TITLE-CHANNEL DEVELOPMENT AT

HDFC STANDARD LIFE - DELHI

By GAGAN VARSHNEY

MBA (2008-2010)

PROJECT REPORT SUBMITTED TO SCHOOL OF MANAGEMENT

IN PARTIAL FULLFLMENT OF MBA PROGRAMME

GAUTAM BUDDHA UNIVERSITY

GREATER NOIDA
 Acknowledgement

It gives me immense pleasure, having done a research project on an interesting

topic i.e. “Channel Development at HDFC Standard Life”.

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The project has widened my horizon as far as academics are concerned but
also helped me to enlarge my knowledge bank. Marketing Management and
Human Resource Management are not the kind of topics which could be
handled with causality. It requires deep study and hard work which is the key to
success. There are many people associated with this project without which this
project would not have been possible.
I thank my institute who gave me this opportunity to show my skills. I thank all my
nearer and dearer ones without whose support this project would not been
possible.
I would like thank Mr. Vinay Litoria, Manager-Corporate relations, GBU Who
allowed me to work in the company as a project trainee.
I would like to thank to Mr. Mrinal Ranjan Prasad, CDM, HDFCSL for his Nobel
inspiration, keen interest, constant supervision and ever willing help throughout
the course of this study.
Above all I would like to thank all the persons whom I contacted and those who
took out a part from their valuable time to answer my queries and for their honest
suggestions about the company HDFC Standard Life and the whole process of
channel development.
I extent my sincere gratitude towards my parents, who have always encouraged
me and gave suggestions as to how to work on this project. They always stood
by me to solve my problems and their support always motivated me.
Above all it gives me immense pleasure to thank author of various books who
indirectly helped me in gaining knowledge about insurance industry.

Table of Content

Chapter Sub Contents Page

No. topics No.

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 Certificate ii

Acknowledgement iii

Table of Contents iv

Abbreviations vii

Executive Summary viii

1 Introduction 1

1.1 Insurance Sector in India 2

1.1.1 Historical Perspective 3

1.1.2 Present Scenario 5

1.1.3 IRDA 6

1.2 Purpose of the study 8

1.3 Limitation of the study 8

1.4 Assumption 9

1.5 Method 9

2 Research Methodology 10

2.1 Objective of the Study 11

2.1.1 Primary Objective 11

2.1.2 Secondary Objective 11

2.2 Research Methodology 12

2.2.1 Research Topic 12

2.2.2 Management Dilemma 12

2.2.3 Management Question 12

2.2.4 Research Question 12

2.2.5 Hypothesis 12

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 2.3 Sample Size 13

2.4 Sample Area 13

2.5 Instrument Used 13

2.6 Method of Data Collection 13

2.7 Research Design 13

3 Organization Overview 15

3.1 Introduction 16

3.2 Key Strengths 17

3.3 Associate Companies 18

3.4 Various Products 19

3.5 Most Selling Plans 24

3.6 Awards and Accolades 28

3.7 Major Competitors 30

4 Channel Development 33

4.1 Channel Development Strategies 34

4.1.1 Eligibility Model 34

4.1.2 Development Strategies 34

4.1.3 Rule of 31 36

4.1.4 Dream Game 37

4.1.5 Ways of gathering name 39

4.1.6 Cold/Warm/Hot 39

4.2 Channel Development Process 41

4.2.1 Flow based approach to channel 41

development process

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5 Data Analysis and Interpretation 44

6 Findings and conclusion 58

6.1 Findings 59

6.2 Recommendation 62

6.3 Conclusion 63

Reference 64

7 Appendix 65

7.1 Questionnaire 66

7.2 IRDA( Protection of policy holders interest) 69

regulations 2002

Abbreviations

AAAI Advertising Agencies Association of

India

AIG American International Group

CDE Channel Development Executive
CDM Channel Development Manager
CEO Chief Executive Officer
COI Centre of Influence

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 FC Financial Consultant
FMCG Fast Moving Consumer goods
GBU Gautam Buddha University
GDP Gross Domestic Product
HDFC Housing Development Finance
Corporation
HDFCSL Housing Development Finance
Corporation Standard Life
ICICI Industrial credit and investment
corporation of India
IRDA Insurance Regulatory and
Development Authority of India
LIC Life Insurance Corporation of India
U.K. United Kingdom

Executive Summary

In today’s corporate and competitive world I found that insurance sector has the
maximum growth and potential as compared to the other sector. Insurance has
achieved a growth rate of 70%-80% while FMCG sector has witnessed a growth
rate of around 12%-15%1. The growth potential attracts me to enter in this sector
and HDFC Standard Life Insurance Company has given me opportunity to work
and get experience in highly competitive and enhancing sector.
The success story of good market share of different organizations depends upon
the availability of the products and services near to the customer which can be
1
http://www.researchandmarkets.com/reports/306103

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distributed through a distribution channel. In insurance sector distribution
channel includes agents and agency holders only. If these companies have
adequate agents in the market they can capture larger market as compared
to the others. Agents are the only way for a company of insurance sector through
which policies and benefits of the company can be explained to the customers.
My study at HDFCSL includes the in depth study about the following important
aspects of channel development at HDFC Standard life.

• About the insurance industry

• A study on causes of low conversion ratio in the company

• Strategies for recruitment

• Eligibility of recruitment and so on.

Attempt has been made to give attention to all the above topics and study them
in depth.

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 1.1 Insurance sector in India

• The sector provides immense opportunities for a country like India

• The business is growing at a rate of 18%-22% annually2

• Presently it covers market of Rs. 450 Billion2

• It contributes roughly around 7% to GDP together with banking sector2

• Still 80% population in India is without Life Insurance which is an indicator

of growth potential for the industry2

2
http://www.researchandmarkets.com/reports/306103

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 • Insurance sector contribute a lot in economic development

• It provides long term fund for infrastructure development.

• It is estimated that over the 6-10 years India would require investments of
about 1 trillion US Dollar.2

• The insurance sector, to some extent can enable investments in

infrastructure development to sustain economic growth.

Figure 1.1

1.1.1 Historical Perspective

• In 1818 it was conceived as a means to provide for English Widows.

• The Bombay Mutual Life Insurance Society started its business in
1870.
• It was the first company to charge same premium for both Indian and non-
Indian lives.
• The Oriental Assurance Company was established in 1880.
• Till the end of nineteenth century insurance business was almost entirely
in the hands of overseas companies.

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 • Insurance regulation formally began in India with the passing of the
Life Insurance Companies Act of 1912 and the provident fund Act
of 1912.
• Several frauds during 20's and 30's sullied insurance business in India.
• By 1938 there were 176 insurance companies.
• The first comprehensive legislation was introduced with the Insurance Act
of 1938 that provided strict State Control over insurance business.
• The insurance business grew at a faster pace after independence.
• The Government of India in 1956, brought together over 240 private life
insurers and provident societies under one nationalized monopoly
corporation and Life Insurance Corporation (LIC) was born.

• Nationalization was justified on the grounds that it would create much

3
needed funds for rapid industrialization.

1.1.1.1 Important Milestone in the life insurance business in India 4

3
http://business.mapsofindia.com/insurance/brief-history-of-insurance-sector.html
4
http://business.mapsofindia.com/insurance/brief-history-of-insurance-sector.html

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 Figure 1.2

1.1.2 Present Scenario

Insurance sector has been opened up for from Indian Private Insurance
companies with the enactment of IRDA act, 1999.as per the provisions of this act

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IRDA was established on April 19, 2000 to protect the interest of the holder
of the insurance policy and to regulate, promote and ensure orderly growth
of the insurance Industry. The act paved way for entry of private players into
the insurance market which was hitherto the exclusive privilege of public sector
insurance companies. Under the new dispensation Indian companies in private
sector were permitted to operate under the following condition:

 Company is formed and registered under the companies act 1956

 The aggregate holding of equity shares by the foreign company, either by

itself or through its subsidiary company or its nominee, do not exceed 26%
paid up equity capital of such Indian insurance company

 The company’s sole purpose is to carry life insurance business or general

insurance business or reinsurance business

 The minimum paid up equity capital for life or general insurance is 100
crores

 The minimum paid up capital for carrying on reinsurance business has

been prescribed as Rs. 200 crores

The Authority has notified 27 Regulations on various issues which include

Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-
insurance, Obligation of Insurers to Rural and Social sector, Investment and
Accounting Procedure, Protection of policy holders' interest etc. Applications
were invited by the Authority with effect from 15th August, 2000 for issue of the
Certificate of Registration to both life and non-life insurers. The Authority has its
Head Quarter at Hyderabad.

1.1.2.1 Protection of the interest of policy holders 5

IRDA has the responsibility of protecting the interest of insurance policyholders.

Towards achieving this objective, the Authority has taken the following steps:

 IRDA has notified Protection of Policyholders Interest Regulations 2001 to

provide for: policy proposal documents in easily understandable language;
claims procedure in both life and non-life; setting up of grievance redressal
machinery; speedy settlement of claims; and policyholders' servicing. The
Regulation also provides for payment of interest by insurers for the delay
in settlement of claim.

5
The word file attached in the appendix

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  The insurers are required to maintain solvency margins so that they
are in a position to meet their obligations towards policyholders with
regard to payment of claims.
 It is obligatory on the part of the insurance companies to disclose clearly
the benefits, terms and conditions under the policy. The advertisements
issued by the insurers should not mislead the insuring public.
 All insurers are required to set up proper grievance redress machinery in
their head office and at their other offices.
 The Authority takes up with the insurers any complaint received from the
policyholders in connection with services provided by them under the
insurance contract.

1.1.3 Insurance Regulatory and Development Authority of India (IRDA)

IRDA is the is a national agency of the government of India based in Hyderabad.

It was formed by the act of Indian Parliament known as IRDA act 1999which was
amended in 2002 to incorporate some emerging requirements. Mission of IRDA
is to protect the interest of the policyholders, to regulate, promote and ensure
orderly growth of the insurance industry and for matters connected therewith or
incidental there to.

1.1.3.1 Duties powers and Function of IRDA

• Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.
• Without prejudice to the generality of the provisions contained in sub-
section (1), the powers and functions of the Authority shall include,

(a) Issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registration;

(b) Protection of the interests of the policy holders in matters

concerning assigning of policy, nomination by policy holders, insurable
interest, settlement of insurance claim, surrender value of policy and
other terms and conditions of contracts of insurance;

(c) Specifying requisite qualifications, code of conduct and practical

training for intermediary or insurance intermediaries and agents;

(d) Specifying the code of conduct for surveyors and loss assessors;

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(e) Promoting efficiency in the conduct of insurance business;

(f) Promoting and regulating professional organizations connected

with the insurance and re-insurance business;

(g) Levying fees and other charges for carrying out the purposes of this
Act;

(h) Calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organizations
connected with the insurance business;

(i) Control and regulation of the rates, advantages, terms and

conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the Tariff
Advisory Committee under section 64U of the Insurance Act, 1938 (4
of 1938);

(j) Specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers
and other insurance intermediaries;

(k) Regulating investment of funds by insurance companies;

(l) Regulating maintenance of margin of solvency;

(m) Adjudication of disputes between insurers and intermediaries or

insurance intermediaries;

(n) Supervising the functioning of the Tariff Advisory Committee;

(o) Specifying the percentage of premium income of the insurer to

finance schemes for promoting and regulating professional
organizations referred to in clause (f);

(p) Specifying the percentage of life insurance business and general

insurance business to be undertaken by the insurer in the rural or
social sector; and

(q) Exercising such other powers as may be prescribed

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This report is about the channel development strategies and process which
are followed in HDFC Standard Life. As my training started I noticed that
there is a problem which the channel development department of the
company is facing i.e. low conversion ratio in the department. So at the end of
the channel development strategies and process there is a small research done
on the causes of low conversion ratio in channel development department.
1.2 Purpose
The project was an attempt to explore the causes of low conversion ratio. Project
started in Delhi on 15th May, 2009. The task I was assigned with was to find out
the drawbacks and shortcomings of the existing process in channel development
of the company. I contacted 100 persons for the purpose of recruitment. I found
out the perception of the people about the insurance industry during the study,
what they demand from the organization, causes of why people didn’t opted for
the job and role of CDE in the process.

1.3 Limitation of the study

The sample obtained is only from the some parts of Delhi. As a result the sample
size of 100 might not be sufficed for the accurate results. Hence study might
become a bit biased and the results can vary to some extent.
All the variables taken during the time of study are appropriate for Daryaganj
branch of HDFCSL and the variables might be different for different branches.
Moreover due to the fact that research analysis software was not available, the
hypothesis has not been properly tested. Hence a simple analysis has been
done.

1.4 Assumptions
The problem assumed i.e. low conversion ratio is for the branch where I was
working i.e. Daryaganj Branch. So there is a possibility that in other branches the
conversion ratio may be more or less.
Moreover the ratio assumed is on an average. There is a possibility that some
executives in the same branch may obtain a high or low conversion ratio.

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1.5 Method
Data collection was done mostly through face to face communication.
Questionnaires were either given to the respondents to fill by their own or the
respondents were asked questions directly or indirectly and were filled by me. In
the cases were respondents were contacted over the telephone the responses
were obtained then and there over the telephone.

Chapterization
The whole report has been divided into 6 chapters. Different chapters have
relevance of their own.

• Chapter 1 talks about the research methodology used. It includes

objective of the study as well.

• Chapter 2 is the general introduction. It talks about the the insurance

industry in brief and some details about the company itself i.e. company
profile has been included in this chapter.

• Chapter 3 talks about the channel development. It talks about the

strategies and the process of channel development.

• Chapter 4 is data analysis and interpretation. It includes the summarized

graphs and tables of the responses which are obtained from the
respondents.

• Chapter 5 talks about findings. It includes findings from the study, any
recommendation made to the company and the conclusion

• After this there is appendix and annexure section. This include some of
the relevant data which cannot be explained in the report and also
includes the questionnaire.

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2.1 Objective of the study

Marketing Research provides information that assists the organization to

define opportunities for product development and market strategy. It works by
assessing whether marketing strategies are accurately targeted, and by
identifying market opportunities or changes that are required by customers.
Market research tends to confirm issues that are well-known in a market initially,
but if planned well and effectively it will also identify new opportunities, market
niches, or ways by which to improve sales, marketing and communications
activities.

The role of market research, therefore, is to reduce uncertainty in decision

making, to monitor the effects of decisions taken, and identify the performance of
a company or a product in the market. During the tenure of my training my
research was related to the causes of low conversion ratio in the channel
development department of HDFC Standard Life.

My project is being undertaken in HDFC Standard Life in which FC recruitment

program has been implemented as a marketing strategy.

2.1.1 Primary Objective

The primary objective of my project is to recruit financial consultants and

increase market share of HDFC Standard Life. In the insurance sector main work
is done by the financial consultants who provide sales to the organization.

2.1.2Secondary Objective

 To Find out the reason why the conversion rate is low in HDFC Standard
life

 Help the company in identifying their main competitor

 To find out whether the people are actually aware about the company and
clear about the tag line of the company

 To find out the expectations of the people from HDFCSL during their
tenure of FC’s with the company

 To find out the role of channel development executive in recruitment of

FC’s

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2.2 Research Methodology

2.2.1 Research Topic

A study on causes of low conversion ratio in the channel development

department of HDFC Standard Life

2.2.2 Management Dilemma

Why is there a low conversion ratio in the channel development department of

HDFC Standard Life?

2.2.3 Management Question

What are the factors which lead to such a low conversion rate?

2.2.4 Research Question

Q.1 Is the low visibility of the company directly related to conversion rate?

Q.2 What is the expectation of the prospective customers from the company?

Q.3 Is the role of channel development executive important in hiring the

financial consultants for the company?

Q.4 Is the perception of the people about the industry the real cause of low
conversion ratio?

2.2.5 Hypothesis

• Tedious formalities prevent the person from joining the company

• Small personal network is one of the cause of low conversion ratio

• Conversion ratio is highest in life insurance corporation of India(LIC)

• Incapability of the financial consultant of convincing the prospect leads to

low conversion ratio

• Desperate people join the company easily for fulfillment of their needs

• High examination fees leads to low conversion ratio

• Fear that company may shut down anytime leads to low conversion ratio

• Unattractive commission rates causes low conversion rate for the

company

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 • People refuses to join because they fear appearing for the
examination

2.3 Sample Size

I have contacted 100 people during my tenure and that was my sample size.

2.4 Sample Area

My working area was North Delhi, Central Delhi and West Delhi. I have collected
my data from these areas.

2.5Instrument Used

I have collected my data from field survey and through telephone. All those
people I approached for the FC’s were asked to fill in the questionnaire.

2.6 Methods of data collection

Data is one of the significant part of the research. The whole research depends
on the data collected. The data collection can be divided into 2 parts.

1. Primary Data

These were those data which was collected afresh for the first time and is
original. The data was collected over telephone, direct communication and
proving the questionnaire to the prospects and ask them to fill that.

2. Secondary Data

This is the data which had already been used somewhere else and is
used by me again. This has been obtained mostly from internet and some
amount of data was obtained from the newspaper.

2.7 Research Design

In this project conclusive research is used. In conclusive research data was collected by
descriptive research method. The method applied in descriptive research is cross
sectional studies field work and survey. My study was concerned with the specific
prediction about the low conversion ratio. It assimilates the narration of facts and
characteristics concerning individual, group or situation.

The objective of my research was to find the causes of low conversion ratio in channel
development department of HDFC standard life. There are lot of insurance company’s
playing in the market and trying to achieve more and more market share. In this situation

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it is very important to sustain in the market and increase the share. For this purpose
I have done a research.

For this objective I have used telephone calling and field survey and try to find out the
response of the public about HDFCSL and Insurance. I have done phone calling and try
to get their view about it. I was working in the organization as a channel development
executive but regarding project I talk about the reliability of the company, trust and some
other questions. I prepared 100 questionnaires for the collection of data.

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3.1 Introduction6

HDFC Limited

HDFC Limited, India’s premier housing finance institution has assisted more
than 3.3 million families own a home, since its inception in 1977 across 2400
cities and towns through its network of over 250 offices. It has international
offices in Dubai, London and Singapore with service associates in Saudi Arabia,
Qatar, Kuwait and Oman to assist NRI’s and PIO’s to own a home back in India.
As of December 2008, the total asset size has crossed more than Rs. 95,000
crores including the mortgage loan assets of more than Rs. 82,800 crores. The
corporation has a deposit base of Rs. 17,551 crores, earning the trust of more
than 9,00,000 depositors. Customer Service and satisfaction has been the
mainstay of the organization. HDFC has set benchmarks for the Indian housing
finance industry. Recognition for the service to the sector has come from several
national and international entities including the World Bank that has lauded
HDFC as a model housing finance company for the developing countries. HDFC
has undertaken a lot of consultancies abroad assisting different countries
including Egypt, Maldives, and Bangladesh in the setting up of housing finance
companies.

Standard Life Group

The Standard Life Group has been looking after the financial needs of
customers for over 180 years. It currently has a customer base of around 7
million people who rely on the company for their insurance, pension, investment,
banking and health-care needs. Its investment manager currently administers
£125 billion in assets. It is a leading pensions provider in the UK, and is rated by
Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1
by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004,
2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and
pension’s provider at the Financial Adviser Service Awards for the last 10 years
running. The '5 Star' accolade has also been awarded to Standard Life
Investments for the last 10 years, and to Standard Life Bank since its inception in
1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at
the Mortgage Magazine Awards in 2006.

6
http://www.hdfcinsurance.com/AboutUs/AboutUs.aspx

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 HDFC Standard Life

HDFC Standard Life Insurance Company Limited. is one of India's leading private
insurance companies, which offers a range of individual and group insurance
solutions. It is a joint venture between Housing Development Finance
Corporation Limited (HDFC Limited), India's leading housing finance institution
and a Group Company of the Standard Life Plc, UK and was among the first
companies to be granted license by IRDA to operate in life insurance sector. As
on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius
Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is
held by others.

3.2 Key Strengths

 Financial Expertise

As a joint venture of the leading financial services group HDFC Standard life
has the financial expertise required to manage the long term investments
safely and efficiently.

 Range of solutions

HDFC Standard life has a range of individual and group solutions which can
be easily customized to specific needs. These group solutions have been
designed to offer complete flexibility combined with the low charging
structure.

 Strong Ethical Values

HDFC Standard life is an ethical and cultural organization. False selling or

false commitment with the customers is not allowed.

 Most respected private company

HDFC Standard life was awarded No.1 private insurance company in 2004 by
world class magazine business world for integrity innovation and customer
care.

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3.3 Associate companies

HDFC Limited

HDFC Bank

HDFC Mutual Fund

HDFC Sales

HDFC Ergo General Insurance

Other Companies

• HDFC Trustee company limited

• GRUH Finance Limited

• HDFC Developers Limited

• HDFC Property Ventures Limited

• HDFC Venture Trustee Company Limited

• HDFC Investment Limited

• HDFC Holdings Limited

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3.4 Various Products

3.4.1 ProtectionPlan7

Protection Plans help you shield your family from uncertainties in life due to
financial losses in terms of loss of income that may dawn upon them in case of
your 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
your family’s financial independence in the event of your unfortunate demise or
critical illness. They are all the more important if you are the chief wage earner in
your family. No matter how much you have saved or invested over the years,
sudden eventualities, such as death or critical illness, always tend to affect your
family financially apart from the huge emotional loss.

Figure 3.3

3.4.2 Children Plans8

7
http://www.hdfcinsurance.com/Products/ProtectionPlans/ProtectionPlans.asp
x
8
http://www.hdfcinsurance.com/Products/ChildrensPlans/ChildrensPlansLP.as
px

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

Figure 3.4

3.4.3 Health Plans9

9
http://www.hdfcinsurance.com/Products/HealthPlans/HealthPlans.aspx

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Health plans give you the financial security to meet health related
contingencies. Due to changing lifestyles, health issues have acquired
completely new dimension overtime, becoming more complex in nature. It
becomes imperative then to have a health plan in place, which will ensure that no
matter how critical your illness is, it does not impact your financial independence.

Figure 3.5

3.4.4 Retirement Plans10

10
http://www.hdfcinsurance.com/Products/PensionPlans/PensionPlan.aspx

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Retirement Plans provide you with financial security so that when your
professional income starts to ebb, you can still live with pride without
compromising on your living standards. By providing you a tool to
accumulate and invest your savings, these plans give you 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. Pension planning has therefore become critical today.

India’s average life expectancy is slated to increase to over 75 years by 2050

from the present level of close to 65 years. Life spans have been increasing due
to better health and sanitation conditions in the country. However, the average
number of years of employment has not been rising commensurately. The result
is an increase in the number of post-retirement years. Accordingly, it has become
necessary to ensure regular income for life after retirement, so that you can live
with pride and enjoy your twilight years

Figure 3.6

3.4.5 Savings and Investment Plans11

11
http://www.hdfcinsurance.com/Products/SavingsPlans/SavingsPlans.aspx

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You have always given your family the very best. And there is no reason why
they shouldn’t get the very best in the future too. As a judicious family man,
your priority is to secure the well-being of those who depend on you. Not just
for today, but also in the long term. More importantly, you have to ensure that
your family’s future expenses are taken care, even if something unfortunate were
to happen to you. Our Savings & Investment Plans provide you the assurance of
lump sum funds for you and your family’s future expenses. While providing an
excellent savings tool for your short term and long term financial goals, these
plans also assure your family a certain sum by way of an insurance cover. With
HDFC Standard Life’s range of Saving & Investment Plans, you can therefore
ensure that your family always remains financially independent, even if you are
not around.

Figure 3.7

3.5 Some Of the most selling plans of HDFC Standard Life

3.5.1 Unit Linked Young Star plus II

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As a parent, your priority is your children’s future and being able to meet their
dreams and aspiration. Today, we need more money for providing a good
education, establishing a professional career or even a modest wedding because
these are expensive. Costs are increasing fast. Just imagine how much we need when
our children take these important steps in life when institute like IIM is increasing their
fees for education by leaps and bound.

This plan ensures us a bright future for your children. It makes your child able to lead a
life of respect and dignity with a secured financial future.

Benefits of this plan12

 Valuable protection to your child in case you are not around.

 An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investments
 Regular loyalty units to boost your fund value every year
 Flexible benefit combinations and premium payment options
 Flexible additional benefit options such as critical illness cover
 Flexible benefit payment preferences- Double and Triple Benefit

Four steps to your own plan

Step1) In this policy you will continue to pay each year of the policy. You can pay
monthly, half-yearly or annually. The minimum regular premium is Rs. 12,000 per year
for annual and half yearly policies. For monthly mode, the minimum regular premium is
Rs 1500 per month.

Step2) We can choose any amount of sum Assured with, a minimum of 5 times your
chosen annul regular premium and a maximum of 40 times your chosen annul regular
premium.

Step3) It offers a range of valuable protection options to secure the future for whole
family. In this policy the customer can choose any one of both which life option (death
Benefit) is and life and health option (death benefit + critical illness benefit). It offers
flexible benefit payment preference. You can choose one of the following two benefit
payment preferences according to the following table:

12
Companies information brochure

xxxii | P a g e
Benefit Types Benefit payment Summary of the benefits
Preference

1. It will pay the sum assured

to the beneficiary.

2. Our family need not pay

any further premiums. it will
pay 100% of all the future
regular premiums at the
Double original level towards the
beneficiary policy as and
Benefit
when due, on an annual
1. It will pay the Sum Assured
basis.
to the beneficiary.

2. Our family need not pay

Death any further premiums. it will
pay 50% of all the future
Benefit
premiums at the original level
Triple towards our policy and 50% of
the premiums will be paid to
Benefit
the beneficiary as and when
due, on an annual basis.

3. Any critical illness cover

terminates immediately.

1. We will pay the sum

Assured to the beneficiary.

2. Our family need not pay

Double any further premiums. It will
Benefit pay 100% of all the future
regular premiums at the
original level towards your
policy as and when due, on
an annual basis.

xxxiii | P a g e
 1. it will pay the sum assured
to the beneficiary.

2. Our family need not pay

Critical any further premiums it will
Illness Triple pay 50% of all the future
premiums at the original level
Benefit Benefit towards your policy as and
when due, on an annual
basis.

3. The death benefit cover

terminates immediately.
Table 3.1

3.5.2 Unit Linked Pension plus

The massage of this plan is living a life of dignity and self respect. It is designed
to provide a retirement income for life with the freedom to maximize your
investment returns. Stride into your golden years of retirement with dignity and
pride.

Benefits of HDFC Unit Linked Pension Plus

This plan is giving you some benefits which will help you in the odd situation. The
benefits of this plan are thus:-

 An outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments
 Regular loyalty units to boost your fund value every year
 A post retirement income for life
 Flexibility to plan your premiums as per your preference
Steps of your own plan

Step1) Choose your retirement age: - In this plan firstly you have to choose
any age you wish to retire at (vesting age), between 50 years and 75 years.

Step2) This is the premium you will continue to pay each year to the policy.
The minimum regular premium is Rs. 10,000 per year. You can pay monthly
(using standing instructions or ECS mandate), quarterly, half yearly or annually.
You may also choose to pay ad hoc single premium Top-up or additional regular

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premiums depending on the policy type you have chosen and your
convenience.

3.5.3 Unit Linked Endowment Fund Plus II

Its massage is to invest in financial security and self respect for your and your
family in this policy, the investment risk in investment portfolio is borne by the
policy holder.

Benefits of this product

The HDFC unit linked endowment plus II gives

 A valuable protection to your family in case you are not around

 An outstanding investment opportunity by providing a choice of the
thoroughly
Researched and selected investment

 Flexible additional benefit options such as critical illness cover.

Simple steps for this product

Step1)Choose your regular premium

This is the premium you will continue to pay each year of the policy. You can pay
monthly, half-yearly or annually. The minimum regular premium is Rs 12,000 per
year for annual and half yearly policies. For monthly mode, the minimum regular
premium is Rs.1, 500 per month.

You may also choose to pay ad hoc single premium top-up or additional
regular premiums depending on your convenience.

Step2) You can choose any amount of sum Assured with:

A minimum of ( the term of your policy/2) times your chosen annual regular
premium.

A maximum of 40 times your chosen annual regular premium.

xxxv | P a g e
Step3) Choose additional plan benefits

It offer a range of valuable protection options to secure the future for your family

Life option - Death Benefit

Extra Life option - death benefit + accidental Death benefit

Life and health option - Death benefit + critical illness benefit

Extra life and health option - Death benefit + critical illness benefit +
Accidental Death benefit.

3.6 Awards and Accolades13

• September 2008 – Received CIO Bold 100 and CIO security awards

The annual award recognizes organizations that amplify the highest level of
operational and strategic excellence in information technology. This year’s award
theme “Bold100” recognizes those executives and organizations that embraced
great risk for sake of great recognition.
HDFC Standard Life has also been one of the five recipients of the Special 2008
CIO Security Award aimed at CIOs, whose pioneering implementations have
taken their enterprise security to the next level. This award category identifies
innovative and groundbreaking deployment of technologies aimed at creating a
secure business infrastructure. The company received the 2008 CIO Bold Award
for its mobile workforce portal and the CIO Security Award for its initiatives for a
secure computing environment, including identity management.

• May 2008 – Received PC Quest best IT implementation award 2008

HDFC Standard Life received the PC Quest Best IT Implementation Award 2008
for Consultant Corner, the applications for its financial consultants, providing
centralized control over a vast geographical spread for key business units such
as inventory, training, licensing, etc.
HDFC Standard Life has won the PC Quest Best IT Implementation Award for
two years consequently. Last year, the company received the award for

13
http://www.hdfcinsurance.com/MediaCenter/MCAwardsAndAccolades.aspx

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Wonders, its path-breaking implementation of an enterprise-wide workflow
system.

• March 2008 – Silver Abby at Goa fest 2008

HDFC Standard Life's radio spot for Pension Plans won a Silver Abby in the radio
writing craft category at the Goa fest 2008 organized by the AAAI. The radio
commercial ‘Pata nahin chala’ touched several changes in life in the blink of an
eye through an old man’s perspective. The objective was drive awareness and
ask people to invest in a pension plan to live life to the fullest even after
retirement, without compromising on one’s self-respect

• March 2008 – Unit Linked Saving Plan tops Mint best TV ad survey
The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of the
leading private insurance companies in India, has topped Mint’s Top Television
Advertisement survey conducted, for February 2008. HDFC Standard Life’s Unit
Linked Savings Plan advertisement was ranked 4th in terms of a combined score
of ad awareness and brand recall and 3rd in terms of ad diagnostic scores
(likeability, enjoyment, believability, and claim). The respondents were between
18 and 40 years.

• February 2008 – Deepak M Satwalekar awarded QUIMPRO Gold

Standard Award 2007
Mr. Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life,
received the QIMPRO Gold Standard Award 2007 in the business category at the
18th annual QUIMPRO Awards function. The award celebrates excellence in
individual performance and highlights the quality achievements of extraordinary
individuals in an era of global competition and expectations.

• January 2008 – “Sar Utha Ke Jiyo” among India’s 60 glorious advertising

moments
HDFC Standard Life’s advertising slogan honored as one of ‘60 Glorious
Advertising & Marketing Moments' over the last 60 years in India,’ by 4Ps
Business and Marketing magazine. The magazine said that HDFC Standard Life
is one of the first private insurers to break the ice using the idea of self respect
(Sar Utha Ke Jiyo) instead of 'death' to convey its brand proposition. This was
then, followed by others including ICICI Prudential, thus giving HDFC Standard
Life the credit of bringing up one such glorious advertising and marketing
moment in the last 60 years.
3.7 Major Competitors

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 1. ICICI Prudential14

ICICI Prudential is a joint venture between ICICI Bank and Prudential plc engaged in the
business of life insurance in India. ICICI Prudential is the largest private insurance
company and second largest insurance in India after LIC. ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank, a premier financial powerhouse, and
prudential plc, a leading international financial services group headquartered in the
United Kingdom. ICICI Prudential was amongst the first private sector insurance
companies to begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority .ICICI Prudential Life's capital stands at
Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential plc holding 74%
and 26% stake respectively. For the year ended March 31, 2008, the company garnered
Retail New Business Weighted premium of Rs. 6,684 crores, registering a growth of
68% over the last year and has underwritten nearly 3 million retail policies during the
period. The company has assets held over Rs. 30,000 crore as on April 30; 2008.ICICI
Prudential Life is also the only private life insurer in India to receive a National Insurer
Financial Strength rating of AAA from Fitch ratings. The AAA rating is the highest rating,
and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers
at the time of maturity or claims. For the past seven years, ICICI Prudential Life has
retained its leadership position in the life insurance industry with a wide range of flexible
products that meet the needs of the Indian customer at every step in life.

Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance
has been one of the earliest private players. Since the time, ICICI Prudential Life
has been the leader in terms of market share as indicated by the IRDA at its
website.

2. Bajaj Allianz Life Insurance

Bajaj Allianz Life Insurance Company Limited is a joint venture between Allianz
AG, one of the world’s largest Life Insurance companies and Bajaj Auto, one of
the biggest 2- &- 3 wheeler manufacturers in the world.

Allianz AG is a leading insurance conglomerate globally and one of the largest

asset managers in the world, managing assets worth worldwide with 115 years of
financial experience in over 70 countries.15

14
http://en.wikipedia.org/wiki/ICICI_Prudential
15
http://en.wikipedia.org/wiki/Bajaj_Allianz_Life_Insurance
xxxviii | P a g e
 3. Max New York Life Insurance
Max New York Life Insurance Company Ltd. is a joint venture between New
York Life, a Fortune 100 company, and Max India Limited, one of India's leading
multi-business corporations. The company has positioned itself on the quality
platform. In line with its vision to be the most admired life insurance company in
India, it has developed a strong corporate governance model based on the core
values of excellence, honesty, knowledge, caring, integrity and teamwork. The
strategy is to establish itself as a trusted life insurance specialist through a quality
approach to business.
4. Tata AIG Life Insurance

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture
company, formed by the Tata Group and American International Group, Inc.
(AIG). Tata AIG Life combines the Tata Group’s pre-eminent leadership position
in India and AIG’s global presence as one of the world’s leading international
insurance and financial services organization.

The Tata Group holds 74 per cent stake in the insurance venture with AIG
holding the balance 26 per cent.16 Tata AIG Life provides insurance solutions to
individuals and corporates. Tata AIG Life Insurance Company was licensed by
Insurance Regulatory and Development Authority to operate in India on February
12, 2001 and started operations on April 1, 2001.

5. Kotak Life Insurance

Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between Kotak
Mahindra Bank Ltd., its affiliates and Old Mutual plc. A company that combines
its international strengths and local advantages to offer its customers a wide
range of innovative life insurance products, helping them in taking important
financial decisions at every stage in life and stay financially independent. The
company is one of the fastest growing insurance companies in India and has
shown remarkable growth since its inception in 2001. Kotak Life Insurance
employs around 5,565 people in its various businesses and has 197 branches
across 141 cities.17

16
http://en.wikipedia.org/wiki/TATA_AIG_Life_Insurance
17
http://www.kotaklifeinsurance.com/ver2/about-us/corporate-overview.htm

xxxix | P a g e
 6. Life Insurance Corporation of India

The Life Insurance Corporation of India (Hindi: भभभभभभ भभभभ भभभभ भभभभ)
(LIC) is the largest life insurance company in India and also the country's largest
investor.; it is fully owned by the Government of India. It also funds close to
24.6% of the Indian Government’s expenses. It has assets estimated of 5 Trillion
Rupees. It was founded in 1956.

Headquartered in Mumbai, which is considered the financial capital of India, the

Life Insurance Corporation of India currently has 8 zonal Offices and 101
divisional offices located in different parts of India, at least 2048 branches located
in different cities and towns of India along with satellite Offices attached to about
some 50 Branches, and has a network of around 1.2 million agents for soliciting
life insurance business from the public.18

7. Reliance Life Insurance

Reliance Life Insurance Company Limited (Reliance Life Insurance) is a part of

Reliance Capital Ltd. of the Reliance Anil Dhirubhai Ambani Group. Reliance
Capital is one of India’s leading private sector financial services companies, and
ranks among the top 3 private sector financial services and banking companies,
in terms of net worth.19

18
http://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_India
19
http://en.wikipedia.org/wiki/Reliance_Life_Insurance

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4.1 Channel Development Strategies

4.1.1 Eligibility Model

From the perspective of eligibility, company judges the prospect accordingly. The
company follows unique eligibility criteria for FC selection through which
company is always able to justify its mission. The basic purpose for having
eligibility model for recruitment is to have good retention and greater
effectiveness in the delivery of the services.

Criteria of FC selection

• Minimum age should be 25 and Maximum age should be 60

The age shows attainment of maturity and responsibility. People are more
consistent in this age.

• Prospective FC should be married

xli | P a g e
Married people have more eager to earn money. Family pressure, increased
responsibility and customers are convinced more by the married FC.

• Staying in the same city for at least past 3 years

The person who is living in the city for more than 3 years has huge natural
market, which helps him to get more business in short period.

• The FC should be graduate

Graduate people have in them basic skills like communication skills, numerical
ability, interpersonal relations, convincing abilities etc. so it gets easier to train
them further.

Other criteria of FC Consultants

 Financial Stability

HDFCSL focuses on classes and not masses thus they select strong financial
consultants.

 Should have a rich and active social circle

It helps to get higher case rate and case size. Also chances of more policies are
there.

 Greed for money

Firm selects consultants who understand the language of commission because

people who want fixed amount as their earnings are not suitable for this
business.

 Independent

HDFCSL selects people who want to be entrepreneur. Housewives and brokers

who want flexible working hours are prospective persons for the business.

 Persuasion

He /She should b persuasive in nature because FC needs to follow up on regular

basis with prospective and new clients without being a nuisance value.

 Excellent interpersonal skills

xlii | P a g e
Developing and maintaining good relations can bring you policies. Also since
all the companies provide basket of similar products sales depends on
convincing ability of the FC and the rapport FC is bail to build.

 Excellent Communication Skills

Since FC needs to communicate about the organization, products, career as FC,

importance of insurance, recommending product as per the requirement, etc..

4.1.1.1 Desirable Candidates

1. Housewives
2. Employees having VRS
3. Sales executives at different companies
4. CA’s
5. Brokers
6. Businessman
7. Doctors
8. Travel Agents
9. Social Workers
10. Teachers/ Professors/ Lecturers

Table 4.1

4.1.2 Development Strategies

There are certain strategies used in order to expand channel distribution network.
These models are followed by most uniformly across and management feels that
these strategies are the building blocks of HDFC Standard Life’s success across
the country. There are 2 basic principles that are required in order to execute
these strategies.

1. Prospecting: Identify the person who fits in the eligibility model

2. Selection: Selecting from them the best for further plan of action

4.1.3 Rule of 31

xliii | P a g e
The rule is associated with the daily activities which are followed to recruit
quality advisors. It says that everyday an executive should collect at least 3
names of the prospective FC and should do 1 screening every day.

Figure 4.1

4.1.4 The dream Game

xliv | P a g e
 Figure 4.2

Mostly people are initially reluctant to join as the FC’s. So there is a strategy to
attract those peoples. Identify the market into 2 parts- Employed (all
businessman’s and other professionals) and Unemployed( students and other
non workers). Once the market has been identified into 2 then start the dream
game. Start showing a dream to the prospect.

Employed

Show the following kind of dreams to such people

 Performance appraisal

 Tax savings

 150% savings of income

 Better growth opportunities

 Provides back support

 Build confidence in diverse situation

Unemployed

 Need to work only 2 days a week and 1 hour a day and can earn
thousands a month

 Better opportunity earn a living or if student- draw a higher pocket money

 You will learn to present you views to other people

 Better opportunities to learn marketing skills

 You will get better stand to learn organizational behavior

 It will provide financial support in times of adverse conditions

 Chance to meet different people in different conditions

xlv | P a g e
Above all this game an executive need to make sure that all these things are
not told in a casual way but in a way that it looks like you are showing a dream to
him.

Figure 4.3

xlvi | P a g e
4.1.5 Ways of gathering Names

• Natural Market

A natural market consists of people to whom you know well from your family,
friend circle, relatives. These could be a good prospect. The most admired way
for recruitment in HDFC Standard Life is through natural market. Such persons
are easily approachable and most of the successful recruitment in HDFC
Standard Life is from natural market.

• Personal Observations

It means identifying a right person through observation. For example a person

residing in your locality and is good in taking initiatives in social activities or a
person who is running a small shop outside a metro station could be a good
prospect.

• Nominator call

A nominator is a person who is very much influential in the market as well in

societies. Name gathering and identification is easier in this case but such people
are highly unapproachable. These people can be very productive in giving
references of the prospect but they are not prospects by default.

• Centre of Influence call

These persons are those people who are influential and are known to you
personally. They are easily approachable and provides good number of refrences
of the prospect.

• Activities

Doing activities such as brand awareness in public places such as malls,

multiplexes, societies or universities can be a good strategy for name gathering.
We can have a questionnaire to fill by the applicants for the lucky draw or
anything.

xlvii | P a g e
4.1.6 Cold/Warm/Hot

This is another method that helps the management trainee and the sales
managers to keep the track of the names he has collected from the various ways
of the name gathering mentioned above.

xlviii | P a g e
Figure
4.4
COLD


WARM

HOT

Cold

xlix | P a g e
Cold is like what you are having. Here we include names of all the persons
we have as the prospect. It include COI’s, references, nominator and so on.
It is the list of all the names that we wish to contact.

 Warm

Once the above said persons are contacted and if any appointment is scheduled
at the office wherein initial screening is then conducted and the candidate enter
into the warm list.

 Hot

After entering into the warm list and agreed to be the FC then he is labeled as
hot.
Start

Name Gathering

Short listing

Contacting
Figure 4.5

4.2 Channel Development Process

Intereste
End
d?
4.2.1 Flow based approach to channel development process

Initial Screening

Career Seminar

Intereste
End
d?

Career interview
NOT
CLEARED

NAT Reappear
l|Page
CLEARE
D
Contract with HDFCSL End
 Yes

No

Figure 4.6

4.2.1.1Names Gathering

Name gathering consist of people you know from natural market and references
you get from their sources. As a management trainee I was supposed to gather
the names on my own. Following information was required to be collected about
the interested candidates.

 Name of the prospect

 Address

 Age

 Marital Status

 Qualification

 Number years in the city

 Financial status

 Profession

 Annual Income

4.2.1.2 Short Listing

li | P a g e
Candidates are shortlisted as per the eligibility criteria laid down by the
company. Only eligible candidates are considered for the next process.

4.2.1.3 Contacting

Candidates are either called as nominator, COI, Prospective agent and a

meeting is fixed with them according to the convenience of both the party

4.2.1.4 Initial Screening

Initial screening is taken if candidate is found eligible using 4 point model. In intial
screening, a sales manager first gives the introduction about the company. Then
several questions such as his family background, his natural market, traits for a
sales person, and his present and past experiences of his jobs are questioned.

Every candidate is required to get at least 3 points in eligibility model the

company. The eligibility standards for AA selection are as follows. In case of
score less than 3, special zonal head approval is required.

FIVE POINT SYSTEM:

Age 25 and over 1 point

Graduate 1 point

Married 1 point

Lived in city more than 3 years 1 point

NAT score 1 point (if passed)

Table 4.2

4.2.1.5 Interview

If a candidate is found suitable he is allowed to take the test and act as an agent
of the company.

4.2.1.6 NAT

Approved candidate is required to appear for a test conducted by IRDA in which

he is supposed to secure minimum of 50% marks.

4.2.1.7 Contract

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All successful candidates who have obtained a legal license from IRDA are
contracted with the company.

liii | P a g e
After the collection of data the most important part is data analysis. It is the most
significant part of the research Whole work regarding data depends upon the
data collection and analysis.

For the purpose a questionnaire was prepared and was filled by the prospective
FC’s. Following is the result of the questionnaire filled by them:

Q.1 Are you employed?

The question was important in the sense that it is important to know or the
company weather employed people show more interest in such kind of work or
unemployed people.

Cumulative
Frequency Percent Valid Percent Percent

Valid Yes 50 50.0 50.0 50.0

No 37 37.0 37.0 87.0

Self employed 13 13.0 13.0 100.0

Total 100 100.0 100.0

Table 5.1

liv | P a g e
 Figure 5.1

Exactly 50% of the people of our sample size were employed 37% of them were
unemployed and 13% were self employed. It was important to know about number of
self employed people as this would provide an important direction to my research.

Q.2 Have you worked as an insurance agent before?

Cumulative
Frequency Percent Valid Percent Percent

Valid No 75 75.0 76.5 76.5

Yes 23 23.0 23.5 100.0

Total 98 98.0 100.0

Missing 9 2 2.0

Total 100 100.0

Table 5.2

lv | P a g e
 Figure 5.2

As it is evident from the above table that mostly people had never experienced
working as an insurance agent. Out of 100 only 23 people had a previous
experience of working as an insurance agent, either Life, Non Life or both.

Q.3 What type of Agency you had previously held?

Cumulative
Frequency Percent Valid Percent Percent

Valid Life 10 10.0 10.2 10.2

Non Life 10 10.0 10.2 20.4

Both 3 3.0 3.1 23.5

10 75 75.0 76.5 100.0

Total 98 98.0 100.0

Missing 9 2 2.0

Total 100 100.0

Table 5.3

lvi | P a g e
Figure 5.3

In the previous question we saw that only 23 people had a previous working
experience. Out of those 23 people 10 had already worked as a life insurance
agent which meant that they already hold a valid license, 10 had worked as a
non life insurance agent and there were 3 who have acted as a both life and non
life.

Q.4 On Behalf of which company would you prefer to hold an agency?

Q.4 On behalf of which company would you prefer to hold an agency?

Cumulative
Frequency Percent Valid Percent Percent

Valid LIC 78 65.5 78.8 78.8

ICICI Prudential 6 5.0 6.1 84.8

HDFC Standard Life 5 4.2 5.1 89.9

Max New York Life Insurance 4 3.4 4.0 93.9

Bajaj Allianz 3 2.5 3.0 97.0

Aviva Life Insurance 2 1.7 2.0 99.0

Any Other 1 .8 1.0 100.0

Total 99 83.2 100.0

Missing 9 1 .8

System 19 16.0

Total 20 16.8

Total 119 100.0

Table 5.4

lvii | P a g e
Figure 5.4

This is one of the most important question which provide a major direction to our
research. When I talked to the people the responses generated were tilted
towards the government company LIC. People have no faith on any of the private
sector company and are not ready to represent them. They said people normally
don’t go for the insurance in such kind of companies. This is evident from the
chart above. 77% of the people responded in favor of LIC and then ICICI was the
most preferred company which followed it. Interesting thing we found out was
that there were 5 people who were willing to join our company but due to some
reason they didn’t.

Q.5 Are you aware of the company HDFC Standard Life?

Cumulative
Frequency Percent Valid Percent Percent

Valid No 35 35.0 35.0 35.0

Yes 65 65.0 65.0 100.0

Total 100 100.0 100.0

Table 5.5

lviii | P a g e
 Q.6 Are you aware about the meaning of the tagline "Sar Utha ke Jiyo"?

Cumulative
Frequency Percent Valid Percent Percent

Valid Yes 40 40.0 40.0 40.0

No 18 18.0 18.0 58.0

Not Sure 8 8.0 8.0 66.0

Not Applicable 34 34.0 34.0 100.0

Total 100 100.0 100.0

Table 5.6

Most of the People are aware about the company but there are still lot of people
who don’t know that such kind of company even exist.

When I talked to the people in regard of the message conveyed through the tag
line “sar utha ke jiyo” only 40% of those who knew about the company know the
meaning of the tag line. It shows that our advertisement is making a place in the
minds of our customers. Still around 20% of the people still don’t know about the
meaning of the tag line.
Q.7 Have you agreed to join the company as Financial Consultant?

Cumulative
Frequency Percent Valid Percent Percent

Valid No 97 97.0 97.0 97.0

Yes 3 3.0 3.0 100.0

Total 100 100.0 100.0

Table 5.7

lix | P a g e
 Figure 5.5

That is the dilemma that the management is facing of low conversion ratio in the
channel development department. It can be noticed from the above figure that
out of 100 only 3 people have agreed to join as the FC’s in the company. A
whopping 97% respondent has simply disagreed to join as the consultant in my
company.

Q.8 What was the reason of not joining the company?

lx | P a g e
 Figure 5.6

When the 97% respondents were asked the reason for not joining the company
we found out that there were 4 man reasons which people gave for not joining
the company. The major reason was High examination fee charged by the
company. When the few respondents asked about this to the people argued that
the examination fee charged by the company is very high as compared to other
companies namely ICICI prudential or Bajaj Allianz or any other. 48%
respondents cited tedious formalities as the major cause of not joining the
company while around 34% people gave the personal reason and fear that
company might shut down in near future as the main cause of not joining the
company. People said they didn’t trust the position of company, they felt that the
company might not sustain the pressure of recession or any other pressure and
they might shut down causing their money to go down the drain. Then there were
few also who thought that they have a small network of people that’s why they
didn’t agreed to join.

lxi | P a g e
 Q.10 What was the purpose of showing interest in the company?

Cumulative
Frequency Percent Valid Percent Percent

Valid Business 36 36.0 37.5 37.5

Part Time 44 44.0 45.8 83.3

Extra Income 16 16.0 16.7 100.0

Total 96 96.0 100.0

Missing 9 4 4.0

Total 100 100.0

Table 5.8

Figure 5.7

lxii | P a g e
Interestingly there was lot of people, around 36% of them who were ready to
take up the profession as the full time business. Then there were 44%
people who were willing to take this as a part time job and some were just
interested in the extra income. They said that one or two policies would work.
They can enjoy the commission on those policies and were not willing to devote
much time to the business,

Q.11 What is your expectation from the company?

Figure 5.8

When people were asked about what they expected from their insurance
company, 95 out of 100 respondents expected attractive commission on the
policies done by them. Since respondents were allowed to give multiple
responses the other expectations were friendly services, a trusted name,

lxiii | P a g e
accessibility of the branch office and quick responses from the seniors. Most
of the people expect a high and attractive commission rate from the
company.

Q.12 What according to you is the size of your personal social and professional network?

Cumulative
Frequency Percent Valid Percent Percent

Valid Very Large 5 5.0 5.2 5.2

Large 72 72.0 74.2 79.4

Neither Large nor Small 12 12.0 12.4 91.8

Small 8 8.0 8.2 100.0

Total 97 97.0 100.0

Missing 9 3 3.0

Total 100 100.0

Table 5.9

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Q.13 Do you have any needs which needs to be fulfilled immediately for which you
require money?

Cumulative
Frequency Percent Valid Percent Percent

Valid Yes 16 16.0 17.2 17.2

No 73 73.0 78.5 95.7

Dont Know 4 4.0 4.3 100.0

Total 93 93.0 100.0

Missing 9 7 7.0

Total 100 100.0

Table 5.10
It was found that people were reluctant to answer the 2 questions but when they
were asked these questions in a different way we got the above said response.
72% of the people felt that they have a large network while 12% of those neither
had small nor a large network. 73% of the respondents felt that they don’t have
any personal immediate needs while 16% had one in the form of either any large
personal asset to owning a house.

Q.14 What do you feel about the commission rate of HDFC Standard Life?

Cumulative
Frequency Percent Valid Percent Percent

Valid Highly Attractive 1 1.0 1.0 1.0

Attractive 45 45.0 45.9 46.9

Neither or Nor 19 19.0 19.4 66.3

Unattractive 29 29.0 29.6 95.9

Highly Unattractive 4 4.0 4.1 100.0

Total 98 98.0 100.0

Missing 9 2 2.0

Total 100 100.0

Table 5.11

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Figure 5.9

Out of 100 respondents 45% felt that the commission offered on various policies
were attractive enough while 29% of them felt that commission needs to be
improve and is not attractive enough to make a person join the company.

Q.15 During the whole conversation with our executive have you at any point of
time felt that he was not telling truth to you?

Cumulative
Frequency Percent Valid Percent Percent

Valid Yes 17 17.0 17.3 17.3

No 77 77.0 78.6 95.9

Can’t say 4 4.0 4.1 100.0

Total 98 98.0 100.0

Missing 9 2 2.0

Total 100 100.0

Table 5.12

lxvi | P a g e
 Figure 5.10

17% people thought that the CDE which approached them was lying to them regarding
the commission rate or the terms and conditions or any other thing. Such people felt that
such kind of executive should not be allowed to work in the company as they tend to
mislead the people for their personal goals while majority believed the executive.

Q.16 Are you satisfied wih the services of our channel development executive?

Cumulative
Frequency Percent Valid Percent Percent

Valid Yes 63 63.0 66.3 66.3

No 29 29.0 30.5 96.8

Cant Say 3 3.0 3.2 100.0

Total 95 95.0 100.0

Missing 9 5 5.0

Total 100 100.0

Table 5.13

lxvii | P a g e
 Figure 5.11

There were only 29% people who were not satisfied with the services of CDE
approached them. These 29% people consisted some of those 17% people who felt that
the CDE was lying to them. Such people were not ready to listen to the arguments and
even they said that they will make their relatives cautious about such kind of executives.

lxviii | P a g e
 6.1 Findings

After doing the survey there was lot of interesting things that were found out from
the people. Responses were generated and were tabulated. The findings of the
survey are enumerated below:

• Most of the people who showed the keen interest in the prospecting were
employed. Self employed people were somewhat reluctant to become
FC’s as they lacked time for either appearing for the examination or giving
time to the business. Company needs to train their CDE’s that they should
properly identify the prospects. Self employed prospects generally don’t
prove productive for the company. So CDE”s should identify such
prospects and discard them and should not waste their time following such
people.

lxix | P a g e
 • 75% people never had an experience of being an insurance agent.
This means that we can assume to an extent that they are incapable
of differentiating between government sector and the private sector
company. 23% of those who had a previous experience of working as an
agent of any kind – Life or Non Life – preferred government company i.e.
Life insurance Corporation of India.

• 78% of the total population opted to represent LIC as an agent. Even

those people who never had been an agent of any LIC. This shows the
brand value that LIC has built over the years. Thus LIC has the highest
conversion ratio in terms of getting FC’s20. CDE’s should be trained more
effectively so that they can handle the mounting competition from LIC.
They should be geared up properly to handle the arguments of the
prospects and counter it with ease and effectiveness.

• HDFC standard life is facing tough competition not only from LIC but also
from ICICI prudential also. More number of people have opted ICICI
Prudential ahead of HDFC Standard Life.

• Talking of fighting competition, a large number of people – 35% of them -

are not aware that the company HDFC Standard Life even exists in the
market and out of those who knows about its presence is not clear about
what the tag line of the company wants to say. Company needs to look
into the matter. Company needs to make their marketing campaign more
aggressive. They should take new measures make their tag line more
understandable so that at least people are aware of the company even if
they are not joining it. They should introduce more advertisements just like
they brought up the Rajasthan Royals campaign on the television so as to
bring in the similar effectiveness in the advertisements.

• 97% people showed reluctance in joining the company for one or the other
reason.

• High examination fees are playing a spoilsport for the company. After
hearing about the examination fee of Rs. 925 people straightaway said no
towards joining the company. 65% of all the people who didn’t join the
company cited high examination fee as the reason for not joining the
company. 48% of the people gave the reason tedious formalities as the
reason of not joining the company. Some got hyper after knowing that they
need to get a NEFT form stamped from the bank. Also some people got a
bit carried away after knowing the list of documents which they need to
20
Agents of LIC are not called FC’s and are defined by other name.

lxx | P a g e
 provide in order to fill the form. Out of the total sample 34% of the
people gave personal reasons which they refused to reveal for not
joining the company. Other reasons included exam phobia, and small
personal and business social network. One of the interesting thing which
was found out during the survey was that around 25% of the people said
that they are not joining the company just because they think that
company might shut down anytime and people might lose their money
which was least expected. Company may consider reducing its
examination fees. They are suffering heavily because of the same reason.
People are not joining the company, they argue in favor of other
companies saying that others are charging less fees. Officials seriously
need to do a lot of thinking in this matter.

• 95% of the people expects high commission rate from the company. Some
of the people expected only high commission from the company. Majority
of the people also asked for the friendly services from the company. Other
expectations included a trusted name, accessibility of the branch office
and quick responses from the superiors.

• Out of the total population only 8% of the people felt that they have a small
social network but only few of those 8% people cited the same reason for
not joining the company. People didn’t used the factor as an excuse for
not joining the company.

• There were only 16% of the people who have on or the other need which
needs to be fulfilled in immediate period. Although it was noticed that
people were quite hesitant to answer the question. The particular question
was then asked other way round and then somewhat accurate responses
were obtained.

• The company’s commission rate got a negative response from the

respondents. 45% of them said that they are fine with the commission rate
but 19% people were indifferent towards it and 29% criticized the
commission rate of the company. Another thing which is quite alarming for
the company is that people are not satisfied with the commission which is
being offered by the company. Commission rate is the backbone of
channel development department. If the company doesn’t revise is
commission rate they might start losing business to others at a faster rate.

• There were 17% of the respondent who didn’t believed the executive while
23% of the sample was not satisfied with the services of the
correspondents. So the management should make the training program of

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 the CDE’s more improved so that they are able to handle the prospect
in a better way.

6.2 Recommendations

As far as recommendations are concerned I think I only have got a small

experience of the sector. Thus company may look into those points which have
been pointed out in the findings section of the report.

 Company may organize a weekly meeting with FC’s and may provide
appraisal training to them. This also works as the performance appraisal
for them.

 Company should try to organize once in a while event for FC’s. This
provides a sense of belongingness to the FC’s

 More of the canopies should be put in, activities should be encouraged by

the SDM’s, CDM’s so that people becomes aware of the company and this
may be used as the platform for some business also.

lxxii | P a g e
  More on advertisements should be spent by the company. Whatever
is visible only sells in the market. So company should introduce more
advertisements on television and also some campaigns like one as
Rajasthan Royals.

 CDE’s may be hired on a permanent basis and on the basis of perform or

perish.

 Some innovative insurance policies may be introduced in the market

which are different from the other companies.

6.3 Conclusion

HDFC Standard Life is one of the renounce companies in the insurance sector. It
helped me in a lot of way during my tenure as a project trainee. It helped me in
my overall personality development, improved my communication skills and also
helped me in enriching my academic knowledge through practical application.

In the insurance company most of the revenue generation is through FC’s and
those FC’s are recruited by CDE’s. They give a lot of priority to recruitment of
FC’s that is why they set up a 5 Q score and quality checks for the FC’s. Lot of
interaction was done with the different type of people during the tenure of 2
months. In this process there was a recruitment of an accountant and 2 aspiring
MBA’s.

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The company provides lot of facilities to their FC’s. Their minimum work
requirements are also very low.

The problem which the company is facing is only short lived. The company can
overcome these problems by changing some of their tactics regarding marketing,
selling, training of FC’s and CDE’s etc. Doing this company can overcome the
problem of low conversion ratio in a quick time.

References

Books

1. Stephen P. Robbins, Timothy A. Judge and Seema Sanghi,

Organizational Behaviour, (Pearson education, 2008)

2. V.S.P Rao, Human Resource Management, 2nd Edtion, 2009

3. NAT study material

Internet

lxxiv | P a g e
 1. HDFCinsurance.com

2. Wikipedia.org

3. Kotaklifeinsurance.com

4. Indiastat.com

5. Researchandmarkets.com

6. IRDA.com

7. Business.mapsofindia.com

Company Brochures and Pamphlets

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 7.1 Questionnaire

Q.1 Are you employed?

1. Yes 2. No 3. Self Employed

Q.2 Have you worked as an Insurance agent before?

1. Yes 2. No

If yes kindly answer the next question else skip to Q.4

Q.3 What type of agency you had previously held?

1. Life 2. Non Life 3. Both

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Q.4 On behalf of which company would you prefer to hold an agency?

1. LIC 5. Bajaj Allianz

2. ICICI Prudential 6. Aviva Life Insurance

3. HDFC Standard Life 7. Any other______________

4. Max New York Life Insurance

Q.5 Are you aware of the company HDFC Standard Life?

1. Yes 2. No

If yes kindly answer the next question or else jump to Q.7

Q.6 Are you aware about the meaning of the tagline “Sar Utha ke jio”

1. Yes 2. No 3. Not Sure

Q.7 Have you agreed to join the company as financial consultant?

1. Yes 2. No

If No kindly answer the next question and if yes answer Q.9

Q.8 What was the reason of not joining the company? (You can give
multiple responses)

1. Personal reasons 5. Fear of company’s shutting

down

2. Tedious formalities 6. Exam appearance

3. Unable to understand the concept 7. Small personal network

4. High Examination fees 8. Any Other__________________

Q.9 Why did you liked about the company? (You can give multiple
responses)

1. Commission rate 4. Status of MNC

2. Immediate requirement of funds 5. Any

other______________

3. Accessibility

Q.10 Why was the purpose of showing interest in the company?

1. Business 3. Extra Income

lxxvii | P a g e
 2. Part time 4. Any other__________________

Q.11 What do you expect from an insurance company? (You can give
multiple responses)

1. A trusted name 5. Quick responses from

superiors

2. Friendly Services 6. Any Other

____________________

3. Attractive commission rates

4. Accessibility

Q.12 What according to you is the size of your personal social and
professional network?

1. Very Large 4. Small

2. Large 5. Very Small

3. Neither Large nor Small

Q.13 Do you have any need which needs to be fulfilled immediately for
which you require money?

1. Yes 2. No 3. Don’t Know

Q.14 What do you feel about the commission rate of HDFC Standard Life?

1. Highly Attractive 4. Unattractive

2. Attractive 5. Highly unattractive

3. Neither or nor

Q.15 During the whole conversation with our executive have you at any
point of time felt that he was not telling the truth to you?

1. Yes 2. No 3. Can’t say

Q.16 Are you satisfied with the services of our channel development
executive?

1. Yes 2. No 3. Can’t say

lxxviii | P a g e
Q.17 What is your gender?

1. Male 2. Female

Q.18 What is your age?

1. 18-25 4. 46-55

2. 26-35 5. Above 55

3. 36-45

Q.19 What is literacy level?

1. 10th Fail 5. Post graduate

2. 10th pass 6. Doctorate

3. 12th pass

4. Graduate

lxxix | P a g e
7.2 Insurance Regulatory and Development
Authority (Protection of Policyholders’ Interests)
Regulations, 2002.

In exercise of the powers conferred by clause (zc) of sub-section (2) of section 114A
of the Insurance Act, 1938 (4 of 1938) read with sections 14 and 26 of the Insurance
Regulatory and Development Authority Act, 1999 (41 of 1999), the Authority, in
consultation with the Insurance Advisory Committee, hereby makes the following
regulations, namely:

Short title and commencement

1. (1) These regulations may be called the Insurance Regulatory and

Development Authority (Protection of Policyholders’ Interests) Regulations, 2002
(2) They shall come into force on the date of their publication in the Official
Gazette and shall apply to all contracts of insurance effected thereafter, except
regulation 4(1) which shall come into force on 1st October, 2002.
(3) These Regulations are in addition to any other regulations made by the
Authority, which may, inter alia, provide for protection of the interest of
policyholders.
(4) These Regulations apply to all insurers, insurance agents, insurance
intermediaries and policyholders.

Definitions

2. (1) In these regulations, unless the context otherwise requires:

(a) “Act” means the Insurance Act, 1938 (4 of 1938);
(b) “Authority” means the Insurance Regulatory and Development Authority
established under the provisions of section 3 of the Insurance Regulatory and
Development Authority Act, 1999 (41 of 1999);
(c) “Cover” means an insurance contract whether in the form of
a policy or a cover note or a Certificate of Insurance or any other form prevalent
in the industry to evidence the existence of an insurance contract;
(d) “Proposal form” means a form to be filled in by the proposer
for insurance, for furnishing all material information required by the insurer in
respect of a risk, in order to enable the insurer to decide whether to accept or
decline, to undertake the risk, and in the event of acceptance of the risk, to
determine the rates, terms and conditions of a cover to be granted.
Explanation: “Material” for the purpose of these regulations shall mean and
include all important, essential and relevant information in the context of
underwriting the risk to be covered by the insurer.
(e) “Prospectus” means a document issued by the insurer or in its behalf to the
prospective buyers of insurance, and should contain such particulars as are
mentioned in Rule 11 of Insurance Rules, 1939 and includes a brochure or leaflet

lxxx | P a g e
 serving the purpose. Such a document should also specify the type and
character of riders on the main product indicating the nature of benefits
flowing thereupon;
(f) Words and expressions used and not defined in these regulations, but defined in
the Act, or the Life Insurance Corporation Act, 1956, (31 of 1956) or the General
Insurance Business (Nationalisation) Act 1972 (57 of 1972), or the Insurance
Regulatory and Development Authority Act, 1999 (41 of 1999) or the Insurance
Rules, 1939 shall have the meanings respectively assigned to them in those Acts
or the Rules.

3. Point of Sale

(1) Notwithstanding anything mentioned in regulation 2(e) above, a

prospectus of any insurance product shall clearly state the scope of
benefits, the extent of insurance cover and in an explicit manner
explain the warranties, exceptions and conditions of the insurance
cover and, in case of life insurance, whether the product is
participating (with-profits) or non-participating (without-profits). The
allowable rider or riders on the product shall be clearly spelt out with
regard to their scope of benefits, and in no case, the premium relatable
to all the riders put together shall exceed 30% of the premium of the
main product.

Explanation: The rider or riders attached to a life policy shall bear the nature and
character of the main policy, viz. participating or non-participating and accordingly the
life insurer shall make provisions, etc., in its books.

(2) An insurer or its agent or other intermediary shall provide all material information in
respect of a proposed cover to the prospect to enable the prospect to decide on the best
cover that would be in his or her interest.

(3) Where the prospect depends upon the advice of the insurer or his agent or an
insurance intermediary, such a person must advise the prospect dispassionately.

(4) Where, for any reason, the proposal and other connected papers are not filled by the
prospect, a certificate may be incorporated at the end of proposal form from the prospect
that the contents of the form and documents have been fully explained to him and that he
has fully understood the significance of the proposed contract.

(5) In the process of sale, the insurer or its agent or any intermediary shall act according
to the code of conduct prescribed by:
i) the Authority

lxxxi | P a g e
 ii) the Councils that have been established under section 64C
of the Act and
iii) the recognized professional body or association of which
the agent or intermediary or insurance intermediary is a member.

4. Proposal for insurance

(1) Except in cases of a marine insurance cover, where current market practices do not
insist on a written proposal form, in all cases, a proposal for grant of a cover, either for
life business or for general business, must be evidenced by a written document. It is the
duty of an insurer to furnish to the insured free of charge, within 30 days of the
acceptance of a proposal, a copy of the proposal form.

(2) Forms and documents used in the grant of cover may, depending upon the
circumstances of each case, be made available in languages recognised under the
Constitution of India.

(3) In filling the form of proposal, the prospect is to be guided by the provisions of
Section 45 of the Act. Any proposal form seeking information for grant of life cover may
prominently state therein the requirements of Section 45 of the Act.

(4) Where a proposal form is not used, the insurer shall record the information obtained
orally or in writing, and confirm it within a period of 15 days thereof with the proposer
and incorporate the information in its cover note or policy. The onus of proof shall rest
with the insurer in respect of any information not so recorded, where the insurer claims
that the proposer suppressed any material information or provided misleading or false
information on any matter material to the grant of a cover.

(5) Wherever the benefit of nomination is available to the proposer, in terms of the Act or
the conditions of policy, the insurer shall draw the attention of the proposer to it and
encourage the prospect to avail the facility.

(6) Proposals shall be processed by the insurer with speed and efficiency and all decisions
thereof shall be communicated by it in writing within a reasonable period not exceeding
15 days from receipt of proposals by the insurer.

5. Grievance redressal procedure

Every insurer shall have in place proper procedures and effective mechanism to address
complaints and grievances of policyholders efficiently and with speed and the same
along-with the information in respect of Insurance Ombudsman shall be communicated to
the policyholder along-with the policy document and as maybe found necessary.

6. Matters to be stated in life insurance policy

(1) A life insurance policy shall clearly state:

lxxxii | P a g e
 (a) the name of the plan governing the policy, its terms and conditions;
(b) whether it is participating in profits or not;
(c) the basis of participation in profits such as cash bonus, deferred bonus,
simple or compound reversionary bonus;
(d) the benefits payable and the contingencies upon which these are payable and the
other terms and conditions of the insurance contract;
(e) the details of the riders attaching to the main policy;
(f) the date of commencement of risk and the date of maturity or date(s) on which the
benefits are payable;
(g) the premiums payable, periodicity of payment, grace period allowed for payment
of the premium, the date the last instalment of premium, the implication of
discontinuing the payment of an instalment(s) of premium and also the provisions
of a guaranteed surrender value.
(h) the age at entry and whether the same has been admitted;
(i) the policy requirements for (a) conversion of the policy into paid up policy, (b)
surrender (c) non-forfeiture and (d) revival of lapsed policies;
(j) contingencies excluded from the scope of the cover, both in respect of the main
policy and the riders;
(k) the provisions for nomination, assignment, and loans on security of the policy and
a statement that the rate of interest payable on such loan amount shall be as
prescribed by the insurer at the time of taking the loan;
(l) any special clauses or conditions, such as, first pregnancy clause, suicide clause
etc.; and
(m) the address of the insurer to which all communications in respect of the policy
shall be sent.
(n) the documents that are normally required to be submitted by a claimant in support
of a claim under the policy.

(2) While acting under regulation 6(1) in forwarding the policy to the insured, the insurer
shall inform by the letter forwarding the policy that he has a period of 15 days from the
date of receipt of the policy document to review the terms and conditions of the policy
and where the insured disagrees to any of those terms or conditions, he has the option to
return the policy stating the reasons for his objection, when he shall be entitled to a
refund of the premium paid, subject only to a deduction of a proportionate risk premium
for the period on cover and the expenses incurred by the insurer on medical examination
of the proposer and stamp duty charges.

(3) In respect of a unit linked policy, in addition to the deductions under sub-regulation
(2) of this regulation, the insurer shall also be entitled to repurchase the unit at the price
of the units on the date of cancellation.

(4) In respect of a cover, where premium charged is dependent on age, the insurer
shall ensure that the age is admitted as far as possible before issuance of the policy
document. In case where age has not been admitted by the time the policy is issued, the
insurer shall make efforts to obtain proof of age and admit the same as soon as possible.

lxxxiii | P a g e
7. Matters to be stated in general insurance policy

(1) A general insurance policy shall clearly state:

(a) the name(s) and address(es) of the insured and of any bank(s) or any other person
having financial interest in the subject matter of insurance;
(b) full description of the property or interest insured;
(c) the location or locations of the property or interest insured under the policy and,
where appropriate, with respective insured values;
(d) period of Insurance;
(e) sums insured;
(f) perils covered and not covered;
(h) any franchise or deductible applicable;
(i) premium payable and where the premium is provisional subject to adjustment, the
basis of adjustment of premium be stated;
(j) policy terms, conditions and warranties;
(k) action to be taken by the insured upon occurrence of a contingency likely to give
rise to a claim under the policy;
(l) the obligations of the insured in relation to the subject matter of insurance upon
occurrence of an event giving rise to a claim and the rights of the insurer in the
circumstances;
(m)any special conditions attaching to the policy;
(n) provision for cancellation of the policy on grounds of mis-
representation, fraud, non-disclosure of material facts or non-cooperation of the
insured;
(o) the address of the insurer to which all communications in respect of
the insurance contract should be sent;
(p) the details of the riders attaching to the main policy;
(q) proforma of any communication the insurer may seek from the
policyholders to service the policy.

(2) Every insurer shall inform and keep informed periodically the insured on the
requirements to be fulfilled by the insured regarding lodging of a claim arising in terms
of the policy and the procedures to be followed by him to enable the insurer to settle a
claim early.

8. Claims procedure in respect of a life insurance policy

(1) A life insurance policy shall state the primary documents which are normally
required to be submitted by a claimant in support of a claim.

(2) A life insurance company, upon receiving a claim, shall process the claim without
delay. Any queries or requirement of additional documents, to the extent possible, shall
be raised all at once and not in a piece-meal manner, within a period of 15 days of the
receipt of the claim.

lxxxiv | P a g e
(3) A claim under a life policy shall be paid or be disputed giving all the relevant
reasons, within 30 days from the date of receipt of all relevant papers and
clarifications required. However, where the circumstances of a claim warrant an
investigation in the opinion of the insurance company, it shall initiate and complete such
investigation at the earliest. Where in the opinion of the insurance company the
circumstances of a claim warrant an investigation, it shall initiate and complete such
investigation at the earliest, in any case not later than 6 months from the time of lodging
the claim.

(4) Subject to the provisions of section 47 of the Act, where a claim is ready for payment
but the payment cannot be made due to any reasons of a proper identification of the
payee, the life insurer shall hold the amount for the benefit of the payee and such an
amount shall earn interest at the rate applicable to a savings bank account with a
scheduled bank (effective from 30 days following the submission of all papers and
information).

(5) Where there is a delay on the part of the insurer in processing a claim for a reason
other than the one covered by sub-regulation (4), the life insurance company shall pay
interest on the claim amount at a rate which is 2% above the bank rate prevalent at the
beginning of the financial year in which the claim is reviewed by it.

9. Claim procedure in respect of a general insurance policy

(1) An insured or the claimant shall give notice to the insurer of any loss arising under
contract of insurance at the earliest or within such extended time as may be allowed by
the insurer. On receipt of such a communication, a general insurer shall respond
immediately and give clear indication to the insured on the procedures that he should
follow. In cases where a surveyor has to be appointed for assessing a loss/ claim, it shall
be so done within 72 hours of the receipt of intimation from the insured.

(2) Where the insured is unable to furnish all the particulars required by the surveyor or
where the surveyor does not receive the full cooperation of the insured, the insurer or the
surveyor as the case may be, shall inform in writing the insured about the delay that may
result in the assessment of the claim. The surveyor shall be subjected to the code of
conduct laid down by the Authority while assessing the loss, and shall communicate his
findings to the insurer within 30 days of his appointment with a copy of the report being
furnished to the insured, if he so desires. Where, in special circumstances of the case,
either due to its special and complicated nature, the surveyor shall under intimation to the
insured, seek an extension from the insurer for submission of his report. In no case shall a
surveyor take more than six months from the date of his appointment to furnish his
report.

(3) If an insurer, on the receipt of a survey report, finds that it is incomplete in any
respect, he shall require the surveyor under intimation to the insured, to furnish an
additional report on certain specific issues as may be required by the insurer. Such a

lxxxv | P a g e
request may be made by the insurer within 15 days of the receipt of the original
survey report.

Provided that the facility of calling for an additional report by the insurer shall not be
resorted to more than once in the case of a claim.

(4) The surveyor on receipt of this communication shall furnish an additional report
within three weeks of the date of receipt of communication from the insurer.

(5) On receipt of the survey report or the additional survey report, as the case may be, an
insurer shall within a period of 30 days offer a settlement of the claim to the insured. If
the insurer, for any reasons to be recorded in writing and communicated to the insured,
decides to reject a claim under the policy, it shall do so within a period of 30 days from
the receipt of the survey report or the additional survey report, as the case may be.

(6) Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the

insured, the payment of the amount due shall be made within 7 days from the date of
acceptance of the offer by the insured. In the cases of delay in the payment, the insurer
shall be liable to pay interest at a rate which is 2% above the bank rate prevalent at the
beginning of the financial year in which the claim is reviewed by it.

10. Policyholders’ Servicing

(1) An insurer carrying on life or general business, as the case may be, shall at all times,
respond within 10 days of the receipt of any communication from its policyholders in all
matters, such as:
(a) recording change of address;
(b) noting a new nomination or change of nomination under a policy;
(c) noting an assignment on the policy;
(d) providing information on the current status of a policy indicating matters, such
as, accrued bonus, surrender value and entitlement to a loan;
(e) processing papers and disbursal of a loan on security of policy;
(f) issuance of duplicate policy;
(g) issuance of an endorsement under the policy; noting a change of interest or
sum assured or perils insured, financial interest of a bank and other interests;
and
(h) guidance on the procedure for registering a claim and early settlement thereof.

11. General

(1) The requirements of disclosure of “material information” regarding a proposal or

policy apply, under these regulations, both to the insurer and the insured.

(2) The policyholder shall assist the insurer, if the latter so requires, in the prosecution of
a proceeding or in the matter of recovery of claims which the insurer has against third
parties.

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(3) The policyholder shall furnish all information that is sought from him by the
insurer and also any other information which the insurer considers as having a
bearing on the risk to enable the latter to assess properly the risk sought to be covered by
a policy.

(4) Any breaches of the obligations cast on an insurer or insurance agent or insurance
intermediary in terms of these regulations may enable the Authority to initiate action
against each or all of them, jointly or severally, under the Act and/or the Insurance
Regulatory and Development Authority Act, 1999.

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