09-02-2012, 01:41 PM
HDFC Standard Life Insurance Company Limited
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EXECUTIVE SUMMARY
HDFC Standard Life insurance is the oldest life insurance company in the
world. It is the largest insurer in the UK and is the 28th largest company in the
world. In India, the company is marketing life insurance products and unit
linked investment plans. From my research at HDFC SLIC, I found that the
company has a lot of competition from other private insurers like ICICI, Aviva,
Birla Sun Life and Tata AIG. It also faces competition from LIC. To compete
effectively HDFC SLIC could launch cheaper and more reasonable products
with small premiums and short policy terms (the number of year’s premium
is to be paid). The ideal premium would be between Rs. 5000 – Rs. 25000
and an ideal policy term would be 10 – 20 years.
THE INSURANCE INDUSTRY IN INDIA
AN OVERVIEW
With the largest number of life insurance policies in force in the world,
Insurance happens to be a mega opportunity in India. It’s a business growing
at the rate of 15-20 per cent annually and presently is of the order of Rs
1560.41 billion (for the financial year 2006 – 2007). Together with banking
services, it adds about 7% to the country’s Gross Domestic Product (GDP).
The gross premium collection is nearly 2% of GDP and funds available with
LIC for investments are 8% of the GDP.
Even so nearly 65% of the Indian population is without life insurance cover
while health insurance and non-life insurance continues to be below
international standards. A large part of our population is also subject to weak
social security and pension systems with hardly any old age income security.
This in itself is an indicator that growth potential for the insurance sector in
India is immense.
A well-developed and evolved insurance sector is needed for economic
development as it provides long term funds for infrastructure development
and strengthens the risk taking ability of individuals. It is estimated that over
the next ten years India would require investments of the order of one trillion
US dollars. The Insurance sector, to some extent, can enable investments in
infrastructure development to sustain the economic growth of the country.
(Source: indiacore.com)
HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818 when it was
conceived as a means to provide for English Widows. Interestingly in those
days a higher premium was charged for Indian lives than the non - Indian
lives, as Indian lives were considered more risky to cover.
KEY MILESTONES
1912: The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.
1938: Earlier legislation consolidated and amended by the Insurance Act
with the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers along with provident societies were
taken over by the central government and nationalized. LIC was formed by an
Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from
the Government of India.
