project on hdfc standard life

HDFC STANDARD LIFE

INSURANCE

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CHAPTER ONE:

INTRODUCTION

1) INTRODUCTION:P a g e | 2

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. 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.

The company launched national operations in December 2001. Today, we

have over 8000 employees across over 12 states in the country and a national

footprint of distributors trained to provide quality financial advice and

insurance solutions to the large Indian customer base.

As we further expand our presence across the country with a large network

of distributors, we continue to provide innovative product and service

offerings to cater to specific insurance and wealth management needs of

customers. Whatever your plans in life, you can be confident that HDFC

Standard life will offer the right financial solutions to help you achieve

them.

1.1 Meaning and Definition of Life Insurance

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1.1.1 Meaning

Life insurance covers the risk that exists in one’s life. These risks may arise

due to accident, illness or natural causes like fire, flood, earthquake. Life

insurance aims to protect the family of the life insured so that they may not

suffer from financial consequences on the death or disability of the insured

person. Life insurance needs to be a mandatory part of every person’s life.

Life insurance is a contract that pledges payment of an amount to the person

assured (or his nominee) on the happening of the event insured against.

Life insurance is a very popular form of insurance. It ensures the life of an

individual and gives financial protection to the members of the family of the

policyholder.

It is different from other types of insurance in various ways. It not only gives

protection but it is a method of compulsory saving. This insurance provides

protection to the family at the premature death or gives adequate amount at

the old age when the earning capacities are reduced.

The contract is valid for payment of the insured amount during:

The date of maturity, or

Specified dates at periodic intervals, or

Unfortunate death, if it occurs earlier.

Life insurance covers the risk that exists in one’s life. These risks may

arise due to accident, illness or natural causes like fire, flood,

earthquake. Life insurance aims to protect the family of the life

insured so that they may not suffer from financial consequences on

the death or disability of the insured person. Life insurance needs to

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be a mandatory part of every person’s life. Life insurance is a contract

that pledges payment of an amount to the person assured (or his

nominee) on the happening of the event insured against.

Life insurance is a very popular form of insurance. It ensures the life

of an individual and gives financial protection to the members of the

family of the policyholder.

1.1.2 Definition

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Life Insurance may be defined as a type of Insurance Contract whereby the

insurer, in consideration of the premium paid in periodical instalments

undertakes to pay an annuity or a certain sum of money either on the death

of the insured or on the expiry of a certain number of years.

Life insurance or life assurance is a contract between the policy owner and

the insurer, where the insurer agrees to pay a designated beneficiary a sum

of money upon the occurrence of the insured individual's or individuals'

death or other event, such as terminal illness or critical illness. In return, the

policy owner agrees to pay a stipulated amount called a premium at regular

intervals or in lump sums.

1.2 Features of Life Insurance Contract

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(1) Nature of General Contract

Since life insurance contract is a sort of contract it is governed by the Indian

Contract Act. According to Section 10 of Indian Contract Act, 1872 a valid

contract must have the following essentialities:

(a) Offer and acceptance.

(b) Legal considerations.

(c) Competent to make contract.

(d) Free consent.

(e) Legal object.

(2) Insurable Interest

The insured must have an insurable interest in the life to be insured for a

valid contract.

Insurable Interest in life insurance may be divided into two categories:

(a) Insurable interest in own life, and

(b) Insurable Interest in other’s life.

The latter can be sub-divided into two classes:

Where proof is not required, and

Where proof is required. Again this insurable interest can be divided

into two classes

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insurable interest arising due to business relationship, and

Insurable interest in family relation.

(3) Utmost Good Faith

The life insurance requires that the principle of utmost good faith should be

preserved by both the parties. The principle of utmost good faith says that

both the parties, proposer (insured) and insurer must be of the same mind at

the time of contract because only then the risk may be correctly ascertained.

They must make full and true disclosure of the facts material to risk.

(4) Warranties

Warranties are integral part of contract. i.e. they form the bases of the

contract between the proposer and the insurer and if any statement whether

material or non – material, is untrue the contract shall be null and void and

the premium paid by him may be forfeited by the insurer.

(5) Proximate Cause

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The efficient or effective cause that causes loss is called ‘PROXIMATE

CAUSE’. It is the real and actual cause of loss. If the cause of loss is

insured, the insurer will pay.

In ‘LIFE INSURANCE’ the doctrine of CAUSA PROXIMA is not applied

because the insurer is bound to pay the amount of insurance whatever may

be the reason of death. It may be natural or unnatural. Hence this principle is

not of much practical importance with life insurance.

(6) Assignment and Nomination

Life insurance policy can be assigned freely for a legal consideration or love

and affection. Notice of assignment must be given to the insurer who will

acknowledge the assignment.

The holder of life insurance policy on his own may either at the time of

affecting the policy or at any subsequent time before the policy matures,

nominate person or persons to whom the money secured by the policy shall

be paid in event of his death.

Nomination can be cancelled before the maturity, but a notice should be

served to this effect.

(7) Return of Premium

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In the ordinary course premium once paid cannot be refunded. But in the

following cases the premium paid are returnable.

On account of misrepresentation or breach of warranty, the insured, in the

absence of any express condition to the contrary, can claim the return of

premium paid.

But where the insured is guilty of fraud in obtaining a policy, he will fail in

his claim to the sum assured.

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1.3 HISTORY OF HDFC STANDARD LIFE

INSURANCE COMPANY LTD.

HDFC Standard Life Insurance Company Ltd. is a, one of India's leading

multi-business corporations and HDFC Life International, the international

arm of HDFC Life, a Fortune 100 company. 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.

Incorporated in 2000, HDFC Standard Life started commercial operation in

April 2001. In line with its values of financial responsibility, HDFC

Standard Life has adopted prudent financial practices to ensure safety of

policyholder's funds. The Company's paid up capital as on 30th April, 2009

Is Rs 1782 core HDFC Standard Life has multi-channel distribution spread

across the country. Agency distribution is the primary channel

complemented by partnership distribution, bancassurance, alliance

marketing and dedicated distribution for emerging markets. The Company

places a lot of emphasis on its selection process for agent advisors, which

comprises four stages - screening, psychometric test, career seminar and

final interview. The agent advisors are trained in-house to ensure optimal

control on quality of training. The company currently has around 75,832

agent advisors at 715 offices across 389 cities. The company also has 36

referral tie-ups with banks, 24 partnership distribution and alliance

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marketing relationships each. HDFC Standard Life has put in place a unique

hub and spoke model of distribution to deepen our rural penetration. This is

the first time such a model has been put in place for rural marketing of

insurance. The company has 139 offices dedicated to rural areas.

HDFC Standard Life offers a suite of flexible products. It now has 39

products covering both life and health insurance and 8 riders that can be

customized to over 800 combinations enabling customers to choose the

policy that best fits their need. Besides this, the company offers 6 products

and 7 riders in group insurance business.

HDFC Life Insurance Company is one of the largest insurance companies in

the United States and the world. Ranked as a Fortune 100 company, HDFC

Life has provided its policyholders with financial security and investment

opportunities since 1841. As a mutual company, HDFC Life is owned solely

by its policyholders, to whom it pays annual dividends and provides long-

term coverage on a wide range of insurance products. The company

prospered during its first 100 years of operations, as the growth of the

nation's population and economy created an expanding market for life

insurance. Since World War II HDFC Life has maintained its competitive

edge by diversification.

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1.4 VISION AND MISSION

1) Financial Expertise

As a joint venture of leading financial services groups, HDFC Standard Life

has the financial expertise required to manage your long-term investments

safely and efficiently.

2) Range of Solutions

We have a range of individual and group solutions, which can be easily

customized to specific needs. Our group solutions have been designed to

offer you complete flexibility combined with a low charging structure.

3) Track Record So Far

Our gross premium income, for the year ending March 31, 2009 stood at Rs.

5,564.69 cores.

As on March 31, 2009, the company has more than 27 lakh polices in force.

3) Strong promoter

HDFC Standard Life is a strong, financially secure business supported by

two strong and secure promoters – HDFC Ltd and Standard Life. HDFC

Ltd’s excellent brand strength emerges from its unrelenting focus on

corporate governance, high Standards of ethics and clarity of vision.

Standard Life is a strong, financially secure business and a market leader in

the UK Life & Pensions sector.

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4) Investment Philosophy

We follow a conservative investment management philosophy to

ensure that our customer’s money is looked after well. The investment

policies and actions are regularly monitored by a formal Investment

Committee comprising non-executive directors and the Principal Officer &

Executive Director.

As a life insurance company, we understand that customers have invested

their savings with us for the long term, with specific objectives in mind.

Thus, our investment focus is based on the primary objective of protecting

and generating good, consistent, and stable investment returns to match the

investor’s long-term objective and return expectations, irrespective of the

market condition.

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1.5 INDUSTRY GROWTH PROSPECTS:

THE YOUTHFUL AGE PYRAMID – 2005

THE EXPECTED AGE PYRAMID - 2030

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CHAPTER TWO:

INSURANCE

REGULATORY AND

DEVELOPMENT

AUTHORITY (IRDA)

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INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITY (IRDA):-

Reforms in the Insurance sector were initiated with the passes of the IRDA

Bill in Parliament in December 1999. The IRDA since its incorporation as a

statutory body in April 2000 has fastidiously such to its schedule of framing

regulations and registering the private sector insurance companies.

The other decision taken simultaneously to provide the supporting systems

to the insurance sector and in particular the life insurance companies was the

launch of the IRDA online service for issue and renewal of licenses to

agents.

Section 14 of IRDA Act, 1999 lays down the duties, powers and

functions of IRDA..

(1) 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.

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(2) 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;

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

(f) promoting and regulating professional organisations 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 organisations 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

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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 organisations referred to

in clause

(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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CHAPTER THREE:

TYPES OF

INSURANCE PLANS

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3. TYPES OF LIFE INSURANCE PLAN

WHY DO WE NEED PROTECTION PLANS?

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 incase

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.

For instance, consider the example of Amit who is a healthy 25 year old guy

with a income of Rs. 1,00,000/- per annum. Let's assume his income

increases at a rate of 10% per annum, while the inflation rate is around 4%;

this is how his income chart will look like, until he retires at the age of 60

years. At 50 years of age, Amit’s real income would have been around Rs.

10, 00,000/- per annum. However, in case of Amit’s unfortunate demise at

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an early age of 42 years, the loss of income to his family would be nearly

Rs. 5,00,000/- per annum.

However, with a Protection Plan, a mere sum of Rs. 2,280/- annually

(exclusive of service tax & educational cess) can help Amit provide a

financial cushion of up to Rs. 10, 00,000/- for his family over a period of 25

years.

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1. HDFC Term Assurance Plan

This plan is designed to help secure your family’s financial needs in case of

uncertainties. The plan does this by providing a lump sum to the family of

the life assured in case of death or critical illness (if option is chosen) of the

life assured during the term of the contract. One can choose the lump sum

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

of one’s death. This helps your family to maintain their financial

independence, even when you are not around.

Features

2. HDFC Loan Cover Term Assurance Plan

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This plan aims to protect your family from your loan liabilities in case of

your unfortunate demise within the policy term. It provides the beneficiary

with a lump sum amount, which is a decreasing percentage of the initial Sum

Assured. This means that as the outstanding loan decreases as per the loan

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

schedule.

Features

3. HDFC Home Loan Protection Plan

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This plan aims to protect your family from your loan liabilities in case of

your unfortunate demise within the policy term. It ensures that your family

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

are not around to repay the outstanding monthly installments on your

housing loan. This provides you with the comfort of knowing that in your

absence, a sum of money will be available towards repaying your housing

loan, making sure that your family will be secure in your family home.

Features

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1. HDFC Children’s Plan

As a parent, your priority is your child’s future and being able to meet your

child’s dreams and aspirations. With our HDFC Children’s Plan, you can

start building your savings today and ensure a bright future for your child.

This ‘With Profits’ plan is designed to secure your child’s future by giving

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

your unfortunate demise, early into the policy term.

Features

2. HDFC YoungStar Super

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As a parent, your priority is to meet your children’s future and being able to

meet your child’s dreams and aspirations. With our HDFC YoungStar Super,

you can start building your savings today and ensure a bright future for your

child. This Plan provides valuable protection to your child in case you are

not around and gives you an outstanding investment opportunity to HDFC

imise your savings by providing you a choice of thoroughly researched and

selected investments. This plan also gives Bumper Addition to the fund

value at Maturity.

Features

3. HDFC YoungStar Super Suvidha

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As a parent, your priority is your child’s future and being able to meet your

child’s dreams and aspirations. With our HDFC YoungStar Super Suvidha,

you can start building your savings today and ensure a bright future for your

child. It is a convenient plan, which saves you from the need of going for

Medicals. This Unit Linked Plan provides valuable protection to your child

in case you are not around and gives you with an outstanding investment

opportunity to HDFC imise your savings by providing you a choice of

thoroughly researched and selected investments. This plan also gives

Bumper Addition to the fund value at Maturity.

Features

4. HDFC YoungStar Supreme Suvidha

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There is no bigger joy than being able to fulfill your child's dream. With

HDFC YoungStar Supreme Suvidha you can fulfill your child’s immediate

and future needs. So tomorrow when you child needs your support you don’t

have to depend on anyone else. This Plan provides valuable protection to

your child in case you are not around and gives you an outstanding

investment opportunity to HDFC imise your savings by providing you a

choice of thoroughly researched and selected investments. This plan also

gives Bumper Addition to the fund value at Maturity.

Features

5. HDFC SL YoungStar Champion Suvidha

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There is no bigger joy than being able to fulfill your child's dream; that too

on your own. With HDFC SL YoungStar Champion Suvidha you can fulfill

your child’s immediate and future needs. So tomorrow when you child needs

your support you don’t have to depend on anyone else. This is a convenient

plan, which saves you from the need of going for Medicals. This Unit

Linked Plan gives you with an outstanding investment opportunity to HDFC

imise your savings by providing you a choice of thoroughly researched and

selected investments. This plan also gives Bumper Addition to the fund

value at Maturity.

Features

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1. HDFC Personal Pension Plan

Today, you are busy climbing the ladder of success and realizing your

dreams. Today, time is with you. Just take a moment and think. Will you be

able to continue at the same pace? Will your income be the same forever?

Will you be able to live life on your own terms even after you retire? The

HDFC Personal Pension Plan is a ‘With Profits’ insurance policy that is

designed to provide a post-retirement income for life with the freedom to

choose your retirement date.

Features

2. HDFC Pension Super

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dreams. Today, time is with you. Just take a moment and think. Will your

income be the same forever? Will you be able to live life on your own terms

even after you retire? The HDFC Pension Super is Unit Linked plan,


choose your retirement date. This plan gives you with an outstanding



gives Bumper Addition to the fund value at vesting.

Features

3. HDFC Pension Supreme

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even after you retire? The HDFC Pension Supreme is Unit Linked plan,






Features

4. HDFC SL Pension Champion

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even after you retire? The HDFC SL Pension Champion is Unit Linked plan,






Features

5. HDFC SL Unit Linked Pension HDFC imiser II

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Ideally, just how spending comes to you, so must saving and investing. You

are able to finance your expenses and take care of your expenses in present

times. However, to ensure that you are able to maintain the same Standard of

living post retirement, you need to make the right kind of investment today.

HDFC SL Unit Linked Pension HDFC imiser II is a unique Single

Premium unit linked plan, designed to provide a post-retirement income for

life with the freedom to HDFC imise your investment returns. This plan also

gives Bumper Addition* of 5% of initial single premium at vesting.

Features

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6. HDFC Endowment Super

You have always given your family the very best. And there is no reason

why they should not get the best in future too. With rising costs, ensuring the

best got your family will need some financial planning. With our HDFC

Endowment Super, you can start building your savings today and ensure that

your family remains financially independent, even when you are not around.

This Unit Linked Plan also gives you with an outstanding investment


thoroughly researched and selected investments.

Features

7. HDFC Endowment Super

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You have always given your family the very best. And there is no reason

why they should not get the best in future too. With rising costs, ensuring the

best got your family will need some financial planning. With our HDFC

Endowment Super, you can start building your savings today and ensure that

your family remains financially independent, even when you are not around.

This Unit Linked Plan also gives you with an outstanding investment



Features

8. HDFC SIMPILIFE

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You have always believed in living life on your own terms. So why let the

changing realities of everyday life overwhelm you and make your

aspirations take a back seat? With our HDFC SimpliLife Plan, you can plan

now to HDFC imise your savings and secure your and your family’s future.

It is a convenient plan, which saves you from the need of going for

Medicals. This Unit Linked Plan gives you with an outstanding investment



Features

9. HDFC Wealth Builder

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HDFC Wealth Builder is an exclusive plan crafted for elite achievers like

you. An investment cum insurance plan that will actively help in building

your wealth and give you twin advantage of exclusive funds (actively

managed for you) along with choice of limited premium payment term.

This plan provides the financial protection to your loved ones and builds up

your wealth effortlessly. This plan also gives Bumper Addition to the fund

value at Maturity.

Features

10. HDFC Money Back Plan

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You have always believed in living life on your own terms. So why let the

changing realities of everyday life overwhelm you and make your

aspirations take a back seat? With our HDFC Money Back Plan, you can

plan now to ensure that you have the necessary funds to have the necessary

funds to secure your long-term as well as short-term financial goals. This

‘With Profits’ plan gives you a proportion of the basis Sum Assured as

Cash lump sums at regular 5-year intervals within the policy term.

Features

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1. HDFC Critical Care Plan

Critical Illness can strike anyone. Today with advancement in medical

science it is possible to survive a critical illness. Expenses on survival with a

critical illness can be very high. HDFC Critical care plan provides for a

lump sum payment on survival post diagnosis of a critical illness, so that in

the event a critical illness strikes, you don’t have to dig into those precious

savings of yours.

Features

2. HDFC SurgiCare Plan

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In the fast paced lives that we lead, medical contingencies may arrive at our

doorstep uninvited.Surgery costs form a substantial portion of health care

expenditure and needs to be provided for. Health issues can get compounded

if left unattended and may require a surgery. Plus, the ever increasing costs

of surgical procedures are sure to burn a hole in our pockets.

HDFC SurgiCare Plan provides you with timely support in case you have to

undergo a major surgery and hospitalisation, as the case maybe, ensuring

your financial independence at all times.

Features

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CHAPTER FOUR:

FINANCIAL

ANALYSIS

(PAST 5 YEARS)

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4. FINANCIAL ANAYISIS

4.1) ANALYSIS OF FINANCIAL STATEMENT

Financial statement analysis is a comprehensive analysis of all three

financial statements: balance sheet, income statement, and cash flow

statement. Financial statements provide useful information. However, one

has to meticulously look for the right information from the right data. One

can undertake the financial statement analysis from different stakeholders’

perspective: creditors, bankers, credit rating agencies, existing shareholders,

potential shareholders, internal management, and employees too.

Financial statement helps in understanding the performance of the

organization. The performance of an organization can be explained on the

basis of the four important aspects of the business:

a) Liquidity: Liquidity shows the ability of the business to service the short

term obligation.

b) Solvency: Solvency shows the ability of the business to meet the long

term obligation.

c) Efficiency: Efficiency shows the ability of the business to use the

resources of the business.

d) Profitability: Profitability shows the ability to the business to generate

and distribute profit.

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4.2) Intra firm comparison of HDFC:

1. Analysis of Short – Term Liquidity:

a. Current ratio = Total Current Assets / Total Current Liabilities

b. Quick ratio = quick current assets / quick current liabilities

Table showing: current ratio and quick ratio of HDFC standard life

Insurance Company Ltd. for the year 2008 and 2009.

Year 2009 (RS.’000) 2008 (RS.’000)

Current assets 9,643,629 8,575,727

Current liabilities 9,029,038 6,251,168

Current ratio and quick

ratio

1.07% 1.37%

Inference:

The above table is showing the details regarding the current ratio and quick

ratio of hdfc standard life insurance company ltd. The standard current ratio

is 2:1, and quick ratio is 1:1, but the company has got only 1.37 and 1.07

both the year the ratio is not satisfactory. But compare to year-2009 ratio

year-2008 ratio was good.

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4.3) Capital Structure and Long -Term Solvency Ratios:

Debt equity ratio =long Term Debt / shareholders fund

Table showing: debt equity ratios of hdfc standard life in the year 2008 and

2009.

Inference:

There is continues increase in Share holders’ Funds and also in an outsider

funds from the year 2008 to 2009. Outsider’s funds are increased more than

the shareholders fund. Hence the outsider’s funds has been increased year by

year, it shows the larger outsiders funds are available to the company. Since

this is quite satisfactory and in the same way it is not good to the

shareholders point of view and also to the company.

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Years 2009 (RS.’000) 2008 (RS.’000)

Outsiders Funds 97,578,470 84,012,076

Share Holders Fund 18,433,462 13,263,132

Debt Equity Ratio 5.29% 6.33%

4.4) GRAPH SHOWING THE CURRENT RATIOS OF

HDFC STANDARD LIFE INSURANCE COMPANY

LTD. FROM THE YEAR 2005 TO 2009.

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2005 2006 2007 2008 2009

P

E

RC

ENTAGE

4.5) TABLE SHOWING THE QUICK RATIOS OF HDFC

STANDARD LIFE INSURANCE COMPANY LTD.:-

YEARS 2009

(Rs.’000)

2008

(Rs.’000)

2007

(Rs.’000)

2006

(Rs.’000)

2005

(Rs.’000)

Liquid

Assets9,643,629 8,575,727 5,325,536 3,869,728 1,143,024

Liquid

liabilities

9,029,038 6,251,168 3,905,497 2,687,296 1,090,355

Acid test

ratio1.07% 1.37% 1.36% 1.44% 1.05%

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4.6) Profitability Ratios:

a. Gross profit ratio = gross profit / sales*100

Table showing: the gross profit ratio of HDFC Standard Life Insurance

Company Ltd.

Year 2009 (Rs.’000) 2008 (Rs.’000)

Gross profit (5,029,631) (2,435,094)

Sales 55,183,763 48,176,166

Gross profit ratio -0.09% -0.05%

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4.7) The Debt Equity ratios of HDFC Standard Life Insurance

Company Ltd. from the year 2005 to 2009.

Years 2009

(RS.’000)

2008

(RS.’000)

2007

(RS.’000)

2006

(RS.’000)

2005

(RS.’000)

Outsiders

Funds

97,578,470 84,012,076 45,999,541 23,633,655 8,470,669

Share

Holders

Fund

18,433,462 13,263,132 8,360,441 6,331,725 3,194,450

Debt

Equity

Ratio5.29% 6.33% 5.50% 3.73% 2.65%

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4.8) The Gross Profit ratios of HDFC Standard Life Insurance company.ltd from the year 2005-2009.

Gross profit ratio in percentageYEARS

2005 2006 2007 2008 2009

-0.14

-0.12

-0.1

-0.08

-0.06

-0.04

-0.02

0

4.9) Table showing Net Profit ratio of HDFC standard life

from the year 2005 to 2009

P a g e | 52

PERCENTAGE

Year 2009

(RS.’000)

2008

(RS.’000)

2007

(RS.’000)

2006

(RS.’000)

2005

(RS.’000)

Net profit

(11,913

,122)

(6,883,49

1)

(4,421,36

4)

(3,165,75

3)

(1,878,181)

Sales 55,183,763 48,176,166 28,226,248 15,469,501 6,866,346

Net profit

ratio

-0.22% -0.14% -0.16% -0.20% -0.27%

4.10) SUGGESTIONS

P a g e | 53

a. It can try to create awareness about this company through some

programmes.

b. There may be proper and immediate response in case of any queries from

customers.

c. It can concentrate to increase its sales revenue as finance is life blood of

any business.

d. It is able try to increase its profits through using better portfolios.

e. There can be an outstanding after sales service which is one of the

important factors.

f. There may be more effective response in case of any incidents/events.

g. Feedback information can be inculcated.

h. It is able to concentrate on decreasing other expenses and it has to spend

the expenses which are really required to the development of the

company.

i. Proper management is to be there and also it should supervise the

activities of the company very well.

j. It needs to be aware of its competitors to overcome from the competition

and to get more market share.

P a g e | 54

4.11) Balance sheet of HDFC STANDARD LIFE

INSURANCE COMPANY LTD. as at March 31 for five

years.

P a g e | 55

Particulars Schedule

2009 (Rs.‘000)

2008 (Rs.‘000)

2007 (Rs.‘000)

2006 (Rs.‘000)

2005 (Rs.‘000)

SOURCES OF FUNDSSHAREHOLDERS’ FUNDS:Share Capital Share application money received pending allotment of shares Reserve and Surplus Credit / [Debit] Fair Value Change Account

5

6

17,958,180

-

552,892

(77,610)

12,706,359

-

552,892

3,881

8,007,148

287,391

65,902

-

6,192,718

-

65,902

73,105

3,190,898

-

-

3,552

Sub-Total 18,433,462

13,263,132

8,360,441

6,331,725

3,194,450

BORROWINGS

POLICYHOLDERS’ FUNDS:Credit / [Debit]

Fair Value Change AccountPolicy Liabilities

Insurance

7 -

(296,885)

29,092,419-

84,085,08

-

193,745

24,366,747-

56,317,97

-

91,247

17,391,531-

25,934,2

-

209,569

11,487,996-

9,732,78

-

174,980

6,377,397-

1,918,292

P a g e | 56

ReservesProvision for

Linked liabilitiesAdd: Fair value

change

3

(15,302,147)

6

3,133,608

64

2,582,499

1

2,203,309

-

Total Provision for Linked Liabilities

68,782,936

59,451,584

28,516,763

11,936,090

-

Sub-Total 97,578,470

84,012,076

45,999,541

23,633,655

8,470,669

Funds for Future AppropriationsFunds for future appropriation - Provision for

lapsed policies unlikely to be

revivedSurplus

Allocated to Shareholders

586,395

531,970

-

-

246,951

-

-

59,485

-

-

25,516

-

-

-

-

TOTAL 117,130,297

97,522,159

54,419,467

29,990,896

11,665,119

APPLICATION OF FUNDS:INVESTMENTSShareholders’ Policyholders’ Assets held to cover Linked Liabilities

88A8B910

4,291,59730,050,097 68,782,93630,248

4,213,06423,299,04359,451,58418,618

1,529,74317,782,866 28,516,763

1,380,91011,695,01011,936,090

984,2536,087,9161,918,29211,984731,824

P a g e | 57

LOANS FIXED ASSETS CURRENT ASSETSCash and bank balances Advances and Other Assets

11

12

1,447,706

4,108,660

5,534,969

1,331,800

4,493,238

4,082,489

12,638 736,054

3,363,556

1,961,980

29,356601,345

2,879,622

990,106

733,529

409,495

Sub-total (A) 9,643,629 8,575,727 5,325,536

3,869,728

1,143,024

CURRENT LIABILITIES PROVISIONS

13

14

8,820,225

208,813

6,129,149

122,019

3,874,652

30,845

2,658,567

28,729

1,069,635

20,720

Sub-Total (B) 9,029,038 6,251,168 3,905,497

2,687,296

1,090,355

NET CURRENT

ASSETS (C) = (A - B)

614,591 2,324,559 1,420,039

1,182,432

52,669

MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT (Shareholders’

15 -

11,913,122

-

6,883,491

-

4,421,364

-

3,165,753

-

1,878,181

P a g e | 58

account) TOTAL 117,130,2

9797,522,15

954,419,4

6729,990,8

9611,665,11

9CONTINGENT LIABILITIES

1. Partly paid-up investments

2. Claims, other than against policies, not

acknowledged as debts by the

company

3. Underwriting commitments

outstanding (in respect of share and securities)4. Guarantees given by or on behalf of the

Company

5. Statutory demands /

liabilities in dispute, not provided for

6.Reinsurance obligations to the extent not

provided for in the accounts

7.Others

-

-

-

-

1,465,718

-

-

-

-

-

-

262,091

-

-

-

-

-

-

309,494

-

-

-

-

-

-

119,829

-

-

-

-

-

-

-

-

-

Total 1,465,718 262,091 309,494 119,829 -

P a g e | 59

4.12) Profit & Loss Account for year ended March 31, from

2005 to 2009

Shareholders’ Account (Non-technical Account)

Particulars schedu

le

2009

(RS.’00

0)

2008

(RS.’00

0)

2007

(RS.’00

0)

2006

(RS.’00

0)

2005

(RS.’00

0)

P a g e | 60

Amounts

transferred from

the Policyholders

Account (Technical

Account)

Income from

Investments

(a) Interest,

Dividends &

Rent - Gross

(b)Profit on sale

/ redemption

of

investments

(c) (Loss on sale

/ redemption

of

investments)

(d)Transfer /

gain on

revaluation /

change in

fair value

(e) Amortization

of

(premium)/di

scount on

794,984

302,367

13,924

(35,870

)

51,887

(2,965)

516,341

242,109

98,694

(11,142)

(21,384)

561

-

126,836

114,192

(12,470)

(23,909)

(2,375)

-

138,496

7,989

(6,933)

(6,594)

(8,926)

-

65,321

10,117

(4,043)

-

(5,156)

P a g e | 61

investments

Sub Total 329,343 308,838 202,274 124,032 66,239

Other Income 300 531 764 3,650 1587

TOTAL (A) 1,124,6

27

825,710 203,038 127,682 67,826

Expenses other

than those directly

related to the

insurance business

Bad debts written

off

Provisions (other

than taxation)

(a) For

diminution

in the value

of

Investments

(net)

(b)Provision for

doubtful

debts

3A 5,307

-

-

-

-

6,148,9

51

12,596

-

-

-

-

3,248,20

8

8,252

-

-

-

-

1,450,39

7

18,251

-

-

-

-

1,397,00

3

10,490

-

-

-

-

954,744

P a g e | 62

(c) Others

Contribution to the

Policyholders Fund

TOTAL (B) 6,154,2

58

3,260,80

4

1,458,64

9

1,415,25

4

965,234

Profit / (Loss)

before tax

Provision for

Taxation

Profit / (Loss) after

tax

APPROPRIATIO

NS

(a) Balance at

the

beginning of

the Year

(b) Interim

dividends

paid during

the Year

(c) Proposed

final

dividend

(d)Dividend

(5,029,

631)

-

(5,029,

631)

(6,883,

491)

-

-

-

-

(2,435,0

94)

-

(2,435,0

94)

(4,421,3

64)

-

-

-

(27,033)

(1,255,6

11)

-

(1,255,6

11)

(3,165,7

53)

-

-

-

-

(1,287,5

72)

-

(1,287,5

72)

(1,878,1

81)

-

-

-

-

(897,348

)

-

(897,348

)

(980,833

)

-

-

-

-

P a g e | 63

distribution

tax

(e) Transfer to

liabilities on

account of

Employee

benefits

Profit / (Loss)

carried forward

to the Balance

Sheet

(11,913

,122)

(6,883,4

91)

(4,421,3

64)

(3,165,7

53)

(1,878,1

81)

Earnings per share

- Basic

(3.28) (2.42) (1.83) (2.92) (3.38)

Earnings per share

- Diluted

(3.28) (2.42) (1.81) (2.92) (3.38)

P a g e | 64

CHAPTER FIVE:

RESEARCH AND

DESIGN

5) METHODS OF DATA COLLECTION

Primary Method

Primary data are those which are collected fresh and for the first time and

thus happen to be original in character. It is always advised to use primary

data whenever possible. They are also known as first handed data.

P a g e | 65

Following are the methods of collecting Primary Data:

(1) Interview

(2) Telephone Interview

(3) Mail Survey

(4) Questionnaire

Questionnaire is a set of questions to find out the data about the Insurance

Company’s performance, which is circulated among the people or customers

of the same Company. The customers may regard to different branches. The

customer or people based on their personal experience give answers to the

sets of questions presented to them on the basis of which we find out the

status of the company.

I have considered 50 samples to get a feedback that how many customers

have taken which kind of policies which I have mentioned in Finding.

Secondary Data

Secondary data means data that are already available. i.e. they refer to data

which have already been collected and analyzed by someone else. Such

information has not been gathered afresh specifically for any research

project.

P a g e | 66

(1) Books

Books were used to refer to the subject matter and to get extra knowledge on

the topic. Books of various authors were referred for the same purpose.

I have referred topics like Meaning, Definition and Features of Life

Insurance from Innovations in Banking and Insurance.

(2) Newspaper

(3) Website

Websites are used to get the general view about the HDFC STANDARD

Life Insurance Company’s product and its history, on the net.

Websites are also used to attract the customers as per the knowledge that I

have.

Websites were used to take general information.

www.hdfcinsurance.com

www.google.com

www.yahoo.com

P a g e | 67

http://www.google.com/

http://www.hdfcinsurance.com/

P a g e | 68

CHAPTER SIX

FINDING

FINDING

1. As per survey 35% of sample are having HDFC STANDARD Life

Insurance Company Term Policy , 30% are having Pension Plan , 25% are

having Children’s Policy and 10% has UILP Plan of HDFC STANDARD

Life Insurance Company Ltd.

P a g e | 69

2. As per survey 20% of sample are taking HDFC STANDARD Life

Insurance Company for Tax Saving and Investment , 30% are taking

Retirement and pension , 30% are taking Children’s Education &Future Plan

and 20% are taking Insurance for Family Life Security.

3. As per survey 40% of sample prefers to have Mediclaim for their family,

15% sample prefers to have Life Plan for their family, 30% sample prefers

to have Whole Life Plan for their family and 15% sample prefers to the

Pension plan.

4. As per survey 30% of sample prefers to pay their premium through Cash,

40% sample prefers to pay their premium through Cheque, 15% sample

prefers to pay their premium through Online and 15% sample prefers to pay

their premium through ECS.

5. As per survey 45% of samples prefer to pay their premium through

monthly, 40% of sample prefers to pay their premium through half-yearly

premium, and 15% of sample prefers to pay their premium through half-

yearly premium.

6. As per survey 40% of sample prefers to invest their money in growth

Fund, 30% of sample prefers to invest their money in balance Fund and 30%

sample prefers to invest their money in Traditional Fund.

As per survey 80% sample are satisfied with HDFC STANDARD Life

Insurance Company Ltd.

P a g e | 70

P a g e | 71

CHAPTER SEVEN:

SUMMARY

HDFC Standard Life Insurance is one of India’s fastest growing life

insurance companies. HDFC Standard India is joint venture between Dabur

and HDFC Standard Group who’s Association with India is form

1834.HDFC Standard vision is to be amongst India leading life insurance

with quality business model focused on sustainable growth. HDFC Standard

P a g e | 72

is also one of the first companies to insurance the contemporary unit-linked

products.

The partners of HDFC Standard life insurance are ABN AMRO Bank, The

Laxmi Vilas Bank LTD, Punjab & Sind Bank Indusland Bank, Bank of

Rajasthan.

Dabur Hold 74% stake and stake in HDFC Standard life insurance Co.

LTD, HDFC Standard life insurance company has a paid up capital Rs

1694.50Crore and it has 224 branches and close to 3000 location.

HDFC Standard life insurance company provide various plan concentrating

on individual plan like overview HDFC Standard new young scholar, HDFC

Standard new pension

Plus, HDFC Standard health plus etc and group plan like HDFC Standard

corporate life plus, Group Gratuity plan HDFC Standard group super vision

plan etc

HDFC Corporation is one of the Indies leading business groups with interest

in provide load For Housing loan, business is insurance & retail. HDFC has

been a pioneering Force in the telecom sector.

Vision of HDFC Standard Life is to be leader and preferred company for

financial protection and wealth management in India. The HDFC

P a g e | 73

Corporation is such as premises are well maintained with good infrastructure

suggestion box for payment of premium through bank.

Some of the product is sold by HDFC Standard Life are future secure

pension, life insurance, bright star plan, aspire life wealth confident, secure

confident, etc.

P a g e | 74

project on hdfc standard life

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