(Print)Rajat Sip

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M S RAMAIAH INSTITUTE OF MANAGEMENT, BANGALORE Page 1

Table of Contents

Chapter -1 (Industry Analysis)

1. Industry Profile 032. Competition in the industry 063. Potential of new entrants into industry 064. Power of suppliers 065. Power of customers 066. Threat of substitute products 07

Chapter -2 (Company Analysis)

1. About the Company 09

2. Vision and Mission 12

3. Products/Offerings 14

4. Competitors information 19

5. Awards/Achievements 21

6. Work Flow Model 24

7. Mckinsey 7-s Model 26

8. Organizational Structure 27

9. Organizational Hierarchy 30

10. SWOT Analysis 31

Chapter 3 (Discussion on Training)

1. Roles and Responsibilities 42

2. Description of Task Handled 43

3. Contribution to the Organization 43

Chapter 4 (Analysis of Task/Research Undertaken)

1. Introduction 45

2. Research Design 46

3. Findings, Recommendations & conclusion 48

Bibliography

Annexure


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CHAPTER -I

INDUSTRY ANALYSIS


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INSURANCE INDUSTRY IN INDIA

The insurance sector in India has come a full circle from being an open competitive market tonationalization and back to a liberalized market again. Tracing the developments in the Indianinsurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.

A brief history of the Insurance sectorThe business of life insurance in India in its existing form started in India in the year 1818 with

the establishment of the Oriental Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the lifeinsurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collectstatistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of

protecting the interests of the insuring public.

1956: 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.

The General insurance business in India, on the other hand, can trace its roots to the Triton

Insurance Company Ltd., the first general insurance company established in the year 1850 inCalcutta by the British.


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INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N.Malhotra was formed to evaluate the Indian insurance industry and recommend its future

direction.

The Malhotra committee was set up with the objective of complementing the reforms initiated in

the financial sector.

The reforms were aimed at creating a more efficient and competitive financial system suitablefor the requirements of the economy keeping in mind the structural changes currently underway

and recognizing that insurance is an important part of the overall financial system where it was

necessary to address the need for similar reforms

In 1994, the committee submitted the report and some of the key recommendations

included:

i) 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 operateii) Competition

Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter theindustry.

No Company should deal in both Life and General Insurance through a single entity. 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

With largest number of life insurance policies in force in the world, Insurance happens to be amega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and

presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per

cent to the countrys GDP. Grosspremium collection is nearly 2 per cent of GDP and fundsavailable with LIC for investments are 8 per cent of GDP.


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Yet, nearly 80 per cent of Indian population is without life insurance cover while healthinsurance and non-life insurance continues to be below international standards. And this part of

the population is also subject to weak social security and pension systems with hardly any old

age income security. This itself is an indicator that growth potential for the insurance sector isimmense.

A well-developed and evolved insurance sector is needed for economic development as itprovides long term funds for infrastructure development and at the same time strengthens the risk

taking ability. It is estimated that over the next ten years India would require investments of the

order of one trillion US dollar. The Insurance sector, to some extent, can enable investments ininfrastructure development to sustain economic growth of the country.

Insurance is a federal subject in India. There are two legislations that govern the sector- TheInsurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has come a full

circle from being an open competitive market to nationalization and back to a liberalized marketagain. Tracing the developments in the Indian insurance sector reveals the 360 degree turn

witnessed over a period of almost two centuries.

iii) Regulatory Body

The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finance Ministry) should be made

independent

iv) 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 (There currentholdings to be brought down to this level over a period of time)

v) 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


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The committee emphasized that in order to improve the customer services and increase thecoverage of the insurance industry should be opened up to competition. But at the same time, the

committee felt the need to exercise caution as any failure on the part of new players could ruin

the public confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the minimum capital

requirement of Rs.100 crore. The committee felt the need to provide greater autonomy to

insurance companies in order to improve their performance and enable them to act asindependent companies with economic motives. For this purpose, it had proposed setting up an

independent regulatory body.

1.2 POTENTIAL OF NEW ENTRANTS INTO INDUSTRY:

It is very difficult for any new company to enter the insurance business because of lots ofbarriers to entry.

1. A very huge capital is required to start an insurance business.2. As the business is regulated by IRDA a company needs license to run insurance business.3. Insurance is a very complex business so a company needs great experience to enter.

1.3 POWER OF SUPPLIERS

Being a service industry power of supplier is negligible.

1.4 POWER OF CUSTOMER:

1. There are many companies selling somewhat similar policies so the customer has the powerto choose.

2. A customer has the power to file a complaint against the insurer in IRDA or consumer forumin case of any unfair practice.

3. The customer has a power to enquire about the current status of his plan at any point of time.4. The customer has a power to withdraw from the chosen plan within a specified period of time.


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1.5 THREATS OF SUBSTITUTE PRODUCTS

As such there is no direct substitute for an insurance policy because it is the only option available

for risk management.

1. Many people buy insurance for tax saving purpose , but there are other substitute products in

which a customer can invest to save tax.

2. Some people buy unit linked policy for good return on investment so they can also go for

equity, MF etc.

The Insurance Regulatory and Development Authority (IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament inDecember 1999. The IRDA since its incorporation as a statutory body in April 2000 has

fastidiously stuck 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 IRDAs online service

for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the insurance

companies would have a trained workforce of insurance agents in place to sell their products,which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a framework of globally

compatible regulations. In the private sector 12 life insurance and 6 general insurance companieshave been registered.


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CHAPTER II

COMPANY ANALYSIS


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COMPANY PROFILE OF HDFC - STANDARD LIFE

The company was incorporated on 14th August 2000 under the name of HDFC Standard LifeInsurance Company Limited. Their ambition from the beginning was to be the first private

company to re-enter the life insurance market in India. On the 23rd of October 2000, this

Ambition was realized when HDFC Standard Life was the first life company to be granted aCertificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%,

while Standard Life owns 18.6%.HDFC Standard Life Insurance Company Ltd. is one of Indias

leading private life insurance companies, which offers a range of individual and group insurance

solutions. It is a joint venture between Housing Development Finance Corporation Limited(HDFC Ltd.), Indias leading housing finance institution and one of the subsidiaries of Standard

Life plc, leading providers of financial services in the United Kingdom.

HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since emerged as

the largest residential mortgage finance institution in the country The corporation has had a

series of share issues raising its capital to Rs. 119 crores. The gross premium income for the yearending March 31, 2007 stood at Rs. 2, 856 crores and new business premium income at Rs.

1,624 crores. The company has covered over 8,77,000 lives year ending March 31, 2007.

HDFC operates through almost 450 locations throughout the country with its corporate

headquarters in Mumbai, India. HDFC also has an International Office in Dubai, UAE, with

service associates in Kuwait, Oman and Qatar.

HDFC is the largest housing Company in India for the last 27 years.

Mr. Deepak S. Parekh is the Chairman of the Company. He is also theExecutive Chairman of Housing Development Finance Corporation Limited (HDFC Limited).

He joined HDFC Limited in a senior management position in 1978. He was inducted as a whole-time director of HDFC Limited in 1985 and was appointed as its Executive Chairman in 1993.He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of

Chartered Accountants (England & Wales).


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JOINT VENTURE:

HDFC Standard Life Insurance Company Limited was one of the first companies to be granted

license by the IRDA to operate in life insurance sector. Reach of the JV player is highly ratedand been conferred with many awards. HDFC is rated AAA by both CRISIL and ICRA.Similarly, Standard Life is rated AAA both by Moodys and Standard and Poors. These reflect

the efficiency with which HDFC and Standard Life manage their asset base of Rs. 15,000 Cr and

Rs. 600,000 Cr. Respectively.HDFC Standard Life Insurance Company Ltd was incorporated on 14

thAugust 2000. HDFC is

the majority stakeholder in the insurance JV with 81.4 %stale and Standard of as a staple pf

18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture.HDFC Standard Life Insurance Company Ltd. Is one of Indias leading Private Life Insurance

Companies., which offers a range of individual and group insurance solutions. It is a joint

venture between Housing Development Finance Corporation Limited (HDFC Ltd.) Indias

leading housing finance institution and the Standard Life Assurance Company, a leadingprovider of financial services from the United Kingdom. Both the promoters are will known for

their ethical dealings and financial strength and are thus committed to being a long-term player

in the life insurance industry- all important factors to consider when choosing your insurer.


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A)Background and inception of the company

HDFC Standard Life Insurance Company Limited. is one of India's leading private insurancecompanies, 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 February28, 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 was incorporated on 14th

august 2000 under the name of Hdfc Standard Life

Insurance Company Ltd.The ambition of the company from as far back as October 1995 was to be the first private

company to re-enter the life insurance market in India ,on 23rd

of October 2000,this ambition was

realized when HDFC LIFE was the only life insurance company to be granted certification of

registration .Hdfc Standard Life has a long and close relationship build upon shared value and trust. The

ambition of Hdfc Standard Life is to mirror the success of the parent company and be the yard

stick by which all other insurance companies in India are measured.HDFC Life is a joint venture between HDFC, Indias largest housing finance institution standard

life assurance company , Europes largest housing finance institution and standard life assurance

companies , Europes largest mutual life company HDFC over RS- 280000 CRORES.

B) Nature of the business carried

HDFC Standard Life Insurance is into a business of insurance. It is one of the first private

insurance companies. Its sell various insurance policy based on the needs of consumer. Its has

traditional insurance plan as well as modern ulip plan in its portfolio, But HDFC is in diversifiedbusiness like banking, housing finance, securities and also.


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C) Vision, Mission and quality policy

Vision

The most successful and admired life insurance company, which mean that we are the mosttrusted company, the easiest to deal with, offer the best value for money, and set the standards in

the industry. In short, The most obvious choice for all.

Mission

We aim to be the top new life insurance company in the market. This does not just mean being

the largest or the most productive company in the market, rather it is a combination of severalthings like-

Customer service of the highest order Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share

Values

Integrity Innovation Customer centric People Care One for all and all for one Team work Joy and Simplicity


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Quality policy

Quality road maptime lines

Phase-1 to phase-3 should run simultaneously

Phases Objectives Visible proof When

Phase-5 Business excellence BE award (external)/serviceguarantee

12-24 months and

Improve levels

Phase-4 Value stream map

projects

6 sigma processes, SLA,

financial benefit.

6-8 months and

improve

Phase-3

Process maturity Process complaint functions 8-12 months andsustenance

Phase-2

Organized workplaces

Zone/region/branch/locationcertification

6-10 months andsustenance

Phase-1

Current business

improvementprograms

Completion of projects and

benefits derived andsustenance

4-6 months and

sustenance


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D) Product/service profile

1. Protection Plans

HDFC Term Assurance Plan:This plan is designed to help secure familys financial needsin case of uncertainties. The plan does this by providing a lump sum to the family of the life

assured in case of death or critical illness (if option is chosen) of the life assured during theterm of the contract. One can choose the lump sum that would replace the income lost to

ones family in the unfortunate event of ones death.

HDFC Loan Cover Term Assurance Plan:This plan aims to protect family from loanliabilities in case of 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.

HDFC Home Loan Protection Plan: This plan aims to protect family from loan liabilitiesin case of unfortunate demise within the policy term. It ensures that family does not lose the

dream house that person have purchased for them, in case person is not around to repay the

outstanding monthly installments on their housing loan.

2. Children's Plans

HDFC Children's Plan:As a parent, everyone priority is their childs future and being ableto meet their childs dreams and aspirations. With HDFC Childrens Plan, they can start

building their savings today and ensure a bright future for their child.

HDFC Young Star Super: This Plan provides valuable protection to insured person child incase his/her is not around and gives them an outstanding investment opportunity to maximize

their savings by providing them a choice of thoroughly researched and selected investments.This plan also gives Bumper Addition to the fund value at Maturity.

HDFC Young Star Super Suvidha:It is a convenient plan, which saves insured personfrom the need of going for Medicals. This Unit Linked Plan provides valuable protection tohis/her child in case he is not around and gives him with an outstanding investment

opportunity to maximize their savings by providing them a choice of thoroughly researched
http://www.hdfcstandardlife.com/Products/ProtectionPlans/TermPlan.aspxhttp://www.hdfcstandardlife.com/Products/ProtectionPlans/LCTermPlan.aspxhttp://www.hdfcstandardlife.com/Products/ChildrensPlans/ChildrensPlans.aspxhttp://www.hdfcstandardlife.com/Products/ChildrensPlans/YoungStarSuper.aspxhttp://www.hdfcstandardlife.com/Products/ChildrensPlans/YoungStarSuperSuvidha.aspxhttp://www.hdfcstandardlife.com/Products/ChildrensPlans/YoungStarSuperSuvidha.aspxhttp://www.hdfcstandardlife.com/Products/ChildrensPlans/YoungStarSuper.aspxhttp://www.hdfcstandardlife.com/Products/ChildrensPlans/ChildrensPlans.aspxhttp://www.hdfcstandardlife.com/Products/ProtectionPlans/LCTermPlan.aspxhttp://www.hdfcstandardlife.com/Products/ProtectionPlans/TermPlan.aspx


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and selected investments. This plan also gives Bumper Addition to the fund value at

Maturity.

HDFC Young Star Supreme Suvidha:This Plan provides valuable protection to insuredperson child in case he is not around and gives him an outstanding investment opportunity to

maximize his savings by providing him a choice of thoroughly researched and selectedinvestments. This plan also gives Bumper Addition to the fund value at Maturity.

HDFC SL Young Star Champion Suvidha:This is a convenient plan, which saves himfrom the need of going for Medicals. This Unit Linked Plan gives him with an outstandinginvestment opportunity to maximize his savings by providing you a choice of thoroughly

researched and selected investments. This plan also gives Bumper Addition to the fund value

at Maturity.

3. Retirement Plans

HDFC Personal Pension Plan:The HDFC Personal Pension Plan is a With Profitsinsurance policy that is designed to provide a post-retirement income for life with the

freedom to choose your retirement date.

HDFC Pension Super:The HDFC Personal Pension Plan is a With Profitsinsurancepolicy that is designed to provide a post-retirement income for life with the freedom tochoose your retirement date.

HDFC Pension Supreme:The HDFC Pension Supreme is Unit Linked plan, designed toprovide a post-retirement income for life with the freedom to choose their retirement date.This plan gives them with an outstanding investment opportunity to maximize their savings

by providing them a choice of thoroughly researched and selected investments. This plan alsogives Bumper Addition to the fund value at vesting.

HDFC SL Pension Champion:The HDFC SL Pension Champion is Unit Linked plan,designed to provide a post-retirement income for life with the freedom to choose theirretirement date. This plan gives them with an outstanding investment opportunity to

maximize their savings by providing them a choice of thoroughly researched and selected

investments. This plan also gives Bumper Addition to the fund value at vesting.

HDFC SL Unit Linked Pension Maximiser II:HDFC SL Unit Linked Pension MaximiserII is a unique Single Premium unit linked plan, designed to provide a post-retirement incomefor life with the freedom to maximize their investment returns. This plan also gives BumperAddition* of 5% of initial single premium at vesting and on death.
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HDFC Immediate Annuity:The HDFC Immediate Annuity is a contract that uses investorcapital to provide them with a guaranteed gross income throughout their lifetime or over aperiod of their choice. The income is guaranteed and is unaffected by the rise and fall of

interest rates. This means the investor can plan their life the way they want it to be, safe in

the knowledge that their gross income will not fall during the period they have selected. TheHDFC Immediate Annuity offers a number of options to meet all their income needs.

4. Savings & Investment Plans

HDFC Endowment Super:With HDFC Endowment Super, investors can start buildingtheir savings and it ensures that their family remains financially independent, even when they

are not around. This Unit Linked Plan also gives them with an outstanding investmentopportunity to maximize their savings by providing them a choice of thoroughly researched

and selected investments.

HDFC Endowment Supreme:With HDFC Endowment Supreme, investors can startbuilding their savings today and it ensures that their family remains financially independent,even when they are not around. It is a convenient plan, which saves them from the need of

going for Medicals. This Unit Linked Plan gives them with an outstanding investmentopportunity to maximize their savings by providing them a choice of thoroughly researched

and selected investments. This plan also gives Bumper Addition to the fund value at

Maturity.

HDFC SimpliLife:It is a convenient plan, which saves investors from the need of going forMedicals. This Unit Linked Plan gives them with an outstanding investment opportunity to

maximize their savings by providing them a choice of thoroughly researched and selected

investments.

HDFC Endowment Super Suvidha:It is a convenient plan, which saves investors from theneed of going for Medicals. This Unit Linked Plan gives them with an outstanding

investment opportunity to maximize their savings by providing you a choice of thoroughly

researched and selected investments. This plan also gives Bumper Addition to the fund value

at Maturity.

HDFC Endowment Supreme Suvidha:It is a convenient plan, which saves insured personfrom the need of going for Medicals. This Unit Linked Plan gives them with an outstanding

investment opportunity to maximize their savings by providing them a choice of thoroughly

researched and selected investments. This plan also gives Bumper Addition to the fund valueat Maturity.

HDFC Wealth Builder:HDFC Wealth Builder is an exclusive plan crafted for eliteachievers. An investment cum insurance plan that will actively help in building investor

wealth and give them twin advantage of exclusive funds (actively managed ) along withchoice of limited premium payment term. This plan provides the financial protection to their
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loved ones and builds up their wealth effortlessly. This plan also gives Bumper Addition to

the fund value at Maturity.

HDFC Endowment Assurance Plan:With HDFC Endowment Assurance Plan, investorscan start building their savings today and ensure that their family remains financiallyindependent, even when they are not around. This With Profitsplan is designed to secure

their familys future by giving their family a guaranteed lump sum on maturity or in case of

their unfortunate demise, early into the policy term.

HDFC Money Back Plan:With HDFC Money Back Plan, investors can plan now to ensurethat they have the necessary funds to have the necessary funds to secure their long-term as

well as short-term financial goals. This With Profitsplan gives them a proportion of the

basis Sum Assured as Cash lump sums at regular 5-year intervals within the policy term.

HDFC Single Premium Whole of Life Insurance Plan:HDFC Single Premium Whole ofLife Plan is a tailor made plan well suited to meet investors long-term investment needs andhelp them to maintain their familys financial independence. This single premium

investmentplan is a Whole of Life plan aimed at providing long-term real growth of their

money. HDFC Assurance Plan:HDFC Assurance Plan helps investors conveniently build their

long-term savings while keeping their familys future protected. This With Profits savings

plan helps them to build their long-term savings while securing their familys future. HDFC Savings Assurance Plan:HDFC Savings Assurance Plan is a With Profits savings

plan which helps investors conveniently build their long-term savings and ensure that theirfamily is protected even if they are not around.

5. Health Plans

HDFC Critical Care Plan:HDFC Critical care plan provides for a lump sum payment onsurvival post diagnosis of a critical illness, so that in the event a critical illness strikes,

investors dont have to dig into those precious savings of them.

HDFC SurgiCare Plan:HDFC SurgiCare Plan provides investors with timely support incase they have to undergo a major surgery and hospitalization, as the case maybe, ensuring

their financial independence at all times.
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6. Rural Products

HDFC Gramin Bima Kalyan Yojana HDFC Gramin Bima Mitra Yojana HDFC Bima Bachat Yojana

7. Social Products

HDFC Development Insurance Plan

E) Area of operation

During the year, company continued to increase its focus on service quality. The company aims

to provide consistent and high quality service across the country through, all channels of delivery

- branches, call centers, internet and the customer portal. Towards this end, periodic serviceaudits conducted across all regional offices and at the call centres provide useful insights into

customer requirements and expectations helping the company improve its processes. Thecompany has implemented a Quality Initiative across its offices which regularly measures the

effectiveness of its processes, reduces leakage and contributes to increasing revenues, managing

costs and improving service quality. The company has also launched a completely revampedwebsite with a big focus on customer education and knowledge. The company has continued to

strengthen its presence in the virtual world, both for creating awareness and facilitating self-

service. Your company continues to explore strategic outsourcing partnerships with a focus on

handling volumes and reaping economies of scale. The combination of outsourcing partnershipsand technology implemented by the company is assisting in improvement of service turnaround

times. As part of its Corporate Social Responsibility, your company continues to explorepartnerships with

F) Ownership pattern

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.
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Bajaj Allianz Life Insurance Co Ltd

Bajaj Allianz Life Insurance is a union between Allianz SE, one of the largest InsuranceCompany and Bajaj Finserv.

Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in

the world, managing assets worth over a Trillion (Over INR. 55, 00,000 Crores). Allianz SE hasover 115 years of financial experience and is present in over 70 countries around the world.

Canara HSBC OBC Life

The shareholding pattern of the Joint Venture is as follows - Canara Bank holds 51% equity,HSBC Insurance (Asia Pacific) Holdings Ltd 26% and Oriental Bank of Commerce 23%. The

Venture has an initial paid up capital of INR 325 crores which will further increase in line withour expansion plans.

The Company commenced business 16th of June, 2008 after receiving requisite approvals fromthe Insurance Regulatory Development Authority (IRDA). Canara HSBC Life has access to 4100

bank branches all over India.

Future Generali Life

Future Generali is a joint venture between the India-based Future Group and the Italy-based

Generali Group.

Future Generali is present in India in both the Life and Non-Life businesses as Future GeneraliIndia Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's

foremost financial services companies-and prudential plc - a leading international financialservices group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80

billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from Insurance Regulatory

Development Authority (IRDA). Today, our nation-wide team comprises of 2074 branches

(inclusive of 1,116 micro-offices), over 225,000 advisors; and 7 bancassurance partners.
http://www.futuregenerali.in/Corporate/Index.aspxhttp://www.futuregenerali.in/Corporate/Index.aspx


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ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strengthrating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential 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 tocustomers all over India.

H) Infrastructural facilities

HDFC SL is providing good infrastructural facilities which are required for employees to

perform their work in a better way. During the year, the Company has invested in additionalinfrastructure capacity and human capital, in terms of offices, technology, staff, financial

consultants, in order to be well positioned to increase the growth momentum in the year ahead.

The company stepped up the recruitment programme in the latter part of the year in preparation

for the next year.

I) Awards/achievements

Received CIO 'the Ingenious 100 2009' Award

HDFC Standard Life has received the CIO The Ingenious 100 - 2009 Award, for ATLAS(Agency Training Licensing and Servicing System). Additionally, the company has received theCIO 100 Security Award 2009 for pioneering LANDesk Management and Security Suite

security implementation and taking its security to a higher level of technological excellence.

HDFC Standard has received the CIO 100 Award for the third consecutive year. It had received

the 2008 CIO Bold Award for Consultant Corner and CIO Security Award for our initiatives for

a secure computing environment, including Sesame - Identity and Access Management. In 2007,the company received CIO 100 award for Wonders and a Special Award in Storage category.

CIO magazine has a long tradition of honoring leading companies for business and technology

leadership and innovations through its flagship award programCIO 100. Its a celebration of

100 organizations (and the people within them) that are using IT in innovative ways to deliver

business value, whether by creating competitive advantage, optimizing business processes,enabling growth or improving relationships with customers.


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Received Diamond EDGE Award 2009

HDFC Standard Life has received the Diamond EDGE Award 2009 for its mobile workforce

portal - Consultant Corner. EDGE - Enterprises Driving Growth and Excellence (using IT) is aninitiative by the ,Network Computing magazine to identify, recognize, and honors end-user

companies in India that have demonstrated the best use of technology to solve a business

problem, improve business competitiveness, and deliver quantifiable ROI to stakeholders.

Network Computing magazine is part of CMP Technology, which brings more than 100 IT

media brands to more than 18 million technology and business decision makers worldwide.

Received 2008 CIO Bold 100 and CIO Security Awards

HDFC Standard Life has received the 2008 CIO Bold 100 Award. This annual award recognizes

organizations that exemplify the highest level of operational and strategic excellence in

information technology. This year's award theme, The Bold 100, recognized those executivesand organizations that embraced great risk for the sake of great reward.

HDFC Standard Life has also been one of the five recipients of the Special 2008 CIO SecurityAward aimed at CIOs, whose pioneering implementations have taken their enterprise security to

the next level. This award category identifies innovative and groundbreaking deployment of

technologies aimed at creating a secure business infrastructure.

The company received the 2008 CIO Bold Award for its mobile workforce portal and the CIOSecurity Award for its initiatives for a secure computing environment, including identitymanagement.

Received PCQuest Best IT Implementation Award 2008

HDFC Standard Life received the PCQuest Best IT Implementation Award 2008 for ConsultantCorner, the applications for its financial consultants, providing centralized control over a vast

geographical spread for key business units such as inventory, training, licensing, etc.

HDFC Standard Life has won the PCQuest Best IT Implementation Award for two years

consequently. Last year, the company received the award for Wonders, its path-breakingimplementation of an enterprise-wide workflow system.

Silver Abby at Goafest 2008

HDFC Standard Life's radio spot for Pension Plans won a Silver Abby in the radio writing craft

category at the Goafest 2008 organized by the Advertising Agencies Association of India

(AAAI). The radio commercial Pata nahin chala touched several changes inlife in the blink of


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an eye through an old mans perspective. The objective was drive awareness and ask people toinvest in a pension plan to live life to the fullest even after retirement, without compromising on

ones self-respect

Unit Linked Savings Plan Tops Mint Best TV Ads Survey

The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of the leading private

insurance companies in India, has topped Mints Top Television Advertisement survey

conducted, for February 2008. HDFC Standard Lifes Unit Linked Savings Plan advertisement

was ranked 4th in terms of a combined score of ad awareness and brand recall and 3rd in termsof ad diagnostic scores (likeability, enjoyment, believability, and claim).

Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007

Mr. Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life, received theQIMPRO Gold Standard Award 2007 in the business category at the 18th annual QimproAwards function. The award celebrates excellence in individual performance and highlights the

quality achievements of extraordinary individuals in an era of global competition and

expectations.

Sar Utha Ke Jiyo among Indias 60 Glorious Advertising Moments

HDFC Standard Lifes advertising slogan honored as one of 60 Glorious Advertising &

Marketing Moments' over the last 60 years in India, by 4Ps Business and Marketing magazine.The magazine said that HDFC Standard Life is one of the first private insurers to break the iceusing the idea of self-respect (Sar Utha Ke Jiyo) instead of 'death' to convey its brand

proposition. This was then, followed by others including ICCI Prudential, thus giving HDFC

Standard Life the credit of bringing up one such glorious advertising and marketing moment inthe last 60 years.


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J) Work flow model

During the year the company launched ATLAS (Agents Training and Licensing AdministrationSystem),a workflow based system, which enables efficient processing of data for training andlicensing of Financial Consultants.

Life insurance is a mechanism for pooling the resources by issuing policy to the investors and

investing funds in securities in accordance with objectives as disclosed in offer document.Investments in securities are spread among a wide cross-section of industries and sectors thus

the risk is reduced. Diversification reduces the risk because all stocks may not move in the

same direction in the same proportion at same time. Hence through diversification the

insurance company earns return through their investment and which is passed back to theinvestors. This is just like a Life Cycle which repeats in nature

WORK FLOW:

MANAGER CHANNEL

DEVELOPMENT

MANAGER

FINANCIAL

CONSULTANTS

CUSTOMERS

MANAGER CORPORATES CUSTOMERS


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K)Future growth and prospects

New Business Market Share

HDFC Life growing steadily

Thus from the above diagram we can say that HDFC SL is growing steadily as it is acquiring

market share from 4.10% to 4.5% in march 2009. Through many strategies like: advertising,good service to customers than competitors etc, it can acquire a good market share in future

Thus from the above diagram we can say that HDFC SL is growing steadily as it is acquiringmarket share from 4.10% to 4.5% in march 2009. Through many strategies like: advertising,

good service to customers than competitors etc, it can acquire a good market share in future

also.

Thus from the above diagram we can say that HDFC Life is growing steadily as it is acquiring

market share from 4.6% in march 2010 to 5.9% in march 2011. Through many strategies like:

advertising, good service to customers than competitors etc, it can acquire a good market sharein future.

BAJAJ ALLIANZ: 8% BIRLA SUNLIFE: 5%

REALIANCE LIFE: 6%MAX NEW YORK: 3%

HDFC SL: 5%SBI LIFE: 9%

ICICI PRUDENTIAL: 12%OTHERS: 12%

Market Share for HDFC Life has gone up from 4.6% Mar 10 to 5.9% Mar 11

OTHERS: 59%

LIC: 40%


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3) MCKINSEY 7-S MODEL

The 7-s model with reference to Hdfc standard life:The 7s model is better known as Mc-Kinsey 7s. This is because the persons who developed this

model Robert H Waterman, Jr., Thomas J. peters and Julian R Philips have been consultants atMC-Kinsey and co. they published their 7s model in their article STRUCTURE IS NOT

ORGANISTATION(1980) and in their books THE ART OF JAPANESE MANAGEMENT

(1981) and IN SEARCH OF EXCELLENCE(1982).

Productive organization change is not simply a matter of structure, although strategy is criticaltoo. Our claim is that effective organizational change is really the relationship between structure,

strategy, systems, styles, skills, staff and something we call super-ordinate goals.

Our central idea is that organization effectives, systems from the interaction of several factor-some especially obvious and some under analysed. Our framework for organization change

graphically depicted the figure.


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STRUCTURE

In the HDFC Life each and every department is empowered with the officer, clerk and sub staff.

The authority is delegated to officer/manager to extract work from the staff. The each department

consists of members based on its requirements.Thus it is having an effective work on the various activities efficiently and effectively.


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SKILLS

It is a more reputed insurance company, as it is providing financial solution of where to invest,

how to invest and number of products with having more benefits to investors. It has reputed

customers who are loyal to the organization. The service given to the customers areaccomplished as per their requirements. Financial services generally do mass supporting services

are rendered to all types (classes) of customers. More over the people feel their task is in safehands of the industry. The organization is having various capabilities over the competitors. These

skills are unique from the competitors of HDFC Life.

The skills are broadly categorized as follows:-Market knowledge, analytical skills, Services, Research, Personal/administration, Soft skills,

Supporting, Medical, Finance, Information relations, others

STYLE

Hdfc standard life follows tip down/bottom up style in its management, where in each majordecision regarding the company is taken in tip down fashion and other decision like targets andgrowth aspects HDFC Life follows bottom up style.

We think it is important to distinguish between the basic personality of a top management team

and the way the team comes across to the organization. Organization may listen to whatmanagers say but they believe what managers do. Not words, but pattern of action is decisive.

The power of style then is essentially manageable.

One aspect of style is symbolic behaviour. Typically have more people on board who understand

exploration are have headed exploration department. Typically they fund exploration moreconsistently.

STRATEGY

By strategy we mean those actions that a company plans in response to or anticipation of

changes in its customers, its competitors. Strategy is the way A Company aims to improve itsposition vis--vis competition perhaps through low cost production or delivery, perhaps by

providing better value to the customer, perhaps by achieving sales and service dominance. it is,

or ought to be, an organization way of saying: here is how we will create unique value.

The HDFC Life has set of objectives, strategies to achieve the objective, the course of action to

be taken to achieve the objective and guidelines for the course of action.Hdfc standard adopts low pricing strategy to generate huge returns and good market share in the

industry, since it has well expanded its business all over INDIA.HDFC Life charges minimal to its clients for the services. It provides more benefits to customers

compared to its competitor. Hence it is known for the good pricing strategy in the industry.


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SYSTEM

The HDFC Life has various techniques to control this procedure as system like to improve the

back office targets by giving addition support.

Information system: the implementation of computers has made information flow fast andreliable. The information is versatile. Since HDFC Life has good backup system.

Recruitment, training and development systemRecruitment process starts with the identification of the vacancies by the department head of the

respective department. A form requesting for the human resource is sent from the department to

HRD.

STAFF

Staff (in the sense of people, not line/staff) is often treated in one of two ways. At the hard end

of the spectrum, we talk of appraisal systems, pay scales, formal training program and the like.

At the soft end, we talk about morale, attitudes, motivation and behaviour.The HDFC Life is in the course of cutting down the cost of service. If it starts recruiting, the

selection is done based on the education qualification first class degree.The various training program to the employees are taken like refresher course, job rotation and

job training. The promotion in the organization is taken place based upon the service, seniority

and educational qualification. The performance appraisal is also taken as a basis for promotion

so officers staff makes it.

SHARED VALUES

Unlike the other six Ss, super ordinate goals dont seem to be present in all, or even most,

organizations. They are, however, evident in most of the superior performers.

The value shared by the members of an enterprise is known as the shared values. Theorganization of HDFC LIFE is having a strategy of sharing values.


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ORGANISATIONAL HIERARCHY

CHAIRMAN

MD

ZONAL

MANAGER

REGIONAL

MANAGER

RETAIL

MARKETING

TERRITORY

MANAGER

BRANCH

MANAGER

ASST. B.M

BUSINESS DEV.

MANAGER

SALES DEV.

MANAGER

ALTERNATIVE

CHANNEL

TERRITORY

MANAGER

BRANCH

MANAGER

CHANNEL

EXUCATIVE

OPERATION

CHANNEL

TEAM

MANAGER

OPERATION

MANAGER

HUMAN

RESOURCE

HR

EXCUTIVES


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Rising real estate industry also pose threat as people are investing a bulk of their money over tothat industry.


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OPERATION AND FINANCIAL HIGHLIGHT


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LEARNING EXPERIENCE

HDFC SLIC is one of the top insurance company in India were people trusted the company andtheir product in market. HDFC SLIC wants to help his customers to live with pride and self-

respect.

It was the good experience to be the part of HDFC SLIC which I come to learn some basic

insurance and their uses and benefits in our life. Firstly, I have attended the training session of

insurance in Ritu Nanda insurance service and I come to know about various product of HDFC

SLIC. The training classes were in M.G Road, Bangalore was around 20 to 25 students is present

in one batch and the lunch and tea is provided by the HDFC SLIC. The total no of 50 hours is

required to complete the training of IRDA Certification.

After training I have given one online IRDA exam and pass the exam.

Some basic skill is taught to me that how to deal with the customer or people and how to

convince them about the product. The people tries to hear all the benefits of the policy or any

product that how the policy is benefiting them in future prospective like tax benefit, retirement

benefit or some other benefit such as 80c , etc.

When there is any understanding is required from the customer side than I with other member

explain him 80c tax benefits to meet customer needs and wants and bring the product policy

according to the requirement to different customer. I have done one policy on one customer

name in which is very difficult to convince the customer towards the product.

ROLES AND RESPOSIBILITIES

The company gave me the project to work on the Financial Analysis of HDFC Life where my

job is to evaluate the performance of the company and to compare it with last 5 yearsperformance to see the position of the company with new trend of company performance as

compare with previous.

It was really quite a good experience to deal with the customer in market with different products

and plans and different demands from the customer side which make me learn how to deal with


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customer in market being as an employee, it also required huge patience to operate or deal with

the people.

DESCRIPTION OF THE TASK HANDLED

During my 8 weeks of project in HDFC Life, a good insight was obtained about the

working of the Insurance sector as the project was mainly on financial analysis of

HDFC Life, for that:

A necessary amount of knowledge was gained about the different funds in HDFC Life. The various products of insurance, the benefits of insurance. The methods of how financial planning can be done for an investor to assist in

investment were learned.

Valuable experience in financial planning technique which helps to plan investmentfor long term so it can to protect from all severities in life, was gained.

CONTRBUTION TO ORGANIZATION

The internship duration that is, 8 weeks of time span is very short for the contribution to

any organization. However, I have succeeded in giving reference for one Life insurance

policy to the company during this period along with this research work which may help

the company in taking useful and important decisions in regard with financial analysis.


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CHAPTER IV

ANALYSIS OF TASK/RESEARCH UNDERTAKEN


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Research Design

AIM

To know the financial position and evaluating the performance of HDFC Life.

STATEMENT OF PROBLEM

Todays financial market is very volatile. Its very tough for a company to maintain a

sustainable growth in this market. Investment is to be thoroughly scrutinized before

making it. Risks are increasing both for the companies and for the people who invests soits a tough job for a company to sustain growth and make profit. As an insurance

company it should always focus on their current position and their performancecompared to the other similar companies in the market so that they can maintain a

proper health. Thousands of investors, policy makers rely upon an insurance

company their emotion and trusts should be kept in mind. The research and the

findings done in this report will help the organization to understand their business more

thoroughly and evaluate their performance in terms of other competitive companies in themarket. It will help them to cut out or minimize the loop holes that are present in the

business.Therefore there is a need to study the financial position and performance of the

company, so that appropriate measure can be taken to sustain the growth and make profit.

Analysis shows the current scenario of the company to company associates as well to theshareholders.

RESEARCH OBJECTIVE

To ascertain the financial position as well as to evaluate the performance ofHDFC Life.

To know the current market share of HDFC Life in Insurance Industry and itsgrowth.


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RESEARCH METHODOLOGY

Approaches to Research Design

1. Research DesignDescriptive Research Design: The research conducted in this project is concerned

with finding who, what, where, when, or how much, hence it is descriptive in nature.

In this research financial analysis of the annual report

of the HDFC Life is undertaken from where description of the current financialposition as well as the performance of the company compared to last financial year is

analysed.

2. Data Collection

Secondary data: The secondary data for the project is obtained from varioussources such as websites, company brochures, journals and publications.

3. Data Analysis

The data was collected by means of secondary data, classified and suitable tables

were prepared. The data was analysed, inferences were drawn and recommendationswere given to meet the objective.

Scope of the study

The scope of the study conducted in this project is restricted to Bangalore.

Limitations of the Study

The study was undertaken only for HDFC Life and the opinion for the life insurancecompanies might differ.

The data is based on secondary data only as mentioned above.


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Findings, Recommendations and Conclusions

ANALYSIS OF FINANCIAL STATEMENT

Financial statement analysis is an analysis of all the three financial statements: balance sheet,

income statement, and cash flow statement. Financial statements provide us with usefulinformation. However, right information from the right data is very necessary. We can undertake

the financial statement analysis from employees, creditors, credit rating agencies, existing

shareholders, potential shareholders, bankers, internal management too.

The purpose of the financial statement analysis is to help users to understand the organization

and the business decisions. These users are both internal and external. The internal users include

the management, employees, and the external users include the shareholders, researchers,bankers, customers, suppliers government representatives.

It helps in understanding the financial position and performance of the company. Theperformance of an organization can be explained on the basis of the four important aspects of the

business:

Liquidity: Liquidity shows the ability of the business to service the short term obligation. Solvency: Solvency shows the ability of the business to meet the long term obligation. Efficiency: Efficiency shows the ability of the business to use the resources of the business. Profitability: Profitability shows the ability to the business to generate and distribute profit.


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Intra firm comparison of HDFC:

1. Analysis of ShortTerm Liquidity:

a. Current ratio = Total Current Assets / Total Current Liabilitiesb. Net working capital =Current assetcurrent liabilities

Table showing: current ratio and quick ratio of HDFC Life in the year 2010-11

Year 2011 (RS.crs) 2010 (RS.crs)

Current assets10607595 7947934

Current liabilities 13187652 12673016

Current ratio 0.804 0.627

Inference:

The above table is showing the details regarding the current ratio of HDFC Life. The standard

current ratio is 0.8:1 in this current year which shows that current liabilities are much more

higher than current asset and the company might face the problem in meeting up its currentliability. But compare to year 2010 the condition in 2011 is much better.


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Graph showing: current ratio and quick ratio of HDFC Life in the year 2010-11

0

5000000

10000000

15000000

20000000

25000000

2011 2010

CURRENT LIABILITIES

CURRENT ASSETS


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b. Net working capital:

Working capital is the lifeblood of the business. Working capital refers to that part of the firmscapital, which is used for financing short term or current assets, such as, cash, marketable

securities, debtors, inventories, bills receivables etc. in a narrow sense, the term working capital

refers to the net working capital. Net working capital is the excess of current assets over currentliabilities.

Table showing: Working Capital of HDFC Life in the year 2010-2011.

Years2011

(RS.crs)

2010

(RS.crs)

Total Current Asset 10607595 7947934

Total Current Liability 13187652 12673016

Net working Capital ( 2580057) (4725082)

Inference :

The working capital is negative that shows the current liability is higher than the current asset

that may affect day to day operation of the business. But it is comparatively in a better condition

than the previous year .

Net working capital = Current assetsCurrent liabilities


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Graph showing: Working Capital of HDFC Life in the year 2010-2011.

0

5000000

10000000

15000000

20000000

25000000

2011 2010

CURRENT LIABILITIES

CURRENT ASSETS


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2. Capital Structure and Long -Term Solvency Ratios:

Debt equity ratio =long Term Debt / shareholders fund

Table showing: debt equity ratios of HDFC Life in the year 2010-11.

Inference:

There is continues increase in Share holders Funds and also in an outsider fundsfrom the year

2010 to 2011. Outsiders funds are increased more than the shareholders fund. Hence the

outsiders 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.

Years 2011 (RS.crs) 2010 (RS.crs)

Outsiders Funds 256449214 193089795

Share Holders Fund 22155241 20417327

Debt Equity Ratio 11.57 9.45


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Graph showing: debt equity ratios of HDFC Life in the year 2010-11.

0

50000000

100000000

150000000

200000000

250000000

300000000

2011 2010

Share Holders Fund

Outsiders Funds


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Debtassets ratio:

Another approach to calculating the debt to capital ratio is to relate the total debt to the total

assets of the firm. The total debt of the firm comprises long- term debt plus current liabilities.

The total assets consist of permanent capital plus current liabilities. Thus,

Debt to total assets/capital ratio= total debt/ total assets

Debt - assets ratio table

Particulars 2011

(Rs.crs)

2010

(Rs.crs)

Total debt 260921468 195644639

Total assets 10607595 7947934

Debt-assets

Ratio

24.59 24.61

Analysis:

The debt-assets ratio of HDFC life is 24.59 for 2011 and 24.61 for the year 2010.

Inference:

There is continues burden of total debt and also in total assets. Debt ratio is near about equal.

Hence the debt ratio has been is high; it shows the larger total debt is more than the total assets

available to the company.


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Graph showing Debt- Asset ratio of HDFC Life in the year 2010-2011

0

50000000

100000000

150000000

200000000

250000000

300000000

2011 2010

Total Assets

Total Debt


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Equity assets ratio:

Still another variant of the debt/equity ratio is to relate the owners/proprietors funds with total

assets. This is called the proprietary ratio. The ratio indicates the proportion of total assets

financed by owners. Symbolically, it is equal to:

Proprietary ratio = Proprietors funds / total assets x 100

Proprietary Fund to Fixed Assets

Proprietary ratio relates shareholders funds to total assets. It is a variant of debt equity ratio.

This ratio shows long term or future of the business. It calculated by dividing shareholders funds

by the total assets.

Preference share capital and equity share capital plus all reserves and surplus items are called

shareholders fund. Total assets include all assets including goodwill.

Significance of the ratio:

The acceptable norm for the ratio is 1: 3. The ratio shows the general strength of the company. Itis very important to creditors as it helps to find out the proportion of shareholders funds in the

total assets used in the business. Higher ratio indicates a secured position to creditors and a low

ratio indicates greater risk to creditors. Proprietary ratio is also analysis in the following manner

Proprietary ratio = shareholders funds/ Fixed


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Table showing: the Proprietary Ratio of HDFC Life in the year 2010-11.

Analysis:

The ratio of 1:3 is considered satisfactory; the Proprietary Ratio of HDFC Life is having a

proprietary ratio of 0.108 which is not satisfactory but its near about double than the previous

year.

Inference:

The Proprietary Ratio of HDFCLifeis increasing over the years. It shows good investment over

by the company in Fixed Asset. In the year 2010 it was 0.05 but it had had risen near about

double in 2011 to 0.108 so it a sign of good health and may show a further improvement in future.

Years

2011

(RS.crs)

2010

(RS.crs)

Fixed Asset 2395729 1143777

Shareholders

Fund

22155241 20417327

Proprietary

ratio

0.108 0.05


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Table showing: the Proprietary Ratio of HDFC Life in the year 2010-11.

0

5000000

10000000

15000000

20000000

25000000

2011 2010

Shareholders Fund

Fixed Assets


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3. Profitability Ratios:

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

Table showing: the gross profit ratio of HDFC Life in the year 2010-11.

Year 2011 (Rs.crs) 2010(Rs.crs)

Gross profit (990021) (2751844)

Sales 89547169 69556324

Gross profit ratio -1.105% -3.95%

Analysis:

The high ratio of gross profit is considered satisfactory; HDFC Life is suffering gross loss in the

year 2010 and 2011.

Inference:

There is an decrease in gross loss and also the percentage of loss in the year 2010 to 2011 is -

3.95 and -1.105 respectively. In the year 2010 it was facing higher gross loss, but later it went on

decreasing. In the year 2011, loss percentage is -1.105 compare to last year the loss has

decreased.


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Table showing: the gross profit ratio of HDFC Life in the year 2010-11

-10000000

0

1000000020000000

30000000

40000000

50000000

60000000

70000000

80000000

90000000

2011 2010

Sales

Gross Profit


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b. Net profit ratio = Net profit ratio= net profit/sales*100

Table showing net profit ratio of HDFC Life for the year 2010-11

ANALYSIS:The high ratio of net profit is considered satisfactory ; HDFC Life. is suffering net

loss in the year 2010 and 2011 respectively.

INFERENCE:

There is an decrease in net loss in 2011 compare to year-2010. The percentage of loss in the year

2010 and 2011 is -17.48 and -21.08 respectively. Though it is not good from the company point

of view as it need to be brought in to positive figure.

Year 2011 (RS.crs) 2010 (RS.crs)

Net profit (15654987) (14664966)

Sales 89547169 69556324

Net profit ratio -17.48% -21.08%


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Graph showing net profit ratio of HDFC Life for the year 2010-11

-20000000

0

20000000

40000000

60000000

80000000

100000000

2011 2010

Sales

Net Profit


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Return on capital employed:

The ROCE is the second type of ROI. Here the profits are related to the total capital employed.

The term capital employed refers to long- term funds supplied by the lenders and owners of the

firm. It can be computed in two ways. First, it is equal to non-current liabilities (long term

liabilities) plus owners equity.

Return on capital employed = (Net profit / Capital employed) x 100

Return on capital employed ratio table

Particulars

2011

(Rs. Crs)

2010

(Rs.Crs)

Net profit (15654987) (14664966)

Capital employed 22155241 20417327

Return on capital

employed ratio

-0.70 -71.82

Analysis:

The high ratio of rate of return on capital employed is considered satisfactory; HDFC standard

life insurance company ltd. is not in the position to earn a better rate of return on total capital

employed in the year 2010-11 respectively.

Inference:

There is an increase in rate of return on capital employed but still it is negative and also the

percentage of capital employed is increasing from the year 2010 to 2011.


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Graph showing Return on capital employed in the year 2010-2011.

-20000000

-15000000

-10000000

-5000000

0

5000000

10000000

15000000

20000000

25000000

2011 2010

Capital Employed

Net Profit


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FINDINGS

Ratio analysis is an important tool for financial statement analysis. Here we studied variousratios relating to measurement of the financial performance such as current ratio, quick ratio,

debt equity ratio, proprietary ratio, gross profit ratio etc. In the previous chapter we made a

detailed analysis of the HDFC Life on the year 2010-11. The major findings are given below:-

The study shows there is a slight change in the current ratio and also it is not satisfactorywhen compare to actual standard of 2:1

The study shows that the net working capital in the company is Rs. (2580057) in 2011and Rs.(4725082). The working capital is negative that shows the current liability is

higher than the current asset that may affect day to day operation of the business.

The study shows that the debt equity ratio is satisfactory from the creditors point of viewthat is in the year 2010 the percentage of ratio is 9.45 and 11.57 in 2011. 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.

The debt-assets ratio is near about equal compared to last financial year.

The study shows that the proprietary ratio to fixed assets is 0.108 in 2011 compared to0.05 in previous year, so it a sign of good health and may show a further improvement in

future.

The study shows that gross profit ratio of the company is -1.105% in 2011, though its inloss but still it has decreased from -3.95%. That is good indication for the company.

There is a decrease in net loss in 2011 compare to year-2010. The percentage of loss inthe year 2010 and 2011 is -17.48 and -21.08 respectively. Though it is not good from the

company point of view as it need to be brought in to positive figure.

The study shows that the return on capital employed is not good because in this year alsoit is earning negative returns and also the percentage of negative returns is near about

equal.


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RECOMMENDATION

a. It can try to create awareness about this company through some programs.b. There may be proper and immediate response in case of any queries from customers.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 companyvery well.

j. It needs to be aware of its competitors to overcome from the competition and to get moremarket share.


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CONCLUSION

HDFC Life has been one of the best life insurance service providers in India. It provides

excellent quality service to their customer. The overall performance of HDFC Life is very goodcompared to other insurance service providers. It stands on fifth position in the insurance

industry. They share a very good rapport with the customers.

The financial condition is not good from year to year. It is in loss condition from past five years.Its debt- equity ratio is good as compared to previous year because of that the company is in a

good condition to get survival in the market.

It is selling more policies from year to year that means the sales percentage isincreasing from many years it is the signal to the growth of the company. Presently it

is incurring more expenses and market share is very less compare to other competitorslike LIC, ICICI Prudential etc.


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BIBILOGRAPHY

WEBSITES:

WWW.HDFCINSURANCE.COM WWW.GOOGLE.COM WWW.YAHOOSEARCH.COM

REFERENCE BOOKS:

PRASANNA CHANDRA: FINANCIAL MANAGEMENT, (TMH), 6/e, 2004 M.Y. KHAN & P.K. JAIN: FINANCIAL MANAGEMENT, (TMH), 4/e, 2004

OTHER REFERENCES:

NEWS PAPERS:o TIMES OF INDIAo ECONOMIC TIMES

MAGAZINES:o BUSINESS WORLD
http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.google.com/http://www.google.com/http://www.yahoosearch.com/http://www.yahoosearch.com/http://www.yahoosearch.com/http://www.google.com/http://www.hdfcinsurance.com/


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ANNEXURES

Balance sheet of HDFC LIFE as at March 31, 2011


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Profit & Loss Account for year ended March 31,2011.Shareholders Account (Non-technical Account)


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