A Project Report

On

FINANCIAL ANALYSIS
(OF HDFC LIFE)

Submitted By
Chetan kotangale
( B.B.A III)
GUIDED BY :PROF. DILIP KOLHE

SHANKARLAL AGRAWAL
COLLEGE OF MANAGEMENT
STUDIES GONDIA(M.S.)

DECLARATION
I hereby declare that the major project

report , entitled FINANCIAL

ANALYSIS, is based on my original study and has not been submitted

earlier for award of any degree or diploma to any institute or university.

The work of other authors(s), wherever used, has not been acknowledged at
appropriate place(s).

Place: New Delhi

Candidate signature

Date:

Name: Amit
Enrl.no: 01112303911

Countersigned
Name: MRS RUCHI GUPTA

Name: S.N MAHESHWARI

Director

Delhi institute of advanced studies

Delhi Institute Of advance

studies

PREFACE
Management of financial analysis plays a significant role in the organization
as the blood plays its role in the human body .It not only provides energy to
the business but simultaneously it is essential for the success of any business
organization management of working capital has close implication with the
two important factors that judge the overall success of the business
profitability and solvency. Nowa-days, the major problem faced by every
business organization is of finance because of drastic changes in the size and
scale of business and increased competition, which results in the increase in
credit business and shortage of financial brackets. In such an environment, the
working capital management has occupied one of the key position in the
business management.
In our study, our main objective is to reflect our attention on the position of
FINANCE MANAGEMENT in HDFC LIFE LTD. And discuss various
aspects of Finance analysis in the company.
The HDFC LIFE LTD Is leading company in the field of INSURANCE
SECTOR. Our study is grouped under chapters where we Discusses various
aspects of the FINANCE MANAGEMENT and effects there of on ultimate
performance of the company.
It gives me great pleasure to acknowledge my in deftness to all those who
have helped me completing this project and bringing it out in its present form.
I am very grateful to my supervisor under whose kind supervision and able
guidance, this work has completed.
It gives me immense pleasure to present this project report on FINANCE
MANAGEMENT carried out at HDFC LIFE LTD In partial fulfillment of
Post graduation course IN M.B.A.

No work can be carried out without the help and guidance of various persons.
I am happy to take this opportunity to express my gratitude to those who have
been helpful to me in completing this project report.
I would be failing in my duty if I do not express my deep sense of gratitude to
MRS. RUCHI GUPTA without her guidance it wouldnt have been possible
for me to complete this project work.
Lastly I would like to thank my parents, friends and well wishers who
encouraged me to do this research work and all those who contributed directly
or indirectly in completing this project to whom I am obligated to.

AMIT
M.B.A (G)

CONTENTS
01.

INTRODUCTION

02.

03.

PURPOSE OF THE STUDY

AIM OF THE STUDY
OBJECTIVE OF THE STUDY

Organization Information
A .About HDFCSLIC
B .company profile
C. what is insurance?
D .scope of insurance
E .objective
F .Award and accolade
G .product of HDFCSL
H .About ULIP
Descriptive work
A. Factsheet
B. Profiling of prospects
C. Mode of contacting prospects
D. Total number of people contacted

04.

FINANCE DEPARTMENT OF HDFC LIFE

05.

A .Conclusion
B. RECOMMENDATION AND
SUGGESTION

06.
07.

ANNEXURE
BIBLOGRAPHY

Purpose of study
During my summer training in the Housing Development finance
corporation standard life insurance company limited (HDFCSL). I have
gotten the work of Analyzing financial need and manage the funds of the
policies. The main focus area of the company is to manage and focus of
customer profit which gets through managing the funds of the policy. Indeed
the work of financial analyst is very significant and gives more and more
customer assistance to the customer so company can earn customer base and
through strong customer base gets more and more policies distribution and
company can sell the policies. The main motive of this project is analysis of
financials of HDFC LIFE.
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 Finance is more
challenging then the other sector because there is 17 insurance companies in
the market who are giving competition to each 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 fi n ance
advi sor . 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 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.

AIM OF STUDY
During the summer training I have done my work through telephone calling,
natural market, and contact person having gone to their home. In the entire
work I have contacted person who is policy holder of the company or
willing customer and prospect customers of the company
I found that most of person can earn as well as get insured t h r o u g h
insurance company and save taxes, life assurance with little effort, which will
give him back support as a HEAD of the family in the diverse situation.
This project will help to understand the current market scenario and
marketing in stiff competition. Being a student of management I can draw the
relevant conclusion from the financial analyze and give the appropriate
suggestion to the organization.
The company can take decision according to the suggestions and it
will provide better experience to the students for their bright carrier. My
project will provide help in these matters which are thus:-

Analyze the people perception about HDFC

Study financial markets and analyze the financials of the
company
To find out the competitive edge of the company over the competitors.

OBJECTIVE OF THE STUDY

The project was an attempt to explore the Analyzing financial need and
manage the funds of the policies in HDFC LIFE . The project was started on
10th June, after knowing all the relevant information about the company
insurance product and policies and its competitors insurance products in
accordance with the prescribed schedule mentioned by management of HDFC
LIFE.
The project started in Janakpuri branch where covering all the investors whom
funds are down and bearing loss. In this process I meet 90 policy holders who facing
loss .I have tried to convince them to continue with company and remain with
the company. During my work I found the perception of the people about
insurance, what they desire from it, and if they su ffer l oss t han what t hey
t hi nk . What the organization should do for the policyholder who suffering
from loss. Many of the customer is not aware about the share market and if
they suffer loss than they blame either company or agent/sales manager. So I
have to manage the customers to remain with us and provide them the best
financial solution to them
As I can say this project gives the abstract of my work at HDFC LIFE as
financial analyst

Chapter: - 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%

20%

Drought
Earthquakes
Floods

35%

Storms

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.

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,

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
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

Europes largest mutual life insurer

Values

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 Cooperate and support across departmental boundaries.
Identify strengths and weaknesses according allocate
responsibility to achieve common objectives.

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

DIFFERENT PLANS OF HDFC SLIC

obvious

choice

for

all

Plans
Traditional

ULIP

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

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.

CHAPTER-2
DISCRIPTIVE
WORK

LIFE INSURANCE SECTOR:

India is emerging a some of the two of the largest markets in the world for life
insurance products, the other being China. In the case of India, the three key
drivers of growth are a large insurable population, a high savings rate, roughly
at about 25 percent and a low penetration, at a mere 2.3 percent. In the 11
months of fiscal year 2004-05, life insurance companies collected premium
worth Rs172 billion and the market grew by a whopping 32.4 per cent during
the year. Of this, the public sector Life Insurance Corporation (LIC) had the
lion's share of the market with premium totaling Rs134 billion. Private sector
players recorded a spectacular growth of 129 percent over the last year,
compared to LIC's growth of 18 percent. India's GDP growth rate of 6 percent
per annum holds great potential for the sector. According to one estimate real
life premium are expected to grow at a compounded annual rate of 15 per cent
over the next ten years.
How does India's life insurance market compare with China's? While India's
market is currently the fifth largest, China's is the third largest in Asia after
Japan and Korea. Low penetration rate of insurance products is common to
IndiaandChina-atjustabout2.3 percent. In China, the savings rate is at 35
percent while for India it is a little lower at 25 percent. A large part of the
growth of the life insurance market in China was driven by the conversion of
bank deposits into endowment products. Demographically China's population
is ageing faster than India's FDI in Insurance Sector. The government of India
is planning to increase the equity limit for foreign direct investment from the
current 26 percent to 49 percent in the insurance sector. Liberalizations of the
FDI policy, including the Budget proposals for raising the sector al caps in
insurance is one of the main factors for the higher FDI inflows during the
current year. In 2003-04 the total FDI inflows in the country touched $3.4
billion. Indian insurance companies have been pushing for the FDI limit to be
raised. The current paid-up requirement of Rs1 billion for general insurance
and Rs2 billion for life insurance have become difficult targets to achieve for
the companies. The companies feel that injection of additional foreign equity
would reduce the costs. The sector was liberalized for private players towards
the end of 1999. Currently, there are 14 insurance companies, including the key
public sector company Life Insurance Corporation, in the life insurance sector
and 13 general insurance companies.

Changing Demographics
In1999, according to KSA-Techno park, savings and investments comprised
14 percent of an Indian consumers expenditure. The other items included
grocery (44 percent), personal care items (6 percent), consumer durables (6.6
per cent), clothing and books and music (5 percent each), eating out (8 per
cent), movies (1 percent). By 2003, expenditure on savings and investments
had declined to just 4.1 percent. The other items included grocery
(41percent) , personal care items (7.6 percent), consumer durables
(6.6percent), clothing (6.9 percent), eating out (10.8 percent), movies and
theatres (4.6percent), books and music (7.6 percent), vacations (3.9 per cent).
Clearly, the increased spending on other items have had a huge impact on the
amount people are spending on savings and investment products. (Source:
Business Worlds Marketing White book 2005).

Composition of Household Financial Savings

Currency
Deposits
Of which Deposits with non banking companies
Share sand debentures
Small savings (central govt. schemes)
Life insurance
Provident and pension funds

1991
10.6%
33.3%
2.2%
14.3%
13.2%
9.5%
16.9%

1996-97 2002-0
8.6%
8.5%
48.2% 41.5%
16.4% 1.6%
6.6%
2.7%
7%
14.3%
10.1% 15.5%
19.1% 14.3%

Source: RBI Annual Reports.

Key Players in the Indian Market

While the public sector LIC dominates the Indian life insurance market
with nearly 80 percent of the market share. It has 248 branches, 115,000
employees and over 1 million agents. It has also been improving internal
processes and systems, upgrading skills of its agency force and managers
And developing innovative products. LIC sold 1.69 corers policies during
the year compared to 18 lakh policies sold by all the private players.
ICICI Prudential is the leader among the private players with a market
share of 6.69 percent after its premium collection totaled Rs11.54 billion.
Bajaj Allianz with sales of Rs 4.9 billion had a market share of 2.86
percent. Birla Sun Life with sales of Rs 4.8 billion had a market share of
2.81 percent and SBI Life with premium collection of Rs 3.9 billion, a

market share of 2.29 percent. With its combination of aggressive marketing

through an agency force and the use of the banking channel, ICICI has
emerged as a key player. Initially, the company drove new business by
opening branches in new locations. The focus has now shifted to
penetrating the locations for increasing market share. The company is also
trying to get higher penetration in the High Net Worth segment. The
company has seven bank assurance partners and this is the largest
contributor to non-agency business. It also has 15 key non-bank partners
and 800 financial sales consultants. As of September 2004, it had 90
branches in 60+ locations. It took the initiative in launching nontraditional products such as life-stage products, retirement solutions and
child plans. It also focused on Unit Linked Plans (ULIPs) to target new
consumer segments. It has a presence in 15 states through partnership
arrangements and as of 2003-04, it sold64, 764 policies in rural areas.
HDFC Standard Life has established its branches in 110 locations and is
targeting non-metro towns. It is hoping to leverage its
pedigree/parentage to gain more customer acceptance. As a result, it is
focusing on quality not
39

Just volume growth. It has developed some innovative products like the
Loan Cover Term Assurance Plan which provides a lump sum in case of
death of the assured life during the term plan. Aimed at the growing segment
of home loan takers, the plan helps the family to repay the outstanding loan.
Given that HDFC has a huge database of home-loan customers; it can easily
tap into this resource to acquire new business. The company is leveraging
Its large customer database of home loan and banking clients to cross-sell
insurance products.

Birla Sun Life

Birla Sun Life was the first to offer ULIPs in the Indian insurance market.
And this has been the primary driver of its growth over the last one year. The
company has been investing in customer education and feels that as a result
customers don't view ULIPs as mutual funds but long term insurance. As of
2004, the company had 33 branches, 10,274 agents, 79 corporate
relationships and 10 bank assurance partners.
Bajaj Allianz has been focusing on second tier towns and cities which are yet
to witness the entry of other life insurance players apart from LIC. It is using
first mover advantage by opening an office in the most prominent location in
a non-metro town. It hires local people who are trained. Its mantra is to
develop only the indispensable infrastructure so that it can match the pricing
of LIC. Apart from that it claims that it is the only private player to provide
policy servicing at the branch level .Standard Chartered is currently its
biggest partner followed by Syndicate Bank and Centurion Bank. The
biggest challenge that the company faces is the weak infrastructure
particularly transport and communications in the smaller cities. It is also
facing a challenge in terms of banking channels, particularly for customers
who bank with cooperative banks, where delays in clearing
Cheques are in evitable. Tied agencies comprise the biggest channel (68%)
of new business acquisitions for Bajaj Allianz. Bank insurance (27%) is the
other significant channel of growth for the company.
Product Preferences among Consumers
Pension policies are becoming popular as people prefer to opt for
solutions that can offer them a regular income after retirement rather than
a lump sum on retirement. Measurable policies for a bulk sum are being
bought only for limited single use such as purchase of a house, childrens
higher education, marriage, etc. This consumer trend is likely to help
companies that offer pension schemes. Term policies are finding favor with
40

Youngsters. Term insurance policies are also finding more and more takers
among the younger generation of consumers. Because the offer protection at
extremely low costs.
It is assumed that life insurance is purchased only to avail of tax-breaks. But
the fact remains that while the tax paying population in the country is just
about 20 million, there is a huge population that has not been tapped. Only
the urban salaried class who fall in the tax net has been targeted for life
insurance policies for tax-saving purposes. The other income-earning classes
such as businessmen, professionals, farmers, provide a great opportunity for
life insurance marketers. There is a need to tap these customer segments
effectively. Currently all their disposable income is going into purchase of
consumer durables such as washing machines, TV, refrigerators and mobile
phones(as is evident from the fact that spending on savings/investment
products has declined from 14 percent to 4 percent in the past decade).
Mutual Funds (MF) have benefited the most during the last two years. Take
the example of the Systematic Investment Plans (SIP) of mutual funds. In just
one quarter ICICI PRU MF sold 20,000 SIPs and it has the potential of
selling about 100,000 new SIPs in a year. There are 33 Mutual Fund
companies in the country and based on this trend one could say that the
estimated fund in flow in MFs through this route alone could touch the Rs20
billion per month. Due to the good performance of MF during the past 2
years, life insurance companies have lost out to mutual funds.

PROFILING PROSPECT
For the Providing assistance of financial management there are certain
criteria for the selection of policy holder. These criteria differ from different
insurance company. We can divide the profiling prospect of HDFCSLIC in
two ways.
Which are thus:1.H.N.I (HIGHLY NET WORTH INDIVIDUALS)
Highly net worth individuals are those persons who having yearly income
more than 20 lacs and they are specially treated as H.N.I clients and they have
provided relationship manager who watching and manage their funds and
provided financial advices and updating all information of policies

2.LOYAL CUSTOMERS FUND VALUE AND HAVING DOWN

Every Company Want more and more business and market share and we all
know that the work in insurance sector is totally based upon the customer
base. The more you have customer the more you earn business. So
HDFCSL provide the facility to customers that they can contact
with financial assistant in the company and manage their funds
which is in loss or customer is not aware about their policies and
managing funds also.

TOTAL
NO.
CONTACTED

OF

PEOPLE

During the work of financial Assistance I have contacted 100 people

including phone calling, meetings, and the other efforts. In these 100 people
I have gotten appointment of 65people. In the 65 person I have assisted 39
people. The percentage of converting the profits at 9%.
During the meeting time with the customer these questions are generally
asked by them which are thus:Which type of this policy in which I m getting loss!
Our premium will charge by your company or
premium is invested or not?
How your policy is working?
How can I believe on you and your company?
Mostly person have still faith in LIC so I have to convince them against the
LIC.

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 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.

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.

OBJECTIVE OF
PROJECT
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 pr 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.
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
whos age is equal or more than 25.

48

32

Instrument Used
I have collected my data form LIFE ASIA and through phone calling. Life
asia 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, 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

33

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

34

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.

35

FINANCE DEPARTMENT

36
CRM is also referred to as Customer Service Management. Generally organizations are more
focused on the path they travel through to reach the success or determined goal. The stages
they traverse includes design, development, marketing, service support, analyzing managerial
track, channeling the development phase, research and development and many more. These
stages of ones business life are as a whole supported with the Customer Relationship
Management features.
In the field of business development, and short term goal tracking with standard terms and
strategies, one must keep up certain flexible terms of communicational relationship and
managerial provisions among the company employees, customers, and clients and with
various departmental staff and members. This enhances a co-operative and comfortable zone
to make the right move of the company development on time.
Focusing on the marketing department, it is important to realize the important of promoting
ones products sales via advertisements, and efficient marketing strands with better quality.
Advertising has to be powerful means to reach the targeted customers in a short time span
with less investment for a perfect outcome of the resulting sale. Sale includes product quality,
competitiveness, advertisement, managing the service to meet the requirements of the clients
and many more.
Marketing ones product means to take the product to the customers who are into the track or
into the field of trade. Sales department is specific in making the product move to the clients
with respect to the deal of sale. This department is more concerned about the sales of the
product that make use of customer service and management terms to keep up good terms on
serving the customers with help-line service to solve problems related to purchase and utility
of products from the company.
Benefits of CRM techniques are more focused towards customer management and services.
Customer relationship management attracts and retains the customers winning the growing
loyalty of the customer and company relationship. CRM processes helps in guiding the way
an organization runs that are targeted generating quality leads, sales and services that are
more focused on the goals and objectives. They help in forming a tie between customer and
organizational relationship that improves the customer satisfaction with the high quality
service and makes the customers feel comfortable to take up business in futurity.
In many industries customers experience with a companys customer service can
significantly affect their overall opinion of the product. Companies producing superior
products may negatively impact their products if they back these up with shoddy service. On

37
the other hand, many companies compete not because their products are superior to their
competitors but because they offer a higher level of customer service. In fact, many believe
that customer service will eventually become the most significant benefit offered by a
company because global competition (i.e., increase in similar products) makes it more
difficult for a companys product to offer unique advantages.
Customer service manifests itself in several ways, with the most common being a dedicated
department to handle customer issues. Whether a company establishes a separate department
or spreads the function among many departments, being responsive and offering reliable
service is critical and in the future will be demanded by customers.

Our Vision & Values

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 one"

Team work

Joy and Simplicity

ORGANIZATIONAL STRUCTURE
BRANCH DEVELOPMENT MANAGER

38

EXECUTIVE SALES MANAGER

SR. SALES MANAGER

SR. SALES MANAGER

8 TO ASST. SALES MANAGER

IN EAH SR. SALES MANAGER

25 TO 35 ADVISORES IN EACH
ASST. SALES MANAGER

Figure 1.2 Organization Structure

39

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 nonlife 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

40
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.

INTRODUCTION
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 closelyrelated 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

41

their planning for the financial sources which are very helpful in the 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.

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

42

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

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.

Profits

Dividend decision

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

43

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.

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 method) Act (Written Down Value

Buildings

WDV
Residential Units 1.63 %

method) WDV
Residential units 5 %

Office Premises 1.63 %

Office Premises 10 %

(Straight

Line

Method

SLM)
Computers
25 % (SLM)
Air Conditioners & 13.91 %

60 %
15 %

Refrigerator
Furniture & Fixtures
Office Equipment
Electrical Installations
Vehicles (Motor Cars)

10 %
15 %
15 %
15 %

18.10 %
13.91 %
13.91 %
25.89 %

44

45

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.

FINACIAL STATEMENT FOR THE YEAR 2009-10

46

1.Cash flow
Particular
Operating activities
Amount received form policy holder
Amount received to reinsurance
Amount paid to policy holder
Amount paid as commission
Payment of employee and suppliers
Deposited with RBI
Income tax paid
Net cash flow from operating activities
Investing activities
Purchases of fix assets
Sales of fix assets
Investment
Interest income
Dividend income
Net cash flow from investing activities
Financing activities
Issue of share
Net cash flow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalent as at beginning of the
year
Cash and cash equivalent as at end of the year

2010

2009

70,817,804
-312,168
-12,053,422
-5,417,619
-13,207,483
0
-309,142
39,821,183
155,217,800
-217,752
5,444
-48,767,468
48,17,558
1,338,737
-42,823,481

54,747,190
-384,636
-5,414,218
-4,136,736
-15,583,363
100,00
-230,833
29,453,152
68,782,936
-581,822
3,159
-39,057,231
3,805,029
745,975
-35,081,730

1,720,000
1,720,000
-1,282,298
4,108,660

5,250,000
5,250,000
-384,578
4,493,238

2,826,362

47

2. BALANCE SHEET

Particular

2010

2009

Share capital

19,680,000

17,958,180

Reserve fund

552,892

552,892

Credit change a/c

184,435

-77,610

Credit change a/c

205,087

-296,885

policy liabilities

37,666,908

29,092,419

insurance reserve

0-

Provision for link liabilities

127,701,636

84,085,083

Add: Fair value change

27,516,164

-15,302,147

total provision

155,217,800

68,782,936

Funds

1,490,013

586,395

funds for provision

1,064,831

531,970

Surplus

Profit and loss

6,95,56,324

5,51,83,763

Total

216,061,966

117,130,297

Share holder

6,304,757

4,291,597

policy holder

43,415,382

30,152,727

Assets held to cover link liabilities

155,217,800

68,782,936

Loans

40,366

30,248

Fix assets

1,143,777

1,451,346

Cash and bank

2,826,362

4,108,660

Advance

4,917,758

5,428,699

Current asset

12,28,585

8,820,225

Provision

187,617

208,813

Net working capital

4,725,082

508,321

Miscellaneous expense

14,664,966

11,913,122

Other Asset

Total

216,610,966

117,130,297

Liability

Assets

48

3. RATIO ANALYSIS
(A) CURRENT RATIO

CURRENT ASSETS:

Cash and bank balances: 2,826,362

Advances and Other Assets: 4,917,758

CURRENT LIABILITIES: 12,281,585

CURRENT RATIO=

CURRENT ASSETS
CURRENT LIABILITIES

77,44,120

2009-10 = 12,281,585
=0.63:1
9537359

2008-09= 8820225

=1.08:1

49

1.2
1
0.8
Column1

0.6
0.4
0.2
0
2009-2010

2008-2009

Comment

Current ratio of HDFC LIFE insurance, has 0.63:1, it means it is less than 1
that indicates firms 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 .

50

(B) LIQUID RATIO

LIQUID RATIO: =

2009-10=

CURRENT ASSETSSTOCK
100
CURRENT LIABILITIESBOD

77,44,12015,21,520
100
12,281,585

= 0.60:1

2008-09=

953735945,44,600
8820225

= 0.57:1

0.6
0.6
0.59
0.59
0.58

Column2

0.58
0.57
0.57
0.56
0.56
0.55
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.

51

(C)Gross profit ratio

GROSS PROFIT
100
NETSALES

GROSS PROFIT RATIO =

2009-10 =

70,051,044
100
31,48,95,290

= 30.25 %

2008-09=

55,646,93 0
100
25,56,98,360

= 21.76%

35
30
25
20

Column1

15
10
5
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.

52

(D) NET PROFIT RATIO

NET PROFIT RATIO=

2009-10=

NET PROFIT
100
NETSALES

6,95,56,324
100
31,48,95,290

= 22.09%

2008-09 =

5,51,83,763
100
25,56,98,360

= 21.58%

22.1
22
21.9
21.8
21.7
21.6
21.5
21.4
21.3

Series 3

2009-2010

2008-2009

Comment: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.

53

(E)Net retention ratio

NET RETENTION RATIO=

NET PREMIUM
100
GROSSPREMIUM

6,95,56,324
100
70,051,044

2009-10 =

= 99.29 %

2008-09=

55,183,763
100
55,646,93 0

=99.17%

99.3
99.28
99.26
99.24
99.22

Series 3

99.2
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.

54

(F)RATIO OF EXPENSES OF MANAGEMENT

RATIO OF EXPENSES OF MANAGEMENT

MANAGEMENT EXPENSES
100
TOTALGROSSPREMIUM

2009-10

20,345,376

= 70,051,044 100

= 29.04 %

2008-09 =

21,915,907
100
55,646,937

=39.38%

40
35
30
25
20
15
10
5
0

Series 3

2009-2010

Comment:-

2008-2009

55

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

(G)COMMISSION RATIO

COMMISSION RATIO =

2009-10 =

Gross commission
100
TOTALGROSSPREMIUM

5,254,973
100
70,051,044

= 7.50 %

2008-09 =

4,248,904
100
55,646,937

=7.64%

12
10
8
6

COMMISSION RATIO(%)

4
2
0
2009-2010

2008-2009

56

(H)RATIO

OF

POLICY

HOLDERS

LIABILITIES

SHAREHOLDERS FUNDS:
RATIO OF POLICY HOLDERS LIABILITIES TO SHAREHOLDERS FUNDS :

POLICY HOLDERS LIABILITIES

100
SHAREHOLDERS FUNDS :

2009-10 =

37666908
100
6304757

= 597.44 %

2008-09=

290992419
100
4291597

= 677.89%

TO

57

680
660
640
620

Series 3

600
580
560
540
2009-2010

2008-2009

(I)RETURN ON INVESTMENT

RETURN ON
INVESTMENT =

EBIT
100
CAPITAL+ SURPLUS+ RESERVE

5,029,631

2009-10 = 19,680,000+552,892 100

= 24.86%
2751844

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

=13.60%

58

25
20
15

Series 3

10
5
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.

(J) DEBT-EQUITY RATIO

DEBT-EQUITY RATIO =

2009-10 =

790592313
100
500494238

=1.58%

2008-09

=1.25%

579047751
100
461137821

LONGTERMDEBT
* 100
SHAREHOLDER SFUND

59

1.6
1.4
1.2
1

Series 3

0.8
0.6
0.4
0.2
0
2009-2010

2008-2009

Comment:
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.

TREND ANALYSES
Asset

2009-2010

2010-2011

2009-2010(%)

2010-

4,291,597
30,152,727

100%

68%

100%

69%

Assets held to cover 155,217,800

68,782,936

100%

44%

link liabilities
Loans
Fix assets
Cash and bank
Advance
Current Asset
Provision
Net working capital
Miscellaneous expense

30,248
1,451,346
4,108,660
5,428,699
8,820,225
208,813
508,321
11,913,122

100%

73%

100%

126%

100%

145%

100%

110%

100%

717%

100%

111%

100%

10%

100%

81%

2011(%)

Share holder
policy holder

6,304,757
43,415,382

40,366
1,143,777
2,826,362
4,917,758
12,28,585
187,617
4,725,082
14,664,966

60

Other Asset
Total
Asset

0
2,16,610,966

0
117,130,297

100%
100%

5%

Liability

Liability

2009-2010

2010-2011

2009-

2010-

2010(%)

2011(%)
91%

100%

100%

100%

142%

100%

42%

100%

77%

100%

100%

100%

Share capital
Reserve fund
Credit change a/c
Credit change a/c
policy liabilities
insurance reserve
Provision
for
link

19,680,000
552,892
184,435
205,087
37,666,908
0127,701,636

17,958,180
552,892
-77,610
-296,885
29,092,419
0
84,085,083

100%

liabilities
Add: Fair value change
total provision
Funds
funds for provision
Surplus
Profit and loss

27,516,164
155,217,800
1,490,013
1,064,831
0
6,95,56,324

-15,302,147
68,782,936
586,395
531,970
0
5,51,83,763

100%

Conclusion:-

100%

44%

100%

39%

100%

49%

100%

100%

100%

79%

61

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

COMMON SIZE STATEMENTS

Asset

2010

Share holder
4,291,597
policy holder
30,152,727
Assets held to cover 68,782,936

2010 (%)
3.66
25.74
58.72

link liabilities
Loans
Fix assets
Cash and bank
Advance
Current Asset
Provision
Net working capital
Miscellaneous expense
Total

0.025
1.24
3.5
4.63
7.53
0.18
4.34
10.17
100

30,248
1,451,346
4,108,660
5,428,699
8,820,225
208,813
508,321
11,913,122
117130297

62

TREND ANALYSES
Share Capital
share capital
PARTICULAR
Authorised Capital
Issued Capital
Subscribed Capital
Called-up Capital

2009-10
30,000,000
19,680,000
19,680,000
19,680,000

2008-09
30,000,000
17,960,000
17,960,000
17,960,000

incre/decre
0
17,20,000
17,20,000
17,20,000

%
0
9.57
9.57
9.57

share capital %
10
9
8
7
6

share capital %

5
4
3
2
1
0

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 %

63
RESERVES AND SURPLUS
PARTICULAR
Revaluation Reserve

2009-10
552,892

2008-09
552,892

incre/decre
0

%
0

Revaluation Reserve
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Revaluation Reserve

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,

Investments Shareholders

64
PARTICULAR
Government Securities
Equity
Debentures / Bonds
Investment Properties
Infrastructure
Other Investments

5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0

2009-10
2,471,702
457,377
208,675
757,540
1,108,284
145,085

2008-09
2,180,149
233,783
100,531
757,540
386,899
64,797

incre/decre
291,553
223,594
108,144
0
721,385
80,288

%
13.373077
95.641685
107.57279
0
186.45305
123.90697

%
incre/decre
2008-09
2009-10

65

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
Cash
Deposit Accounts
Current Accounts
current liabilities
Agents Balances
Premiums
received
advance
Security Deposits
Sundry creditors
Claims Outstanding
Unallocated Premium

2009-10
279,148
1,340,581
1,206,633
2009-10
422,567
in 296,400
21,441
5,078,198
433,935
232,117

2008-09
668,726
1,751,354
1,653,161

incre/decre
-389,578
-410,773
-446,528

%
-58.25674
-23.4546
-27.01056

2008-09
525,903
278,748

incre/decre
-103,336
17,652

%
-19.64925
6.3326015

21,441
3,894,536
198,361
274,095

0
1,183,662
235,574
-41,978

0
30.392889
118.76024
-15.31513

66

100%
80%
60%
40%
20%

% -58.25674491
-23.4545957
-27.01055735 %

incre/decre -389,578
-410,773 -446,528
incre/decre

2008-09 668,726
1,751,354 1,653,161
2008-09

2009-10 279,148
1,340,581 1,206,633
2009-10

0%
Agents Balances

CONCLUSION:
As 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
Growth fund
38
Balance manage

2010
73

fund
Equity

32

48

manage

fund
Liquid

34
manage 28

62
31

67
fund

80
70
60
50
40
30
20

2009

10

2010

In above diagram comparison of funds 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%.

Equity markets

INDICES

BSE Sensex
S&P

31-5-12

16,219

CNX 4,924

30-4-2012

1month rate 1year rate of

of return

return

17,319

-6.35

-12.35

5,248

-6.17

-11.44

68

Nifty
BSE 100
BSE

4,942

5,268

-6.19

-12.34

Mid 5,908

6,316

-6.46

-14.50

Small 6,271

6,765

7.30

-23.86

Cap
BSE
Cap

69

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.

70

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.
The physical evidences include signage, reports, punch lines, other tangibles, employees
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.

71

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

1234 . ADC lio tr e pr c not ar S t ait vl e s I n d u c t i o n

72

conclusion

73

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.

74

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.
6. 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 %

75

RECOMMENDATION AND SUGGSTION

76

RECOMMENDATIONS
The HDFC company should now try to identify the gap between current level of customer
service and customer expectations. Some of the strategies being recommended are as
follows:
Brand Building:
HDFC is a very huge Brand in US in Insurance but in India it is not known as a Insurance
brand. So HDFC need to focus on Brand building Activities which can be done through
Advertising, Road shows, Knops, Sponsoring Events in rural & Urban Areas.
Educating the Consumers:
HDFC should take initiative to educate the consumers regarding all these aspects & take
competitive Advantage on this front as its Allocation charges are minimum in the whole
Indian Insurance Industry.
Need to Increase Market Presence:
It should make more channel partners & do business tie ups with more broking houses &
should hire marketing agencies for aggressive marketing purpose. It can also increase its
Business Units.

Concentration More On Rural Areas :

HDFC need to concentrate more towards the rural areas as 60-70% of India population is
living in rural areas and most of the people in rural areas are not insured so there is a huge
potential in the rural sector.

Product Differentiation:
Offering a product that is distinctly different from other products available in the market by
other insurance players.

More Guaranteed Plans to be Introduced:

As we know today the stock market is giving very less return even in last year the return
comes Negative so the company need to introduce some more granted plans so that customer

77
can invest in them and have assured return on them which ultimately is an edge in
competition in insurance sector.

Need to commence Medical claim Products and General Insurance :

There are very less which are having Medical claim products and also very less companies
providing General Insurance with Life Insurance for example ICICI , Reliance and Bajaj
Allianz so HDFC also need to come in General Insurance business so that they can compete
with these players.

Flexibility:
The companies should make their products flexible for the convenience of their customer.

Hassle Free Service:

All bureaucracy in customer interactions should be eliminated.

Proper Policy Documentation:

Wrong interpretations/ non-awareness of policy document by the customer may have serious
implications in the long term and the possibility of the same should be alleviated by the
company which leads to.

78

Recommendation can be use by the firm for the betterment increased of the firm
after study and analysis of project report on study and analysis of working
capital. I would like to recommend.
1. Company should raise funds through short term sources for short term
requirement of funds, which comparatively economical as compare to long term
funds.
2. Company should take control on debtors collection period which is major
part of current assets.
3. Company has to take control on cash balance because cash is non earning
assets and increasing cost of funds.
4. Company should reduce the inventory holding period with use of zero
inventory concepts.
Over all company has good liquidity position and sufficient funds to repayment
of liabilities. Company has accepted conservative financial policy and thus
maintaining more current assets balance. Company is increasing sales volume
per year which supported to company for sustain 2nd position in the world and
number one position in Asia.

79

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.

80

ANNEXURE

81

QUESTIONNAIRE
PERSONAL DETAILS:
Name:
Mobile Number:
Adress:____________________________________________
___________
__________________________________________________
___________
__________________________________________________
___________
__________________________________________________
___________
_______________________________
Occupation: _____________________
Age: ____________________________

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

a. To build a corpus for retirement

82

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

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

83

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

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

7. 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.

84

g) Other If any ,Please Specify

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

85

86

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

8th Edition, 2001.

4.
.Author:Evertt.E.AdamProduction
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

Publishing

and

House,

opration