25-04-2014, 04:57 PM
TO CREATE AWARENESS ABOUT HDFC STANDARD LIFE INSURANCE PRODUCT IN PUBLIC
CREATE AWARENESS ABOUT HDFC.doc (Size: 1.09 MB / Downloads: 76)
EXECUTIVE SUMMARY
This Project Report has been completed in Partial fulfillment of my management Program, MASTER OF BUSINESS ADMINISTRATION (MBA) in the company HDFC STANDARD LIFE INSURANCE. The objective of my project was “TO CREATE AWARENESS ABOUT HDFC STANDARD LIFE INSURANCE PRODUCT IN PUBLIC”.
HDFC STANDARD LIFE is the name which is working as one of the best private insurance company in insurance sector.
With such a large population and the untapped market of population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per Cent to the country’s 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.
INTRODUCTION
HDFC STANDARD LIFE is the name which is working as one of the best private insurance company in insurance sector. HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.It got the certificate of registration on 23rd October.
LIFE INSURANCE IN INDIA
INTRODUCTION
With such a large population and the untapped market of population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per Cent to the country’s 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.
A BRIEF HISTORY
The insurance came to India from UK; with the establishment of the Oriental Life Insurance Corporation in 1818.The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the Central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network
Across the length and the breath of the country. After the liberalization the entrance of foreign players have added to the competition in the market.
INSURANCE SECTOR REFORMS
Prior to liberalization of Insurance industry, Life insurance was monopoly of LIC. In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor Was formed to evaluate the Indian insurance industry and give its recommendations. The Committee came up with the following major provisions
• Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry.
• Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.
• Only one State Level Life Insurance Company should be allowed to operate in each state.
It was after this committee came into effect the regulatory body of insurance sector was formed with the name of IRDA.
IMPACT OF LIBERALIZATION
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 give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 81 %( 2004-05).The following companies has the rest of the market share of the insurance industry.
CUSTOMER SERVICE
Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of The customer service in the industry. Computerization of operations and updating of Technology has become imperative in the current scenario. Foreign players are bringing in international best practices in service through use of latest technologies. The one time Monopoly of the LIC and its agents are now going through a through revision and Training programmes to catch up with the other private players. Though lot is being done For the increased customer service and adding technology to it but there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels.
DISTRIBUTION CHANNELS
Till date insurance agents still remain the main source through which insurance products Are sold. The concept is very well established in the country like India but still the Increasing use of other sources is imperative. It therefore makes sense to look at well-Balanced, alternative channels of distribution.
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.
The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.
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.