28898210 kotak project
TRANSCRIPT
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Summer training PROJECTREPORT
ON
Consumer Investment & Buying Behaviourat Kotak Life Insurance
of
KOTAKLIFE
INSURANCE
Submitted In the Partial Fulfillment for the Award of the Degree
Of
MASTER OF BUSINESS ADMINISTRATION
Session 2009-1011
Submitted to: Submitted by:
Dr. Amit kumar tirpathi ANJANI DAYAL SRIVASTAVA
(H.O.D) ROLL NO:0935370004
MBA 3RD SEM
APOLLO INSTITUTE OF
TECHONOLOGY
KANPUR
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Declaration
I declare that the project entitled A STUDY ON A INSURANCE
COMPANY (Conducted on behalf ofKOTAK LIFE INSURANCE LTD,
civil line kanpur) under the guidance ofMr. Amit kumar tripathi submitted
in partial fulfillment of the requirement for the award of the degree ofMasters
in Business Administration to Gautam budh technical
universityLucknow is my original work carried out during 1June, 2010 to
1agust, 2010, and not submitted for the award of any other degree, diploma,
fellowship or other similar or prize to any other institute, organization or
university by any other person.
ANJANI DAYAL SRIVASTAVA
MBA 3RD
SEM
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Certificate of the Organisation
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APOLLO INSTITUTE OFTECHNOLOGY(Approved by AICTE, New Delhi & Affiliated to G.B.T.U., Lucknow)
Village- Sundhela, Block- Sarsaul, Kanpur Allahabad Highway, KanpurPhone: 0512-2752111, 2752113, Fax No: 0512-2752114
Certificate of the Institute
I have the pleasure to certify that Mr. Anjani Dayal Srivastava, a student of
2nd year (Full-Time) Master of Business Administration program ofGautam
Budha Technical University, Lucknow, is bonafide student of our Institute.
The dissertation titled/project report Consumer Investment &
Buying Behaviour at Kotak Life Insurance is a record of
original research work carried out by Mr. Anjani Dayal Srivastava under my
supervision and guidance ofMr.Ravindra bhatiya and no part of this report
has been submitted for the award of any other degree, diploma, fellowship or
any other similar title or prize.
Dr. Amit Kumar Tripathi
H.O.D (Management Department)
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Acknowledgement
In preparation of this report by me, I feel great pleasure because it gives me extensive
practical knowledge in my career. I get idea about Indian Life Insurance Industry by this
project.
I express my deep sense of gratitude to My Company Guide Mr. Vishal Kumar
(ABM), Mr. Surabh mahana (SM) for his valuable guidance during my project work. I also
like to all staff of Kotak Life Insurance who guide me in project work directly or indirectly to
complete my training project.
I am thankful to Mr. Ravindra Bhatia (Faculty Guide) for valuable inspiration and
guidance provided me throughout the course of this project. They have patient and critically
gone the subject matter.
I would like to take opportunity to express my gratitude towards all of them who have
contributed directly or indirectly in my project work.
At last I would like to extend my deep sense of gratitude to my friends, colleagues
and each individual who directly or indirectly help me during the project work.
ANJANI DAYAL SRIVASTAVA
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Table of Contents :-
1. Executive summary... 8
2. Company Profile....11
3. Objectives of the Research13
4. Literature Review ........................14
5. Research Methodology 26
6. Data Analysis & Interpretation...29
7. Finane.55
A}Working capital management..58
B}Ratio analysis..59
8 Conclusions and Recommendations...70
8. Limitations...74
9. Bibliography / References.....................76
10.Appendices.....77
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Executive Summary
Executive Summary :-
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I was given the opportunity to pursue my training in KOTAK LIFE INSURANCE for a
period of 2 months. My project is titled Consumer Investment & Buying Behaviour at
Kotak Life Insurance.
The basic project objectives are as follows:-
To study consumer investment behaviour
To study brand awareness of Kotak
Comparison of ULIPs.
To discuss various new avenues in insurance and find the Market potential of
ULIP in NCR region (Delhi).
As a part of my project I was required to carry out two surveys.
The following vital conclusions were derived:
Trust needs to be developed among the customers both as far as the ULIP
as
a product is concerned
Some respondents despite of knowing about ULIP were hesitant to talk on
it
because they were not too confident about their knowledge. This very fact
completely declines the concept of providing switches as a lucrative feature
in ULIP (which is done by most of the companies). The reason is that very
rarely people have the ability or time to use these features.
Important Recommendations that were suggested are:
Building trust by providing the customers with adequate knowledge about
the company and then the product.
Enhancing the level of awareness in terms of the company, their Partners
and then the product and special emphasis among the female chunk of the population.
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Adequate advertisement via appropriate media should be done by the
various
companies as is done in the case of mutual Funds.
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a
strong and powerful supervisory and regulatory authority for insurance. Post nationalization,
the role of Controller of Insurance diminished considerably in significance since the
Government owned the insurance companies.
But the scenario changed with the private and foreign companies
foraying in to the insurance sector. This necessitated the need for a strong, independent and
autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would
have taken time, the then Government constituted through a Government resolution an
Interim Insurance Regulatory Authority pending the enactment of a comprehensive
legislation.
The Insurance Regulatory and Development Authority Act, 1999 is an
act to provide for the establishment of an Authority to protect the interests of holders of
insurance policies, to regulate, promote and ensure orderly growth of the insurance industry
and for matters connected therewith or incidental thereto and further to amend the Insurance
Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business
(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its subsidiaries (for
general insurance business).
The act extends to the whole of India and will come into force on such date
as the Central Government may, by notification in the Official Gazette specify. Different
dates may be appointed for different provisions of this Act.
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The Act has defined certain terms; some of the most important ones are as
follows: Appointed day means the date on which the Authority is established under the act.
Authority means the established under this Act.
Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd January,
1996.
Words and expressions used and not defined in this Act but defined in the
Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General Insurance
Business (Nationalization) Act, 1972 shall have the meanings respectively assigned to them
in those Acts
A new definition of "Indian Insurance Company" has been
inserted. "Indian insurance company" means any insurer being a company
(a) Which is formed and registered under the Companies Act, 1956
(b) in which the aggregate holdings of equity shares by a foreign company, either by itself or
through its subsidiary companies or its nominees, do not exceed twenty-six percent, Paid up
capital in such Indian insurance company .
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Company Profile
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Stock broking businesses in the UK. Kotak Group was established in 1985.Kotak
Mahindra Bank is the parent company of the group. Kotak Group entered into the life
insurance business in 2001. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture
between Kotak Mahindra Bank Ltd. (74%) and Old Mutual plc. (26%) Old Mutual plc is a
world-Class international financial services company. It was established in South Africa
before 160 years.
OLD MUTUAL is the largest financial services business in South Africa, through its
life insurance, asset management, banking and general insurance operations. The company
serves 4 million life insurance policyholders and employs over 13 000 South Africans in its
local operations.
In the USA, OLD MUTUAL is one of the top ten fixed annuity businesses offering an
array of specialist asset management skills through its 23 asset management businesses. The
companys US Life business recorded sales of $4 billion at the end of 2002.
Operations in the United Kingdom are focused on wealth management, through Gerrard
as one of the leading private client
The OLD MUTUAL Group has the ability to cater for a variety of consumer segments
and offers a comprehensive and innovative range of products for all income groups.
Objectives of the Research
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The main motto of the present study accomplishes the following objectives :-
To know about brand awareness of Kotak Life Insurance and potential customersperception for investment in ULIP.
To estimate and analyze the MARKET POTENTIAL OF ULIP in a particular region(Delhi).
To know about the Tax benefits under ULIP Plan :-
Life insurance plans are eligible for deduction under Sec. 80C ,
Pension plans are eligible for a deduction under Sec. 80CCC ,
Health insurance plans and critical illness riders are eligible for deduction under Sec. 80D ,
The maturity proceeds or withdrawals oflife insurance policies are exempt under Sec10(10D).
To generate the premium in timely manner.
To identify the qualities for a good financial Advisor to enhance the business, of thecompany at the particular duration of time.
Literature Review
13
http://www.iciciprulife.com/public/Life-plans/Life-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Retirement-Plans/LifeLink-Super-Pension.htmhttp://www.iciciprulife.com/public/Health-plans/About-health-insurance.htmhttp://www.iciciprulife.com/public/default.htmhttp://www.iciciprulife.com/public/default.htmhttp://www.iciciprulife.com/public/Life-plans/Life-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Retirement-Plans/LifeLink-Super-Pension.htmhttp://www.iciciprulife.com/public/Health-plans/About-health-insurance.htmhttp://www.iciciprulife.com/public/default.htm -
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Overview of LIFE INSURANCE:-
Life insurance is a form of insurance that pays monetary proceeds upon the death of the
insured covered in the policy. Essentially, a life insurance policy is a contract between the
named insured and the insurance company wherein the insurance company agrees to pay an
agreed upon sum of money to the insured's named beneficiary so long as the insured's
premiums are current.
With a large population and the untapped market area of this population
insurance happens to be a very big opportunity in India. Today it stands as a business
growing at the rate of 15-20% annually. Together with banking services, it adds about 7
percent to the countrys GDP. In spite of all this growth statistics of the penetration of the
insurance in the country is very poor. Nearly 80% of Indian populations are without life
insurance cover and the health insurance. This is an indicator that growth potential for the
insurance sector is immense in India.
It was due to this immense growth that the regulations were introduced in
the insurance sector and in continuation Malhotra Committee was constituted by the
government in 1993 to examine the various aspects of the industry. The key element of the
reform process was participation of overseas insurance companies with 26% capital. Creating
a more competitive financial system suitable for the requirements of the economy was the
main idea behind this reform.
Since then the insurance industry has gone through many changes. The
liberalization of the industry the insurance industry has never looked back and today stand as
one of the most competitive and exploring industry in India. The entry of the private players
and the increased use of the new distribution are in the limelight today. The use of new
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distribution techniques and the IT tools has increased the scope of the industry in the longer
run.
Insurance is the business of providing protection against financial aspects of risk, such as
those to property, life health and legal liability. It is one method of a greater concept known
as risk management which is the need to mange uncertainty on account of exposure to loss,
injury, disadvantage or destruction.
The business of insurance is related to the protection of the economic
values of assets. Every asset has a value. The asset would have been created through the
efforts of the owner. The asset is valuable to the owner, because he expects to get some
benefit from it. The benefit may be an income or in some other form.
In India, insurance began in 1818 with life insurance being transacted by an
English company. The first insurance company was the Bombay mutual assurance society ltd,
formed in 1870 in Mumbai. Insurance helps to reduce the consequences of adverse situation.
Insurance is the method of spreading and transfer of risk. The fortunate many who are
exposed to some or similar risk shares loss of the unfortunate. Insurance does not protect the
assets but only compensates the economic or financial loss.
In insurance the insured makes payment called premiums to an insurer,
and in return is able to claim a payment from the insurer if the insured suffers a defined type
of loss. This relationship is usually drawn up in a formal legal contract.
Insurance companies also earn investment profits, because they have the
use of the premium money from the time they receive it until the time they need it to pay
claims. This money is called the float. When the investments of float are successful they may
earn large profits, even if the insurance company pays out in claims every penny received as
premiums. In fact, most insurance companies pay out more money than they receive in
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premiums. The excess amount that they pay to policyholders is the cost of float. An insurance
company will profit if they invest the money at a greater return than their cost of float.
An insurance contract or policy will set out in detail the exact
circumstances under which a benefit payment will be made and the amount of the premiums.
Marine insurance is the oldest type of insurance and one of the earliest
records of a marine policy relates to a Mediterranean voyage in 1347. This was followed by
life insurance some 300 years later. Fire insurance, however, did not begin until after the
Great fire of London in 1666. In India all the three insurance developed as under:
INSURANCE Security against a contingent loss.
Where ever there is uncertainty there is risk. The risk cannot be averted. The risk is
uncertainty of the financial loss .we dont have any command on uncertainties. This makes it
is essential that we think in favor of advice that becomes instrumental in spreading the loss. It
is in this context that we think about Insurance, which is considered to be a social device to
accumulate funds to meet uncertain losses.
The Main Functions of Insurance are :-
It provides protection against the possible changes of generating losses.
It eliminates worries to miseries of losses of poverty and death.
It provides capital to national economy since the accumulated funds are
invested in productive heads.
The insurance industry in India can broadly classify in two parts. They are.
1) Life insurance.
2) Non-life (general) insurance.
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1. Life Insurance:-
Life insurance can be defined as life insurance provides a sum of money
if the person who is insured dies while the policy is in effect.
In 1818 British introduced to India, with the establishment of the oriental life
insurance company in Calcutta. The first Indian owned Life Insurance Company; the Bombay
mutual life assurance society was set up in 1870. The life insurance act, 1912 was the first
statuary measure to regulate the life insurance business in India. In 1983, the earlier
legislation was consolidated and amended by the insurance act, 1938, with comprehensive
provisions for detailed effective control over insurance. The union government had opened
the insurance sector for private participation in 1999, also allowing the private
Companies to have foreign equity up to 26 %. Following the opening up of the
insurance sector, 12 private sector companies have entered the life insurance business.
Benefits:-
Life insurance encourages saving and forces thrift.
It is superior to a traditional savings vehicle.
It helps to achieve the purpose of life assured.
It can be enchased and facilitates quick borrowing.
It provides valuable tax relief.
Thus insurance is found to be very useful in the lives of the person both in short
term and long term.
Fundamental principles of life insurance contract:-
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A. Principle of good faith:A positive duty to voluntary disclose, accurately and fully, all facts,
material to the risk being proposed whether requested or not.
B. Principle of Insurable Interest:
Relationships with the subject matter (a person) which is recognized
in law and gives legal right to insure that person.
2. Non-Life (general) Insurance:-
Triton insurance co. ltd was the first general insurance
company to be established in India in 1850, whose shares were mainly held by the British.
The first general insurance company to be set up by an Indian was Indian mercantile
insurance co. Ltd., which was stabilized in 1907. There emerged many a player on the Indian
scene thereafter.
The general insurance business was nationalized after the promulgation of General
Insurance Corporation (GIC) OF India undertook the post-nationalization general insurance
business.
Brief history of Insurance Sector in India:-
The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and disaster
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existed in primitive men also. They too sought to avert the evil consequences of fire and
flood and loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the recent past,
particularly after the industrial era past few centuries yet its beginnings date back almost
6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and these
companies were not insuring Indian natives. However, later with the efforts of eminent
people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian
lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums
were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of
first Indian life insurance company in the year 1870, and covered Indian lives at normal rates.
Starting as Indian enterprise with highly patriotic motives, insurance companies came into
existence to carry the message of insurance and social security through insurance to various
sectors of society. Bharat Insurance Company (1896) was also one of such companies
inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance
companies. The United India in Madras, National Indian and National Insurance in Calcutta
and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-
operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the
great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and
Swadeshi Life (later Bombay Life) were some of the companies established during the same
period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912,
the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life
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Insurance Companies Act 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 Crore, it rose to 176
companies with total business-in-force as Rs.298 Crore in 1938. During the mushrooming of
insurance companies many financially unsound concerns were also floated which failed
miserably. The Insurance Act 1938 was the first legislation governing not only life insurance
but also non-life insurance to provide strict state control over insurance business. The demand
for nationalization of life insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January 1956 that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the
19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing them adequate
financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long-term contracts and
during the currency of the policy it requires a variety of services need was felt in the later
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years to expand the operations and place a branch office at each district headquarter. Re-
organization of LIC took place and large numbers of new branch offices were opened. As a
result of re-organization servicing functions were transferred to the branches, and branches
were made accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 Crore of New Business in 1957 the corporation crossed
1000.00 Crore only in the year 1969-70, and it took another 10 years for LIC to cross
2000.00 Crore mark of new business. But with re-organization happening in the early
eighties, by 1985-86 LIC had already crossed 7000.00 Crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers 100
divisional offices and connects all the branches through a Metro Area Network. LIC has tied
up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at
Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives which
inspired our forefathers to bring insurance into existence in this country inspire us at LIC to
take this message of protection to light the lamps of security in as many homes as possible
and to help the people in providing security to their families.
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Some of the important milestones in the life insurance business in Indiaare:-
1850 Non life insurance debuts with triton insurance company. 1870 Bombay mutual
life assurance society is the first Indian owned life insurer
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 to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 Crore from the Government of India.
The General insurance business in India, on the other hand, can trace its
roots to the Triton Insurance Company Ltd., the first general insurance company established
in the year 1850 in Calcutta by the British. Some of the important milestones in the general
insurance business in India are:
1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
1957 General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices.
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1968 The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the
general insurance business in India with effect from 1st January 1973. 107 insurers
amalgamated and grouped into four companies viz. the National Insurance Company
Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and
the United India Insurance Company Ltd. GIC incorporated as a company.
Insurance Sector Reforms:-
In 1993, Malhotra Committee, headed by former Finance Secretary
and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and
recommend its future direction.
The Malhotra committee was set up with the objective of complementing
the reforms initiated in the financial sector. The reforms were aimed at creating a more
efficient and competitive financial system suitable for the requirements of the economy
keeping in mind the structural changes currently underway and recognizing that insurance is
an important part of the overall financial system where it was necessary to address the need
for similar reforms In 1994, the committee submitted the report and some of the key
recommendations included.
1997 Insurance regulator IRDA set up
2000 IRDA starts giving licenses to private insurers: Kotak Life Insurance, ICICI
prudential and HDFC Standard Life insurance first private insurers to sell a policy
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2001 Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks
allowed selling insurance plans.
Existing Insurance Companies:-
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Research Methodology:-
Research always starts with a question or a problem. Its purpose is to question through the
application of the scientific method. It is a systematic and intensive study directed towards a
more complete knowledge of the subject studied. Marketing research is the function which
links the consumer, customer and public to the marketer through information- information
used to identify and define marketing opportunities and problems generate, refine, and
evaluate marketing actions, monitor marketing actions, monitor marketing performance and
improve understanding of market as a process.
Marketing research specifies the information required to address these issues, designs, and
the method for collecting information, manage and implemented the data collection process,
analyses the results and communicate the findings and their implication.
I prepared my project as Exploratory as well as Qualitative Research type, as the objective
of the study demands the answers of the question related to find the potentiality of life
insurance in the city.
The Marketing Research Process
As marketing research is a systemic and formalized process, it follows a certain sequence of
research action. The marketing process has the following steps:
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QUANTITATIVE RESEARCH
To give numerical evidence to the research, Survey Method has been adopted.
Questionnaires have been used to collect Primary data for the research. Questionnaire help
in easy quantification and this is a quick and cheaper method, since time and financial
constraints were there. This way, larger sample size could be used from sources situated at
other cities as well. A Five point Graphic Rating Scale or Likert Scale has been used in this
research to find out the degree of agreement of respondents with given statements relating to
subject.
Research Design
In ourlive project, we decided primary data collection method because our study nature does
not permit to apply observational method. In survey approach we had selected a questionnaire
method for taking a customer view because it is feasible from the point of view of our subject
& survey purpose. We conducted 50 sample of survey in our project in Delhi region.
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Data Analysis and Interpretation:-
In it through the help of questionnaires we conducted the research and these are as below:-
Statement 1 :- Annual Income of the people.
Lac
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30%8%12%
50%
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Statement 2:- People want to Invest their surplus Money.
F i x e d D e p o s i t
M u tu a l F u n d s (
S t o c k s (1 5 % )
R e a l E s t a t e (1
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Statement 3 :- Benefits required by the people regarding theirInvestments.
Saving (28%)
High Returns (4
Tax-rebates (12
Ris k-c over (30%
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Statement 4:- Expectations from the Life Insurance Companies.
32
0
10
20
30
40
50
60
High-rtrn
(20%)
Liquidity
(13%)
Security
(52%)
Lower
Premium
(15%)
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Statement 5:- Preference among various Insurance Plans
33
0
5
10
15
20
25
30
35
Term-cover
(18%)
Endo-wment
(33%)
Child
advantage
(21%)
Pension
scheme
(6%)
Unit link
(22%)
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Statement 6:- Customers awareness about the Product
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
LIC
ICICITATA AIG
BIRLA
KLI
HDFC
Bajaj Allianz
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Statement 7:- At an age point people have taken Insurance-policy
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Statement 8:- Occupation Group
36
0
5
10
15
20
25
30
35
20 - 30Yr. (33%)Yr. (31%)
41 - 50Yr. (22%)
Above 50Yr. (14%)
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G o vt .
E m p lo y e e (1
P r iva t e
E m p . (5 2 % )
B u s .
P r o fe s s i o n a l
O t h e r s (1 2 %
Statement 9:- Awareness about Unit Linked Investment Plan
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Statement 10:- Company which ULIPs you have taken
38
0
10
20
30
40
50
60
70
Yes (30%) No (70%)
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39
0
10
20
30
40
50
60
ICICIPrudential(50%)
HDFC
Standard(15%)
KLI(17%)
Others (18%)
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Statement 11:- Peoples interest of investing in KLI
40
0
10
20
30
40
50
60
Intd. (15%) Semi-intd.(30%)
Not Interested(55%)
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Statement 12:- Medium to select KLI.
In s u r a n c e C o n s
(1 2 % )
R e la t ive s (2 5 % )
A d ve rt is e m e n t (
O t h e r S o u rc e s (
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KOTAK MAHINDRA OLD MUTAL PLC KOTAK LIFE
BANK INSURANCE
( 74% ) ( 26% ) ( 100% )
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Old Mutual Plc:-
Old Mutual was established more than 150 years ago. Old mutual plc, Is a
world-class international financial service company. It owns the largest companies in the
following areas in South Africa.
They are:
1. Life Insurance Company
2. Asset Management Company
3. Bank
4. Non-life insurance company
It has been developed into an International financial services group whose activities
are focused on asset gathering and asset management. The Old Mutual Group offers a diverse
range of financial services in three principal geographies: South Africa, the United States and
the United Kingdom. The company is listed on the London Stock Exchange with a market
capitalization of approximately $6 billion and is a member of the elite FTSE 100 index. In the
2003 rankings of the World's 500 largest corporations by Fortune magazine, Old Mutual
climbed 87 places to position number 366 and was also listed as the 14th largest insurance
company in the world.
Old Mutual is the largest financial services business in South Africa, through its life
insurance, asset management, banking and general insurance operations. The company serves
4 million life insurance policyholders and employs over 13 000 South Africans in its local
operations.
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In the USA, Old Mutual is one of the top ten fixed annuity businesses
offering an array of specialist asset management skills through its 23 asset management
businesses. The companys US Life business recorded sales of $4 billion at the end of 2002.
Operations in the United Kingdom are focused on wealth management, through
Gerrard as one of the leading private client stock broking businesses in the UK.
The Old Mutual Group has the ability to cater for a variety of consumer
segments and offers a comprehensive and innovative range of products for all income groups.
Kotak Mahindra Old Mutual Life Insurance
A 26%-74% Joint venture between Old Mutual plc and KotaK Mahindra Bank Ltd.
Started operations May 2001
209% growth in premium income (year ending March 2005)
Presence in 55 cities across the country
More than 1,60,000 policies issue (year ending March 2005)
More than 7000 Life Advisors ( year ending March 2005)
Over 1000 professional employees (year ending March 2005)
44 branches in 31 cities.
7500 life advisors.
1000employees of very good quality.
Ranks 2nd in terms of average premium per policy.
Ranks 4th in total advertising awareness.
First year premium income:
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2001-02: 7Crores
2002-03: 35Crores
2003-04: 125Crores
2005-06: 373Crores
2006-07: 396Crores
2007-08: 614Crores
2008-09: 947Crores
AWARDS
2004
Best equity House in India by Euro Money
Best Equity House in India by Asia Money
2005
Indias Best Equity House in India by Finance Asia
Best Equity House in India by Euro Money
Best Equity House in India by Asia Money
Best India Equity House by IFR
2006
Best Broker in India by Finance Asia
Best Equity House in India by Euro money
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The basic step of any research is to find out the problem of the company, the problem
may be inside in the company or outside of the company. Well Defined problem is half
solved. The researcher has defined the problem of the organization which is converted in to
the study topic.
To study the organizational activities of all the department with the help of
secondary as well as primary data collection method
Promoters:
Kotak Mahindra Private Ltd.
Kotak Mahindra Prime Limited (KMPL) is a 100% subsidiary of Kotak
Mahindra Group (Kotak Group) formed to finance all passenger vehicles. The company is
dedicated to financing and supporting automotive and automotive related manufacturers,
dealers and retail customers. The Company offers car financing in the form of loans for the
entire range of passenger cars and multi utility vehicles. The Company also offers Inventory
funding to car dealers and has entered into strategic arrangement with various car
manufacturers in India for being their preferred financier.
As on March 31, 2005, KMP has a retail distribution network comprising of
54 branches (including representative offices) covering about 100 locations in 17 states in the
country and has a wide network of Direct Marketing Associates, brokers and agencies
supporting the distribution network and servicing around 113,000 customers.
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Kotak Mahindra Bank Ltd.
Kotak Mahindra Bank Limited (KMBL) is the holding company and the
flagship of the Kotak Mahindra Group. It was actually incorporated as Kotak Capital
Management Finance Limited on November 2, 1985 and obtained its Certificate of
Commencement of Business on February 11, 1986.
It commenced operations with Bill Discounting and soon started other fund-
based activities like corporate leasing & hire purchase, automobile finance and money market
operations. Subsequently, it also entered the funds syndication and the Investment banking
business.
Old Mutual Plc
It has been developed into an International financial services group whose
activities are focused on asset gathering and asset management. The Old Mutual Group offers
a diverse range of financial services in three principal geographies: South Africa, the United
States and the United Kingdom. The company is listed on the London Stock Exchange with a
market capitalization of approximately $6 billion and is a member of the elite FTSE 100
index. In the 2003 rankings of the World's 500 largest corporations by Fortune magazine, Old
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Co-Operative Bank, Renuka Nagrik Sahakari Bank, Amanath Co-Operative Bank, Arvind
Sahakari Bank, Bhandara Urban Co Operative Bank.
SALES DISTRIBUTION:
Tied Agency:
Tied Agency is the largest distribution channel of Kotak Life, comprising a
large advisor force that targets various customer segments. The strength of tied agency lies in
an aggressive strategy of expanding and procuring quality business. With focus on sales &
people development, tied agency has emerged as a robust, predictable and sustainable
business model.
Bank assurance and Alliances:
Kotak life was a pioneer in offering life insurance solutions through banks and
alliances. Within a short span of two years, and with nearly a large number of partners, B &
A has emerged as a vital component of the companys sales and distribution strategy,
contributing to approximately one third of companys total business. The business philosophy
at B&A is to leverage distribution synergies with our partners and add value to its customers
as well as the partners. Flexibility, adaptation and experimenting with new ideas are the
hallmarks of this channel.
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Market Share:-
Life Insurance Companys Market share Based On premium in India.
YEAR 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
L.I.C 98% 94% 87% 78% 72% 69%
K.L.I 2% 6% 13% 22% 28% 31%
Industry growth rate at 31% (2008-09) with premium income From new Business.
What is customer satisfaction?
Customer satisfaction refers to how satisfied customers are with the products or services they
receive from a particular agency. The level of satisfaction is determined not only by the
quality and type of customer experience but also by the customers expectations.
A customer may be defined as someone who:
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has a direct relationship with, or is directly affected by your agency and
Receives or relies on one or more of your agencys services or products.
Customers in human services are commonly referred to as service users, consumers or
clients. They can be individuals or groups.
An organization with a strong customer service culture places the customer at the centre of
service design, planning and service delivery. Customer centric organizations will:
determine the customers expectations when they plan
listen to the customer as they design
focus on the delivery of customer service activities
Value customer feedback when they measure performance.
Why is it important?
There are a number of reasons why customer satisfaction is important in Insurance Sector:
Meeting the needs of the customer is the underlying rationale for the existence of
community service organizations. Customers have a right to quality services that
deliver outcomes.
Organizations that strive beyond minimum standards and exceed the expectations of
their customers are likely to be leaders in their sector.
Customers are recognized as key partners in shaping service development and
assessing quality of service delivery.
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The process for measuring customer satisfaction and obtaining feedback on organizational
performance are valuable tools for quality and continuous service improvement.
Insurance Solutions for Individuals:
Kotak Life Insurance offers a range of innovative, customer-centric products that meet the
needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to
create a customized solution for each policyholder.
Protection
Helping you to grow and protect
your wealth.
Savings & Investments
Manage today for a better
tomorrow.
Retirement
The road to retirement, Make it
easy
Child
Plan a good future for your
child.
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Finance
The field of finance refers to the concepts of time, money and risk and how they are
interrelated. Banks are the main facilitators of funding through the provision of credit,
although private equity, mutual funds, hedge funds, and other organizations have become
important. Financial assets, known as investments, are financially managed with careful
attention to financial risk management to control financial risk. Financial instruments allow
many forms of securitized assets to be traded on securities exchanges such as stock
exchanges, including debt such asbonds as well as equity in publicly-traded corporations.
The main techniques and sectors of the financial industry:-
Finance is used by individuals (personal finance), by governments (public finance),
by businesses (corporate finance), as well as by a wide variety of organizations including
schools and non-profit organizations. In general, the goals of each of the above activities are
achieved through the use of appropriate financial instruments and methodologies, with
consideration to their institutional setting.
Corporate finance
Managerial orcorporate finance is the task of providing the funds for a
corporation's activities. For small business, this is referred to as SME finance. It generally
involves balancing risk and profitability, while attempting to maximize an entity's wealth and
the value of its stock.
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Long term funds are provided by ownership equity and long-term credit, often in
the form ofbonds. The balance between these forms the company's capital structure. Short-
term funding orworking capital is mostly provided by banks extending a line of credit.
Another business decision concerning finance is investment, or fund
management. An investment is an acquisition of an asset in the hope that it will maintain or
increase its value. In investment management in choosing a portfolio one has to decide
what, how much and when to invest. To do this, a company must:
Identify relevant objectives and constraints: institution or individual goals, time
horizon, risk aversion and tax considerations;
Identify the appropriate strategy: active v. passive hedging strategy
Measure the portfolio performance
Financial management is duplicate with the financial function of the
Accounting profession. However,financial accounting is more concerned with the reporting
of historical financial information, while the financial decision is directed toward the future
of the firm.
The Accounts of the Authority for the financial year 2007-08 have been audited
by the Comptroller and Auditor General of India (C&AG). C&AG, in their draft separate
audit report, has advised revision in the accounts due to some wrong classifications. The
same has been carried out. A copy of revised accounts for the year 2007-08 is placed at
Annexure. X. The revised accounts are under submission to C&AG and final report on the
same is awaited.
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A) WORKING CAPITAL MANAGEMENT
Working capital refers to that part of the firms capital which is required for
financing short-term or current assets, such as, cash, marketable securities, debtors,
inventories, bills receivable etc. the assets of this type are relatively temporary in nature.
Unfortunately, there is much disagreement among financiers, accountant, economics and
businessmen as to the exact meaning of the team working capital
However, working capital is also known as circulating capital or short term
capital. Working capital can be derived by the deference between current assets and current
liabilities of the firm.
GROSS WORKING CAPITAL= TOTAL CURRENT ASSETS
WORKING CAPITAL= CURRENT ASSETS CURRENT LIABILITIES
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Working capital = Current Assets Current Liabilities
For year 2009
Working Capital = C.A C.L
= 1,69, 28,070- 91,42,090
= 77,85,980
For year 2008
Working Capital = C.A C.L
= 91,42,090 84,56,720
= 6, 85,370
60
Particular 2009 2008
Current Assets
Cash and Bank Balances 1,24,86,44
0
57,09,840
Advances and Other Assets 44,41,630 34,32,250
Sub-Total (A) 1,69,28,07
0
91,42,090
Current Liabilities 1,55,17,19
0
81,89,430
Provisions 7,09,690 2,67,290
Sub-Total (B) 1,62,26,88
0
84,56,720
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B)- RATIO ANALYSIS:
Ratio analysis isn't just comparing different numbers from the balance sheet,
income statement, and cash flow statement. It's comparing the number against previous years,
other companies, the industry, or even the economy in general. Ratios look at the
relationships between individual values and relate them to how a company has performed in
the past, and might perform in the future.
Ratio analysis is the method or process by which the relationship of items or group
of items in the financial statement are computed, determined and presented.
CURRENT RATIO:
Meaning:
This ratio compares the current assets with the current liabilities. It is also known as working
capital ratio or solvency ratio. It is expressed in the form of pure ratio.
E.g. 2:1
CURRENT RATIO = Current Assets / Current Liabilities.
Particular 31-MAR-
09
31-MAR-
08
Current Assets
Cash and Bank Balances 1,24,86,44
0
57,09,840
Advances and Other Assets 44,41,630 34,32,250
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Sub-Total (A) 1,69,28,07
0
91,42,090
Current Liabilities 1,55,17,19
0
81,89,430
Provisions 7,09,690 2,67,290
Sub-Total (B) 1,62,26,88
0
84,56,720
For year 2009
Current Ratio = C.A / C.L
= 1,69,28,070 / 1,62,26,880
= 1.04
For year 2008
Current Ratio = C.A / C.L
= 91,42,090 / 84,56,720
= 1.08
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INTERPRETATION
The current ratio in the year 2009 has decrease the current ratio as compare
to the year 2008 in steadily it indicates good liquidity of current assets.
TURNOVER RATIO / INTEREST COVERAGE RATIO / ACTIVITY RATIO
INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest
Particular 31-MAR-
09
31-MAR-
08
Profit before tax 1,096,3570 435,9510
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Less
Interest 96,3730 65,6440
Profit before interest & tax 999,9840 3703070
INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest
FOR YEAR 2009
INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest
=999,9840 / 96,3730
= 10.38%
FOR YEAR 2008
INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest
= 370,3070 / 65,6440
=5.64
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INTERPRETATION:
The current ratio in the year 2009 has decrease the current ratio as compare the year
2008 it mean that company has done less investment in interest coverage ratio or turnover
ratio.
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STRENGTHS:
I. Financial Acumen - Holds a stable and diversified portfolio and has received some
of the highest ratings in financial strength from industrys independent rating
agencies.
II. Disciplined fund management- Years of experience in asset management, and a
strong track record in managing funds - backed by the acclaimed expertise of Old
Mutual plc
III. Innovativeness- Known for being an innovator in providing world-class pragmatic
financial solutions, with a constant focus on customization and flexibility
IV. Unrelenting Customer Focus - A highly committed sales force, with customer
satisfaction as the key driving force - a major differentiator
V. Transparency in Services - Daily declaration of fund performances, regular
performance benchmarking, well regulated asset management, and monthly
newsletter on market updates
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OPPORTUNITIES:
Liberalization of Indian economy.
As the industry is growing the whole market is virgin.
The whole private sector is opened to be trapped even though the competition is fierce
from government owned insurance companies.
Its a volume business that is even if the company has few good corporate the
turnover cease to increase by manifold.
Products:
Preserver funds look good due to comfortable liquidity in the economy and
there is little chance hike in short-term rate by RBI.
Finance minister unveiled a budget favoring consumer spending, boosting
demand and therefore higher economic growth.
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THREATS
The government players will become aggressive thus growth is going to be tough.
Entry of other players is not ruled out.
Apprehension towards Kotak being a private life insurance company.
We expect the industry to rationalize in future that is mergers and acquisitions will
happen, which will impact the industry and Kotak life fortunes.
Products:
Past performance of these plans is not indicative of the future performance of
the plan.
The sum invested in the funds is subject to market risks and there can be no
assurance that the objective of plan will be achieved.
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All benefits payable under the policy are subject to tax laws and other
financial enactment, as they exist from time to time.
CONCLUSIONCONCLUSION
After analysing the all situation we come at the following conclusions:-
The important facts which we could conclude from our data regarding the buying
behavior of individuals are that people give maximum importance to the tax benefit that
they receive after investing in the unit linked insurance plan.
Regarding the acceptance of ULIP as a product over other investments it is analyzed
that though a lot of our sample population was aware about it and had invested in it but
still a lot of them (including Females) wanted to invest in it but were confused regarding
other options like mutual funds. So a lack of public awareness was encountered.
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Kotak has vast market and very firm grip on its traditional customers and monopoly
of life insurance products.
IRDA is also playing very comprehensive role by regulating norms mandating to private
players in this sector, that increases the confidence level of the customers to the private
players.
Suggestions or Recommendations
The study has provided with the useful data from the respondents. There has a lot to be
recommended. Following are the recommendations:-
There is a need for better promotion for the investment products & services. The
bank should advertise its products through television because it will reach to the
masses.
More returns should be provided on Insurance plans.
As the bank provides the Insurance facility to its customers. It should provide this
facility by tie up with the other Insurance organizations as well. The main reason is
that, the entire customers do not want Insurance of only one company. They should
have choice while selecting a suitable Insurance plans. This will definitely add to the
goodwill & profit for the insurance industry.
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Discount charges should be made available because of the severe competition within
the private players as well as the biggest threat posed by LIC and SBI.
Most of the customers as per our sample are inclined towards ICICI Prudential
because of the strong policy base and easy accessibility. So other competitors really
need to make a new brand awareness policy.
Normally ULIP has a lock-in of 3 years. This should be reduced to 1 or 2 years so as
to make it more flexible.
Findings
Talking of its the market share of the leading players it was found that
LIC rules when it comes to an age group of 50 plus due to the credibility
and trust it has gained in all past years. Where the other age groups prefer
to explore the leading private players where in our sample KLI and
ICICI prudential make a clean sweep. Other banks like HDFC were found
with a limited proportion only (according to our findings).
How to present oneself before the customer
Get out the real need from the customer
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How to handle the pressure of targets
How to work in teams
Limitations:
Some of the difficulties and limitations faced by me during my training are as follows:
Lack of awareness among the people This is the biggest limitation
found in this sector. Most of the people are not aware about the importance and the
necessity of the insurance in their life. They are not aware how useful life insurance
can be for their family members if something happens to them.
Perception of the people towards Insurance sector People still
consider insurance just as a Tax saving device. So today also there is always a rush to
buy an Insurance Policy only at the end of the financial year like January, February
and March making the other 9 months dry for this business.
Insurance does not give good returns Still today people think that
Insurance does not give good returns. They are not aware of the modern Unit Linked
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Insurance Plans which are offered by most of the Private sector players. They are still
under the perception that if they take Insurance they will get only 5-6% returns which
is not true nowadays. Nowadays most of the modern Unit Linked Insurance Plans
gives returns which are many times more than that of bank Fixed deposits, National
saving certificate, Post office deposits and Public provident fund.
Lack of awareness about the earning opportunity in the Insurance
sector People still today are not aware about the earning opportunity that the
Insurance sector gives. After the privatization of the insurance sector many private
giants have entered the insurance sector. These private companies in order to beat the
competition and to increase their Insurance Advisors to increase their reach to the
customers are giving very high commission rates but people are not aware of that.
Increased competition Today the competition in the Insurance sector
has became very stiff. Currently there are 14 Life Insurance companies working in
India including the LIC (life insurance Corporation of India). Today each and every
company is trying to increase their Insurance Advisors so that they can increase their
reach in the market. This situation has created a scenario in which to recruit Life
insurance Advisors and to sell life Insurance Policy has became very very difficult.
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BIBLIOGRAPHY / REFERENCES:-
Sr.no Book Author
1 Basic Marketing Research Churchill & Brown
2 Insurance principles & practice P.A.S.Mani.
3 Life insurance in finance Prof. O.S.Gupta.
4 Marketing management Philip kotler.
5 Marketing Research Naresh Malhotra
Web sites:-
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www.kotak.com
www.licindia.com
www.irda.org
www.lifeinsure.com
www.kotakdirect.in
www.financeindiamart.com
www.google.com
www.businesstoday.com
APPENDICES
Appendix-I
NEED ANALYSER
PERSONAL DETAIL
Name: _____________________________________
Age: ______________________________________
Address: __________________________________
__________________________________
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Mobile/Phone No: __________________________
Gender: Male Female
Marital Status: Married Unmarried
Children: ____________
Employment Status: Employed Selfemployed Unemployed
DETAIL
Saving: Yes No
Monthly Range: ____________________
Direct your savings:
1) Bank Deposits 2) Stock Market 3) Other Investment
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If Bank Deposit Why:
________________________________________________________________
_________________________________________________________
_______
Why not:
_______________________________________________________________
________________________________________________________
________
If Stock / Mutual Why:
________________________________________________________________
_______________________________________________________
_________
Other Investment:
________________________________________________________________
___________________________________________________________
_____
How much money do you need to secure your future?
Rs._________________
Any Dream: ________________________________________________________________
Do you like the KOTAK Life advisor to serve you a beneficial plan?
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Yes No
Appendix-II
QUESTIONNAIRE:-
Q1. What is your Annual income? (In lakes)
(1) 5
Q2. Where do you want to invest your surplus money?
(1) Fixed deposit
(2) Mutual funds
(3) Stocks
(4 Real Estate
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Q3. What benefits do you want from your Investments?
(1) Savings
(2) High returns
(3) Tax rebates
(4) Risk cover
Q4. What do you expect from the life insurance companies?
(1) High return
(2) Liquidity
(3) Security
(4) Low premiu
Q5. At this point of time if you were taking a life insurance plan you would like to take which
scheme?
(1) Endowment
(2) Term cover
(3) Child advantage
(4) Pension scheme
(5) Unit link
Q6. Do you know about the product of these Companies?
(1) LIC
(2) ICICI
(3) TATA AIG
(4) BIRLA
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(5) OMKM
(6) HDFC
(7) Bajaj Allianz
Q7. At what age have have you taken Life Insurance Policy?
(1) 20 30
(2) 31 40
(3) 41 50
(4) Above 50
Q8. What is your occupation group?
(1) Government Employee
(2) Private Employee
(3) Business Professional
(4) Others
Q9. Are you aware about ULIP?
(1) Yes
(2) No
Q10. Which companys ULIP have you taken?
(1) ICICI Prudential
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(2) HDFC Standard Life
(3) KLI
(4) Others
Q11. Are you interested in investing in KLI?
(1) Interested
(2) Semi-interested
(3) Not-interested
Q12. Through which medium you opted for KLI?
(1) Insurance Consultants
(2) Relatives
(3) Advertisements
(4) Other Sources