A PROJECT REPORT

ON

HDFC Standard Life Insurance Company Ltd

IN

CUSTOMER-BUYING BEHAVIOR IN LIFE INSURANCE INDUSTRY Submitted to the SCHOOL OF MANAGEMENT In partial fulfillment of the requirements for the award of the degree Of MASTER OF BUSINESS ADMINISTRATION By Anand. N (Reg.No.35080039) Under the guidance of Prof S. Sundararajan PROFESSOR

SCHOOL OF MANAGEMENT SRM UNIVERSITY SRM NAGAR, KATTANKULATUR, KANCHIPURAM DISTRICT-603203 MAY-2010
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BONAFIDE CERTIFICATE
Certified that this project report titled CUSTOMER-BUYING BEHAVIOR IN LIFE INSURANCE INDUSTRY is the bonafide work of Anand. N who carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported here in does not form part of any other Project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.

PROJECT GUIDE Prof S. Sundararajan

HEAD OF THE MBA DR.JAYSHREE SURESH

..

EXTERNAL EXAMINER

-----------------------------------

DECLARATION
We hereby declare that this project work entitled CUSTOMER-BUYING

BEHAVIOR IN LIFE INSURANCE INDUSTRY submitted at SRM School

of Management studies is partial fulfillment of the requirement for the degree of Master of Business Administration is a record of original work done by use for Department Business Administration, SRM School of Management Studies. It has not been submitted to the award of any Degree.

Place: Chennai

Signature of the Candidate

Date:

_____________________

ACKNOWLEDGEMENT
I first thank my Almighty God and my parents for their sustained blessings and grace at all stages of my training.

I render my gratitude and special thanks to Mr. P. Ganesh Sachidanandhan (Business Manager) of Coimbatore regional office for his help and encouragement throughout the project completion.

I render my unfathomable gratitude and special thanks to Prof S. Sundararajan for his valuable guidance, remedial encouragement, timely suggestions and his deference shown during the preparation of this dissertation.

I render my special thanks to our College Management and to our beloved Dean Dr.Jayshree Suresh, for giving me this opportunity to carry out this Project.

Last but not the least, I thank my friends and well wisher for their good cooperation while I am doing my project.

CONTENTS

CHAPTER NO. I INTRODUCTION

PARTICULARS

PAGE NO. 05 06 08 08 09 10 11 23 32 33 33 35 67 68 70 71 72

1.1 INTRODUCTION TO THE STUDY 1.2 OBJECTIVES OF THE STUDY 1.3 SCOPE OF THE STUDY 1.4 LIMITATIONS OF THE STUDY II INDUSTRY & COMPANY PROFILE 2.1 INDUSTRY PROFILE 2.2 COMPANY PROFILE III RESEARCH METHODOLOGY 3.1 RESEARCH DESIGN 3.2 METHODOLOGY IV V ANALYSIS AND INTERPRETATION 5.1 FINDINGS 5.2 SUGGESTIONS VI CONCLUSION BIBLIOGRAPHY ANNEXURE

LIST OF TABLES
TABLE NO. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 PARTICULARS Age group of respondents Occupation of the respondents Respondents awareness of investment option Respondents having an insurance policy Respondents interest of investing options Term of investment preferred Perception about insurance Kind of buying process preferred What people look for in an insurance company Features made you to invest in HDFC-SLIC Perception towards HDFC-SLIC Satisfaction with respect to policies offered. Respondents preference for clarifying any query. Benefits of insurance perceived by respondents Satisfaction with current policy PAGE NO. 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64

LIST OF FIGURES

FIGURE NO. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15

PARTICULARS Age group of respondents Occupation of the respondents Respondents awareness of investment option Respondents having an insurance policy Respondents interest of investing options Term of investment preferred Perception about insurance Kind of buying process preferred What people look for in an insurance company Features made you to invest in HDFC-SLIC Perception towards HDFC-SLIC Satisfaction with respect to policies offered. Respondents preference for clarifying any query. Benefits of insurance perceived by respondents Satisfaction with current policy

PAGE NO. 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65

EXECUTIVE SUMMARY:

In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and HDFC Standard Life Insurance Company Ltd has given me the opportunity to work and get experience in highly competitive and enhancing sector. The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. However understanding the market, consumer preference and introducing new products to suit different tastes and at the same time offering a value product would be the key steps to fight competition. Marketing is an important activity in any organizations sales strategy. Marketing helps in promoting the products in the targeted market and create a recall value and branding to the products. Marketing department perform the initial market study for the suitability of the product launches; study the market requirements in the existing markets to further strengthen the market capitalization identity the feature needed for a longevity of a product. Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the Customer.

CHAPTER -- I INTRODUCTION

1.1 INTRODUCTION TO THE STUDY

Customer is the king and it is the customer who decides what a business is and therefore a sound marketing programme starts with a careful analysis of habits, attitudes, motives and needs of the customers.

Definition of Buying Behavior:

Buying Behavior is the decision processes and acts of people involved in buying and using products.

Customer buying behavior:

Customer buying behavior refers to the buying behavior of the ultimate end user i.e. the customer. A firm needs to analyse the buying behavior for :

Buyers reactions to a firms marketing strategy has a great impact on the firms success.

The marketing concept stresses that a firm should create a marketing mix that satisfies a customer and therefore need to analyze the what, where, when and how the customers buy. Marketers can better predict how customers will respond to marketing strategies.

How Consumer Buy: 1. Need/Want/Desire is recognized:

In the first step the customer has determined that for some reason he/she is not satisfied(i.e. customers perceived actual condition) and wants to improve his/her situation. External factors can also trigger the customers needs. Marketers are particularly good at this through advertising, in-store displays etc.

2. Search for information:

Assuming that customers are motivated to satisfy his/her need they will

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undertake a search for information on possible solutions. The sources may be simple like the past experience or the customer may expend considerable effort to locate information from outside sources(internet, etc.). How much effort the customer directs towards searching depends on factors such as: The importance of satisfying the need Familiarity with available sources The amount of time available for search.

3. Evaluate options:
Customers search efforts may result in set of options from which a choice can be made. It should be noted that there may be two levels to this stage. At level one the customer may create a set of possible solutions to their solution while at level two the customer may be evaluating particular products within each solution.

4. Purchase:
In many cases the solution chose by the customer is the same as the product whose evaluation is highest. The intended purchase may be altered at the time of purchase for many reasons such as the product is out of stock, a competitor offering incentive at the time of purchase, the customer lacking in necessary of funds.

5. After purchase evaluation:

Once the customer has made the purchase they are faced with the evaluation of the decision. If the product performs below the customers expectation then he/she will re-evaluate the satisfaction with the decision, which at its extreme might result in the customer returning the product while in less extreme situations the customer will retain the product but may take a negative view of the product. Such evaluations might occur in expensive or highly important purchases. Customer service centre and follow-up market research are useful tools in helping to address the purchasers concern.

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1.2 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES: To determine reasons behind opting for an insurance. To determine customers buying behaviour towards private insurance companies and their expectation form private insurance companies. To determine the feedback on services provided by any other insurance agent. To study the types of benefits provided by insurance services.

SECONDARY OBJECTIVES: To know whether the service offered by the company has satisfied the needs of all groups of people. To find out the benefits preferred by the customers. To know about their views about the company and to assess to their views.

1.3. SCOPE OF THE STUDY:

A big boom has been witnessed in Insurance Industry in recent times. A large number of new players have entered the market and are trying to gain market share in this rapidly improving market. The study deals with HDFC Standard Life in focus and the various segments that it caters to. The study then goes on to evaluate and analyze the findings so as to present a clear picture of trends in the Insurance sector.

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1.4. LIMITATIONS OF THE STUDY:

1) The research is confined to a certain parts of Coimbatore and does not necessarily show a pattern applicable to all parts of the Country. 2) Some respondents were reluctant to divulge personal information, which can affect the validity of all responses. 3) In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings. 4.) The data collected from the customers may be biased.

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CHAPTER--II

INDUSTRY & COMPANY PROFILE

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INDUSTRY PROFILE THE HISTORY OF INDIAN INSURANCE INDUSTRY

LIFE INSURANCE In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. Unethical practices adopted by some of the players against the interests of the consumers then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the socalled Life Insurance Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and reach.

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Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: The market contained 154 Indian and 16 foreign life insurance companies.

GENERAL INSURANCE

The General Insurance industry in India dates back to the Industrial Revolution and the subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the British brought General Insurance to India, and a similar path was followed in the development of this industry. A number of private companies were in existence for years and years until, in 1971, the Indian Government decided that the public interest would be served by nationalizing the industry, merging all the 107 companies into four companies, depending on the sort of business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras respectively. The General Insurance Corporation (GIC) was set up in 1972 as a holding company, having these four companies as its subsidiaries.

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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 and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

LIFE INSURANCE CORPORATION OF INDIA (LIC) Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nationbuilding activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum.

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 General Insurance Corporation of India (GIC) The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) (ii) (iii) (iv) National Insurance Company Limited; New India Assurance Company Limited; Oriental Insurance Company Limited; and United India Insurance Company Limited.

(However, with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies. IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: 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 75% of the insurance sector but the upcoming natures of these private players are enough to

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give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-05). 1. HDFC Standard Life Insurance Company Ltd. HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life 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.), Indias leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have been covered through our group business tie-ups. 2. Max New York Life Insurance Co. Ltd. Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India. 3. ICICI Prudential Life Insurance Company Ltd. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7banc assurance and 150 corporate agent tie-ups.

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4. Om Kotak Mahindra Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. 5.Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Bajaj Allianz Life Insurance Company Ltd. MetLife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.

6. Royal Sundaram Alliance Insurance Company Limited The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi. 7. Bajaj Allianz General Insurance Company Limited Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength.

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Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and Allianz, AG, holds the remaining 26% Germany. 8. ICICI Lombard General Insurance Company Limited ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001. 9. Cholamandalam General Insurance Company Ltd. Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, and Kolkata.

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10. TATA AIG General Insurance Company Ltd. Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake. Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines. 11. Reliance General Insurance Company Limited. 12. IFFCO Tokio General Insurance Co. Ltd 13. Export Credit Guarantee Corporation Ltd. 14. HDFC-Chubb General Insurance Co. Ltd.

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MARKETING OF INSURANCE IN INDIA

Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a sector, which leads to benefits across the full spectrum, from the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. In an under-insured economy, newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

Marketing Mix Policies Different companies can choose to position themselves differently and hence the Marketing Mix is different. However, there are certain common characteristics that one can cull out from the possible strategies that companies adopt. Product: The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans. The key to success is in providing insurance solutions, not standardized insurance products. The concept of riders/optional benefits has already been a huge innovation brought about by the new players, which has led to customization of products for individual needs. However, companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in.

Place: Different companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. Many companies

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like HDFC Standard Life are focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these. Price: Price is a relevant differentiator only in two segments - pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long-term returns generated are more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good long-term maturity value for customers. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge. Promotion and Advertising: The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these.

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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customersatisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.

Role of IRDA:
Protecting the interests of policyholders. Establishing guidelines for the operations of insurers, and brokers. Specifying the code of conduct, qualifications, and training for insurance intermediaries and agents. Promoting efficiency in the conduct of insurance business. Regulating the investment of funds by insurance companies. Specifying the percentage of business to be written by insurers in rural sectors. Handling disputes between insurers and insurance intermediaries.

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COMPANY PROFILE
ABOUT HDFC STANDARD LIFE INSURANCE 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 Percent of equity in the joint venture.

HDFC STANDARD LIFE INSURANCE PARENTAGE HDFC Limited.

HDFC is India leading housing finance institution and has helped build more than 23, 00,000 houses since its incorporation in 1977. In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr. As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors. Rated AAA by CRISIL and ICRA for the 10th consecutive year Stable and experienced management High service standards Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development. Presented the Dream Home award for the best housing finance Provider in 2004 at the third Annual Outlook Money Awards.

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Standard Life Group (Standard Life plc and its subsidiaries)

Standard Life Group (Standard Life plc and its subsidiaries) The Standard Life group has been looking after the financial needs of customers for over 180 years It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs

Its investment manager currently administers 125 billion in assets It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's

Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006

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KEY STRENGTHS

1) FINANCIAL EXPERTISE As a joint venture of financial services groups, hdfc standard life has the financial expertise required to manage your long-term investments safely and efficiently.

2) RANGE OF SOLUTIONS We have a range of individual and group solutions, which can be easily customised to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure.

3) TRACK RECORD SO FAR Our gross premium income, for the year ending March 31, 2008 stood at Rs.4,859 crores and new business premium income stood at Rs. 2,685 crores. The company has covered over 9,59,000 lives year ending March 31, 2008.

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SWOT ANALYSIS OF HDFC-SLIC STRENGHTS:

1.) Domestic image of HDFC supported by Standard Lifes international image is the strength of the company. 2.) Strong and well spread network og qualified intermediaries and sales person. 3.) Strong capital and reserve base. 4.) The company provides customer service of the highest order. 5.) Huge basket of product range which are suitable for all age and income groups. 6.) Large pool of technically skilled manpower with in depth knowledge and understanding of the market. 7.) The company also provides innovative products to cater to different needs of different customers.

WEAKNESS:
1.) Heavy management expenses and administrative costs. 2.) Low customer confidence on private players. 3.) Vertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any exception. 4.) Poor retention percentage of tied up agents.

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OPPORTUNITIES:
1.) Insurable population: According to IRDA only 10% of people are insured. This suggests that more than 300m people, with the potential to buy insurance, remain uninsured. 2.) There will be inflow of managerial and financial expertise from the worlds leading insurance markets. Further the burden of educating consumers will also be shared among many players. 3.) International companies will help in building world class expertise in local market by introducing the best global practices.

THREATS:
1.) Other private insurance companies also vying for the same uninsured population. 2.) Competition from public sector insurance companies like LIC, National Insurance Company Limited, Oriental Insurance Limited, New India Assurance Company Limited and United India Insurance Company Limited. People trust and go to them more. 3.) Poaching of customer base by other companies. 4.) Most people dont understand the need or are not willing to take insurance policies in general.

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CORPORATE OBJECTIVES

Our 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'. 'The most obvious choice for all'. Our Values Values that we observe while we work Integrity Innovation Customer centric People Care One for all and all for ones Teamwork Joy and Simplicity

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PRODUCT PROFILE: Individual product: We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, we have 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. Term Assurance Plan Loan Cover Term Assurance Plan

Investment Plans Our investment products are well suited to meet your long-term needs. Single Premium Whole Life Plan

Pension Plans Our Pension Plans help you secure your financial independence even after retirement. Personal Pension Plan Unit Linked Pension Plan Unit Linked Pension Plus

Our Immediate Annuity plan will aid you in receiving income post retirement and securing you financial independence.

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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 childrens 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 Young star Unit Linked Young star Plus

Health Plans Our health plans provides you with timely support in case of any health related emergencies and helps you and your family to remain financially independent in difficult times Critical care plan Surqi care plan

Group Products: One-stop shop for employee-benefit solutions 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. We 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. We now offer the following group products to our esteemed corporate clients Group Term Insurance Group Variable Term Insurance Group Unit-Linked Plan

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Social Product Development Insurance plan is an insurance plan which provides life cover to members of a Development Agency for a term of one year. On the death of any member of the group insured during the year of cover, a lump sum is paid to that members beneficiaries to help meet some of the immediate financial needs following their loss. Other product: Rural products Tax benefits

The Value Added Services Offered By The HDFC std. life insurance: Electronic clearing system: It is a system where your premium gets directly debited from your bank account on your due dates. This helps the customer to pay the insurance premium with out to the insurance company. Financial advisors: Advisors are the back is not just selling of the policies but listen to the customer like what they need, how much they can invest, which policy suits them the and what kind of policy expect from us i.e. what kind of policies should be designed for them. Ease in renewal of the lapsed policy: Policy holder can easily renew their policy without much more difficulties for these customers can seed the help of financial consultant.

Other service: Customized products All the information about the companies and its products are available in companys web site. In case a customer wants to pay their premiums through cheque then they can draw them in favors of the insurance company in which he has the policy. Market information: customers can check their policy status through online. Clime settlement: clime settlement in private life insurance company is faster than the other insurance company. 35

CHAPTERIII RESEARCH METHODOLOGY

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3.1. RESEARCH DESIGN OF THE STUDY:

Marketing research can be defined as the systematic design, collection, analysis, and reporting of the data and finding relevant to a specific marketing situation facing the company. Research design is the basic plan which guides the researchers in the collection and analysis of data required for practicing the research product. In fact the research design is the conceptual structure with which research is conducted. It consist the blue print for the collection, measurement and analysis of the data that was followed completing the study to ensure that study is relevant to the problem and will follow the predetermined and set data. The main data feature of Research Design is that it specifies population to be studied. The main them of the chapter is to know the source of the data the researcher has collected. Data are raw facts of observation, typically about physical phenomenon. Descriptive research : The research design selected for this research is descriptive research design.

3.2. METHODOLOGY:
Collection of the data for the study can be drawn from following methods for study. Sources of the data: After determining the objectives of study and research design, the next important step is data is step collection method. The information has to be collected from the retailers. During the process of the study the data is collected from the target segment that is customers, dealers and distributors with help of a structured well designed questionnaire.

Data is collected from Primary data Secondary data 37

Primary data It was collected through questionnaire prepared contains relevant questions that are both close ended and opened. Individual and group interviews also under taken with difference consumers, I have collected mainly the Primary Data for my study by utilizing the questionnaire and interview methods.

Secondary data These data are collected from published sources such as Magazines, NEWS papers, several books, and also from the help of web site www.hdfcsl.com.

(A) Sampling plan of the study: Sample size: Sample size refers to number of elements to be included in the study several qualitative factors should also be taken into consideration when determining the sample size. These include the nature of research, number of variable, and nature of analysis, sample size used in similar studies incidence rates, completion rates, and resources constraints. During the process of the study, survey has been conducted on 100 respondents. Sampling method: The researcher had choice between probability and non probability sampling methods. In this study a simple non probability method namely convenience sampling was adopted. NON PROBABILITY METHOD CONVENIENCE SAMPLING METHOD

38

CHAPTERIV ANALYSIS & INTERPRETATION

39

TABLE 4.1: AGE GROUP OF RESPONDENTS

Age Group

No. of respondent

Percentage

Below 25

31

31%

25 to 35

39

39%

35 to 45

25

25%

45 and above

5%

Total

100

100%

Sources: primary data collected through questionnaire

40

FIG-4.1: AGE GROUP OF RESPONDENTS

45 40 35 30 25 20 15 10 5 0 below25 25to35 35to45 45andabove No.ofrespondents

INTERPRETATION:
The above figure reveals that most of the people 32% are working in government and 29%are Business sector

41

Table 4.2: OCCUPATION OF THE RESPONDENTS

Working sector

No. of respondent

Percentage

Govt.

32

32%

IT

16

16%

Education

6%

Finance

13

13%

Business

29

29%

Other

4%

Total

100

100%

Sources: primary data collected through questionnaire

42

FIG - 4.2: OCCUPATION OF THE RESPONDENTS

35

30

25

20 no.ofrespondents 15

10

0 Govt IT Education Finance Business Other

INTERPRETATION:
The above figure reveals that most of the people 32% are working in government and 29%are Business sector

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Table

4.3:

RESPONDENTS

AWARENESS

OF

INVESTMENT OPTION

Awareness

No. of respondent

Percentage

Yes

33

33%

No

14

14%

Have some knowledge

53

53%

Total

100

100%

Sources: primary data collected through questionnaire

44

FIG - 4.3: RESPONDENTS AWARENESS OF INVESTMENT OPTION

60

50

40

30 No.ofRespondants 20

10

0 Yes No HavesomeKnowledge

INTERPRETATION:
This graph shows that only 33% of people are aware of the investment option and 53% of people have some knowledge about it. But 14% of people are not aware of the investment option available to them

45

Table 4.4: POLICY

RESPONDENTS HAVING AN

INSURANCE

Response

No .of respondents

percentage

Yes

53

53%

No

47

47%

Total

100

100%

Sources: primary data collected through questionnaire

46

FIG - 4.4: POLICY

RESPONDENTS HAVING AN

INSURANCE

54 53 52 51 50 49 no.ofrespondents 48 47 46 45 44 Yes No

INTERPRETATION:
This graph shows that 47% of people not having an insurance policy and 53% of people having an insurance policy.

47

Table 4.5: RESPONDENT INTEREST OF INVESTING OPTIONS

Need for investment

Respondents

percentage

Retirement

28

28%

Tax saving

21

21%

Earnings

33

33%

Liquidity

18

18%

Total

100

100%

Sources: primary data collected through questionnaire

48

FIG - 4.5: RESPONDENT INTEREST OF INVESTING OPTIONS

35

30

25

20 No.ofrespondentas

15

10

0 Retirement TaxSaving Earnings Liquidity

INTERPRETATION:
The figure shows 33% of people have insurance for future earnings and 28% are investing for Retirement.

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Table 4.6: TERM OF INVESTMENT PREFERRED

Investment Method

No .of respondents

percentage

Short term

32

32%

Medium Term

22

22%

Long Term

46

46%

Total

100

100%

Sources: primary data collected through questionnaire

50

FIG - 4.6: TERM OF INVESTMENT PREFERRED

50 45 40 35 30 25 No.ofrespondants 20 15 10 5 0 ShortTerm MediumTerm LongTerm

INTERPRETATION:
The above figure shows 46% of respondents prefer long term investment where as 32% prefer medium term and only 22% prefer short term.

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Table 4.7: PERCEPTION ABOUT INSURANCE

RESPONSE

NO. OF RESPONDENTS

SHARE (%)

A saving tool

32

32%

A tax saving device

29

29%

A tool to protect your family

39

39%

Sources: primary data collected through questionnaire

52

FIG - 4.7: PERCEPTION ABOUT INSURANCE

INTERPRETATION
The above figure shows that 32% of the respondents have perception of Insurance being a saving tool and 29% of the respondents have perception of Insurance being a tax saving device.But 39% of the respondents are with the view that Insurance is a tool to protect your family.

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Table 4.8: KIND OF BUYING PROCESS PREFERRED

BUYING PROCESS

NO. OF RESPONDENTS

SHARE (%)

Customer approached Insurance company/Agent

44

44%

Company/agent approached customer

56

56%

Total

100

100%

Sources: primary data collected through questionnaire

54

FIG - 4.8: KIND OF BUYING PROCESS PREFERRED

INTERPRETATION
44% of the respondents approached the Insurance Company / Agent. Whereas, 56% of the respondents were approached by the Company /Agent.

55

Table 4.9: WHAT PEOPLE LOOK FOR IN INSURANCE COMPANY?

RESPONSE

NO. OF RESPONDENTS

SHARE (%)

A trusted name

29

29%

Friendly service & responsiveness

25

25%

Good plans

29

29%

Accessibility

17

17%

Sources: primary data collected through questionnaire

56

FIG - 4.9: WHAT PEOPLE LOOK FOR IN INSURANCE COMPANY?

INTERPRETATION
29% customers look for a Trusted name in a company for insurance. 29% customers look for a good plan in a company for insurance. Friendly service & responsiveness and Accessibility are also important factors looked by customers in a company.

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Table 4.10: FEATURES MADE YOU TO INVEST IN HDFC STANDARD LIFE INSURANCE

FEATURE

NO.OF RESPONDENTS

SHARE (%)

Money Back Guarantee

15

15

Larger Risk Coverance

37

37

Easy Access to Agents Low Premium Companys Reputation TOTAL

7 30 11 100

7 30 11 100

Sources: primary data collected through questionnaire

58

FIG - 4.10: FEATURES MADE YOU TO INVEST IN HDFC STANDARD LIFE INSURANCE

INTERPRETATION: Majority of the respondent (37%) found Larger risk coverance as the most attracted feature of the all.

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Table 4.11: RESPONDENT PERCEPTION TOWARDS THE HDFC STANDARD LIFE INSURANCE COMPANY

Opinion

No .of respondents

Percentage

Average

29

29%

Aggressive

21

21%

Excellent

14

14%

Professional

36

36%

Total

100

100%

Sources: primary data collected through questionnaire

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FIG - 4.11: RESPONDENT PERCEPTION TOWARDS THE HDFC STANDARD LIFE INSURANCE COMPANY

40

35

30

25

20 Noofrespondents 15

10

0 Average Aggressive Excellent professional

INTERPRETATION:
The above graph shows that 36% of Respondents believes the operations of the company to be professional and 29% believe it is Average.

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Table 4.12: SATISFACTION OF THE RESPONDENTS WITH RESPECT TO POLICIES OFFERED.

RESPONSE

NO. OF RESPONDENTS

SHARE (%)

Satisfied

60

60%

Not satisfied

40

40%

Not Responded

0%

Total

100

100%

Sources: primary data collected through questionnaire

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FIG - 4.12: SATISFACTION OF THE RESPONDENTS WITH RESPECT TO POLICIES OFFERED.

INTERPRETATION
60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded.

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Table

4.13

RESPONDENTS

PREFERENCE

FOR

CLARIFYING ANY QUERY

Services

No. of Respondents

Percentage

Advisor

39

39%

company website

16

16%

customer care

28

28%

branch manager

17

17%

Total

100

100%

Sources: primary data collected through questionnaire

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FIG - 4.13: RESPONDENTS PREFERENCE FOR CLARIFYING ANY QUERY

45 40 35 30 25 20 15 10 5 0 Advisor companywebsite customercare branchmanager No.ofrespondents

INTERPRETATION:
The above graph shows that 39% people believes in Advisor, 28% of people believes Customer care while company website and branch Manager People clarify any query first respectively 16% and 17%

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Table 4.14: BENEFITS OF INSURANCE PERCIEVED BY RESPONDENTS

BENEFITS

NO.OF RESPONDENTS

SHARE (%)

Cover Future Uncertainty

55

55

Tax Deductions

20

20

Future Investment

25

25

TOTAL

100

100

Sources: primary data collected through questionnaire

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FIG - 4.14: BENEFITS OF INSURANCE PERCIEVED BY RESPONDENTS

INTERPRETATION
55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy. Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively

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Table 4.15: SATISFACTION OF CURRENT POLICY

Satisfaction level

No. of Respondents

Percentage

Yes

82

82%

No

18

18%

Total

100

100%

Sources: primary data collected through questionnaire

68

FIG - 4.15: SATISFACTION OF CURRENT POLICY

90 80 70 60 50 40 30 20 10 0

82

18

No.ofrespondents

Yes

No

INTERPRETATION:
The above figure shows that 82% of respondents are satisfied with their current policy and only 18% of people are not happy with their policy.

69

CHAPTER V FINDINGS & SUGGESTIONS

70

5.1 FINDINGS:

It reveals that 39% of respondents belong to 25 to 35 age group and 31% are belong to below 25 ages. ( Ref: Table 4.1) The survey shows that maximum 32% of the respondents are in working govt. sector. ( Ref: Table 4.2) Out of 100respondents 33% of the respondents were well known about HDFCSL investment option. ( Ref: Table 4.3) 53% of the people having a insurance policy. ( Ref: Table 4.4) 33% of respondents are indented to invest on their earning only. ( Ref: Table 4.5) 46% of respondents are preferred long term investment term in HDFC-SLIC. ( Ref: Table 4.6) 56% of the respondents prefer the buying process of the company/agent approaching the customer while 44% prefer vice-versa. ( Ref: Table 4.8) 36% of the respondents perception about HDFC-SLIC is professional, and 21% has told that it is being aggressive and 14% are Excellent. ( Ref: Table 4.11) 60% of the respondents are satisfied with the policies offered in HDFC-SLIC. ( Ref: Table 4.12) 39% of the respondents using Advisor service which the service offered by the HDFC-SLIC. ( Ref: Table 4.13) 55% of the respondents perceive the benefits of insurance as a cover for future uncertainity. ( Ref: Table 4.14) 82% of respondents are satisfied with current policy offered by HDFC-SLIC. ( Ref: Table 4.15)

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5.2 SUGGESTIONS:

In Coimbatore most of the people are working in Government and Business sector and they dont have much financial planning. Another important point is they have good compensation package. So the company should bring more innovative and should carry out more promotional activities in government fields. Better promotion of unit linked plans can generate more sales to the company.

HDFC STANDARD LIFE INSURANCE COMPANYs unit linked insurance plans can effectively meet the requirements of the customers, because unit linked plans are directly related to the market, so the customers can creates more wealth through fund and they can enjoy the tax benefit, and also the insurance cover. The pressure on the sales team would be lessoned by increasing the awareness among the people about the credibility of the companies and need for capitalizing on the various insurance plans offered by the private life insurance companies. As the awareness of insurance is less among the people, its awareness should be creating among the people by conducting stage shows and explaining its need and importance. Insurance should not be considered only as a risk cover element but also as a long term investment It is also recommended to concentrate to on lower income group people. More efforts should be taken by the companys financial consultants to convert the leads into policy holder of HDFC-SLIC. Follow up should be taken and customer relation should be maintained by the inviting the existing customers to the seminars conducted when launching a new product or any changes are made to the products or rules to retain them. Coming with new promotional activities like giving new advertisements, keeping stalls, conducting seminars in companies, and giving ads through SMS can be done by HDFC Standard Life insurance Co. to create awareness among customers.

72

CHAPTER VI CONCLUSION

73

CONCLUSION:
Our exhaustive research in the field of Life Insurance threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products.

People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been impressed by the marketing and advertising campaigns of insurance companies. A high penetration of print, radio and Television ad campaigns over the years is beginning to have its impact now. Another heartening trend was in terms of people viewing insurance as a tax saving and investment instrument as much as a protective one. A very high number of respondents have opted for insurance for such purposes and it shows how insurance companies have been successful to attract public money in recent times.

The general satisfaction levels among public with regards to policy and agents still requires improvement. But therein lies the opportunity for a relative new comer like HDFC Standard Life Insurance Company Ltd. LIC has never been known for prompt service or customer oriented methods and HDFC Standard Life can build on these factors.

74

BIBLIOGRAPHY

WEBSITES REFFERED: www.irda.com www.hdfcinsurance.com www.insurance.ind.com www.moneyoutlook.com

BOOKS & JOURNALS REFFERED: Marketing Management- Philip kotler. Research Methodology- C.R. Kothari. IRDA Journal. Outlook The laymans guide to insurance.

75

ANNEXURE
QUESTIONNARE:

I am Anand.N, MBA second year student of SRM University currently doing my project in HDFC Standard Life Insurance Company. As a part of my study I am collecting information of the existing customers to know the CUSTOMER-BUYING BEHAVIOUR IN LIFE INSURANCE INDUSTRY. I kindly request you to fill the following questionnaire.

(1) (2) (3)

What is your name? Sex: [ ]Male [ ]Female

Which age group do you belong to? [ ] less than 25years, [ ] 25 to 35 tears, [ ] 35 to 45 years [ ] above 45years

(4)

Which sector are you working in? [ ] Education [ ] Government [ ] Finance [ ] IT [ ] Business [ ] others

(5)

Are you aware of the all the Investment options available? [ ] Yes [ ] No

[ ] Have some knowledge

(6)

Do have any insurance policy? [ ] Yes [ ] No

76

(7)

Why do you want to invest in to insurance? [ ] Retirement [ ] Earnings [ ] Tax saving [ ] Liquidity

(8)

Which term of investment preferred? [ ] Short term [ ] Medium term [ ] Long term

(9) What is your perception about insurance? [ ] A saving tool [ ] A tax saving device

[ ] A tool to protect your family (10) What kind of buying process do you prefer? [ ]Customer approached Insurance company/Agent [ ] Company/agent approached customer (11) What do you look for in an insurance company? [ ] A trusted name [ ] Good plans [ ] Friendly service & responsiveness [ ] Accessibility

(12) Which features made you to invest in HDFC Standard Life Insurance? [ ] Money Back Guarantee [ ] Easy Access to Agents [ ] Companys Reputation (13) What is your opinion towards the services provided by HDFC Standard Life Insurance? [ ] Average [ ] Excellent [ ] Aggressive [ ] professional [ ] Larger Risk Coverance [ ] Low Premium

77

(14) Are you satisfied with the policies of the insurance provider? [ ] Satisfied [ ] Not Responded (15) If you want to clarify any query to whom you consult first? [ ] advisor [ ] customer care [ ] company website [ ] branch manager [ ] Not satisfied

(16)How do you perceive the benefits of insurance provided? [ ] Cover Future Uncertainty [ ] Tax Deductions [ ] Future Investment (17) Are you satisfied with your current policy? [ ] Yes [ ] No

Any more information you would like to share regarding your perception about HDFC-SLIC.

THANK YOU

78