAA awarded by CRISIL and

ICRA two of India’s leading credit rating agencies respectively for the last 7 years

consequently.

d) It has a depositor base of over 13 lakhs depositors and agent face of over 50000.

e) Of the total deposit 82%are sourced from individual and trust depositors, which

demonstrate the tremendous confidence that retail investors, have in the company.

f) HDFC promoted companies have emerged to meet the investor and customer’s

needs.

g) HDFC bank for commercial banking HDFC mutual fund of mutual fund of

products.

h) HDFC standard life insurance company for life insurance and pension plan and

product and HDFC Chubb for general insurance product.

i) Being an institution that is strongly committed to the highest standard of quality

and excellence , HDFC has own several accolades in the past few years one such

award is “Ramakrishna Bajaj National Quality Award” for the year 1999.This

award was instituted to award reorganization to Indian companies for business

excellence and quality achievements. HDFC is the only Company so far to

receive this award in the service category.

j) Focus on excellence, customer satisfaction and enhancing shareholder value.

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k) Awarded as one of the top7 word’s best companies (Financial service) to sustain

competitive advantage in long run by GOLDMAN SACH in 2008.

1.13 Standard Life Insurance Company (SLIC)

a) Founded in 1825, Standard life has been at the fore front of the U.K. Insurance

Industry for 177 years by combining sound financial judgment with integrity and

reliability. The largest mutual life company in Europe, it has operations in the

U.K, Ireland, Spain, Germany, Austria and Canada with representative offices in

Hong Kong and China.

b) Headquarter in EDINBURGH.

c) One of its most recent successes was the launch of standard life bank on 1 st

January 1998. The introduction of its innovative mortgage product in January

1999 had an immediate impact on the U.K. market, accounting for 11% of the all

new lending within the first operational year. The current deposits base of the

bank is U.S. $ 7.1 Bn.

d) Standard life has total assets of U.S.$ 121 Bn and the new premium income last

year of U.S.$ 9.2 Bn. Its U.K. investment portfolio accounts for approximately

2% of all shares listed in the London Stock Exchange.

e) It is one of the few insurance companies in the world to receive AAA rating from

two of the leading International Credit Rating Agencies, Moody’s And Standard

and Poor’s. The letter described standard life’s ability to meet its claims

obligations of overwhelming under a variety of economic conditions.

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f) Not surprisingly, standard life is rated as one of the strongest companies in the

world, in financial terms.

g) The quality and values standard life brings to this venture are immense. The

company’s reputation in the U.K. market remains unrivalled. Besides being voted

‘Company of the year’ for overall service, for the third consecutive year, standard

life was recently voted ‘Company of the Decade’ by independent brokers.

1.2 Vision &Values

HDFC Life is one of India's leading private insurance companies, which offers a range of

individual and group insurance solutions. HDFC is the most successful and admired life

insurance company which means that we are the most trusted company, easiest to deal

with, offer the best value for money and set the standard in the industry. In sort “THE

MOST OVIOUS CHOICE FOR ALL”. It is a joint venture between Housing

Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance

institution and Standard Life plc, a Group Company of the Standard Life, UK. HDFC, as

on December 31, 2008, holds 72.26 per cent of the paid up equity in the joint venture.

Figure:-1.1(Vision &Values)

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Joy &

Simplicity

Techniques Integrity

Customer

centric

Innovation People Care

1.21 Mission

To be the top new life insurance company in the market. This doesn’t just mean being the

largest or the most productive company in the market, rather it is a combination of

several things like-

a) Customer Service Of Higher Order

b) Value for money for customers

c) Professionalism in carrying out business

d) Innovative Products to cater different needs of different customers

Entrepreneurship Network

Fame Money

Ll

Reward and recognition Social aspect

Figure:-1.2(Mission)

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Life insurance profession

Explanation of figure number 1.2

a) Entrepreneurship: Life insurance selling can be said as entrepreneurship because in life

insurance there are agents who sell policies, that are consider as their individual

contribution to earn profits.

b) Fame: If they achieve target within the given time spam, they get fame like title

“employee of the year”

c) Network: More policies they sell better network build by the agent .It depends on what

channel they choose and how effective they build relationship.

d) Money: As they sell policies, the commission earned by agent is around 22% to 35%

which is remarkable

e) Reward and recognition: On achievement of targets they get good rewards and

recognition .Even foreign tour and sports cars are rewarded.

f) Social aspect: Selling insurance is kind of social security and social assurance.

1.3 Product Range

Various Plans Of HDFC Standard Life Insurance Are As Below:

1.31 Protection Plan

Protection Plans help insurer shield their family from uncertainties in life due to

financial losses in terms of loss of income that may dawn upon them in case of their

untimely demise or critical illness. Securing the future of one's family is one of the

most important goals of life. Protection Plans go a long way in ensuring their

family's financial independence in the event of their unfortunate demise or critical

illness. They are all the more important if insurer is the chief wage earner in their

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family. No matter how much insurer have saved or invested over the years, sudden

eventualities, such as death or critical illness, always tend to affect their family

financially apart from the huge emotional loss.

Types of Protection Plans: -

a) HDFC Term Assurance Plan: This plan is designed to help secure family’s

financial needs in case of uncertainties. The plan does this by providing a lump

sum to the family of the life assured in case of death or critical illness (if option is

chosen) of the life assured during the term of the contract. One can choose the

lump sum that would replace the income lost to one’s family in the unfortunate

event of one’s death.

b) HDFC Premium Guarantee Plan: HDFC Premium Guarantee Plan is an

insurance plan that comes with twin advantage of protection and return of

premiums on maturity. So, insurer can enjoy life knowing that their family

financial independence is secure even in their absence. And their premiums are

guaranteed on their survival at maturity.

c) HDFC Loan Term Cover Insurance Plan: This plan aims to protect family

from loan liabilities in case of unfortunate demise within the policy term. It

provides the beneficiary with a lump sum amount, which is a decreasing

percentage of the initial Sum Assured. This means that as the outstanding loan

decreases as per the loan schedule, the cover under the policy also decreases as

per the policy schedule.

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d) HDFC Home Loan Protection Plan: This plan aims to protect family from loan

liabilities in case of unfortunate demise within the policy term. It ensures that

family does not lose the dream house that person have purchased for them, in case

person is not around to repay the outstanding monthly installments on their

housing loan.

1.32 Children Plan

Children's Plans helps insurer save so that insurer can fulfill their child's dreams and

aspirations. These plans go a long way in securing their child's future by financing

the key milestones in their lives even if insurer is no longer around to oversee them.

As a parent, insurer wish to provide their child with the very best that life offers, the

best possible education, marriage and life style

Types Of Children Plans:

a) HDFC Children’s Plan: As a parent, their priority is their child's future and

being able to meet their child's dreams and aspirations. With HDFC Child Plan

policy, insurer can start building their savings today and ensure a bright future for

their child. This 'With Profits' plan is designed to secure their child's future by

giving their child (Beneficiary) a guaranteed lump sum on maturity or in case of

insurer unfortunate demise, early into the policy term.

b) HDFC SL Young Star Super II: There is no bigger joy than being able to fulfill

ones child's dream on their own. With HDFC SL Young Star Super II insurer can

fulfill their child's immediate and future needs. So tomorrow when their child

needs their support insurer don't have to depend on anyone else.

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.

1.33 Retirement Plans

Retirement Plans provide insurer with financial security so that when their

professional income starts to ebb, insurer can still live with pride without

compromising on their living standards. By providing insurer a tool to accumulate

and invest their savings, these plans give insurer a lump sum on retirement, which is

then used to get regular income through an annuity plan. Given the high cost of

living and rising inflation, employer pensions alone are not sufficient. Retirement

planning has therefore become critical today.

Types of Retirement Plans

a) HDFC Life Classic Pension Insurance Plan: With HDFC Life Classic Pension

Insurance Plan, insurer can be financially prepared for their life - post retirement.

This traditional pension plan is designed to assist insurer to live their post

retirement days to a maximum - without any compromise. This pension plan will

build a corpus during the policy term so that insurer can enjoy post retirement

income for life. This limited pay plan offers guaranteed reversionary bonus.

1.4 Turnover of HDFC LIFE

HDFC Life Insurance Company is a Private Sector Organization that offers services in

Insurance with Annual Total Turnover of 2500-5000 Crs and with Employee Strength of

5001 & above.

HDFC has a vision to ascend to the "preferred company" status by 2012 - to be preferred

by customers, shareholders and employees. The Company believes that by being

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available, attentive and reliable, it will become the preferred company for its customers.

And its people are Human Capital who has a key role in this process, and it is committed

to create an emotional commitment with its employees.

Employees at HDFC believe that a fun filled and friendly work environment helps reduce

stress and creates a healthy bond between colleagues. HDFC strive to ensure that their

employees unwind themselves from time to time, have a hearty laugh amidst the work-

pressure which is always a great reliever in stress and a motivator in challenging

conditions.

HDFC care about its employees and keenly collects feedback to learn first-hand about

their daily experience at work. HDFC aims to be a preferred employer, and hence it has

transparent processes in place to ensure that its employees can have their say.

To achieve this HDFC has periodic employee satisfaction surveys requesting for

feedback and input from their employees to find out whether they are delivering a work

experience that optimizes employee performance and engagement.

It is also important to motivate employees to focus on customer success; profitable

growth and the company well-being. HDFC provide all those benefits to their employees

for their motivation. HDFC listen to employees and making them feel involved will

create loyalty, in turn reducing turnover allowing for growth.

1.5 Organization Structure HDFC LIFE

CEO (Amitabh Chaudhary)

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Zonal Manager (VP) - Mr. Rishi Mehta

Regional Manager (AVP)-Mr. Vikash

Circle Head-Mr. Jeevan Singla

CM CFLS

Sales Development Manager Executive Sales Manager

(Mr. Dipesh Rai)

Senior Sales Manager

Sales Manager (Mrs. Ritu Sharma)

Assistant Sales Manager (Mr. Dhiraj Kumar)

Business Development Manager (Mr. Vishokanand Mishra)

Figure: 1.3(Present Leadership)

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Explanation of above figure:-In HDFCLIFE there is one CEO, under CEO one Zonal

manager for different zone, under Zonal manager one regional manager, under regional

manager there is one circle head and under circle head there are two person CM and

CFLS and under CFLS there are so many person works like ESM,SM,ASM,BDM etc.

1.6 Position of HDFC LIFE

HDFC Life Insurance Company Ltd. is one of India's leading private life insurance

companies, which offers a range of individual and group insurance solutions. It is a joint

venture between Housing Development Finance Corporation Limited (HDFC Ltd.),

India's leading housing finance institution and The Standard Life Insurance Company, a

leading provider of financial services from the United Kingdom. Both the promoters are

well known for their ethical dealings and financial strength and are thus committed to

being a long-term player in the life insurance industry.

HDFC Life has been adjudged one of the Best Companies to Work for in India in 2010.

The company participated in the Great Places to Work study for the first time and ranked

first in the insurance category. It ranked 34th on the Top 50 Best Companies to Work for,

in India 2010 list. The company was also awarded for its unique employee initiative –

Mission in-Genius national quiz.

HDFC Life Young Star Super has been voted Product of the Year 2010 in the 'Insurance'

category by more than 30,000 consumers nationwide across 36 markets.

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Solvency ratio=188% as on 31stmarch 2012.Total funds under management as on 31st

march 2012 Rs-322bn.The company has the best AML compliance and underwriting

practices in this industry.

1.7 Sources of Data Collection

1.71 Secondary Data

The secondary data has been collected through internet (Company’s official

website)www.hdfclife.com and some other website also

www.irdaindia.org,www.sellingwell.com,www.insureme.com,www.advisortoday

.com, www.unlockthegame.com ,www.lic.com.

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CHAPTER 2

SWOT ANALYSIS

2.1 Strength

a) Domestic image of HDFC supported by Standard Life’s International image is

strength of the company.

b) Strong and well spread network of qualified intermediaries and sales person.

c) Strong capital and reserve base.

d) The company provides customer service of the highest order .

e) Strong parentage.

f) Value driven company.

g) Well regulated and disciplined process.

2.2 Weakness

a) Heavy management expenses and administrative costs.

b) Low customer confidence on the private players.

c) Poor retention percentage of tied up agents

2.3 Opportunities

a) Insurable population: According to IRDA only 10% of the population is insured

which represents around 30% of the insurable population. This suggests more

than 300m people, with the potential to buy insurance, remain uninsured.

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b) There will be inflow of managerial and financial expertise from the world’s

leading insurance markets. Further the burden of educating consumers will also be

shared among many players. .

2.4 Threats

a) Other private insurance companies also vying for the same uninsured population.

b) Big public sector insurance companies like Life Insurance Corporation (LIC) of

India, National Insurance Company Limited, Oriental Insurance Limited, New

India Assurance Company Limited and United India Insurance Company Limited.

People trust and go to them more.

c) Poaching of customer base by other companies.

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CHAPTER 3

DATA COLLECTION AND PRESENTATION

3.1 Human Resource Development

HDFC Life has a comprehensive Human Resource (HR) policy in place to build a diverse

and robust talent pipeline, drive greater employee engagement and enhance capabilities to

transform the Company into a future-ready organisation.

3.11 Employee Recruitment & Loyalty

Recruiting and retaining the best talent and providing them with a congenial ambiance to

ensure individual growth sets HDFC Life apart. Organizational blue printing exercise is

conducted to understand current operational environment to function efficiently and

accomplish organizational strategy. Job descriptions are clearly defined to clarify

expectations from each role to drive business outcomes. Critical business positions are

mapped and the right individuals are assigned to the role. HDFC Life adopted innovative

strategies to dig deeper into the market’s alternate talent pools and make them insurance-

ready. The Company recruits the best talents to enhance product quality quotient.

Besides, it also aims to achieve cost leadership. The strategy has been planned to:

a) Recruit for tomorrow’s position today.

b) Build internal bench strength.

c) Design scientific tools.

d) Set benchmarks to evaluate quality and process adherence.

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3.12 Training and development

The Company’s T&D team designs and conducts different types of programs such as

induction, product training, insurance training, and regulatory training, to employees at

all levels in the company and distributors as well. The T&D team also provides

leadership development interventions for team managers. To cater to a large audience

comprising over 10,000 on-roll staff and thousands of agents the company has invested in

infrastructure and technology. A team of 400 T&D professional work across pan-India

branches to deliver value-added and customer centric products.

The T&D Team Provides Different Types Of Trainings, Comprising:

a) Online training

b) Instructor-led training

c) Blended training

d) Virtual (using video conferencing) training

e) On-the-job training

f) One-on-one coaching and mentoring

g) Threaded discussions on our online training platform, GOAL

3.13 Communication

HDFCLIFE communicate internally through platforms, like CEO Confluence, CEO

Blogs, Coffee with Leadership, Sparsh, Esparsh, IPSAT and so on. Use of different

modes helps foster a culture of open communication, engaged workforce and respect for

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diverse opinions. The feedback obtained during these meetings is reviewed and

implemented to improve the overall working environment.

3.14 Performance Management and Recognition

HDFC Life advocates a fair and transparent performance management system (PMS), in

line with its organized and systematic ways of reviewing progress, setting targets,

Communicating, recognizing and rewarding achievements, providing performance

feedback and encouraging development programmes. The performance management

processes are designed and differentiated based on the employee profiles as well as the

roles and nature of the functions they are associated with. While the frontline sales

employees are mapped to the Front Line Assessment and Growth (FLAG) programme,

the rest of the organization is reviewed for performance annually through Contribution

Management System (CMS). The Organization’s compensation policy has been aligned

to the above-mentioned PMS to ensure that performance is duly rewarded objectively and

transparently. HDFC Life has a comprehensive recognition framework, Shikhar, to

acknowledge the employees timely for imbibing the organization’s values, excelling in

performance and putting in extra efforts to help achieve the Company’s goals. This

recognition is based on parameters, such as performance, potential, past experience and

service quality. HDFCLIFE Company also recognises employees completing five and ten

years

3.15 CSR Initiative

Swabhimaan, HDFC Life’s Corporate Social Responsibility (CSR) initiative, aims to

play a positive role by contributing towards the advancement of society and conservation

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of environment while engaging with its stakeholders. Swabhimaan aims to contribute to

improving and enhancing the quality of life of communities in which the company

operates thereby helping to create an equitable society. HDFC Life has in place a

comprehensive corporate social responsibility (CSR) framework, which is governed by a

formal policy. Besides, the Company’s employees also actively embrace and participate

in the Company’s community initiatives to accelerate inclusive growth and strengthen

environment protection

3.2 Information Technology

In a world where technology is fast evolving, it is imperative to include a technological

edge in business to perform better. Hence, HDFC Life continues to harness technology to

improve efficiency, increase productivity and create a distinct competitive advantage.

During the year under review, the Company launched a transformation initiative called

’Technology-Enabled Business Transformation’ (TEBT). The programme aims to steer

the Company ahead of competition by providing customer-friendly systems, seamless

business processes, agility and enhanced initiatives, like customer relationship

management (CRM),enterprise data warehouse (EDW), information security, service-

oriented architecture (SOA), digital insurance, mobility and virtual office have been

conceived to achieve these objectives. During the year, the Company launched the Point

of Sale (POS) system - Click2Buy, a first-of-its-kind initiative in India’s life insurance

industry. With Click2Buy, the Company has enabled the sales team to underwrite and

communicate the decision or requirements to customers at the Point of Sale. The

Company has also introduced an online policy selling (OPS) platform to enable

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customers buy insurance online. During the year, SAP business intelligence warehouse

(IW) and incentive compensation management (ICM) Phase1 were successfully

implemented. Business planning and controlling modules were also commissioned for

strengthening budgeting and planning process. To improve work environment flexibility,

virtual desktops have been deployed in top 80 branches. The year also saw launch of

Project Tablet with a focus on boosting productivity of distribution channel and

improving buying experiences of customers. HDFC Life has successfully completed ISO

27001surveillance audit and certification for digital channels, making it the only life

insurance Company to achieve this feat. The technology team also received nine awards,

including four international ones, for effective and innovative technology use.

a) Greater and effective control on accounts payable through better invoicing

and payment processing

b) Reduction in paper work because of online formats for entering and

retrieving information

c) Availability of timely, accurate information with detailed content and better

presentation

d) Quicker response and follow-up with customers

e) Better monitoring and quicker resolution of queries from within and outside

f) Quick response to change in business operations and market consumption

g) Improved business processes providing a competitive advantage

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h) Improved supply-demand linkage with remote locations and branches in

other countries

i) Unified customer database usable by all applications

j) Single write/validate, multi-read for data

k) Improved customer service and satisfaction

l) Increased flexibility in operations

m) Improved resource utility and reduced quality cost

n) Improved information accuracy.

3.3 Marketing

3.31 Product

The company deals with intangible service product. Apart from offering life insurance

policies, the company also offers underwriting and consulting services. When a person or

an organization buys an Insurance policy from the company, he not only buys a policy,

but along with it he also receives assistance and advice of the agent and the facilities of

claims and compensation. It is natural that the company wants to maximize its

profitability. Hence, while deciding the product portfolio or the product-mix, the

company focuses on making the services or the schemes motivational. The HDFC Life

has intensified efforts to promote urban savings, but as far as rural savings are concerned,

it is not that impressive. The introduction of Rural Career Agents Scheme has been found

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instrumental in inducing the rural prospects but the process is at infant stage and requires

more professional excellence. In short, the formulation of product-mix should be in the

face of innovative product strategy. The company has varied products specially designed

and customized for people at different stages of life.

The need for life insurance – either protection or saving – is universal, irrespective of

market conditions. Everyone has a need, be it protection of income from unforeseen

events, protection from loan liability, planning for future savings requirements, pension

requirement, or cover for medical exigencies. Companies need based communication has

helped build this positioning. Though it is noticed that customers are deferring their plans

to buy policies, they have surely not cut off insurance from their list of purchases as they

are well aware of the growing need for insurance in their lives.

3.32 Pricing

In the insurance business the pricing decisions are concerned with:

i) The premium charged against the policies,

ii) Interest charged for defaulting the payment of premium and credit facility, and

iii) Commission charged for underwriting and consultancy activities.

With a view of influencing the target market or prospects the formulation of pricing

strategy becomes significant. In a developing country like India where the disposable

income in the hands of prospects is low, the pricing decision also governs the

transformation of potential policyholders into actual policyholders. The strategies may be

high or low pricing keeping in view the level or standard of customers or the

policyholders. The pricing in insurance is in the form of premium rates. The three main

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factors used for determining the premium rates under a life insurance plan are mortality,

expense and interest. The premium rates are revised if there are any significant changes

in any of these factors.

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a) Mortality(deaths in a particular area):

When deciding upon the pricing strategy the average rate of mortality is one of

the main considerations. In a country like South Africa the threat to life is very

important as it is played by host of diseases.

b) Expenses:

The cost of processing, commission to agents, reinsurance companies as well as

registration are all incorporated into the cost of installments and premium sum

and forms the integral part of the pricing strategy.

c) Interest:

The rate of interest is one of the major factors which determines people‘s

willingness to invest in insurance. People would not be willing to put their funds

to invest in insurance business if the interest rates provided by the banks or other

financial instruments are much greater than the perceived returns from the

insurance premiums.

3.33 Promotion

HDFCLIFE is doing various promotion activities, new USP in policies like Sampoonrna

samridhi, youngstar and advertisement etc. HDFCLIFE is doing promotion by targeting

different market segments like young and single, just married, married with children,

married with growing children and nearing retirement. HDFCLIFE is doing

advertisement according to different segment.

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3.34 Physical distribution

Distribution is a key determinant of success for all insurance companies. Today, the

nationalized insurers have a large reach and presence in India which is a challenge for

new private insurance company like HDFC LIFE. So to improve their physical

distribution HDFCLIFE is paying attention towards creating more and more financial

consultant to capture whole market and also provide e-payment to their customers so that

they can easily pay their premium.

3.4 Finance

Attached as Annexure-1

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B. DATA PRESENTATION

Research Methodology

R e s e a r c h   m e t h o d o l o g y   i s   a   w a y   t o   s y s t e m a t i c a l l y   s o l v e   t h e   r e s e a r c h

problem. It may be understood as a science of studying how research is done

scientifically. So, the research methodology not only talks about the research methods but

also considers the logic behind the method used in the context of the research study.

Research Design:

Descriptive research is used in this study because it will ensure the minimization of bias

and maximization of reliability of data collected. The researcher had to use

fact a n d   i n f o r m a t i o n   a l r e a d y   a v a i l a b l e   t h r o u g h   f i n a n c i a l   s t a t e m e n t s  

o f   e a r l i e r   y e a r s   a n d analyze these to make critical evaluation of the available

material. Hence by making the type of the research conducted to be both Descriptive and

analytical in nature. From the study, the type of data to be collected and the

procedure to be used for this purpose were decided.

Data Collection:

The required data for the study are basically secondary in nature and the data are

collected from the audited reports of the company.

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Sources of Data:

The sources of data are from the annual reports of the company from the

year 2005-2006 to 2008-2009.

Methods of Data Analysis:

The data collected were edited, classified and tabulated for analysis. The

analytical tools used in this study are ratio analysis, percentage and graphs

Scope of study

This study is about the ratio analysis of “HDFCLIFE”, which is a part of financial analysis. The

analysis has been conducted for four consecutive financial years 2005-06 to 2008-09

Ratio analysis is perhaps the first financial tool developed to analyze and interpret the financial statement

and is still used widely for this purpose. Financial performance analysis is a well researched area and

innumerable studies have proved the utility and usefulness of this analytical technique. This research

seeks to investigate and constructively contribute to help:

a) The company in finding out the gray areas for improvement in performance.

b) The company to understand its own position over time.

c) The managers to understand their contribution to the performance of the company.

d) The present and potential investors, outside parties such as the creditors, debtors, government and

many more to get an idea of the overall performance of the firm.

Ratio Analysis Ratio Analysis enables the business owner/manager to spot trends in a

business and to compare its performance and condition with the average performance of

similar businesses in the same industry. To do this compare your ratios with the average

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of businesses similar to yours and compare your own ratios for several successive years,

watching especially for any unfavorable trends that may be starting. Ratio analysis may

provide the all-important early warning indications that allow you to solve your business

problems before your business is destroyed by them.

The Balance Sheet and the Statement of Income are essential, but they are only the

starting point for successful financial management. Apply Ratio Analysis to Financial

Statements to analyze the success, failure, and progress of your business

3.5 Calculation of current ratio

Figure:-3.1(Graph of Current Ratio)

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Interpretation of above figure

Current ratio in the year 2005-06 was 3.26 & it has decreased to 3.15 in the year 2006-07

there is continually fall in the ratio in the year 2007-08 and 2008-09 by o.15 and 0.1

respectively. It shows that company current assets are decreasing and liabilities are

increasing.

3.6 Quick ratio

Figure no:-3.2(Graph of quick ratio)

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Interpretation of above figure

Quick ratio was 2.21 in the year 2005-06 and it has decreased by 0.11 in the next year. It

has further decreased to 1.91 in the year 2007-08 but shows an increment in 2008-09 to

1.95.its shows that company liquidity of assets and liability are decrease.

3.7 Working capital turnover ratio

Figure No:-3.3(Graph of Working Capital Turn Over Ratio)

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Interpretation of above figure

Working capital turnover ratio decrease to 0.95 from 2.47 as compare to the year 2006-07

and 2005-06.The ratio increased to 2.93 in 2007-08 and continued to increase in the next

year. i.e. 2008-09 to 3.37.

3.72 TURN OVER RATIOS

3.8 Inventory turnover ratio

Figure No:-3.4(Graph of inventory turnover ratio)

Interpretation of above figure

Inventory turnover ratio was 17.7 in 2005-06 and 17.41 in 2006-07.The ratio decreased in

the 2007-08 to 14.90. It has further decreased to 14.88 in 2008-09.

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3.9 Debtors turnover ratio

Figure No.-3.5(Graph of debtor’s turnover ratio)

Interpretation of above figure

Debater’s turnover ratio was 6.71 in 2005-06 and 6 in 2006-07.The ratio decreased in the

year 2007-08 to 5.44 and it increased in 2008-09 to 5.64.It shows that the ratio is

decreasing continuously which indicates that debt are not being collected rapidly.

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3.9 Creditors turnover ratio

Figure No.-3.6(Graph of creditor’s turnover ratio)

Interpretation of above figure

Credit turnover ratio was 9.21 in the year 2005-06 and in 2006-07 it increased to 13.74

and decreased 11.46 in 2007-08 and it further decreased to 10.11 in 2008-09.

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3.10 Net profit margin

Figure No-3.7 (Graph of net profit margin)

Interpretation of above figure

Net Profit Margin was 6.71% in 2005-06 and it continuously decreased to 6.29%, 5.87%

and 2.75% in year 2006-07, 2007-08 and 2008-09 respectively.

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CHAPTER-4

FUNCTIONAL ANALYSIS

4.1 Human resource management

a) HDFC Life adopted innovative strategies to attract the best talent from the market

so that the company easily achieves their targets.

b) The Company’s T&D team designs and conducts different types of programs

such as induction, product training, insurance training, and regulatory training,

to employees at all levels in the company and distributors as well.

c) Shikhar, program is developed to acknowledge the employees for imbibing the

organization’s values, excelling in performance and putting in extra efforts to help

achieve the Company’s goals.

4.2 Information technology

a) HDFC LIFE takes first initiative to introduce Click2Buy facility.

b) The company’s CLICK2BUY facility arms its partners with an online form

accessible via an internal link.

c) This online form, with its dynamic questions, helps to gather all relevant customer

information in one go in a hassle-free manner.

d) This information is processed real-time by an intelligent rule engine-enabling

Virtual underwriting decisions within minutes in the customer’s living room

e) To improve work environment flexibility, virtual desktops have been deployed in

top 80 branches.

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4.3 Marketing

a) HDFC Life also won the 2nd Best Marketing Campaign award (for a social cause)

during the India Giving Challenge 2012.

b) HDFC Life achieved a high brand awareness of 60% in FY 2013 as per the

syndicated Nielsen Brand Track. ‘Sar Utha Ke Jiyo' retains the highest customer

connect and positive association with a brand in the category.

c) HDFC Life's Facebook page ranked No.1 in Asia in terms of engagement by Un

metric com. The company also has an increasing follower base on Twitter, highest

in the Indian Life Insurance Category.

d) Unmetric.com is a Social Media Monitoring and Benchmarking tool utilized by

brands globally, to gauge their social media performance.

e) To deliver a great customer experience consistently across all touch points, HDFC

Life launched Serveshresht – a service transformation initiative.

4.4 Finance

a) Continue growth in net worth indicates HDFC Life is a Profit making entity and

having sound financial health

b) Current ratio which shows the status of Working capital for day to day operation

is very sound. This has been made possible by efficient management decision

and focused efforts for debtor realizations and inventory control.

c) HDFC Life is a debt free company. Funds are investments are made to take of

future needs and to earn higher interest income

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d) HDFC Life has issue Bonus share to the owner i.e Railway, which now increase

the share capital at Rs 100 crore from Rs 40 crore. This will facilitate taking

loans etc. for HDFC Life extension and Equity contribution in Joint venture/

mega/ SPV projects.

e) The total assets increased by 459.51 crore in 2012 which shows the good

financial condition of HDFC life.

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CHAPTER-5

FINDINGS AND CONCLUSION

5.1 Findings of departments

a) Quick ratio is continuously decreasing ,it shows that liquidity of assets and liabilities

are decreasing.

b) Working capital declined in 2006-07 but after that it started rising.

c) The current ratio is continuously decreasing which indicates current assets are

decreasing and liabilities are increasing.

d) Inventory turnover ratio is decreasing since 2007-08 , this indicates that the

management of inventories is not efficient.

e) Most of the policy holder prefers LIC as it is the biggest govt. company in India.

After LIC people prefer ICICI & then HDFC Life to have insurance policy. As LIC is

the undisputed market leader with 62% of market share.

f) Debtor turnover ratio is declining every because debts are not being collected rapidly.

g) Occupation also plays a role in customer preference as the risk oriented workmen

prefer the insurance cover more.

h) Marital status also influence the customer preference, as they prefer to invest where

the repayment capacity is more and timely based.

i) Most of the people seek higher return so this will also influences their preference.

j) People mostly invest 10-30k yearly as this is their maximum capacity to invest.

k) People prefer to invest in insurance plan as the feel that it is better to retain their

money with them rather than paying Tax. As investing in insurance is considered as

saving & tax concessions are given to them.

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l) Peoples feel that HDFC Life is more beneficial because it provides claims on time

without any problems.

m) The goodwill of the HDFC Life also plays a vital role in preference of customers.

Insurance cover is mostly preferred because of protection cover then for saving purpose.

5.2 Suggestions

a) People are not aware of the life insurance. Most of them know only one company

which provides life insurance i.e. LIC. So awareness campaign should be run so

that people are aware of different life insurance companies in India.

b) Debts should be collected on time to improve the debtors turnover ratio

c) It was felt that most of the people took life for tax savings or just to cover up

their life, not as an investment avenue. Life Insurance companies need to

advertise in such a manner that people start investing in life insurance like the

way they invest in the stock market

d) There is need to improve current ratio also to improve the position of current

assets and liabilities of the company.

e) hold on to the policyholders trust which might lead the company to the path of

success

f) Insurance companies should try to adopt different strategies to market their

products or plan. Companies should not primarily focus on the agents for their

business

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g) Use of recognition/appreciation tools to motivate good Product of HDFC LIFE

Insurance.

h) Existence of a clearly stated product policy in writing

i) Creation of management structures for implementation of stated new attractive

product.

j) Extensive use of advertisement covering the entire product.

k) Communication with customers on a continuous basis about the product

l) Use of a culture based teamwork rather than structure based small groups

m) Use of customer attitude surveys for communicating as well as gauging the

progress of change process

n) Self observation for monitoring people’s satisfaction and effectiveness of Product

of HDFC LIFE Insurance system in relation to both operational and strategic

levels of enterprise

o) Losing an efficient employee in the name of negotiation

p) Customer should know the review of Product of HDFC LIFE Insurance once the

upgrading is done, so that the company will try to rectify the weaknesses.

q) Have to ensure that right marketing candidate is at the right job, so that more

efforts can be expected from them with utmost product satisfaction.

r) Induction or advertisement process should be developed.

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s) Corporate Governance must be given a priority in the Company’s Policy, being

the top company.

5.3 CONCLUSIONS

As discussed in the executive summary, HDFC LIFE believes in the power of “Attractive

product”. Cultural Initiatives like own product, Community Development Programs has

lifted the morale of the customer.

It cannot however be said that the Attractive product bundle is cause of success of any

successful and visionary company. Instead it seems that innovative Attractive product of

HDFC LIFE are a reflection of overall vision of the leaders whose only source of

motivation is not the bottom line. It gives me immense pleasure to conclude with the

findings of my study.

The customers of Product of HDFC LIFE feel very happy with growth of the

organization and they feel proud to be a part of the organization. Management and staff

focus more on achieving the company Targets attractive product option scheme is one of

the motivating factor to retain the customers.

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BIBLIOGRAPHY

Books referred

1. Cooper, Donald R- and Pamels Schindler (2008), Business Research Methods, Tata

McGraw Hills Publishing Co Ltd, New Delhi.

2. Philip Kotler, Kevin Lane Keller, Mithileshwar Jha & Abraham Koshy (2012),

“Marketing Management: A South Asian Perspective”, Pearson education, New Delhi.

3. David L. (2007), “Market Research”, Tata Mc Graw Hill Publishing Co Ltd, New

Delhi.

Website searched

4. www.hdfclife.com

5. www.irdaindia.org

6. www.selling-well.com

7. www.insureme.com

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