Swot Analysis of Hdfc Standard Life Insurance

Analysis of the industry’s environment

(SWOT Analysis)
HDFC and Standard Life first came together for a possible joint venture, to enter the life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995, the companies signed a 3-year joint venture agreement.
STRENGTH
1. Domestic image of HDFC supported by Prudential’s international image is strength of the company.
2. Strong and well spread network of qualified intermediaries and sales person.
3. Strong capital and reserve base.
4. The company provides customer service of the highest order.
5. Huge basket of product range which are suitable to all age and income groups.
6. Large pool of technically skilled manpower with in depth knowledge and understanding of the market.
7. The company also provides innovative products to cater to different needs of different customers.
WEAKNESS
1. Heavy management expenses and administrative costs.
2. Low customer confidence on the private players.
3. Vertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any exception.
4. Poor retention percentage of tied up agents.

OPPORTUNITIES
1. Insurable population –According to ING only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured.
2. There will be inflow of managerial and financial expertise from the world’s leading insurance markets. Further the burden of educating consumers will also be shared among many players.
3. International companies will help in building world class expertise in local market by introducing the best global practices.
4. Insurance liberalization in India is expected to result in a wider choice of major commercial insurance covers, such as fire, export credit, and product liability etc.
THREATS
Major challenges in a competitive environment are as follows: -
1. Regular entering of the new life insurance companies the market growing day by day.
2. The global bigwigs entering the insurance market have expertise in the field and are in a position to drive the market through their core competence in insurance.
3. Liberalization in this sector will cause market disorder because of fierce competition and the domestic insurers will lose their base.
4. Competition will bring pressure on profit margins and underscore the need for better control on claims, cost and management expenses.
5. The company is also facing some threat from the existing private players in the industry.

6. Due to entry of banking sector to underwrite the insurance business, it will pose a serious challenge in motor and personal lines of insurance with their wide area network of branches and their strong customer relationships. Like SBI Life Insurance.

Analysis of the nature and strength of competitive forces (Porter’s Five Force model)

An industry analysis usually begins with a general examination of the forces influencing the organization. The objective of such study is to use this to develop the competitive advantage of the organization to enable it to defeat its rival companies. So, in order to overview the industry environment (Competition), which the HDFC Standard Life Insurance Company is confronting, can be better evaluated with the help of the Porter’s five forces model.