Consumer Behavior On Ulips Offered By Hdfc Standard Life

CONSUMER BEHAVIOR ON UNIT LINKED INSURANCE PLANS (ULIPs) OFFERED BY HDFC STANDARD LIFE

EXECUTIVE SUMMARY HDFCSL was started as the first private life insurance company in India. Its mission is to offer best value for money and set the standards in the industry. The research work unveiled the tough competition of HDFCSL’s ULIPs with that of other players like LIC, SBI, etc. The overall study shows the persistency of HDFCSL’s ULIP performance helping the Indian consumers to achieve their financial goals superiorly.

COMPANY PROFILE  

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Incorporated on 14th August, 2000 Joint venture between Housing Development Finance Corporation ltd. (HDFC) & Standard Life. Rated ‘AAA’ by CRISIL and ICRA. Has 27 Lakh policies in force. Offers a bouquet of insurance solutions catering the needs of both individuals & organizations. Offers various unit linked plans like Unit linked wealth maximiser plus, Unit linked pension II, unit linked young star, etc.

WHAT ARE ULIPs? 

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Combination of safety of insurance protection & wealth creation opportunities. Life cover + investment in funds being opted for. Types: for retirement, for children’s education, for wealth creation, for health solution. Switching funds without any extra cost Long term investment Flexible & transparent Most ULIPs provide an option to increase or decrease premium after 3 years.

OBJECTIVES OF THE STUDY 

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Overview the acceptability and effectiveness of ULIPs in Indian consumer market. To list down the benefits of ULIPs. To understand the level of awareness of consumer about ULIPs. Influencing and inducing potential customer to buy ULIPs and other conventional plans offered by HDFCSL.

RESEARCH Title of the study: Consumer behavior on ULIPs offered by HDFCSL. Research design: Descriptive research. Sample plan under the survey:  Sample size: 50 respondents  Sample area: New Delhi (mainly west Delhi)  Sampling time frame: 1 month

continued… Data collected from:  Primary: mainly through questionnaires.  Secondary: websites, journals, company brochures, etc. Sampling technique: Non probability convenience sampling.

DATA ANALYSIS MARKET SHARE OF LIFE INSURANCE COMPANIES. M a rk e t s h a re o f life in s u ra n c e c o m p a n ie s

5%

9% 35%

14%

L IC IC IC I P ru d e n tia l B a ja j A llia n z HDFC S L Ta t a A IG

14%

O t h e rs 23%

CHANNEL CONTRIBUTING TO BRAND AWARENESS Channel that contributes brand awareness

12% 9%

Advertisements Face to face interactions 52%

27%

Internet Others

AWARENESS OF ULIPs

A w a re n e s s o f U L IP s

32% Y es No 68%

READINESS TO INVEST IN ULIPs

R e a d in e s s to in v e s t in U L IP s

12%

4%

40%

Y es No M ay be Don’t k now

44%

LIMITATIONS OF THE STUDY      

The size of sample was very small. Some information may vary for different people. Respondents might have given biased answers. Small sample size did not cover all age groups. Time constraint. The figures of result and analysis are approximate.

SWOT ANALYSIS STRENGTHS:  HDFCSL has the financial expertise required to manage the long term investment safely and efficiently.  Rated ‘AAA’ by CRISIL and ICRA for high service standards. WEAKNESSES:  Low number of offices and small network.  Lesser number of financial consultants.  Lack of knowledge.

OPPORTUNITIES:  Life insurance has captured its mere 15-20% growth. Therefore, a wide open untapped market is open to the company.  Still the number of companies are few and the company has full prospects to grow. THREATS:  People are hesitant to invest and put their money to private life insurance companies.  Alternative financial services such as mutual funds, shares and securities pose problems.  Rising real estate industry also pose threat as people are investing a bulk of their money there.

FINDINGS OF THE STUDY I found that people think their security indispensable as compared to other factors like tax savings, investment, etc. Whole life policy is popular due to family need, endowment policy is popular due to life stage needs. Premium mode also influences buying behavior. Annual & half yearly mode of payment is preferred. Network reach and visibility of insurance is very important criterion for the customer while buying an insurance policy.

OVERALL MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES 54%

LIC ICICI Prudential 15%

Bajaj Allianz 9%

8%

2%

4%

8%

HDFC SL

Companies

O th er s

ru de nt

ia Ba l ja jA llia nz HD FC SL Ta ta AI G Re lia nc e lif e

Tata AIG LI C

60% 50% 40% 30% 20% 10% 0%

IC IC IP

Percentage

Market share of life insurance companies

Reliance life Others

AMOUNT OF PREMIUM COLLECTED BY HDFCSL AS COMPARED WITH LIC Amount of premium collected by HDFCSL compared with LIC 16000 15000 14000 13000 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0

15350

11360

LIC HDFCSL 3563 1167

Aug'09

931 Aug'08 Premium (in crore)

707 Aug'07

RECOMMENDATIONS  

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The company needs more manpower and planning to reach the desired level. It should try to sell those plans which the customer requires & not the plan where advisors benefits are higher. Aggressive promotion for ULIPs should be done. Customer’s grievances should be met on time. The plans should be made flexible. The various funds in which investments for ULIPs are done should be made aware to people. Returns from investment should be taken care of.

BIBLIOGRAPHY      

www.hdfcinsurance.com www.google.com www.allbusiness.com www.wikipedia.com Business today magazines HDFCSL in-house brochures

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