Market

With current inflationary conditions and rising

cost of living, life insurance is an imperative for
Indians to secure their financial responsibilities.
The recent history of unfortunate events and
calamities clearly demonstrates the uncertainties
of life and of leaving loved ones bereft and
financially vulnerable.
Given this environment it can be assumed
that for most people, insurance would be the
magic wand everyone would have. The truth is
that at the turn of the 21st century insurance
penetration was a very dismal 1.77%. Ten years
later, however, thanks to the efforts of 24
insurance companies and several million agents
hot-footing it across the country this number
has nearly trebled. Still a very humble 4.60% and
with insurance density the ratio of premium
underwritten in a given year to the total
population of nearly Rs. 2500 (US$ 55.60) the
scope that this business, therefore, offers is so
immense that even an exorbitant sum may
actually fall short of reality.
It is in this context that HDFC Life a joint
venture between India's leading private financial
institution, HDFC, and the 175-year old
Standard Life of the UK was established on
3rd October 2000. This robust partnership was
built on the experience of financial accounting
and stellar customer service. For the 2009/10
financial year the company had received total
premium of Rs. 7000 crore (US$ 1.60 billion), its
assets under management totalled over Rs. 2000
crore (US$ 444.40 million) and it was actively
serving the interests of over 3.50 million clients.
Achievements
In a young, untapped market where so much
needs to be accomplished, every effort a
company makes will naturally be seen as a
powerful initiative. In turn these will attract a
bevy of accolades. However, it is the quality of
awards that will ultimately determine the nature
of achievements.
In this evaluation HDFC Life scores
handsomely. Business World had rated HDFC
Life as The Most Respected Private Insurance
Company as far back as 2003/04. The accolade
was repeated in 2010 when the company was
determined India's Most Trusted Private Life
Insurance Brand in the
Most Trusted Brand
Survey 2010,
conducted by The
Economic Times Brand
Equity and the
Nielsen
Company. It
also received
the Product of
the Year 2010
recognition in the insurance category for its
product, YoungStar Super.
For its marketing innovation, the creative
tagline developed by HDFC Life Sar Utha Ke
Jiyo (live with your head held high) was
honoured amongst India's 60 Glorious
Advertising Moments by 4Ps magazine. The
brand was also selected as 4Ps Power Brand
2007, for being one of India's 25 Best Start-up
Companies.
The company's performance in the area of
human resource development, too, has won
separate laurels. In 2010 it was adjudged one of
the Best Companies to Work for in India in the
Great Places to Work study and was ranked first
in the insurance category.
In the IT segment the company received the
CIO Ingenious 100 2009 Award, for ATLAS, its
Agency Training Licensing and Servicing System.
HDFC Life also bagged the PC Quest Best IT
Implementation Award 2007 for Wonders its
path-breaking implementation of an enterprise-
wide workflow system.
The most recent award the company has
received is the prestigious Indian Merchants'
Chamber Ramkrishna Bajaj National Quality
Award 2010. In this evaluation the company was
declared the winner of the Performance
Excellence Trophy.
History
It may come as a surprise to most people but
the untold truth is that insurance in India is a
concept more than 3000 years old. It finds
extensive mention in the writings of Manu
(Manusmriti) c.500-1200 BC, Yagnavalkya
(Dharmasastra) and Kautilya (Arthasastra) an
exhaustive treatise on statecraft. These brilliant
works explain the concept of pooling resources
which in times of natural crisis could be
redistributed to the affected for succour and
relief. Modern insurance is based on these very
principles.
India's regulated insurance effort dates
back to 1818 but the Indian Life Assurance
Companies Act did not come into force until
almost exactly one hundred years later. It would
take another 80 years and the Malhotra
Committee report in 1999 for the Insurance
Regulatory and Development Authority (IRDA)
to be formed to, amongst other things, protect
the interests of policyholders.
HDFC Life became the first private sector life
insurance company to be flagged off after
IRDA's formation. Today, ten years after it
was launched, the company boasts of a base
of 200,000 agents operating through a
countrywide network of more than 500
branch offices.
Despite the criticality of life insurance, sales in
the industry has been characterised by over
reliance on tax benefits and limited advice-based
selling. HDFC Life has deviated from this route,
focussing instead on complete transparency, by
adopting the Need Based Selling model. This has
helped clients understand their latent needs
before directing attention to tax benefits.
HDFC Life is one of the few companies
whose product details illustrations beyond the
mandatory regulatory requirement and provide
a comprehensive indication of the relation
between charges and returns.
Product
HDFC Life's product portfolio comprises 25
solutions, which meet various customer needs,
such as pure protection, pension, savings,
investment and health. Customers have the
added advantage of customising their plans, by
adding five optional benefits called riders, at a
nominal cost.
The company's offerings come with both
limited underwriting and fully underwritten
options. The objective is to provide similar
benefits to two sets of customers those who
are looking for better value products and those
who are looking for similar benefits, but prefer
over-the-counter life insurance solutions.
Some of the key products launched in line
with the new regulatory environment include
HDFC SL Crest, ProGrowth Maximiser,
YoungStar Super II, ProGrowth Flexi,
Endowment Gain, Pension Maximus and
ClassicAssure insurance plans, catering to
customers from all income groups. These
products offer diverse benefits flexible
premium payment options, flexibility to change
premium paying term, multiple investment funds
and highest NAV guarantee for people who are
50 BUSINESS SUPERBRANDS
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comfortable with the idea of safeguarding their
investment with guaranteed returns and short
premium paying term. The products also offer
adequate tax benefits.
Realising that on either side of what is
euphemistically called the 'normal insurable age'
are two polarised extremes children and the
retired with their own distinct needs, HDFC
Life developed products specific to them. Its
YoungStar Super was, in fact, voted Product of
the Year 2010 in the insurance category by
more than 30,000 consumers nationwide.
As part of its customer-centric approach
HDFC Life introduced a 30-day free look-in
period on all unit-linked insurance plans (ULIPs).
The company also introduced another proactive
innovation providing an assurance that if within
one year of taking a policy the insured felt that
he or she had taken the wrong product, HDFC
Life, at the least possible cost, would work with
them to select another product from the
company that fitted their needs better.
Recent Developments
Recently, on its 10th anniversary, the company
unveiled a new brand identity that it felt better
reflected modern vibrancy and dynamism and
was in closer sync with today's youth. Inspired
by the form and colours of the HDFC brand,
the new logo is a symbol of assurance,
protection and pride of a life well lived.
Along with its flagship product offerings
YoungStar and Endowment, now re-
branded ProGrowth HDFC
Life launched a unit-linked
highest NAV guarantee plan
called Crest. This was
especially designed for
people who wanted to
safeguard their investment
even as they sought
guaranteed returns.
Additionally, the
company also
introduced several
other products
ProGrowth Flexi,
Endowment Gain
and Classic Assure
insurance plans to reach those for whom
affordability was the key criterion.
Other customer-centric initiatives include a
welcome call, SMS on the move, online portal
and e-services for customers, robust grievance
handling and even rules that help curb mis-
selling. The company's claim repudiation in
2008/09 and 2007/08 were the lowest in the
private life insurance industry. In 2009/10, claim
repudiation stood at 4.70%.
Promotion
HDFC Life is strongly driven by research. It
believes that in order to be relevant it is
essential to listen to potential consumers. This
simple philosophy has allowed HDFC Life to
develop customer-centric products and services.
Indeed, the brand's pay-off line is less the
encapsulation of the company's belief and more
a plea to a client. Sar Utha Ke Jiyo was derived
from the insight that an individual doesn't
want to be a burden on his family and that
he doesn't want his family to depend on
anyone after his death.
It is also because of research that the
brand's communication reaches far
beyond the promise of security. The
appeal is aimed at ensuring financial
independence and self-respect of an
individual and his family.
The brand communications
strategy follows a unilateral approach
where the focus lies on need-based
product category advertising, be it
ensuring the financial security for one's
family, investing for a child's future, or
planning for the golden years.
Brand Values
Insurance is a long-term savings vehicle and the
need for life insurance either protection or
savings is universal. In pursuance of this, the
brand has striven to promote the concept of
financial independence and thus help both, the
insured and his family, lead a life of dignity and
self-respect.
It is this self-respect that every piece of
communication from HDFC Life exhibits: the
need to invest in insurance not because of fear
or profit, but because of the need to lead a life
of dignity to the very end.
Starting with the sales force, these values
resonate across all functions of the company.
Consistent with this approach is the brand's
investment focus. It is based on the primary idea
of protecting and generating returns that match
the investor's long-term objective, irrespective
of market condition.
This strict protocol has thrown up gratifying
results in the findings of a brand equity study
completed in 2010. The research has shown that
consumers perceive HDFC Life as a reliable
financial expert, trustworthy, honest, genuine
and ethical.
HDFC Life would not have wanted it any
other way.
www.hdfclife.com
Things you didnt know about
HDFC Life
51 BUSINESS SUPERBRANDS
HDFC Life is the coming together of HDFC,
one of India's largest financial institutions and
Standard Life a 185-year old, US$ 280 billion
(Rs. 1,260,000 crore) company
HDFC Life is the first private sector life
insurance company to be registered with the
Insurance Regulatory and Development
Authority (IRDA)
The creation of children's and pension plans
categories has been substantially driven by
HDFC Life
HDFC Life is the only life insurance company
to offer a 30-day free look-in period for
customers to review the policy
In case a policyholder, up to one year after
taking a policy, finds the product doesn't suit
him HDFC Life allows him or her to shift to
another company policy at minimal cost
HDFC Life is one of the few companies whose
product illustrations go beyond those
mandated by regulatory requirement and
provide a comprehensive indication of the
relation between charges and returns
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