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Introduction
Expert Credite (Trust the one who has proved it)
We have known this truth for a long time (about 2000 years ago). It is especially important when it comes to investing money. Life insurance, being a long-term business, the money is managed over longer periods. One needs to entrust his money to a company that can be trusted not only for the protection services that it offers but also for its expertise in managing money. This has to be with reference to the time facto. Selection of a good company becomes imperative. There are a lot of benefits associated with a right selection. Benefits of selecting a right company
1.
Safety: Safety of money invested is a fundamental benefit. It means preservation of capital invested. It is all the more important considering the time scales involved in life insurance business.
2.
Value of money: Value for money is a relative concept. It means the best possible value for your money invested. It also means that these benefits come to you at the best possible costs. So its the matching of your costs with the gains.
3.
Professional money management: One of the important benefits that you get is professional money management when you select a right company. Professional money management ensures that your money is managed in the best possible manner to offer you the value for your money.
4.
Service standards: Life insurance is a service intensive industry. Especially with the advent of unit linked plans the definition of service has undergone a lot of change. Contrary to the popular perception, service begins much before even the policy is sold. Service is required starting from identification of needs to suggesting the appropriate solution and also then after sales
service. On selection of a right company you can be assured of getting these services.
5.
Consistency: As mentioned above, it is the long-term business. Minimum term of a contract starts from 10 years and continues to whole of the life! It is imperative that service standards should be consistent not only in the beginning but also for the entire term of policy. A good company knows the importance of consistency and strives to ensure the same in all of its services. These and other benefits are the strong reasons why it is very
What is their vision about the joint venture? Whats the level of expertise that they have contributed to the venture? 3. Financial Strengths of Promoters Another crucial dimension is the level of financial support or commitment that these parents have extended to their insurance venture. It certainly calls for deeper pockets to commit large funds upfront and continue to do so as and when needed. The key questions are: What are the financial strengths of respective companies? What was the initial commitment/support in the form of capital brought in? What are the important indicators/ratios? 4. Products & Flexibility Post privatization we are witnessing a lot of innovation as a result of which we have new products being introduced at a rapid rate. Companies trying to market these products aggressively have created more jargon than a common man can digest. To evaluated a company on this parameter one needs to ask few key questions like: What needs are getting satisfied? It is more important that the underlying needs are satisfied rather than the no of products marketed. Does the company have simple and sound products that would cater to different needs of individuals? The company that emphasizes need based selling (e.g. Disha) and offers flexibility to design solutions according to these needs is clearly a company to be considered. Today companies offer great flexibility in customizing solutions by way of using base products as well as riders. So the need based selling becomes the core proposition. 5. Technology orientation Technology has transformed the way we do business now a days. It has helped companies to deliver superior quality of service and that too very
quickly. It also enables companies to process volumes of business with minimum errors something very vital for life insurance business! The key question to be asked is: How the company is making use of IT for its advantage in designing and executing customer centric business processes? 6. Business Practices Life insurance is a very unique business. Business practices certainly have great impact on overall success of the company. It is well said that life insurance business begins after the policy is sold! It goes without saying that the company that has clear vision of its business is the company to be with. The key question is what are the strategies a company adopts to maximize returns for the customers? We can judge this on the basis of following points: Focused underwriting/Risk management that results in better assessment of the risk and lower claims experiences. Cost controls to save every rupee possible and utilize it to give better returns. Prudent investment to maximize returns. Respect to the Regulators A high compliance orientation. Customer friendly processes.
In addition to various points mentioned above, one major area of evaluation is the Selling practices. Key question: What are the selling practices adopted by the company? Important considerations are: a. Professionally well-trained and respectable sales force b. Need based consultative selling method rather than hard selling. c. Emphasis on ethical selling 7. Track Record
Taking a closer look at it s performance since its inception. It could mean evaluation on various parameters like: Bonuses declared, Claims settled, Business transacted, spread and so on 8. The Team After all its the team that translates vision into reality shapes a company from nothing. It would be worthwhile to take a look at the composition of team. A team of highly competent professionals can really make a difference and add real value to all the stakeholders. It would also be interesting to take a look at the efforts that company putting in to upgrade its human capital.
Concepts of Insurance
The
most
successful
and
admired
life
insurance
company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, The most obvious choice for all.
the individual is left with no other option than to deal with the event, as in most cases the happening of the event is beyond the control of the individual
also there are many people in the society who are likely to face the similar risk in the same period.
such profits made by one policyholder. More the number of policyholders who make such profits the more un-viable the insurance would become. Hence in insurance it is an established principle that even in case of overinsurance the policyholder would not be paid more than the loss suffered by him.
PRINCIPLES OF INSURANCE
We will look at the three basic principles of insurance. Principle of Indemnity Principle of Utmost Good Faith Insurable Interest
Principle of Indemnity
The Principle of Indemnity refers to the contractual provision whereby the loss sustained by an individual be mad good by the insurance company. In insurance other than life insurance of accident insurance the principle of indemnity is involved, by which one party promises to make good the loss incurred by the other. The value of life, however, is incapable of estimation and except in a limited sense cannot be made good by insurance. Hence, a life insurance contract is, not a contract of Indemnity.
and take a final decision whether to accept the risk or not. If accepted, on what terms and conditions. Misrepresentation or Non-disclosure of material facts can lead to the avoidance of contract by the insurer.
Insurable Interest
Insurable Interest refers to the pecuniary (monetary) interest, which the individual (proposer) has on the subject matter to be insured. In the life insurable interest it becomes a gambling contact. Insurable Interest is necessary for a valid contract of insurance (both life as well as non-life). In life insurance, the person who is to benefit from the proceeds of insurance must be in such a relationship to the insured as to have a real interest in the continued life of the insured. There must be a reasonable ground, either pecuniary or based on affinity, to expect some benefit or advantage from the continuance of the life of the life assured. This real interest is partly compensated for by the proceeds of the insurance when the life assured dies. Any other basis would involve an element of gambling. As we have seen earlier, Insurance is a means of sharing of the risk. All the risks cannot be insured. Only the risks, which satisfy the following criteria, can be insured. There has to be a large numbers of exposure units for the risk to be insured The loss occurred due to the risk should be definite and measurable The loss must be fortuitous The loss must not be catastrophic The losses due to the risk should be on suffered by the group of policyholders on random The risk cover should be economically viable
Limitation of Insurance
All risks cannot be insured There must be insurable interest Insurance is limited to the financial value There must be large number of similar risks It must be possible to calculate the risk of loss Losses should not be catastrophic Losses must not be too small Losses must be reasonably unexpected Losses must be accidental It must be consistent with public policy
CHORONOLOGY OF INSURANCE BUSINESS IN INDIA:In year 1998 PSU monopoly come to an end in insurance sector. Insurance regulatory authority ( IRA ) bill tabled which set terms for entry of private players.
In year 1999 IRA bill redrafted as IRDA bill , new bill proposes regulator for that bill also develop the insurance sector, IRDA readies road map for entry of private players. In year 2000 IRDA invites application form from private players and set guidelines for issue of licenses to private companies, in October 2000, HDFC Standard Life becomes the first private life insurance company to get license. Royal sundaram and Reliance got non-life insurance licenses. ICICI Prudential and HDFC Standard Life launch the first private life policies in December 2000. In year 2001, new regime for training and licensing agents were introduced, Royal Sundaram becomes first non-life insurer to sell policies. In year 2002, Banks allowed to sell insurances, advent of TPAS promises better health care. In year 2003, sale of policies through brokers allowed.
This Act was passed by Parliament in December 1999 and it received presidential assent in January 2000. This Act provides for the establishment of the Authority to protect the interest of holders of insurance policies, to regulate, promote and ensure orderly growth of insurance industry and for matters connected therewith or incidental thereto. It amended the Insurance Act, 1938, which has been noted above. It also amended the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972, thus opening up the insurance sector to private participation. Under this Act, an authority called IRDA has been established. This is a corporate body established for the purpose and objects as set out in the explanation to the title. The " Authority" replaces "Controller" under Insurance Act 1938. The first schedule amends Insurance Act 1938. It states that if "Authority" is superseded by the Central Government, the "Controller of Insurance" may be appointed till such time as " Authority" is reconstituted. Section 2 defines Indian insurance company, insurance agents, intermediaries, insurance intermediaries (including insurance brokers and re-insurance brokers), insurance consultants, surveyors and loss assessors The Authority has the power to specify the conditions for registration of insurers and the qualifications, training and code of conduct for the intermediaries/ agents.
CONSTITUTION OF THE AUTHORITY:The IRDA consists of the following members: A chairperson. Not more than 5 whole-time members. Not more than 4 part-time members.
TO BE APPOINTED BY THE CENTRAL GOVERNMENT:They should be among persons of ability, integrity and standing with experience in life insurance, general insurance, actuarial science, finance, economics, law, accountancy. administration or any other discipline, thought to be useful by the Central Government. The chairperson, members, officers and other employees of the Authority shall be public servants under the Indian Penal Code.
FUNCTIONS OF THE AUTHORITY:The following functions are mandated for the Authority: To issue certificate of registration, renew, withdraw, suspend or cancel such registration. To protect the interests of the policyholders/ insured in the matter of insurance contract with the insurance company. To specify requisite qualifications, code of conduct and training for insurance intermediaries and agents. To specify code of conduct for surveyors/ loss assessors. To promote efficiency in the conduct of insurance business. To promote and regulate professional organizations connected with the insurance and reinsurance organizations connected with the insurance and reinsurance business. To undertake inspection, conduct enquiries and investigations including audit of insurers and insurance intermediaries. To control and regulate the rates, terms and conditions to be offered by insurer To specify the form and manner for maintenance of books of accounts and the statement of accounts. To regulate investment of funds by the insurance companies.
To supervise the functioning of Tariff Advisory Committee. To specify the percentage of life and general insurance business to be undertaken in the rural or social sector.
INTRODUCTION TO THE COMPANY:The HDFC STANDARD LIFE INSURANCE COMPANY is actually a joint venture between HDFC and STANDARD LIFE.
HDFC Share holding 81.4 % STANDARD LIFE INSURANCE Share holding 18.6 %
The thought of inception of company was commenced on January 1995. The joint agreement was signed in the month of October 1998. It was officially incorporated on 14 August 2000, The certificate of registration granted on 23 October 2000. It is the first private insurance company to granted a certificate of registration. Now let us have a look at each of the joint venture company in detail. HDFC (HOUSING DEVELOPMENT FINANCIAL CORPORATION): FOUNDATION:-
FINANCIAL STRENGTHS:Asset base of more than Rs. 20,000 Corers. AAA rated for 6 consecutive years ( only company ).
OTHER STRENGTHS:-
Low average loan to value ratio. Debt adverse nature of borrowers. Steady level of prepayments. Growth in urban market / salaried class. Geographical spread.
MILESTONES OF HDFC:-
Ramakrishna bajaj national quality award in 1999. Excellence in service sector industry award in1998. One of the best Indian boards award in1997.
STANDARD LIFE:-
Coming to standard life, it was founded in 1825. Its headquarter is situated in Eden Berg, first came in to India in 1847 latter again in 1997 ( with joint venture with HDFC ) After it was retreated from India in 1987. It has a strong asset base of Rs. 595000 Crores under management with premium income of Rs. 30000 Crores. The Standard Life group originally operated only through branches or agencies of the mutual company in the United Kingdom and certain other countries. Its Canadian branch was founded in 1833 and its Irish operations in 1838. This largely remained the structure of the group until 1996, when it opened a branch in Frankfurt, Germany with the aim of exporting its UK life assurance and pensions operating model to capitalise on the opportunities presented by EC Directive 92/96/EEC (the Third Life Directive) and offer a product range in that market with features which local providers were unable to offer. In the 1990s, the group also sought to diversify its operations into areas which complemented its core life assurance and pensions business, with the intention of positioning itself as a broad range financial services provider.
THE HDFC STANDARD LIFE INSURANCE COMPANY has wide reach and has made its presence felt in many areas around the globe.
GLOBAL PRESENCE:
UNITED KINGDOM CANADA IRELAND GERMANY AUSTRIA SPAIN HONG KONG CHINA
31 Offices 11 Offices 7 Offices 1 Office 1 Sales Office 31 Offices 1 Representative office. 2 Offices
OUR VISION:
ACHIEVEMENTS SO FAR: First company in private sector to declare bonus. 5th successive year of bonus declaration. Insured over 1350000 policy holders with a sum assured of 15000 crores. Best claims experience in the industry. Winner of OUTLOOK MONEY AWARD for consecutive 2 years. Voted as Indias most respected Pvt life insurance company, BUSINESS WORLD. And STANDARD LIFE INSURANCE being the oldest in the industry it brings together 208 years of professional money management expertise. And being the most trusted brand in India ( HDFC ) its the obvious choice for all, because it has its hand in each and every part of the finance industry.
FINANCIAL CONGLOMERATE
OBJECTIVE OF HDFC SLIC:To be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like
Customer service of the highest order Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share
ORGANISATIONAL STRUCTURE
ORGANISATION STRUCTURE
THE DIAGRAMMATIC LOOK OF THE COMPANY STRUCTURE
MANAGING DIRECTOR
GENERAL MANAGER
BRANCH MANAGER
SALES REMUNERATION
SALES TRAINING REPRESENTATIVE RESIDENT MANAGER BDM CORPORATE AGENT SALES MANAGEMENT INFORMATION
TEAM OF BDM
TEAM OF CONSULTANTS
FCS
DEFINITION OF FINANCIAL CONSULTANT The foundation of law of agency is expressed in the maxim 'Qui facit alium, facit per se' i.e. one who acts through others, acts to himself. Therefore, contracts entered into through an agent and obligations arising from acts done by an agent, may be enforced in the same manner and will have the same legal consequences, as if the contracts have been entered into and the acts done by the principal himself. To this effect, some legal provisions are:
1. Section 182 of the Indian Contract Act 1982 defines the words
'Agent' and 'Principal'. "Agent": An agent is a person employed to do any act for another or to represent another in dealing with a third person. "Principal": The person for whom such act is done or who is so represented is called the 'Principal'. The essence being that the principal authorizes the agent to represent or act for him in bringing the principal in contractual relationship with a third person.
2. Section 183 of the Indian Contract Act, provides that any person
who is of the age of majority according to the law to which he is subject and who is of sound mind may be employed as an agent. Thus a person competent to enter into contract with the third person may be appointed as an agent.
3. Section 184 of the Indian Contract Act, provides that as between
the principal and the third persons, any person may become an agent but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions contained in the Act. In other words, a person who is not otherwise competent to contract can be an agent, so as to bind the principal to a third person but such person cannot be held liable either by the principal or by the third party.
4. Under Section 185 of the Indian Contract Act, no consideration is
necessary to create an agency. Suppose A authorizes his friend B, who has knowledge of the computer hardware to buy a computer for him. B accepts the responsibility. Here a valid contract of agency is created between A and B although no consideration is involved in the contract.
5. AUTHORITY OF AN AGENT
As explained above, principal is responsible for all the acts done by the Agent, but he can curtail his responsibility the extent of authority granted to the agent. This authority can be expressed or up to implied. In other words, it is by words, spoken or written. It is implied when it is to be inferred from the circumstances of the case. Some of the Insurers do not authorize their agents to collect premium (except first premium along with the proposal) or any other amount from the policyholders. But, if any agent collects such amount, remits to the insurer & gets receipts & hand over back to the policyholder, it can be termed as implied authority & it is called inferred or construed authority.
6. AGENT'S REGULATIONS
Under Section 42 of the Insurance Act,1938,The Insurance Regulatory & Development Authority (IRDA) has issued IRDA (Licensing of Insurance Agents) Regulations,2000. For Regulation, Click here. For Amendments Click Here.
For Regulations on licensing of corporate Agent, IRDA 2002. SELECTION PROCESS OF F.C. 1)Filling of agency application form. 2)Selection Test. 3)Initial screening by BDM & discussion on interest free training cum performance deposit of Rs. 1,000. 4)Interview by Branch/ Resident manager with the help of BDM. 5)Acceptance of training cum performance deposit. 6)Recommendation for IRDA training. Why they are called as F.C.? -Our representative are professional & skilled advisors who are able to recommend best solutions based upon individual customers needs. -Need for a consultant who will provide a customer centric solution in insurance is inevitable. -Given this environment we believe that the successful advisor/agent will have to assume responsibility of Certified F.C.
-Title consultant therefore reflects the image we wish to develop & advocate in market. Mandatory requirements for F.C appointment-: IRDA Mandatory- 18+ years of age / 10+2 passed. - Willing to undergo 100 hours IRDA mandatory training - Has no agency with any life insurance company. - Candidate referred should score high values & ethics & should be a match with HDFC SL values. - Ambitious, self motivated, should be able commit time & wants to make serious money. Assistance to F.C. by the company-: - Company would support them by providing required training & regular coaching. - Company also provides information in form of sales aids etc. so that you are able to provide best service to customers. - One of principal responsibility of BDM is to ensure that each F.C. is supported. Role of F.C. in HDFC SL-: - To sell the product of company in a professional & ethical manner. - To set ,monitor & achieve sales target for self. - To positively promote companys brand, its mission, aims & values. - Analyze customers financial requirements. - Recommend appropriate life insurance & pension solutions, so that the customer is able to meet his/her financial objectives in most optimum manner. - Provide support to customers on an ongoing basis.
Besides the mandatory training that financial consultant have to undergo prior to being licensed, the company has developed and implemented various training modules as part of a structured sales process. PRODUCTS OFFERED BY HDFCSLIC CONVENTIONAL PLANS: PLANS Term Assurance benefits Endowment Assurance Money Back Plan Personal Pension Plan Loan Cover Term Assurance Single Premium Whole Of Life Life insurance + savings + upto 4 optional benefits Life insurance + savings + upto 4 optional benefits Savings + Retirement planning Life insurance for loan cover Protection + 1 optional benefit Life insurance + Investments BENEFITS Life insurance at an affordable Price + up to 2 optional
UNIT LINKED PLANS: Unit linked policies make use of units. A unit in simple terms is a component/constituent. It represents a fraction of the total part. It can also be defined as a precisely specified quantity in terms of which the magnitudes of other quantities of the same kind can be stated. In financial terms a unit represents a portion of the money or fund or underlying assets. Today you will find mainly Mutual funds as well as unit
linked life insurance policies make use of units in the products that they offer. These products come with a lot of features because of the concept of unit. In this workbook lets focus on the unit-linked insurance policy of HDFC Standard Life.
Unit Link Young Star Plus The HDFC Unit Link Young Star Plus gives : An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Regular loyalty units to boost your fund value every year. Valuable protection to your child in case you are not around. Flexible benefit combinations and payment options. Flexible additional benefits options such as critical illness cover. Access your accumulated fund before maturity. You can choose your premium and the investment funds. We will then invest your premium, net of premium allocation charges in your chosen funds in the proportion you specify. At the end of the policy term, you will receive the accumulated value of your funds. In case of your unfortunate demise during the policy term , we will : Pay the sum assured you had chosen to your child. Continue your policy and continue to pay the original regular premiums you had chosen. All unit linked life insurance plans are different from traditional plans and are subject to different risk factors.
Unit Link Pension Plan The HDFC Unit Link Pension Plus gives: An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Regular loyalty units to boost your fund value every year. Provides a post retirement income for life. Gives you the flexibility to plan your retirement date.
Gives you the freedom to invest premium as per your preference. You can choose your premium and the investment funds. We will then invest your premium, net of premium allocation charges in your chosen funds in the proportion you specify. At the end of the policy term, you will receive the accumulated value of your funds, which will be used to provide your pension income. In the event of your unfortunate demise during the policy term , your spouse will receive a cash lumps sum to help him/her manage the retirement years. Unit Linked Endowment Plan The unit linked endowment plan (ULEP) is a regular premium unit linked contract. Benefits Death Benefits On Death of the life assured under the Unit Linked Endowment Plan we will pay the higher of the following two values Value of the policy fund Sum assured less any withdrawals The policy will terminate after payment of the death claim
SWOT
SWOT Analysis STRENGTH: 1)The asset base of HDFC SLI is more than 20,000 crore. 2)It has been awarded AAA rating for 6 consecutive years. 3)It has low average loan to value ratio & has a debt average ratio of borrowers. 4)It has study level of payment with high growth in urban market. 5)It has high quality of loan underwriting & is expanding over a vast geographical area. 6)Insurance business is booming in India with the good image of company .It could very easily cater the market. 7)HDFC is successful company in housing sector & has earned a lot of reputation in eyes of consumers providing them with best services. WEAKNESS: 1)Consumer unawareness about its offerings due to minimal advertising expenditure. 2)Limited range of products. 3)The network of HDFCSLIC is not so organized as that of LIC and due to its very good and skilled network and infrastructure, the LIC is far ahead of all other insurance companies. 4)It is seen that HDFCSLIC does not give sufficient liberty to its trainees while dealing with new customers. OPPURTUNITIES: 1)Insurance sector is on boom in India with more & more peoples opting for insurance, this pose a good opportunity for the company. 2)India contributes to just 0.41% of words insurance premium while it stand 2nd in terms of population. So, insurance sector holds a good opportunity. 3)There are great opportunity of insurance policy in field of life insurance & children plans.
THREATS: 1)Company can face a threat from other insurance sector company which are having a pitched battle in order to gain market share. 2)Customers buys insurance product only if he finds that company has a good reputation hence company should pay attention in image building of company.
METHODOLOGY
COMPARISON: ANALYZING DIFFERENT PLAYERS To better understand how the insurance landscape is changing, we analyzed the performance of various players by drawing upon the statistics in the IRDA (Insurance Regulatory and Development Authority) Journal (for this April and May). The growth in premiums and market share numbers was computed by spreading out single-premium collections over 10 years, which is the international norm. The following are the important conclusions: Adjusted for single premium, the industry registered 14 per cent growth in premiums, across individual and group plans. There has also been a shuffling of the pecking order among private insurance players, compared to their standings this March. Though ICICI Prudential continues to head the list, HDFC Standard Life (HDFC), which finished FY05 as the fourth largest private insurer in terms of market share, had moved up to occupy the second slot at end-May. HDFC was given a leg up by a more than two-fold jump in premium collections for individual plans and a manifold rise in premiums for group plans. HDFC'S gain has come at the expense of Birla Sun Life (BSL), which slipped three places to occupy the fifth slot. Premium collections for individual plans grew just 12 per cent and group premiums dropped nearly 100 per cent. BSL's total premium collections for the two-month period are down 22 per cent on a year-on-year basis. Bajaj Allianz's position as the third largest private sector player has remained unchanged. However, Bajaj improved its market share from 2.8 per cent at the end of March to 3.6 per cent as of end May.
A significant jump in group, non-single premium and a close-to-100-percent leap in individual non-single premiums have been the key growth drivers. Also, in Bajaj's case, the contribution from single-premium plans, at a shade over 40 per cent of total premiums collected, is the highest among its frontline peers. TATA AIG occupies the fourth slot, with a market share just marginally lower than that of Bajaj Allianz. Individual non-single premium collections played an integral role in TATA AIG, pushing it up from its No 5 position at the end of FY05. ICICI Prudential continues to consolidate its position as the country's leading private insurer. From a market share of close to 9 per cent at the end of March this year, ICICI Pro gained a further three-percentage-point share in the April-May period and established a lead of eight percentage points over its nearest private sector competitor, HDFC. Growth rates across both individual and group business were strong, at 75 per cent and 56 per cent respectively; this is noteworthy considering that it has come off a relatively higher base. Other players, too, have posted strong growth rates, though from a small base. In LIC's case, the total premium collection, reckoned after the single-premium adjustment, declined by 2 per cent on a year-onyear basis. The composition of LIC's premium income for April and May reveals a fivefold rise in individual single-premium and a drop in both individual nonsingle-premium and group single-premium. For LIC, too, single premiums make up more than half of the total premium collections. The high dependence on single premium has led to LIC's market share declining to 67 per cent, as of end May.
COMPARISION IN CONTEXT OF PREMIUM: The following graph shows the weighted new business premium income collected by private life insurers during FY2005/06, as per the statistics
released by the Insurance Regulatory and Development Authority (IRDA). Private life insurers increased their market share to 35.5% in this period, up from 26.3% in the FY2004/05.
NEW BUSINESS:
The first year premium income increased from Rs.209.33cr in the previous year to Rs486.15cr. in current year. The cumulative sum assured in respect of policies issued increased from Rs14,059.63cr.as at 31st march 2004 to Rs.30,586.44cr as at 31st march 2005. During the year company introduce the HDFC Unit Link Young Star Plan and another savings product specially designed for the bank assurance channel. With this, company now has a portfolio of 13 retail and 7 group product, covering the savings, investment, protection and retirement needs of the customer along with 5 optional rider benefits.
BONUS:
The company declared the following bonuses: REGULAR PREMIUM POLICIES:
The company declared a reversionary bonus for the financial year 1st april 2004 to 31st march 2005 at an annual rate of 2.75% of the sum assured for all regular premium HDFC Endowment assurance plans, HDFC Childrens plan, HDFC Money Back Plans and HDFC Personal Pension Plans that were still in force on march 31st 2005 and have paid all premium in full when due. Further an interim
bonus at an annual rate of 2.25% of the sum assured was declared for claims that arise in respect of the aforesaid policies before the next bonus declaration where all the premium have been paid as and when due.
CAPITAL:
During the year, the company raised the paid-up equity share capital from Rs.255.50cr to Rs.320cr.
ACHIEVEMENTS SO FAR...
HDFC Standard Life Insurance is the first private life insurance
company to be granted a license by IRDA Rated by Business world as Indias Most Respected Private Life Insurance Company in 2004 Insurance over 1350000 policyholders with a sum assured of 15000 corers. Has grown over 130% in the last year, with more than 8 lakh policyholders Has one of the widest branch networks with offices in over 100 cities servicing over 440 towns
Has the highest brand recall, close to 80% (Source: AC Neilson ORG MARG, April 2005)
FINDINGS:
Tax Consultants:- People visit a tax consultant to get tax benefits
thus they are potential customers for the purchase of insurance products as their products results in tax benefits. So tax consultants have potential to be better financial consultants, most of the tax consultants are already agents of some or the other life insurance companies rest few have a very busy schedule. Out of the 20 tax consultants targeted following were the findings: -
25% tax consultants didnt have time to work as an agent. 30% of the tax consultants didnt take cases of less than 5 lakhs, thus felt that taking agency would effect their reputation. 20%tax consultants were already working for some life insurance company. 5% tax consultants were interested in joining HDFCSLIC.
HDFCSLIC. Moreover the working of the company is also very simple and they could easily operate from their existing office without running behind the clients. 20% of the chartered accountants were not interested in joining HDFCSLIC as financial consultants though they were looking forward of getting agency of some other insurance sector. 10% of the total people visited were interested in joining HDFCSLIC but asked for time to consider. 20% of the chartered accountants were not having time for agency. 10% of the total people had problems about the person on whose name he/she would be taking the agency so they asked to give at least 2or3 months time. 28% of the total chartered accountants visited were already agents of some other companies. Amongst the 10% of the chartered accountants who are interested in joining HDFCSLIC 2% people were already having agencies of some or the other agency but were interested in joining HDFCSLIC because some of their clients are using the services of one or the other bank and are satisfied with the services asked about the insurance products of the company.
They are very little concerned with the company for which they are working. Turn out ratio of shopkeepers was very less due to 2 reasons: - Lack of time - Commission structure lured them to join this business but they were avoiding training and exam as they take it as complicated and technical.
RECOMMENDATIONS
The company should start an aggressive advertising policy because most of the people I have visited were not having good knowledge about the company insurance business. The company should try to give better incentives to their financial consultants; the incentives could be in the form of gifts because IRDA doesnt allow cash incentives. The company should start quarterly as well as monthly closing for the financial consultants. The company can appoint some permanent financial consultants, as MAX NEWYORK and ING VYASYA BANK are doing it.
CONCLUSION:
The life insurance is the emerging sector having the huge growth prospect. It is for the mutual benefits of the insurance companies and the insured. Due to the vast opportunities in this sector many private companies have entered in this field, which has resulted in immense competition among them. Thus, there is a need for every company to come with innovative and customer oriented products and policies. The people are also to be made aware about the importance of insurance in their life. The financial consultants are lifeblood of this business; hence there is need for every company to have efficient team of FCs.
Financial consultancy is a profession which bestows upon the person the status of an expert hence he can derive satisfaction from the fact that hundreds of people actually benefit from his advice, thereby generating tremendous goodwill.
1. Maximum people have little awareness about insurance industries. 2. Only handful of people have full knowledge about the insurance sector. 3. Upper and middle class society places a big role in the insurance companies. 4. A huge mass of the potential customers is a still untrapped.
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