varun kushwaha (hdfc)
DESCRIPTION
projectTRANSCRIPT
SUMMERSUMMER INTEINTE RNSHIPRNSHIP REPORTREPORT
ONON
““ RECRUITMENT OF AGENTS & ADDITIONRECRUITMENT OF AGENTS & ADDITION OF NEW POSITIVE CUSTOMERS IN HDFCOF NEW POSITIVE CUSTOMERS IN HDFC
LIFE INSURANCE CO. LTD.”LIFE INSURANCE CO. LTD.”
(In partial fulfillment of Master of Business Administration, MBA )
With special reference to
By :
VARUN KUSHWAHAROLL NO. - 1115070065
Programme with Class (MBA BATCH : 2011-2013)
Date: SEPTEMBER 17, 2012
CET- IILM- AHLCET- IILM- AHLGR.NOIDA(U.P)GR.NOIDA(U.P)
SUMMER INTERNSHIP REPORTSUMMER INTERNSHIP REPORT
ON
“RECRUITMENT &RECRUITMENT & ULIP COMPARISIONULIP COMPARISION ”(In partial fulfillment of Master of Business Administration, MBA)
With special reference to
By:VARUN KUSHWAHA
ROLL NO. - 1115070065
Programme with Class (MBA, BATCH of 2011-2013)
Date: SEPTEMBER 17, 2012
Under the guidance of
MR. ASHISH RAZDAN BRANCH MANAGER
HDFC LIFE&
MISS NEHA TOMAR SDM
2
Certificate of Approval from Faculty GuideCertificate of Approval from Faculty Guide
The following Summer Project titled “RECRUITMENT OF FCs & ADDITION OF
NEW POSITIVE CUSTOMERS & COMPARISION OF ULIP” is hereby approved as
a certified study in management carried out and presented in a manner satisfactory to
warrant its acceptance as a prerequisite for the award of MASTER OF BUISNESS
ADMISTRATION for which it has been submitted. It is understood that by this approval
the undersigned do not necessarily endorse or approve any statement made, opinion
expressed or conclusion drawn therein but approve the Summer Project Report only for the
purpose it is submitted.
Date: SEPTEMBER 17, 2012 SUBODH CHAUDHARY
3
Certificate from Summer Project GuideCertificate from Summer Project Guide
This is to certify that Mr. VARUN KUSHWAHA, a student of Masters of
Business Administration (MBA), batch of 2011-2013, CET-IILM-AHL ROLL NO.
(1115070065), has taken the Summer Internship Training at HDFC Life Insurance
Company Ltd. during June 1, 2012 to July 15, 2012. He has worked under my guidance
for the Project Title “Recruitment of Agents & addition of new positive customers and
Ulip Comparison”. He has also been guided by Ms. NEHA TOMAR , HDFC Branch :
HAUZ KHAS, New Delhi – ).
This project report is prepared in partial fulfillment of Masters of Business
Administration (MBA) to be awarded by CET-IILM-AHL.
To the best of my knowledge, this piece of work is original and no part of this report
has been submitted by the students to any other Institute/University earlier.
Date: SEPTEMBER 17, 2012 MR.ASHISH
RAZDAN
(CIRCLE MANAGER)
HDFC LIFE.
HAUZ KHAS (OPP. IIT GATE) NEW DELHI
4
ACKNOWLEDGEMENT ACKNOWLEDGEMENT
“Many talented people have contributed to the successful completion of this work & I
would like to extend a word of thanks & appreciation to all of them.”
The project title “RECRUITMENT OF AGENTS & ADDITION OF POSTIVERECRUITMENT OF AGENTS & ADDITION OF POSTIVE
CUSTOMERS & COMPARISION OF ULIPCUSTOMERS & COMPARISION OF ULIP” has been conducted by me during June 1,
2012 and July 15, 2012 at HDFC Life Insurance Company. I have completed this project,
based on the Primary research, under the guidance of Mr. ASHISH RAZDAN (BRANCH
MANAGER) and Ms. NEHA TOMAR (SALES DEVELOPMENT MANAGER).
I owe enormous intellectual depth towards my guides Mr. ASHISH RAZDAN
and Ms NEHA TOMAR, who have augmented my knowledge in the field of
“Recruitment”. They have helped me learn about the process and gave me valuable
insight into the subject matter. I am obliged to Mr. ASHISH RAZDAN ( HDFC Life
Insurance Co. Ltd ) for corporation during the internship.
I obliged to AKSHARA (Faculty Guide) for his criticism & discussion that have
constantly inspired me throughout the tuner of & for making available the guidance and
encouragement since the day of my joining throughout my work. My increased spectrum of
knowledge in this field is the result of there constant supervision and direction that has
helped me to absorb relevant and high quality information.
Last but not least, I owe everything in this life to my parents who are a content source
of inspiration & pillars of support. Above all, I would like to thanks the Almighty “God”
without whose will this project can not completed.
MANISH VERMA
5
PREFACEPREFACE
This project is designed as the final report of summer training. Main aim has been to
give an update of diversified applications of Life Insurance in various areas.
This project primarily deals with the practical aspect of Life Insurance in which we
adopted various methodologies to recruit Financial Advisor for HDFC Standard Life
Insurance.
This project also outlines the variety of products offered by HDFC Standard Life in the
market to their costumers.
And in further this project also aids the information about the emerging trends of
insurance sector now these days. The business of insurance is also affected by a number of
factors. Life Insurance is affected slightly more by certain factors than general insurance
business.
This project should prove about all the techniques & strategies adopted by insurance
sector to recruit Financial Advisor.
6
EXECUTIVE SUMMARYEXECUTIVE SUMMARY HDFC Standard Life Insurance Company Ltd. started its operation in India in 2000 and
since it is marching towards glory and has many laurels to its name. My training period in
this company has given me a lot of confidence and exposure to what corporate world is.
The project given to me is “Recruitment & Addition of Positive Customers &
Comparison of Ulip”, which is headed by my industry guide Mr. ASHISH RAZDAN
This project reflects the working culture of HDFC Life Insurance. As to how the
company uses various methods in recruiting Financial Advisors from different sectors
doctor, business man, service people, low income groups, house wives, working women,
advocate, tax consultant etc.As per regarding of various knowledge, I experienced that how
HDFC Standard Life Insurance is different amongst other companies, which makes it
no.2.The experience gained in working at HDFC Standard Life help to know that although
being no.2 in private sector it faces huge competition by LIC. LIC being a government
backed Insurance Corporation has a strong hold in the market as people still in favor LIC
over any other Private life insurance companie. Therefore it was a big challenge for taking
the agency of HDFC Standard Life Insurance as per against the agency of L.I.C. This
project also gives the details information of different product of HDFC Standard Life
Insurance.
Thus the project talks about the experience gained by us in these two months in
training of HDFC Standard Life Insurance as summer trainee.
7
REPORT CONTENTSREPORT CONTENTS
SL. NO.SL. NO. TITLETITLE PG. PG. NO.NO.
1.1. COVER PAGE CERTIFICATE OF APPROVAL FROM
FACULTY GUIDE CERTIFICATE FROM SUMMER PROJECT
GUIDE ACKNOWLEDGEMENT PREFACE EXECUTIVE SUMMARY TABLE OF CONTENT
1-23
4
567-89-11
2.2.CHAPTER-1 : OVERVIEW OF CHAPTER-1 : OVERVIEW OF INSURANCE IN INDIAINSURANCE IN INDIA
HISTORY OF INSURANCE SECTOR IN HISTORY OF INSURANCE SECTOR IN INDIAINDIA
ENTRY OF PRIVATE PLAYERSENTRY OF PRIVATE PLAYERS INDIAN INSURANCE INDUSTRY: NEW INDIAN INSURANCE INDUSTRY: NEW
AVENUES FOR GROWTH AVENUES FOR GROWTH PROJECTION IN INDIAN INSURANCE PROJECTION IN INDIAN INSURANCE
INDUSTRYINDUSTRY INSURANCE INDUSTRY REVENUE - INSURANCE INDUSTRY REVENUE -
GROWTH SECTORGROWTH SECTOR DISTRIBUTION CHANNELSDISTRIBUTION CHANNELS
12-2212-22
12-1512-15
16-1716-1717-2017-20
20-2120-21
21-2221-22
2222
3.3.CHAPTER-2 : COMPANY PROFILECHAPTER-2 : COMPANY PROFILE“HDFC STANDARD LIFE INSURANCE “HDFC STANDARD LIFE INSURANCE CO. LTD.”CO. LTD.”
HDFC (HOUSING DEVELOPMENT HDFC (HOUSING DEVELOPMENT FINANCE CORPORATION LIMITEDFINANCE CORPORATION LIMITED
BANK ASSURANCE PARTNERSBANK ASSURANCE PARTNERS HDFC GROUPHDFC GROUP STANDARD LIFESTANDARD LIFE HISTORY OF THE HISTORY OF THE THE JOINT VENTURE:THE JOINT VENTURE:
SWOT ANALYSIS : HDFC STANDARDSWOT ANALYSIS : HDFC STANDARD
LIFELIFE
PRODUCTS : PENSION, GROUP, PRODUCTS : PENSION, GROUP,
23-4023-40
23-2523-252626262627-3027-303030
3131
8
INDIVIDUALINDIVIDUAL ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE FINANCIAL YEAR 2007-2008 : FINANCIAL YEAR 2007-2008 :
HIGHLIGHTSHIGHLIGHTS
32-3832-38
39394040
4.4.CHAPTER 3 : RECRUITMENT OF CHAPTER 3 : RECRUITMENT OF AGENTS / FINANCIAL AGENTS / FINANCIAL CONSULTANTS CONSULTANTS
MEANING OF RECRUITMENT MEANING OF RECRUITMENT
VALUE OF RECRUITMENT INVALUE OF RECRUITMENT IN
INSURANCE INDUSTRYINSURANCE INDUSTRY
ABOUT INSURANCE AGENTSABOUT INSURANCE AGENTS
NATURE OF THE WORK NATURE OF THE WORK
WORKING CONDITIONSWORKING CONDITIONS
TRAINING AND OTHER QUALIFICATIONTRAINING AND OTHER QUALIFICATION
EMPLOYMENTEMPLOYMENT
JOB OUTLOOKJOB OUTLOOK
EARNINGSEARNINGS
AGENTS RECRUITMENT PROCESS INAGENTS RECRUITMENT PROCESS IN
HDFC STANDARD LIFE INSURANCE CO.HDFC STANDARD LIFE INSURANCE CO.
LTD.LTD.
METHODOLOGY THAT USED TOMETHODOLOGY THAT USED TO
RECRUITING FINANCIAL ADVISORRECRUITING FINANCIAL ADVISOR
WAYS BY WHICH I CONVINCED PEOPLEWAYS BY WHICH I CONVINCED PEOPLE
TO BECOME FINANCIAL ADVISORS OFTO BECOME FINANCIAL ADVISORS OF
HDFC STANDARD LIFEHDFC STANDARD LIFE
COMMISSION STRUCTURE:COMMISSION STRUCTURE:
SOME STATISTICS ABOUT FC’S INSOME STATISTICS ABOUT FC’S IN
HDFCSLIC : 2007-08HDFCSLIC : 2007-08
FINDINGSFINDINGS
41-6041-60
4141
4242
434343-4443-4445454545464646-4846-48484849-5249-52
52-5452-54
5454
54-5554-55
56-5756-57
9
POSITIVE FINDINGSPOSITIVE FINDINGS
NEGATIVE FINDINGS:NEGATIVE FINDINGS:
STRATEGIES USED FOR EXPANDING THESTRATEGIES USED FOR EXPANDING THE
RECRUITMENTRECRUITMENT
SUGGESTIONS AND SUGGESTIONS AND RECOMMENDATIONSRECOMMENDATIONS
5858
585858-5958-59
5959
6060
5.5.CHAPTER 4 : ULIP COMPARISIONCHAPTER 4 : ULIP COMPARISION OF HDFC STANDARD LIFE WITHOF HDFC STANDARD LIFE WITH OTHER LIFE INSURERSOTHER LIFE INSURERS
MEANING OF ULIP:MEANING OF ULIP:
FEATURES OF ULIP:FEATURES OF ULIP:
SIMILARITY OF ULIP AND MUTUALSIMILARITY OF ULIP AND MUTUAL
FUNDSFUNDS
ADVANTAGES OF ULIPS OVERADVANTAGES OF ULIPS OVER
MUTUAL FUNDSMUTUAL FUNDS
WHY DO INSURERS PREFER ULIPS?WHY DO INSURERS PREFER ULIPS?
ULIP PLANS OFFERED BY HDFCULIP PLANS OFFERED BY HDFC
STANDARD LIFESTANDARD LIFE
ULIP PERFORMANCE REPORT – PLANSULIP PERFORMANCE REPORT – PLANS WITH EXPOSURE OF UPTO 100% TOWITH EXPOSURE OF UPTO 100% TO EQUITY.EQUITY.
THE INSIGHTSTHE INSIGHTS
FEATURES/ COMPARISION OF HDFCFEATURES/ COMPARISION OF HDFC WITH OTHER INSURERSWITH OTHER INSURERS
CONCLUSION / BIBLIOGRAPHYCONCLUSION / BIBLIOGRAPHY
10
CHAPTER-1 : INTRODUCTIONCHAPTER-1 : INTRODUCTION
======================================================
OVERVIEW OF INSURANCE SECTOR IN INDIA
The insurance sector in India has come a full circle from being an
open competitive market to nationalization & back to a liberalized market again. Tracing
the developments in the Indian insurance sector reveals the 360 degree turn witnessed over
a period of almost two centuries.
A brief history of insurance sector in India
The business of Life Insurance in India in its existing from started in India in the year 1818
with the establishment of the Oriental Life Insurance Company by European in Kolkata.
Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statue to regulate the
life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the Government to collect
statistical information about both life & Non-life insurance business.
1938: Earlier legislation consolidated & amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
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1956: Even though the first legislation was enacted in 1938, it was only in 19 January
1956, that life insurance in India was completely Nationalized, through the Life Insurance
Corporation Act, 1956. There were 245 insurance companies of both Indian and foreign
origin in 1956. Nationalization was accomplished by the govt. acquisition of the
management of the companies. The Life Insurance Corporation of India was created on 1st
September, 1956, as a result & has grown to be the largest Insurance Company in India
The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850
in Calcutta by British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to Transact all classes
of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct & sound business practices.
1968: The Insurance Act amended to regulate investments & set minimum Solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with the effect from 1st January 1973.
107 insurers amalgamated & grouped into four Companies viz. the National Insurance
company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a
company which was headquartered in each of four metropolitan cities.
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Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor
R.N.Malhotra, was formed to evaluate the Indian insurance industry & recommend its
future direction.
The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector.
The reforms were aimed at “creating a more efficient and competitive financial system
suitable for the requirements of the economy keeping in mind the structural changes
currently underway and recognizing that insurance is an important part of the overall
financial system where it was necessary to address the need for similar reforms…..”
In 1994, the committee submitted the report and some of the key recommendation
included:
1) Structure
Government stake in the insurance companies to be brought down to 50%.
Government should take over the holdings of GIC & its subsidiaries can act as
independent corporations.
All the insurance companies should be given greater freedom to operate.
2) Competition
Private companies with a minimum paid up capital of Rs.1bn should be allowed to
enter the industry.
No company should deal in both Life & General Insurance through a single entity.
Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
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3) Regulatory Body
The Insurance Act should be changed.
An Insurance Regulatory body should be set up.
Controller of Insurance (Currently a part from Finance Ministry) should be made
independent.
4) Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced
from 75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company (There
current holdings to be brought down to this level over a period of time)
5) Customer Services
LIC should pay interest on delay in payments beyond 30 days.
Insurance companies must be encouraged to set up unit link pension plans.
Computerization of operations and updating of technology to be carried out in the
insurance industry.
The committee emphasized that in order to improve the customer services and increase the
coverage of the insurance industry should be opened up to competition. But at the same
time, the committee felt the need to exercise caution as any failure on the part of new
players could ruin the public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirements of Rs.100crores.
The committee felt the need to provide greater autonomy to insurance companies in order
to improve their performance & enable them to act as independent companies with
economic motives. For this purpose, it had proposed setting up an independent regulatory
body.
ENTRY OF PRIVATE PLAYERSENTRY OF PRIVATE PLAYERS
14
The introduction of private players in the industry has added to the colors in the dull
industry. The initiative taken by the private players are very competitive & have given
immense competition to the on time monopoly of the market LIC. And most of them joint
ventures between Indian groups and global insurance giants. Since the advent of the private
players in the market the industry has seen new and innovative steps taken by the players in
this sector. The new players have improved the service quality of the insurance.
The following companies are present in Life Insurance Industry in India.
Life Insurer in Public Sector :
Life Insurance Corporation of India
Name of the Private Players:
S.No. RegistrationNumber
Date of Reg.
Name of the Company
1 101 23.10.2000
2 104 15.11.2000
3 105 24.11.2000
4 107 10.01.2001
5 109 31.01.2001
6 110 12.02.2001
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7 111 30.03.2001
8 114 02.08.2001
9 116 03.08.2001
10 117 06.08.2001
INDIAN INSURANCE INDUSTRY: NEW AVENUES FOR GROWTH INDIAN INSURANCE INDUSTRY: NEW AVENUES FOR GROWTH
The insurance sector was opened up for private participation four years ago and FICCI has
doing yeoman service to the development of this sector by facilitating exchange of views
between the industry, policymakers, and the regulator through the annual conference. The
FICCI deserves appreciation for the professional manner in which these conferences are
organized and should be legitimately proud of the contribution made by it in the growth
and development of insurance sector.
It was also recognized that India has a vast potential that is waiting to be tapped and this
could be achieved when sufficient competition is generated. The insurance sector was,
therefore, opened up for private sector participation with provision for limited foreign
equity exposure. Now there is four years experience of the public and private sector
together operation in the market.
The gains are obvious for anyone who has been closely monitoring the Indian insurance
scene. The total premium collected by the insurers both life and non-life in the year 2003-
2004 is Rs.82, 415 crores (Rs.66, 288 crores in life and Rs. 16,127 crores in non-life)
compared to Rs. 44, 985 crores (Rs.34, 898 crores in life and Rs. 10,087 crores in non-life)
during the year 2000-2001.
“This represents an 83% increase in the last three years over the base year 2000-01.”
16
If we take the three year block prior to the opening of the sector, we find that the total
premium collected in 1997-98 was Rs.27, 089 crores (life: Rs.19354 crores; non-life
Rs.7735 crores) which has grown to Rs.44, 985 by 2000-2001 representing an increase of
66%. Insurance sector has obviously started growing at a rapid pace after the sector was
opened up. The Credit for enlarging the market should however goes to the private sector
as they came up with an aggressive marketing strategy to establish their presence.
The insurance penetration i.e. premia as percentage of GDP has increased from 2.32% in
2000 to 2.88% in 2003.
In non life insurance rankings in term of premium volumes has improved from 29th in
2000 to 28th in 2003 and he share of world market has increased from 0.25% to 0.29%.
While the improvements are not dramatic, we are reassured that we are moving in the right
direction. In prompt the private companies to innovate, find niche markets and expand into
the rural areas. As a result the insurance penetration would increase and the customer
would stand to gain. There is a thriving Unit Linked insurance market that has been
generated exclusively by the private sector. The annuity market has started growing.
In the case of general insurance also, the public sector has responded to the challenge by
entering into corporate agency relationships with providers of goods and services.
Till two years ago, the only mode of distribution or life insurance products was through
agents. We have today alternate channels like banc assurance, brokers, corporate agents
and direct marketing through internet
The average size of the life insurance policy before the opening up of the sector was around
Rs.50, 000/-. This has now risen to about Rs.80, 000/-. The policies sold by the private
insurers are in the range of Rs.1.1 lakhs to Rs.1.2 lakhs, way above the industry average.
As we look back at these four years, one can reasonably be proud of the strides made by the
industry. We are witnessing a demographic change in the country and the younger
generation which is exposed to the outside world demands products and services which are
17
at par with what is available in the advanced countries. This is the biggest challenge. There
is no doubt that the Indian insurance companies would face this challenge and provide
services on par with services provided in the advanced countries.
GDP GROWTH RATE- PANTALOON TO TAP INSURANCE MARKET GDP GROWTH RATE- PANTALOON TO TAP INSURANCE MARKET
Assicurazioni Generali and Pantaloon Retail (India) Limited signed an agreement for the
setting up of a life and non-life joint venture in India. This will mark the entry of the
Generali Group, ranked 22nd in the global Fortune 500 in a new market.
“Emerging countries host 86 percent of the world population, produce 23 percent of wealth,
but generate just 12.3 percent of life and 10.4 percent of non-life premiums of the world’s
insurance industry. In the emerging economies, major growth perspectives are certainly
offered by China and India.
Headquartered in Mumbai and named Future Generali, the new joint venture, in
compliance with Indian legislation, will be 26% owned by Generali with the remaining
74% owned by Future Group through its retail arm Pantaloon Retail (I) Limited and
Pantaloon Industries Limited. Once it has obtained the required authorisation from the
Insurance Regulatory and Development Authority (IRDA), Future Generali, which will
have an initial capital of INR 2 billion, will operate in the market through two separate
companies in the life and non-life areas.
The Indian Market: Strong growth expectations for the insurance sector (+15/20% p.a. over
the next 15 years). India is a rapidly expanding market as shown by the 8.3% GDP growth
in 2005. Currently the country has a population of over one billion, 54% of which is under
25. The middle class consists of approximately 92 million families (around 300 million
people) with an annual average income of at least US$ 5,000 per family.
India’s very high propensity to save (26% of GDP PIL) is expected to grow even further
with the future expansion of the economy.
The Indian insurance market was deregulated in 2000 and currently sees the presence of 14
life and 13 non-life providers. Total premium income in 2005 amounted to approximately €
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17.5 billion, 67% of which in the life segment. The Indian insurance industry has recorded
significant growth rates in the past years both the life and non-life segments. In particular,
starting 2000 the market recorded an overall annual growth rate of over 16% (18.5% in the
life segment and 10% in the non-life). The insurance market is expected to expand at an
annual growth rate of 15-20% over the next 15 years.
Generali is Europe’s third largest insurance group with a premium income of € 62.8 billion
in 2005. Its Parent Company is Assicurazioni Generali S.p.A., the leading Italian insurance
company, founded in Trieste in 1831.Characterised from the outset by a strong
international outlook and now present in 40 countries, Assicurazioni Generali is a leading
operator in Germany, France, Austria, Spain, Switzerland as well as in Israel.
PROJECTION IN INDIAN INSURANCE INDUSTRY - “TOUCH $60 BN BY 2011”PROJECTION IN INDIAN INSURANCE INDUSTRY - “TOUCH $60 BN BY 2011”
An exponential growth of 500% is projected in the insurance industry in India within the
next five years. With rural and semi urban consumers contributing for about $36 billion,
out of which $24 billion will come through life insurance while the rest will be derived
19
from non-life insurance sector, the industry will observe an exceptional spurt in the next
four years. The shoot in the industry will make the insurance industry in India a $60 billion
business by the year 2010.
Indian economy, predominantly an agrarian economy, offers enormous growth
opportunities for the insurance sector. As per experts, rural sector can become a prominent
contributor in the overall growth of the insurance industry in India, provided the needs &
occupational structure of people living in villages is understood.
For instance, various crops that are comparatively expensive need to be covered under crop
insurance schemes. Also, there are various other requirements of the farmers that need to
be looked after by the insurance companies. However, foreign investment also needs to be
encouraged for the further growth of insurance industry in India. Thus, the government has
decided to increase the FDI or foreign direct investment up to 48%. This increase will help
boost up the insurance industry in India.
In its recently published market research report titled, “Indian Insurance Industry Forecast
(2007-2009)” RNCOS has provided a complete overview of the insurance sector in India.
The report discusses the insurance sector in India in a global perspective. “The life
insurance premium in India, taken as a percentage of the GDP, is 1.8% whereas it is 5.2%
in the US”, as per the report”.
INSURANCE INDUSTRY REVENUE - GROWTH SECTORINSURANCE INDUSTRY REVENUE - GROWTH SECTOR
The insurance sector is - that with globalisation and deregulation worldwide, insurance can
reach more people. Besides, with increasing competition, it offers more innovative
products and services to individuals as well as the industry. The bad news is - that the
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business is more complex than ever. But the best news is - that the sector is opening up
several avenues for professionals.
Insurance, worldwide, is one of the most potent financial sectors. In 2000, the global
insurance industry recorded revenues of $2244.30 billion. With the rapid development of
technology, changing consumer behavior and increasing private participation & foreign
equity, insurance companies have shifted their focus to providing greater value to the
customer with a wide range of products. And this is a big challenge.
Devising specific strategies to reach out to specific segments of the market, different
countries and social strata, is one aspect of the challenge. The other more complex one
entails - designing the products, marketing them, ensuring the smooth selling of products,
collecting premiums, managing claims, managing & investing the funds and managing a
vast enterprise.
DISTRIBUTION CHANNELS:DISTRIBUTION CHANNELS:
Till date insurance agents still remain the main source through which insurance products
are sold. The concept is very well established in the country like India but still the
increasing use of other sources is imperative. It therefore makes sense to look at well
21
balanced, alternative channels of distribution. LIC has already well established and have an
extensive distribution channel and presence. New players may find it expensive and time
consuming to bring up a distribution network to such standards. Therefore they are looking
to the diverse areas of distribution channel to have an advantage. At present the distribution
channels that are available in the market are:
Direct selling
Corporate agents
Group selling
Brokers and cooperative societies
To make all these channels a success the companies have to be very alert and skillful to
know how to use these channels in a proper way.
CHAPTER-2 : COMPANY PROFILE
THE Company “HDFC STANDARD LIFE INSURANCE CO. LTDTHE Company “HDFC STANDARD LIFE INSURANCE CO. LTD.”:
22
HDFC Standard Life Insurance Company Ltd. 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 Ltd.), India's
leading housing finance institution and a Group Company of the Standard Life, UK. HDFC
as on December 31, 2007 holds 72.38 per cent of equity in the joint venture.
Let us first understand both the partners and then the newly entity formed :
HDFC (Housing Development Finance Corporation Limited).
Incorporated in 1977 as a public limited company to specialize in provision of housing
finance to individuals, co-operative societies and the corporate sector. HDFC is the first
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private sector retail housing finance company. HDFC is listed on both BSE (Bombay Stock
Exchange) and NSE (National Stock Exchange).
HDFC Strengths
Low average loan to value ratio
Debt averse nature of borrowers
Steady level of prepayments
Growth in urban market/salaried class
Geographically dispersed
Corporate strengths
Strong brand
Customer base of over 2 million
Stable and experienced management
High service standards
High quality loan portfolio
Provision for contingencies
Constant technological upgradation of systems
Capital adequacy ratio
Market Positioning
Consistent growth in retail loans of 35%-50% for the last 5 years
Increased network of offices
Liability management
Packaged home loan product with special offers from group companies
Market capitilazation in June 2002 was Rs.79 billion (US $1.6 billion).
AWARDS AND ACCOLADES ACHIEVED BY HDFC:AWARDS AND ACCOLADES ACHIEVED BY HDFC:
United Nations Scroll of Honour – 1991
24
Best presented accounts 1994-1995 and 1996-1997 (3rd place) – in the SAARC
region by the South Asian Federation of Accounts in the financial sector category.
India’s best manged company by Asia money magazine – 1995 and 1996
Most competitive Indian company by Euro money - 1997
One of the 5 best Indian Boards by Business Today – 1997
Excellence in service industry by the Indian Institute of Marketing Management and
Top Management Club (Pune) – 1998
Shield for the best presented accounts for banks and financial institutions – over 11
times (8 years in a row)
IMC Ramakrishna Bajaj National Ouality Award in the service category – 1999
CII-EXIM Bank Comendation Certificate for commitment to Total Quality
Management – 2000
Asia money declared HDFC as the second best managed company in India – 2001
Euro money identified HDFC as one ot Asia’s top 10 best managed companies in
the finance sector – 2001
Rated as the Best Non-Banking Financial Company in Asia by Institutional
Investor Research group – 2002
BANK ASSURANCE PARTNERSBANK ASSURANCE PARTNERS
25
S
HDFC GROUP HDFC GROUP
STANDARD LIFE (The Standard Life Insurance Assurance Company).
Founded in 1825.
Mutual Life Insurance Company since 1925.
Largest mutual life insurance company in Europe.
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AA2 rated by Moody’s and standard & Poor’s
Assets under management over Rs. 5,81,000 crores (£ 83.2 billion)
FINANCIAL STRENTH:FINANCIAL STRENTH:
Total assets under management - Rs.7,07,836 crores
New premium income upto 2003 - Rs.76,277 crores
Triple AAA rated by Standard and Poor’s and Moody’s
AWARDS AND ACCOLADES:
Year Awards
1990 Best mortgage service
1991 3 star service award
1992 Overall best company
1993 Overall best company
1994 Overall best company
1995 4 star service award
1996 Company of the year
1997 Company of the year
1998 Company of the year
1999 Company of the decade
EXPERIENCE IN THE INDIAN MARKET:EXPERIENCE IN THE INDIAN MARKET:
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First market entry - 1847
Innovative products and processes
Moved out of India - 1956
Last claim settled in 1997
HDFC STANDARD LIFE INSURANCE.
First Private Life Insurance Company in India.
First private company to declare five consecutive annual bonuses.
More than 165 branches by October 2005.
Lowest Claim Ratio till date in the industry
Already insured more than 6,00,000 lives.
New business premium – Rs.232.5 crore.
Growth – 76%.
Corporate agency channel, including its bancassurance business grew by
150% to Rs.50 crore.
Unit linked products – 27%.
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Company with largest distribution network among private insurers.
HISTORY OF THE HISTORY OF THE THE JOINT VENTURE:THE JOINT VENTURE:
Discussions commenced - January 1995
Joint venture agreement signed - October 1995
Joint venture agreement renewed - October 1998
Life Insurance project team established - January 2000
Company officially incorporated - 14th August 2000
First private sector Life Insurance company to be granted a certificate of
registration- 23rd October 2000
SHAREHOLDING:
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SHAREHOLDING
hdfc81%
standardlife19%
SWOT ANALYSIS : HDFC STANDARD LIFE
STRENGTHS STRENGTHS
Strong JV – both partners deep-pocketed
Quality of underwriting
Long term perspective
First mover advantage
WEAKNESSESWEAKNESSES
More focus on Traditional insurance plans,need to work on upcoming unit linked plans.
Need to redo benchmarking more frequently since industry now has several new
players
OPPURTUNITIESOPPURTUNITIES
Immense growth potential in Indian market as :
Only 1 out of 5 insurable population has insurance coverage
By 2010, 100 mn elderly to look for pension planning & annuities
325 mn labour force without social security represent huge oppurtunity
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THREATSTHREATS
Sector attractiveness is translating into too many players and increasing competitive
pressures
Unpredictable Govt. regulations ( Dynamic Environment )
To provide competitive pricing, need to work on riskier investments ( subject to govt
regulations)
SOME PRODUCTSSOME PRODUCTS:
Individual Products - HDFC Standard Life realize that not everyone has the same kind of
needs. Keeping this in mind, a varied range of Products that you can choose from to suit all
your needs. These will help secure your future as well as the future of your family.
Protection Plans - You can protect your family against the loss of your income or the
burden of a loan in the event of your unfortunate demise, disability or sickness. These
plans offer valuable peace of mind at a small price. Our Protection range includes our
Term Assurance Plan & Loan Cover Term Assurance Plan.
HDFC Term Assurance Plans - The HDFC Term Assurance Plan is an insurance
policy that is designed to help secure your family's financial needs. 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.
HDFC Loan Cover Term Assurance Plans - This Plan provides a lump sum on
the unfortunate death of the life assured within the policy term. If you are taking a
loan to buy a house for your family, this plan can help you ensure that life's
uncertainties do not affect their shelter. It is an affordable plan that has been
designed to help your family repay the outstanding loan in case of your unfortunate
death. The lump sum will be a decreasing percentage of the initial Sum Assured as
the outstanding loan decreases as per the loan schedule, the cover under the policy
also decreases as per the policy schedule.
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Investment Plans - Our Single Premium Whole of Life plan is well suited to meet your
long term investment needs. We provide you with attractive long term returns through
regular bonuses.
HDFC Single Premium Whole Of Life Plan - Whole of life plan aimed at
providing long-term real growth of your money. Single premium investment plan.
In case of your unfortunate demise during the policy term, this participating (‘With
Profits’) insurance plan will pay your family the Sum Assured and compound
Reversionary Bonuses, which are usually added annually. An additional Terminal
Bonus may be paid depending on the performance of the underlying investments.
During Guaranteed Surrender Periods you get the Sum Assured and all bonuses
vested as at the date of surrender.
Pension Plans - Our Pension Plans help you secure your financial independence
even after retirement. Our Pension range includes our Personal Pension Plan, Unit
Linked Pension, Unit Linked Pension Plus.
HDFC Personal Pension Plan - We understand your need to build a secure future
for yourself. Hence, the HDFC Personal Pension Plan is an insurance policy that is
designed to provide a post - retirement income for life with the freedom to choose
your retirement date. You can choose your premium, the Sum Assured and your
retirement date. At the end of the policy term, you will receive the Sum Assured
plus any attaching bonus, which will provide your post - retirement income. The
HDFC Personal Pension Plan is an insurance policy, which can benefit you in the
following ways:
Provides a post retirement income in your golden years.
Gives you the flexibility to plan your retirement date.
Gives you the flexibility to plan your retirement date.
The plan receives simple Reversionary Bonuses, which are usually added annually.
At the end of the term an additional Terminal Bonus may be paid depending on the
performance of the underlying investment. (See 'Bonuses' for more details).
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HDFC Unit Linked Pension - The HDFC Unit Linked Pension is an insurance
policy that is designed to provide a retirement income for life with the freedom to
maximise your investment returns. Stride into your golden years of retirement with
dignity and pride. An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments.A post retirement income for life.
Flexibility to plan your retirement date. Freedom to invest premiums as per your
preference. You can choose your premium and the investment fund or funds. We
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.
Unit Linked Pension Plus - The HDFC Unit Linked Pension Plus is an insurance
policy that is designed to provide a retirement income for life with the freedom to
maximise your investment returns. Stride into your golden years of retirement with
dignity and pride. 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 retirement date. Freedom to invest premiums as per your preference. You can
choose your premium and the investment fund or 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
lump sum to help him or her manage the retirement years.
Savings Plans - Our Savings Plans offer you flexible options to build savings for your
future needs such as buying a dream home or fulfilling your children’s immediate and
future needs. Our Savings range includes Endowment Assurance Plan,
Unit Linked Endowment, Unit Linked Endowment Plus, Money Back Plan, Children’s
Plan, Unit Linked Youngstar, Unit Linked Insurance plan.
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HDFC Endowment Assurance Plan - With our HDFC Endowment Assurance
Plan, you can ensure that your family remains financially independent, even if you
are not around. You can ensure that they live a life of respect and dignity. An ideal
way to secure your long-term financial goals. Valuable protection to your family by
way of lump sum payment in case of your unfortunate demise within policy term.
Lump sum payment (basic Sum Assured plus any bonus additions) on survival up to
maturity date. Very flexible benefit options and payment options. In case of your
unfortunate demise during the policy term, this participating ('With Profits')
insurance plan will pay your family the Sum Assured (together with the attached
bonuses) you had chosen.
HDFC Unit Linked Endowment - An outstanding investment opportunity by
providing a choice of thoroughly researched and selected investments. Valuable
protection to your family in case you are not around. Flexible benefit combinations
and payment options. Flexible additional benefit options such as critical illness
cover. Access to your accumulated fund before maturity. In case of your
unfortunate demise during the policy term, we will pay the greater of your Sum
Assured (less any withdrawals you have made in the two years before your claim)
and your total fund value to your family.
HDFC Unit Linked Endowment Plus - 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
family in case you are not around. Flexible benefit combinations and payment
options. Flexible additional benefit options such as critical illness cover. Access to
your accumulated fund before maturity.
HDFC Money Back Plan -
LONG-TERM GOALS SHORT TERM GOALS
Provide adequate cover for Life, Critical
Illness or disability Buying a car
Saving for big-ticket assets like your Saving for your marriage
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house
Saving for your children's education Vacation abroad
Having a regular system for savings
HDFC Children's Plan - Invaluable financial support to your child. A choice to customise
an ideal plan for your child. Multiple options for multiple benefits. The HDFC Children's
Plan is designed to secure your child's future by giving your child (the beneficiary) a
guaranteed lump sum, on maturity or in case of your unfortunate demise, early in the policy
term. The premiums, paid by you, are invested by the company to give you good. long-term
returns. The plan receives simple Reversionary Bonuses, which are usually added annually.
At the end of the term an additional Terminal Bonus may be paid depending on the
performance of the underlying investment.
HDFC Unit Linked Young Star - An outstanding investment opportunity by
providing a choice of thoroughly researched and selected investments. Valuable
protection to your child in case you are not around. Flexible benefit combinations
and payment options. Flexible additional benefit options such as critical illness
cover. Access to your accumulated fuoductnd before maturity. 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.
HDFC Unit Linked Young Star Plus - 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 benefit options such as critical illness cover. Access to your accumulated
fund before maturity. Pay the Sum Assured you had chosen to your child. Continue
your policy AND continue to pay the original regular premiums you had chosen. This
means we will continue to make your savings on your behalf, in your absence. The fund
will be available for your family's use until the original Maturity Date. Use HDFC
35
Standard Life's excellent investment options to maximise your savings & maximise
your child's achievements.
GROUP PRODUCTS -GROUP PRODUCTS -
Group Term Insurance Plans - The Group Term Insurance (GTI) plan
meets this need and serves as an ideal way for companies to reinforce their
bond with their employees. The sort of needs, you, as an employer need to
cater to could be in form of: Employee benefits, Cover for housing or
vehicle loans given by you to your employees, A GTI cover for future
service gratuity liability to be taken along with the HDFC Group Unit
Linked Plan. The HDFC group term insurance plan will have the following
structure: One year renewable term insurance plan, One master policy issued
covering all members of the group, Sum assured is payable on death (either
due to natural causes or accidents). The plan covers death due to any cause;
accidental or natural, and hence is more comprehensive than Group Personal
Accident Insurance. Several multinational corporations, large Indian
companies, foreign banks and software companies have already chosen the
HDFC Group Term Insurance, an innovative product from HDFC Standard
Life Insurance, to protect their employees.
Optional Rider Benefits: Accidental Death Benefit, Total Permanent Disability, Total
Permanent and Partial Diability Benefit, Critical Illness Benefit, Terminal Illness Benefit.
Group variable Term Insurance - The Group Variable Term Insurance is
a tailor made insurance policy for third party institutions. HDFC Standard
Life Insurance Company will offer life insurance to customer’s of one or
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more of the third party’s specific products in order that in the event of their
death, there will be a lump sum available.
On death, will pay a lump sum known as a sum assured. The sum assured
varies over time in order that the customer receives the cover that they need,
Is a group policy, Has no lengthy underwriting procedure, Is simple to
administer.Most employers have a statutory obligation to pay a gratuity to
its employees on termination of employment. This gratuity is in the form of
a one-off payment made on termination of employment. It depends on salary
and number of years of service, so will therefore increase with time. The
HDFC Group Unit Linked plan is a new and innovative unit-linked plan,
which offer employers and gratuity scheme trustees a flexible and cost
effective way to fund this gratuity liability.
Grouped Unit Linked Plan - The HDFC Group Unit Linked plan is also a
great employee retention and motivation tool that helps employers to fund
their employees’ post-retirement needs in a systematic, tax-efficient and
cost-effective manner. Moreover, as a unit-linked plan, it gives you
tremendous flexibility and freedom to customise individual retirement funds
for your employees based on their appetite for risk and the stage of life they
are in.
ORGANIZATIONAL STRUCTURE :
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CHAIRMAN
MDSENIOR
MANAGER
FINANCIAL YEAR 2007-2008 : HIGHLIGHTSFINANCIAL YEAR 2007-2008 : HIGHLIGHTS
New Business premium income up by 63 % to Rs. 2685 crores. Total Premium income is up by Rs. 4859 corers as against Rs. 2856 corers in FY 2006-07
Alternate channels including Banc assurance has recorded an impressive growth of over 63 % to 41 % to the effective Premium Income ( EPI )
Group business funds under management have increased to Rs 959 crores, registering a growth over FY 2006-2007.
The average premium has increased to Rs. 33000.
Company products and services are now available in 723 cities and towns across the country
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NATIONALHEAD(HR)
NATIONALHEAD(SALES)
NATIONALHEAD(FIN)
NATIONALHEAD(MKT)
ZONAL MANAGER TER.MANA
GER
EXECUTIVEMANAGER
REGIONAL MANAGER
BRANCH MANAGER
ASM/ABM/SDM
AGENTS
CHAPTER 3 :CHAPTER 3 : RECRUITMENT OF AGENTS / FINANCIAL RECRUITMENT OF AGENTS / FINANCIAL CONSULTANTS CONSULTANTS
The job assigned in HDFC Standard Life Insurance to project trainees are to make the
channel and to make new customers for the company by selling the business which support
the HDFC Standard Life for further growth & prosperity in Insurance sector in India
among other private players. In other words, project trainees have to recruit the financial
advisor for the company and sell some Insurance policies.
RECRUITMENT :RECRUITMENT :
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“Recruiting is the discovering of potential applicants for actual or anticipated
organizational vacancies. In other words, it is a ‘linking activity’ bringing together those
with jobs and those seeking jobs.”
Recruitment refers to the process of finding possible candidates for a job or function,
usually undertaken by recruiters. It also may be undertaken by an employment agency or a
member of staff at the business or organization looking for recruits. Advertising is
commonly part of the recruiting process, and can occur through several means: through
online, newspapers, using newspaper dedicated to job advertisement, through professional
publication, using advertisements placed in windows, through a job center, through campus
graduate recruitment programs, etc. In some countries, such as the United States, it is
legally mandated to provide equal opportunity in hiring.
VALUE OF RECRUITMENT IN INSURANCE INDUSTRYVALUE OF RECRUITMENT IN INSURANCE INDUSTRY
As per regarding different industries in marketing the insurance sector is also booming in
India with great speed. The main factor which influence the insurance sector to reach high
is that there is a big number of untapped markets. To tap that untouched markets the
insurance company needed some potential advisor. An insurance company’s success is
measured by the number of people who are active in the real sense, so there is a hard core
competition among the insurance companies to recruit the best of financial advisors
available in the market. The advisor job is typically assessed by looking for skills, e.g.
communication skills, typing skills, computer skills. Evidence for skills required for a job
may be provided in the form of qualifications (educational or professional), experience in a
job requiring the relevant skills or the testimony of references The very fact that an advisor
brings business to the company and this would lead to fulfill the importance of recruitment.
An insurance company thrives on the business being generated by these advisors, therefore,
it is important to recruit such kind of people who have good networking and who can
devote considerable time in the business. And these potential advisors are to be searched
among all untapped market which influence to doing business with insurance sector.
Because it is commonly says that the organization is being known as the working culture of
that industry and by their norms & values. By seeing this strong dedication to achieve
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higher goals in industry it is as common that this dedication must also seen in advisors too.
So, that will able to bring out good or best business for company to fulfill their company
targets. And it is a big challenge to convince an ordinary person to be the financial advisor
for the company. Because in today’s time the people have adopted a wrong perception
regarding financial advisor that this is not the good recognition able job. So this will create
a huge difference in recruiting a financial advisor or for any other designation for company
ABOUT INSURANCE AGENTSABOUT INSURANCE AGENTS
NATURE OF THE WORK NATURE OF THE WORK
Most people have their first contact with an insurance company through an insurance sales
agent. These workers help individuals, families, and businesses select insurance policies
that provide the best protection for their lives, health, and property. Insurance sales agents
who work exclusively for one insurance company are referred to as captive agents.
Independent insurance agents, or brokers, represent several companies and place insurance
policies for their clients with the company that offers the best rate and coverage. In either
case, agents prepare reports, maintain records, seek out new clients, and, in the event of a
loss, help policyholders settle their insurance claims. Increasingly, some are also offering
their clients financial analysis or advice on ways the clients can minimize risk.
Insurance sales agents, commonly referred to as “producers” in the insurance industry, sell
one or more types of insurance, such as property and casualty, life, health, disability, and
long-term care. Property and casualty insurance agents sell policies that protect individuals
and businesses from financial loss resulting from automobile accidents, fire, theft, storms,
and other events that can damage property. For businesses, property and casualty insurance
41
can also cover injured workers’ compensation, product liability claims, or medical
malpractice claims.
Life insurance agents specialize in selling policies that pay beneficiaries when a
policyholder dies. Depending on the policyholder’s circumstances, a cash-value policy can
be designed to provide retirement income, funds for the education of children, or other
benefits. Life insurance agents also sell annuities that promise a retirement income. Health
insurance agents sell health insurance policies that cover the costs of medical care and loss
of income due to illness or injury. They also may sell dental insurance and short-term and
long-term-disability insurance policies.
An increasing number of insurance sales agents are offering comprehensive financial
planning services to their clients, such as retirement planning, estate planning, or assistance
in setting up pension plans for businesses. As a result, many insurance agents are involved
in “cross-selling” or “total account development.” Besides offering insurance, these agents
may become licensed to sell mutual funds, variable annuities, and other securities. This
practice is most common with life insurance agents who already sell annuities; however,
property and casualty agents also sell financial products.
Technology has greatly affected the insurance agency, making it much more efficient and
giving the agent the ability to take on more clients. Agents’ computers are now linked
directly to the insurance carriers via the Internet, making the tasks of obtaining price quotes
and processing applications and service requests faster and easier. Computers also allow
agents to be better informed about new products that the insurance carriers may be offering.
The growth of the Internet in the insurance industry is gradually altering the relationship
between agent and client. In the past, agents devoted much of their time to marketing and
selling products to new clients, a practice that is now changing. Increasingly, clients are
obtaining insurance quotes from a company’s Web site and then contacting the company
directly to purchase policies. This interaction gives the client a more active role in selecting
a policy at the best price, while reducing the amount of time agents spend actively seeking
new clients. Because insurance sales agents also obtain many new accounts through
referrals, it is important that they maintain regular contact with their clients to ensure that
42
the clients’ financial needs are being met. Developing a satisfied clientele that will
recommend an agent’s services to other potential customers is a key to success in this field.
Increasing competition in the insurance industry has spurred carriers and agents to find new
ways to keep their clients satisfied. One solution is to increase the use of call centers, which
usually are accessible to clients 24 hours a day, 7 days a week. Insurance carriers and sales
agents also are hiring customer service representatives to handle routine tasks such as
answering questions, making changes in policies, processing claims, and selling more
products to clients. The opportunity to cross-sell new products to clients will help agents’
businesses grow. The use of call centers also allows agents to concentrate their efforts on
seeking out new clients and maintaining relationships with old ones.
WORKING CONDITIONSWORKING CONDITIONS
Most insurance sales agents are based in small offices, from which they contact clients and
provide information on the policies they sell. However, much of their time may be spent
outside their offices, traveling locally to meet with clients, close sales, or investigate
claims. Agents usually determine their own hours of work and often schedule evening and
weekend appointments for the convenience of clients. Although most agents work a 40-
hour week, some work 60 hours a week or longer. Commercial sales agents, in particular,
may meet with clients during business hours and then spend evenings doing paperwork and
preparing presentations to prospective clients.
TRAINING AND OTHER QUALIFICATIONSTRAINING AND OTHER QUALIFICATIONS
IRDA Regulations for becoming an agent:
The three pre-requisites laid down by IRDA to qualify as an agent under the licensing
regulations are:
Educational Qualification: Possess a minimum educational qualification of 12th
standard or equivalent
(if population >5000) and 10th standard or equivalent (if population < 5000).
43
Practical Training: Complete one hundred hours (100) of practical training in life
insurance business.
Pre-recruitment Test: Pass the pre-recruitment test, based on an examination
conducted by the Insurance Institute of India or another approved body. (Agents
licensed before the regulations were notified i.e. on July 14, 2000 will be exempt
from the above requirements.)
The regulations also mention a 'Tied Agency System' wherein an agent can represent only
one life insurer or one general insurer or both, at a time. A person having both agencies,
life and non-life shall be known as a 'Composite Agent'
EMPLOYMENTEMPLOYMENT
Life Insurance Corporation (LIC), which is growing at a record 65 per cent, is set to make
yet another record by endorsing about 2,000 more agents to join the prestigious million
dollar round table (mdrt). If it is successful, the Indian life insurance monolith would top
the list among leading global insurance companies in the mdrt list. "LIC has endorsed the
concept of agents joining the mdrt. The agents have themselves shown interest," mdrt
president Marvin h Feldman told reporters here on Wednesday. Feldman, who had
discussions with LIC chairman G N Bajpai recently, said Indian life insurance agents
selling Rs 4,90,900 worth of new policies a year would qualify for becoming a member of
mdrt. LIC currently has 144 agents who are part of mdrt while max New York life has four
such agents. "There are one million insurance agents in India and the number is expected to
increase substantially with the entry of 13 private life insurance companies. We expect the
mdrt membership from India to double this year," he said. Currently, New York life has the
highest number 2,306 agents in mdrt followed by northwestern mutual (1,531), MetLife
(926), prudential (807) and mass mutual (739). mdrt, an international association of 25,000
best life insurance professionals, is planning to set up a Asia-pacific chapter in the coming
years headquartered in either Singapore or Hong Kong. "Our members from India may also
44
start an India-chapter after some time," Feldman said. Indian insurance market is poised to
grow to Rs 1, 80,000 crore by 2010 and provide immense opportunities for agents.
JOB OUTLOOKJOB OUTLOOK
Although employment of insurance sales agents is expected to grow more slowly than
average for all occupations through 2014, opportunities will be favorable for college
graduates who have sales ability, excellent interpersonal skills, and expertise in a wide
range of insurance and financial services. Multilingual agents also should be in high
demand because they can serve a wider range of customers. Insurance language tends to be
quite technical, so it is important for insurance sales agents to have a firm understanding of
relevant technical and legal terms. Many beginning agents fail to earn enough from
commissions to meet their income goals and eventually transfer to other careers. Most job
openings are likely to result from the need to replace agents who leave the occupation or
retire. A large number of agents are expected to retire over the next decade.
Future demand for insurance sales agents depends largely on the volume of sales of
insurance and other financial products. Sales of health insurance and long-term-care
insurance are expected to rise sharply as the population ages. In addition, a growing
population will increase demand for insurance for automobiles, homes, and high-priced
valuables and equipment. As new businesses emerge and existing firms expand their
insurance coverage, sales of commercial insurance also should increase, including coverage
such as product liability, workers’ compensation, employee benefits, and pollution liability
insurance.
Employment of agents will not keep up with the rising level of insurance sales, however.
Many insurance carriers are trying to contain costs. As a result, many are shedding their
captive agents—those agents working directly for insurance carriers—and are relying more
on independent agents or direct marketing through the mail, by phone, or on the Internet.
Agents who incorporate new technology into their existing businesses will remain
competitive. Agents who use the Internet to market their products will reach a broader
45
client base and expand their businesses, but because most clients value their relationship
with their agent, the Internet should not threaten jobs, given that many individuals still
prefer discussing their policies directly with their agents, rather than through a computer.
Also, the automation of policy and claims processing is allowing insurance agents to take
on more clients.
Agents may face increased competition from traditional securities brokers and bankers as
they begin to sell insurance policies. Because of increasing consolidation among insurance
companies, banks, and brokerage firms, and due to increasing demands from clients for
more comprehensive financial planning, insurance sales agents will need to expand the
products and services they offer.
Agents who offer better customer service also will remain
competitive. Call centers are another important way carriers and agents are offering better
service to customers, because such centers provide greater access to their policies and more
prompt services.
Insurance and investments are becoming more complex, and many people and businesses
lack the time and expertise to buy insurance without the advice of an agent. Moreover,
most individuals and businesses consider insurance a necessity, regardless of economic
conditions. Therefore, agents are not likely to face unemployment because of a recession.
EARNINGSEARNINGS
Many independent agents are paid by commission only, whereas sales workers who are
employees of an agency or an insurance carrier may be paid in one of three ways—salary
only, salary plus commission, or salary plus bonus. In general, commissions are the most
common form of compensation, especially for experienced agents. The amount of the
commission depends on the type and amount of insurance sold and on whether the
transaction is a new policy or a renewal. Bonuses usually are awarded when agents meet
their sales goals or when an agency meets its profit goals. Some agents involved with
financial planning receive a fee for their services, rather than a commission.
Company-paid benefits to insurance sales agents usually include continuing education,
training to qualify for licensing, group insurance plans, office space, and clerical support
46
services. Some companies also may pay for automobile and transportation expenses,
attendance at conventions and meetings, promotion and marketing expenses, and retirement
plans. Independent agents working for insurance agencies receive fewer benefits, but their
commissions may be higher to help them pay for marketing and other expenses.
The Commission for the agent includes 40% of the amount of the premium in the case of
General Insurance and 20% in the case of ULIP (United Linked Insurance Plans).
Agents Recruitment Process in HDFC standard life insurance co. ltd. :
The first criteria to become an agent in HDFCSLIC is that, the person have to fullfil at least
3 Q scores out of 5 Q scores. Q score is the condition to become an insurance agent for
HDFCSLIC. If any person is not able to complete 3 Q score as demanded by HDFCSLIC,
then the person is not eligible for Agent and his application will surely be rejected. These Q
scores of HDFCSLIC are as follows:
Q1 : The person should be more than 30 years of age
Q2 : The person has a minimum qualification of class 12th.
Q3 : The person is married.
Q4 : Living in the same city since the past 3 years.
Q5 : Family income of more than Rs. 3 lakhs.
The other details related to IRDA and agents are as follows :
I. INTRODUCTION –I. INTRODUCTION –
47
A critical element of financial sector is the development of a pool of human resource
having right skill and expertise in each segment of the industry to provide quality
intermediation to market participants. Quality intermediation requires personnel working in
the industry need to (i) follow a code of conduct (ii) have a understanding of the business
and skills to service different constituents in the market. In order to ensure this, the
Insurance Regulatory and Development Authority constituted under Insurance Regulatory
and Development Authority Act, 1999 has notified the IRDA (licensing of Insurance
Agents) Regulations, 2000.
Regulation 6 of the Regulation requires that a person desiring to obtain or renew a license
to act as an insurance agent or a composite insurance agent shall pass the pre-recruitment
examination in life or general insurance business, or both, as the case may be, conducted by
the Insurance Institute of India, Mumbai or any other examination body “duly recognized
by the Authority”.
II. DOCUMENTS REQUIREDII. DOCUMENTS REQUIRED -
Documents required for ‘New’ agents
Enrolment fee of Rs. 925 for candidates appearing in Manual Exam and Rs. 825 for
candidates appearing in Online Exam (Demand Draft favoring HDFC Standard life
insurance company limited payable at Mumbai)
Agency application form (recruitment form)
The application must be filled in English or Hindi
Any address proof of potential advisor.
Proof of age (Document proving that the applicant is above 18 years of age School
certificate, Driving license or Voters Id )
Proof of qualification (12th pass, graduation certificate or Post Graduation
Certificate)
8 passport size photographs.
Training Completion Certificate
Pass certificate of the Pre- recruitment examination
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03 stamp size photographs.
Pan card photocopy
Cancelled cheque by the candidate
Agreement signed by the candidate
Documents required for ‘Transfer’ of Agents from another life Insurance company
Acknowledged copy of the letter submitted to the other insurance company on
surrendering of their license (This will have a 90 days cooling period)
No objection certificate from the other Insurance Company
Copy of the license
Completed application form (VA)
The application must be filled in English or Hindi
Any correction or alteration must be initialed by the applicant
Proof of age (Document proving that the applicant is above 18 years of age - School
certificate, Driving license or Voters Id )
Proof of qualification (12th pass, graduation certificate or Post graduation
certificate)
Copy of Life insurance license
Training completion certificate
Pass certificate of the Pre - recruitment examination
03 stamp size photographs.
III. ELIGIBILTY FOR EXAMINATION – III. ELIGIBILTY FOR EXAMINATION –
A person desiring to obtain or renew a license to act as an insurance agent or a composite
insurance agent shall possess the minimum qualification of a pass in 12th standard or
equivalent examination conducted by any recognized Board / Institution, where the
applicant resides in a place with a population of five thousand or more as per the last
census, and a pass in 10th standard or equivalent examination from a recognized Board/
Institution if the applicant resides in any other place.
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IV. MODE OF EXAMINATION –IV. MODE OF EXAMINATION –
There are two options available to a prospect agent:
i) A candidate can opt for either manual mode for training i.e. class-room training
ii) A candidate can opt for electronic mode of training i.e. on-line training, which is
also the preferred segment.
V. PATTERN OF EXAMINATION –V. PATTERN OF EXAMINATION –
Only objective multiple choice questions are asked. A candidate is required to indicate the
correct alternative. The examination is of 1 hours duration. Maximum marks are 50.
Numerical questions carry 20% of the marks. A candidate is required to secure at least 50%
of marks to be declared successful.
VI. DISCIPLINE –VI. DISCIPLINE –
On arrival at the designated test center on the specified day, the test administrator verifies
identity of the candidate and grants him access to the test terminal. The candidate can bring
in a calculator, a pen and the hall ticket only to the examination hall and nothing else. No
assistance is available during the test. A candidate found using any unfair means or in
possession of any incriminating material during the test will be expelled from the
examination hall and his test would be cancelled. The decision of the test administrator in
this regard shall be final.
Methodology that used to recruiting Financial Advisor:
To recruit the financial advisor their we used various techniques like recruiting process,
and can occur through several means like collecting data: through online, newspapers,
using newspaper dedicated to job advertisement, through professional publication, using
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advertisements placed in windows, through a job center, through campus graduate,
residential areas, etc.
By Collecting Referrals:
To initialized this process to recruit financial advisor firstly. I have to jot down some data
or some kind referrals though which I can make them call & convince them to be the
advisor of our company. For this firstly I prepared MY MARKET HUNDRED. In this my
market I have jotted down all the name of people to whom I know & my friends links too.
Though which I generated the referrals. & contact them to be the financial advisor for
HDFC Standard life.
By Cold Calling:
Cold calling refer as personal interaction with people. Here we met different people of
different profile. And make them sure to work with HDFC Standard Life. And offer them
career & recognition with HDFCSLIC itself.
By Activities:By Activities:
Activities were another way of pitching people by identifying a certain place where we
could approach people and talk to them about the business opportunity. Generally we had
to work in a group which again was further divided in an area into four or five strategic
points.
BY TELE CALLING: BY TELE CALLING:
Tele calling is a very common method used by most of the insurance companies to pitch
people to become their respective advisors. Tele calling primarily means calling up people
and talking to them about the opportunity being provided and where one can earn a lot by
devoting just few hours of the day.
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BY DIRECT MARKETING:BY DIRECT MARKETING:
Through direct marketing we were suppose to make the people aware of the opportunity
that HDFC STANDARD LIFE was offering. By doing this we could target a large number
of people instead of few.
Ways by which I convinced people to become financial advisors of HDFC StandardWays by which I convinced people to become financial advisors of HDFC Standard
Life:-Life:-
DURING MY SUMMER TRAINING ( 1 ST JUNE, 2012 –15 TH JULY, 2012 ) IN HDFC
LIFE. FIRST, I MADE MY FIRST 30 GUIDE IN WHICH I WROTE ALL MY FRIENDS
AND RELATIVES DETAILS TO WHOM I CONTACT FIRST. MOST OF THEM
GAVE ME POSITIVE RESPONSE AND READY TO TAKE THE POLICY.BUT
LATER THEY DENIED TO TAKE THE POLICY.
COMMISSION STRUCTURE:COMMISSION STRUCTURE:
Commission ranges from 20% to 30% in first year of the policy.
Renewal commission is paid at the following rates:
2nd year- 2%
3rd year- 2%
4rh year- 2%
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Unique selling proportions: career as an INSURANCE ADVISOR
BE YOUR OWN BOSS
No.2 private life insurance company
Business with no capital\
Flexi- timings
Clear growth path
Success determined by your own ability
No limits of earning
Renewal commission
Rewards 7 recognition
World class product & services
Foreign trips, star club membership, reward items.
Full time manager support
Zero balance account
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SOME STATISTICS ABOUT FC’S IN HDFCSLIC : 2007-08
FC SELECTION & LINKAGE TO BUSINESS PRODUCTIVITY – AGEFC SELECTION & LINKAGE TO BUSINESS PRODUCTIVITY – AGE PROFILEPROFILE
0%
5%
10%
15%
20%
25%
30%
INACTIVE 27 28 23 11 6% 5% 4% 3%
ACHIEVERS 12 18 17 18 11 7% 6% 4%
<=25
26-30
31-35
36-40
41-45
46-50
51-55
>55
FC SELECTION AND LINKAGE TO BUSINESS PRODUCTIVITY – INCOMEFC SELECTION AND LINKAGE TO BUSINESS PRODUCTIVITY – INCOME PROFILEPROFILE
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0%
20%
40%
60%
80%
100%
< 1 LAKH >= 1 LAKH
Inactive Agents tend to come from Low
Income classes
FC Selection and Linkage to Business Productivity - Income Profile
INACTIVE
ACHIEVERS
FC SELECTION & LINKAGE TO BUSINESS PRODUCTIVITY – OCCUPATION PROFILE
FC SELECTION & LINKAGE TO BUSINESS PRODUCTIVITY - OCCUPATION PROFILE
65%18%
9% 3% 5%
Seif Employed Service Home Maker Student Retired
PEOPLE WITH EXPERIENCE IN HDFCSLICPEOPLE WITH EXPERIENCE IN HDFCSLIC
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0%5%
10%15%20%25%30%35%40%45%50%
1 - 3YEAR
LESSTHAN 1YEAR
MORETHAN 3YEARS
NONE
Self Employed people with more than 1 year of sales experience
do well
FINDINGS:-FINDINGS:- The two months of summer training at HDFC Standard Life gave me the opportunity to
have a first hand knowledge of what is the importance of Agents in Insurance Industry is
all about. Agents being the oxygen of life insurance industry and the most important
distribution channel, the knowledge I gained here made me observe few things. Like:
POSITIVE FINDINGSPOSITIVE FINDINGS :
HDFC Standard Life comes in contrast as joint venture with strong respected
partner which highlights as strong positive finding. Regarding product it has
comprehensive portfolio with innovative & flexible offers which makes HDFC
Standard Life a super brand with multi- channel. HDFC Standard Life has world
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class best service in insurance sector. With holding talent people from diverse
industries.
NEGATIVE FINDINGS:NEGATIVE FINDINGS:
Due to high fee structure the middle class family person can not pay this amount of
fee in spite of their willingness. This shows the negative points that in spite of
various strong points due to some negative points it reduces their productivity.
The another negative point is that people have strong holding on LIC that is
government sector whose roots are penetrated in India from last 50 years. This
shows huge challenge for us to pitch people against LIC services.
According to Q-Score. The person who doesn’t qualify the Q-Score can not be
financial advisor. The main eligibility points are:
o Age>25
o Married
o Graduate
o Income >3 lacs per annum
o Tenure in city > 3 years
The people have to at least meet the three points to clear the Q-Score level. Because only
Q-Score can judge whether the person is applicable to future Sales manager of company, to
maintain the quality of the company.
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STRATEGIES USED FOR EXPANDING THE RECRUITMENT:STRATEGIES USED FOR EXPANDING THE RECRUITMENT:
Contact all representative manager like H.R. in meeting in branch
Advertising of HDFC Standard Life heavenly place ads in TV’s, radios, to target
audience.
Through campaign
Meeting people who are enjoying running insurance sector for further promotion.
By promotional activities.
SUGGESTIONS AND RECOMMENDATIONS :SUGGESTIONS AND RECOMMENDATIONS :
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Being the no. 2 private life insurance company in India, it’s the duty to meet the
expectations of the people when claiming to be such a reputed organization. Thus I
would like to contribute to making it a better organization.
The first suggestion I would like to give is that the fees of Rs. 1000 should be
deducted so that people who are willing and can chase their dream to work with
HDFC Standard Life and this would lead in holding a better or best perception for
company among people. Because in India most of the people who belonged to
middle class family which shows helps in making the country growth in upward
direction. So by keeping in this mind the fee structure should be reduced. That
makes convince for normal person.
Secondly there should be the BOP session on Sunday too for potential advisor
because most of the people are busy in their lives so that they cant give time to
attend that BOP session in week days. This would greatly improve the efficiency of
the organization, & help in bringing the better quality wise advisor.
CHAPTER 4 : ULIP COMPARISION OF HDFC STANDARD LIFE
WITH OTHER LIFE INSURERS
UNIT LINKED INSURANCE PLANSUNIT LINKED INSURANCE PLANS
Meaning Of ULIP:
A policy, which provides for life insurance where the policy value at any time varies
according to the value of the underlying assets at the time. ULIP is life insurance solution
that provides for the benefits of protection and flexibility in investment. The investment is
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denoted as units and is represented by the value that it has attained called as Net Asset
Value (NAV).
A ULIP structure looks like as follows:
FEATURES OF ULIP:FEATURES OF ULIP:
ULIP distinguishes itself through the multiple benefits that it provides to the consumer.
The plan is a one-stop solution providing:
· Life protection
· Investment and Savings
· Flexibility
- Adjustable Life Cover
- Investment Options
· Transparency
· Options to take additional cover against
Unit linked insurance plans
Units in funds
Underlying investment
Contribution Less Charge
Investment& Life Cover
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Investment represented asunits
Lifecover
- Death due to accident
- Disability
- Critical Illness
- Surgeries
· Liquidity
· Tax planning
The two strong arguments in favour of unit-linked plans are:
Firstly, the investor knows exactly what is happening to his money
Secondly it allows the investor to choose the assets into which he wants his
funds invested.
An investor in a ULIP knows how much he is paying towards mortality, management and
administration charges. He also knows where the insurance company has invested his
money.
The investor gets exactly the same returns that the fund earns but he also bears the
investment risk. The transparency makes the product more competitive. So if you are
willing to bear the investment risks in order to generate a higher return on your retirement
funds ULIPs are for you. Traditional ‘with profits’ policies too invest in the market and
generate the same returns prevailing in the market. But here the insurance company evens
out returns to ensure that policyholders do not hold money in a bad year. In that sense they
are safer. ULIPs also offer flexibility. For instance a policyholder can ask the insurance
company to liquidate units in his account to meet to mortality charges if he is unable to pay
any premium installment. This eats into savings but ensures that the policy will continue to
cover his life.
ULIP came into play in the 1960s and became very popular in Western Europe and
Americas. The reason that is attributed to the wide spread popularity of ULIP is because of
the transparency and the flexibility which it offers. Unit- linked plans are a contemporary
product: transparent and flexible. Individuals have greater control over their investments.
The popularity of ULIPS stems from the fact that they offer customers “integrated financial
solutions with a transparent charge structure”. In today’s times, ULIP provides solutions
for insurance planning, financial needs, financial planning for children’s future and
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retirement planning. Unit-linked insurance plans (ULIPs) have become something of a rage
with their 'promise' of market-linked returns combined with the dual benefit of insuring
your life from eventualities.
SIMILARITY OF ULIP AND MUTUAL FUNDSSIMILARITY OF ULIP AND MUTUAL FUNDS
In structure yes. In objective, no. Because of high first year charges mutual funds are a
better option if you have a 5 year horizon. But if you have a horizon of 10-years or more
than ULIP’S have an edge.
To explain this further a ULIP has high first year charges towards acquisition (including
agents commissions). As a result they find it difficult to outperform mutual funds in the
first 5 years. But in the long term, ULIP managers have several advantages over mutual
fund managers. Since policyholder premium come at regular intervals investment can be
planned out more evenly. Mutual fund managers cannot take a similar long term view
because they have bulk investors who can move money in and out of the scheme at short
notice.
ADVANTAGES OF ULIPS OVER MUTUAL FUNDSADVANTAGES OF ULIPS OVER MUTUAL FUNDS
The two serve different needs. ULIPs offer a combination of protection and savings. And
they work best over the long term. You cannot enter and exit too soon, as the cost of exit is
high. Mutual fund investments are of short term nature. People also now find ULIPs are
better than traditional funds, where everything was bundled.
WHY DO INSURERS PREFER ULIPS?WHY DO INSURERS PREFER ULIPS?
Insurers love ULIPs for several reasons. Most important of all, insurers can sell these
policies with lesser capital of their own than what would be required if they sold traditional
policies. In traditional ‘with profits’ policies the insurance company bears the investment
risk to the extent of insured amount. In ULIPs the policyholder bears most of the
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investment risk. Since ULIPs are designed to mobilize savings, they give insurance
companies an opportunity to get a large chunk of asset management business which has
been traditionally dominated by mutual funds. ULIPs are suitable for individuals who are
already adequately insured and are reasonably well-informed and savvy to take active
investment decisions by using the `switch option' that is provided to a ULIP policyholder.
Also policyholders with regular endowment plans who are not satisfied with the 4-6%
returns can consider taking a ULIP with a lower equity component. It is best if insurance-
seekers tread the middle path and choose balanced plans (with about 50-60% equity
component). Ideally they need to avoid taking the aggressive 100% equity ULIP, which
could needlessly expose their assets to market volatility. So if insurances-seekers/investors
play their cards right, they can make this marriage work.
ULIP PLANS OFFERED BY HDFC STANDARD LIFE
HDFC UNIT LINKED ENDOWMENT PLUS II
The HDFC Unit Linked Endowment Plus II gives:
Valuable protection to your family 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
You can choose your premium and the investment fund or 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
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funds.In case of your unfortunate demise during the policy term, we will pay the greater of your Sum Assured (less any withdrawals you have made in the two years before your claim) and your total fund value to your family.HDFC Standard Life is the name of our Insurance Company and HDFC Unit Linked Endowment Plus II is the name of this plan. The name of our company and the name of our plan do not, in any way, indicate the quality of the plan, its future prospects or returns.
4 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the premium you wish to invest Step 2 Choose the amount of protection (Sum Assured) you desire Step 3 Choose the additional plan benefits you desire Step 4 Choose the investment fund or funds you desire
HDFC UNIT LINKED ENDOWMENT SUVIDHA PLUS
The HDFC Unit Linked Endowment Suvidha Plus gives you:
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 family in case you are not around
Flexible premium payment options
Access to your accumulated fund before maturity
No need to go for medical. Just signing a “Declaration of Health” statement will do!
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That’s Suvidha for you !!
You can choose your premium and the investment fund or 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 greater of your Sum Assured (less any withdrawals you have made in the two years before your claim) and your total fund value to your family.
Use HDFC Standard Life’s excellent investment options to maximise your savings & secure your and your family’s future. We will provide financial security for your
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family in your absence.
4 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the premium you wish to investStep 2 Choose the period for which you want to remain investedStep 3 Choose the investment fund or funds you desireStep 4 Sign the “Declaration of Health“ statement
HDFC UNIT LINKED ENHANCED LIFE PROTECTION II
The HDFC Unit Linked Enhanced Life Protection II gives:
Valuable protection to your family in case you are not around Increasing insurance cover every year An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investments Flexible premium payment options
You can choose your premium and the investment fund or 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 greater of your current Sum Assured (less any withdrawals you have made in the two years before your claim) and your total fund value to your family.
Use HDFC Standard Life’s excellent investment options to maximise your savings & secure your and your family’s future. We will provide financial security for your family in your absence.
3 EASY STEPS TO YOUR OWN PLAN :3 EASY STEPS TO YOUR OWN PLAN :
Step 1 Choose the premium you wish to invest Step 2 Choose the amount of protection (Sum Assured) you desire Step 3 Choose the investment fund or funds you desire
HDFC UNIT LINKED PENSION PLUS
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The HDFC Unit Linked Pension Plus gives you:
An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments
Regular Loyalty Units to boost your fund value every yearA post retirement income for lifeFlexibility to plan your retirement dateFreedom to invest premiums as per your preference
You can choose your premium and the investment fund or 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 lump sum to help him or her manage the retirement years.
Use HDFC Standard Life's excellent investment options to maximise your savings & secure your golden years. Don't compromise on self-respect, ever. Go ahead, hold your head high and enjoy life with the HDFC Unit-Linked Pension Plus.
3 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose your retirement age Step 2 Choose the premium you wish to invest, based on your retirement needs Step 3 Choose the investment fund or funds you desire
These were the Ulip Plans offered by Both the Companies : ICICI Prudential and HDFC Standard life. It is no doubt that both the companies are offering the best, but if we look at the market ratings of ULIP Plans in Indian Insurance Industry for the past year :
ULIP Performance Report – Plans with exposure of upto 100% to Equity.
As on 19-March-2008 - Returns (%) as on 19-March-2008
Scheme NameEquity (%)
1 Year
2 Year CAGR
Since Inception CAGR
UPTO 100% EQUITY PLAN
Aviva Easy Life Plus - Unit Linked 0-85% 10.01 8.76 22.30
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Aviva Life Bond - Unit Linked 0-85% 10.01 8.76 22.25
Aviva Life Bond 5 Growth - Unit Linked 0-85% 11.78 11.71 27.94
Aviva Life Long - Unit Linked 0-85% 10.01 8.76 22.25
Aviva Life Saver - Unit Linked 0-85% 10.01 8.76 22.25
Aviva Save Guard Growth - Unit Linked 0-85% 11.78 11.71 29.47
Aviva Young Achiever - Unit Linked 0-85% 10.01 8.76 17.98
Bajaj Allianz Unit Gain - Equity Plan 100% 21.87 17.69 20.12
Bajaj Allianz Unit Gain- Equity Gain Plan 100% 10.64 8.72 29.97
Bajaj Allianz Unit Gain Pension - Equity Plus
85-100% 23.16 19.06 20.68
Bajaj Allianz Unit Gain Pension-Equity Index Plus 100% 10.48 9.67 17.73
Bajaj Allianz Unit Gain Plus - Equity Index
85-100% 23.64 18.89 31.55
Bajaj Allianz Unit Gain Plus- Equity Plus
85-100% 10.52 9.23 31.53
Bharti Axa Future Confident Grow Money
85-100% 19.22 - 18.87
Bharti Axa Future Confident II Grow Money
85-100% 19.22 - 18.87
Bharti Axa Wealth Confident Grow Money
85-100% 19.22 - 18.87
Birla Individual Life - Magnifier 50-90% 18.29 12.40 23.34
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HDFC Unit Linked Endowment Growth Plan 100% 18.68 14.17 26.47
ICICI Pru Life Time Maximier (Growth) Plan
75-100% 22.15 15.33 29.21
ICICI Pru Life Time Pension Growth #
75-100% 21.12 15.82 32.32
ICICI Pru LT Pension II - Growth Fund
75-100% 22.20 16.49 31.99
ICICI Pru Premier Maximiser (Growth) II Plan
75-100% 22.99 16.22 30.64
OM Kotak Aggressive Growth Plan
75-100% 24.77 22.40 27.13
OM Kotak Growth Plan75-100% 19.13 14.68 25.80
SBI Life Horizon II Equity Pension Fund
75-100% - - 32.37
SBI Life Unit Plus Growth Fund
75-100% 47.28 25.17 43.93
SBI Life Unit Plus II Equity Pension Fund
75-100% - - 32.29
SBI Life Unit Plus II Growth Pension Fund
75-100% - - 47.86
Average 16.70 13.24 24.98
Maximum 24.77 22.40 32.32
Minimum 10.01 8.72 17.73
ANALYSISANALYSIS
In the above classification the allocation of money is different from company to company. If we take into account the companies of 100 % allocation of money, according to Money control, we can divide the policies in to Type- I and Type- II.
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The winner in the Type-I category is TATA AIG LIFE’S INVESTASSURE IITATA AIG LIFE’S INVESTASSURE II , which has scored primarily because its one-year return, at 72 per cent, was way above the benchmark return of 53 per cent of the BSE Sensex.
This despite the fact that it has a fund management charge (FMC) of 1.75 per cent, more than double the 0.8 per cent that HDFC Standard Life charges. In fact, HDFC Standard Life has done very well on the cost parameter.
The insurer is clearly the lowest cost one in our examples, but has lost out due to underperformance over the time period. At returns of 42.7 per cent, HDFC Standard Life has underperformed the benchmark by about 10 percentage points. In fact, Tata and Bharti have outperformed the index by 10 percentage points or more.
Four companies were unable to beat the benchmark over a one-year period. In Type-II policies, there is much less competition, with just six companies in the fray. Kotak Life’s Platinum Advantage is the winner and has a nice mix of lower costs and decent returns. It has consistently out performed the benchmark.
THE..INSIGHTSTHE..INSIGHTS
As we got our hands full of the innards of the insurance industry, we also got some insights that are worth sharing. The insurance industry has some way to go in terms of transparency, disclosure and standardization. The following are the gaps we found between the ad-speakand the reality in unit-linked products.
Lack of flexibility in life cover. Ulips are known to be more flexible in nature than the traditional plans and, on most counts, they are. However, some insurance companies do not allow the individual to fix the life cover that he needs. These rely on a multiplier that is fixed by the insurer. For example, a 30-year-old will be forced to take an SA of Rs 11.25 lakh in Tata’s InvestAssure II policy since the SA is 22.5 times the premium.
OVERSTATING THE YIELD.OVERSTATING THE YIELD. Insurance companies work on illustrations. They are allowed to show you how much your annual premium will be worth if it grew at 10 per cent per annum. But there are costs, so each company also gives a post-cost return at the 10 per cent illustration, calling it the yield. For me, the most startling discovery was that some companies were not including the mortality cost while calculating the yield. This amounts to overstating the yield.
Internally made sales illustration. During the process of collecting information, it was found that the sales benefit illustration shown was not conforming to the Insurance Regulatory and Development Authority (IRDA) format.
The practice, it seems, is still prevalent in many locations—30 per cent return illustrations are still rampant. During the process of collecting information, we found out that future return projections in the illustrations were not sticking to the 6 and 10 per cent stipulated by
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IRDA.
TYPE-II PLANS STILL FEW.TYPE-II PLANS STILL FEW. An insurance policy’s chief aim is to protect the financial future of the family of the insured, starting from the day of the policy, and not from year 10 or 15. This makes a policy that gives the SA plus the fund value as death benefit superior to the one that just gives the fund value.
The fund value will be small in the first seven to 10 years of the policy term and will not serve as a good insurance product. We found that just six of the 14 companies offer such a plan. Few more exist, but are in the nature of whole-life plans.
FEATURES/ COMPARISION OF HDFC WITH OTHER INSURERSFEATURES/ COMPARISION OF HDFC WITH OTHER INSURERS
As we know that HDFCSLIC is a strong competitor among other insurers in Indian insurance market, the following features under the Ulip of HDFCSLIC are as follows :
1. In the above pharagraph, it is clearly defined that HDFC LIFE has the cheapest fund charge of only 0.8% among all the other private life insurers. No insurer is charging 0.8% as fund management charge.
2. HDFC LIFE is providing reversionary bonus of 0.10% at the end of every year to the ulip policy holders which no company is providing to their customers.
3. HDFC LIFE is also providing waiv-up facility to its policyholders that no other life insurer is providing.
4. HDFC LIFE is also providing 20 % guaranteed returns on their ULIP plans, if we see ICICI Prudential they have guaranteed returns of 10 % only. No other life insurer except, HDFC LIFE is providing 20 % guaranteed returns to their policyholders.
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CONCLUSION:CONCLUSION:
Unit Linked Insurance Plans (ULIPs) were always seen as a 'wonder product' that
simultaneously fulfilled an individual's needs for investment and insurance. However, the
recent downswings in the markets have forced investors to do a rethink. Very often it was
poor selection that was responsible for the investors' woes.
LIC enjoys credibility over other private players in the industry.
People look for security over returns in market linked plans.
People are now showing more interest in ULIP as compared to some of the
traditional plans.
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BIBLIOGRAPHY:BIBLIOGRAPHY:
www.irda.org
www.hdfcinsurance.com
HDFC: Vision and Values guide
http://www.iii.org/individuals/life/
http://finance.yahoo.com/q/pr?s=puk
http://biz.yahoo.com/ic/430.html
http://www.marketresearch.com/vhp/business/
http://en.wikipedia.org/wiki/Life_insurance
http://finance.yahoo.com/q/pr?s=puk
http://economictimes.indiatimes.com/
http://www.domain-b.com/finance/insurance
http://www.jobsahead.com
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