CHAPTER 1

INTRODUCTION
1.1 Introduction to insurance industry
Indian Insurance Industry has become more competitive in the recent years particularly
after 1990s. Most of the largest financial corporation all over the world has entered with
their insurance products to India's Insurance Market.
The end of the year 2000 marks a significant change and growth of 'India
Insurance' industry scenario. Monopoly of Public Sector Insurance company marks an
end and Private companies makes inroad. Foreign companies, both Life and General
flocked, collaborated and helped astronomical growth of 'Insurance Industry in
India’. ‘India Insurance' growth was long overdue. Within 1st 12 months of liberation of
'Indian Insurance Industry' 10 licenses for selling life insurance products and 6 licenses
for selling non-life products were issued to private companies. The Public sector giant
LIC started losing its market share at the cost of stupendous growth of private players.
Now 'India Insurance' industry has more than a dozen private life insurance players and 9
private general insurance companies. Aggressive and penetrative marketing strategy
coupled with wide product bandwidth was an instant success among the ignorant masses.
Most of the private companies registered more than 100% growth till then and are still
continuing with such monstrous growth figures. Although, 'Insurance in India' is not
regarded as a basic need but it is getting popular among semi urban to rural masses. Top
rank private companies like HDFC BANK, Tata AIG, Bajaj Allianz etc are
aggressively researching and innovating products for huge untapped rural 'India
Insurance' market. Collaboration with micro finance companies, post offices, rural banks
and village management authorities for selling insurance is doing wonders.

Life insurance products cover risk for the insurer against eventualities like death or
disability. Non-life insurance products cover risks against natural calamities, burglary,
etc. They are not as popular as life products in the ' Insurance India's' portfolio. Until very
recently it had only corporate buyers, but with natural disasters like, earth quakes,
tsunamis, storms and floods becoming more frequent and damaging there has been a

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sudden spurt in sales of general insurance amongst individuals. Consumerism of life style
goods and modern amenities has also contributed to its growth. With more awareness and
wide bandwidth of insurance product portfolio the growth for 'India Insurance' story will
only get more competitive and more affordable to all sections of Indian society. Insurance
sector in India is one of the booming sectors of the economy and is growing at the rate of
15-20 per cent annum. Together with banking services, it contributes to about 7 per cent
to the country's GDP. Insurance is a federal subject in India and Insurance industry in
India is governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and
General Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and
Development Authority (IRDA) Act, 1999 and other related Acts.
The origin of life insurance in India can be traced back to 1818 with the establishment of
the Oriental Life Insurance Company in Calcutta. It was conceived as a means to provide
for English Widows. In those days a higher premium was charged for Indian lives than
the non-Indian lives as Indian lives were considered riskier for coverage. The Bombay
Mutual Life Insurance Society that started its business in 1870 was the first company to
charge same premium for both Indian and non-Indian lives. In 1912, insurance regulation
formally began with the passing of Life Insurance Companies Act and the Provident
Fund Act.
By 1938, there were 176 insurance companies in India. But a number of frauds
during 1920s and 1930s tainted the image of insurance industry in India. In 1938,
the first comprehensive legislation regarding insurance was introduced with the
passing of Insurance Act of 1938 that provided strict State Control over
insurance business.
Insurance sector in India grew at a faster pace after independence. In 1956,
Government of India brought together 245 Indian and foreign insurers and provident
societies under one nationalized monopoly corporation and formed Life Insurance
Corporation (LIC) by an Act of Parliament, viz. LIC Act, 1956, with a capital
contribution of Rs.5 crore.
The (non-life) insurance business/general insurance remained with the private sector till
1972. There were 107 private companies involved in the business of general operations
and their operations were restricted to organized trade and industry in large cities. The

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General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from January 1, 1973. The 107 private insurance
companies were amalgamated and grouped into four companies: National Insurance
Company, New India Assurance Company, Oriental Insurance Company and United
India Insurance Company. These were subsidiaries of the General Insurance Company
(GIC).

In 1993, the first step towards insurance sector reforms was initiated with the formation
of Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N.
Malhotra. The committee was formed to evaluate the Indian insurance industry and
recommend its future direction with the objective of complementing the reforms initiated
in the financial sector.

1.1.1 CURRENT SCENARIO OF INSURANCE INDUSTRY IN INDIA

During the first half of the current financial year, the 13 life insurers have underwritten
first year premium of Rs.5, 76,595.87 lakhs towards 87,38,024 policies. Of this
individual business accounted for Rs.4,63,760.09 lakhs for 87,52,535 policies. The group
business accounted for Rs.1, 02,835.78 lakhs for 5,779 policies.
Interestingly about 60% of the business done by the life insurers during the
current financial year has been in the second quarter. Correspondingly 65% of the
policies underwritten during the six month period have been accounted for in July to
September 2006.
Analysis of individual business statistics shows that LIC accounted 88% of the
business in the terms of premium. As against this the private insurers captured 12% of the
premium. In terms of group business LIC captured 93.63% of the premium. The twelve
private insurers captured only 7.17% of the premium in the total group business.
A review of the performance of the private players further reveals of rapid
business expansion. The latest quarterly figures released by the Insurance Regulatory
Development Authority (IRDA) show that HDFC Life Insurance Company is continued
to lead with a premium income of Rs.74.3 Crore in the first quarter of this year followed

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by HDFC Standard Life Insurance. “The maximum growth in the first quarter has come
from unit-linked products (ULIP’s) which contributed over 60% of business, along with
retirement products,” said Saugata Gupta, head of marketing at HDFC Life Insurance.
She added, “In fact we have identified retirement solutions and child plans as two growth
areas and have decided to invest the

Resources necessary to raise awareness and build brand recognition and loyalty in these
two segments.”
The insurer has grown its premium income by almost 130% over the corresponding
period last year. Similarly Tata AIG Life Insurance has also grown by over 150% in
premium income from April -June 2005 to the same period this year.

1.1.2 CHALLENGES BEFORE THE INDUSTRY

 Broadening the Benefits
The companies must try to broaden the benefits of the insurance they are providing to the
consumers.
There are some companies which are providing people with very good schemes which
are a combination of both life and general insurance. Companies are providing the clients
with the benefits of having life insurance combined with the mediclaim insurance which
was prior provided by general insurance companies only.

 Channel of Distribution
Allegent partners believe strongly that professional agents and brokers will continue to
play a dominate role in the delivery of most insurance products to the end user customer.
We also recognize the continuing role that other channels and technology, including the
Internet, are having in facilitating insurance processing and delivery.
In serving our clients, Allegent evaluates all potential distribution channels and makes
recommendations that take into account the various issues related to each. In most cases,
insurance distribution involves multiple channels and relationships that facilitate the
overall process.

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Our services include research, evaluation, financial modeling, business, marketing and
sales planning, and implementation planning. In addition, we assist with implementation
execution using our network of relationships.

 Expectation of the Consumers

Customers expect more than ever before. Simply satisfying your customer doesn't cut it
these days. A company has to go beyond average levels of basic satisfaction. By
managing a few of the company’s customers' expectations, a company can reap the
benefits of a customer who is loyal and truly enjoys doing business with you.

 Consumer Education
Insurance companies must try to impart education to the people about the benefits of
insurance. People in India are interested in taking insurance just for the sake of saving
their income tax. So it becomes the duty of the insurance agent and the company that they
should provide their customer with good basic knowledge of having insurance. They
must collectively educate the Indian consumer that insurance is just not for saving tax but
also for getting good returns and for covering the risk factor and the loss which the
dependents of that person whom the company is insuring can bear if the that person
meets some mishap. Govt should also organize some camps and should collectively with
the insurance companies must try to educate the common people the benefits of getting
insurance.

 Catering the Rural Area

These days lots of private life insurance companies are actively serving the need for the
life insurance in the Indian market. There are a total of 17 private and 1 govt life
insurance companies which are in the Indian market. But out of these none of the private
life insurance company is operating in the rural area except that of govt LIC. So people
living in the rural areas are bound to get life insurance from LIC even if they are not
interested to buy one.

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  LIC Awakes at a long period of time
After the opening up of Indian insurance market again for the private insurance players it
was a great threat for the Govt owned LIC. Stakes of LIC in case of premium collection
went down with the entry of new players. In 2003 IRDA (Insurance Regulatory and
Development Authority) asked LIC to deposit an additional sum of Rs 2000 Crores as a
security money, which inspite of being operational in the Indian market for so many
years LIC was not having. This was a major setback for LIC. At that time LIC got
awaked from a long sleep and started with a new bolt. It started banc assurance and tied
up with various govt as well as private sector to act as corporate agents for LIC and sell
their products to the customers. It also started advertising the products using the print as
well as electronic media.

 Large Number of Private Companies

Also large no of private players are operating in the Indian market. In all there are a total
of 17 private life insurance companies which are providing people with life insurance.
Due to such an intense competition it becomes difficult for the people to decide which
plan and which company they should choose for buying a life insurance. This is a major
challenge for the growth of life insurance in the Indian industry.

 Consumer Grievance Redressal

All the insurance companies have got various ways of consumer grievance redressal.
Some of the ways of the consumer grievance redressal are given below.

1) Grievance Redressal Officers :

Grievance Redressal Officers have been designated at all levels of the Organization:
At the Branch level: The Sr/Branch Manager
At the Divisional level: The Marketing Manager
At the Zonal level: The Regional Manager(Marketing) in case of Ordinary policies.

II) Complaint Cells :

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For those customers who are not in a position to meet the Grievance Redressal Officers in
person, a Complaint Cell is functioning at the Central, Zonal and Divisional Offices.
They can send their written complaints to these Offices. Such complaints are registered
and monitored with the respective servicing units for proper redressal.

III) Claims Review Committee:

In a few cases of death claims, insurance companies put to the necessity of repudiating
them to safeguard the interest of the genuine policyholders. Claimants who are
dissatisfied with the decision of repudiation of claim can approach the Claims Review
Committees set up at all the seven Zonal Offices and at the Central Office. These
Committees comprise of senior Officials of the Corporation and also retired High
Court/District Judges and they review the claims objectively and dispassionately to rule
out any miscarriage of justice to the claimant.
IV) Complaints received through the Government:
Some of the aggrieved policyholders write directly to the Government of India seeking
redressal of their grievances. Such grievances are attended to on a top priority basis. For
this purpose, a special cell has been set up at the Central Office level for monitoring and
for satisfactory redressal.

V) Policyholder Councils and Zonal Advisory Boards:

Policyholders' Councils have been established by all the life insurance companies. Three
policyholders of the area represent the interest of the policyholders and interact with the
Divisional Management on consumer concerns. Similarly, at all the seven Zonal Centers,
Zonal Advisory Boards are functioning. Many consumer-activists are inducted as
Members to these Fora to protect the rights of the consumers.

1.1.3 REFORMS IN INSURANCE SECTOR

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Insurance sector has been opened up for competition from Indian private insurance
companies with the enactment of Insurance Regulatory and Development Authority Act,
1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and
Development Authority (IRDA) was established on 19th April 2000 to protect the
interests of holder of insurance policy and to regulate, promote and ensure orderly growth
of the insurance industry. IRDA Act 1999 paved the way for the entry of private players
into the insurance market which was hitherto the exclusive privilege of public sector
insurance companies/ corporations. Under the new dispensation Indian insurance
companies in private sector were permitted to operate in India with the following
conditions:
 Company is formed and registered under the Companies Act, 1956;
 The aggregate holdings of equity shares by a foreign company, either by itself or
through its subsidiary companies or its nominees, do not exceed 26%, paid up
equity capital of such Indian insurance company;
 The company's sole purpose is to carry on life insurance business or general
insurance business or reinsurance business.
 The minimum paid up equity capital for life or general insurance business is
Rs.100 crores.
 The minimum paid up equity capital for carrying on reinsurance business has
been prescribed as Rs.200 crores.
The Authority has notified 27 Regulations on various issues which include Registration
of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation
of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection
of policy holders' interest etc. Applications were invited by the Authority with effect
from 15th August, 2000 for issue of the Certificate of Registration to both life and non-
life insurers. The Authority has its Head Quarter at Hyderabad. Detailed information on
IRDA is available at their web-site www.irdaindia.org.
Malhotra Committee also proposed setting up an independent regulatory body - The
Insurance Regulatory and Development Authority (IRDA) to provide greater autonomy
to insurance companies in order to improve their performance and enable them to act as
independent companies with economic motives.

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Insurance sector in India was liberalized in March 2000 with 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. There is a 26 percent equity cap for foreign partners in an
insurance company. There is a proposal to increase this limit to 49 percent. The opening
up of the insurance sector has led to rapid growth of the sector. Presently, there are 16 life
insurance companies and 15 non-life insurance companies in the market. The potential
for growth of insurance industry in India is immense as nearly 80 per cent of Indian
population is without life insurance cover while health insurance and non-life insurance
continues to be well below international standards.

1.1.4 LEGISLATIVE AND REGULATORY MATTERS:-

 INSURANCE REGULATORY & DEVELOPMENT AUTHORITY (IRDA)
ACT, 1999.

Insurance Regulatory and Development Authority (IRDA) was constituted in 1999

by an Act of Parliament to protect the interests of the policyholders and to
regulate, promote and ensure orderly growth of the insurance industry.

IRDA allows registration of new players in the insurance field. It also has the
authority to renew, modify, withdraw, suspend or cancel such registration. IRDA ensures
protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts of insurance. It
specifies requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents.

After creation of IRDA, insurance sector has seen tremendous growth. Before IRDA
came into force there were only players in the insurance field, namely, Life Insurance

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Corporation of India (LIC) and General Insurance Corporation of India (GIC). Since then
23 new players have entered in the insurance sector.

Under this Act an authority called IRDA has been set up. This is a corporate body
established for the purpose and objects as set out in the explanation to the title. The
Authority replaces “Controller” under Insurance Act 1938. The first schedule amends
Insurance Act 1938. It states that if Authority is superceded by Central Government, the
Controller of Insurance may be appointed till such time as “Authority” is reconstituted.

Constitution of IRDA:-
 The Insurance Regulatory and Development Authority consists of the following
members:
1. Chairperson.
2. Less than five whole time members.
3. Less than four part time members.
 Members should be persons of Ability, Integrity & Standing.
 They should have experience in the fields of
1. Life Insurance
2. General Insurance
3. Actuarial Science
4. Finance
5. Economics
6. Law
7. Accountancy
8. Administration
 Chairperson, members, officers and other employees of Authority shall be public
servants.

1.1.5 FUNCTIONS OF IRDA

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 1. To issue certificate of registration, renew, withdraw, suspend or cancel such
registration.
2. To protect the interest of policyholders/insured in the matter of insurance contract
with the insurance company.
3. To specify requisite qualification, code of conduct and training for insurance
intermediaries and agents.
4. To specify code of conduct for surveyors/loss assessors.
5. To promote efficiency in the conduct of insurance business.
6. To promote and regulate professional organizations connected with the insurance
and reinsurance business.
7. To levying fees and other charges for carrying out the purposes of this Act.
8. To undertake inspection, conduct enquiries and investigations including audit of
insurers and insurance intermediaries.
9. To control and regulate the rates, terms and conditions to be offered by the insurer
regarding general insurance business not so controlled by Tariff Advisory
Committee u/s 604 of Insurance Act, 1938.
10. To regulate investment of funds by the insurance companies.
11. To adjudicate dispute between insurers and intermediaries of insurance.
12. To specifying the percentage of life insurance business and general insurance
business to be undertaken by the insurer in the rural or social sector.

1.1.6 LIFE INSURANCE CORPORATION OF INDIA ACT, 1956

Life Insurance Corporation of India (LIC) is an autonomous body authorized to run the
life insurance business in India with its Head Office at Mumbai. It has been established
by an act of the Parliament and started functioning from
19th January 1956.
LIC of India Act was passed by the Parliament on 18th June 1956 and it came into effect
from 1st July 1956. The then Finance Minister, Shri C.D. Deshmukh, while piloting the
bill, outlined the Objectives of LIC:
 To conduct the business with the utmost economy, in a spirit of trusteeship to
charge premium no higher than warranted by strict actuarial considerations.

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  To invest the funds for obtaining maximum yield for the policy holders consistent
with safety of the capital.
 To render prompt and efficient service to policy holders, thereby making
insurance widely popular.
The life insurance business of 154 Indian life offices constituted by 16 non-Indian
insurers operation in India and 75 Provident Societies was taken over by the
Government of India. 245 Indian and foreign insurers and provident societies
taken 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.

LIC is the biggest insurance player in the country. Out of the total premium of Rs
3766 crores generated by the insurance industry through group business in the year 2005-
06, LIC alone accounted for Rs 3051 crore.
In the financial year 2005-06, LIC has grown at 30.68%. In respect of number of lives
insured, LIC has shown a growth of over 152%. In respect of number of schemes, LIC
has a growth of 2%. LIC's market share in number of individuals covered and number of
policies stands at 77% and 81%, respectively.

Structure
 Government stake in the insurance Companies to be brought down to 50%.
 Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations.
 All the insurance companies should be given greater freedom to operate.

Competition
 Private Companies with a minimum paid up capital of Rs.1billion should be
allowed to enter the industry.
 No Company should deal in both Life and General Insurance through a single
Entity.

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  Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
 Postal Life Insurance should be allowed to operate in the rural market.
 Only one State Level Life Insurance Company should be allowed to operate in
each state.

Regulatory Body
 The Insurance Act should be changed.
 An Insurance Regulatory body should be set up.
 Controller of Insurance should be made independent.

Investments
 Mandatory Investments of LIC Life Fund in government securities to be reduced
from 75% to 50%.
 GIC and its subsidiaries are not to hold more than 5% in any company.

Customer Service
 LIC should pay interest on delays in payments beyond 30 days
 Insurance companies must be encouraged to set up unit linked pension plans.
 Computerization of operations and updating of technology to be carried out in the
insurance industry.

Protection of the interest of policy holders:

IRDA has the responsibility of protecting the interest of insurance policyholders.

Towards achieving this objective, the Authority has taken the following steps:
IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for:
policy proposal documents in easily understandable language; claims procedure in both
life and non-life; setting up of grievance redressal machinery; speedy settlement of

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claims; and policyholders' servicing. The Regulation also provides for payment of
interest by insurers for the delay in settlement of claim.
The insurers are required to maintain solvency margins so that they are in a position to
meet their obligations towards policyholders with regard to payment of claims.
It is obligatory on the part of the insurance companies to disclose clearly the benefits,
terms and conditions under the policy. The advertisements issued by the insurers should
not mislead the insuring public.
All insurers are required to set up proper grievance redress machinery in their head office
and at their other offices.
The Authority takes up with the insurers any complaint received from the policyholders
in connection with services provided by them under the insurance contract.

1.2 INTRODUCTION TO HDFC LIFE INSURANCE CO.

India's Number One private life insurer, HDFC Life Insurance Company is a joint
venture between HDFC Bank-one of India's foremost financial services companies-
and Prudential plc- a leading international financial services group headquartered in
the United Kingdom. Total capital infusion stands at Rs. 23.72 billion, with HDFC
Bank holding a stake of 74% and Prudential plc holding of 26%

We began our operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team
comprises of over 680 offices, over 235,000 advisors; and 23 bancassurance
partners.

HDFC was established in 1955 to lend money for industrial development. Today, it has
diversified into retail banking and is the largest private bank in the country.
Prudential plc was established in 1848 and is presently the largest life insurance
company in the UK.

HDFC Life Insurance Company has consistently been India’s No.1 private life insurer
from the time of its inception in December 2000. As on February 2007, the company has

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over 150 billion Assets under Management and a capital base of 20.65 billion, which is
the highest capital base amongst all the private life insurers in the country. The company
collected a total premium of Rs 5,254 crore in 2006-07.

HDFC was the first life insurer in India to receive a National Insurer Financial Strength
rating of AAA (Ind) from Fitch ratings. For three years in a row, HDFC has been voted
as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG
Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and
customer base, we continue to tirelessly uphold our commitment to deliver world-class
financial solutions to customers all over India.
In the last six years of operations the company has garnered more than 30% market share
in the private life insurance sector, well establishing their dominance in the life insurance
industry. With a wide range of flexible products that meet the needs of the Indian
customer at every step in life.

Vision- To make HDFC the dominant life and Pension player built on trust by world-
class people and service.
Mission- To make the company the dominant player in the life insurance industry with
their commitment to excellence focuses on service, speed and innovation and leveraging
their technological expertise.
Objective- For a vision come true and mission fulfilled, the key factor – The success of
the organization.
 The success of the organization is based on its strong focus on the values and
clarity of purpose. These includes-
 Understanding the needs of the customers and offering them superior products
and services.
 Building long lasting relationship with our partners.
 Providing an enabling environment to foster growth and learning for our
employees.

1.2.1 Qualities of HDFC Life

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The HDFC edge comes from our commitment to our customers, in all that we do - be it
product development, distribution, the sales process or servicing. Here's a peek into what
makes us leaders.
1. Our products have been developed after a clear and thorough understanding of
customers' needs. It is this research that helps us develop Education plans that offer the
ideal way to truly guarantee your child's education, Retirement solutions that are a hedge
against inflation and yet promise a fixed income after you retire, or Health insurance that
arms you with the funds you might need to recover from a dreaded disease.
2. Having the right products is the first step, but it's equally important to ensure that our
customers can access them easily and quickly. To this end, HDFC has an advisor base
across the length and breadth of the country, and also partners with leading banks,
corporate agents and brokers to distribute our products.
3. Robust risk management and underwriting practices form the core of our business.
With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a
smooth and hassle-free claims process.
4. Entrusted with helping our customers meet their long-term goals, we adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term.
5. Last but definitely not the least, our 20,000 plus strong team is given the opportunity to
learn and grow, every day in a multitude of ways. We believe this keeps them engaged
and enthusiastic, so that they can deliver on our promise to cover you, at every step in
life.

1.2.2 DISTRIBUTION NETWORK

HDFC has one of the largest distribution networks amongst private life insurers in India,
having commenced operations in 41 cities and towns in India. These are: Ahmedabad,
Bangalore, Bhopal, Bhubhaneshwar, Chandigarh, Chennai, Coimbatore, Dehradun, Goa,
Guntur, Gurgaon, Hyderabad, Indore, Jaipur, Jalandhar, Jodhpur, Kanpur, Karnal, Kochi,
Kolkata, Kottayam, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur,
Nasik, Noida, New Delhi, Patiala, Pune, Rajkot, Surat, Thane, Thrissur, Vadodara, Vashi,
Vijayawada and Vizag.

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The company has eleven banc assurance tie-ups, having agreements with HDFCBank,
Allahabad Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank,
and Punjab & Maharashtra Co-operative Bank, Goa State Co-operative Bank, Indoor
Paraspar Sahakari Bank, Manipal State Co-operative Bank and Jalgaon People’s Co-
operative Bank, as well as some corporate agents. It has also tied up with organizations
like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically
underprivileged sections of society.
HDFC has recruited and trained over 25,000 insurance agents to interface with and
advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide
superior quality of service to customers.

1.2.3 HDFC GROUP COMPANIES

HDFC Bank is India's second-largest bank with total assets of Rs. 3,446.58 billion (US$
79 billion) at March 31, 2007 and profit after tax of Rs. 31.10 billion for fiscal 2007.
HDFC Bank is the most valuable bank in India in terms of market capitalization and is
ranked third amongst all the companies listed on the Indian stock exchanges in terms of
free float market capitalization*. The Bank has a network of about 950 branches and
3,300 ATMs in India and presence in 17 countries and it also includes various call centers
and internet banking HDFC Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries and affiliates in the areas of investment banking, life
and non-life insurance, venture capital and asset management. The Bank currently has
subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain,
Hong Kong, Sri Lanka and Dubai International Finance Centre and representative offices
in the United States, United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. Our UK subsidiary has established a branch in Belgium.

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HDFC Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).
HDFC Bank was originally promoted in 1994 by HDFC Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in HDFC Bank
was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, HDFC Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and
secondary market sales by HDFC to institutional investors in fiscal 2001 and fiscal 2002.
HDFC was formed in 1955 at the initiative of the World Bank, the Government of India
and representatives of Indian industry. The principal objective was to create a
development financial institution for providing medium-term and long-term project
financing to Indian businesses. In the 1990s, HDFC transformed its business from a
development financial institution offering only project finance to a diversified financial
services group offering a wide variety of products and services, both directly and through
a number of subsidiaries and affiliates like HDFC Bank. In 1999, HDFC become the first
Indian company and the first bank or financial institution from non-Japan Asia to be
listed on the NYSE.

1.2.4 Standard life group (standard life plc and its subsidiaries)
 Standard life group(standard life plc and its subsidiaries)
 The standard life group has been looking after t he financial needs of customers
for over 180 years.
 It currently has a customer base of around 7 million people who rely on the
company for their insurance, pension, investment, banking and health-care needs.
 Its investment manager currently administers 125 billion pound in assets.
 It is a leading pension provider in U.K. and is rated by standard & poor as ‘strong’
with a rating of A+ and as ‘good’ with a rating of A1 by moody’s.
 Standard life was awarded the ‘Best Pension Provider’ in 2004,2005 and 2006 at
the money marketing awards, and it was voted a 5 star life and pensions provider
at the financial advisor service awards for the last 10 years running. The ‘5 star’

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 accolade has also been awarded to standard life investment 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.

1.2.6 SWOT ANALYSIS

HDFC is one of the most powerful, world class Life Insurance Co., gaining appreciation
for their strong work ethics, excellent performance, professionalism and team work
which led them to progress in today’s challenging environment. Though with its
excellence performance and every efforts has been made to present the most authentic
and truly representative findings, but some uncontrollable factors do affect the
performance and thus bring about some deviations and hurdles in progress. So, with its
strengths and good quality, the company is having some weaknesses, and threats and
opportunities. Its SWOT analysis is as below:

Strengths
 HDFC is the largest private player in the insurance industry in India.
 Excellent services.
 Customization of Products as per customer’s needs.
 Brand Image.
 Business Experience.
 Strong Financial Base.
 Innovative products, Technology, organization culture and climate.
 The company has a large network of branches which is helpful to customer for
the payment.

Weaknesses

19
  Lot of competitors are in the market offer same product by the title difference in
the premium and offerings.
 Target only higher income group whereas other companies are trying to catch
middle-lower level people.
 Higher premiums as compared to the other companies
 Clients face problems to get insured due to large number of formalities.
 High targets for financial advisors and for the sales department.

Opportunities
 Huge market is literally untapped. Out of estimated 320 million insurable markets
only 20% of the population is insured.
 In a conservative society of India where people are more inclined towards risk
free investments such as Bank FD’s and savings rather than equity and high risk
investments insurance offers the best of both worlds – The security with high
returns. So there exists high potential for insurance company like HDFCprulife
 In the pension field where people want good life after their retirement.
 Indian people are more emotional towards their children that are why children
plans are selling like hot cakes.
 Health insurance and pension Schemes, an estimated market potential of
approximately $15 billion.

Threats
 Weak perception of private players in the minds of Indian people due to frequent
financial scams
 Large number of insurance players
 Existing wrong business practices of companies like – LIC First premium is paid
by their agents where – as IRDA suggests that even forms to be filled by the
clients themselves

20
  Players like Allianz Bajaj and Birla sun life with low premium for the similar
plans
 Entry of many other private companies with equally strong experience and
financial strength of foreign partners making the competition difficult and
saturating the urban markets.
 LIC has woken up from sleep and is following competitive strategies. Its huge
surplus in Life Fund gives a capability to lodge Price war.
 Current Government policies do not encourage Gross Domestic Savings. If the
Tax Liability of the service class rises, the customer will have little money to
invest.
 For the Insurance sector Government set the authority that is IRDA (Insurance
Regulatory and Development Authority) which is undertaken to track record of all
the companies and change rules day by day more rigid which is very difficult for
the companies.

1.2.7 PRODUCTS OFFERED BY HDFC LIFE

1. Insurance Solutions for Individual
HDFC Life Insurance offers a range of innovative, customer-centric products that meet
the needs of customers at every life stage. Its 17 products can be enhanced with up to 6
riders, to create a customized solution for each policyholder.

2. Saving Solution
- Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of
protection.
- Cash plus is a transparent, feature-packed savings plan that offers 3 levels of protection
as well as liquidity options.
- Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns.
- Cash Back is an anticipated endowment policy ideal for meeting milestone

21
expenses like a child’s marriage, expenses for a child’s higher education or purchase
of an asset.

3. Protection Solution
Lifeguard is a protection plan, which offers life cover at very low cost. It is
available in 3 options – level term assurance, level term assurance with return of
premium and single premium.

4. Child Solution
Smart Kid child plans provide guaranteed educational benefits to a child along with life
insurance cover for the parent who purchases the policy. The policy is designed to
provide money at important milestones in the child’s life. Smart Kid child planed are also
available with in unit-linked form - both single premium and regular premium.

5. Market-Linked Solution
- Life Link is a single premium Market Linked Insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market.

- Lifetime offers customers the flexibility and control to customize the policy to meet the
changing needs at different life stages. It offers 3 investment options - Growth Plan,
Income Plan and Balanced Plan.

6. Retirement Solutions
- Forever Life is a retirement product targeted at individuals in their thirties.
Market-linked retirement products.

- Lifetime Pension is a regular premium market-linked pension plan

- Lifeline Pension is a single premium market-linked pension plan.

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7. Single Premium Solution
- Assure Invest is a single premium savings product with life cover for terms of 5,
7 or 10 years.
- Reassure is a retirement product for senior citizens who are on the verge of
retirement or have just retired.
HDFC also launched ''Salaam Zindagi'', a social sector group insurance policy targeted
at the economically underprivileged sections of the society.

8. Group Insurance Solution:

HDFC also offers Group Insurance Solutions for companies seeking to enhance benefits
to their employees.
 Group Gratuity Plan: HDFC group gratuity plan helps employers fund their
statutory gratuity obligation in a scientific manner. The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations.

 Group Superannuation Plan: HDFC offers a flexible defined contribution

superannuation scheme to provide a retirement kitty for each member of the
group. Employees have the option of choosing from various annuity options or
opting for a partial commutation of the annuity at the time of retirement.

 Group Term Plan: HDFC flexible group term solution helps provide affordable
cover to members of a group. The cover could be uniform or based on
designation/rank or a multiple of salary. The benefit under the policy is paid to the
beneficiary nominated by the member on his/her death.

9. Flexible Rider Solution

HDFC Life offers flexible riders, which can be added to the basic policy at a marginal
cost, depending on the specific needs of the customer.
 Accident & Disability benefit: If death occurs as the result of an accident during
the term of the policy, the beneficiary receives an additional amount equal to the

23
 sum assured under the policy. If the death occurs while traveling in an authorized
mass transport vehicle, the beneficiary will be entitled to twice the sum assured as
additional benefit.

 Accident benefit: This rider option pays the sum assured under the rider on death
due to accident.

 Critical Illness Benefit: protects the insured against financial loss in the event of
9 specified critical illnesses. Benefits are payable to the insured for medical
expenses prior to death.

 Major Surgical Assistance Benefit: provides financial support in the event of

medical emergencies, ensuring that benefits are payable to the life assured for
medical expenses incurred for surgical procedures. Cover is offered against 43
different surgical procedures.

 Income Benefit: This rider pays the 10% of the sum assured to the nominee
every year, till maturity, in the event of the death of the life assured. It is
available on Smart Kid, Secure Plus and Cash Plus.

 Waiver of Premium: In case of total and permanent disability due to an

accident, the premiums are waived till maturity. This rider is available with
Secure Plus and Cash Plus.

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1.3 INTRODUCTION TO INSURANCE:-
1.3.1 Meaning of insurance
Insurance may be described as a social device to reduce or eliminate risk of life
and property. Under the plan of insurance, a large number of people associate themselves
by sharing risk, attached to individual.
The risk, which can be insured against include fire, the peril of sea, death,
incident, & burglary. Any risk contingent upon these may be insured against at a
premium commensurate with the risk involved.
Insurance is actually a contract between 2 parties whereby one party called insurer
undertakes in exchange for a fixed sum called premium to pay the other party happening
of a certain event.
Insurance is a contract whereby, in return for the payment of premium by the
insured, the insurers pay the financial losses suffered by the insured as a result of the
occurrence of unforeseen events.

25
With the help of insurance, large number of people exposed to a similar risk makes
contributions to a common fund out of which the losses suffered by the unfortunate few,
due to accidental events, are made good.
Insurance is the most important aspect a novice to insurance market should be
conversant with. Insurance is a hedging instrument used as a precautionary measure
against future contingent losses. Insurance is used for managing the possible
risks of the future.
Insurance can be defined as the process of reimbursing or protecting a person from
contingent risk of losses through financial means
Insurances are bought in order to hedge the possible risks of the future which
might / might not take place. This is a mode of financially insuring that if such
a incident happens then the loss does not affect the present well-being of the
person. Thus, through insurance, a person buys the future happiness and smooth
living.
A simple example will make meaning of insurance easy to understand. A biker is
always subjected to the risk of head injury. But it is not certain that the accident
causing him the head injury would definitely occur. Still people riding bikes cover
their heads with a helmet. This helmet in such cases act as insurance by protecting
him/her from the contingent accident and the ultimate danger.
Though loss of life or injuries cannot be measured in financial terms, still in this
materialistic world it is quantifiable which tries to compensate the potential future loss
financially.
It may sound that the financial reimbursement by the insurance giving company comes
free of cost. But in real life, insurance is not a free commodity. The Insurance
companies do charge a regular payment from the insurance customers (known as
Insurance Premium) which are reimbursed, either in part or entirety, to the customers in
cases of actual loss (for which the insurance has been bought).
Insurance can range from life to medical to general (residential, commercial property,
natural incidents, burglary, etc).

26
Life insurance: - It insures the life of the person buying the Life Insurance Certificate.
Once a Life Insurance is sold by a company then the company remains legally entitled to
make payment to the beneficiary after the death of the policy holder.

Medical insurance: - This is also known as medi claim. Here, the policy holder is
entitled to receive the amount spent for his health purposes from the insurance company.

General insurance: - This insurance type involves insuring the risks associated with the
general life such as automobiles, business related, natural incidents, commercial and
residential properties, etc

1.3.2 Purpose and need for insurance

 Assets are likely to be destroyed or made non-functional due to perils like fire,
floods, breakdowns, lightning and earthquake.
 Damage to assets caused by any peril is the risk that assets are exposed to.
 Insurance becomes relevant only if there are uncertainties of occurrence of event
leading to loss.
 We can say that human life is an income generating assets which can be lost on
early death or disabilities caused by accidents.
 Insurance does not protect the assets but only compensates the economic or
financial loss.

1.3.3 ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT

 Investments are necessary for economic development.
 Life insurance plays a major role in mobilization of public savings.
 Savings out of life insurance funds are utilized in investments for growth.
 Looking to general insurance business, industry, trade would be seriously
handicapped in the absence of insurance cover relating to fire and engineering
risks.

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1.3.4 FUNCTIONS OF INSURANCE : -
The functions of Insurance can be bifurcated into two parts:
1. Primary Function
2. Secondary Function
3. Other Function

The PRIMARY FUNCTION of insurance includes the following:

a). Provide Protection - The primary function of insurance is to provide protection
against future risk, accidents and uncertainty. Insurance cannot check the happening of
the risk, but can certainly provide for the losses of risk. Insurance is actually a protection
against economic loss, by sharing the risk with others.

b). Collective bearing of risk - Insurance is a device to share the financial loss of few
among many others. Insurance is a mean by which few losses are shared among larger
number of people. All the insured contribute the premiums towards a fund and out of
which the persons exposed to a particular risk is paid.

c). Assessment of risk - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk. Risk is the basis for determining
the premium rate also.

d). Provide Certainty - Insurance is a device, which helps to change from

uncertainty to certainty. Insurance is device whereby the uncertain risks may be
made more certain.

THE SECONDARY FUNCTION OF INSURANCE INCLUDES THE

FOLLOWING:
a). Prevention of Losses - Insurance cautions individuals and businessmen to adopt
suitable device to prevent unfortunate consequences of risk by observing safety
instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses
cause lesser payment to the assured by the insurer and this will encourage for more

28
savings by way of premium. Reduced rate of premiums stimulate for more business and
better protection to the insured.

b). Small capital to cover larger risks - Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks and
uncertainty.

c). Contributes towards the development of larger industries - Insurance provides

development opportunity to those larger industries having more risks in their setting up.
Even the financial institutions may be prepared to give credit to sick industrial units
which have insured their assets including plant and machinery.

THE OTHER FUNCTIONS OF INSURANCE INCLUDE THE FOLLOWING:

a). Means of savings and investment - Insurance serves as savings and
investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's For the purpose of availing income-tax
exemptions also, people invest in insurance.

b). Source of earning foreign exchange - Insurance is an international business. The

country can earn foreign exchange by way of issue of marine insurance policies and
various other ways.

c). Risk Free trade - Insurance promotes exports insurance, which makes the foreign
trade risk free with the help of different types of policies under marine insurance cover.

1.3.5 CLASSIFICATION OF INSURANCE

Life is full of uncertainty. Trials and tribulations abound in each and every aspect of life.
No one can truly predict or even estimate what the future has in store for him. Life offers
no guarantees by itself, except the incidences of death and taxation.

29
This lack of security present throughout life can be overcome partially through insurance.
Insurance can never replace or repair a loss. But the monetary value offered by insurance
helps in adjusting to the new circumstances.
Despite offering innumerable options and immense scope, insurance can be classified
into four main categories.
 Insurance of Person
 Insurance of Property
 Insurance of Interest
 Insurance of Liability

Insurance of Person
Under the purview of this class of insurance, the risks associated with human life in
general can be covered up to the limit specified. A person can insure his or her life and
his health against any unplanned contingencies.
In event of his death, his dependants will be reimbursed to the full amount that he was
insured for. Or if the insured person meets with an accident or suffers from an illness that
cripples him forever, he will be compensated with the complete sum assured anyway
since he may not be able to lead a normal life again.
In case, the accident is not that severe, he should be able to recover after medical
treatment and rehabilitation. If he has opted for medical cover, then his medical expenses,
treatment and medication will be paid for by his insurance policy.

Insurance of Property
Everyone possesses material value in the form of tangible assets. Assets can be in the
form of a landed estate or a vehicle, share holdings or plain old paper money.
Since tangible property has a physical shape and consistency, it is subject to many risks
ranging from fire, allied perils to theft and robbery. An individual's lifetime of hard work
can be wiped out in a blink of an eye.

30
But if a person judiciously invests in insurance for his property prior to any unexpected
contingency then he will be suitably compensated for his loss as soon as the extent of
damage is ascertained.

Insurance of Interest
Every individual has to discharge certain specific duties. Everyone is expected to
maintain a standard of conduct. But then, it is an intrinsic part of human nature to err. No
one is infallible and no one will ever be.
Owing to an occasional error or omission committed by us, our clients or customers
might suffer a loss. In turn we might have to pay those damages or compensation out of
our own personal resources.
However, if our chosen profession qualifies for insurance of interest, then our insurance
policy will more than suffice in arranging for the funds and court formalities that might
ensue in the aftermath of legal libel.

Insurance of Liability
Every person has to regulate his actions and behaviour so as not to cause injury or
damage to other people and their property. Everyone is personally responsible and liable
for his actions.
If due to lack of control over his actions or prejudiced behaviour, a person incurs any
liability then he has to provide compensation out of his personal resources. Liabilities:
legal, civil or criminal can have severe repercussions on social standing and prestige
besides the financial status.
1.3.6 DISTRIBUTION CHANNEL IN INSURANCE:-
1.3.6.1 AGENT: An insurance agent is the local representative of a insurance company.
A legitimate insurance agency must be licensed by a state board before he or she can
legally sell insurance policies to customers. Generally, an agent works as the local face of
a single insurance company, but occasionally an independent agent may work with
different companies depending on their areas of expertise and coverage.
Most consumers interested in purchasing insurance coverage will only deal with a local
insurance agent directly. He or she is authorized to present all of the coverage options

31
available through the larger insurance company. Since part of an agent's salary is based
on commissioned sales, he or she will often offer one stop shopping for all of the
customer's insurance needs. He or she may sell individual policies for car, home, life and
medical insurance, or offer a package plan which incorporates a combination of these
needs.

1.3.6.1.1 CODE OF CONDUCT OF AN AGENT:

Every insurance agent shall
• identify himself and the insurance company of whom he is an insurance agent;
• disclose his licence to the prospect on demand;
• disseminate the requisite information in respect of insurance products offered for
sale by his insurer and take into account the needs of the prospect while
recommending a specific insurance plan;
• disclose the scales of commission in respect of the insurance product offered for
sale, if asked by the prospect;
• explain to the prospect the nature of information required in the proposal form by
the insurer
• bring to the notice of the insurer any material fact that may adversely affect the
underwriting decision of the insurer as regards acceptance of the proposal, by
making all reasonable enquiries about the prospect;
• inform promptly the prospect about the acceptance or rejection of the proposal by
the insurer;
• obtain the requisite documents at the time of filing the proposal form with the
insurer; and other documents subsequently asked for by the insurer for completion
of the proposal;
• render necessary assistance to the policyholders or claimants or beneficiaries in
complying with the requirements for settlement of claims by the insurer;
No insurance agent shall, ----
• solicit or procure insurance business without holding a valid licence;
• induce the prospect to omit any material information in the proposal form;

32
 • induce the prospect to submit wrong information in the proposal form or
documents submitted to the insurer for acceptance of the proposal;
• behave in a discourteous manner with the prospect;
• interfere with any proposal introduced by any other insurance agent;
• offer different rates, advantages, terms and conditions other than those offered by
his insurer;
• demand or receive a share of proceeds from the beneficiary under an insurance
contract;
• force a policyholder to terminate the existing policy and to effect a new proposal
from him
• become or remain a director of any insurance company;

1.3.6.2 BANCASSURANCE:
It is an innovative distribution channel involving banks to sell insurance products of
insurance companies.
According to IRDA, ‘bancassurance’ refers to banks acting as corporate agents for
insurers to distribute insurance products.
New insurance co. get a readymade customer data base & higher reach to compete with
insurance giants.
Banks leverage their distribution strengths to increase their fee based income for survival.
Banks can increase their profits without setting aside additional capital.
It is a viable source of
additional revenue for the banks.

FACTS ABOUT BANCASSURANCE:

• 7,000 bank branches of the 80, 000 across the country sell insurance products.
• Private players got 28.29% of new business income through bancassurance.
•
RBI Norms on Bancassurance
• A subsidiary of a bank will not be allowed to join the insurance company on risk
participation basis.

33
 • The banks need not obtain prior approval of the RBI for engaging in insurance
agency business.
•
RBI identified 3 routes of participation in insurance business:
• Providing fee based insurance services without risk participation
• Investing in an insurance co. for providing infrastructure and services support
• Setting up of a joint venture insurance co. with risk participation. The maximum
equity contribution such a bank will normally be 50 per cent of the paid up capital
of the insurance company.
• Bank is permitted to market life, general and health insurance products.
• Insurers is permitted to collaborate with various NBFCs and banks in different
states for marketing their insurance products, provided NBFCs and banks will not
be permitted to sell insuring products of competing insurers in one particular
state.
• The bank should not adopt any restrictive practice of forcing its customers to go
in only for a particular insurance company in respect of assets financed by the
bank.
Table 1.1:- New business premium of life insurers - channel wise 2010-11 (%)
Insurer Individual Corporate Corporate Brokers Direct
Agents Agents Agents Selling
(Banks) (Others)
Private 46.89 33.21 8.70 4.77 6.43

LIC 97.45 1.81 0.59 0.04 0.11

(Source:http://www.paisabazaar.com/life-insurance/term-insurance-india.aspx visit on- 18 july 2013)

CHARACTERISTICS OF A GOOD SALES PERSON IN INSURANCE

INDUSTRY
1. He should be speedy, needy and Greedy
2. He should be presentable.

34
 3. He should have good Communication Skills.
4. He should be ready to serve with a smiling face.
5. He must have good social contacts.
6. He should be hard working.
7. He should be amiable.
8. He must have attire to do something in life.

1.3.6.3. INSURANCE BROKER:

• An Insurance Broker is someone who represents customer, unlike an insurance
agent, who represents the insurance company.
• Insurance broker searches for the best insurance coverage at the lowest cost for
the client. Insurance brokers do not work for insurance companies, but for the
buyers of insurance products. They constantly compare the merits of competing
insurance companies to find the best deal for their customers.
• Insurance broker represents the insurance buyer, and not the insurance company
(insurance seller), though the remuneration of insurance broker is paid and borne
by the insurance companies. There is no additional cost to the insurance buyer for
placing business through insurance broker.
• Insurance brokers have been introduced into the Indian market by IRDA as
professionals, who will truly represent and service the interests of insurance
buyers.

35
• Insurance brokers have qualified and experienced insurance experts and can buy
insurance for their clients at the most competitive premium rate and terms.
• Insurance brokers provide a package of services to the insurance buyer, including
post-insurance services as well as assisting in submission of claim documents to
insurance company.
• Insurance brokers have to obtain license from the IRDA before they carry on
insurance broking in India and the operations of insurance brokers are monitored
and controlled by IRDA. a copy of code of conduct prescribed by IRDA for
insurance brokers is enclosed.
• Insurance brokers are different from insurance agents. Insurance agents represent
a given insurance company, and not the insurance buyer. Thus, insurance agents
sell the insurance policies of a given insurance company, taking care of the
interests of the insurance company (insurance seller), and not of the insurance
buyers.
• Insurance broker can place the insurance of his client with any insurance
company, in the best interest of the insurance buyer. Thus, the insurance broker is
a single window solution for all insurance problems of the insurance buyer with
all insurance companies.

36
 CHAPTER 2
REVIEW OF LITERATURE
Mols Peter, (2001) opined that Retail banks more than others are vigorous in their
promotion of and have been successful in changing their distribution channel structure by
introducing new electronic channels, such as PC banking and Internet banking. A
tentative model is proposed relating a number of variables to the banks’ promotion and
successful introduction of the electronic channels. Responses from 60 key managers in
the largest retail banks in Denmark indicate that bank size, expected advantages for the
customers, attention to the future, senior management support, and willingness to
cannibalize existing channels may be important factors in explaining the successful
introduction of the electronic channels. Further, the results indicate that different attitudes
and perceptions are related to different means of attracting customers to the electronic
channels. Finally, discusses the implications for the banks and other firms of adopting the
Internet as a distribution channel

37
White lesley (2001) examined that Survey responses of 801 financial customers who
provided information regarding their usage of, and attitudes towards, financial
distribution channels. Distinctive segments within the financial market that had
significantly different levels of usage of financial distribution channels. Financial
customers were asked to indicate their orientation towards convenience, service,
technology, computers, change, knowledge about methods of accessing money, and
confidence in using electronic banking. Financial customers’ usage of human tellers,
automated teller machines, electronic funds transfer at the point of sale, credit cards,
cheques, Internet banking and telephone banking was investigated, and this information
was used to determine if relationships exist between customer orientations and the usage
of financial distribution channels.

Morash, (2009) in an article emphasis that a long-standing and important concept in

marketing is the existence of flows in the channel of distribution. Various channel
strategies related to flow separation, postponement, and acceleration have been described
separately in different parts of the marketing literature. Building on order penetration
points and a network paradigm, the concepts are systematically integrated. Specific
managerial tools such as a network planning matrix and mathematical network analysis
are also presented. The need to integrate marketing flows for achieving customer
satisfaction is highlighted. By linking separate flow strategies, channel performance can
be leveraged for competitive advantage.

Roger Pyatt t. (2005) opined that the strategic marketing priorities of three major
manufacturers and six of their independent value-added resellers, and includes the buyers
perspective by comparing these marketing priorities with the purchasing strategies of ten
departmental end-users representing a range of business types. In addition to the study of
manufacturer-intermediary co-operation, channel power and conflict, and its resolution,
the work compares channel members' attitudes towards the management of marketing
variables in a classic manner with their attitudes towards business relationships; and
throws some insight as to where their priorities may lie. The intermediary's role is

38
appraised and some recommendations for the consideration of manufacturers indirect
channel managers are discussed.

Sally McKechnie, (2002) opined that Channels of distribution changing rapidly and
multi-channeling becoming increasingly widespread, studies of consumers will need to
focus not just on understanding product choice, but also on understanding the reasons for
channel choice. Although the choice of individual channels and the adoption of new
channels has been researched, there is little to suggest that we have a more general
understanding of why consumers, although purchasing essentially similar products, use
some channels rather than others. Using the example of financial services, where multi-
channeling has been the norm for some time, this paper reports on an exploratory study to
identify those factors which influence channel choice. Based on the results of focus group
discussions, the paper argues that channel choice in financial service can usefully be
conceptualized as being determined by consumer, product channel and organisational
characteristics, with product-channel interactions and consumer-channel interactions
being particularly important.

Chris Easingwood et. Al., (2005) opined that Customer heterogeneity, customer volatility
and environmental conflict positively influence the choice of multiple channels, whereas
intermediary heterogeneity and volatility may reduce the need to use such channel
strategies.

Eda Atilgan et. Al. , (2004) opined that Consumers' attitudes and adoption of Internet
banking among sophisticated consumers. Based on a random sample of academicians,
demographic, attitudinal, and behavioral characteristics of Internet banking (IB) users and
non-users were examined. Significant differences between the demographic profiles and
attitudes of users and non-users. IB users were further investigated, and three sub-
segments were defined according to a set of bank selection criteria. Finally, based on the
similarities between various Web-based bank services, four homogeneous categories of
services were defined.

39
Mols p. (2003) opined that Bank customers are divided into an Internet banking segment
and a branch banking segment and it is argued the former is growing and the latter is
declining. This development is predicted dramatically to change the distribution channel
structure in the retail banking sector. Two important strategic distribution channel
decisions face banks. The first is whether to target the branch banking segment or the
Internet banking segment. The other regards the geographical area banks aim to serve.
This can be the local/national area or several nations. Based on this, four pure distribution
channel strategies and a dual strategy are identified and their advantages and
disadvantages are discussed.

Boon and cheng yu, (2003) opined that Significant implications of technological
advances in the banking sector is the possibility of delivering banking services through
electronic channels (e-channels). E-channels provide alternatives for faster delivery of
banking services to a wider scope of customers; e-channels have gained increasing
popularity in delivering banking services. However, prior to the implementation of e-
channels, several factors and investment costs must be identified to ensure a more cost
effective and efficient execution of e-channel services. Banks’ operation management is
the main factor affecting the success of ATMs, PC and branch banking, while product
innovation and knowledge development factors are found to have the most significant
effect on the success of banking kiosks and phone banking respectively.

Sertan Kabadayi, (2008) opined that High-specific asset investments, high-

environmental uncertainty, and high-internal uncertainty conditions firms add direct
channels and adopt an independent-direct multiple channel system, under low levels of
those variables firms expand their channel system into multiple channels by adopting an
independent-independent multiple channel system.

Daniel e. (2004) opined that Electronic or online banking is the newest delivery channel
to be offered by the retail banks in many developed countries and there is wide agreement
that this channel will have a significant impact on the market. Aims to quantify the
current provision of electronic services by major retail banking organisations in the UK

40
and the Republic of Ireland. Additional insight into the banks‘ adoption of this new
channel is gained by exploring two areas important in the analysis of new offerings, that
is: an organisation‘s approach to innovation; and their view of the current and future
markets. The organisation‘s vision of the future, their prediction of customer acceptance,
which tends to be very low, and their organisational culture of innovation are the most
important of the suggested factors in their adoption of electronic delivery.

Hughes T. (2006) opined that The addition of new channels alongside those already in
existence opens up new areas of the organization to customer contact and creates
significant challenges in relation to staff roles and existing processes for interacting with
customers. Channel integration is a strategic issue potentially requiring structural changes
to the organization and changes in the behavior of customers.

Laing A. (2005) opined that Explores the purchasing behavior of independent financial
advisors (IFAs) within the context of the UK financial sector. Reports on empirical work
in which attitudes of such independent distributors toward identified supplier selection
criteria were assessed. Set within the context of relationship marketing theory, seeks to
employ findings to develop a generic conceptual basis for approaching the marketing of
services to independent intermediaries.

Hall K. et. Al. (2012) opined that the rapid growth of online social networks and near
ubiquity of mobile phones in much of the world offers social marketers enormous
potential for engaging consumers in radically new ways. The nature of these new
communication platforms differs from traditional media in important ways that can make
them more effective for marketing, most notably the potential for deeper consumer
engagement, multi-directional information exchange, and location-based tracking and
messaging.

Jason and smith (2003) opined that Financial Systems Inquiry (the Wallis Report) should
contribute to a further increase in competition in the banking sector, with more non-bank

41
financial institutions and specialty companies entering the market. Increased competition,
weakening interest rates, squeezed profit margins and the surge of mortgage originators
into a traditional banking market have all prompted a search for new and innovative
methods of improving internal efficiency, leading to the development of new banking
products and the exploration of alternate delivery methods, or channels.

Chiang and cheng (2009) opined that Efficiency score of a direct marketing channel is
significantly higher than that of a comparable indirect marketing channel. The efficiency
relationship between the indirect marketing channel and the direct marketing channel is
independent. A marketing efficiency evaluation, when divided into different marketing
channels for evaluation, provides meaningful results for marketing decision-makers.

Tezcan N. (2012) opined that Perceived usefulness, perceived social risk, perceived
performance risk and perceived benefit directly affect attitudes towards mobile banking,
and that attitude is the major determinant of mobile banking adoption intention. In
addition, no direct relationship between perceived usefulness and intention to use,
perceived ease of use and attitude, financial risk, time risk, security/privacy risk and
attitude was detected.

42
 Chapter 3
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. In it we study the
various steps, the research processes that are generally adopted to study the research
problem and basic logics behind them. The basic steps in this research are shown in the
chart below

3.1 Research Process

Formulating the research problem

Extensive literature survey

Developing the hypothesis

43
 Preparing the research design

Research proposal

Field work or data collection

Preparation and analysis of data

Generalizations and interpretation

The research consisted ofPreparation

two Oral
stages. In
of the first report
written
presentation stage, a survey was conducted to collect
the data about the people. The second stage involved analysis of the data collected in the
first stage.

3.2 OBJECTIVES OF THE STUDY:-

3.2.1 Main Objective –

 To analyses the Recruitment process of Agents for the company.

3.2.2 Sub Objective –
1. To look for segment of people so that they can be introduced in the system.
2. To study how much respondent choose insurance as a side business.
3. To study the effect of demographic characteristics (income) of people on insurance
agency.
4. To analyze the prospect to find whether the person is fit for insurance business.
Thus, Research methodology has been presented in the context of sampling, data
collection, and sources of data and description of the tools.

44
3.3 LIMITATIONS OF THE STUDY
Due to constraints of time and resource, the present study is likely to suffer from certain
limitations. Some of these are mentioned here under, so that the findings of the study may
be understood in a proper perspective.

The limitations of the study are: -

1. Some of the respondents of the survey were unwilling to share information and some
of them were biased.
2. The research was carried out in a short period of 2 months as a part of summer
training. Therefore the sample size and other parameters were selected accordingly so as
to finish the work within the given time frame.
3. Risk of being identified as a summer trainee (HDFC) while visiting different life
insurance companies.
4. Little bit problem was faced by me in SPSS software.
5. Difficult to find particular prospects.
6. Lack of proper coordination between me and prospects
3.4 Research design
The methodology consisted of Descriptive research. The problem was solved by
recruiting people into the system. The information was collected through Questionnaire is
as follows-
 General Information.
 Wants to earn extra income through side business.
 To know the preference of insurance sector.
 To know the awareness about HDFC.
 To know about their interest in becoming advisors.
 Factors which influence them to join HDFC.
 Time that can be devoted for this profession
 To fix an interview if interested.

3.5 Data Collection

45
Data has been collected both from primary as well as secondary sources as described
below.

3.6 Sample size

The sample size for the survey was 100.

3.7 TYPE OF DATA USED

The study was mainly based upon primary data and secondary data.

a) Primary sources
The primary source of data was Questionnaire filled by people at HDFC Life office of
Panipat. After the collection of data it was arranged and the people who were found
suitable and interested were interviewed which consisted of 32 people.
b) Secondary sources
The secondary sources of data were the various websites and insurance manuals. This
mainly provided information about the insurance sector and the company’s profile. These
helped in gaining knowledge about the industry. These sources are listed in References.

3.8 PROCEDURE IN COLLECTION OF DATA

The data required for the study was collected for the first time and it is primary in its
usage for reporting. The primary data was collected with the help of structured
questionnaire.

3.9 SAMPLING TECHNIQUE

Convenience sampling method is used without any stratification to obtain a
uniform size of respondents in sex category.

46
4.0 ANALYSIS AND INTERPRETATION:
DEMOGRAPHICS
4.1 Gender

Table 4.1
Gender classification
Gender No of respondents
Male 62
Female 38
Source: Questionnaire survey

47
 GENDER

FEMALE, 38

MALE, 62

MALE FEMALE

Fig 4.1:- Number of respondents as per Gender

INTERPRETATION:
From the above Pie chart 62% of respondents are Male & 38% of respondents are
Female.

2. Age (years)
Table 4.2
Number of respondents as per Age
Age ( years ) No of respondents
20-25 yrs 24
25-30 yrs 25
30-40 yrs 30
40-50 yrs 9
50 & above yrs 12
Source: Questionnaire survey

48
 AGE ( YEARS )

Above 50, 12
20-25, 24
40-50, 9

30-40, 30 25-30, 25

20-25 25-30 30-40 40-50 Above 50

Fig 4.2:- Number of respondents as per Age

INTERPRETATION:
From the above Pie chart out of 100 respondents 24% of respondents are 20-25yrs of age
, 25% of respondents age is between 25-30, 30% of respondents age is between 30-40
yrs, 9% of respondents age is between 40-50 yrs and 12% of respondents age is 50 yrs &
above

3. Qualification
Table 4.3:-
Number of respondents as per Qualification
Qualification No of respondents
Higher Secondary 3
Graduate 43
Post Graduate 50
Others 4
Source: Questionnaire survey

49
 QUALIFICATION

4, 41, 3

2, 43
3, 50

1 2 3 4

Fig 4.3:- Number of respondents as per Qualification

INTERPRETATION:

From the above Pie chart out of 100 respondents only 3% of respondents are Higher
secondary. 43% of respondents are Graduates, 50% of respondents are Post graduates &
4% of respondents are others.

4. Occupation
Table 4.4:-
Number of respondents as per Occupation
Occupation No of respondents
Student 16
Housewife 15
Businessmen 23
Salaried 21

50
 Professionals 17
Retired persons 8
Source: Questionnaire survey

OCCUPATION

6 1
8% 16%
5
17%
2
15%

4
21% 3
23%

1 2 3 4 5 6

Fig 4.4:- Number of respondents as per Occupation

INTERPRETATION:

From the above Pie chart out of 100 respondents 16 % are students , 15 % are housewives
, 23% are businessmen , 21% are belong to Salaried class, 17% are professionals & 8 %
are retired persons.

5. Annual Income (Family)

Table 4.5:-
Number of respondents as per Annual Income
Income No of respondents
Up to Rs 1,00,000 18
Rs. 1,00,000 – Rs. 2,50.000 32
2,50,000 & above 50

51
Source: Questionnaire survey

ANNUAL INCOME( Family )

18%

50%

32%

1 2 3
Fig 4.5:- Number of respondents as per Annual Income

INTERPRETATION:

From the above Pie chart out of 100 respondents 18 % of respondents annual Income are
up to Rs.1,00,000, 32% of respondents annual Income is between Rs. 1,50,000 – Rs.
2,50,000 & 50% of respondents annual Income is more than Rs. 2,50,000.

6. Do you have any side business along with your occupation?

Table 4.6
Respondent doing side business
Options No of respondents
Yes 45
No 55

52
Source: Questionnaire survey

HAVE ANY SIDE BUSINESS

45

55

1 2

Fig 4.6:- Respondent doing side business

INTERPRETATION:
From the above Pie chart out of 100 respondents 45 % of respondents have side business
& 55% of respondents don’t have any side business.

7. Would you be interested in earning some extra money through a side business in
insurance sector as an agent?
Table 4.7
Interested respondent
Options No of respondent
Sure 23

53
 I can think 19
Can’t say 8
Not likely 21
Not at all 29
Source: Questionnaire survey

No of respondent
29
30
23 21
25 19
no of respondent

20
15
8
10
5
0
Sure I can think Can’t say Not likely Not at all

No of respondent

Fig 4.7:- interested respondent

Interpretation:-
From the above chart it become clear that 50% of the respondents are not interested 23%
are fully interested and 19% respondent can think about it.

8. Do you think that Insurance sector is better than other sectors?

Table 4.8
Respondents consider insurance sector better
Options No of respondent
Definitely yes 21

54
 Probably yes 18
Can’t say 11
Not likely 17
Not at all 33
Source: Questionnaire survey

No of respondent

40 33

30 21
no of respondent

18 17
20 11

10

0
Definitely yes Probably yes Can’t say Not likely Not at all

No of respondent

Fig 4.8:- Respondents consider insurance sector better

Interpretation:-

From the above chart it is interpreted that 39 respondent consider insurance sector is
better than other sectors but 50 respondent not consider insurance sector better.

9 Reasons of selecting this sector

Table 4.9
Reasons for choosing
FACTORS Very Important Neutral Not Least

55
 important important important
Earnings 39 31 18 8 4
Growth 13 19 21 19 28
Scope 23 12 47 7 11
Less Burden 19 21 11 16 33
No Routine Work 45 13 2 17 23
Source: Questionnaire survey

50 47
45
45
39
40
35 33
no. of respondent

31
30 28

25 23 23
21 21
18 19 19 19
20 16 17
15 13 12 13
11 11
10 8 7
4
5 2
0
Earnings Growth Scope Less Burden No Routine Work

Very important Important Neutral Not important Least important

Fig 4.9:- Reasons for choosing this sector

Interpretation:-
From the above chart it is interpreted that 70% of the respondent consider
earning as an important factor, 32% consider growth and 58% of the
respondent consider less burden of work as an important factor.

10. Have you heard of HDFC?

Table 4.10:-
Awareness about HDFC life

56
 Heard of HDFC No of respondents
Yes 85
No 15
Source: Questionnaire survey

No of respondents

15

85

Yes No

Fig 4.10:- Awareness about HDFC Life

INTERPRETATION:

From the above Pie chart shows that out of 100 respondents 85 % of respondents heard
about the company HDFC life insurance & 15% of respondents do not know about the
company.

11. If Yes to Q5, then through which source?

Table 4.11:-

57
 Source of getting information
Source of getting information No of respondents
Newspaper 25
Television 21
Business Magazine 18
Friends/Relatives 21
Others 2
Don’t Know 13
Source: Questionnaire survey

No of respondents
2

13 25
21
21
18

Newspaper Television Business Magazine Friends/Relatives Others Don’t Know

Fig 4.11:- Source of getting information

INTERPRETATION:
The above bar diagram shows that out of 100 respondents 25% out of them get
information about HDFC life insurance from newspaper and only 2% use their own
supervision. Out of 100 respondents 13% of them don’t know about the company HDFC
life insurance.

12. Do you want to be a Financial Advisor with HDFC?

58
 Table 4.12:-
Respondents who want to be financial advisor
Options No of respondents
Yes 32
Undecided 48
No 20
Source: Questionnaire survey

No of respondents
60

50 48
no. of respondenty

40
32
30
20
20

10

0
Yes Undecided No

No of respondents

Fig 4.12:- Respondents who want to be financial advisor

INTERPRETATION:
From the above Pie chart shows that out of 100 respondents 32 % of respondents want to
be a financial advisor in the company HDFC life insurance, 48% of respondents are not
able to decide and 20% of respondents don’t want to be a financial advisor in the
company.

59
13. If Yes to Q7, then to what extent does each of the following Factors influence you
to join HDFC life insurance?
Table 4.13:-
Factor influence to join HDFC life insurance
VERY CAN’T VERY
FACTORS HIGH LOW
HIGH SAY LOW
Brand Name 30 20 15 19 16
Goodwill of the company 36 29 5 17 13

Better returns for Advisors 46 45 0 5 4

Wide product range 22 12 23 20 23
Source: Questionnaire survey

50 46 45
45
40 36
no. of respondent

35 30 29
30
22 23 23
25 20 19 20
20 16 17
15
13 12
15
10 5 5 4
5 0
0
Brand Name Goodwill of the Better returns for Wide product
company Advisors range

VERY HIGH HIGH CAN’T SAY LOW VERY LOW

Fig 4.13:- Factor influence to join HDFC life insurance

Interpretation:
As we know many factors affect whether to join an insurance company or not. But better
returns is the most important factor which factor which affect the decision (i.e. more than
90%) & goodwill of the company is also equally important.

60
14. How much time would you like to devote to this?
Table 4.14
Time devote to insurance sector
Options No. of respondent
0-1 hr. 26
1-3 hr. 32
More than 3 hr. 42
Source: Questionnaire survey

No. of respondent

50
42
40
no. of respondent

32
26
30

20

10

0
0-1 hr. 1-3 hr. More than 3 hr.
No. of respondent

Fig 4.14:- Time devote to insurance sector

Interpretation:
From the above chart in is interpreted that 42% of the respondent like to devote more
than 3 hour, 32% of the respondent like to devote 1-3 hour & 26% like to devote less than
1 hour to insurance sector.

61
5.1 Findings

 It has been found that majority of the respondent i.e. 50% having income 2.5 lakh

or more than that.

 More than 50% respondents i.e. 62% are male and rest are female i.e. 38%.

 From the above study ut has been revealed that 555 respondents have some side

business also.

 There are 40% respondents, consider insurance as a good sector for earning and

only 11% are neutral about this.

 It has been revealed that more that 70% are there who can devote more than 1

hour daily for insurance.

 From the study it has been found that many sectors affects the decision regarding

join the company like goodwill of the company, product range etc.

 It has been found that people get aware about HDFC life through many sources

like T.V., newspaper, magazine, agents etc.

62
5.2 Suggestion

 There should be a weekend batch of training for the people who cannot take their

full six days from there busy schedule.

 There should be some fixed salary with some fixed targets as other companies are

doing.

 Advertising should be given in the newspapers so that more number of people can

come for the interview.

 Various MBA institutes should be targeted to get people with good marketing as

well as interpersonal skills.

 Presentation about advisor as a career opportunity should be given in the various

seminars an get together.

63
5.3 Conclusion:-

From above analysis & findings, it is concluded that main objective of this project to
analyze the “distribution channel of HDFC Life” has been achieved. Other objective
such as to know the preference of respondents towards various plans of HDFC life, To
reveal the purpose of joining HDFC life, to reveal the source which motivates them to
join HDFC life.

The plans of HDFC life is expected to go on stream. HDFC life already has good number
of insurance plans. It is on the brim of increasing its customers through its attractive
schemes and offer. The objective of the report is to analyze distribution channel of HDFC
life so that new opportunities can be explored. The important facts extract from data is
the overall satisfaction of individual towards various channels. The important factor that
is to be considered by individual while joining HDFC life has been analyzed. Also the
brand name of the insurance company and quality of service is considered to be most
important factor while joining company.

64
 REFERENCES

Niels Peter Mols, (2001) "Organizing for the effective introduction of new distribution
channels in retail banking", European Journal of Marketing, Vol. 35 Iss: 5/6, page no.661
– 686

Jennifer Thornton, Lesley White, (2001) "Customer orientations and usage of financial
distribution channels", Journal of Services Marketing, page no.168 – 185

Donald J. Bowersox, Edward A. Morash, (1989) "The Integration of Marketing Flows in

Channels of Distribution", European Journal of Marketing, page no.58 – 67

Malcolm T. Cunningham, T. Roger Pyatt, (1989) "Marketing and Purchasing Strategies

in the Distribution Channels of Mid-range Computers", European Journal of Marketing,
page no.130 – 143

Nancy Jo Black, Andy Lockett, Christine Ennew, Heidi Winklhofer, Sally McKechnie,
(2002) "Modelling consumer choice of distribution channels: an illustration from
financial services", International Journal of Bank Marketing, page no.161 – 173

Filipe Coelho, Chris Easingwood, (2005) "Determinants of multiple channel choice in

financial services: an environmental uncertainty model", Journal of Services Marketing,
page no.199 – 211

Serkan Akinci, Safak Aksoy, Eda Atilgan, (2004) "Adoption of Internet banking among
sophisticated consumer segments in an advanced developing country", International
Journal of Bank Marketing, page no.212 – 232

Niels Peter Mols, (1999) "The Internet and the banks’ strategic distribution channel
decisions", International Journal of Bank Marketing, page no.295 – 300

Ong Hway-Boon, Cheng Ming Yu, (2003) "Success factors in e-channels: the Malaysian
banking scenario", International Journal of Bank Marketing, Vol. 21 Iss: 6/7, page no.369
– 377

Sertan Kabadayi, (2008) "Adding direct or independent channels to multiple channel

mix", Direct Marketing: An International Journal, page no.66 – 80

65
Elizabeth Daniel, (1999) "Provision of electronic banking in the UK and the Republic of
Ireland", International Journal of Bank Marketing, page no.72 – 83

Tim Hughes, (2006) "New channels/old channels: Customer management and multi-
channels", European Journal of Marketing, page no.113 – 129

Angus Laing, (1995) "The marketing of financial services to independent distributors",

Journal of Services Marketing, page no.6 – 18

Jay M. Bernhardt, Darren Mays, Amanda K. Hall, (2012) "Social marketing at the right
place and right time with new media", Journal of Social Marketing, page no.130 – 137

Jason Ramsay, Malcolm Smith, (1999) "Managing customer channel usage in the
Australian banking sector", Managerial Auditing Journal, page no.329 – 338

Chiang Ku Fan, Shu Wen Cheng, (2009) "An efficiency comparison of direct and indirect
channels in Taiwan insurance marketing", Direct Marketing: An International Journal,
page no.343 – 359

Ulun Akturan, Nuray Tezcan, (2012) "Mobile banking adoption of the youth market:
Perceptions and intentions", Marketing Intelligence & Planning, page no.444 – 459

66
 Questionnaire to analyses the channel of distribution of
HDFC Life

I am tarun miglani and pursuing MBA. I am doing a Research on channel of

distribution of HDFC Life. Please help me by filling up this questionnaire and
providing me the required information. The information provided by you will be kept
confidential and would be used only for the academic purpose.

PERSONAL DETAILS
1. Name____________________________
2. Gender
 Male  Female
3. Age (years)
20-25 25-30 30-40 40-50 50 and above

4. Qualification
 Higher secondary  Graduate  Post graduate  others

5. Occupation
Student Housewife Businessmen
Salaried  Professionals  Retired Persons

67
6. Annual Income (Family)
 Up to Rs.1,00,000
 Rs.1,00,000 – Rs.2,50,000
 Above Rs.2,50,000

Q1. Do you have any side business along with your occupation?
 Yes  No

Q2. Would you be interested in earning Rs. 10,000 to Rs. 12,000 per month through
a side business in insurance sector as an agent?
 Sure  I can think  Can’t say  Not likely  Not at all

Q3. Do you think that Insurance sector is better than other sectors?
Definitely Yes Probably Yes  Can’t say Not likel Not at all

Q4. What are the reasons of choosing this sector?

M IMP - MOST IMPORTANT H IMP - HIGHLY IMPORTANT
IMP – IMPORTANT U IMP - UNIMPORTANT
H UIMP - HIGHLY UNIMPORTANT T UIMP - TOTALLY UNIMPORTANT
FACTORS M H IMP U IMP H T
IMP IMP UNIMP UNIMP
Earnings
Growth
Scope
Less Burden
No Routine Work

68
Q5. Have you heard of HDFC?
 Yes  No

Q6. If Yes to Q5, then through which source?

 Newspaper  Television
 Business Magazine  Friends/Relatives
 Others, please specify……………..

Q7. Do you want to be a Financial Advisor with HDFC?

 Yes  Undecided  No

Q8. If Yes to Q7, then to what extent do each of the following Factors influence you
to join HDFC Prudential life insurance?
VERY CAN’T VERY
FACTORS HIGH LOW
HIGH SAY LOW
Brand Name
Easier to Sell
Goodwill of the company
Better returns for Advisors
Non monetary benefits
Wide product range
Training and development

Q9. How much time would you like to devote to this?

 0-1 hr.  1-2 hr.  2-3 hr  more than 3 hr

69
THANK YOU

70