CONTENTS 1.EXECUTIVE SUMMARY......................................................................................... ......2 2.INTRODUCTION TO THE TOPIC................................................................................. .3 3.AIM OF THE STUDY...................................................................................................4 4.INTODUCTION TO INSURANCE INDUSTRY.................................................................5 5.ORGANIZATIONAL PROFILE.......................................................................................6 5.1 FORMATION OF COMPANY..................................................................................6 5.2 PRODUCT SCOPE:.............................................................................. ...............10 5.3 PRODUCT PORTFOLIO.......................................................................................13 5.4 MILESTONES IN THE HISTORY...........................................................................17 5.5COLLABORATIONS & AFFILIATIONS:...................................................................18 5.6 HEAD OFFICES AND BRANCHES.......................................................................20 5.7 ORGANIZATION STRUCTURE:............................................................................23 6.FINDINGS.................................................................................................... ............23 7.SUGGESTION................................................................................ ..........................26 8.CONCLUSIONS:................................................................................. ......................27 9.BIBLIOGRAPHY............................................................................................ ............28
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1. EXECUTIVE SUMMARY In today’s 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. The growth potential attracts individuals to enter this sector and HDFC Standard Life Insurance Company Ltd has given me the opportunity to work and get experience in highly competitive and enhancing sector.
The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In insurance sector, distribution channel includes only agents or agency holders of the company. If companies like LIC, RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies.
Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customers. An agent is a primary source for procurement of insurance business and as such his role is the corner stone for building a solid edifice of any life insurance organization. To effect a good quality of life insurance sale, an agent must be equipped with technical aspects of insurance knowledge, he must possess analytical ability to analyze human needs, he must be abreast with up to date knowledge of merits or demerits of other instruments of investment available in the financial market, he must be endowed with a burning desire of social service and over and above all this, he must possess and develop an undeterred determination to succeed as a Life Insurance Salesman. In short he must be an agent with professional approach in life insurance salesmanship.
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2. INTRODUCTION TO THE TOPIC
THE TOPIC: “FINANCIAL CONSULTANT FOR HDFCSLIC, CHENNIA” At HDFC Standard Life Insurance, I underwent the training as “Financial Consultant” for my summer internship. The selection of the training was in order to know how these companies generate business through them. Financial Consultants are those sources of a company who have their own relations and personal contacts among common public that they use to generate business through. Company has certain criteria to recruit these Financial Consultants. The steps are as follows. •
He should be at least 12th passed.
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He should complete IRDA training.
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He should clear the IRDA exam.
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He should through successfully the exam and training.
Some other criteria: •
He should have good personal contacts.
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He should have convincing power.
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He should be above 18th year old.
Once he through all these steps of recruitment, he becomes the legal Financial Consultant of the company and reserve the right to sale the policy to any prospect client also he is paid the commission a certain percentage. There are some reward and tour package also.
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3. AIM OF THE STUDY The financial sector is one of the booming and increasing leaps and bounce, some of the experts say only 20% of Indian population is insured which means 80% Indian are not insured and therefore having a bright prospect of progress of this sector where I too would like to build my career and be a part of success story. The Financial consultants are another channel through which the company sales its policy. It is really difficult to convince and sale a single policy but since these consultants have their contacts which they can sale a single policy. Whereas I found my interest in dealing, interacting and handling a team, because all this most of time park you in some critical zone which becomes challenge for you and your responsibility becomes to solve the critical situation or problems.
IMPORTANCE TO THE COMPANY: After interacting with company’s marketing head I got to know that they have many Financial Consultants but not getting the policies up to the expectations level of the company. Company is really interested in knowing if there is any mistake or lacking somewhere in process of recruiting and or the criteria they have fixed for the recruitment. The ultimate purpose of giving me this topic was to revise its recruitment policy/process.
OBJECTIVE OF THE STUDY: •
The process of recruitment of HDFC STANDARD LIFE INSURANCE LTD.
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How is the training given?
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What are the criteria of selection?
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The culture of insurance company particularly of HDFC.
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What are the problems faced by these financial consultants on daily basis?
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How to convince and convert the prospect client into real client?
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4. INTODUCTION TO INSURANCE INDUSTRY Insurance can be defined as assurance for uncertainty. Insurance is about something going wrong. Its’ often about things going right.; One of the Wonders of human nature is that we never believe anything can actually go wrong. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to liberalized market again. Tracking the development in Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. The business of life insurance in Indian in its existing form started in India in the year 1818 with the establishment of Oriental Life. Insurance Company in Calcutta. Some of the important milestones in life insurance business in India are. 1912: The Indian Life insurance Companies Act enacted as first statue to regulate the life insurance business. 1928: The Indian Insurance Compan9es Act enacted to enable the government to collect statistical information about 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. 1965: 245 Indian and foreign insurers and provident societies take over by the central government and nationalized. LIC formed by an act of parliament viz. LIC. Act . 1956, with a capital contribution of Rs. 5 Crore from the government of India.
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5. ORGANIZATIONAL PROFILE 5.1 FORMATION OF COMPANY HOUSING DEVELOPMENT FINANCE CORPORATION: HDFC was started by Hasmukh Bhai Parekh in1977 with the formation of Malhotra Committee. HDFC was incorporated with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 10 crores. HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 119 crores. The net worth of the corporation as on March 31, 2000 stood at Rs. 2,096 crores. HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai, India. HDFC also has an international office in Dubai, U.A.E., with service associates in Kuwait, Oman and Qatar. HDFC’s main goals are to: a) Develop close relationships with individual households. b) Maintain its position as the premier housing finance institution in the country. c) Transform ideas into viable and creative solutions. d) Provide consistently high returns to shareholders. e) To grow through diversification by leveraging off the existing client base.
STANDARD LIFE: 6
The Standard Life Assurance Company ("Standard Life") was established in 1825 and the first Standard Life Assurance Company Act was passed by Parliament in 1832. Standard Life was reincorporated as a mutual assurance company in 1925. Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 182 years, is a modern company surviving quite a few changes since selling its first policy in 1825. The company expanded in the 19th century from its original Edinburgh premises, opening offices in other towns and acquiring other similar businesses. Standard Life currently has assets exceeding over £70 billion under its management and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor.
STANDARD LIFE ASIA LIMITED/JOINT VENTURES: The group’s Hong Kong subsidiary, Standard Life Asia Limited (“SL Asia”), was incorporated in 1999 as a joint venture and became a wholly-owned subsidiary of Standard Life in 2002. The group’s operations in Hong Kong were established to give the group a presence in the Far East from which it could expand into China. The group’s joint ventures in India with Housing Development Finance Corporation Limited (“HDFC”) were incorporated in 2000 (in relation to the life assurance and pension’s joint venture) and 2003 (in relation to the investment management joint venture). The group’s joint venture in China with Tianjin Economic Development Area General Company (“TEDA”) became operational in 2003.
STANDARD LIFE GROUP: 7
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The Standard Life group has been looking after the financial needs of customers for over 182 years
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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
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Its investment manager currently administers £125 billion in assets
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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
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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 pension’s 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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INCORPORATION OF HDFC STANDARD LIFE INSURANCE CO. LTD.: The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited. Their ambition from the beginning was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life was the first life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured. HDFC Standard Life Insurance Company Ltd. is one of India’s 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.), India’s leading housing finance institution and one of the subsidiaries of Standard Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry.
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5.2 PRODUCT SCOPE: HDFC Standard Life offers a bouquet of insurance solutions to meet every need. The company caters to both, individuals as well as to companies looking to provide benefits to their employees. For individuals, the company has a range of protection, investment, pension and savings plans that assist and nurture dreams apart from providing protection. The customers can choose from a range of products to suit their life-stage and needs. For organizations they have a host of customized solutions that range from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company. The products of the company are categorized into various sections which are as follows : A. INDIVIDUAL PRODUCTS B. GROUP PRODUCTS C. RURAL PRODUCTS D. SOCIAL PRODUCTS E. TAX BENEFITS For Individuals, HDFC Standard Life has a range of protection, investment, pension and savings plans that assist and nurture dreams apart from providing protection. Customer can choose from a range of products to suit his life-stage and needs.
For Organizations, HDFC Standard Life has a host of customized solutions that range from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These
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affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company.
Individual Products: 1. HDFC Children's Plan, 2. HDFC Endowment Assurance Plan, 3. HDFC Loan Cover Term Assurance Plan, 4. HDFC Money Back Plan, 5. HDFC Personal Pension Plan, 6. HDFC Single Premium Whole Of Life Plan, 7. HDFC Term Assurance Plan, 8. HDFC Unit Linked Endowment, 9. HDFC Unit Linked Endowment Plus, 10. HDFC Unit Linked Pension, 11. HDFC Unit Linked Pension Plus, 12. HDFC Unit Linked Young Star, 13. HDFC Unit Linked Young Star Plus
At HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, varied range of products that customer can choose from to suit all needs. These will help secure customer future as well as the future of family.
Protection Plans: Customer can protect his family against the loss of his income or the burden of a loan in the event of his unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price.
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HDFC Standard Life Protection range includes Term Assurance Plan & Loan Cover Term Assurance Plan.
Investment Plans: HDFC Standard Life Single Premium Whole of Life plan is well suited to meet long term investment needs. HDFC Standard Life provides with attractive long term returns through regular bonuses. Pension Plans:
HDFC Standard Life Pension Plans help secure financial independence even after retirement. Pension range includes Personal Pension Plan, Unit Linked Pension, and Unit Linked Pension Plus Savings Plans. Savings Plans:
HDFC Standard Life Savings Plans offer flexible options to build savings for future needs such as buying a dream home or fulfilling children’s immediate and future needs.
Group Products: 1. Group Term Insurance, 2. Group Variable Term Insurance, 3. Group Unit Linked Plan, 4. Gratuity Group Unit Linked Plan, 5. Superannuation Group Unit Linked Plan , 6. Leave Encashment
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5.3 PRODUCT PORTFOLIO HDFC offers products as per the life stages of the customers and their respective needs.
Your insurance need will change as your life does, from starting to work to enjoying your golden years and all the stages in between. Each one of these stages may pose a different insurance need/cover for you. In this section, we have drawn up the basic life stages and help you analyze various insurance needs accordingly.
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LIFE STAGES & NEEDS IN HAT STAGES
STAGE 1: YOUNG & SINGLE
An important stage where one lays down the foundation of a successful life ahead. Take advantage of the time and power of compounding to ensure that you build up your dreams. Start saving early. NEEDS: Save for Home & Wedding Tax Planning Save for Golden Years
STAGE 2: JUST MARRIED
Marriage brings about a significant change. New dreams and new opportunities also bring in additional responsibilities. While both of you look forward to a happy and secure life, it is equally important to ensure that eventualities don’t come in the way of shaping your dreams. NEEDS: Planning for home / securing your home loan liability. Save for vacation. 14
Save for your first child. STAGE 3: PROUD PARENTS
Once you have children, your need for life insurance is even more. You need to protect your family from an untoward incident. Ensure your protection umbrella takes into account the future cost of securing your child’s dream. You will want life to go on for your loved ones, and having enough life insurance is a way to help ensure that.
NEEDS: Provide for children's education Safeguarding family against loan liabilities Savings for post-retirement
STAGE 4: PLANNING FOR RETIREMENT
While you are busy climbing the ladder of success today, it is important for you to take time and plan for your life after retirement. Having an early start for retirement planning can make a significant difference to your savings. Think about your golden years even before you have reached them. The key is to think ahead and plan well using your time and money. NEEDS – Provide for regular income post retirement Immediate Tax benefits 15
Lead a secure, independent and comfortable life style in your retirement years. COMPARITIVE ADVANTAGE OVER COMPETITORS PRODUCT:
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I compared two products, ICICI smart kid unit link and HDFC young star, in both the policies parent is insured and child in nominee or beneficiary,
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Both the policies contains same features, only additional rider is available in smart kid is income benefit rider (IBR), how this rider works? this rider comes in the picture when the parent expires or becomes permanent disable at that time this rider pay 10% of sum assurance to nominee,
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HDFC Youngstar offers Insurance Cover upto 20 Times of Annual Premium. You may Pay Rs. 30000 per year & take Insurance Cover of Rs. 6 Lacs.
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You may take Critical Illness Rider in HDFC Youngstar upto 65 years Age(as it Cheaper than other ULIPS ).
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The returns from HDFC Taxsaver, HDFC LT Advantage fund are better than the returns from HDFC Standard Life Equity Fund.
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HDFC Standard ULIP Returns are over 70% in last 1 year.
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HDFC Youngstar with Maximum Insurance Cover of Rs.3.6 Lacs
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5.4 MILESTONES IN THE HISTORY
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HDFC is India’s leading housing finance institution and has helped build more than 23, 00,000 houses since its incorporation in 1977.
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In Financial Year 2003-04 its assets under management crossed Rs.36,000Cr.
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As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors.
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Rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive year
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Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development.
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Presented the ‘Dream Home’ award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards
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HDFC Standard Life Insurance is the first private life insurance company to be granted a license by IRDA
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Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India’s number 1 personal finance magazine
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Rated by ‘Business world’ as ‘India’s Most Respected Private Life Insurance Company’ in 2004.
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Has the highest brand recall, close to 80% (Source: AC Neilson ORG MARG, April 2005)
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Has one of the widest branch networks with offices in over 100 cities servicing over 440 towns
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5.5COLLABORATIONS & AFFILIATIONS:
SUBSIDIARY AND ASSOCIATE COMPANIES:
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HDFC Bank
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HDFC Mutual Fund
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HDFC Standard Life Insurance Company
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HLSIL
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HDFC Chubb General Insurance Company Ltd.
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Intelnet Global Services Ltd.
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Other Companies Co-Promoted by HDFC
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Financial Information with regard to Subsidiary Companies
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GROUP COMPANIES
BANCASSURANCE PARTNERS
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5.6 HEAD OFFICES AND BRANCHES HEAD OFFICE: HDFC Standard Life Insurance Co. Ltd. 'Trade Star', 2nd floor,’A’Wing, Junction of Kondivita and M.V. Road, Andheri-Kurla Road, Andheri (East), Mumbai - 400 059. PHONE:
(Board) (022) 2822 0055 / 6751 6666
Fax:
2822 9998 / 2822 2414
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BRANCH LOCATIONS SITE MAP:
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TABLE OF FINANCIAL FIGURES:
PARAMETERS
APR-MAR 2006- APR-MAR 07 (Rs.Cr)
2007-08 (Rs.Cr)
GROWTH (%)
Total received premium
668.40
1532.21
129.23
New business
486.15
1028.94
111.65
Renewal
182.25
503.27
103.47
Effective Premium Income (Total)
436.08
887.30
103.47
Group Business Premium (EPI)
49.40
135.15
173.58
APR-MAR 2006-07 (Rs.Cr)
APR-MAR 2007-08 (Rs.Cr)
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5.7 ORGANIZATION STRUCTURE: Chairman
MD
Zonal Manager Regional Manager
Retail Marketing Territory Manager Branch Manager
Asst. B.M.
Alternative Chanel Territory Manager Branch Manager
Operation Chanel
Human Resource
Team Manager
HR Executive
Operation Manager
Channel Executive
Business Dev. Mgr. Sales Dev. Mgr.
6. FINDINGS 23
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Financial consultant, the right way to start career:
As a financial consultant the role will be to identify prospective customer. You will makes presentation, as to how you can help analyses their financial needs, provide customize financial solution to cater to their respective needs and conduct reviews on regular basis to keep customers on thank.
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Easy way to start on career:
Zero investment: There is no start-up capital. Be an own boss with a flexible working environment, unlimited earning potential and the opportunity to be part of world class sales team.
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Flexible work timings, part time or full time:
FCs can work whenever he likes and from whereeve4r he like, FCs can work full time depending on their convenience its like no other job however, the time.
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PROFESSIONAL TRAINING PROGRAMS AND CONTINUID GUIDANCE:
At HDFC standard training is an inherent element of our support system for FCs. Some of our training and support initiative are as:
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IRDA Training: Online training of 100 hrs. prepares for career as FCs and enables to pass the IRDA examination. After the IRDA license, first step towards a successful career as a FC.
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Basic Training and Induction: Independence of work experience, this training will give perfect knowledge about the insurance industry along with comprehensive knowledge about the insurance along with comprehensive knowledge abut HDFC SLIC Product.
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Disha training: This is a professional sales skill program eased by us to one selling skills. Those program enable to understand customer need and provide need based insurance solution.. A huge step from an amateur to a true finance professional.
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Advance Training: Once FC have settled down as a FC professional we will continuously upgrade capability and knowledge through sophisticated training program, fit for this dynamic world of financial products and markets.
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7. SUGGESTION Finally some recommendations for the company are as fallows: To make people aware about the benefit of becoming HDFC Standard Life’s Financial Consultant, following activities of advertisement should be done through 1. Print Media. 2. Hoarding & Banners. 3. Stalls in Trade Fares 4. Distribution of leaflets containing details information. 5. Company can recruit sales promoters so that maximum information can be provided to the potential client. By showing additional and alternative income source along with various schemes for Financial Consultant in the company so that more and more FC can be recruited. Free life cover for every active Financial Consultant. Make people understand about the meaning of the IRDA authorization and its validity.
Company should organize the program in the society, so that people will be aware about the company.
They should have separate time slot for Working Professionals, House Wives and Retired people. Agency of non-life products should also be provided along with life. 26
Company should open more branches in different cities. 8. CONCLUSIONS: HDFC Standard Life, the insurance arm of HDFC is expected to go on stream. Promoted by HDFC & Standard Life, already has good number of employees on board and is recruiting Financial Consultants heavily to take the headcount to many more. It is on the brim of increasing its client through its attractive schemes and offer. The project opportunities provided was market segmentation and identifying prospective clients in potential geographical location and for recruiting them as financial consultant so to explore new Business Opportunity. Through this project, it could be concluded that people are not much aware about the various benefit of being Financial Consultant that are currently prevailing in the insurance industry.
Insurance was considered as unsought good which require hard core selling, but in changing trend in income and people becoming financially literate, the demand for insurance is increasing day by day. So, it is the company that first approaches gets its share of reward. Proper after sale service can help the advisors to generate more business. Gradually people are realizing the fact that insurance is not a necessary evil but means to attain worry free life.
This activity much attract unemployed people as for them a source of income is a great help for developing there future. Company’s promotional activities for recruiting Financial Consultant are also very less. So, at last the conclusion is that there is tough competition ahead for the company from its major competitors in terms of number of Financial Consultants.
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Last but not the least I would like to thank HDFC SLI for giving me an opportunity to work in the field of Financial Consultant. I hope the company finds my analysis relevant.
9. BIBLIOGRAPHY Reference: To obtain more information regarding present study and to subordinate it with theoretical proof following references were made.
Books Referred:
Personal management.
Book of license training programme for insurance advisers.
Websites Referred:
www.hdfcinsurance.com
www.irda.com
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