Life is a gift that each one of us cherishes. Indeed, life is so beautiful, but at the same, it's also very uncertain. As we drive through life, we find a partner, bring up a sweet family, and perhaps start a business. Today we're enjoying our life, spending time with our loved ones, working for our family, No matter what our profession is! And yes, no one knows what will happen tomorrow.
Here, the significance of insurance in a long-term plan rises. It's because insurance is all about giving financial protection that assists you in taking care of yourself and your loved ones.
The main motive of life insurance is to furnish financial help to dependants upon the sudden death of their persons.
These are the following reasons why people purchase life insurance:
1. To give an income to restore the earning ability.
2. To spend for college educations and dependency earnings for the family.
3. To sponsor retirement plans, to repay a loan in the event of sudden death.
4. To sponsor business or alliance in the incident of death of one of the company owners.
The agreement expends a stipulated amount. It's provided to the named legatee after the insured dies.
About HDFC Life Insurance Company
Business Model Of HDFC Life Insurance Company
What's unique about HDFC Life Insurance Company's Business Model
How does HDFC Life Insurance company make money?
Conclusion
FAQs
About HDFC Life Insurance Company
When we talk about life insurances, so many insurance companies strike in our minds, from which HDFC life is one of them. HDFC refers to Housing Development Finance Corporation, which is a leading long-term life insurance solutions provider. It's the 3rd largest firm on the Indian product exchanges. It is the 15th largest employer in our country, with almost 120,000 workers.
Areas of operation
Since 23 October 2000, HDFC Life Insurance company has been serving across 421 branches and 980+ cities and villages of developing India. This business has also established a liaison department in Dubai.
With a multi-channel network, It has a powerful existence in its markets. Its network comprises bancassurance partners, SFBs, direct channels, MFIs, and insurance brokers. Apart from this, it also has partnerships with about 39 ecosystems that are non traditional.
Key products and services
Its essential products and services include pension, health, savings, protection investment, and a wide range of plans providing the requirements of youths and women. These products add up to an aggregate of 37 commercial stocks with more than 13 group products.
Yet, it formulates other optional riders (customization of existing plans with optional benefits) to help the customers. HDFC Life Insurance Company has about seven riders for its customers.
The essential products include protection plans, health plans, retirement plans, rural & social plans, children's plans, savings & investment plans, women's plans, etc.
Target Audiences
Since its establishment in 2000, HDFC Life Insurance Company has been offering insurance solutions, both individual and group, across all cities of India. It mainly targets adults.
HDFC Life Insurance Company has been successful in big cities such as Delhi, Pune, Mumbai, and Bangalore. It's working to extend its services to the remotest corners of the country with the assistance of about 250 partners.
HDFC is performing a commendable job both online and offline. It's an overall strategy to target audiences by establishing its presence on the three most prominent social media platforms: Twitter, Facebook, and YouTube.
Anagha S
Business Model Of HDFC Life Insurance Company
At HDFC Life, they had already jumped to the fundamental shift from being product-centric to evolving customer-centric. They needed to set the customers at the middle of our business model, influence the vast quantities of customer data that is being produced and deliver specific offerings fitted to their unique necessities.
They are required to be accessible anytime and anywhere. It implies that the services are needed to be created digitally first! The life insurance business models have improved over the last decade, ridden by the policyholders. They are working on it and presently created a robust customer approval architecture; you would see businesses striding into the successive era of customer-centricity.
The Company has classified its product portfolio which covers all the major five principal categories across the individual and company categories namely participating, non-participating insurance term, non-participating insurance health, other non participating, and unit-linked insurance products.
Moving on to decoding the company's business model, the company has two types of products and services. The first category includes lean products such as ULIP. The second category of products is the traditional products.
Lean products contribute about 55% to the business model of the company. On the other hand, traditional products contribute about 45% to the business model of the company. The company also has tie-ups with many bancassurance, SFBs, MFIs which help in selling the products of the company on their premises.
The company has a scaling-based business model, which means the profit during the initial years wasn't much. HDFC Life Insurance Company started getting earnings from 2011.
It's the blend of perfect consumer-oriented architecture along with proper scaling and investment which has helped HDFC Life Insurance Company reach glorious heights.
What's unique about HDFC Life Insurance Company's Business Model?
HDFC Life Insurance Company is a cooperative business between HDFC Ltd and one of India’s leading housing finance associations, and Standard Life Aberdeen, an international investment company. It was established in 2000; HDFC Life is a prominent long-term life security solutions provider in India.
1. Costumer-centered approach: Presently, one of the transformative ideas that propel customer-centricity to another phase is a customer approval architecture that chops across regions. The company's visualization of the customer as the only authority to choose and decides when, how, and with whom to share her data is the key.
It could be related to her health, finances, identity, location, driving records, and anything else produced (only) on her approval. While numerous leaders and entities could be behaving as the custodians of this data, they are not the owners - that authority would rest entirely with the person. With such an architecture, insurers would be able to personalize, price better and even serve better!
A consumer who provides insurer access to her medical data constantly can be given bonuses for enhancing and maintaining her health metrics nicely than the average consumer.
Similarly, an individual who shares her driving data can look forward to discounts on machine protection on the back of her safe driving. The insurance company is taming success with such a consumer-centered approach.
2. Coalitions & Tie-ups: On March 31st, 2020, the Company comprised 37 private and 11 group products in its portfolio, along with six discretionary rider benefits, catering to a different extent of customer requirements.
HDFC Life proceeds to profit from its existence across the nation with 421 branches and more portions of touch-points through various coalitions. The coalitions include 270 bancassurance members, including NBFCs (Non-Banking Financial Companies), SFBs (Small Finance Banks), MFIs (Micro Finance Institutions), etc., and an additional 40 new ecosystem me. The rigid core of financial adelgids also bolsters the Company.
It's the prominent financial business company in India that has always been fulfilling and ensuring its services. It has a very tough foothold in the market as a finance company.
Pratyusha Srivastava
How does HDFC Life Insurance Company make money?
Let us understand how HDFC Life Insurance Company makes money through its business strategy by taking a small example. They take money from overseas and increase capital through investing in ECBs, the domestic bond market, Masala Bonds, deposits, and a variety of references. Commercial paper is just one of the numerous sources through which they increase their money.
They generate income in two ways: Charging bonuses in trade for insurance range and also re-investing those dividends into other interest-generating assets. Like all private companies, HDFC insurance companies, too, try to market productively and lowers managerial costs.
The returns from the premiums of policies are also a part of how the company generated its revenue. The other miscellaneous charges from the customers also contribute to the business model.
The profitability mainly depends on three factors. These factors are:
1. Profit extracted from policyholders
2. Rate of claim settlement ratio
3. Mortality rate
4. With a well-prepared business model, the company has generated healthy revenue. The company keeps in check the rate of inflow and outflow, which helps it manage its revenue.
Souvik Dey
Conclusion
The above study on HDFC Life Insurance Company states all its key products and services to the insurers by making it a profitable business by their planning and strategies. They even perfected their business model and provided greater access to a holistic suite of services, including bank accounts.
HDFC Life has been thinking of widening its agencies and also enhance its assistance to bonuses from 12-13%. With that too, the proportioned level of 25% by moving beyond the top 25-30 cities.
The company plans to develop the agency force and look out for LIC’s defense of its attrition to private peers.
HDFC is India’s leading life insurance company which is extending its range to you individually as well as group insurance solutions—and tailored to fulfill your needs, life objectives, and plans.
FAQs
What is full form HDFC?
HDFC stands for Housing Development Finance Corporation Ltd.
When was HDFC Life established?
HDFC Life is a leading long-term life insurance solutions provider in India which was established in 2000.
Who is owner of HDFC Life?
HDFC Life Insurance company is the parent organization of HDFC Life.
Is HDFC Life a subsidiary of HDFC Bank?
HDFC Life Insurance Company Limited is a joint venture between HDFC Ltd. and Standard Life Aberdeen, a global investment company.
Author: Sushree Sangeeta Behera
Source : https://startuptalky.com/hdfc-life-insurance-business-model/
Date : 2021-09-01T07:38:53.000Z