A Project Report On

CUSTOMER BUYING BEHAVIOUR WITH A FOCUS ON MARKET SEGMENTATION FOR HDFC LIFE INSURANCE

SUBMITTED FOR THE PARTIAL FULLFILMENT OF MASTER IN BUSINESS ADMINISTRATION OF BARKATULLAH UNIVERSITY, BHOPAL

SUBMITTED BY

Mohd.Akram Khan MBA 3rd SEMISTER

Satyam Education & Social Welfare Society BHOPAL.(M.P.)

SESSION 2011-12

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PREFACE
The reseacrch provides an opportunity to a student to demonstrate application of his / her knowledge, skill and competencies required during the technical session. Research also helps the student to deote his / her skill to analyze the problem to suggest alternative solutions, to evaluate them and to provide feasible recommendations on the provided data. The research on the topic of CUSTOMER BUYING BEHAVIOUR WITH A FOCUS ON MARKET SEGMENTATION FOR HDFC LIFE INSURANCE. Although I have tried my level best to prepare his report on error free report every effort has been made to offer the most authenticate position with accuracy.

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ACKNOWLEDGEMENT
I am thankful to HDFC Life Insurance, Bhopal for giving me the opportunity to work on a real time project which gave me a valuable insight into the Sales/Marketing area. I am grateful to my faculty mentor Prof. Amit Patel for his valuable support and guidance during the project. He has been a source of constant improvements in the project. I am grateful to my guide Mr.Kripa Shankar Tiwari (A.S.M), HDFC Life Insurance for providing useful direction in drafting the scope of the project and giving helpful advice throughout the project. My project at HDFC Standard Life Insurance was a great learning experience and for that I shall always be indebted to it.

Mohd.Akram Khan

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DECLARATION
I hereby declare that the project report entitled Insurance is an authentic work done by me. The project was undertaken as a part of the course curriculum of M.B.A programme, Barkatullah University, Bhopal. This has not been submitted to any other examination body earlier. Customer buying

behaviour with a focus on Market Segmentation in HDFC Life

Signature : Candidates Name : Mohd.Akram Khan

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CONTENTS OF THE PROJECT REPORT Contents Page no.

INTRODUCTION TO INSURANCE INDUSTRY

7 8 - 11
12 13 - 16 17 - 20

Executive summary
History of insurance Major players in insurance industry in India Marketing of insurance

COMPANY PROFILE

21

About HDFC life insurance HDFC life insurance parentage About standard life group HDFC key strength Corporate objective 22 23 24 25 26 26 - 27 28
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COMPANYS INSURANCE PLANS

Individual products Group products

Social products

29 - 31

RESEARCH METHODOLOGY

32

Objective of the Study Scope of the Study Significance of the Study Research Design Sampling Methodology Limitations Of Research

33

34 35 36 37

FACTS AND FINDINGS

38 - 39 40 - 61 62 63 64 61 - 65

Data analysis and Interpretation Conclusion Recommendations Bibliography Appendix (Questionnaire)

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INTRODUCTION TO INSURANCE INDUSTRY

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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 7080% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and HDFC 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. 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. During my summer training in the Housing Development finance corporation standard life insurance company limited (HDFCSL). I have gotten the work of recruitment of financial consultant or financial advisor, or insurance agent who becomes the base of any insurance company. In the company my department was Channel Development Department whose work is to recruit financial consultant and I was working as a recruitment consultant manager. The main focus area of the company is to recruit more and more financial consultant who brings business in the company. Indeed the work of financial consultant is very significant and gives more and more distribution of the policy of the insurance to the company thorough selling the policies. The main motive of this project is distribution enhancement. HDFCSL is one of Indias leading private insurance companies. It offers both individual and group insurance solution. It is a joint venture between HDFC and a group of company of Standard Life. I have chosen insurance sector as the place for summer training because in these days this sector is in boom and it will never go down. All people invest their money in insurance and get more benefited. In the sector the work of marketing is more challenging then the other sector because there is 17 insurance companies in the market who are giving competition to each Page 8

other and the work of convince people for investment in respective company is a challenging work and success in the sector proves that the respective person is a good marketer. Today insurance sector India is on boom because all people want to invest. Those who dont know about investment in share market and dont want to invest in mutual funds they invest in insurance sector. Insurance sector gives them investment plus risk cover. Those who dont want to take risk in the investment go to insurance sector. It also gives income tax benefits to the peoples. Insurance company are now launching ULIP plan and gives chance to the investor to choose their investment pattern according to their fund investment table(this table is included in the product information of the product of HDFC Standard life). This fund investment tells us that how much the investor want to take risk. Generally in the ULIP plan, the thesis is that The more you risk the more you have profit.

VALUES
1. Integrity
HDFC Life Insurance believes in honest and trustfulness in every action. Transparency in dealing with customers. It is stick to principles irrespective of outcome. When we work in HDFCSL then we observed that its rules and activity of every person in the organization is just and fair to every one. Integrity is the bedrock on which the company and the expectations of the customers and employees are built. Integrity gives inner feeling to both customer and the employees to work with it. It establishes the credibility of the person, defines the character and empowers one to do justice to the job. It enables confidence and trust, achieving transparency and laying a strong foundation for a binding relationship. It guide principle for all walks of life.

2. Innovation
It is the process of building a store house of treasures through experiences. Lots of product is going to be launched by the competitors. So it is very important to look every product and process through fresh eyes everyday. It is the significant part of the business that attracts customer. Innovation is essential to exceed customer expectation and maximize customer retention because it is the sector of investment so you need to fulfill the customer expectation which help you to retain customer. Innovation helps to achieve competitive advantage. It promotes growth and upgrade standards in the industry. It fosters creativity amongst employees and partners. It opens a world of new possibilities because it brings new concept which helps to entice the customer.

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3. Customer centric
Customer becomes the main properties of any organization. Whatever work done by the organization runs around the expectations of the customer. Customer becomes centre point of the organization and the main focus of the organization becomes to understand his expectations by keeping him as the centre point. It gives more focus on customer activity and saying. It tries to understand customer needs and deliver solutions. As we know that the market is changed. Lots of competitors is here who search chance to increase their market share and entice your customer so customer interest become always supreme.

4. People Care
Genuinely try to understand those people who are working with HDFCSL. It guides their development through training and support. It helps them to develop their requisite their skills so that they can reach their true potential. It tries to know them on a personal front because it works as a performance appraisal. It try to create an environment of trust and openness so that all people who are working here behave friendly and helps to each other because team work is most important for getting success and give respect for the time of others. People are the most valuable assets of the company so it tries to motivate individual to give his/her best. It wants to establish a valuable relationship with them to create a joyful working environment. The most important thing is that it tries to provide job satisfaction for their people.

5. Team work One for all and all for one

Here whole team takes the ownership of the deliverables. It consults all involved in the work and try to understand their opinion and then arrive ant a common objective. There is a cooperation and support across departmental boundaries. It identifies strengths and weaknesses accordingly allocate responsibility to achieve common objectives. Team work helps everyone to achieve more. it adds joy at work place which add interest in the work and new stamina in the work. It generates synergy and provides a focused approach. When an idea or activity performed in a group, it has greater acceptability. Team work proves one for all and all for one.

6. Joy and simplicity

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It believes in joy and simplicity so that people in the organization will be more dedicated towards work and they will give more business to the organization. Work with joy and simplicity brings creativity and new imagination which also brings new innovative ideas that promote competitive advantage to the organization.

MISSION OF HDFSLIC
We aim to be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market; rather it is 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

HDFC GROUP COMPANIES

HDFC Limited HDFC Bank HDFC Asset Management Co. Limited
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HDFC Securities Limited HDFC Standard Life Insurance Company CIBIL Credit Information Bureau Investigation Ltd HDFC Chubb General Insurance Intel net Global

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 so-called Life Insurance Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and reach.

Some of the important milestones in the life insurance business in India are:

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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.

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 nation-building 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, KenIndia 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). Page 13

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

IN ADDITION TO ABOVE STATED 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 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 2010. 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. Page 14

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.

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.

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 AVIVA Life Insurance 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. Religere Aegon Life Insurance Company Limited Star Union Life Insurance Company Limited Diachi Bhartiya Exsa Life Insurance Company Limited Relience Life Insurance Company Limited India First (Bank of Baroda) Life Insurance Company Limited Sahara Life Insurance IDBI Fruitis

Future Generali Life Insurance Company

Kendra HSBC Shriram Life Insurance Company Limited

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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.

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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 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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PROCESS
Cashless settlement:
One of the most defining and customer-friendly changes that weve seen in recent years relates to the way claims settlements are made. The advent of the third-party administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless settlement of health and auto insurance claims. TPAs are entities who process claims on behalf of insurers: the IRDA licenses them after it is satisfied that they have the financial strength, the trained manpower, the infrastructure and the skills to undertake this activity. Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for cashless settlement of auto insurance claims.

Lower premiums:
The spirit of competition and the broadening of the risk experience of insurance companies have contributed to a fall in premiums over the years. Thats because, other things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the lives of, say, 100 people. Further, a broader base will provide greater efficiencies on costs such as distribution, management and claims. A broad basing of the mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to continue.

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 Premium payment flexibility:

Insurers have imparted certain flexibility to premium payment options in order to address this concern. For instance, one now have the option to pay your premiums upfront, which is then carried forward for the tenure of the policy. The yearly premiums are drawn from the initial corpus. Insurers have also introduced the concept of automatic cover maintenance to protect your policy from lapsing owing to your omission to pay your premium on time. Under this, in the event of your not paying the premium, the insurer dips into your investment account to the extent of the premium. Of course, this comes with an in-built drawback: your investment portion diminishes year on year to the extent of the amount paid to cover your risk.

Physical Evidence:
This can play a significant role for marketing in the Indian scenario. Since Internet users are comparatively lesser than countries such as US, the offline mode will be preferred in India. Although the distribution model is largely agent-based, wherever the customer is in contact with the company, this factor can play a significant role in luring the customer.

People:
The most important factor that materializes sales and maintains customer relationships on a longterm basis is this factor. No matter what distribution strategy a company adopts, customer relationship has to be taken care of in order to maintain the customer base on a long-term basis.

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INTRODUCTION TO THE COMPANY

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COMPANY PROFILE OF HDFC STANDARD LIFE INSURANCE COMPANY LTD

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 High service standards Awarded The Economic Times Corporate Citizen of the year Award for its longstanding 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
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 .

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 .

TRACK RECORD SO FAR OUR GROSS PREMIUM INCOME , FOR 9,59,000 LIVES MARCH 31, 2010 STOOD RS. 2,685 RS. 4,859

THE YEAR ENDING

AT

CRORES AND NEW BUSINESS PREMIUM INCOME STOOD AT OVER YEAR ENDING

CRORES .T HE COMPANY HAS COVERED

MARCH 31,2010.

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CORPORATE OBJECTIVE

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 Team work Joy and

Simplicity

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BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE INSURANCE INSURANCE PLANS AVAILABLE
INDIVIDUAL PRODUCTS
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. Our Protection range includes our Term Assurance Plan & Loan Cover Term Assurance Plan

Investment Plans

Our single Premium Whole Life plan is suited to meet your long term Investment needs. We provide you with attractive long-term returns through Regular bonuses Pension Plans

Our Pension Plans help you secure your financial independence even after Retirement. Our Pension range includes our Personal Pension Plan, Unit Linked Pension, and Unit Linked Pension Plus Savings Plans Page 26

Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream home or fulfilling your children immediate and future needs. Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus, Unit Linked Endowment Plus II, Money Back Unit Linked Enhanced Life Protection II, Children's Plan, Unit Linked Young Star, Unit Linked Young Star Plus, Unit Linked Young Star Plus II

GROUP PRODUCTS
One-stop shop for employee-benefit solution 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

An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your company Also suitable for other employee benefit schemes such as salary saving schemes.

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SOCIAL PRODUCT
Development Insurance Plan
Development Insurance plan is an insurance plan that 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 those member beneficiaries to help meet some of the immediate financial needs following their loss. Eligibility - Members of the development agency and their spouses with: Minimum age at the start of the policy 18 years last birthday Maximum age at the start of policy 50 years last birthday

-Employees of the Development Agency are not eligible to join the group. The group to be covered is only eligible if it contains more than 500 members. Premium Payments The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member. Benefits On the death of each member covered by the policy during the year of cover a lump sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of an accident, an additional lump sum will be paid equal to half the sum assured. There are no benefits paid at the end of the year of cover and there is no surrender value available at any time. The role of the Development Agency Due to the nature of the groups covered, HDFC Standard Life will be passing certain administrative tasks onto the Development Agency. By passing on these tasks the premium charged can be lower. These tasks would include: -Submission of member data in a specified computer format -Collection of premiums from group members -Recording changes in the details of group members

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Disbursement of claim payments and the mortality rebate (if any) to group members. These tasks would be in addition to the usual duties of a policyholder such as: -Payment of premiums -Reporting of claims -Keeping policy holder information up to date Training and support will be available to give guidance on how to complete the tasks appropriately. Since these additional tasks will impose a burden on the Development Agency, the Development Agency may charge a Rs. 10 administration fee to their members.

Prohibition of rebates Section 41 of the Insurance Act, 1938 states -No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurer. -If any person fails to comply with sub regulation (previous point) above, he shall be liable to payment of a fine, which may extend to rupees five hundred

TAX BENEFITS
INCOME TAX GROSS SECTION Sec. 80C SALARY Across Slabs All ANNUAL HOW MUCH TAX CAN HDFC YOU SAVE? STANDARD

LIFE PLANS the life insurance

income Upto Rs. 33,990 saved on All investment Rs. 1,00,000. of

plans.

Sec. 80 CCC

Across slabs.

all

income Upto Rs. 33,990 saved on All the pension plans. Investment of Rs.1,00,000. Upto Rs. 3,399 saved on All the health insurance Investment Rs. 10,000. of riders available with the conventional plans.

Sec. 80 D*

Across all income slabs

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TOTAL SAVINGS POSSIBLE ** calculated for a male with gross annual Rs37,389 Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, income exceeding Rs. 10,00,000. Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to the conditions laid down therein.

RESEARCH METHODOLOGY

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Title:
To determine customer-buying behavior with a focus on market segmentation for HDFC Life Insurance.

TITLE JUSTIFICATION:
The above title is self explanatory. The study deals mainly with studying the buying pattern in the insurance industry with a special focus on HDFC Standard Life Insurance. The various segments of the markets divided in terms of Insurance Needs, Age groups , Satisfaction levels etc will also studied.

OBJECTIVE
Primary objective
To ascertain information of customer's insurance policies if any and reasons for opting for those particular policies. To know their preferred policy.

Secondary objective

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To determine customers perception towards private insurance companies and their expectation form private insurance companies.

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 analyse the findings so as to present a clear picture of trends in the Insurance sector.

SIGNIFICANCE OF THE STUDY

SIGNIFICANCE TO THE INDUSTRY :

This is a limited study which takes into consideration the responses of 100 people. This data can be explorated to take in the trends across the industry. The significance for the industry lies in studying these trends that emerge from the study. It is a rapidly changing and evolving sector. People are only beginning to wake up to its vast possibilities. A study like this can attempt to guide the future of the industry based on current trends.

SIGNIFICANCE FOR THE RESEARCHER :

To facilitate and provide all the useful information of the study, the company, the insurance industry and also provide marketing ways, methods of HDFC Life insurance. Page 32

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RESEARCH DESIGN
NON-PROBABILITY EXPLORATORY & DESCRIPTIVE EXPERIMENTAL RESEARCH
The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary & secondary. A well-structured questionnaire was prepared and personal interviews were conducted to collect the customers perception and buying behavior, through this questionnaire.

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SAMPLING METHODOLOGY

Sampling Technique :

Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done. Thus my sampling came out to be judemental and convinient

Sampling Unit :

The respondants who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, Self Employed people etc.

Sample size :

The sample size was restricted to only 100, which comprised of mainly peoples from different regions of Bhopal due to time constraints.

Sampling Area :

The area of the research was Bhopal, INDIA.

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LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of BHOPAL and does not necessarily shows a pattern applicable to all of 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.

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FACTS / FINDINGS
1. As the people think that insurance is a tool to protect their family & a tax saving device. They are aware of the fact & are realizing its, importance. The company should try to expand & build up its infrastructure because there is a large potential for insurance in India. 2. Company should come up with its more branch in Bhopal. With the objective and goals to meet the demands & expectations of the public. Because the entrance of private players will increase the competition and it would be a tough task to secure a good position in market. 3. Since HDFC STANDARD LIFE INSURANCE LTD is leading with several companies policies it should be easy for them to penetrate into the market and secure a good position if they pay greater attention to the service part provided to their customer and thereby forming a long and trusted relationship. 4. As seen from the survey that at present 70% of the customer are having insurance policy out of which 87% of the customer are planning for new investments. So it can be a good potential for the company and they should make an attempt to trap these customers. 5. 43% of the customers are even ready to go for insurance if a service provider away from their home is providing it. But intend they should provide good products and services. The company should try to convince these customers and get them in its favour.

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DATA ANALYSIS & INTERPRETATION

1. DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE Yes No

NO. OF RESPONDENTS 70 30

SHARE (%) 70% 30%

INTERPRETATION
Of the sample size of 100 surveyed respondents 70% of the respondents are having

Insurance policy. 30% of the respondents are either not having any Insurance policy at present or their

policy is already matured. And at present 100% of the respondents are with the view that Insurance is a tool to

protect your family.

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2. DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES

COMPANYS NAME L.I.C. HDFC ICICI PRUDENTIAL SBI LIFE RELIANCE LIFE INSURANCE TOTAL

NO.OF RESPONDENT 78 2 10 7 3 100

SHARE (%) 78 2 10 7 3 100

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1 by that percent of respondents. Only 2% prefer HDFC Standard Life.

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3. DATA

GIVES

BENEFITS

OF

INSURANCE

PERCEIVED

BY

RESPONDENTS
BENEFITS Cover Future Uncertainty Tax Deductions Future Investment TOTAL NO.OF RESPONDENTS 55 20 25 100 SHARE (%) 55 20 25 100

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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4. DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED RESPONDENTS

FEATURE Money Back Guarantee Larger Risk Coverance Easy Access to Agents Low Premium Companys Reputation TOTAL

NO.OF RESPONDENTS 15 37 7 30 11 100

SHARE (%) 15 37 7 30 11 100

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

5. DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS

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POLICY TYPE

NO. OF RESPONDENTS

SHARE (%)

LIFE POLICY NON LIFE POLICY BOTH

52 17 31

52 17 31

INTERPRETATION
52% of the respondents have Life Insurance Policy while 31% have both.

6. DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE

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RESPONSE

NO. OF RESPONDENTS

SHARE (%)

A saving tool A tax saving device A tool to protect your family

32 29 39

32% 29% 39%

INTERPRETATION
family. 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

7. DATA SHOWS BUYING PROCESS OF THE PEOPLE

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BUYING PROCESS

NO. OF RESPONDENTS

SHARE (%)

Customer approached Insurance company/Agent Company/agent approached customer Total

44

44%

56

56%

100

100%

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

8. DATA SHOWS REASONS BEHIND FOR INSURANCE

RESPONSE NO. OF SHARE (%) Page 44

RESPONDENTS Tax saving Saving / Investment Family protection 31 31 38 31% 31% 38%

INTERPRETATION
31% of the Respondents opted for Insurance for tax saving benefits. 31% of the Respondents opted for saving / Investments. But all of them, i.e. 38% of the respondents have opted for insurance for their family

protection.

9. DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY

RESPONSE NO. OF RESPONDENTS Page 45 SHARE (%)

Satisfied Not satisfied Not Responded Total

60 40 0 100

60% 40% 0% 100%

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.

1.

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO SERVICE AGENT

RESPONSE Satisfied NO. OF RESPONDENTS 45 SHARE (%) 45%

Page 46

Not satisfied Not Responded Total

55 0 100

55% 0% 100%

INTERPRETATION
45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded.

1. DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

RESPONSE

NO. OF RESPONDENTS

SHARE (%)

Paying tax

100

100% Page 47

Not paying tax Total

100

0% 100%

INTERPRETATION
Of the sample size of 100 respondents, all the respondents are paying tax

1.

DATA SHOWS RESPONDENTS INVESTMENTS FOR TAX SAVING

INVESTMENTS NO. OF RESPONDENTS 30 19 19 14 30% 19% 19% 14% Page 48 SHARE (%)

LIC NSC Bonds PPF

PF EPF

12 6

12% 6%

INTERPRETATION
30% of the respondents save their tax by investing in LIC, which is the highest

among all Investment. This shows that most people for getting taxes benefits invest in LIC. 19% of the respondents do their tax saving by investing in NSC. 19% of the respondents to their tax saving by investing in bonds.

1.

DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF INVESTMENT FOR SECURING THEIR FUTURE
INVESTMENTS Fixed Assets Bank deposits Jewellery Securities i.e. bonds, MFs Shares Insurance NO. OF RESPONDENTS 33 5 11 17 4 30 SHARE (%) 33% 5% 11% 17% 4% 30%

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INTERPRETATION
33% of the respondents as with the view that Fixed Assets is the best form of

investment for securing their future. 30% of the respondents are with the perception that Insurance is the best form of

investment for securing their future, which is one of the highest and this shows that insurance is an important key for securing your future.

10. DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM THEIR INVESTMENT

RESPONSE Saving & Returns Security Tax benefits

NO. OF RESPONDENTS 38 35 27

SHARE (%) 38% 35% 27%

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INTERPRETATION
38% of the respondents intent to gain saving and returns from their investment. 35% of the respondents intent to gain security from their investments. Whereas, 27% of the respondents intent to gain tax benefits from their investments.

11.

DATA GIVES PEOPLES PERCEPTION ON

APPROPRIATE AGE FOR BUYING INSURANCE

RESPONSE After 25 years After 35 years After 45 years Anytime

NO. OF RESPONDENTS 29 10 0 61

SHARE (%) 29% 10% 0% 61%

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INTERPRETATION
29% of the respondents are with the view that insurance should be bought after the age of 25 years. 10 % of the respondents are with the view that insurance should be buyed after the

age of 35 years. Whereas, 61% of the respondents are with the view that buying of insurance do not

have any thing to do with age i.e. there is no age limitations. It can be purchased any time according to the need.

12.

DATA

SHOWS

PEOPLE

OPINION

ABOUT

INDIAN

INSURANCE COMPANIES
RESPONSE Rigid plans Non user friendly Unsatisfactory services Non Aggressive Satisfactory Good Very good NO. OF RESPONDENTS 35 15 14 18 13 5 0 35% 15% 14% 18% 13% 5% 0% Page 52 SHARE (%)

Page 53

INTERPRETATION
plans. 15% feel that Indian Insurance companies are Non-user friendly. 14% feel that services of Indian Insurance companies are Unsatisfactory. 18% of the respondents are with the view that Indian Insurance companies are Non35% of the respondents have the opinion that Indian Insurance Companies have Rigid

aggressive. 13% of the respondents feel that products and services of Indian Insurance companies

is Satisfactory. Whereas only 5% feel that it is Good enough.

13.

DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE COMPANY

RESPONSE NO. OF RESPONDENTS 29 25 29 17 SHARE (%) 29% 25% 29% 17%

A trusted name Friendly service & responsiveness Good plans Accessibility

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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.

14. DATA

SHOWS

PEOPLE

PLANNING

FOR

NEW

INVESTMENTS

RESPONSE

NO. OF RESPONDENTS

SHARE (%)

Planning Not planning Total

87 13 100

87% 13% 100%

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INTERPRETATION
Only 13% of the customers contacted are not planning for new investments presently.

whereas, 87% of the customers are still planning for new investments this can be a great potential for Reliance Life Insurance to take them on their favor.

1. DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS 2.
RESPONSE NO. OF RESPONDENTS Yes No Uncertain Total 43 44 13 100 43% 44% 13% 100% Page 56 SHARE (%)

INTERPRETATION
The interested customers i.e. 43% are ready to go for insurance even away from a city if services and products are worthwhile, which again is a good prospect (potential) for HDFC Standard Life Insurance to take them on their favor.

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 impressioned 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.

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Another heartning 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 respondants have opted for insurance for such purposes and it shows how insurance companies ahve 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 oppurtunity 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.

RECOMMENDATIONS
As the people think that insurance is a tool to protect their family & a tax saving device. They are aware of the fact & realizing its, importance. The company should try to expand & build up its infrastructure because there is a large potential for insurance in India. Company should come up with its more number of branch in Bhopal with the objective and goals to meet the demands & expectations of the public. Because the entrance of private players will increase the competition and it would be a tough task to secure a good position in market. Since HDFC Standard Life Insurance Company Ltd is leading with several companies policies it should be easy for them to penetrate into the market and secure a good Page 58

position if they pay greater attention to the service part provided to their customer and thereby forming a long and trusted relationship. As seen from the survey that at present 70% of the customer are having insurance policy out of which 87% of the customer are planning for new investments. So it can be a good potential for the company and they should make an attempt to trap these customers. 43% of the customer is even ready to go for insurance if a service provider away from their home is providing it. But intend they should provide good products and services. The company should try to convince these customers and get them in its favor.

BIBLIOGRAPHY
1. BOOKS/MAGAZINES REFFERED
STUDY GUIDE - PRINCILES & PRACTICES OF LIFE / INSURANCE, by AIMA. Books published by INSURANCE INSTITUTE OF INDIA LIFE-INSURANCE, by Mc GILL INSURANCEWATCH. MONEYOUTLOOK. Page 59

WEBSITES REFFERED
WWW.MONEYOUTLOOK.COM WWW.INSURANCE.IND.COM WWW.HDFCINSURANCE.COM

REPORTS/ARTICLES REFFERED
REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY. March 2011.

QUESTIONNAIRE
1. ARE YOU EMPLOYED ? A. YES B. NO If YES, only then proceed

2. DO YOU HAVE ANY INSURANCE POLICY? A. YES B. NO Page 60

3. WHICH INSURANCE POLICY DO YOU HAVE? A. NON-LIFE B. BOTH C. LIFE

4. WHICH COS INSURANCE POLICY YOU PREFER THE MOST? (RANK THEM) A. LIC B. ICICIPRUDENTIAL C. SBI LIFE INSURANCE D. RELIANCE LIFE INSURANCE E. TATA AIG LIFE F. ANY OTHER

5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY ? A. <5Yrs B. 5-10 Yrs C. 10-15 Yrs D. Any Other

6. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COVER? (RANK THEM) A. COVER FUTURE UNCERTAINITY B. TAX DEDUCTIONS Page 61

C. FUTURE INVESTMENT D. ANY OTHER

7. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT? (RANKTHEM) A. LOW PREMIUM B. LARGER RISK COVERANCE C. MONEY BACK GUARNTEE D. REPUTATION OF COMPANY E. EASY ACCESS TO AGENTS F. ANY OTHER

8. YOUR MONTHLY INCOME? A. <4k C. 8k-12k B. D. 4k-8k 12k-16k

9 WHATS YOUR PERCEPTION ABOUT INSURANCE?(RANK THEM) A. A SAVING TOOL B. A TAX SAVING DEVICE C. A TOOL TO PROTECT FUTURE

10. HOW HAS / WOULD YOU BOUGHT / BUY AN INSURANCE? A. CUSTOMER APPROCHED INSURANCE COs B. INSURANCE COs APPROCHED CUSTOMER

11. ARE YOU SATISFIED WITH THE POLICY? Page 62

A. SATISFIED SAVING TOOL B. NOT SATISFIED

12. DO YOU PAY TAXES? A. YES B. NO 13. WHERE HAVE YOU INVESTED FOR TAX SAVING? (RANK THEM) A. LIC B. NSC C. BONDS D. PPF E. PF F. EPF

14. WHICH IS THE BEST FORM OF INVESTMENTS? (RANK THEM)

A. FIXED ASSETS B. BANK DEPOSITS C. JEWELLERY

D. SECURITIES, i.e. Bonds, MFs

E. SHARES F. INSURANCE

15. WHAT DO YOU INTENT TO GAIN FROM INVESTMENTS? A. SAVING & RETURNS B. SECURITY Page 63

C. TAX BENIFITS 16. WHATS THE RIGHT AGE TO BUY INSURANCE? A. AFTER 25 Yrs B. AFTER 35 Yrs C. AFTER 45 Yrs D. ANYTIME 17. HOW WOULD YOU RATE INDIAN INSURANCE COs? A. RIGID PLANS B. NON-USER FRIENDLY C. UNSATISFATORY SREVICES D. NON-AGGRESSIVE E. SATISFACTORY F. GOOD G. VERY GOOD

18. WHAT WOULD YOU LOOK FOR IN AN INSURANCE COs? (RANK THEM) A. TRUSTED NAME B. FRIENDLY SERVICE & RESPONSIVENESS C. GOOD PLANS D. ACCESSIBILITY

19. ARE YOU PLANNING FOR NEW INVESTMENTS? A. PLANNING B. NOT PLANING

20. WOULD YOU GO FOR INSURANCE IF A SERVICE PROVIDER Page 64

AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS? A. YES B. NO

THANK YOU

NAME ADDRESS

: :

______________________________ ______________________________

___________________________________________________ OCCUPATION : ______________________________

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