HDFC STANDARD LIFE

INSURANCE

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 CHAPTER ONE:
INTRODUCTION

1) INTRODUCTION:
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HDFC Standard Life Insurance Company Limited is one of India's leading
private insurance companies, which offers a range of individual and group
insurance solutions. It is a joint venture between Housing Development
Finance Corporation Limited (HDFC Limited), India's leading housing
finance institution and a Group Company of the Standard Life Plc, UK. As
on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life
(Mauritius Holding) 2006, Ltd. holds 26.00% of equity in the joint venture,
while the rest is held by others.
The company launched national operations in December 2001. Today, we
have over 8000 employees across over 12 states in the country and a national
footprint of distributors trained to provide quality financial advice and
insurance solutions to the large Indian customer base.

As we further expand our presence across the country with a large network
of distributors, we continue to provide innovative product and service
offerings to cater to specific insurance and wealth management needs of
customers. Whatever your plans in life, you can be confident that HDFC
Standard life will offer the right financial solutions to help you achieve
them.

1.1 Meaning and Definition of Life Insurance

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1.1.1 Meaning
Life insurance covers the risk that exists in one’s life. These risks may arise
due to accident, illness or natural causes like fire, flood, earthquake. Life
insurance aims to protect the family of the life insured so that they may not
suffer from financial consequences on the death or disability of the insured
person. Life insurance needs to be a mandatory part of every person’s life.
Life insurance is a contract that pledges payment of an amount to the person
assured (or his nominee) on the happening of the event insured against.
Life insurance is a very popular form of insurance. It ensures the life of an
individual and gives financial protection to the members of the family of the
policyholder.
It is different from other types of insurance in various ways. It not only gives
protection but it is a method of compulsory saving. This insurance provides
protection to the family at the premature death or gives adequate amount at
the old age when the earning capacities are reduced.
The contract is valid for payment of the insured amount during:
 The date of maturity, or
 Specified dates at periodic intervals, or
 Unfortunate death, if it occurs earlier.

 Life insurance covers the risk that exists in one’s life. These risks may
arise due to accident, illness or natural causes like fire, flood,
earthquake. Life insurance aims to protect the family of the life
insured so that they may not suffer from financial consequences on
the death or disability of the insured person. Life insurance needs to

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 be a mandatory part of every person’s life. Life insurance is a contract
that pledges payment of an amount to the person assured (or his
nominee) on the happening of the event insured against.
 Life insurance is a very popular form of insurance. It ensures the life
of an individual and gives financial protection to the members of the
family of the policyholder.

1.1.2 Definition

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Life Insurance may be defined as a type of Insurance Contract whereby the
insurer, in consideration of the premium paid in periodical instalments
undertakes to pay an annuity or a certain sum of money either on the death
of the insured or on the expiry of a certain number of years.
Life insurance or life assurance is a contract between the policy owner and
the insurer, where the insurer agrees to pay a designated beneficiary a sum
of money upon the occurrence of the insured individual's or individuals'
death or other event, such as terminal illness or critical illness. In return, the
policy owner agrees to pay a stipulated amount called a premium at regular
intervals or in lump sums.

1.2 Features of Life Insurance Contract

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(1) Nature of General Contract

Since life insurance contract is a sort of contract it is governed by the Indian

Contract Act. According to Section 10 of Indian Contract Act, 1872 a valid
contract must have the following essentialities:
(a) Offer and acceptance.
(b) Legal considerations.
(c) Competent to make contract.
(d) Free consent.
(e) Legal object.

(2) Insurable Interest

The insured must have an insurable interest in the life to be insured for a
valid contract.
Insurable Interest in life insurance may be divided into two categories:
(a) Insurable interest in own life, and
(b) Insurable Interest in other’s life.
The latter can be sub-divided into two classes:
 Where proof is not required, and

 Where proof is required. Again this insurable interest can be divided

into two classes

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  insurable interest arising due to business relationship, and
 Insurable interest in family relation.

(3) Utmost Good Faith

The life insurance requires that the principle of utmost good faith should be
preserved by both the parties. The principle of utmost good faith says that
both the parties, proposer (insured) and insurer must be of the same mind at
the time of contract because only then the risk may be correctly ascertained.
They must make full and true disclosure of the facts material to risk.

(4) Warranties

Warranties are integral part of contract. i.e. they form the bases of the
contract between the proposer and the insurer and if any statement whether
material or non – material, is untrue the contract shall be null and void and
the premium paid by him may be forfeited by the insurer.

(5) Proximate Cause

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The efficient or effective cause that causes loss is called ‘PROXIMATE
CAUSE’. It is the real and actual cause of loss. If the cause of loss is
insured, the insurer will pay.
In ‘LIFE INSURANCE’ the doctrine of CAUSA PROXIMA is not applied
because the insurer is bound to pay the amount of insurance whatever may
be the reason of death. It may be natural or unnatural. Hence this principle is
not of much practical importance with life insurance.

(6) Assignment and Nomination

Life insurance policy can be assigned freely for a legal consideration or love
and affection. Notice of assignment must be given to the insurer who will
acknowledge the assignment.
The holder of life insurance policy on his own may either at the time of
affecting the policy or at any subsequent time before the policy matures,
nominate person or persons to whom the money secured by the policy shall
be paid in event of his death.
Nomination can be cancelled before the maturity, but a notice should be
served to this effect.

(7) Return of Premium

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In the ordinary course premium once paid cannot be refunded. But in the
following cases the premium paid are returnable.
On account of misrepresentation or breach of warranty, the insured, in the
absence of any express condition to the contrary, can claim the return of
premium paid.
But where the insured is guilty of fraud in obtaining a policy, he will fail in
his claim to the sum assured.

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1.3 HISTORY OF HDFC STANDARD LIFE
INSURANCE COMPANY LTD.

HDFC Standard Life Insurance Company Ltd. is a, one of India's leading

multi-business corporations and HDFC Life International, the international
arm of HDFC Life, a Fortune 100 company. The company has positioned
itself on the quality platform. In line with its vision to be the most admired
life insurance company in India, it has developed a strong corporate
governance model based on the core values of excellence, honesty,
knowledge, caring, integrity and teamwork.

Incorporated in 2000, HDFC Standard Life started commercial operation in

April 2001. In line with its values of financial responsibility, HDFC
Standard Life has adopted prudent financial practices to ensure safety of
policyholder's funds. The Company's paid up capital as on 30th April, 2009
Is Rs 1782 core HDFC Standard Life has multi-channel distribution spread
across the country. Agency distribution is the primary channel
complemented by partnership distribution, bancassurance, alliance
marketing and dedicated distribution for emerging markets. The Company
places a lot of emphasis on its selection process for agent advisors, which
comprises four stages - screening, psychometric test, career seminar and
final interview. The agent advisors are trained in-house to ensure optimal
control on quality of training. The company currently has around 75,832

agent advisors at 715 offices across 389 cities. The company also has 36
referral tie-ups with banks, 24 partnership distribution and alliance

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marketing relationships each. HDFC Standard Life has put in place a unique
hub and spoke model of distribution to deepen our rural penetration. This is
the first time such a model has been put in place for rural marketing of
insurance. The company has 139 offices dedicated to rural areas.

HDFC Standard Life offers a suite of flexible products. It now has 39

products covering both life and health insurance and 8 riders that can be
customized to over 800 combinations enabling customers to choose the
policy that best fits their need. Besides this, the company offers 6 products
and 7 riders in group insurance business.

HDFC Life Insurance Company is one of the largest insurance companies in

the United States and the world. Ranked as a Fortune 100 company, HDFC
Life has provided its policyholders with financial security and investment
opportunities since 1841. As a mutual company, HDFC Life is owned solely
by its policyholders, to whom it pays annual dividends and provides long-
term coverage on a wide range of insurance products. The company
prospered during its first 100 years of operations, as the growth of the
nation's population and economy created an expanding market for life
insurance. Since World War II HDFC Life has maintained its competitive
edge by diversification.

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1.4 VISION AND MISSION

1) Financial Expertise
As a joint venture of leading financial services groups, HDFC Standard Life
has the financial expertise required to manage your long-term investments
safely and efficiently.

2) Range of Solutions
We have a range of individual and group solutions, which can be easily
customized to specific needs. Our group solutions have been designed to
offer you complete flexibility combined with a low charging structure.

3) Track Record So Far

Our gross premium income, for the year ending March 31, 2009 stood at Rs.
5,564.69 cores.
As on March 31, 2009, the company has more than 27 lakh polices in force.

3) Strong promoter
HDFC Standard Life is a strong, financially secure business supported by
two strong and secure promoters – HDFC Ltd and Standard Life. HDFC
Ltd’s excellent brand strength emerges from its unrelenting focus on
corporate governance, high Standards of ethics and clarity of vision.

Standard Life is a strong, financially secure business and a market leader in

the UK Life & Pensions sector.

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 4) Investment Philosophy
We follow a conservative investment management philosophy to
ensure that our customer’s money is looked after well. The investment
policies and actions are regularly monitored by a formal Investment
Committee comprising non-executive directors and the Principal Officer &
Executive Director.
As a life insurance company, we understand that customers have invested
their savings with us for the long term, with specific objectives in mind.
Thus, our investment focus is based on the primary objective of protecting
and generating good, consistent, and stable investment returns to match the
investor’s long-term objective and return expectations, irrespective of the
market condition.

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1.5 INDUSTRY GROWTH PROSPECTS:

THE YOUTHFUL AGE PYRAMID – 2005

THE EXPECTED AGE PYRAMID - 2030

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 CHAPTER TWO:
INSURANCE
REGULATORY AND
DEVELOPMENT
AUTHORITY (IRDA)

INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITY (IRDA):-
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Reforms in the Insurance sector were initiated with the passes of the IRDA

Bill in Parliament in December 1999. The IRDA since its incorporation as a

statutory body in April 2000 has fastidiously such to its schedule of framing

regulations and registering the private sector insurance companies.

The other decision taken simultaneously to provide the supporting systems

to the insurance sector and in particular the life insurance companies was the

launch of the IRDA online service for issue and renewal of licenses to

agents.

Section 14 of IRDA Act, 1999 lays down the duties, powers and

functions of IRDA..

(1) Subject to the provisions of this Act and any other law for the time

being in force, the Authority shall have the duty to regulate, promote

and ensure orderly growth of the insurance business and re-insurance

business.

(2) Without prejudice to the generality of the provisions contained in sub-

section (1), the powers and functions of the Authority shall include,

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(a) issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registration;

(b) 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;

(c) specifying requisite qualifications, code of conduct and practical training

for intermediary or insurance intermediaries and agents;

(d) specifying the code of conduct for surveyors and loss assessors;

(e) promoting efficiency in the conduct of insurance business;

(f) promoting and regulating professional organisations connected with the

insurance and re-insurance business;

(g) levying fees and other charges for carrying out the purposes of this Act;

(h) calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers, intermediaries,

insurance intermediaries and other organisations connected with the

insurance business;

(i) control and regulation of the rates, advantages, terms and conditions that

may be offered by insurers in respect of general insurance business not so

controlled and regulated by the Tariff Advisory Committee under section

64U of the Insurance Act, 1938 (4 of 1938);

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(j) specifying the form and manner in which books of account shall be

maintained and statement of accounts shall be rendered by insurers and other

insurance intermediaries;

(k) regulating investment of funds by insurance companies;

(l) regulating maintenance of margin of solvency;

(m) adjudication of disputes between insurers and intermediaries or

insurance intermediaries;

(n) supervising the functioning of the Tariff Advisory Committee;

(o) specifying the percentage of premium income of the insurer to finance

schemes for promoting and regulating professional organisations referred to

in clause

(p) specifying the percentage of life insurance business and general

insurance business to be undertaken by the insurer in the rural or social

sector; and

(q) exercising such other powers as may be prescribed

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 CHAPTER THREE:
TYPES OF
INSURANCE PLANS

3. TYPES OF LIFE INSURANCE PLAN

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WHY DO WE NEED PROTECTION PLANS?

Protection Plans help you shield your family from uncertainties in life due to
financial losses in terms of loss of income that may dawn upon them incase
of your untimely demise or critical illness. Securing the future of one’s
family is one of the most important goals of life. Protection Plans go a long
way in ensuring your family’s financial independence in the event of your
unfortunate demise or critical illness. They are all the more important if you
are the chief wage earner in your family. No matter how much you have
saved or invested over the years, sudden eventualities, such as death or
critical illness, always tend to affect your family financially apart from the
huge emotional loss.
For instance, consider the example of Amit who is a healthy 25 year old guy
with a income of Rs. 1,00,000/- per annum. Let's assume his income
increases at a rate of 10% per annum, while the inflation rate is around 4%;
this is how his income chart will look like, until he retires at the age of 60
years. At 50 years of age, Amit’s real income would have been around Rs.
10, 00,000/- per annum. However, in case of Amit’s unfortunate demise at
an early age of 42 years, the loss of income to his family would be nearly
Rs. 5,00,000/- per annum.

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However, with a Protection Plan, a mere sum of Rs. 2,280/- annually
(exclusive of service tax & educational cess) can help Amit provide a
financial cushion of up to Rs. 10, 00,000/- for his family over a period of 25
years.

1. HDFC Term Assurance Plan

This plan is designed to help secure your family’s financial needs in case of
uncertainties. The plan does this by providing a lump sum to the family of
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the life assured in case of death or critical illness (if option is chosen) of the
life assured during the term of the contract. One can choose the lump sum
that would replace the income lost to one’s family in the unfortunate event
of one’s death. This helps your family to maintain their financial
independence, even when you are not around.

Features

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2. HDFC Loan Cover Term Assurance Plan
This plan aims to protect your family from your loan liabilities in case of
your unfortunate demise within the policy term. It provides the beneficiary
with a lump sum amount, which is a decreasing percentage of the initial Sum
Assured. This means that as the outstanding loan decreases as per the loan
schedule, the cover under the policy also decreases as per the policy
schedule.

Features

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3. HDFC Home Loan Protection Plan
This plan aims to protect your family from your loan liabilities in case of
your unfortunate demise within the policy term. It ensures that your family
does not lose the dream house that you have purchased for them, in case you
are not around to repay the outstanding monthly installments on your
housing loan. This provides you with the comfort of knowing that in your
absence, a sum of money will be available towards repaying your housing
loan, making sure that your family will be secure in your family home.

Features

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1. HDFC Children’s Plan
As a parent, your priority is your child’s future and being able to meet your
child’s dreams and aspirations. With our HDFC Children’s Plan, you can
start building your savings today and ensure a bright future for your child.
This ‘With Profits’ plan is designed to secure your child’s future by giving
your child (Beneficiary) a guaranteed lump sum on maturity or in case of
your unfortunate demise, early into the policy term.

Features

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2. HDFC YoungStar Super
As a parent, your priority is to meet your children’s future and being able to
meet your child’s dreams and aspirations. With our HDFC YoungStar Super,
you can start building your savings today and ensure a bright future for your
child. This Plan provides valuable protection to your child in case you are
not around and gives you an outstanding investment opportunity to HDFC
imise your savings by providing you a choice of thoroughly researched and
selected investments. This plan also gives Bumper Addition to the fund
value at Maturity.

Features

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3. HDFC YoungStar Super Suvidha
As a parent, your priority is your child’s future and being able to meet your
child’s dreams and aspirations. With our HDFC YoungStar Super Suvidha,
you can start building your savings today and ensure a bright future for your
child. It is a convenient plan, which saves you from the need of going for
Medicals. This Unit Linked Plan provides valuable protection to your child
in case you are not around and gives you with an outstanding investment
opportunity to HDFC imise your savings by providing you a choice of
thoroughly researched and selected investments. This plan also gives
Bumper Addition to the fund value at Maturity.

Features

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4. HDFC YoungStar Supreme Suvidha
There is no bigger joy than being able to fulfill your child's dream. With
HDFC YoungStar Supreme Suvidha you can fulfill your child’s immediate
and future needs. So tomorrow when you child needs your support you don’t
have to depend on anyone else. This Plan provides valuable protection to
your child in case you are not around and gives you an outstanding
investment opportunity to HDFC imise your savings by providing you a
choice of thoroughly researched and selected investments. This plan also
gives Bumper Addition to the fund value at Maturity.

Features

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5. HDFC SL YoungStar Champion Suvidha
There is no bigger joy than being able to fulfill your child's dream; that too
on your own. With HDFC SL YoungStar Champion Suvidha you can fulfill
your child’s immediate and future needs. So tomorrow when you child needs
your support you don’t have to depend on anyone else. This is a convenient
plan, which saves you from the need of going for Medicals. This Unit
Linked Plan gives you with an outstanding investment opportunity to HDFC
imise your savings by providing you a choice of thoroughly researched and
selected investments. This plan also gives Bumper Addition to the fund
value at Maturity.

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Features

1. HDFC Personal Pension Plan

Today, you are busy climbing the ladder of success and realizing your
dreams. Today, time is with you. Just take a moment and think. Will you be
able to continue at the same pace? Will your income be the same forever?

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Will you be able to live life on your own terms even after you retire? The
HDFC Personal Pension Plan is a ‘With Profits’ insurance policy that is
designed to provide a post-retirement income for life with the freedom to
choose your retirement date.

Features

2. HDFC Pension Super

Today, you are busy climbing the ladder of success and realizing your
dreams. Today, time is with you. Just take a moment and think. Will your
income be the same forever? Will you be able to live life on your own terms
even after you retire? The HDFC Pension Super is Unit Linked plan,
designed to provide a post-retirement income for life with the freedom to
choose your retirement date. This plan gives you with an outstanding
investment opportunity to HDFC imise your savings by providing you a
choice of thoroughly researched and selected investments. This plan also
gives Bumper Addition to the fund value at vesting.

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Features

3. HDFC Pension Supreme

Today, you are busy climbing the ladder of success and realizing your
dreams. Today, time is with you. Just take a moment and think. Will your
income be the same forever? Will you be able to live life on your own terms
even after you retire? The HDFC Pension Supreme is Unit Linked plan,
designed to provide a post-retirement income for life with the freedom to
choose your retirement date. This plan gives you with an outstanding
investment opportunity to HDFC imise your savings by providing you a
choice of thoroughly researched and selected investments. This plan also
gives Bumper Addition to the fund value at vesting.

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Features

4. HDFC SL Pension Champion

Today, you are busy climbing the ladder of success and realizing your
dreams. Today, time is with you. Just take a moment and think. Will your
income be the same forever? Will you be able to live life on your own terms
even after you retire? The HDFC SL Pension Champion is Unit Linked plan,
designed to provide a post-retirement income for life with the freedom to
choose your retirement date. This plan gives you with an outstanding
investment opportunity to HDFC imise your savings by providing you a
choice of thoroughly researched and selected investments. This plan also
gives Bumper Addition to the fund value at vesting.

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Features

5. HDFC SL Unit Linked Pension HDFC imiser II

Ideally, just how spending comes to you, so must saving and investing. You
are able to finance your expenses and take care of your expenses in present
times. However, to ensure that you are able to maintain the same Standard of
living post retirement, you need to make the right kind of investment today.
HDFC SL Unit Linked Pension HDFC imiser II is a unique Single
Premium unit linked plan, designed to provide a post-retirement income for
life with the freedom to HDFC imise your investment returns. This plan also
gives Bumper Addition* of 5% of initial single premium at vesting.

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Features

6. HDFC Endowment Super

You have always given your family the very best. And there is no reason
why they should not get the best in future too. With rising costs, ensuring the
best got your family will need some financial planning. With our HDFC
Endowment Super, you can start building your savings today and ensure that

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your family remains financially independent, even when you are not around.
This Unit Linked Plan also gives you with an outstanding investment
opportunity to HDFC imise your savings by providing you a choice of
thoroughly researched and selected investments.

Features

7. HDFC Endowment Super

You have always given your family the very best. And there is no reason
why they should not get the best in future too. With rising costs, ensuring the
best got your family will need some financial planning. With our HDFC
Endowment Super, you can start building your savings today and ensure that
your family remains financially independent, even when you are not around.
This Unit Linked Plan also gives you with an outstanding investment
opportunity to HDFC imise your savings by providing you a choice of
thoroughly researched and selected investments.

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Features

8. HDFC SIMPILIFE
You have always believed in living life on your own terms. So why let the
changing realities of everyday life overwhelm you and make your
aspirations take a back seat? With our HDFC SimpliLife Plan, you can plan
now to HDFC imise your savings and secure your and your family’s future.
It is a convenient plan, which saves you from the need of going for
Medicals. This Unit Linked Plan gives you with an outstanding investment
opportunity to HDFC imise your savings by providing you a choice of
thoroughly researched and selected investments.

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Features

9. HDFC Wealth Builder

HDFC Wealth Builder is an exclusive plan crafted for elite achievers like
you. An investment cum insurance plan that will actively help in building
your wealth and give you twin advantage of exclusive funds (actively
managed for you) along with choice of limited premium payment term.
This plan provides the financial protection to your loved ones and builds up
your wealth effortlessly. This plan also gives Bumper Addition to the fund
value at Maturity.

Features
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 10. HDFC Money Back Plan
You have always believed in living life on your own terms. So why let the
changing realities of everyday life overwhelm you and make your
aspirations take a back seat? With our HDFC Money Back Plan, you can
plan now to ensure that you have the necessary funds to have the necessary
funds to secure your long-term as well as short-term financial goals. This
‘With Profits’ plan gives you a proportion of the basis Sum Assured as
Cash lump sums at regular 5-year intervals within the policy term.

Features

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 1. HDFC Critical Care Plan
Critical Illness can strike anyone. Today with advancement in medical
science it is possible to survive a critical illness. Expenses on survival with a
critical illness can be very high. HDFC Critical care plan provides for a

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lump sum payment on survival post diagnosis of a critical illness, so that in
the event a critical illness strikes, you don’t have to dig into those precious
savings of yours.

Features

2. HDFC SurgiCare Plan

In the fast paced lives that we lead, medical contingencies may arrive at our
doorstep uninvited.Surgery costs form a substantial portion of health care
expenditure and needs to be provided for. Health issues can get compounded
if left unattended and may require a surgery. Plus, the ever increasing costs
of surgical procedures are sure to burn a hole in our pockets.
HDFC SurgiCare Plan provides you with timely support in case you have to
undergo a major surgery and hospitalisation, as the case maybe, ensuring
your financial independence at all times.

Features

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CHAPTER FOUR:
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 FINANCIAL
ANALYSIS
(PAST 5 YEARS)

4. FINANCIAL ANAYISIS

4.1) ANALYSIS OF FINANCIAL STATEMENT

Financial statement analysis is a comprehensive analysis of all three
financial statements: balance sheet, income statement, and cash flow
statement. Financial statements provide useful information. However, one
has to meticulously look for the right information from the right data. One
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can undertake the financial statement analysis from different stakeholders’
perspective: creditors, bankers, credit rating agencies, existing shareholders,
potential shareholders, internal management, and employees too.
Financial statement helps in understanding the performance of the
organization. The performance of an organization can be explained on the
basis of the four important aspects of the business:
a) Liquidity: Liquidity shows the ability of the business to service the short
term obligation.
b) Solvency: Solvency shows the ability of the business to meet the long
term obligation.
c) Efficiency: Efficiency shows the ability of the business to use the
resources of the business.
d) Profitability: Profitability shows the ability to the business to generate
and distribute profit.

4.2) Intra firm comparison of HDFC:

1. Analysis of Short – Term Liquidity:

a. Current ratio = Total Current Assets / Total Current Liabilities
b. Quick ratio = quick current assets / quick current liabilities

Table showing: current ratio and quick ratio of HDFC standard life
Insurance Company Ltd. for the year 2008 and 2009.

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 Year 2009 (RS.’000) 2008 (RS.’000)
Current assets 9,643,629 8,575,727

Current liabilities 9,029,038 6,251,168

Current ratio and quick 1.07% 1.37%
ratio

Inference:
The above table is showing the details regarding the current ratio and quick
ratio of hdfc standard life insurance company ltd. The standard current ratio
is 2:1, and quick ratio is 1:1, but the company has got only 1.37 and 1.07
both the year the ratio is not satisfactory. But compare to year-2009 ratio
year-2008 ratio was good.

4.3) Capital Structure and Long -Term Solvency Ratios:

Debt equity ratio =long Term Debt / shareholders fund

Table showing: debt equity ratios of hdfc standard life in the year 2008 and
2009.

Years 2009 (RS.’000) 2008 (RS.’000)

Outsiders Funds 97,578,470 84,012,076

Share Holders Fund 18,433,462 13,263,132

Debt Equity Ratio 5.29% 6.33% P a g e | 47

 Inference:
There is continues increase in Share holders’ Funds and also in an outsider
funds from the year 2008 to 2009. Outsider’s funds are increased more than
the shareholders fund. Hence the outsider’s funds has been increased year by
year, it shows the larger outsiders funds are available to the company. Since
this is quite satisfactory and in the same way it is not good to the
shareholders point of view and also to the company.

4.4) GRAPH SHOWING THE CURRENT RATIOS OF

1.6 HDFC STANDARD LIFE INSURANCE COMPANY

1.4 LTD. FROM THE YEAR 2005 TO 2009.

1.2
P
1
E

RC 0.8

E 0.6
N
0.4
TA
G 0.2
E P a g e | 48
0
2005 2006 2007 2008 2009
4.5) TABLE SHOWING THE QUICK RATIOS OF HDFC
STANDARD LIFE INSURANCE COMPANY LTD.:-

YEARS 2009 2008 2007 2006 2005

(Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000)

Liquid
9,643,629 8,575,727 5,325,536 3,869,728 1,143,024
Assets

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 Liquid 9,029,038 6,251,168 3,905,497 2,687,296 1,090,355
liabilities

Acid test
ratio
1.07% 1.37% 1.36% 1.44% 1.05%

4.6) Profitability Ratios:

a. Gross profit ratio = gross profit / sales*100

Table showing: the gross profit ratio of HDFC Standard Life Insurance
Company Ltd.

Year 2009 (Rs.’000) 2008 (Rs.’000)

Gross profit (5,029,631) (2,435,094)
Sales 55,183,763 48,176,166
P a g e | 50
 Gross profit ratio -0.09% -0.05%

4.7) The Debt Equity ratios of HDFC Standard Life Insurance

Company Ltd. from the year 2005 to 2009.
Years 2009 2008 2007 2006 2005
(RS.’000) (RS.’000) (RS.’000) (RS.’000) (RS.’000)

Outsiders 97,578,470 84,012,076 45,999,541 23,633,655 8,470,669

Funds

Share
Holders 18,433,462 13,263,132 8,360,441 6,331,725 3,194,450
Fund

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Debt
Equity
5.29% 6.33% 5.50% 3.73% 2.65%
Ratio

4.8) The Gross Profit ratios of HDFC Standard Life

Insurance company.ltd from the year 2005-2009.

Gross profit ratio in percentage

YEARS

P a g e | 52
 0
2005 2006 2007 2008 2009

P -0.02
E
R -0.04
C
E -0.06
N
T -0.08
A
G -0.1
E
-0.12

-0.14

4.9) Table showing Net Profit ratio of HDFC standard life

from the year 2005 to 2009

Year 2009 2008 2007 2006 2005

(RS.’000) (RS.’000) (RS.’000) (RS.’000) (RS.’000)
(11,913 (6,883,49 (4,421,36 (3,165,75
Net profit ,122) 1) 4) 3) (1,878,181)

P a g e | 53
 Sales 55,183,763 48,176,166 28,226,248 15,469,501 6,866,346
Net profit -0.22% -0.14% -0.16% -0.20% -0.27%
ratio

4.10) SUGGESTIONS

a. It can try to create awareness about this company through some

programmes.

b. There may be proper and immediate response in case of any queries from
customers.

P a g e | 54
c. It can concentrate to increase its sales revenue as finance is life blood of
any business.

d. It is able try to increase its profits through using better portfolios.

e. There can be an outstanding after sales service which is one of the

important factors.

f. There may be more effective response in case of any incidents/events.

g. Feedback information can be inculcated.

h. It is able to concentrate on decreasing other expenses and it has to spend

the expenses which are really required to the development of the
company.

i. Proper management is to be there and also it should supervise the

activities of the company very well.

j. It needs to be aware of its competitors to overcome from the competition

and to get more market share.

P a g e | 55
 4.11) Balance sheet of HDFC STANDARD LIFE
INSURANCE COMPANY LTD. as at March 31 for five
years.

Particulars Schedu 2009 2008 2007 2006 2005

le (Rs.‘000) (Rs.‘000) (Rs.‘000 (Rs.‘000 (Rs.‘000)
) )
SOURCES OF
FUNDS
SHAREHOLDE
6,192,71
P a g e | 56
RS’ FUNDS: 5 17,958,18 12,706,35 8,007,14 8 3,190,898
Share Capital 0 9 8
Share - -
application - - 287,391
money received 6 65,902 -
pending 552,892 552,892 65,902
allotment of 73,105 3,552
shares (77,610) 3,881 -
Reserve and
Surplus
Credit / [Debit]
Fair Value
Change Account

Sub-Total 18,433,46 13,263,13 8,360,44 6,331,72 3,194,450

2 2 1 5

BORROWING 7 - - - - -
S
POLICYHOLD
ERS’ FUNDS: (296,885) 193,745 91,247 209,569 174,980
Credit / [Debit]
Fair Value 29,092,41 24,366,74 17,391,5 11,487,9 6,377,397
Change Account 9 7 31 96 -
Policy Liabilities - - - - 1,918,292
Insurance 84,085,08 56,317,97 25,934,2 9,732,78
Reserves 3 6 64 1 -
Provision for
Linked liabilities (15,302,1 3,133,608 2,582,49 2,203,30
Add: Fair value 47) 9 9
change
Total Provision 68,782,93 59,451,58 28,516,7 11,936,0 -
for Linked 6 4 63 90
Liabilities
Sub-Total 97,578,47 84,012,07 45,999,5 23,633,6 8,470,669

P a g e | 57
 0 6 41 55
Funds for Future 586,395 - - - -
Appropriations
Funds for future 531,970 246,951 59,485 25,516 -
appropriation -
Provision for
lapsed policies - - - - -
unlikely to be
revived
Surplus
Allocated to
Shareholders

TOTAL 117,130,2 97,522,15 54,419,4 29,990,8 11,665,11

97 9 67 96 9
APPLICATION
OF FUNDS:
INVESTMENT
S 8 4,291,597 4,213,064 1,529,74 1,380,91 984,253
Shareholders’ 8A 30,050,09 23,299,04 3 0 6,087,916
Policyholders’ 8B 7 3 17,782,8 11,695,0 1,918,292
Assets held to 9 68,782,93 59,451,58 66 10 11,984
cover Linked 10 6 4 28,516,7 11,936,0 731,824
Liabilities 30,248 18,618 63 90
LOANS 11 1,331,800 12,638 29,356 733,529
FIXED ASSETS 1,447,706 736,054 601,345
CURRENT 12 4,493,238 409,495
ASSETS 4,108,660 3,363,55 2,879,62
Cash and bank 4,082,489 6 2
balances 5,534,969
Advances and 1,961,98 990,106
Other Assets 0

Sub-total (A) 9,643,629 8,575,727 5,325,53 3,869,72 1,143,024

P a g e | 58
 6 8

CURRENT 13 8,820,225 6,129,149 3,874,65 2,658,56 1,069,635

LIABILITIES 2 7
PROVISIONS 14 208,813 122,019 20,720
30,845 28,729

Sub-Total (B) 9,029,038 6,251,168 3,905,49 2,687,29 1,090,355

7 6
NET
CURRENT 614,591 2,324,559 1,420,03 1,182,43 52,669
ASSETS (C) = 9 2
(A - B)
MISCELLANE 15 - - - - -
OUS
EXPENDITURE
(to the extent not 11,913,12 4,421,36 3,165,75 1,878,181
written off or 2 6,883,491 4 3
adjusted)
DEBIT
BALANCE IN
PROFIT AND
LOSS
ACCOUNT
(Shareholders’
account)
TOTAL 117,130,2 97,522,15 54,419,4 29,990,8 11,665,11
97 9 67 96 9
CONTINGENT
LIABILITIES
1. Partly paid-up - - - - -
investments
2. Claims, other - - - - -
than against
policies, not
acknowledged as
P a g e | 59
 debts by the - - - - -
company

3. Underwriting
- - - - -
commitments
outstanding (in
262,091 309,494 119,829 -
respect of share 1,465,718
and securities)
- - - -
4. Guarantees
given by or on -
behalf of the - - - -
Company
-
5. Statutory
demands /
liabilities in
dispute, not
provided for

6.Reinsurance
obligations to
the extent not
provided for in
the accounts

7.Others
Total 1,465,718 262,091 309,494 119,829 -

P a g e | 60
 4.12) Profit & Loss Account for year ended March 31, from
2005 to 2009

Shareholders’ Account (Non-technical Account)

2009 2008 2007 2006 2005
Particulars schedu (RS.’00 (RS.’00 (RS.’00 (RS.’00 (RS.’00
le 0) 0) 0) 0) 0)
Amounts 794,984 516,341 - - -
transferred from
the Policyholders
Account
(Technical
Account) 302,367 242,109 126,836 138,496 65,321
Income from
Investments 13,924 98,694 114,192 7,989 10,117

P a g e | 61
 (a) Interest,
Dividends & (35,870 (11,142) (12,470) (6,933) (4,043)
Rent - Gross )
(b) Profit on sale
/ redemption (21,384) (23,909) (6,594)
of 51,887 -
investments 561 (2,375) (8,926)
(c) (Loss on sale (2,965) (5,156)
/ redemption
of
investments)
(d) Transfer /
gain on
revaluation /
change in
fair value
(e) Amortization
of
(premium)/di
scount on
investments
Sub Total 329,343 308,838 202,274 124,032 66,239
Other Income 300 531 764 3,650 1587
TOTAL (A) 1,124,6 825,710 203,038 127,682 67,826
27
Expenses other 3A 5,307 12,596 8,252 18,251 10,490
than those directly
related to the - - - - -

P a g e | 62
insurance business
Bad debts written
off - - - - -

Provisions (other - - - - -
than taxation)

(a) For - - - - -
diminution 6,148,9 3,248,20 1,450,39 1,397,00 954,744
in the value 51 8 7 3
of
Investments
(net)

(b) Provision for

doubtful
debts

(c) Others

Contribution to the
Policyholders Fund
TOTAL (B) 6,154,2 3,260,80 1,458,64 1,415,25 965,234
58 4 9 4

Profit / (Loss) (5,029, (2,435,0 (1,255,6 (1,287,5 (897,348

P a g e | 63
 before tax 631) 94) 11) 72) )
Provision for - - - - -
Taxation (5,029, (2,435,0 (1,255,6 (1,287,5 (897,348
Profit / (Loss) after 631) 94) 11) 72) )
tax
APPROPRIATIO (6,883, (4,421,3 (3,165,7 (1,878,1 (980,833
NS 491) 64) 53) 81) )
(a) Balance at
the - - - - -
beginning of
the Year - - - - -
(b) Interim
dividends - - - - -
paid during
the Year - (27,033) - - -
(c) Proposed
final
dividend
(d) Dividend
distribution
tax
(e) Transfer to
liabilities on
account of
Employee
benefits
Profit / (Loss)

P a g e | 64
carried forward (11,913 (6,883,4 (4,421,3 (3,165,7 (1,878,1
to the Balance ,122) 91) 64) 53) 81)
Sheet
Earnings per share (3.28) (2.42) (1.83) (2.92) (3.38)
- Basic
Earnings per share (3.28) (2.42) (1.81) (2.92) (3.38)
- Diluted

CHAPTER FIVE:
RESEARCH AND
DESIGN

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5) METHODS OF DATA COLLECTION

Primary Method

Primary data are those which are collected fresh and for the first time and
thus happen to be original in character. It is always advised to use primary
data whenever possible. They are also known as first handed data.
Following are the methods of collecting Primary Data:

(1) Interview

(2) Telephone Interview

(3) Mail Survey

(4) Questionnaire

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Questionnaire is a set of questions to find out the data about the Insurance
Company’s performance, which is circulated among the people or customers
of the same Company. The customers may regard to different branches. The
customer or people based on their personal experience give answers to the
sets of questions presented to them on the basis of which we find out the
status of the company.

I have considered 50 samples to get a feedback that how many customers

have taken which kind of policies which I have mentioned in Finding.

Secondary Data

Secondary data means data that are already available. i.e. they refer to data
which have already been collected and analyzed by someone else. Such
information has not been gathered afresh specifically for any research
project.

(1) Books

Books were used to refer to the subject matter and to get extra knowledge on
the topic. Books of various authors were referred for the same purpose.

I have referred topics like Meaning, Definition and Features of Life

Insurance from Innovations in Banking and Insurance.

(2) Newspaper
P a g e | 67
(3) Website

Websites are used to get the general view about the HDFC STANDARD
Life Insurance Company’s product and its history, on the net.

Websites are also used to attract the customers as per the knowledge that I
have.

Websites were used to take general information.

 www.hdfcinsurance.com
 www.google.com
 www.yahoo.com

P a g e | 68
CHAPTER SIX
FINDING

P a g e | 69
FINDING
1. As per survey 35% of sample are having HDFC STANDARD Life
Insurance Company Term Policy , 30% are having Pension Plan , 25% are
having Children’s Policy and 10% has UILP Plan of HDFC STANDARD
Life Insurance Company Ltd.

2. As per survey 20% of sample are taking HDFC STANDARD Life

Insurance Company for Tax Saving and Investment , 30% are taking
Retirement and pension , 30% are taking Children’s Education &Future Plan
and 20% are taking Insurance for Family Life Security.

3. As per survey 40% of sample prefers to have Mediclaim for their family,
15% sample prefers to have Life Plan for their family, 30% sample prefers
to have Whole Life Plan for their family and 15% sample prefers to the
Pension plan.

P a g e | 70
4. As per survey 30% of sample prefers to pay their premium through Cash,
40% sample prefers to pay their premium through Cheque, 15% sample
prefers to pay their premium through Online and 15% sample prefers to pay
their premium through ECS.

5. As per survey 45% of samples prefer to pay their premium through

monthly, 40% of sample prefers to pay their premium through half-yearly
premium, and 15% of sample prefers to pay their premium through half-
yearly premium.

6. As per survey 40% of sample prefers to invest their money in growth

Fund, 30% of sample prefers to invest their money in balance Fund and 30%
sample prefers to invest their money in Traditional Fund.

As per survey 80% sample are satisfied with HDFC STANDARD Life
Insurance Company Ltd.

P a g e | 71
CHAPTER SEVEN:
SUMMARY

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HDFC Standard Life Insurance is one of India’s fastest growing life
insurance companies. HDFC Standard India is joint venture between Dabur
and HDFC Standard Group who’s Association with India is form
1834.HDFC Standard vision is to be amongst India leading life insurance
with quality business model focused on sustainable growth. HDFC Standard
is also one of the first companies to insurance the contemporary unit-linked
products.

The partners of HDFC Standard life insurance are ABN AMRO Bank, The
Laxmi Vilas Bank LTD, Punjab & Sind Bank Indusland Bank, Bank of
Rajasthan.

Dabur Hold 74% stake and stake in HDFC Standard life insurance Co.
LTD, HDFC Standard life insurance company has a paid up capital Rs
1694.50Crore and it has 224 branches and close to 3000 location.

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HDFC Standard life insurance company provide various plan concentrating
on individual plan like overview HDFC Standard new young scholar, HDFC
Standard new pension

Plus, HDFC Standard health plus etc and group plan like HDFC Standard
corporate life plus, Group Gratuity plan HDFC Standard group super vision
plan etc

HDFC Corporation is one of the Indies leading business groups with interest
in provide load For Housing loan, business is insurance & retail. HDFC has
been a pioneering Force in the telecom sector.

Vision of HDFC Standard Life is to be leader and preferred company for

financial protection and wealth management in India. The HDFC
Corporation is such as premises are well maintained with good infrastructure
suggestion box for payment of premium through bank.

Some of the product is sold by HDFC Standard Life are future secure
pension, life insurance, bright star plan, aspire life wealth confident, secure
confident, etc.

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