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. However, we still remain in the dark about what happens the following day.
Here, the significance of insurance in a long-term plan rises. It's because insurance is all about giving financial protection that helps us take care of ourselves, our families, and our 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 extend another income arm, to restore the earning ability.
2. To sponsor college education 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. The HDFC Life Insurance Company Ltd. is one of the most reputed private life insurance companies for the Indian citizens, who can avail of a wide range of life insurance plans and packages that the company brings.
Founded in 2000, headquartered in Mumbai, HDFC is a subsidiary of Housing Finance Development Corporation (HDFC), and Standard Life, Abrdn, which operates as a long-term life insurance provider, which brings an array of individual and group insurance services.
HDFC Life Insurance Company Highlights
|Startup Name||HDFC Life Insurance Company Ltd.|
|Owned by||HDFC, and Standard Life, Abrdn|
|Industry||Insurtech, Insurance, Fintech|
|CEO||Vibha Padalkar (CEO and MD)|
About HDFC Life Insurance Company
HDFC Life Insurance History
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?
About HDFC Life Insurance Company
When we talk about life insurance companies, there are numerous such companies that strike our minds, out of which HDFC life is one of the prominent ones. HDFC refers to Housing Development Finance Corporation, which is a leading long-term life insurance solutions provider along with being a huge banking institution. HDFC currently boasts of having 421+ branches and operates in over 980 cities, villages and towns in India. The company is presently working with a whopping 16544+ people. Furthermore, the HDFC Life parent organization, HDFC Bank is hailed as the 3rd largest firm on the Indian product exchanges. Besides, it is also identified as the 19th largest employer in India, with the gigantic workforce it operates with.
Areas of operation
Since 23 October 2000, HDFC Life Insurance company has been serving as a trusted life insurance organization, which is currently spread in over 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.
The 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. Its overall strategy is to target audiences by establishing its presence on the three most prominent social media platforms: Twitter, Facebook, and YouTube.
HDFC Life Insurance History
HDFC Life Insurance was incorporated on August 14, 2000, and currently stands owned by HDFC Ltd and Standard Life. The HDFC bank now wants to own some additional stakes in the Life Insurance segment of HDFC Ltd to cross the 50% mark in shareholding. For this, the HDFC bank has written to RBI on April 5, 2022, requesting the approval of owning 47.82% shares that HDFC Ltd. owns in HDFC Life, or buying additional shares from the market and thereby, increase its holding to over 50%.
Starting in the month of August 2000, the HDFC life insurance corporation had successfully obtained the certificate of commencement of business not earlier than October 12, 2000. Furthermore, it was on October 23, 2000, that it obtained the certificate of registration from the Insurance Regulatory and Development Authority of India (IRDAI) to undertake the life insurance business. From here, to have partnerships with over 39 non-traditional ecosystems along with possessing a multi-channel network, consisting of Insurance agents, Bancassurance partners, a Direct channel, Insurance Brokers, MFIs, SFBs and more, the journey of HDFC Life Insurance is fascinating indeed!
Business Model Of HDFC Life Insurance Company
The HDFC Life has already evolved from a product-centric to a customer-centric model of approach. It needed to set the customers in 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, which it is continuing to work on.
Everything and everyone 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. The company is working on it and presently created a robust customer approval architecture; you would see businesses striding into the successive era of customer-centricity.
The life insurance company of HDFC has classified its product portfolio that 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 decide when, how, and with whom to share the data is the key.
It could be related to his/her health, finances, identity, location, driving records, and anything else produced (only) on the customer's 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 only with the person. With such an architecture, insurers would be able to personalize, price better and even serve better!
A consumer who provides the insurer access to their medical data constantly can be given bonuses for updating, enhancing, and maintaining their health metrics in a more organized way than the average consumer.
Similarly, an individual who shares his/her driving data can look forward to discounts on machine protection on the back of their 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.
It's a prominent financial business company in India that has always been fulfilling and ensuring quality services. It has developed an enviable foothold in the market as a finance and insurance provider.
How does HDFC Life Insurance Company make money?
HDFC Life Insurance Company makes money primarily via its life insurance plans, which are laid out as:
- Protection Plans
- Health Plans
- Children's Plans
- Savings Plans
- Retirement Plans
- SHAURYA Plans
- ULIP Plans
- Group Insurance Plans
- Discontinued Insurance Plans
- Rural and Social Plans
Now, 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
With a well-prepared business model, the company has generated healthy revenue. HDFC Life keeps checking the rate of inflow and outflow, which helps it manage its revenue. The company has reported a 3% increase in its net Q3 profits, which rose from INR 264.99 cr to INR 273.65, whereas the total revenue of HDFC Life has significantly decreased from INR 21126 cr to INR 14222 cr, as of January 2022.
The above study on HDFC Life Insurance Company states all its key products and services to the insurers by making it a profitable business through 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.
What is the full form of 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 Ltd. and Standard Life, Abrdn are the owners 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.
Which is the HDFC bank parent organization?
The HDFC bank's parent organizations are HDFC Ltd. and Standard Life, Abrdn.