TABLE OF CONTENT

Chapter No. Particulars Page No.

 Acknowledgement
 Executive summary

1. Introduction:- 1-17
 Introduction to industry
 Introduction to company
 Introduction to topic

2. Literature review 18-20

3. Research methodology 20-28
4. Data Analysis and Interpretation 29-54
5. Findings ,Suggestions and Conclusion 55-58
Bibliography 59
Annexure 60-65
INDUSTRY OVERVIEW
With an annual growth rate of 15-20% and the largest number of life insurance policies in
force, the potential of the Indian insurance industry is huge. Total value of the Indian
insurance market (2010-11) is estimated at Rs. 550 billion (US$10 billion). According to
government sources, the insurance and banking services contribution to the country's
gross domestic product (GDP) is 7% out of which the gross premium collection forms a
significant part. The funds available with the state-owned Life Insurance Corporation (LIC)
for investments are 8% of GDP. Till date, only 20% of the total insurable population of
India is covered under various life insurance schemes, the penetration rates of health and
other non-life insurances in India is also well below the international level. These facts
indicate the of immense growth potential of the insurance sector. The year 1999 saw a
revolution in the Indian insurance sector, as major structural changes took place with the
ending of government monopoly and the passage of the Insurance Regulatory and
Development Authority (IRDA) Bill, lifting all entry restrictions for private players and
allowing foreign players to enter the market with some limits on direct foreign ownership.
Though, the existing rule says that a foreign partner can hold 26% equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs.8.7 billion have
poured into the Indian market and 21 private companies have been granted licenses.
Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected.
Indians, who had always seen life insurance as a tax saving device, are now suddenly
turning to the private sector and snapping up the new innovative products on offer. The
life insurance industry in India grew by an impressive 36%, with premium income from
new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving
stiff competition from private insurers. This report "Indian Insurance Industry: New
Avenues for Growth 2012", finds that the market share of the state behemoth, LIC, has
clocked21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies
in2004-05. But this was still not enough to arrest the fall in its market share, as
private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion
in2003-04 Though the total volume of LIC's business increased in the last fiscal year
(2004-2005) compared to the previous one, its market share came down from 87.04 to
78.07%. The 14 private insurers increased their market share from about 13% to about
22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also
speak of the growing share of the private insurers. The share of LIC for this period has
further come down to 75 percent, while the private players have grabbed over 24
percent. There are presently 12 general insurance companies with four public
sector companies and eight private insurers. According to estimates, private insurance
companies collectively have a 10% share of the non-life insurance market.

1
 INTRODUCTION OF HDFC LIFE

INRODUCTION OF HDFC LIFE

Risk is found everywhere. It cannot be eliminated together, only it can be

minimized. Human life is full of risk. There is a risk when a man walks on the
road, travels in a bus, train or an aero plane and when he is engaged in trade,
profession or business. Also there is a risk when property is destroyed by fire,
flood, earthquakes, etc. Thus, the involvement of risk is inescapable.

Risk Percentage

Drought 4%

Earthquakes 20%

Floods 35%

Storms 41%

Risk
4%

41% Drought
20%
Earthquakes
Floods
Storms
35%

2
Insurance is a method by which we can spread over the risk. It is a way of
reducing uncertainty of occurrence of an event. Insurance is entirely a
method of co-operative endeavor where in the loss caused by a particular
risk is spread over among a large section of persons. Insurance is a process in
which a large number of persons collect their small contributions, called the
premium, in a pool and out of this losses are paid to the suffering persons.

The Business of insurance is related to the protection of the economic

values of assets. Every asset has a value. The asset would have been created
through the efforts of the owner. The asset is valuable to the owner, because
he expects to get some benefits from it. It is a benefit because it meets some
of a factory or a cow, the product generated by it is sold and income is
generated. In the case of a motor car, it provides comfort and convenience in
transportation. There is no direct income. Both are assets and provide
benefits.

3
INTRODUCTION OF THE COMPANY

HDFC Life Insurance Company Limited. 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 Limited), India's leading housing finance
institution and a Group Company of the Standard Life Plc, UK. As on February
28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) 2006,
Ltd. holds 26.00% of equity in the joint venture, while the rest is held by
others.

HDFC Life believes that establishing a strong and ethical foundation is

an essential prerequisite for long-term sustainable growth. To ensure this, we
have concentrated our focus on expansion of branch network, organizing an
efficient and well trained sales force, and setting up appropriate systems and
processes with optimum use of technology. As all these areas form the basic
infrastructure for establishing the highest possible customer service
standards. Our core values are drilled down to all levels of employees, as
these are inviolable. We continue to promote high integrity in business
practices and shun short cuts and unethical practices, as we wish to be
perceived as an institution with high moral standing. Since our inception in
2000, when the Indian insurance space was opened for private participation,
we have consistently focused on setting benchmarks in all aspect on
insurance business. Beingthe first private player to be registered with the
IRDA and the first to issue a policy on December 12, 2000,

4
 The HDFC was established in 1977, for the purpose of providing the home
loan for long term

 HDFC is rated as (AAA) by the CRISIL and ICRA.

 In the year 2004, it was awarded DREAM HOME AWARD.

 It has got 3rd rank in the investment management, in year 2006.

 One of the largest financial institution of India with more then 2 million
satisfied customer base.

HDFC HAS FOLLOWING GROUP COMPANIES

 HDFC Ltd.

 HDFC Standard life

 HDFC Mutual fund

 HDFC Securities

 HDFC Bank

 HDFC realty.com

 HDFC CIBIL

 HDFC Chubb General Insurance Co. Ltd.

 HDFC Centre For Housing Finance

 HDFC Distribution

 HDFC Intel net

 HDFC Securitization

5
 HDFC Deposits

 HDFC Home Loans

OUT STANDARD LIFE (U.K)

 Founded in 1825, and is now one of the largest life Insurance companies in
the world.

 Strong reputation build over 182 years

 Currently over 5 mn. policyholders benefiting from the services offered

 Europe’s largest mutual life insurer

6


7
1.Integrity

 Honest and Truthful in every action

 Transparency
 Stick to principles irrespective of outcome
 Be just and fair to everyone.

2.Innovation

 Building a store house of treasures through experiences.

 Looking at every product and process through fresh eyes everyday.
3.Customer Centric
 Understand customer expectations by keeping him as the centre – point.
 Listen actively
 Understand customer needs and deliver solutions.
 Customer interest always supreme.
4.People Care
 Genuinely understanding the people we work with.
 Guiding their development through training and support.
 Helping them develop requisite skills to reach their true potential.
 Know them on a personal front.
 Create an environment of trust and
 Respect for the time of others.
5.Team Work
 Whole team takes the ownership of the deliverables.
 Consult all involved, understand and arrive at a company Co-operate and
support across departmental boundaries.
 Identify strengths and weaknesses according allocate responsibility to
achieve common objectives.
8
6.Joy and Simplicity
 Environment that fosters fun in the form of celebration of individual and team
success.
 To encourage work as fun that contributed to personal and organizational
development.
 Joy is also derived through simple processes and forms.

VISION STATEMENTS

“ The most successful and admired life insurance

Company, which means that we are the most trusted
Company, the easiest to deal with, offer the best value
for money, and set the standards in the industry. In
short, “The most obvious choice for all”

9
DIFFERENT PLANS OF HDFC SLIC

Traditional Plans ULIP

Traditional

 Traditional plan is a life insurance solution that provides the client only
guaranteed return.

10
ULIP (Unit Linked Insurance Plan)

 Unit Linked insurance plan is a life insurance solution that provides the client
with the benefits of protection & flexibility in investment .It is solution which
provides for life insurance where the policy value at any time varies
according to the value of the underlying assets at the time.

11
 INTRODUCTION TO TOPIC

Financial management means procurement of funds at minimum costs

and effective utilization in order to maximize the wealth of shareholders.

The term of financial management refers to its relationship with the

closely-related fields of economics and accounting, its functions, scope and
objectives. Financial management, as an academic discipline, has undergone
fundamental changes in its scope and coverage. In the early years of its evolution
it was treated synonymously with the raising of funds. In the
current literature pertaining to financial management, a broader
scope so as to include, in addition to procurement of funds, efficient use of
resources is universally recognized.

Financial management, as an integral part of overall management, is not a

totally, independent area. It draws heavily on related disciplines and fields of study,
such as economics, accounting, marketing, production and quantitative methods. A
part from economics and accounting, finance also draws for its key
day to day decisions on supportive disciplines such as marketing, production and
quantitative methods, for instance, financial managers should consider
the impact of new product development and promotion plans made in the
marketing area since their plans will require capital outlays and have an impact on
the projected cash flows.

Finally, the tools of analysis developed in the quantitative methods area are
helpful in analyzing complex financial management problem. Organization makes
their planning for the financial sources which are very helpful in the
12
 future course of action.

Taking a commercial business as the most common organizational structure, the key
objectives of financial management would be to:

 Create wealth for the business

 Generate cash, and
 Provide and adequate return on investment bearing in mind the risks that the
business is taking and the resources invested.

CONCEPT OF FINACING

1. Financial Planning

Management needs to ensure that enough funding is

available at the right time to meet the needs of the business. In the short
term, funding may be needed to invest in equipment, pay employees
and fund sales made on credit. In the medium and long term,
funding may be required for significant additions to the productive
capacity of the business or to make acquisitions.

2. Financial Control

Financial control is a critically important activity to help the business ensure

that the business is meeting its objectives.
13
3. Financial Decision-Making

A key financing decision is whether profits earned by the business should be

retained rather than distributed to shareholders via dividends. If dividends are too
high, the business may be starved of funding to reinvest in growing revenues and
profits further.

FINANCIAL DECISIONS

Financial management consists of four major decisions or functions which are as

discussed as below.

1. Investment decision

Investment decision is the long term, strategic policies of an organization.

Investment decisions have a long term effect on the
working of an organization. Thus an enterprise should invest in proposals
which maximize share value.

2. Financing decision

14
There are various sources of capital like equity, preference shares, borrowed funds,
and retained profits. The finance manager has to select a proper mix of owned at the
minimum cost. A financing decision adds to the value to the value of shareholders.

3. Dividend decision

Profits can either be distributed or reinvested into the

business. The proportion of profits that needs to be distributed and that needs to
be retained is a crucial decision. It is the job of finance manager to satisfy the
shareholders as well as claw back into the business. This division of profit when done
in an optimum manner maximizes shareholder value.

4. Liquidity decision

An enterprise needs finance for the day today activities for

the smooth functioning. The brand of FM that deals with investments in current
assets & liabilities, in other words investment is the net working capital comprises
of the liquidity decisions.

15
DEPRECIATION POLICY IN HDFC LIFE

Depreciation is charged as per the below mentioned rates

Asset Rate as per Companies Act Rate as per Income Tax

(Written Down Value Act (Written Down Value
method) – WDV method) – WDV

Buildings Residential Units 1.63 % Residential units 5 %

Office Premises 1.63 % Office Premises 10 %

(Straight Line Method – SLM)

Computers 25 % (SLM) 60 %

Air Conditioners & 13.91 % 15 %

Refrigerator

Furniture & Fixtures 18.10 % 10 %

Office Equipment 13.91 % 15 %

Electrical Installations 13.91 % 15 %

Vehicles (Motor Cars) 25.89 % 15 %

16
 Companies Act

1. The rate 13.91 % is applicable to Plant and Machinery (applicable to A/C, Office
Equipment and Electrical Installations).
2. The Depreciation under Companies Act for Computers is 16.21 % (SLM). However,
the rate adopted by us is 25 % SLM.
3. Except Computers, all the rates are as per Companies Act.
4. No depreciation is charged in the year of sale.
5. Depreciation is charged for the full year in the year of purchase.

Income Tax Act

1. Machinery and Plant other than the specified – 15 % (applicable to A/C, Office
Equipment and Electrical Installations).
2. Rates of premises, computers, vehicles and furniture specified.
3. If the asset is put to use for 180 days or more in a year, 100 % depreciation is provided

during the financial year. If the period is less than 180 days ---50 % depreciation is
provided for tax purposes

17
 LITERATURE REVIEW

A comprehensive review of related past studies helps the researcher to adopt, modify and
improve the conceptualisation of framework and provide a link with past approaches. The
findings and recommendation of the past literature relating to consumer behaviour towards
life insurance services are not many. Only few comprehensive studies exclusively towards
consumer behaviour on endowment policy are carried out in India. Based on the review of
literature the researcher has enable to identify her source for the present study. The
available studies are collected from research articles, committee reports, projects and
surveys conducted. Khan, M.K. (1978)1 attempts to know the opportunities and prospects
in the career of a life insurance sector. He explains about what a good career is and how a
good career should be for selling of life insurance products. There is no age barrier and it
requires no previous occupational experience but one must be a professional and capable of
creating opportunities in building personality. The relationship of life Insurance agent with
clients is not temporary and the service rendered has no substitutes. He also observes that
life insurance agent remains, in a sense, permanent server to the clients. Ramesh Jain
(1980)2 conducts a case study at Sagar branch, Calcutta, of Life Insurance Company view
the spread of life insurance in a particular area and to 1 Khan, M.K., “Prospects of a Career
in Life Insurance Business in India - An Analysis, Indian Journal of Marketing, Volume 7,
No. 6, Feb 1978, P. 23-31. 2 Ramesh Jain, A Project on “The Organization and Working of
Life Insurance Corporation of India: A Case Study of Sagar Branch, Jabalpur”, Jan-June
1980, P. 45-48. 64 channelize the mobilized saving for nation building activities. Analyzing
the processing of procurement of insurance business and administration of Life Insurance
Company in branch level, the study also brings out the growth of total new business and
about 30% of Life Insurance Companies individual assurance business originated from the
rural sector - it adds to the privilege of Life Insurance Company to contribute their
investments to many of the vital projects and schemes under 20 point programmes. The
findings of the study were to establish servicing center to have continuous interaction with
the policyholders and the sagar branch has still greater potentialities of expansion in rural
area. Rajkumar (1985)3 views that advertising is to influence a customer, who has a limited
spending power and it seems to operate through familiarizing spreading news over cog
inertia and image building improving market share, educating, informative and to have staff
support. As far as insurance industry is concerned, misconception is a common problem
and the pre-testing revealed that most of the rich people are associated with insurance and
he viewed that the treatment of Life Insurance Company to the public is always unfair.
Shesha Ayyar, V. (1986)4 in his article entitled “Product Development” has discussed
various issues connected with developing new polices such as the importance of developing
new schemes and various problems involved in the development of new schemes in
Company. He suggested the need for including ancillary benefits such as accident benefits,
disablement and hospitalization benefits.
18
3 Rajkumar, “The Role of Insurance Advertising”, Indian Journal of Marketing, Vol. 15,
No.2, July 1985, P. 21-23. 4 Shesha Ayyar, V., “Product Development”, Yogakshema, July
1986, P. 16. 65 Rajan Saxena (1986)5 in his article entitled “Life Insurance Services”
discusses various issues relating to life insurance. The author insists on the importance of
life insurance and discusses on various strategies of life insurance. Mishra, M.N. (1987)6
made a study to appraise the strategies of Life Insurance Company. While reviewing the
strategies, the author felt that before 1960 Life Insurance Company did not give much
attention to the objective of customer satisfaction, but from 1980 onwards the corporation
has taken several remedial measures to provide better customer service and improve the
customer satisfaction. Ashis Deb Roy (1987)7 in his article entitled “We Care for our
Customers” has examined the nature and importance of better customer services to
policyholders and has emphasized the need for quality in service. He has given a detailed
note on the various steps to be taken by Life Insurance Company to improve the customer
service such as training programmes conducted by Company to its agents and employees,
opening new branches and introduction of computers in insurance branch offices.
Venkatesh, N.C. (1987)8 in his article entitled “On the Trail of Better Service” has
discussed the importance of better and personal servicing to the customers and has
emphasized the importance of satisfying the policyholders. The Planning Wing of the LIC
Divisional Office, Thanjavur (1987)9 has conducted a sample survey on “Customer
Satisfaction”. The objectives of the study found the level of consumer satisfaction
regarding the services, particularly on the 5 Rajan Saxena, “Marketing of Life Insurance
Services”, Yogakshema, December 1986, P.15. 6 Mishra, M.N., “Appraisal of Marketing
Strategies of the Life Insurance Corporation of India”, Indian Journal of Marketing, Vol.
Xvii, No. 6, Feb 1987, P. 25-31. 7 Ashis Deb Roy, “We Care for our Customers”,
Yogakshema, April 1987, P. 4. 8 Venkatesh, N.C., “On the Trail Of Better Service”,
Yogakshema, November 1987, P. 28. 9 Planning Wing of LIC Divisional Office, Thanjavur
Division, “Customer Satisfaction with Particular Reference to Maturity Claims” Special
Study No. 1, 1987. 66 aspects such as timely dispatch of discharge forms, reminders, the
cooperation given by agents or development officers, courtesy and sympathy of Company
officials, receipt of the policy amount within the due date etc. The results of the study
revealed the following points. They are:

• Discharge forms are received before the due date by seventy nine per cent of the
policyholders.

• Eleven per cent of the policyholders approached the agent or development officer for
help in the submission of the requirement and they are happy with the services rendered by
them.

• Twenty one per cent of the policyholders submitted the requirements after receiving a
reminder from the branch office.
19
• Six per cent of the policyholders approached the branch office for discharge forms.

• Ninety per cent of the policyholders were satisfied with the prompt service rendered by
the branch office.

• Some policyholders stated that the corporation should insist the agents and development
officers render all possible help to their clients at the time of claim and survival benefits
settlement. The overall conclusion from the above study were:

• There is an imperative need for keeping up the tempo of maturity claims settlement
operationsat the present level.

• It is desirable to verify the policy ledgers every fortnight for omissions in the computer
list so that the delays can be reduced and all the claims can be settled before the due date.
67

• A few policyholders, who expressed their grievances at the delay, could have been
satisfied, if some courteous and prompt attention had been paid to them when they came to
office. The Insurance Institute of India prepared a Project Report on “Marketing of Life
Insurance”, (1987)10. This project was undertaken to examine the following aspects:
Extent of life insurance coverage, awareness, attitudes and beliefs of people on life
insurance, perceptions, sense of identification of employees with Life Insurance Company.
He concluded that LIC is a better avenue of investment than bank deposits. LIC products
are sold easily among the consumers on account of its reliability. Rao, B.S.R. and Appa
Rao Machiraju (1988)11 in their article entitled “Life Insurance and Emerging Trends in
Financial Services Market”, contends that the agents of life insurance should improve their
services to the level of financial experts. The authors felt that the change in the economic
scenario would help the corporation in better services field. Raghunadhan, R. (1988)12 in
his article “Population - Insurable and Insured” made an attempt to analyze the insurance
coverage of the insurable population and concluded that more self employed and
agricultural labourers are to be tapped. The author gave a suggestion to improve and
introduce new schemes to satisfy the groups.

20
RESEARCH METHODOLOGY

ABSTRACT OF MARKET RESEARCH

Marketing Research provides information that assists and organization to

define opportunities for product development and market strategy. It works
by assessing whether marketing strategies are accurately targeted, and by
identifying market opportunities or changes that are required by customers.
Market research tends to confirm issues that are well-known in a market
initially, but if planned well and effectively it will also identify new
opportunities, market niches, or ways by which to improve sales, marketing
and communications activities.

WHY MARKET RESEARCH STUDY

The role of market research, therefore, is to reduce uncertainty in decision

making, to monitor the effects of decisions taken, and identify the
performance of a company or a product in the market. During internship my
market survey was related with the distribution enhancement of the
insurance policies of HDFCSL. To be more specific, we can list five key uses
for market research, namely to:

a. Identify the size, shape, and nature of a market, so as to understand the

market and marketing opportunities.

b. Test out strategic and product ideas which help to define the most
21
effective customer-led strategies.

c. Monitor the effectiveness of strategies

d. It will define when marketing expenditure, promotions and targeting need

to be adjusted or improved.

The variety of purposes listed above makes it clear that market research is
not simply a “first check.”It is useful ahead of any action, but it also provide
same answer of checking and refining views as operations proceed.
Companies, especially those for which budget seem tight, who have
selected one of these uses for market research are always concerned to
make the research a worthwhile investment. Best results come when their
marketing and sales planning is influenced by the results of research. In
other words, when research pays for itself by providing a basis for change
and improvement in operational matters.

22
RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem.

It may be understood as a science of studying now research is done
systematically. In that various steps, those are generally adopted by a
researcher in studying his problem along with the logic behind them.

It is important for research to know not only the research method but also
know

methodology. ”The procedures by which researcher go about their work of

describing, explaining and predicting phenomenon are called methodology.”
Methods comprise the procedures used for generating, collecting and
evaluating

data. All this means that it is necessary for the researcher to design his
methodology for his problem as the same may differ from problem to
problem. Data collection is important step in any project and success of any
project will be largely depend upon now much accurate you will be able to
collect and how much time, money and effort will be required to collect that
necessary data, this is also important step.

Data collection plays an important role in research work. Without proper

data available for analysis you cannot do the research work accurately.

23
My project is being undertaken in HDFCSL in which finance management
program and distribution enhancement of insurance policies of HDFCSL has
been implemented as a marketing strategy. HDFCSL tied up with world class
insurance product.

Primary Objective

The primary objective of my project is to p r o v i d e Financial assistance and

to increase market share of HDFCSL. In the insurance sector the main work is
done by the financial planning manager who brings selling for the
organization as well providing the best solution for policies which is not in
profit. It improves the services of the organization.

Secondary Objective

In this point we can conclude the company objective which is to increase the
market share in the insurance sector and this will happens it becomes more
beneficiary and reliable to the customer. Customer should have faith on it. It
is trying to do it. Today it comes under top 5 insurance companies. It wants
to reach on the top.

24
Working Procedure

In my summer training I have targeted Delhi. I have collected my data some

parts of Delhi. Here I have to approach various detail of insurance product of
HDFCSL and the other competitor of it, suggestions, its marketing strategy
and its advertisement. As a part of marketing research I also have collect the
data in order to find out market share of HDFCSL from our sample space.
During the period I was in continuous touch with my senior and sales
manager and I have to submit daily report of my work and full information
about phone calls and questioners. Questionnaire consisting of open ended
questions was used for collecting the information.

Sample Area

My working area was Delhi. As we know that those person will invest in
insurance sector who are salaried or professional. I have targeted those
person who’s age is equal or more than 25.

25
Instrument
Used

I have collected my data form LIFE ASIA and through phone calling.
Lifeasia is the software which used by every insurance company and
this software help me to know the customer details and customer
policy information which help me providing best solution through
discussion with my seniors.

Types of data collection

There are two types of data collection methods available.

1. Primary data collection

2. Secondary data collection

1) Primary data

The primary data is that data which is collected fresh or first hand, and
for first time which is original in nature. Primary data can collect through
personal interview, questionnaire etc. to support the secondary data.

2) Secondary data collection method

The secondary data are those which have already collected and stored.
Secondary data easily get those secondary data from records, journals,

26
 annual reports of the company etc. It will save the time, money and
efforts to collect the data. Secondary data also made available through
trade magazines, balance sheets, books etc. This project is based on
primary data collected through personal interview of head of account
department, head of SQC department and other concerned staff
member of finance department. But primary data collection had
limitations such as matter confidential information thus project is based
on secondary information collected through five years annual report of
the company, supported by various books and internet sides. The data
collection was aimed at study of working capital management of the
company

 We used both methodology i.e. primary and secondary

 We take the sample size of 100 POLICY HOLDERS
 Sample location is Delhi
 This is stratified sampling

27
LIMITATIONS OF THE STUDY

Limitations of the study

Following limitations were encountered while preparing this project:

1) Limited data:-

This project has completed with annual reports; it just constitutes one
part of data collection i.e. secondary. There were limitations for primary
data collection because of confidentiality.

2) Limited period:-

This project is based on five year annual reports. Conclusions and

recommendations are based on such limited data. The trend of last five
year may or may not reflect the real working capital position of the
company

3) Limited area:-

Also it was difficult to collect the data regarding the competitors and
their financial information. Industry figures were also difficult to get.

28
 DATA ANALYSIS& INTERPRETATION

Comment

Current ratio of HDFC LIFE insurance, has 0.63:1, it means it is less

than 1 that indicates firm’s ability to meet current obligations & greater the
safety of funds of short-term creditors. It also indicates the sound solvency of
the company is lover.

(B) LIQUID RATIO

CURRENT ASSETS−STOCK
LIQUID RATIO: = ∗ 100
CURRENT LIABILITIES−BOD

77,44,120−15,21,520
2009-10= ∗ 100
12,281,585

= 0.60:1

9537359−45,44,600
2008-09=
8820225

= 0.57:1

29
 0.605
0.6
0.595
0.59
0.585
0.58
LiQuid Ratio
0.575
0.57
0.565
0.56
0.555
2009-2010 2008-2009

Comment

The liquid ratio of HDFC life in 2009 was 0.57 and in 2010 is .60 so increasing
the liquid ratio and company have a good liquid position over the year.

(C)Gross profit ratio

GROSS PROFIT
GROSS PROFIT RATIO = ∗ 100
𝑁𝐸𝑇𝑆𝐴𝐿𝐸𝑆

70,051,044
2009-10 = ∗ 100
31,48,95,290

30
 = 30.25 %

55,646,930
2008-09= ∗ 100
25,56,98,360

= 21.76%

35

30

25

20
Column1
15

10

0
2009-2010 2009-2010

Comment:-

The gross profit ratio of HDFC LIFE in 2009 was 21.76% and in 2010 is 30.25%
so increasing the gross profit of HDFE LIFE over the year and company become
a strong in his financial performance.

(D) NET PROFIT RATIO

31
 NET PROFIT
NET PROFIT RATIO= ∗ 100
𝑁𝐸𝑇𝑆𝐴𝐿𝐸𝑆

6,95,56,324
2009-10= ∗ 100
31,48,95,290

= 22.09%

5,51,83,763
2008-09 = ∗ 100
25,56,98,360

= 21.58%

22.2
22.1
22
21.9
21.8
21.7 Series 3
21.6
21.5
21.4
21.3
2009-2010 2008-2009

Comment:-

32
The net profit ratio of HDFC LIFE in 2009 was 21.58% and in 2010 is 22.09%
therefore the net profit is increasing. The company have good profit margin.
The company should more and more profit for the future.

(E)Net retention ratio

NET PREMIUM
NET RETENTION RATIO= ∗ 100
𝐺𝑅𝑂𝑆𝑆𝑃𝑅𝐸𝑀𝐼𝑈𝑀

6,95,56,324
2009-10 = ∗ 100
70,051,044

= 99.29 %

55,183,763
2008-09= ∗ 100
55,646,930

=99.17%

33
 99.3
99.28
99.26
99.24
99.22
99.2
Series 3
99.18
99.16
99.14
99.12
99.1
2009-2010 2008-2009

Comment:-

The net retention ratio of HDFC LIFE in 2009 was 99.17% and in 2010 is
99.29% therefore increasing the net retention ratio of the HDFE LIFE. So
company become successful for maintain the premium level over the year.

(F)RATIO OF EXPENSES OF MANAGEMENT

RATIO OF EXPENSES OF MANAGEMENT

MANAGEMENT EXPENSES
= ∗ 100
𝑇𝑂𝑇𝐴𝐿𝐺𝑅𝑂𝑆𝑆𝑃𝑅𝐸𝑀𝐼𝑈𝑀

20,345,376
2009-10 = ∗ 100
70,051,044

34
 = 29.04 %

21,915,907
2008-09 = ∗ 100
55,646,937

=39.38%

45
40
35
30
25
20 Series 3
15
10
5
0
2009-2010 2008-2009

Comment:-

The ratio of expense of management of HDFC LIFE in 2009 was

39.38% and in 2010 is 29.07% so decreasing the management expenses over
the year

35
(G)COMMISSION RATIO

Gross commission
COMMISSION RATIO = ∗ 100
𝑇𝑂𝑇𝐴𝐿𝐺𝑅𝑂𝑆𝑆𝑃𝑅𝐸𝑀𝐼𝑈𝑀

5,254,973
2009-10 = ∗ 100
70,051,044

= 7.50 %

4,248,904
2008-09 = ∗ 100
55,646,937

=7.64%

36
 7.7

7.65

7.6

7.55

7.5

7.45

7.4
2009-2010 2008-2009

(H)RATIO OF POLICY HOLDERS’ LIABILITIES TO SHAREHOLDERS’ FUNDS:

RATIO OF POLICY HOLDERS’ LIABILITIES TO SHAREHOLDERS’ FUNDS :

POLICY HOLDERS’ LIABILITIES

= ∗ 100
SHAREHOLDERS’ FUNDS∶

37666908
2009-10 = ∗ 100
6304757

37
 = 597.44 %

290992419
2008-09= ∗ 100
4291597

= 677.89%

700
680
660
640
620
Series 3
600
580
560
540
2009-2010 2008-2009

(I)RETURN ON INVESTMENT

RETURN ON

EBIT
INVESTMENT = ∗ 100
CAPITAL + SURPLUS+RESERVE

38
 5,029,631
2009-10 = ∗ 100
19,680,000+ 552,892

= 24.86%

2751844
2008-09 = ∗ 100
19,680,000+ 552,892

=13.60%
30

25

20

15
Series 3

10

0
2009-2010 2008-2009

Comment:-
The return on investment ratio of HDFC LIFE in 2009 was 13.60% and
in 2010 is 24.86% there increasing the return on investment over the year so
company become a profitable over the year.

39
(J) DEBT-EQUITY RATIO

𝐋𝐎𝐍𝐆−𝐓𝐄𝐑𝐌𝐃𝐄𝐁𝐓
DEBT-EQUITY RATIO = * 100
𝐒𝐇𝐀𝐑𝐄𝐇𝐎𝐋𝐃𝐄𝐑’𝐒𝐅𝐔𝐍𝐃

𝟕𝟗𝟎𝟓𝟗𝟐𝟑𝟏𝟑
2009-10 = ∗ 𝟏𝟎𝟎
𝟓𝟎𝟎𝟒𝟗𝟒𝟐𝟑𝟖

=1.58%

579047751
2008-09= ∗ 100
461137821

=1.25%

1.8

1.6

1.4

1.2

0.8 Series 3

0.6

0.4

0.2

0
2009-2010 2008-2009

Comment:

40
The debt-equity ratio of HDFC LIFE in 2009 was 1.25% and in 2010 is 1.58%
there increasing the level of equity against long term debt.

41
 Asset

Asset 2009-2010 2010-2011 2009-2010(%) 2010-2011(%)

Share holder 6,304,757 4,291,597 100% 68%

policy holder 43,415,382 30,152,727 100% 69%

Assets held to cover 155,217,800 68,782,936 100% 44%

link liabilities

Loans 40,366 30,248 100% 73%

Fix assets 1,143,777 1,451,346 100% 126%

Cash and bank 2,826,362 4,108,660 100% 145%

Advance 4,917,758 5,428,699 100% 110%

Current Asset 12,28,585 8,820,225 100% 717%

Provision 187,617 208,813 100% 111%

Net working capital 4,725,082 508,321 100% 10%

Miscellaneous 14,664,966 11,913,122 100% 81%

expense

Other Asset 0 0 100%

Total 2,16,610,966 117,130,297 100% 5%

Liability 2009-2010 2010-2011 2009-2010(%) 2010-2011(%)

42
Share capital 19,680,000 17,958,180 100% 91%

Reserve fund 552,892 552,892 100% 100%

Credit change a/c 184,435 -77,610 100% 142%

Credit change a/c 205,087 -296,885 100% 42%

policy liabilities 37,666,908 29,092,419 100% 77%

insurance reserve 0- 0 100% 100%

Provision for link liabilities 127,701,636 84,085,083 100% 0

Add: Fair value change 27,516,164 -15,302,147 100%

total provision 155,217,800 68,782,936 100% 44%

Funds 1,490,013 586,395 100% 39%

funds for provision 1,064,831 531,970 100% 49%

Surplus 0 0 100% 100%

Profit and loss 6,95,56,324 5,51,83,763 100% 79%

Conclusion:-

According to trend analysis the hdfc life doing improvement in 2010-2011

compare to 2009-2010 so company is growing in following way

1). The liquid position of the company improving around 145 %

2).The increase in fixed asset is financed by issue of debenture

43
3).Higher improvement in current asset the compare the two year 717% are
improvement in 2010-2011

COMMON SIZE STATEMENTS

Asset 2010 2010 (%)

Share holder 4,291,597 3.66

policy holder 30,152,727 25.74

Assets held to cover 68,782,936 58.72

link liabilities

Loans 30,248 0.025

Fix assets 1,451,346 1.24

Cash and bank 4,108,660 3.5

Advance 5,428,699 4.63

Current Asset 8,820,225 7.53

Provision 208,813 0.18

Net working capital 508,321 4.34

Miscellaneous 11,913,122 10.17

expense

Total 117130297 100

TREND ANALYSES

44
Share Capital

share capital

PARTICULAR 2009-10 2008-09 incre/decre %

Authorised Capital 30,000,000 30,000,000 0 0

Issued Capital 19,680,000 17,960,000 17,20,000 9.57

Subscribed Capital 19,680,000 17,960,000 17,20,000 9.57

Called-up Capital 19,680,000 17,960,000 17,20,000 9.57

share capital %

12
10
8
6
4
2
0
0 17,20,000 17,20,000 17,20,000
share capital %
30,000,000 17,960,000 17,960,000 17,960,000
30,000,000 19,680,000 19,680,000 19,680,000
Authorised Issued Capital Subscribed Called-up
Capital Capital Capital

CONCLUSION:

in the year 2008-09 the Authorized share capital was 30,000,000 and at
current year the Authorized share capital are same there are no changes arise
in Authorized share capital between two year and Called-up Capital,
Subscribed Capital , Issued Capital were 17,960,000 and in current year
increase by 17,20,000 so as compare to the previous year increase by 9.57 %

45
RESERVES AND SURPLUS

PARTICULAR 2009-10 2008-09 incre/decre %

Revaluation Reserve 552,892 552,892 0 0

Revaluation Reserve
100%
90%
80%
70%
60%
50%
Revaluation Reserve
40%
30%
20%
10%
0%
2009-10 2008-09 incre/decre %

CONCLUSION:

in the year 2008-09 the Revaluation Reserve are 5,52,892 and at

current year are same there are no changes arise in the current year,

46
Investments – Shareholders

PARTICULAR 2009-10 2008-09 incre/decre %

Government Securities 2,471,702 2,180,149 291,553 13.373077

Equity 457,377 233,783 223,594 95.641685

Debentures / Bonds 208,675 100,531 108,144 107.57279

Investment Properties 757,540 757,540 0 0

Infrastructure 1,108,284 386,899 721,385 186.45305

Other Investments 145,085 64,797 80,288 123.90697

6,000,000
5,000,000
4,000,000
3,000,000
2,000,000 %
1,000,000 incre/decre
0
2008-09
2009-10

47
CONCLUSION

in the year 2008-09 the investment in Government Securities was

2180149 and at current year are having 2471702 so increase by 291,553 and
so 13.37 % are increase as compare to previous. And Equity, Debentures /
Bonds, Investment Properties, Infrastructure, Other Investments, are increase
by respectively 95.64%, 107%,0%, 186% 123%.

Working Capital

current assets 2009-10 2008-09 incre/decre %

Cash 279,148 668,726 -389,578 -58.25674

Deposit Accounts 1,340,581 1,751,354 -410,773 -23.4546

Current Accounts 1,206,633 1,653,161 -446,528 -27.01056

current liabilities 2009-10 2008-09 incre/decre %

Agents’ Balances 422,567 525,903 -103,336 -19.64925

Premiums received in advance 296,400 278,748 17,652 6.3326015

Security Deposits 21,441 21,441 0 0

Sundry creditors 5,078,198 3,894,536 1,183,662 30.392889

Claims Outstanding 433,935 198,361 235,574 118.76024

Unallocated Premium 232,117 274,095 -41,978 -15.31513

48
 100%
As
80% % -58.25674491 -23.4545957
60% -27.01055735 %
40% incre/decre -389,578 -
20% 410,773 -446,528 incre/decre
0%
2008-09 668,726 1,751,354
-20% 1,653,161 2008-09
2009-10 279,148 1,340,581
1,206,633 2009-10

compared to previous year, Current Accounts are decrease by as compare to

the previous year respectively,-58%, -19%, 6.33%,0%, 30.39%, in the year
2008-09 the current asset of cash, Deposit Accounts -23%, -27%,. And current
liabilities of Agents’ Balances, Premiums received in advance, Security
Deposits, Sundry creditors are decrease or increase

Comparison of funds for year 2010:

Fund 2009 2010

Growth fund 38 73

Balance manage
fund 32 48

Equity manage
fund 34 62

Liquid manage
fund 28 31

49
 80
70
60
50
40
30
20
10 2009
0 2010
Growth fund Balance Equity Liquid manage
manage fund manage fund fund

In above diagram comparison of fund’s performance for year 2010.

The above diagram represents the comparison of various funds. The

growth fund in 2009 was 38% and at present in 2010 are 73% so increased by
35%. And second fund is balance manage fund there was 32%in 2009 and at
present jn 2010 is 48% so increase by 16%. And third fund is equity manage
fund there was in 2009 was 34% and at present in 2010 are 62% so increase
by 28%. And forth fund are liquid fund there was in 2009 was 28% and present
in 2010 are 31% so increase by 4%.

50
Equity markets

INDICES 31-5-12 30-4-2012 1month rate 1year rate of

of return return

BSE Sensex 16,219 17,319 -6.35 -12.35

S&P CNX 4,924 5,248 -6.17 -11.44

Nifty
BSE 100 4,942 5,268 -6.19 -12.34

BSE Mid Cap 5,908 6,316 -6.46 -14.50

BSE Small 6,271 6,765 7.30 -23.86

Cap

51
 6.Processes

The process should be customer friendly in insurance industry. The speed and
accuracy of payment is of great importance. The processing method should be easy
and convenient to the customers. Installment schemes should be streamlined to
cater to the ever growing demands of the customers. IT & Data Warehousing will
smoothen the process flow. IT will help in servicing large no. of customers efficiently
and bring down overheads. Technology can either complement or supplement the
channels of distribution cost effectively. It can also help to improve customer service
levels. The use of data warehousing management and mining will help to find out
the profitability and potential of various customers product segments.

What is Welcome Calling to the customer?

Welcome Calling is a call made to all our new customers to ensure that the policy
chosen by them is as per requirement.

What is the objective of Welcome Calling?

Welcome Calling serves mainly 2 objectives:

 First, to contact the customer as per the given contact details thereby ensuring
contact ability.
 Second, to verify if the customer has fully understood the important features the
insurance plan chosen and whether it suits the customer's requirement, thereby
avoiding mis-sale occurrences.

52
 The process of customer Welcome Calling of customer

 A welcome call is made to the customer after the application for insurance policy has
been accepted by the company.
 Before disclosing any policy related information, our Customer Service Associate
(CSA) will do a mandatory verification by asking few questions.
 If the policy holder is not available, information can be shared with a third party who
takes care of the policy holder's finances, post confirmation from the third party that all
the discussed details will be shared with the Policy Holder.
 Once the verification is done, the CSA will inform the customer on all the Key features
of the insurance plan.
Once all the key features have been communicated, the CSA can also make a note of
any query, request or complaint by the customer.
 If the customer is not contactable despite multiple attempts, we will send a Welcome
Calling Letter to the communication address of the customer.

Physical Distributions

Distribution is a key determinant of success for all insurance companies. Today, the
nationalized insurers have a large reach and presence in India. Building a distribution
network is very expensive and time consuming. Technology will not replace a
distribution network though it will offer advantages like better customer service.
Finance companies and banks can emerge as an attractive distribution channel for
insurance in India. In Netherlands, financial services firms provide an entire range of
products including bank accounts, motor, home and life insurance and pensions. In
France, half of the life insurance sales are made through banks. In India also, banks
hope to maximize expensive existing networks by selling a range of products.

53
The physical evidences include signage, reports, punch lines, other tangibles,
employee‘s dress code etc.

A. Tangibles: banks give pens, writing pads to the internal customers. Even the
passbooks,chequebooks, etc reduce the inherent intangibility of services.

B. Punch lines: punch lines or the corporate statement depict the philosophy and
attitude ofthe bank. Banks have influential punch lines to attract the customers.

SOME CHANNEL OF DISTRIBUTIONS IN HDFC LIFE

• Direct Sales Manager

1. Direct Sales • Individual Sales
• ( Door to Door Marketing )

• Business through Financial Consultants

2. Sales Development
Manager’s Induction

• Bank Relation
3. Alternative • ( HDFC,SBI,BOB,Andra Bank,AXIS
Induction Bank etc...)

4. Corporate • Group Selling

• Collabration with other Companies
Induction

54
55
 FINDINGS

1. The hdfc life insurance provided many types of insurance policy.

a) Life insurance

b) Pension plan

c) Mutual funds

d) Tax saving plan

2. Other company will provided same product which is provided by hdfc life
insurance. But more over people prefer hdfc insurance.

3. More of the custumer prefer the Life cover policy, tax saving policy, health
insurance etc.

4. Hdfc life recruit more financial consultant for sale more policy in market.

5. The culture of hdfc company provide excellent culture to custumer at the time of
home visit by consultant and branch visit by custumer for purchase a policy.

6. The company provided more facility to corporate and indivisual at the time of
selling policy or at the time of working.

56
 SUGGESTIONS:

The company should try to increase his financial performance in the future.

The company should try to increased his product cycle.

Stable Managed fund & Secure Managed Fund provide low return. but less risk in
Stable Managed fund & Secure Managed Fund.

Most of the people are not aware about HDFC STANDARD LIFE INSURANCE CO.LTD
so they have to advertise their company and their product.

HDFC LIFE INSURANCE CO.LTD focuses on the urban area so now they have to focus
on rural area also.

HDFC LIFE INSURANCE CO.LTD should try to increase awareness of their UNIT LINK
PLAN

The company should increase their distribution network.

57
 CONCLUSION

Introduction

1. It has got 3rd rank in the investment management, in year 2006One of the largest
financial institution of
2. India with more then 2 million satisfied customer base.
3. The most successful and admired life insurance Company, which means that we are the
most trusted Company, the easiest to deal with, offer the best value for money, and set
the standards in the industry. In short, “The most obvious choice for all

Financial analysis is important aspect of financial management. The study of financial

managementat HDFC LIFE LTD. has revealed that the current ratio was as per the
standard industrial practice but the liquidity position of the company showed an
increasing trend.

58
 Finance department

1. The proprietary ratios shows efficient capital structure. Considering the turnover
ratios, the management having effective collection system and low investment in
stocks.
2. The Depreciation under Companies Act for Computers is 16.21 % (SLM). However,
the rate adopted by us is 25 % SLM.
3. Machinery and Plant other than the specified – 15 % (applicable to A/C, Office
Equipment and Electrical Installations).
4. Current ratio of HDFC LIFE insurance, has 0.63:1 It also indicates the sound solvency
of the company is higher.
5. The net profit ratio in 2009 was 21.58% and in 2010 is 22.09% therefore the net profit is
increasing. The company have good profit margin. The company should more and
more profit for the future.

Issued Capital were 17,960,000 and in current year increase by 17,20,000 so as

compare to the previous year increase by 9.57 %

59
 BIBLOGRAPHY

Books Referred

1. Maheshwari, S.N.; Financial Managemen, Principles and Practice, Sultan Chand &
sons, 9th Edition 2004.
2. Maheshwari, S.N.; Elements of Financial Management, Sultan Chand & Sons, 2003
7th Edition.
3. Pandey, I.M.; Financial Management, Vikas Publishing House, 8th Edition, 2001.
4. .Author:Evertt.E.AdamProduction and opration management prentice hall 5th edition
Websites References

www.hdfclife.com/

www.bimadeals.com › Life Insurance › Life Insurance Companies

www.myinsuranceclub.com › Life Insurance › Companies

www.indiancustomers.in/company/hdfc-standard-life

www.hdfclife.com/Children'sPlans/child-insurance-plans.

www.hdfclife.com/savingsplans/WholeLife

60
ANNEXURE

61
QUESTIONNAIRE

PERSONAL DETAILS:

Name:

Mobile Number:

Adress:________________________________________
_______________

______________________________________________
_______________

______________________________________________
_______________

______________________________________________
_______________

_______________________________

Occupation: _____________________

Age: ____________________________

62
1. Of the following what at present are your investment needs?

a. To build a corpus for retirement

b. To save for children education/ marriage

c. To provide for medical emergencies

d. To provide for family financial security

e. To create wealth

f. All of the above

2. Which of the following you think as investment for tax- saving?

a. Mutual funds

b. Fixed deposit

c. Insurance

d. Ppf

e. All of the above

63
3. Have you ever been invested in mutual funds?

a. Yes b. No

4. Have you ever been invested in ulip insurance plans?

a. Yes b. No

5. If you had Rs 1000/- where you prefer to invest

a. Mutual fund

b. Fixed deposit

c. Direct equity

d. Life insurance

e. Postal office deposit

64
6. Out of the following in which Mutual Fund you have invested?

a) HDFC

b) Tata Mutual Fund . 

c) Franklin Templeton . 

d) Reliance . 

e) ICICI Prudential . 

f) SBI . 

g) Other If any ,Please Specify

6. Out of the following company which company ulip plans you

have invested?

a) HDFC LIFE. 

b) Tata AIG . 

c) BAJAJ ALLIANZE . 

d) Reliance . 

e) ICICI Prudential . 

f) SBI LIFE. 

g) Other If any ,Please Specify

65
8. To how much extent are you satisfied with the services offered by
HDFC LIFE regardingULIP INVESTMENT PLANS?

a) Exteremly satisfied.
b) Satisfied to the lesser extent
d) Dissatisfied to lesser extent
e) Extremely dissatisfied.

9. Do you prefer GROWTH FUND OR DIVERSIFY YOUR MONEY in

various fund?

a) growth fund 

b) diversify funds 

c) Depends upon the risk bearing condition 

66