Professional Documents
Culture Documents
(Session: 2007-10)
PREFACE
Sr.No. Content
Preface
Acknowledgements
Objective
Chapter-1-Insurance In India
Insurance In India
A Brief History Of The Insurance Sector
Insurance Sector Reforms
Indian Insurance Industry
Insurance Business
Entry Of Foreign Players
Guidelines For Entry Of Insurance
Collaboration Of Indian Companies With Foreign Players
Chapter- 2-
Insurance Regulatory & Development Authority
Government Regulation
Duties, Powers And Functions Of IRDA
IRDA Notification
Chapter – 3
-Hdfc Standard Life Insurance
Industry profile
Company profile
Organizational structure
Research methodology
Market position
Chapter – 4
Competitor profiling
Recruitment
Issues In Recruitment
Recruitment Procedure
Guide Lines Of HDFC Standard Life Insurance Regarding
Recruitment Of Financial Consultants
Highlights
Endless Earning Possibilities
FAQS (Frequently Asked Questions)
Chapter- 5-
Products Of HDFC Standard Life Insurance
Individuals
Group Products
Claim Settlement Process
Premium Delay Procedure
Loans On Policies
Nomination
Chapter – 6-
Faq’s On Insurance
Chapter – 7
-Location Of HDFC Standard Life Branches
HDFC Standard Life Insurance Companies Locations
10. Conclusion
11. Limitation of This Study
12. Recommendation
13. Bibliography
14. Annexure
Objectives
INSURANCE IN INDIA
The insurance sector in India has come a full circle from
being an open competitive market to nationalization and
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.
Introduction
Insurance Sector
Insurance sector is broadly divided into two parts:
Life Insurance
Non Life/General Insurance
The reform in the insurance sector leading finally to the opening of the
insurance sector for private participation has brought in its wake major
changes not only in the design of the products available in the market but
also the manner in which they are marketed. We have today a host of
products coupled with a large number of intermediaries who market them.
Companies especially life insurance companies are adopting different
types of distribution channels to grab customers. Multi-channel distribution
model is such a new concept that is presently seemed to be alluring to
Indian life insurers. In a multiple distribution model, a single insurance
company uses more than one distribution channel to market its products.
Distribution channels of Life Insurance in Indian Market.
The distribution scenario of life insurance has varied a lot with post
liberalization Policies in Indian market. By any yardstick, India, with about
200 million middle class households, presents a huge untapped potential
for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive
for global insurance majors.
Financial consultant (agent) is one of the most important modes of
distribution of life insurance products. Financial consultant (Agents)
continues to be the predominant distribution channel, today a number of
innovative alternative channels are being offered to consumers. Some of
them are banc assurance, brokers, the internet and direct marketing.
1. Agents:
Agents have function of direct selling to the customer; they are main
intermediary between the company and the client. There are two types of
agents, General and Career agents. The General agents work for different
insurers at the same time but career agent’s work for only one insurer.
Prior to liberalization no minimum qualification was laid down for the
people who wanted to become insurance agents. They generally acted as
life brokers and cared more for their commission than the needs of the
customer. As the result they didn’t make the required efforts to educate the
customers about insurance products being offered. But with the entry of
the new players in the Indian market the insurance market has changed
drastically. Private insurers focused more on the technical expertise and
service excellence so they give proper training to the agents and teach
them properly about the insurance products which they are suppose to
sell.
2. Brokers:
Insurance brokers are the organizations who assess the complete
insurance needs of the customers and then work out with insurers to give
a complete solution to customers.
Broker’s attributes:
Brokers must have ability to develop a more comprehensive
understanding of a client’s business and broad spectrum of risks.
They are not tied with particular insurer and are expected to give the best
service to the customer according to the need of the customer.
3. Banc assurance:
This refers to the distribution of the insurance products through banks.
Products are distributed through a bank’s branches and also through new
distribution systems such as electronic banking. Bancassurance is
believed to be the best because banks are familiar with the target
customers needs and have a strong delivery mechanism. The reasons
why banks have pushed the life insurance products are:
1) Mature and highly competitive banking markets
2) Broadening of the product base
a) One - stop shopping
b) Complementary Products
3) Leverage bank’s competitive edge on the marketing side
a) Frequency of contacts
b) Customer knowledge
c) Image/Brand name
Some of the disadvantages of the bancassurance are initial investment
and training of people and lack of awareness about this new concept.
4. Corporate Agents:
Corporate agents function the same way as brokers do, barring the fact
that they can sell only one insurance company’s products. Some corporate
agents, however, have tried to circumvent this regulation by setting up two
or three sister firms so that they can offer a basket of products to their
clients. This term refers to the corporate that acts as agents to the
insurance companies. The insurance company chooses a third party which
is financially sound and assigns it the responsibility of covering a given
location. This third party is called corporate agent.
Winds of Change:
Reforms have marked the entry of many of the global insurance majors
into the Indian market in the form of joint ventures with Indian companies.
Some of the key names are AIG, New York, Allianz, Prudential, Standard
Life, Old Mutual. The entry of new players has rejuvenated the erstwhile
monopoly player LIC, which has responded to the competition in an
admirable fashion by launching new products and improving service
standards.
i) 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.
All the insurance companies should be given greater
freedom to operate.
ii) 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 and General Insurance
through a single entity
Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies
Postal Life Insurance should be allowed to operate in the
rural market
Only one State Level Life Insurance Company should be
allowed to operate in each state
iv) 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)
v) 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
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 requirement of Rs.100
crores. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their
performance and enable them to act as independent
companies with economic motives. For this purpose, it had
proposed setting up an independent regulatory body.
INDIAN INSURANCE INDUSTRY
Insurers
Insurance industry, as on 1.4.2000, comprised mainly two
players: the state insurers:
Life Insurers:
Life Insurance Corporation of India (LIC)
General Insurers:
General Insurance Corporation of India (GIC) (with
effect from Dec'2000, a National Reinsurer)
GIC had four subsidary companies, namely (with effect from
Dec'2000, these subsidiaries have been de-linked from the
parent company and made as independent insurance
companies.
The Oriental Insurance Company Limited
The New India Assurance Company Limited,
National Insurance Company Limited
United India Insurance Company Limited.
N
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General Insurers :
S. Registra Date of Name
No tion Registr of the
. Number ation Comp
any
Life Insurers:
S R D Name of the Company
. eg a
N ist t
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N R
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2 12 1 Aviva Life
2 4 Insurance Co. India
. Pvt. Ltd.
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.
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General Insurers :
S Regist Date Name of
. ration of the
N Numbe Regis Company
o r tratio
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Life Insurers:
S Re Da Name of the
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N tra of
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1 12 06 Sahara India
7 .0 Insurance
2. Company Ltd.
20
04
Yr: 2004-2005 :
Insurance Industry in this year, so far has 1new entrants;
namely
Life Insurers:
S Re Da Name of the
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N trat of
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. Nu g.
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INSURANCE BUSINEES:
Insurance business is divided into four classes :
1) Life Insurance
2) Fire Insurance
3) Marine Insurance and
4) Miscellaneous Insurance.
Life Insurers transact life insurance business; General
Insurers transact the rest.
No composites are permitted as per law.
LEGISLATION (as on 1.4.2000):
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.
INSURANCE PRODUCTS (as on 1.4.2000) (for latest
information get in touch with the current insurers – website
information of insurers is provided at the web page for
insurers.
Life Insurance:
Popular Products: Endowment Assurance (Participating),
and Money Back (Participating). More than 80% of the life
insurance business is from these products.
General Insurance:
Fire and Miscellaneous insurance businesses are
predominant. Motor Vehicle insurance is compulsory.
Tariff Advisory Committee (TAC) lays down tariff rates for
some of the general insurance products (please visit
website of GIC for details )
2001
New products have been launched by life insurers. These
include linked-products. For details, please visit the
websites of life insurers.
INFORMATION
About the insurance industry, the following documents may
be helpful:
Malhotra Committee Report (The Report of the Committee
on Reforms in the Insurance Sector);
IRDA's First Annual Report - 2001
Foreign Partner:
Sun Life Assurance, Sun Life Financial's primary insurance
business, has excellent ratings with the world's top rating
agencies. With assets under management as on September
30, 2000 totalling more than CDN billion, it ranks amongst
the largest international financial services organisations in
the world.
Foreign Partner:
Established in 1848, Prudential plc. of U.K. has grown to be
the largest life insurance and mutual fund company in U.K.
Prudential plc. has had its presence in Asia for the past 75
years catering to over 1 million customers across 11 Asian
countries.
Metropolitan Life
MetLife India proudly carries a
135 year old legacy of helping
build financial freedom for
everyone.
Metropolitan Life Insurance
Company ("MetLife"), a subsidiary of MetLife, Inc. (NYSE:
MET), is a leading provider of insurance and other financial
services to individual and institutional customers. The
MetLife Companies serve approximately 12 million
individuals in the U.S. and companies and institutions with
33 million employees and members, including 88 of the
Fortune 100 companies. MetLife also has, through its
subsidiaries and affiliates, international insurance
operations in 12 countries. For more information about
MetLife, please visit the company's web site at
www.metlife.com.
a chairman
5 whole-time members
4 part-time members
PRELIMINARY
1. Short title and commencement
These regulations may be called the Insurance Regulatory
and Development Authority (Reinsurance) Regulations, 2000
and are issued in pursuance of Section 114 of the Act.
They shall come into force from the date of its publication
in the Official Gazette.
These regulations apply to all general insurers transacting
direct insurance business.
IRDA NOTIFICATION
Chapter – 3
HDFC Standard Life
Insurance
INDUSTRY PROFILE
Incorporated in 1977 as a public limited company
To specialize in provision of housing finance to individuals,
co-operative societies & the corporate sector
First private sector retail housing finance company
HDFC is listed on both BSE and NSE
Market capitalization (June 2002) - Rs. 79 billion (US $ 1.6
bn)
P
.
COMPANY PROFILE
Protection Investment
• Endowment Assurance
Plan
• Personal Pension Plan
• Unit Linked Endowment
Plan
• Unit Linked Pension Plan
• Children’s Plan
• Unit Linked Young Star
Saving
Pension
Main Text
RESEARCH DESIGN:
This report is basically a collection and perceptive
examination of the Executive channel distribution of HDFC
STANDARD LIFE Insurance Company. The study has been a
blend of field exploration as well desk research.
RESEARCH OBJECTIVE:
To study the channel distribution of Insurance Industry and
to understand consumer perception with regard to the
Insurance Sector and its upcoming growth stratum.
SAMPLE DESIGN:
The study is conducted upon the Sample survey is
conducted in Delhi and its suburbs with the help of Simple
random sampling method.
Segmentation
By Professions
Geographically
(Psychographic)
Santacruz
Insurance consultant
Vile Parle
Stock Broker
LIMITATIONS
Survey is restricted to Delhi,NCR and its suburbs only.
The study is limited to Lawyers, Chartered Accountants and
Property dealers and home makers only.
The study was undertaken on a small account due to
paucity of time and resources.
The sample size chosen after random selection through tele
calling thus results of the low as compared to direct
interaction.
MARKET POSITION
Commission Structure:
Depends on the product, like on savings
20-40% 1st year premium.
On investment 2%
On pension 7.5%
Modes & ways through which the company recruits agents:
Direct contacts.
Newspaper adds.
Consultants.
Member of the company can introduce a new member.
Current agent force:
Around 500-700 in Delhi.
Top 5 USP’s (Unique Selling Proposition) Of HDFC Std.Life:
Best insurer according to Outlook.
Well supported by foreign 1st private sector life insurance
Company to be granted a license.
Declared bonus every year from the day of incorporation
(only company)
Provides fast service to the customers in terms of claim
COMPETITOR PROFILING
Commission Structure:
Minimum - 2%
Maximum – 40%.
Varies from product to product- 25%, 7.5%, 10% & 15%.
Modes & ways through which the company recruits agents:
Reference (only)
Max New York life recruits agents only on basis of
reference.
Current agent force:
Around 2000-3000 in Delhi.
BANCASSURANCE
Banc assurance symbolizes the convergence of banking and
insurance. The term has its origins in France and involves
distribution of insurance products through a bank's branch
network.
Banks and Life insurers build a mutually beneficial
relationship and offer their customers a great deal of value-
add in the process. Banks give life insurance companies an
opportunity to increase their distribution presence, and they
also earn a fee income from the arrangement.
Currently HDFC Standard Life Insurance have seven
partners – HDFC Bank,HDFC Security,HDFC Home Loan,
HDFC Mutual Fund,HDFC Reality.com,HDFC Deposit.
ADVANTAGES OF BANCASSURANCE
Advantages to banks
Productivity of the employees increases.
By providing customers with both the services under one
roof, they can improve overall customer satisfaction
resulting in higher customer retention levels.
Increase in return on assets by building fee income through
the sale of insurance products.
Can leverage on face-to-face contacts and awareness about
the financial conditions of customers to sell insurance
products.
Banks can cross sell insurance products E.g. Term
insurance products with loans.
Advantages to insurers
Insurers can exploit the banks' wide network of branches
for distribution of products. The penetration of banks'
branches into the rural areas can be utilized to sell
products in those areas.
Customer database like customers' financial standing,
spending habits, investment and purchase capability can be
used to customize products and sell accordingly.
Since banks have already established relationship with
customers, conversion ratio of leads to sales is likely to be
high. Further service aspect can also be tackled easily.
Advantages to consumers
Comprehensive financial advisory services under one roof.
i.e., insurance services along with other financial services
such as banking, mutual funds, personal loans etc.
Enhanced convenience on the part of the insured
Easy accesses for claims, as banks are a regular go.
Innovative and better product ranges
HDFC SLIC was a pioneer in offering life insurance solutions
through banks. Within a short span of two years, and with
nearly a large number of partners, Bank has emerged as a
vital component of the company's sales and distribution
strategy, contributing to approximately one third of
company's total business.
The business philosophy at Bank is to leverage distribution
synergies with our partners and add value to its customers
as well as the partners. Flexibility, adaptation and
experimenting with new ideas are the hallmarks of this
channel.
DIRECT MARKETING
Direct marketing program of HDFC Standard life insurance
is a powerful way to communicate with best prospects and
customers—targeted direct marketing efforts are necessary
for acquiring more and more customers for the company.
HDFC Standard Life Insurance Company’s directing
marketing distribution channel gives the opportunity to:
Create an effective direct marketing plan
Acquire new customers
Gain insight into your direct marketing customer base
Leverage relationships with your existing customers
Improve customer retention and decrease churn
Target new direct marketing opportunities
Assist with new product development