project on hdfc product distribution
TRANSCRIPT
-
7/31/2019 Project on Hdfc Product Distribution
1/65
Minor Project
ON
STUDY ON DISTRIBUTION ENHANCEMENT OF HDFC
LIFE.
[Submitted in Partial Fulfillment]
BACHELOR OF BUSINESS ADMINISTRATION [BBA]
[Third Semester 2010-1013]
SUBMITTED BY UNDER THE SUPERVISION
SHUBHAM BHATIA (05311401710) MR. S.THIYAGRAJAN
BBA (III SEM) (INTERNAL PROJECT GUIDE)
From
Bhai Parmanand Institute of Business Studies
(Government of Delhi)
Shakarpur-92
Affiliated to Guru Gobind Singh Indraprastha University, Delhi.
-
7/31/2019 Project on Hdfc Product Distribution
2/65
-
7/31/2019 Project on Hdfc Product Distribution
3/65
BHAI PARMANAND INSTITUTE OF BUSINESS STUDIES
SHAKARPUR, DELHI
DATE:
DECLARATION BY THE CANDIDATE
I hereby declare that the work, which is being presented in the project,
entitled Study on Distribution enhancement of HDFC LIFE. is an
authentic record carried of my own work carried out by me under the
supervision and guidance of MR. S.Thiyagarajan , Project Guide, BHAIPARMANAND INSTITUTE OF BUSINESS STUDIES, Shakarpur , Delhi.
This project was undertaken as a part of the curriculum of Guru Gobind
Singh Inderprastha University, Delhi for the partial fulfilment of MBA
from Bhai parmanand Institute of Business Studies, Shakarpur.
I have not submitted the matter embodied here in this project for the
award of any other degree/diploma.
SHUBHAM BHATIA
ROLL NO. 0531140171
B.B.A, 3RD SEMESTER
BHAI PARMANAND INSITUTE OF
BUSINESS STUDIES, SHAKARPUR,
DELHI.
-
7/31/2019 Project on Hdfc Product Distribution
4/65
BHAI PARMANAND INSTITUTE OF BUSINESS STUDIES
SHAKARPUR, DELHI
DATE:
CERTIFICATE BY THE CANDIDATE
This is to certify that MR. SHUBHAM BHATIA ROLL NO. 05311401710,
Student of BBA-3rd semester, has satisfactory completed his Project
Research Title- study on Distribution enhancement of HDFC LIFE.
As a part of curriculum under my guidance for the partial fulfilment of
B.B.A degree under Guru Gobind Singh Indraprastha University, Delhi forthe year 2010-2013.
MR. S.THIYAGARAJAN
[BBA-IN-CHARGE]
BPIBS, SHAKARPUR
-
7/31/2019 Project on Hdfc Product Distribution
5/65
ACKNOWLEDGEMENT
The project entitled Study of Distribution enhancement of HDFC
LIFE. Was a challenging assignment for me required an improved
environment, extensive endeavour and all necessary support. I take this
an oppurunity to express my gratitude to MR. S.THIYAGARAJAN my
project guide for his able guidance, cooperation and out of box thinking
without which this project would not have been exciting at all.
The successful progression of my project also gives mre the opportunity
to acknowledge and appreciate the staff of the college that provide me
much needed stimulating suggestion and encouragement in order to
sterr this project towards completion.
SHUBHAM BHATIA
-
7/31/2019 Project on Hdfc Product Distribution
6/65
PREFACE
There are number forces that make marketing an endlessly changing activity.
The constantly activity sociological, psychological and political environment
may represent the uncontrollable marketing factors. To understanding these
factors in better way marketing research is of atmost importance.
This Project Report has been completed in Partial fulfillment of my
Management Program, Master of Business Administration in the company
HDFC STANDARD LIFE INSURANCE. The objective of my project wasEnhancement of Channel Distribution.
HDFC STANDARD LIFE is the name which is working as one of the best private
insurance company in insurance sector.
With such large population and the untapped market of populations insurance
happens to be very big opportunity in India. Today it stands as a business
growing at the rate of 15-20 percent annually. Together with banking services,
It adds about 7 percent to the countrys GDP. In spite of all this growth the
statistics of the penetration of the insurance in the country is very poor.
Nearly 80% of Indian populations are without Life Insurance cover and the
Health Insurance. This is an indicator that growth potential for the insurance
sector is immense in India.
-
7/31/2019 Project on Hdfc Product Distribution
7/65
CONTENTS
CERTIFICATE OF ORGANISATION
CERTIFICATE OF PROJECT GUIDE
OBJECTIVE
ACKNOWLEDGEMENT
EXECUTIVE SUMMARY
PROJECT OBJECTIVE
Section 1 : INDUSTRY PROFILE
1)Overview & Historical Perspective2)Insurance Sector Reforms3)Nature of Industry4)Indian Insurance Industry
Regulatory Body : IRDA5)Importance of Liberalization
Market share of various players6)Current Scenario7)SWOT Analysis of Industry
Section 2 : COMPANYS PROFILE
HDFC Ltd. : 1) Introduction
2) Subsidiary & Associate Companies
-
7/31/2019 Project on Hdfc Product Distribution
8/65
HDFC STANDARD LIFE
1) Introduction
2) Key Personnel
3) Knowledge Management
Life Stages4) Product Mix
5) Current Sales
6) Future Plans
Section 3 : MAIN SECTION
1)Financial Planning2)360 Financial Planning
Section 4 : CONCLUSIONS & RECOMMENDATION
Section 5 : BIBLIOGRAPHY
ANNEXURE
-
7/31/2019 Project on Hdfc Product Distribution
9/65
EXECUTIVE SUMMARY
Overall, the life insurance and pension sector is set for rapid changes and
growth in the years ahead. Delivering service, building trust and being
innovative are key areas in which any company will have to excel in order to
do well in the long road ahead. Different companies will take different
approaches and it would be myriad of solutions that will be found to delight
the Indian customer.
During the first part, I was given complete classroom training about the
various Commission and Renewal structure, Club Membership-Additional
benefit which the company offers.
Later, Market Research was done through various activities and tele-calling
which are discussed further in the report. Activities led to practical exposure
and taught me the aspects of people dealing.
Finally, interesting conclusions were drawn out of the data collected regarding
the Awareness of Financial Planning among the people in todays environment.
It was great experience because conveing general people to make him
Financial Consultant are a great deal of confidence.
-
7/31/2019 Project on Hdfc Product Distribution
10/65
PROJECT OBJECTIVES
To Enhance Distribution Channel through generate Financial Consultant.
To study the awareness of Financial Planning among the people.
To study the importance of Insurance in todays scenario.
Brand awareness of various private insurance companies. Preference among different investment tools. Purpose of buying insurance. Preference in choosing channel for buying life insurance. Quality of service provided by agents and clients satisfaction
Level.
Customers perception ofimprovements brought in by entry ofPrivate Insurance Companies.
-
7/31/2019 Project on Hdfc Product Distribution
11/65
RESEARCH MEHODOLOGY
D.1 JOB PROFILE
Working in HDFC-SLIC was of a very good learning experience for me. I learned a
lot from my unit manager. He taught me different aspects of corporate world and
how to make the sales effective. He made sure that I put in my best efforts and
gave me the deep insight of insurance sector. From the very beginning he told me
that he wont provide me with any kind of leads and databases, so that I put my
efforts and generate my own leads and complete my targets in the given time.
During my training I interacted with customers who were very much unknown to
me and in the nascent stages I was having a little bit of hitch but later on I started
enjoying while interacting with the customers.
D.2 RESEARCH DESIGN:
. The research design applied here was exploratory research and descriptive
research.
Exploratory Research is one in we dont know about the problem, we have to find
about the problem and then work on solving the problem. Whereas in case of
descriptive research, we know the problem, we just have to find the solution to the
problem. Generally descriptive research design is applied after exploratory research
-
7/31/2019 Project on Hdfc Product Distribution
12/65
design. As in first case we tried to find out the problem area, as in initially there
was problem in pitching the right thing to the customer and finding out the right
customer who is actually interested in entering into the insurance market. Once the
problem was known, then descriptive research was applied as to what benefits and
extra thing could be given to customer so as to attract the customer.
D.3 RESEARCH TOOL
Research tool:
In this project we have used primary data as well as secondary data. Primary
data is one in which we find out the raw data through directly contacting the people
and asking them to fill in the questionnaire and through some activities ands
secondary data is by using the contacts which are already available Primary data is
applied as we have used the questionnaire and through marketing activities,
secondary data has been used in form of yellow pages, various personal contacts.
-
7/31/2019 Project on Hdfc Product Distribution
13/65
SECTION 1- INDUSTRY
PROFILE.
.
-
7/31/2019 Project on Hdfc Product Distribution
14/65
OVERVIEW
With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. Its a business growing at the rate of
15-20 per cent annually.
Together with banking services, it adds about 7 percent to the countrys GDP .
Important milestones in the life insurance business in India:
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1956: 245 Indian and foreign insurers and provident societies were taken over by
the central government and nationalized. LIC formed by an Act of Parliament- LIC
Act 1956- with a capital contribution of Rs.5 cr. from the Government of India.
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 and sound business practices.
1972: The general insurance business in India nationalized through The General
Insurance Business (Nationalization) Act, 1972 with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies- the National
Insurance Company Limited, the New India Assurance Company Limited, the
Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
incorporated as a company.
-
7/31/2019 Project on Hdfc Product Distribution
15/65
Insurance Sector Reforms
Prior to liberalization of Insurance industry, Life insurance was monopolyof LIC.
In 1993, Malhotra Committee- headed by former Finance Secretary and RBI
Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and
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 structuralchanges 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
recommendations included:
Structure
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.
Competition
Private Companies with a minimum paid up capital ofRs.1 billion should be
allowed to enter the sector. No Company should deal in both Life and
General Insurance through a single entity. Foreign companies may be
allowed to enter the industry in collaboration with the domestic companies.
-
7/31/2019 Project on Hdfc Product Distribution
16/65
Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be set
up. Controller of Insurance- a part of the Finance Ministry- should be made
independent
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)
Customer Service
LIC should pay interest on delays in payments beyond 30 days. Insurance
companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology is to be carried
out in the insurance industry
-
7/31/2019 Project on Hdfc Product Distribution
17/65
STATISTICS (INDIAN & GLOBAL)
This section gives the users important and detailed statistics of the Indian as well
as the Global insurance industry. These statistics would give important insights ofwhere the respective markets are headed for.
The global life insurance market stands at $1,521.2 billion while the non-lifeinsurance market is placed at $922.4 billion.
The United States itself accounts for about one-third of the $2443.6 billionglobal insurance market and Japan stands next with a 20.62% share.
India takes the 23rd position with US $9.933 billion annual premiumcollections and a meager 0.41% share.
Out of one billion people in India, only 35 million people are covered byinsurance.
India's life insurance premium as a percentage of GDP is just 1.77 per cent. The income derived by GIC and its subsidiary companies through investment
was Rs.2491.76 crore and the investable fund generated was Rs.2843 crore
in 1999-2000.
Indian insurance market is set to touch $25 billion by 2010, on theassumption of a 7 per cent real annual growth in GDP.
a variety of perils. By purchasing insurance policies, individuals and businesses can
receive reimbursement for losses due to car accidents, theft of property, and fire
and storm damage; medical expenses; and loss of income due to disability or
death.
The insurance industry consists mainly of insurance carriers (or insurers) and
insurance agencies (Financial Consultant) and brokerages. In general,
insurance carriers are large companies that provide insurance and assume the risks
-
7/31/2019 Project on Hdfc Product Distribution
18/65
covered by the policy. Insurance agencies and brokerages sell insurance policies for
the carriers.
Insurance companies assume the risk associated with annuities and insurance
policies and assign premiums to be paid for the policies. In the policy, the
companies states the length and conditions of the agreement, exactly which losses
it will provide compensation for, and how much will be awarded.
The premium charged for the policy is based primarily on the amount to be
awarded in case of loss, as well as the likelihood that the insurance carrier will
actually have to pay. In order to be able to compensate policyholders for their
losses, insurance companies invest the money they receive in premiums, building
up a portfolio of financial assets and income-producing real estate which can then
be used to pay off any future claims that may be brought.
Direct insurance carriers offer a variety of insurance policies.
Life insurance provides financial protection to beneficiariesusually spouses and
dependent childrenupon the death of the insured.
Disability insurance supplies a preset income to an insured person who is unable
to work due to injury or illness
Health insurance pays the expenses resulting from accidents and illness.
AnAnnuity(a contract or a group of contracts that furnishes a periodic income at
regular intervals for a specified period) provides a steady income during retirement
for the remainder of ones life.
Property-casualty insurance protects against loss or damage to property
resulting from hazards such as fire, theft, and natural disasters.
Liability insurance shields policyholders from financial responsibility for injuries to
others or for damage to other peoples property. Most policies, such as automobile
and homeowners insurance, combine both property-casualty and liability coverage.
-
7/31/2019 Project on Hdfc Product Distribution
19/65
Companies that underwrite this kind of insurance are called property-casualty
carriers.
What is Life Insurance?
Human life is subject to risks of death and disability due to natural and accidental
causes. When human life is lost or a person is disabled permanently or temporarily,
there is a loss of income to the household. The family is put to hardship. Risks are
unpredictable. Death/disability may occur when one least expects it. There are a
number of life insurance products which offer protection and also coupled with
savings.
A Term insurance product provides a fixed amount of money on death during the
period of contract.
A Whole Life insurance product provides a fixed amount of money on death.
An Endowment Assuranceproduct provided a fixed amount of money either on
death during the period of contract or at the expiry of contract if life assured is
alive.
A Money Back Assurance product provides not only fixed amounts which are
payable on specified dates during the period of contract, but also the full amount of
money assured on death during the period of contract.
An Annuity product provides a series of monthly payments on stipulated dates
provided that the life assured is alive on the stipulated dates.
A Linked product provides not only a fixed amount of money on death but also
sums of money which are linked with the underlying value of assets on the desired
dates.
-
7/31/2019 Project on Hdfc Product Distribution
20/65
There are a variety of life insurance products to suit to the needs of various
categories of peoplechildren, youth, women, middle-aged persons, old people;
and also rural people, film actors and unorganized laborers.
Life insurance products could be purchased from registered life insurers notified by
the IRDA. Insurers appoint insurance agents to sell their products.
As per regulations, insurers have to give the various features of the products at the
point of sale. The insured should also go through the various terms and conditions
of the products and understand what they have bought and met their insurance
needs. They ought to understand the claim procedures so that they know what to
do in the event of a loss.
-
7/31/2019 Project on Hdfc Product Distribution
21/65
INDIAN INSURANCE SECTOR
REGULATORY BODY
Insurance is a federal subject in India. The primary legislation that deals with
insurance business in India is: Insurance Act, 1938, and Insurance Regulatory &
Development Authority Act, 1999.
The Insurance Regulatory and Development
Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body
in April 2000 has fastidiously stuck to its schedule of framing regulations and
registering the private sector insurance companies.
The other decision taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of
the IRDAs online service for issue and renewal of licenses to agents. Since being
set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations.
MISSION-IRDA
To protect the interests of the policyholders, to regulate, promote and
ensure orderly growth of the insurance industry and for matters connectedtherewith or incidental thereto.
-
7/31/2019 Project on Hdfc Product Distribution
22/65
IMPACT OF LIBERALISATION
The introduction of private players in the industry has added to the colors in the
dull industry. The initiatives taken by the private players are very competitive and
have given immense competition to the on time monopoly of the market LIC. 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. As a result LIC
down the years have seen the declining phase in its career. The market share was
distributed among the private players. Though LIC still holds the 79% of the
insurance sector but the upcoming natures of these private players are enough to
give more competition to LIC in the near future. LIC market share has decreased
from 95% (2002-03) to 81 %( 2004-05).
LIC has the current market share of 79%. ?Among the private players ICICI Prudential has the maximum of appx 5.60%
Followed by Bajaj Allianz (3.27 %) and HDFC Standard Life of about 3.11%.
Below is the table that shows the market share of various players of the industry.
-
7/31/2019 Project on Hdfc Product Distribution
23/65
The following companies have the rest of the market share of the insurance
industry.
COMPANY NAME MARKET SHARE
LIC 79.30
ICICI PRUDENTIAL 5.63
BAJAJ ALLIANZ 3.27
HDFC STANDARD LIFE 3.11
BIRLA SUNLIFE 2.32
TATA AIG 1.45
SBI LIFE 1.24
MAX NEWYORK 0.90
AVIVA LIFE 0.82
ING VYSYA 0.66
OM KOTAK LIFE 0.54
AMP SANMAR 0.38
METLIFE 0.33
RELIANCE LIFE 0.05
-
7/31/2019 Project on Hdfc Product Distribution
24/65
The liberalization of the Indian insurance sector has opened new doors to private
competition and the new and improved insurance sector today promises several
new job opportunities. With private players now in the field, there will be
innovative products, better packaging, improved customer service, and, most
importantly, greater employment opportunities.
WHAT DOES LIFE INSURANCE HAVE TO OFFER?
Life insurance is many different things to many different people. For some, it is a
premium to be paid on time. For others it offers liquidity since cash can be
borrowed when needed. For the investment-minded, it denotes a constantly
growing capital account and numerous other benefits.
The contractual guarantee is the promise to pay, backed by one of the oldest and
most stably regulated financial industry operating in the Indian sub-continent
today.
1) Insurance Buys Time and Money
People like to refer to life insurance as time insurance, the reason being that lifeinsurance proceeds are paid to the insured's beneficiaries in case of death. The
money proffered by life insurance helps buy time to adjust to the change of
circumstances. Insurance provides large amounts of cash that will keep the lifestyle
for the survivors the way it was before the insured's death.
2) Insurance Offers Peace of Mind
For the person who buys an insurance policy, it offers absolute and complete peace
of mind. He or she knows that the decision made by him will provide sound benefits
in the future, whether or not the individual may live to see it.
-
7/31/2019 Project on Hdfc Product Distribution
25/65
3) Multiple Applications
The future is uncertain for each and every one. No one knows how long he or she
will live. The investment benefit is paid to the insured's beneficiaries after his death
or it can be used during the life as well. Life insurance policy owners can turn to thecash value of the policy in case of a financial emergency when all avenues are
either blocked or denied.
4) Enduring Elasticity
Since life insurance is flexible enough to serve several needs, the insured can keep
several long-term goals in mind once he or she invests in the insurance plan. The
cash value of the policy can be allocated towards augmenting the monthly income
during the retirement years. Leisure years should be turned into pleasure years.
Permanent life insurance is designed on the concepts of long-term flexibility.
5) Financial Security
The insurance policy offers contractual guarantees to people looking for peace of
mind when they buy life insurance. Life insurance offers complete financial security.
The purchase of life insurance demonstrates concern for a family's future financial
well being.
6) Regard for Family
The purchase of life insurance clearly displays care and concern for the people the
policy owner loves.
7) Insurance is Safer
No financial institution can do what life insurance does. No industry can back its
products with reserves and surplus as sound as those of the insurance industry.
The proof of strength and safety that insurance companies have ensured even
under the most adverse of conditions is a matter of pride for the entire insurance
industry. For generation after generation, life insurance has been acclaimed as the
very benchmark of security against which the other industries are measured.
-
7/31/2019 Project on Hdfc Product Distribution
26/65
OPPORTUNITIES FOR INSURANCE COMPANIES
In the now open sector on insurance, the following is what I feel will determine the
success of the company in particular and the industry in general:
A change in the attitude of the populationIndians have always been wary of employing their hard-earned money in a venture
that will pay them on their death. Insurance has always been used as a Tax saving
tool. No more, no less. It is depend upon the Financial Consultant to educate the
people to secure/insure their future against any unknown calamity and make a
shield around their families and businesses.
An open and transparent environment created under the IRDA.The reason for this being on the top of our understanding is that when ever we
have seen any sector open up in India there are always grey areas and unsure
policies. These are not exactly what any player, be it Indian or foreign, looks for. It
creates an air of uncertainty in all the decision making process. Insurance as a
sector requires players who are strong financially and are willing to wait for returns.
Their confidence can be bolstered only if there is an open and a transparent policy
guidelines. This will also help the consumers feel safe that the regulatory is an
active one and cares to do everything possible to keep things under control and
help the insurance environment grow maturely.
A well-established distribution network.To cater to the largest democracy in the world is by no means a cakewalk.
Insurance profits are directly related to number of insured and this is in turn related
to the reach.
Trained professionals to build and sell the product.It is said that the insurance agent (Financial Consultant) is the best salesman in
the world. He makes you pay, regularly, an amount promising to pay back only on
-
7/31/2019 Project on Hdfc Product Distribution
27/65
your death. Thus the players will require an excellent sales team to sell their
products in the now competitive environment.
Encouragement of new and better products and letting the hackneyedones die out.
This will itself ensure the market grows. And that every class/society gets a product
that best suits them.
-
7/31/2019 Project on Hdfc Product Distribution
28/65
SWOT ANALYSIS OF INSURANCE INDUSTRY
STRENGTH
1.Best returns with the added advantage of 100% life insurance coverage.
2. Good option for new investors into the market as all the money is invested
by best fund managers so with less knowledge also they can earn good
returns.
3. Best commission charges paid to the agents which vary from 12% to 40%
which is much higher as compared to mutual funds i.e. , only 2-2.5%.
WEAKNESS
1. HDFC SLIC could not able to match LIC in remote areas services.
2. Misleading facts given by Financial Consultant about the returns of ULIPs.
3. Hidden charges taken by the companies.
4. Less Promotional Campaigns.
-
7/31/2019 Project on Hdfc Product Distribution
29/65
OPPORTUNITY
1. 80 percent of Indian population is still under insured. So there is a bigopportunity for insurance companies.
2. As the stock market can be under the mark any time so it can bring loss to
the investors but as in ULIPs there is proper mixture of debt securities and
equity so the loss is incurred during dark trading days also.
3. Unit-linked products are exempted from tax and they provide life insurance.
4. Increasing consumer awareness about Insurance and its use.
THREAT
1. Cannibalism within the industry by providing misleading figures to the
investors.
2. Govt.s instability has a long term repercussions affecting companys policies
and its growth.
-
7/31/2019 Project on Hdfc Product Distribution
30/65
CONCLUSION
With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India, which is growing at the rate of 15-20
per cent annually.
Nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And
this part of the population is also subject to weak social security and pension
systems with hardly any old age income security.
And also the changing attitude and increasing awareness level of the population is
an indicator that growth potential for the insurance sector is immense.
-
7/31/2019 Project on Hdfc Product Distribution
31/65
SECTION 2
-
7/31/2019 Project on Hdfc Product Distribution
32/65
COMPANYS PROFILE
INTRODUCTION
Helping Indians experience the joy of home ownership.
Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emerged
as the largest residential mortgage finance institution in the country. Thecorporation has had a series of share issues raising its capital to Rs. 119 crores.
HDFC operates through 75 locations throughout the country with its Corporate
Headquarters in Mumbai, India.
OBJECTIVES AND BACKGROUND
Background
HDFC was incorporated in 1977 with the primary objective of meeting a social need
that of promoting home ownership by providing long-term finance to households
for their housing needs. HDFC was promoted with an initial share capital of Rs. 100
million.
Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the
country through the provision of housing finance in a systematic and professional
manner, and to promote home ownership. Another objective is to increase the flow
of resources to the housing sector by integrating the housing finance sector with
the overall domestic financial markets..
-
7/31/2019 Project on Hdfc Product Distribution
33/65
ORGANIZATION AND MANAGEMENTHDFC is a professionally managed organization with a board of directors consisting
of eminent persons who represent various fields including finance, taxation,
construction and urban policy & development. The board primarily focuses on
strategy formulation, policy and control, designed to deliver increasing value to
shareholders.
FOUNDER Mr. Hasmukhbhai Parekh
BOARD OF DIRECTORS
Mr. D S Parekh Chairman
Mr. Keshub Mahindra Vice Chairman
Ms. Rene S. Karnad Executive Director
Mr. K M Mistry Managing Director
Mr. Shirish B. Patel
Mr. B S Mehta
Mr. D M Sukthankar
Mr. D N Ghosh
Dr. S A Dave
Mr. S Venketaraman
Dr. Ram S. Tarneja
Mr. N M Munjee
Mr. D M Satwalekar
-
7/31/2019 Project on Hdfc Product Distribution
34/65
HDFC has a staff strength of 1029, which includes professionals from the fields of
finance, law, accountancy, engineering and marketing.
SUBSIDIARY & ASSOCIATE COMPANIES
HDFC Bank
HDFC Mutual Fund
HDFC Standard Life
Intelenet Global Services Ltd.
HDFC Chubb General Insurance Company Ltd.
HDFC Reality
Other Companies Co-Promoted by HDFCHDFC Trustee Company Ltd.HDFC Developers Ltd.HDFC Venture Capital Ltd.HDFC Ventures Trustee Company Ltd.
HDFC Investments Ltd.HDFC Holdings Ltd.Home Loan Services India Pvt. Ltd.Credit Information Bureau (India) Ltd
-
7/31/2019 Project on Hdfc Product Distribution
35/65
HDFC STANDARD LIFE INSURANCE
HDFC Standard Life Insurance Company Limited was one of the first companies to
be granted license by the IRDA to operate in life insurance sector. Each of the JV
player is highly rated and been conferred with many awards. HDFC is rated 'AAA' by
both CRISIL and ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and
Standard and Poors. These reflect the efficiency with which HDFC and Standard Life
manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively.
HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.
HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and
Standard Life has a stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of
the venture.
-
7/31/2019 Project on Hdfc Product Distribution
36/65
THE PARTNERSHIP :
HDFC and Standard Life first came together for a possible joint venture, to enter
the Life Insurance market, in January 1995. It was clear from the outset that both
companies shared similar values and beliefs and a strong relationship quickly
formed. In October 1995 the companies signed a 3 year joint venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further
strengthening the relationship.
In October 1998, the joint venture agreement was renewed and additional resource
made available. Around this time Standard Life purchased 2% of Infrastructure
Development Finance Company Ltd. (IDFC). Standard Life also started to use the
services of the HDFC Treasury department to advise them upon their investments
in India.
Towards the end of 1999, the opening of the market looked very promising and
both companies agreed the time was right to move the operation to the next level.Therefore, in January 2000 an expert team from the UK joined a hand picked team
from HDFC to form the core project team, based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC and a 5%
stake in HDFC Bank.
-
7/31/2019 Project on Hdfc Product Distribution
37/65
COMPANYS MISSION:
To be the top life insurance company in the market.
This not only means being the largest or the most productive company in themarket, but a combination of several things like-
Customer service of the highest order Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share
COMPANYS VISION:
The most successful and admired life insurance company. Which means that
We are the most trusted company, the easiest to deal with offer the best
value for money, and set the standards in the industry.
IN SHORT:-
The most obvious choice for all .
COMPANYS VALUES:
SECURITY: Providing long term financial security to our policy holders willbe our constant endeavor. This is done by offering life insurance and pension
products.
-
7/31/2019 Project on Hdfc Product Distribution
38/65
TRUST: Company appreciates the trust placed by our policy holders in us.Hence, company will aim to manage their investments very carefully and live
up to this trust.
INNOVATION: Recognizing the different needs of our customers, companywill be offering a range of innovative products to meet these needs.
Companys mission is to be the best new life insurance company in India and these
are the values that will guide us in this.
-
7/31/2019 Project on Hdfc Product Distribution
39/65
KEY MANAGEMENT PERSONNEL
Chairman
Mr. Deepak S. Parekh
Board Of Directors
Mr. K. M. Mistry
Ms. Renu S. Karnad
Mr. A. M. Crombie
Ms. Marcia D. Campbell
Mr. Norman Keith Skeoch
Mr. G. R. Divan
Mr. G. N. Bajpai
Mr. Ranjan Pant
Mr. Ravi Narain
-
7/31/2019 Project on Hdfc Product Distribution
40/65
Managing Director & CEO
Mr. D. M. Satwalekar
AUDIT COMMITTEE
Haribhakti & Company
Chartered Accountants
B.K. Khare & Co.
Chartered Accountants
Bankers
HDFC Bank Ltd.
Union Bank of India
Indian Bank
The Saraswat Co-operative Bank Ltd.
Federal Bank
-
7/31/2019 Project on Hdfc Product Distribution
41/65
KNOWLEDGE MANAGEMENT
When Should One Go For Insurance?
Your insurance need will change as your life does, from starting to work to enjoying
your golden years and all the stages in between. Each one of these stages may
pose a different insurance need/cover for you. In this section, we have drawn up
the basic life stages and help you analyze various insurance needs accordingly.
-
7/31/2019 Project on Hdfc Product Distribution
42/65
Stage 1 : Young and Single
This is an important stage where one lays down the foundation of a successful life
ahead. Take advantage of the time and power of compounding to ensure that you
build up your dreams, so start saving early.
Your needs:
oSave for a home and weddingoTax PlanningoSave for Golden years
Stage 2 - Just Married
Marriage brings about a significant change. New dreams and new opportunities also
bring in additional responsibilities. While both of you look forward to a happy and
secure life , it is equally important to ensure that eventualities dont come in the
way of shaping your dreams.
Your needs:
o Planning for home / securing your home loanliability
o Save for vacationo Save for your first child
-
7/31/2019 Project on Hdfc Product Distribution
43/65
Stage 3 - Proud Parents
Once you have children, your need for life insurance is even more. You need to
protect your family from an untoward incident. Ensure your protection umbrella
takes into account the future cost of securing your childs dream. You will want life
to go on for your loved ones, and having enough life insurance is a way to help
ensure that.
Your needs:
o Provide for childrens educationo Safeguarding family against loan liabilitieso Savings for post-retirement
Stage 4 - Planning for Retirement
While you are busy climbing the ladder of success today, it is important for you to
take time and plan for your life after retirement. Having an early start for
retirement planning can make a significant difference to your savings. Think about
your golden years even before you have reached them. The key is to think ahead
and plan well using your time and money.
Your needs:
o Provide for regular income post retiremento Immediate Tax benefitso Lead a secure, independent and comfortable
life style after retirement
-
7/31/2019 Project on Hdfc Product Distribution
44/65
PRODUCT MIX
At HDFC Standard Life, there is a bouquet of insurance solutions to meet every
need. They cater to both, individuals as well as to companies looking to provide
benefits to their employees.
For individuals, they have a range of protection, investment, pension and savings
plans that assist and nurture dreams apart from providing protection. One can
choose from a range of products to suit ones life-stage and needs.
For organizations they have customized solutions that range from Group Term
Insurance, Gratuity, Leave Encashment and Superannuation Products.
PRODUCTS FOR INDIVIDUALS
PROTECTION- 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.
Plans: Term Assurance Plan
Loan Cover Term Assurance Plan.
INVESTMENT - This includes a plan that is well suited to meet your long term
investment needs. We provide you with attractive long term returns through
regular bonuses.
-
7/31/2019 Project on Hdfc Product Distribution
45/65
Plan : Single Premium Whole Of Life
PENSION - Our Pension Plans help you secure your financial independence even
after retirement and live a relaxed retired life.
Plans : Personal Pension Plan
Unit Linked Pension
Unit Linked Pension Plus
SAVING - Our Savings Plans offer you flexible options to build savings for your
future needs such as buying a dream home or fulfilling your childrens immediate
and future needs.
Plans : Endowment Assurance Plan,
Unit Linked Endowment,
Unit Linked Endowment Plus,
Money Back Plan,
Childrens Plan,
Unit Linked Youngstar,
Unit Linked Youngstar Plus .
-
7/31/2019 Project on Hdfc Product Distribution
46/65
GROUP PLANS
HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit
solutions to their employees. They offer different products for different needs of
employers ranging from term insurance plans for pure protection to voluntary plans
such as superannuation and leave encashment.
Plans: Group Term Insurance with Riders
Group Term Insurance with Profit-Share
Group Unit-Linked Plan
For Gratuity
For Defined Benefit Superannuation
For Defined Contribution Superannuation
Group Leave Encashment Plan
RURAL CUSTOMER - According to research findings, there is keenness among
rural customers to invest in savings cum protection plan with a term of five years,
especially, if the premium amount is low and affordable. Keeping this in view, HDFC
STD> LIFE has plans like:
Plans : Bima Bachat Yojana.
Super Bachat Yojana
-
7/31/2019 Project on Hdfc Product Distribution
47/65
DISTRIBUTION OFFICES
In addition to the corporate office at Mumbai, your Company had 169 offices in over
135 cities/towns in the country. It has a widespread network of Financial
Consultants, Corporate Agents and Brokers servicing customers in these cities and
towns.
FINANCIAL CONSULTANTS
The number of licensed Financial Consultants appointed by your Company increased
from over 23,000 in the previous year to over 33,000 in the current year. During
the year, the Company continued its
-
7/31/2019 Project on Hdfc Product Distribution
48/65
CURRENT SALES-HDFC Standard Life
HDFC STANDARD LIFE PACING AHEAD
The Financial Express 15th May 2010
HDFC Standard Life has recorded a strong year-on-year growth of
112% for the period April-March 2009-10, in comparison to the
same period 2008-09, with a new business first year premium of
Rs 1,029 crore.
In terms of effective premium income (EPI), which gives a 10%
value to a Single Premium policy and is an internationally-
accepted indicator of an insurance company's performance, the
EPI grew by 103% to Rs 887 cr from Rs 436 crore.
HDFC Standard Life's growth in new business is a manifestation
of the number of lives insured as well as an increase in the
average premium. For the individual business, volume measured by
the number of lives insured witnessed a 32% growth.
The average premium also grew by 62% to Rs 27,500 in 2008-09
from Rs 17,000 in 2004-05.
During the year the company issued over 3,97,000 policies and has covered
more than 22,50,000 lives
-
7/31/2019 Project on Hdfc Product Distribution
49/65
Table Showcasing Financial Results:
Parameters
April-March
2008-09
(Rs. Cr)
April-March
2009-10
(Rs. Cr)
Growth
(%)
Total received premium 668.40 1532.21 129.23
i. New Business 486.15 1028.94 111.65
ii. Renewal 182.25 503.27 176.14
Effective Premium
Income (Total) 436.08 887.30 103.47
Group Business Premium
(EPI) 49.40 135.15 173.58
-
7/31/2019 Project on Hdfc Product Distribution
50/65
FUTURE PLANS
HDFC has always been market-oriented and dynamic with respect to resource
mobilization as well as its lending program. This renders it more than capable to
meet the new challenges that have emerged. Over the years, HDFC has developed
a vast client base of borrowers, depositors, shareholders and agents, and it hopes
to capitalize on this loyal and satisfied client base for future growth. Internal
systems have been developed to be robust and agile, to take into account changes
in the volatile external environment.
HDFC has developed a network of institutions through partnerships with some of
the best institutions in the world, for providing specialized financial services. Each
institution is being fine-tuned for a specific market, while offering the entire HDFC
customer base the highest standards of quality in product design, facilities and
service.
-
7/31/2019 Project on Hdfc Product Distribution
51/65
SECTION 3- FINANCIAL PLANNING
-
7/31/2019 Project on Hdfc Product Distribution
52/65
FINANCIAL PLANNING
A comprehensive financial advisory service involving financial strategies, tax,
corporate/trust structures, estate planning, legal issues, family law, asset
allocation, asset protection and investment advice.
Financial Planning takes into account:
Desired asset allocation, risk profile and return expectations. Building cash flows correlating all expenses and income. Inflation and outflows
due to loans are considering in building the financial plan.
Future goals like retirement, housing and children's education / marriage orother needs.
Why do you need Financial Planning?
You may have many dreams, needs and desires. For example, you could be
dreaming of:
Owning a new car, Buying a dream house, Providing your children with the best education, Planning a grand wedding for your children Having a great time after your retirement
-
7/31/2019 Project on Hdfc Product Distribution
53/65
But in today's world of skyrocketing costs and increasing inflation, how many of
these dreams can you hope to turn into reality? By planning well, you can utilize
your limited resources to the fullest.
EXPERIENCE THE POWER 360 FINANCIAL PLANNING
The only thing permanent in life is change. Times change. People change. So doeslife. You expect life to be much better tomorrow than it is today. Tomorrow, you
hope to fulfill all your dreams and aspirations. But what happens if things take an
untoward turn? Or, if there is an eventuality? Perhaps it's time for you to change
the way you plan your investments...
How will 360 Financial Planning help?
-
7/31/2019 Project on Hdfc Product Distribution
54/65
Instead of investing in an ad-hoc manner, 360 Financial Planning helps you take a
holistic, all-round view. Briefly, 360 Financial Planning comprises:
Investment Planning Cash Flow Planning Tax Planning Insurance Planning Children Future Planning Retirement Planning
INVESTMENT PLANNING: To make your wealth grow
Everyone needs to save for a rainy day. Once you have saved enough to take care
of emergencies, you should start thinking about investing and to make your money
grow.
Investment Planning Service includes:
Risk Profiling Asset Allocation and Portfolio Construction Creation and Accumulation of Wealth through Systematic Investment Plans
(SIP)
Regular review of progress and Portfolio Rebalancing
CASH FLOW PLANNING: To provide for assets and meet the periodic cash
requirements
In simple terms, cash flow refers to the inflow and outflow of money. It is a record
of your income and expenses.
Cash flow planning refers to the process of identifying the major expenditures in
future (both short-term and long-term) and making planned investments so that
the required amount is accumulated within the required time frame.
-
7/31/2019 Project on Hdfc Product Distribution
55/65
TAX PLANNING: To save on taxes and increase your income
Proper tax planning is a basic duty of every person which should be carried
out religiously.
According to the Income Tax Act, 1961, One will be eligible for Tax Benefits under
Section 80C and Section 10(10D) of the act.
One has to compare the advantages of several tax saving schemes and depending
upon your age, social liabilities, tax slabs and personal preferences, decide upon a
right mix of investments, which shall reduce your tax liability to zero or the
minimum possible.
INSURANCE PLANNING: To protect yourself, your family and your Assets.
"Insurance is not for the person who passes away, it for those who
survive," goes a popular saying that explains the importance of Insurance
Planning.
It is extremely important that every person, especially the breadwinner, covers the
risks to his life, so that his family's quality of life does not undergo any drastic
change in case of an unfortunate eventuality. Insurance Planning is concerned with
ensuring adequate coverage against insurable risks.
CHILDREN'S FUTURE PLANNING: To give your children a financially secure
future
Like every parent, you too must be overjoyed to watch your child grow. All parents
want to give the best possible upbringing to their children. This includes good
education and security, in case of any eventuality. Soon, your little bundle of joy
will grow up, and it will be time to provide for his or her higher education and
wedding.
-
7/31/2019 Project on Hdfc Product Distribution
56/65
The purpose of Children's Future Planning is to create a corpus for foreseeable
expenditures such as those on higher education and wedding, and to provide for an
adequate security cover during their growing years.
RETIREMENT PLANNING: Because retirement is a time to relax, not to get
worried
Some like it. Some dont. But retirement is a reality for every working person. Most
young people today think of retirement as a distant reality.
However, it is important to plan for your post-retirement life if you wish to retain
your financial independence and maintain a comfortable standard of living even
when you are no longer earning. This is extremely important, because, unlike
developed nations, India does not have a social security net.
-
7/31/2019 Project on Hdfc Product Distribution
57/65
CONCLUSION
The various conclusions drawn from the project are:
There has been a tremendous change in the insurance industry. And with it there
has been continuous growth in this sector both in Indian as well as world context.
The opening up of the insurance sector has changed the whole look of the industry.
While the LIC, in order to face the competition is coming up with new strategies.
New private players are leading the sector due to their strategic management and
tailored made projects.
From the research, we also conclude that though the awareness and people opting
for LIC plans are more as compared to other private players but the latter are
gaining momentum in the market day by day.
The demand for insurance is likely to increase with rising per-capita income, rising
literacy rates, and growth of service sector. In-fact opening up of the insurance
sector is an integral part of the liberalization process being persued by many
developing countries.
-
7/31/2019 Project on Hdfc Product Distribution
58/65
Life insurance as a form of protection is the single-most important financial product
any earning member of a family must have. Having said this, a well-diversified
portfolio is one of the first rules of financial planning, and as such one should
consider different instruments as the ability to save increases.
Possible investment options range from bank deposits and government small saving
schemes to mutual funds, stocks and property.
So lets conduct this business with utmost economy with the spirit of
trusteeship; thereby making insurance widely popular.
RECOMMENDATION
Positioning insurance as a means to fulfilling ones duties during ones lifetime. Fears relating to thefts, ailments, death could be addressed through sensitive
communication
Fears relating to claims: Need to promote trust. Demonstrating claimtestimonials, positioning as worry free.
Low returns: Reposition insurance as a risk cover, security instrument ratherthan a financial investment.
Lack of understanding: Training of Channels To provide quality advice on products best suited
Lack of Knowledge: Ease of Process, simplifying the product and theprocedure
Need to promote the quality of awareness The benefits: Leverage on Risk Protection or Returns oriented or both
The product: catering to life stages Need for Branding in Insurance: Branding is more relevant in the Insurance
market which not only faces the problem of securing and retaining customers in
an increasingly competitive marketplace but also experiences the need for
heightened relevance of the brand proposition in a world where brand has been
termed the new religion.
-
7/31/2019 Project on Hdfc Product Distribution
59/65
In rural India, the LIC is especially synonymous with insurance. But in the
wake of competition insurance companies have to do a considerable brand
building exercise at least in urban India. Adequate time, investment and
longer-term management of the brand are essential, not only for success but
also survival. All brands need to be built around well-differentiated and
credible positioning that springs from the organizations history. The brand
must not only be believed but lived by management and employees.
-
7/31/2019 Project on Hdfc Product Distribution
60/65
BIBLIOGRAPHY
Websites
www.rbi.org.in
www.irdaindia.org
www.banknetindia.com
www.hdfcinsurance.com
www.businessworldonline.com
http://www.rbi.org.in/http://www.rbi.org.in/http://www.irdaindia.org/http://www.irdaindia.org/http://www.banknetindia.com/http://www.banknetindia.com/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.businessworldonline.com/http://www.businessworldonline.com/http://www.businessworldonline.com/http://www.hdfcinsurance.com/http://www.banknetindia.com/http://www.irdaindia.org/http://www.rbi.org.in/ -
7/31/2019 Project on Hdfc Product Distribution
61/65
LIMITATIONS
I had put my best effort in gathering the data I have tried my
level best that the data provided and the survey done are
authentic as they could be, but there are some limitation ,
which are mentioned below:
The study period is limited, the researcher has to collectthe necessary and the important within the limited
period of the time and it is not possible to collect it, due
to lack of time.
Some organisations were hesitant to speak freely asthey have feared the information to leak outside.
-
7/31/2019 Project on Hdfc Product Distribution
62/65
PERFORMANCE APPRAISAL
MINOR PROJECTStudents Name: Shubham Bhatia.
Programme: BBA(Gen.)-[2010-2013]
You are required to provide your opinion on the following parameters.
Outstanding Good Satisfactory Unsatisfactory
A B C D
1. Technical knowledge gathered about the industry and the job he/she was involved.2. Communication Skills: Oral/ Written/ Listening skills.3. Ability to work in a team.4. Ability to take initiative.5. Ability to develop a healthy long term relationship with client.6. Ability to relate theoretical learning to the practical training.7. Creativity and ability to innovate with respect to work methods & procedures8. Ability to grasp new ideas and knowledge9. Presentation skills10. Documents skills11. Sense of Responsibility12. Acceptability (patience, pleasing manners, the ability to instill trust, etc.)13. His/her ability and willingness to put in hard work14. In what ways do you consider the student to be valuable to the organization?
Consider the students value in term of: (a) Qualification
(b) skills and abilities
(c) Activities/Roles performed
15. PunctualityAny other comments .
Assessors Overall rating
Assessors Name:
Designation:
Organization name and address:
Email id:
Contact No:
Annexure-A
-
7/31/2019 Project on Hdfc Product Distribution
63/65
BHAI PARMANAND INSTITUTE OF BUSINESS STUDIES
EVALUATION SHEET FOR MINOR PROJECT REPORT
STUDENTS NAME :
ROLL NO. :
EVALUATORS FEEDBACK:
DID THE STUDENT CONTACT YOU
REGULARLY FOR DISCUSSION? :YES/NO(Please tick)
REPORT IS APPROVED / DISAPPROVED:
MARKS AWARDED :
(Out of 50)
SIGNATURE OF EVALUATOR
NAME:
DATE:
*In case report is disapproved, student has to resubmit the report after incorporating
the suggestions given on the feedback form. Revised report should be submitted along
with the feedback form.
-
7/31/2019 Project on Hdfc Product Distribution
64/65
BHAI PARMANAND INSTITUTE OF BUSINESS
ATTENDANCE FOR MINOR PROJECT REPORT
Name of the student :Shubham Bhatia
Course :BBA (3RD
SEMESTER)
Roll No. :05311401710
Name of the Supervisor :MR. S.THIYAGRAJAN
S.No. Date Time Progress of Report
(Remarks)
Signature of
Student
Signature of
Supervisor
1
2
3
4
5
6
7
8
910
-
7/31/2019 Project on Hdfc Product Distribution
65/65