copy of a summer training repor2

8/7/2019 Copy of A SUMMER TRAINING REPOR2

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A SUMMER TRAINING REPORT

IN

KOTAK MAHINDRA LIFE INSURANCE

ON

To determine customer satisfaction and marketsegmentation for Kotak Life Insurance

SUBMITTED IN PARTIAL FULFLLMENT OF REQUIREMENT OF

BACHELOR OF BUSINESS ADMINISTRATION (B.B.A.) GURU

JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR

TRAINING SUPERVISOR: SUBMITTED BY:MR.RAKESH SOLANKI SUSHANT SINGH

ENROLLMENT NO.HEAD OFFICE: HARSHA BHAWAN, 08511243422

E-BLOCK, CONNAUGHT PLACE)

SESSION: MARCH 2011

GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGYHISAR -125001


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Declaration

I would like to confirm that this project work undertaken by me is

original and authentic. This report is being submitted in partial

fulfillment of the requirement of Bachelor of Business

Administration (BBA) Guru Jambheshwar University of science

and technology, Hisar.

The content of this report is based on the information collected

during my tenure at kotak Mahindra Life Insurance.

Place: SUSHANT SINGH

Date: (08511243422)

ACKNOWLEDGEMENT


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A lot of effort has gone into this training report. My thanks are due to many people

with whom I have been closely associated.

I would like to extend my sincere gratitude and appreciation to my Mentor

Mr.Rakesh Solanki, Operation Head, Kotak Life Insurance, for extending valuable

guidance and encouragement from time to time, without which it would not have

been possible to undertake and complete this project. I am grateful to for giving me

the opportunity of doing my internship under his aegis. I am grateful to all the

above mentioned individuals for putting their faith in me to conceptualize the

Research Design and be part of crucial projects and for giving us opportunity to get

hands-on Experience in the Life Insurance Sector. at Kotak Life Insurance.

I would also like to extend my gratitude to Ms. Suman Shokeen, Jagannath Institute

of Management Sciences for being an excellent mentor and helping me whenever I

approached her.

I would also like to thank my family for their support and patience throughout the

completion of the project.

Table of Contents

TOPICS Page No


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Chapter-1 Introduction

1.1Overview of the industry as a whole

1.2Profile of the Organization

1.3Analysis of Kotak Mahindra Life Insurance

1.4Major players into insurance sectors

Chapter-2 Objectives and Methodology

2.1 Significance

2.2 Managerial usefulness of the study

2.3 Objectives

2.4 Scope of the Study

2.5 Research Design

2.6 Sampling Methodology

2.7 Limitations

Chapter-3 Conceptual Discussion

Chapter-4 Data Analysis

Chapter-5 Findings & recommendations

Bibliography

Annexure


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PREFACE

The contours of insurance business have been changing across the globe and the ripple

effects of the same can be observed in the domestic markets as well. An evolving

insurance sector is of vital importance for economic growth. While encouraging savings

habit it also provides a safety net to both enterprises and individuals. The insurance

industry also provides crucial financial intermediation services, transferring funds from

the insured to capital investment, which is critical for continued economic expansion and

growth, simultaneously generating long-term funds for infrastructure development. In

fact investments in infrastructure are ideal for asset-liability matching for life insurance

companies given their long term liability profile. Development of the insurance sector is

necessary to support the structural changes in the economy. Social security and pension

reforms too benefit from a mature insurance industry. The insurance sector in India,

which was opened-up for private participation in the year 1999 has completed seven

years in a liberalized environment. Since opening up of the insurance sector in 1999, 24

private companies have been granted licenses by 31st March, 2007 to conduct business in

life and general insurance. Of the 24, 15 were in the life insurance and nine (including a

standalone health insurance company) in general insurance. During the last seven years

capital amounting to Rs.9625.28 crore was brought in by the private players, of which the

contribution of the foreign partners has been Rs.2174.28 crore. During this period the

average annual growth of first year premium in the life segment worked out to 47.06 per

cent and in the non-life segment it was 16.87 per cent. The industry services the largest

number of life insurance policies in the world.


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The Authority and the industry have been playing an active role in increasing consumer

awareness. Insurance companies in general and private insurance companies in particular,

are reaching out to untapped semi-urban and rural areas through advertisement

campaigns and by offering products suitable to meet the specific needs of the people in

these segments.

The insurers are increasingly introducing innovative products to meet the specific needs

of the prospective policyholders. products, imaginative marketing, and aggressive

distribution enabled fledgling private insurance companies to sign up Indian customers

faster belying expectations at the time of opening up of the sector. At the time of opening

up of the sector, life insurance was viewed as a tax saving device. Of late policyholders

perspective is slowly changing towards taking insurance cover irrespective of tax

incentives. The insurable populace is looking for products which suit their specific

requirements. As of now a variety of choices are available in the market meeting the

requirements of different cross-sections of the society and across age groups. With the

registration of Bharti Axa Life Insurance Co. Ltd., the number of companies operating in

the life insurance industry has increased to sixteen. The new entrant commenced

underwriting life premium in August, 2006. By end March 2007, there were sixteen life

and sixteen non-life insurance companies (including the national re-insurer). Apollo

DKV, another standalone health insurance company and Future Generali Insurance Co.

Ltd. and Future Generali Indian Life insurance Co. Ltd. were granted Certificate of

Registration in 2007-08 and are in the process of commencing operations.

EXECUTIVE SUMMARY


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Insurance is a federal subject in India and has a history dating back to 1818. Life and

general insurance in India is still a nascent sector with huge potential for various global

players with the life insurance premiums accounting to 2.5% of the country's GDP whilegeneral insurance premiums to 0.65% of Indias GDP. The insurance sector in India has

gone through a number of phases and changes, particularly in the recent years when the

govt. of India in 1999 opened up the insurance sector by allowing private companies to

solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector

is considered as a booming market with every other global insurance company wanting to

have a lion's share. Currently, the largest life insurance company in India is still owned

by the government.

Insurance in India has its history dating back till 1818, when oriental life insurance

company was started by Europeans in Kolkata to cater to the needs of European

community. Pre-independent era in India saw discrimination among the life of foreigners

and Indians with higher premiums being charged for the latter. It was only in the year

1870, Bombay mutual life assurance society, the first Indian insurance company covered

Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started mushrooming up. In

the year 1912, the life insurance companies act, and the provident fund act were passed to

regulate the insurance business. The life insurance companies act, 1912 made it necessary

that the premium rate tables and periodical valuations of companies should be certified

by an actuary. However, the disparage still existed as discrimination between Indian and

foreign companies. The oldest existing insurance company in India is national insurance

company ltd, which was founded in 1906 and is doing business even today. The

insurance industry earlier consisted of only two state insurers: life insurers i.e. Lifeinsurance corporation of India (LIC) and general insurers i.e. General insurance

corporation of India (GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked from parent

company and made as independent insurance companies: oriental insurance company


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limited, new India assurance company limited, national insurance company limited and

united India insurance company limited. The reforms in the insurance sector leading

finally to the opening of the insurance sector for private participation have brought in its

wake major changes not only in the design of the products available in the market but

also the manner in which they are marketed. We have today a host of products coupled

with a large number of intermediaries who market them.

The post-liberalized insurance industry panorama in India is witnessing dramatic changes

in terms of a slew of latest products and services, new channels of distribution, greater

use of I.T. as a service facilitator etc. There is also the phenomenon of noticeable shifts in

consumer preferences impacting the product mix being offered by insurers. The market

structure dominated by a few stabilized public sector players and the 'new' players in the

market (some of whom claim their lineage from established international insurance

behemoths) is in a state of flux- in terms of figure out market shares but is full of

potential.

Added to these are the rising trends of convergence of financial services, especially in the

areas like wealth management and evolution of newer risk management tools, particularly

in the context of reinsurance management. Greater attention is also being bestowed on the

areas like Agricultural Insurance and risk coverage of export-import trade. Then there is

impact of visible socio-economic changes like greater urbanization, greater job mobility,

growth of the services industry, weakening of traditional family structure, impact of

globalization etc. All in all, interesting things are happening in the Indian insurance

scene.


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Chapter -1

INTRODUCTION

TO THE

INDUSTRY

HISTORY OF INSURANCE SECTOR

The insurance sector in India has come to a full circle from being an open competitive

market to nationalization and back to a liberalized market again. Tracing the

developments in the Indian insurance sector reveals the 360-degree turn witnessed over a

period of almost 190 years. The business of life insurance in India in its existing form


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started in India in the year 1818 with the establishment of the Oriental Life Insurance

Company in Calcutta. Some of the important milestones in the life insurance business in

India are:

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.

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.

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.

INSURANCE SERVICES

Insurance is system by which the losses suffered by a few are spread over many, exposed

to similar risks. Insurance is a protection against financial loss arising on the happening

of an unexpected event. Insurance policy helps in not only mitigating risks but also

provides a financial cushion against adverse financial burdens suffered.


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Insurance policies cover the risk of life as well as other assets and valuables such as

home, automobiles, and jewellery.

The functions of Insurance can be bifurcated into two parts:

Primary Functions

Secondary Functions

Primary Functions

Provide Protection: The primary function of insurance is to provide protection against

future risk, accidents and uncertainty.

Collective Bearing of Risk: Insurance is a device to share the financial loss of few

among many others. Insurance is a mean by which few losses are shared among larger

number of people.

Assessment of Risk: Insurance determines the probable volume of risk by evaluating

various factors that give rise to risk. Risk is the basis for determining the premium rate

also

Provide Certainty: Insurance is a device, which helps to change from uncertainty to

certainty. Insurance is device whereby the uncertain risks may be made more certain.

Secondary Functions

Prevention of Losses: Insurance cautions individuals and businessmen to adopt

suitable device to prevent unfortunate consequences of risk by observing safety

instructions; installation of automatic sparkler or alarm systems, etc. Prevention of

losses causes lesser payment to the assured by the insurer and this will encourage

for more savings by way of premium. Reduced rate of premiums stimulate for

more business and better protection to the insured.


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Small Capital to cover Larger Risks: Insurance relieves the businessmen from

security investments, by paying small amount of premium against larger risks and

uncertainty.

Contributes towards the Development of Larger Industries: Insurance provides

development opportunity to those larger industries having more risks in their

setting up. Even the financial institutions may be prepared to give credit to sick

industrial units which have insured their assets including plant and machinery.

LIFE INSURANCE, INDIA

Life is very fragile and death is a certainty. We cannot control the uncertainties of life.

But, we can cover the risks surrounding us. Life insurance, simply put, is the cover for

the risks that we run during our lives. It protects us from the contingencies that could

affect us.

Life insurance is not for the person who passes away, it for those who survive. It is the

responsibility of every bread earner to guard against the events that could affect the

family in the unfortunate circumstance of his / her demise. Thus, having a life insurance

policy is very vital. Before going for a life insurance policy it is imperative that you know

about various types of life insurance policies. Major among them are:

Endowment Policy

Whole Life Policy

Term Life Policy

Money-back Policy

Joint Life Policy

Group Insurance Policy

Loan Cover Term Assurance Policy

Pension Plan or Annuities

Unit Linked Insurance Plan

GENERAL INSURANCE, INDIA


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General Insurance provides much-needed protection against unforeseen events such as

accidents, illness, fire, burglary et al. Unlike Life Insurance, General Insurance is not

meant to offer returns but is a protection against contingencies. Almost everything that

has a financial value in life and has a probability of getting lost, stolen or damaged, can

be covered through General Insurance policy.

Property (both movable and immovable), vehicle, cash, household goods, health,

dishonesty and also one's liability towards others can be covered under general insurance

policy. Under certain Acts of Parliament, some types of insurance like Motor Insurance

and Public Liability Insurance have been made compulsory.

Major insurance policies that are covered under General Insurance are:

Home Insurance

Health Insurance

Motor Insurance

Travel Insurance

INSURANCE COMPANIES IN INDIA

Before insurance sector was opened to the private sector Life Insurance Corporation

(LIC) was the only insurance company in India. After the opening up of Insurance sector

in India there has been a glut of insurance companies in India. These companies have

come up with innovative and flexible insurance policies to cater to varying needs of the

individual. Opening up of the Insurance sector has also forced the Lic to tighten up its

belt and deliver better service.

Insurance in a narrow sense would be an individual or group purchasing health care

coverage in advance by paying a fee called premium. In its broader sense, it would be

any arrangement that helps to defer, delay, reduce or altogether avoid payment for health

care incurred by individuals and households. Given the appropriateness of this definition

in the Indian context, this is the definition, we would adopt. The health insurance market

in India is very limited covering about 10% of the total population. The existing schemes

can be categorized as:

(1) Voluntary health insurance schemes or private-for-profit schemes;

(2) Employer-based schemes;

(3) Insurance offered by NGOs / community based health insurance, an


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(4) Mandatory health insurance schemes or government run schemes (namely ESIS,

CGHS).

Voluntary health insurance schemes or private for profit schemes

With the passing of the Insurance Regulatory Development Authority Bill (IRDA) the

insurance sector was opened to private and foreign participation, thereby paving the way

for the entry of private health insurance companies. The Bill also facilitated the

establishment of an authority to protect the interests of the insurance holders by

regulating, promoting and ensuring orderly growth of the insurance industry. The bill

allows foreign promoters to hold paid up capital of up to 26 percent in an Indian company

and requires them to have a capital of Rs 100 crore along with a business plan to begin its

operations.Currently, a few companies such as Bajaj Alliance, ICICI, Royal Sundaram,

and Cholamandalam among others are offering health insurance schemes. The nature of

schemes offered by these companies is described briefly.

Bajaj Allianz: Bajaj Alliance offers three health insurance schemes namely, Health

Guard, Critical Illness Policy and Hospital Cash Daily Allowance Policy.

- The Health Guard scheme is available to those aged 5 to 75 years (not allowing entry

for those over 55 years of age), with the sum assured ranging from Rs 100 0000 to 500

000. It offers cashless benefit and medical reimbursement for hospitalization expenses

(preand post-hospitalization) at various hospitals across India (subject to exclusions and

conditionsThe Critical Illness policy pays benefits in case the insured is diagnosed as

suffering from any of the listed critical events and survives for minimum of 30 days from

the date of diagnosis.

ICICI Lombard: ICICI Lombard offers Group Health Insurance Policy. This policy

is available to those aged 5 80 years, (with children being covered with their parents)

and is given to corporate bodies, institutions, and associations. The sum insured is

minimum Rs 15 000/- and a maximum of Rs 500 000/-. The premium chargeable

depends upon the age of the person and the sum insured selected.


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Almost 4,500 years ago, in the ancient land of babylonia, traders used to bear risk of the

caravan trade by giving loans that had to be later repaid with interest when the goods

arrived safely. In 2100 bc, the code of Hammurabi granted legal status to the practice.

That, perhaps, was how insurance made its beginning.

Life insurance had its origins in ancient Rome, where citizens formed burial clubs that

would meet the funeral expenses of its members as well as help survivors by making

some payments.

As European civilization progressed, its social institutions and welfare practices also got

more and more refined. With the discovery of new lands, sea routes and the consequent

growth in trade, medieval guilds took it upon themselves to protect their member traders

from loss on account of fire, shipwrecks and the like.

Since most of the trade took place by sea, there was also the fear of pirates. So these

guilds even offered ransom for members held captive by pirates. Burial expenses and

support in times of sickness and poverty were other services offered. Essentially, all these

revolved around the concept of insurance or risk coverage. That's how old these concepts

are, really.

The first step insurance as we know it today owes its existence to 17th century England.

In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's coffee

house in London, where merchants, ship-owners and underwriters met to discuss and

transact business. By the end of the 18th century, Lloyd's had brewed enough business to

become one of the first modern insurance companies.

KMOM- The Partnership and LineageA 26% - 74% Joint Venture Between

As stated above Kotak Mahindra Life Insurance has Joint venture with Old Mutual plc.Old Mutual Plc is the 12th largest Insurance Company in the world. It has its base of over

4 million life assurance policyholders. It has one of the best Payouts among insurers in

the world. It has one of the best Solvency Ratios among insurers in the world. A FTSE

100 financial services group and ranks as a Fortune Global 500 company.The Old Mutual


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group manages in excess of 239 billion pounds in funds (Dec06). The company is 160

years old and has prominent presence in the United States and the United Kingdom.

Now the question arises that why for the business in India of life insurance Kotak

Mahindra chose Old Mutual plc and vice versa.

Features of Kotak Mahindra and Old Mutual plc at a glance:

KOTAK MAHINDRA OLD MUTUAL plc

Brand Equity Domain KnowledgeBranch Network TechnologyEntrepreneur Employees Product InnovationKnowledge of Indian Market Training ExpertiseAccess to customer base Global Perspectives

Insurance

Back to the 17th century. In 1693, astronomer Edmond Halley constructed the first

mortality table to provide a link between the life insurance premium and the average life

spans based on statistical laws of mortality and compound interest. In 1756, Joseph

Dodson reworked the table, linking premium rate to age.

Enter companies...

The first stock companies to get into the business of insurance were chartered in England

in 1720. The year 1735 saw the birth of the first insurance company in the American

colonies in Charleston, sc.

In 1759, the Presbyterian synod of Philadelphia sponsored the first life insurance

corporation in America for the benefit of ministers and their dependents. However, it was

after 1840 that life insurance really took off in a big way. The trigger: reducing

opposition from religious groups.

The growing years...

The 19th century saw huge developments in the field of insurance, with newer products

being devised to meet the growing needs of urbanization and industrialization.


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In 1835, the infamous New York fire drew people's attention to the need to provide for

sudden and large losses. Two years later, Massachusetts became the first state to require

companies by law to maintain such reserves. The great Chicago fire of 1871 further

emphasized how fires can cause huge losses in densely populated modern cities. The

practice of reinsurance, wherein the risks are spread among several companies, was

devised specifically for such situations.

There were more offshoots of the process of industrialization. In 1897, the British

government passed the workmen's compensation act, which made it mandatory for a

company to insure its employees against industrial accidents. With the advent of the

automobile, public liability insurance, which first made its appearance in the 1880s,

gained importance and acceptance.

In the 19th century, many societies were founded to insure the life and health of their

members, while fraternal orders provided low-cost, members-only insurance.

In India

Insurance in India can be traced back to the Vedas. For instance, Yogakshema, the name

of life insurance Corporation of Indias corporate headquarters, is derived from the Rig-

Veda. The term suggests that a form of "community insurance" was prevalent around

1000 BC and practiced by the Aryans.

Bombay mutual assurance society, the first Indian life assurance society, was formed in

1870. Other companies like oriental, Bharat and empire of India were also set up in the

1870-90s.

It was during the Swadeshi movement in the early 20th century that insurance witnessed

a big boom in India with several more companies being set up.

As these companies grew, the government began to exercise control on them. The

insurance act was passed in 1912, followed by a detailed and amended insurance act of

1938 that looked into investments, expenditure and management of these companies'

funds.


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By the mid-1950s, there were around 170 insurance companies and 80 provident fund

societies in the country's life insurance scene. However, in the absence of regulatory

systems, scams and irregularities were almost a way of life at most of these companies.

As a result, the government decided nationalise the life assurance business in India. The

life insurance corporation of India was set up in 1956 to take over around 250 life

companies.

For years thereafter, insurance remained a monopoly of the public sector. It was only

after seven years of deliberation and debate - after the RN Malhotra committee report of

1994 became the first serious document calling for the re-opening up of the insurance

sector to private players -- that the sector was finally opened up to private players in

2001.

The insurance regulatory & development authority, an autonomous insurance regulator

set up in 2000, has extensive powers to oversee the insurance business and regulate in a

manner that will safeguard the interests of the insured.

Company detail

Kotak Mahindra is one of India's leading financial conglomerates, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the group caters

to the financial needs of individuals and corporate.

The group has a net worth of over Rs 5,997 crore, employs over 20,000 people in its

various businesses and has a distribution network of branches, franchisees, representative

offices and satellite offices across 370 cities and towns in India and offices in New York,


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London, San Francisco, Dubai, Mauritius and Singapore. The group services around 5

million customer accounts.

Our story

The Kotak Mahindra group was born in 1985 as Kotak capital management finance

limited. This company was promoted by Uday Kotak, Sidney a. A. Pinto and Kotak &

company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and

that's when the company changed its name to Kotak Mahindra finance limited.

Since then it's been a steady and confident journey to growth and success.

1986 Kotak Mahindra finance limited starts the activity of bill discounting

1987 Kotak Mahindra finance limited enters the lease and hire purchase market

1990 the auto finance division is started

1991 the investment banking division is started. Takes over FICOM, one of

India's largest financial retail marketing networks

1992 enters the funds syndication sector

1995 brokerage and distribution businesses incorporated into a separate company

- Kotak securities. Investment banking division incorporated into a separate company -

Kotak Mahindra capital company

1996 the auto finance business is hived off into a separate company - Kotak

Mahindra prime limited (formerly known as Kotak Mahindra primus limited). Kotak

Mahindra takes a significant stake in ford credit Kotak Mahindra Limited, for financing


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Car finance

Securities

Institutional equities

Investment banking

International business

Kotak private equity

Kotak realty fund

KOTAK MAHINDRA GROUP OF COMPANIES

Kotak Mahindra offers pragmatic, world-class solutions. Put simply, solutions with a lot

of common sense; Solutions that take care of every individuals four basic financial needs

- Earning, Saving, Investing and Spending i.e. Helping people to live life in the

complete sense, sans worries.

Kotak Mahindra is one of India's leading financial institutions, offering complete



to the financial needs of individuals and corporate.

The group has a net worth of over Rs. 2,840 crore, employs around 7,800 people in its



London, Dubai and Mauritius. The Group caters over 1.6 million customer accounts.

KOTAK MAHINDRA BANK LTD

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD

KOTAK MAHINDRA CAPITAL COMPANY LTD


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INTERNATIONAL SUBSIDIARIES

KOTAK MAHINDRA PRIME LTD

KOTAK SECURITIES LTD

KOTAK MAHINDRA ASSET MANAGEMENT COMPANY

THEIR VISION

The Global Indian Financial Services Brand: Their customers will enjoy the benefits

of dealing with a global Indian brand that best understands their needs and delivers

customized pragmatic solutions across multiple platforms. They will be a world class

Indian financial services group. Their technology and best practices will be benchmarked

along international lines while their understanding of customers will be uniquely Indian.

They will be more than a repository of their customers savings. We, the Group, will be a

single window to every financial service in a customer's universe.

The most Preferred Employer in Financial Service: A culture of empowerment and a

spirit of enterprise attract bright minds with an entrepreneurial streak to join them and

stay with them. Working with a home-grown, professionally-managed company, which

has partnerships with international leaders, gives their people a perspective that is

universal as well as unique.

The most trusted financial services company: They endeavor create an ethos of trust

across all their constituents. Adhering to high standards of compliance and corporate

governance is an integral part of building trust.

Value Creation: Value creation rather than size alone is their business driver

ANALYSIS OF KOTAK MAHINDRA LIFE INSURANCE


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Kotak Mahindra is one of India's leading financial conglomerates, offering complete



to the diverse financial needs of individuals and corporate.

The group has a net worth of over Rs. 3,380 crore, employs around 12,300 people in its



London, Dubai, Mauritius and Singapore. The Group services around 2.9 million

customer accounts.

In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held by Ford

Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak Mahindra

(FCKM) held by Kotak Group.

In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak Capital

and Kotak Securities.

Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak

Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps customers to take

important financial decisions at every stage in life by offering them a wide range of

innovative life insurance products, to make them financially independent.

Kotak Life Insurance saw its First Year Premium income jump from Rs 126 cr in 2003-

04 to 375 cr in 2004-05, a growth of 198%. This follows a 246% growth in the previous

year.

Kotak Life Insurance is likely to maintain its aggressive growth of infrastructure with

Sales Managers numbers planned to grow from 450 in 2004-05 to 850 in current


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financial. Correspondingly, the Life Advisor base of 7000 in 2004-05 is planned to move

up to 12000 by end of this financial. Even the Alternate Distribution Channel and the

Group Insurance Sales Teams has been expanded. However all this shall be done with

them getting more out of the current structure. The important element of current year

strategy is how they sweat the infrastructure that they have put in place over the last

couple of years. It is imperative that they make their money go longer than the

competition to ensure them breakeven faster. Kotak Life Insurance plans to achieve this

Break Even within the next three years.

Kotak Group is building a strong financial service offered under the banner of "Think

Investment. Think Kotak." and Kotak Life Insurance lead products, Kotak Safe

Investment Plan II and Kotak Flexi Plan have captured a significant share of the business.

Built around the promise of Capital Guarantee, both these products offer excellent

opportunity for their customers and embody the brand promise perfectly. Kotak Life

builds around the same innovative streak for which Kotak has been famous in other

segments of the financial services earlier. Their offerings in the market are rated highly

by both the distributors as well as the customers. They are committed to build stronger

and better products in the future too.

Kotak Life Insurance is very bullish about its future. Built around the three pillars of

stronger leverage,- group synergies, greater focus on quality execution and innovative

product offerings.

Their challenge will lie in channelizing their accumulated learning across the group to

their advantage and building a culture, which encourages performance-linked growth.

Kotak is and shall remain a company that encourages people to take challenges and build

value for all the stakeholders.


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Kotak Mahindra believes in offering its customers a lifetime of value- A commitment

that has made it a leading financial services group with net worth of around Rs. 1700

crore as well as a market leader in the areas of investment banking and distribution of

financial products.

The company has raked in new business premium of Rs 160 crore at the end of July

2007, a growth of 46 per cent from Rs 110 crore in the year-ago period

PRODUCTS

Term Plans

Kotak Term Assurance Plan

Kotak Preferred Term Plan

Endowment Plans

Kotak Endowment Plan

Kotak Money Back Plan

Kotak Child Advantage Plan

Kotak Capital Multiplier Plan

Kotak Retirement Income Plan

Kotak Premium Return Plan

Unit Linked Plans


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Kotak Retirement Income Plan (Unit Linked)

Kotak Safe Investment Plan II

Kotak Flexi Plan

Kotak Easy Growth Plan

Kotak Privilege Assurance Plan

Group

Employee Benefits

Kotak Term Group Plan

Kotak Credit-Term Group Plan

Kotak Complete Cover Group Plan

Kotak Gratuity Group Plan

Kotak Superannuation Group Plan

Rural

Kotak Gramin Bima Yojna

PRODUCT

a) Kotak Flexi plan

Advantages:

Choice of 5 professionally managed funds included Gilt Fund, Floating

Rate Fund, Bond Fund, Balanced Fund, Growth Fund.


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Riders options for enhanced protection

Loan facilities in case of emergencies

Simplified documentation and procedures

b) Kotak Retirement Income Plan

The Kotak Retirement Income Plan is a savings plan designed to meet your post

retirement needs. It is a plan that gives you jeene Ki azaadi by giving you the

choice to remain independent even after retirement.

Advantages:

In this plan minimum age of 18 years of old and maximum age is 60

years.

You may buy an annuity either from Kotak Life Insurance.

You can make lump sum injections into your policy at any time before

retirement.

For a with cover plan you have the facility of Automatic cover

c) Kotak Endowment Plan

An Endowment policy is a combination of savings along with risk cover. These

policies designed to accumulate wealth and at the same time cover your life. In

simple words, issued for specific time periods during which you pay a regular

premium.

Advantages:


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In this plan minimum age of 18 years of old and maximum age is 65

years.

You can take a loan against your policy has been in force for at least three

years.

You have the option of paying premiums quarterly, half yearly or yearly.

You have the benefit of a 15-day free look period.

d) Kotak Capital Multiplier Plan

The Kotak Capital Multiplier Plan is a participating plan that is built in such a

way that it allows your money to multiply, and gives you the flexibility of using

this money the way you need it, in regular and irregular withdrawals. This is an

endowment plan, which is very flexible and has a lot of in-built benefits.

Advantages:

1 In this plan minimum age of 18 years of old and maximum age is 60

years.

At the start of your withdrawals period, you can draw the full proceeds or

you can draw up to 50% of your basic sum assured or accumulation

account, whichever is higher.

In addition to the regular premiums, you can make lump sum

injection into your plan during the premium paying period. A

Supplementary Accumulation Account will be created.

e) Kotak Child Advantage Plan

The Kotak Child Advantage Plan is an investment plan designed to meet your

child s future needs. It is a plan that gives your child the azaadi to realise his/her


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The high volumes in the insurance business help spread risk wider, allowing a

lowering of the rates of the premium to be charged and in turn, raising profits. When

there is a bigger base, the probabilities become more predictable, and with system

wide risks balanced out, profits improve. This explains the current scenario of

mergers, acquisitions, and globalization of insurance.

Insurance is a type of savings. Insurance is not only important for tax benefits, but

also for savings and for providing security. It can be serving as an essential service

which a welfare state must make available to its people.

Insurance play a crucial role in the commercial lives of nations and act as the

lubricants of economic activities. Insurance firms help to spread the potentially

financial consequences of risk among the large number of entities, to mobilize and

distribute savings for productive use, facilitate investment, support and encourage

external trade, and protect economic entities against external risk.

Insurance and economic growth mutually influences each other. As the economy grows,

the living standards of people increase. As a consequence, the demand for life insurance

increases. As the assets of people and of business enterprises increase in the growth

process, the demand for general insurance also increases. In fact, as the economy widens

the demand for new types of insurance products emerges. Insurance is no longer confined

to product markets; they also cover service industries. It is equally true that growth itself

is facilitated by insurance. A well-developed insurance sector promotes economic growth

by encouraging risk-taking. Risk is inherent in all economic activities companies are thus

able to support infrastructure projects which require long term funds. There is thus a

mutually beneficial interaction between insurance and economic growth. The low income

levels of the vast majority of population have been one of the factors inhibiting a faster


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growth of insurance in India. To some extent this is also compounded by certain attitudes

to life. The economy has moved on to a higher growth path. The average rate of growth

of the economy in the last three years was 8.1 per cent. This strong growth will bring

about significant changes in the insurance industry.

Insurance regulatory and development authority :

In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as

an autonomous body to regulate and develop the insurance industry. The IRDA was

incorporated as a statutory body in April, 2000. The key objectives of the IRDA include

promotion of competition so as to enhance customer satisfaction through increased

consumer choice and lower premiums, while ensuring the financial security of the

insurance market. The IRDA opened up the market in August 2000 with the invitation for

application for registrations. Foreign companies were allowed ownership of up to 26%.

The Authority has the power to frame regulations under Section 114A of the Insurance

Act, 1938 and has from 2000 onwards framed various regulations ranging from

registration of companies for carrying on insurance business to protection of

policyholders interests.

Role of IRDA:

Protecting the interests of policyholders.

Establishing guidelines for the operations of insurers and brokers.

Specifying the code of conduct, qualifications and training for insurance

intermediaries and agents.


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Promoting efficiency in the conduct of insurance business.

Regulating the investment of funds by insurance companies.

Specifying the percentage of business to be written by insurers in rural sectors.

Handling disputes between insurers and insurance intermediaries.

Changing perception of Indian customers:

Indian Insurance consumers are like Indian Voters, they are soft but when time is right

and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products

are the reflection of changing aspirations and growing demand of Indian consumers.

For historical years, Indian consumers were at receiving end. Insurance Product was

underwritten and was practically forced onto consumers on a Take-it-As-it-basis. All

that got changed with passage of IRDA act in 1999. New insurance companies have

come into existence leading to open competition and hence better products for customers.

Indian customers have become very sensitive to Coverage / Premium as well as the

Products (read Risk Solution), that is given to them. There are not ready to accept any

product, no matter even if that is coming from the market leader, should that product is

not serving the purpose. A case in point is ULIP Product / Group Life and Credit Life in

Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the

Non-life segment are new age Avatar. The new products are constantly being demanded

by Indian consumers, which is putting huge pressures on Insurance companies (Read

Risk Under-writers) and Brokers to respond.

Now Indian customers are aware of insurance industry and insurance products provided

by companies. They have become more sensitive. They would not accept any type of


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insurance product unless it fulfills their requirements and needs. In historic days

customers looking at insurance products as a life cover which can provide security

against any unacceptable events, but now customers look at insurance products as an

investment as well as life cover. So todays customers wants good return from the

insurance companies. The Indian customers forms the pivot of each companys strategy.

Changing face of Indian insurance industry:

After the Insurance Regulatory and Development Authority Act have been passed there

has been establishment of many private insurance companies in India. Previously there

was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the

only life-insurance company for the people till 2000. L.I.C. still holds 71.4% of the

market share in 2006. But after the introduction of private life insurance companies there

is a great competition in Indian market now. Everyone is trying to capture the fresh

market here and penetrate it with aggressive marketing strategies.

In India only 25% of the population has life insurance. So Indian life-insurance market is

the target market of all the companies who either want to extend or diversify their

business. To tap the Indian market there has been tie-ups between the major Indian

companies with other International insurance companies to start up their business. The

government of India has set up rules that no foreign insurance company can set up their

business individually here and they have to tie up with an Indian company and this


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foreign insurance company can have an investment of only 24% of the total start-up

investment.

Indian insurance industry can be featured by:

Low market penetration.

Ever growing middle class component in population.

Growth of customers interest with an increasing demand for better insurance

products.

Application of information technology for business.

Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has more than a dozen private players, each of

which are making strides in raising awareness levels, introducing innovative products and

increasing the penetration of life insurance in the vastly underinsured country. Several of

private insurers have introduced attractive products to meet the needs of their target

customers and in line with theirbusiness objectives. The success of their effort is that

they have captured over 28% of premium income in five years.

The biggest beneficiary of the competition among life insurers has been the customer. A

wide range of products, customer focused service and professional advice has become the

mainstay of the industry, and the Indian customers forms the pivot of each companys

strategy. Penetration of life insurance is beginning to cut across socio-economic classes

and attract people who have never purchased insurance before.


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capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and

101 divisional offices located in different parts of India, at least 2048 branches located in

different cities and towns of India along with satellite Offices attached to about some 50

Branches, and has a network of around one million and 200 thousand agents for soliciting

life insurance business from the public. Over its existence of around 50 years, Life

Insurance Corporation of India, which commanded a monopoly of soliciting and selling

life insurance in India, created huge surpluses, and contributed around 7 % of India's

GDP in 2009.

The Corporation, which started its business with around 300 offices, 5.6 million policies

and a corpus of INR 459 million, has grown to 25000 servicing around 180 million

policies and a corpus of over INR 3.4 trillion.

Objectives

Holding the money with obligation and using it in the best possible manner in the

interests of the policyholder and the community.

Bringing attractive savings plans and making them easily accessible to the

policyholders.

Giving attractive returns to the people and keeping in mind national priorities.

Being trustworthy to the customers and develop the spirit of corporate social

responsibility.


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Spreading insurance in both rural and urban areas and covering all the insurable

persons at a reasonable cost.

Bringing in plans and policies favorable to the changing environment.

Providing efficient service and involving people in the organization for their

satisfaction.

Bajaj Allianz General Insurance Company Limited is a joint venture

between Bajaj Auto Limited and Allianz AG of Germany.

Bajaj Allianz General Insurance came into existence on 2nd May 2001, when it got

certification of Registration from the Insurance and Regulatory Development Authority.

Bajaj Auto has a share of 74%, whereas Allianz has the remaining 26%. In the very first

year, the company made a strong position for itself in the industry and was reckoned

amongst the top private insurers. The premium income of the company as on 31st March

2006 was Rs. 1285 crores, whereas the profit after tax made was Rs. 52 crores. Bajaj

Allianz has a Pan India network covering over 100 towns from Jammu to

Thiruvananthapuram and aims to spread its operations in many other cities.

The vision of the organization is to be the first choice for customers, and provide job

satisfaction to the employees and create shareholder value. The organization strives to

excel in its products and services, providing total customer satisfaction.


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Insurance Company in India, it has developed a strong corporate governance model

based on the core values of excellence, honesty, knowledge, caring, integrity and

teamwork. The strategy is to establish itself as a Trusted Life Insurance Specialist

through a quality approach to business. Incorporated in 2000, Max New York Life started

commercial operation in 2001. In line with its values of financial responsibility, Max

New York Life has adopted prudent financial practices to ensure safety of policyholder's

funds. The Company's paid up is Rs. 1,782 crore.

ICICI Prudential Life Insurance Company

ICICI Prudential is a joint venture between ICICI bank and Prudential plc, both having

strong operations in their respective countries. ICICI bank is one of the leading banks in

India providing quality financial services and Prudential is an international financial

service provider headquartered at United Kingdom. ICICI and Prudential have respective

shares of 74% and 26%. The Company started operating in December 2000. Currently,

total capital with the company is Rs. 18.15 billion.

ICICI Prudential was the first insurance company in India to receive a National Insurer

Financial Strength rating of AAA (Ind.) from Fitch ratings. It has been given the honour

of being among the Most Trusted Brands in the industry by Economic Times for 3

consecutive years. It has a network of 450 branches, over 1,50,000 insurance advisors

and 18 banc assurance partners.


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Education insurance - Smart Kid

Protection Solutions

Life Guard

Home Assure

Group Insurance Solutions

ICICI Prudential also offers Group Insurance Solutions for companies seeking

to enhance benefits to their employees.

Group Immediate Annuities

Group Term Plan

Group Superannuation Plan

Group Gratuity Plan

ICICI Lombard General Insurance

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI

Bank Limited and Fairfax Financial Holdings Limited. ICICI bank is India's second

largest bank; Fairfax is Canada-based, engaged in general insurance, reinsurance,


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insurance claims management and investment management. ICICI Lombard General

Insurance Company commenced its operations in general insurance business in August

2001.

ICICI Lombard is India's number one private insurance company; it is also the first

general insurance company to be given certification of ISO 9001:2000. It has also been

awarded Gold Shield for "Excellence in Financial Reporting". It is among the top three

companies to be awarded the "General Insurance Company of the Year" at the 10th Asia

Insurance Industry Awards.

Products

Business Solutions

Industrial All Risk

Fire and Special Perils

Electronic Equipment Insurance

Fidelity Insurance

Consequential Loss (Fire) Insurance

Tea Corp Insurance

Burglary Insurance

Machinery

Personal Solutions

Group Personal Accidents


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Health

Health Insurance

Project Solutions

Contractors' All Risk

Contractors' Plant & Machinery

Erection All Risk

Performance Guarantee

Travel Insurance

Senior Citizen Overseas Travel

Individual Overseas Travel

Corporate Overseas Travel

Birla Sun Life Insurance Company Limited

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between

Aditya Birla Group and Sun Life Financial Inc. BSLI started functioning in

March 2001 after getting the certificate of registration from IRDA.

Birla Sun Life Insurance Company Limited introduced unit Linked Life Insurance


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Solutions in India. Within a short span of time it was able to establish itself as a

leading player in the Private Life Insurance Industry. It has been innovative and

come up with customer-centric products to provide safety and services. The

company has web-enabled IT systems for better customer services and a strong

distribution channel which is easily approachable. The company shows corporate

governance and a high degree of transparency in all business practices. It has

professional knowledge and global expertise of Aditya Birla Group.

. These innovative solutions are linked with global and technical expertise and are

deployed by a multi channel distribution network and enhanced technology.

The company aims at keeping all people associated with it - customers, clients,

stakeholders and employees- happy and fully satisfied. It wants to provide value

added products and services to the customers, job satisfaction to employees and

highest returns to the shareholders.

Saving

Simply Life

Flexi Save Plus

Supreme Life

Life Companion

Flexi Cash Flow

Prime Life


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Flexi Save Plus

Retirement

Flexi Secure Life Retirement Plan II

Riders

Critical Illness Plus Rider

Term Rider

Waiver of Premium

Critical Illness Rider

Critical Illness - Woman Rider

Accidental Death and Dismemberment.

TATA AIG General Insurance

Tata AIG General Insurance Company Ltd. is a joint venture between Tata Sons and

American International Group, Inc. (AIG). The Tata Group is holding 74 per cent stake

and the rest 26 percent is held by AIG. The company has got the expertise, knowledge

and strength of both the organizations. Tata AIG General Insurance Company was


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founded on January 22, 2001. It offers general insurance in various categories, such as

automobile, home, personal accident, travel, energy, marine, property and casualty and

specialized financial solutions.

Jamsetji Tata founded Tata Group in 1860s. It has an estimated turnover of around US $

14.25 billion. It has spread its operations in various fields such as steel, power, hotels,

airlines, software services, communications, etc. Some of its major projects have been

Tata Tea, Tata Steel, Tata Chemicals, Titan, Tanishq, Voltas, Westside and Tata Motors.

Its imprints are made on the telecommunication and technology sector.

American International Group, Inc. (AIG) is the leading international player in insurance

and financial services. Its network spreads across 130 nations.

I FFCO Tokio General Insurance

IFFCO Tokio General Insurance is a customer-centric company aiming to be

easily accessible and approachable to all sections of society. It offers products and

services that provide quality at reasonable cost. The organization has the deep

knowledge of IFFCO and thus developed a business plan that has both stability

and integrity.

It has set global standards for itself and is the only private general insurance


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company in India to make 5 consecutive years of experience. ITGI has been one

of the few companies to show underwriting profits within four years of

operations.

The company focuses on delivering creative solutions to its customers. IFFCO

Tokio General Insurance has 273 employees present in 68 cities, dedicated to give

full satisfaction to the customers. It is the first company to underwrite mega

policies for a fertilizer and automobile client.

HDFC Standard Life Insurance Company Limited

HDFC Standard Life Insurance Company Limited is one of the first companies to be

licensed by IRDA to operate in the Insurance sector. The company came into existence

on 14th August 2000. Both Crisil and ICRA have honored it with AAA Ratings.

Similarly Moody's and Standard and Poors have also honoured it AAA ratings. HDFC

holds 81.4% share in HDFC and the remaining 18.6% stake is with Standard Life. It

integrates the strong expertise and stability of Standard Life and HDFC.

It is one of the most trusted companies; it is easily accessible and approachable, offering

value services to its customers.

The company aims to provide:

Innovative products to cater to different needs of different customers

Customer service of the highest order

Use of technology to improve service standards


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ICICI Prudential Life Insurance Company Ltd.

Om Kotak Mahindra Life Insurance Co. Ltd.

Birla Sun Life Insurance Company Ltd.

Tata AIG Life Insurance Company Ltd.

Allianz Bajaj Life Insurance Company Ltd.

Metlife India Insurance Company Pvt. Ltd.

AMP SANMAR Assurance Company Ltd.

SBI Life Insurance Company Limited

ING Vysya Life Insurance Company Private Limited

GENERAL INSURERS

Royal Sundaram Alliance Insurance Company Limited

Reliance General Insurance Company Limited.

IFFCO Tokio General Insurance Co. Ltd

TATA AIG General Insurance Company Ltd.

Bajaj Allianz General Insurance Company Limited

ICICI Lombard General Insurance Company Limited.
http://www.iciciprulife.com/http://www.omlotakmahindra.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.allianzbajaj.co.in/http://www.metlife.com/http://www.ampsanmar.com/http://www.ingvysyalife.com/http://www.royalsun.com/http://www.royalsun.com/http://www.itgi.co.in/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.iciciprulife.com/http://www.omlotakmahindra.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.allianzbajaj.co.in/http://www.metlife.com/http://www.ampsanmar.com/http://www.ingvysyalife.com/http://www.royalsun.com/http://www.royalsun.com/http://www.itgi.co.in/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.icicilombard.com/


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Chapter-3

Research Methodology

RESEARCH METHODOLOGY

(a) TITLE

To determine customer satisfaction and market share of different

brands


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Customer is the king.

In the era of cutthroat competition and economic recession, above axiom has

more importance than ever before.

Marketing starts with the customer and ends the customer .-Peter Drucker.

So no organization, small or big ignores the customers.

Earth is not the center of universe but revolves around the Sun .

-Copernicus.

Similarly, we have come to believe that business firm is not the center of

economic universe but revolves around the customer.

Build customer and not only products.

Building customers is not a single step exercise but a process ------.

Insurance industry is growing at a very fast pace. In this cut throat competitive era it is

important for the marketers to design and deliver their services efficiently. Marketer has

to understand the needs of the untapped customers. This thesis will help to understand the

industry with respect to the needs, demands, preferences of the customer and the products

that the company offers to cater to those needs for measuring customer satisfaction.

d. Significance of the Study

India is a huge, diverse and complex market of which, the insurance sector was opened

for private competition in 2000. Thus, insurers endeavored to segment the market

carefully. Distribution was seen to be the key of success. Regulators were made to

formulate strong and fair guidelines. Private insurers were perceived to have served best


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by a middle-market approach, targeting customer segments that were currently untapped.

Multinational insurers were observed to be keenly interested in emerging insurance

markets.

It was believed that Private insurers would learn and unlearn simultaneously. New

entrants with small share of a large and growing market would be profitable. The new

entrants would be best served by micro-level two pronged strategies. First, by introducing

innovative products; offering a right mix of flexibility/risk/return and secondly, by

targeting specific markets. In a scenario where buyers look for the low prices, Brand

loyalty would be at high risk. Therefore, strong marketing strategies would be needed.

Kotak, being an old player, had huge opportunities awaiting it. Through the devising of

various effective strategies it has made a place for itself in the insurance industry. New

schemes and distribution channels have strengthened its resolve to be able to better serve

its customers and contribute to the industry.

e. Research Design

Data has been collected through one to one interaction and discussion with various

people who are involved in the business of insurance as Sales manager, Life Advisors,

Marketing Manager Customers and others. Newspapers, Internet, Magazines and Journals

would provide ample material about latest trends and practices in insurance industry.

Kotak organizes various outdoor activities to boost its business and brand. Interaction

with customers during such outdoor activities would enable to understand the success

ratio of such kind of outdoor activities. Various products of the company would be

discussed with respect to their benefits and advantages. Various insurance players would

be compared with respect to their market share and products that they offer.


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Primary Data has been collected through discussions, activities and observations of

various people involved in the business whereas

Secondary Data through annual reports of the company, newspaper, magazines, journals

and internet.

f. Sampling Methodology

1. Sampling design is Random Sampling Method

2. Sampling Area would be Delhi

3. Sample Size: 100 (50 Male and 50 Female)

g. Collection of Data

Primary data: Individual respondents, Chartered Accountants, Tax Consultants,

Insurance Agents, Auto loan providers were personally visited and interviewed. They

were the main source of Primary data. The method of collection of primary data was

direct personal interview through a structured questionnaire.

Secondary Data : It was collected from internal sources. The \official records, news

papers, magazines, management books, preserved information in the companys database

and website of the company.

h. Limitations

Only Delhi region covered for this report because of not availability of time and

resource.

Also for customer behavior factor analysis for a company are not sharing more

internal information either on internet or ready to give.

Not many people are keen on interacting and the market segmentation of an actual

advisor is very less.


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Chapter-3

Conceptual Discussion

EFFECTIVE MARKETING STRATEGIES FOR

INSURANCE PRODUCTS FOR DETERMINING

CUSTOMER SATISFACTION

Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly

more aware and are actively managing their financial affairs. People are increasingly

looking not just at products, but at integrated financial solutions that can offer stability of

returns along with total protection. In view of this, the insurance managers need to


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Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it. The

following factors influence the market and demand of product-

Government policies.

Growth in population.

Changing age profile.

Income wise distribution of the population. Level of insurance

awareness.

The pricing of the policies.

The economic climate of the country.

The aversion to risk.

Social and political features of the country.

Growth scenario in the world.

Different companies adopt different approaches in their marketing strategies. One

approach is focus upon product quality which can give confidence in the mind of

customers that they are offered by best featured products. And other approach is focusing

on customers needs, which involve a heavy investment in developing relationships with

policyholders. Under this approach customer can expect a range of products and service

offered to him. Third approach is market segmentation under which the population can be

divided into several homogeneous products and groups, the effort should be tie clients to


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the company by customized combination of coverage, easy payment plans, risk

management advice, and convenient and quick claim handling.

Success of an insurance company depends on four important functions:

Identification of markets: Identification of markets means need to

understand the trends in culture and businesses constantly, through conducting

research and analysis. Insurance companies can take this job on their own or

assign it to an external agency. Relying on an external agency can be risky due to

the questionable loyalty of the agents.

Assessment of risks (of the insured and the insurance corporation)

and estimation of losses: Efficiency of actuaries and assessors of the

insurance policies in fixing premiums and settling claims is foremostan important

area for achieving overall efficiency in operations. The quality of assessing the

risk and estimation of losses has the largest claim on the performance of an

insurance company. Well trained, experienced and expert hands are needed for

the operations.

Penetration into and exploitation of markets: Market penetration orexploitation of a company can be identified with the growth in number of policies

in each type of insurance, growth rate in earnings or turnover, companys market

share, increase in number of branches and divisions etc. Efforts of the company as

a whole and that of the divisions and branches are assessed to measure the

effectiveness.

Control over investment and operating costs: Control over resources

such as men, machines, and materials at each level of the organization provide

measures of efficiency of a unit as well as the organization. Investment control

and expense control are dealt separately and the effectiveness of managements

decisions at various levels is to be assessedseparately.


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To find best prospects:

Allocating marketing strategies against market potential.

Estimating potential for specific products within local markets.

Identifying high opportunity areas.

Measuring agency performance relative to market potential.

Optimizing your agency network against market potential.

Attributes to develop marketing strategies:

Channel data: - Useful to know future buying preferences, learning about products

and purchase channels.

Consumer attitudes.

Consumption data: - Useful to evaluate annual premiums, number of annuities

owned, value of annuities, and with which company the current policy is held.

FUNCTIONING OF INSURANCE INDUSTRY

Insurers Business Model:

Profit = Earned Premium + Investment Income Incurred Loss

Underwriting expenses

Insurers make money in two ways:

1. Through Underwriting, the processes by which insurers select the risks to insure

and decide how much in premiums to charge for accepting those risks, and


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2. By investing the premiums they collect from insured.

The most difficult aspect of the insurance business is the underwritingof policies. Using

a wide assortment of data, insurers predict the likelihood that a claim will be made

against their policies and price products accordingly. To this end, insurers use actuarial

scienceto quantify the risks they are willing to assume and the premium they will charge

to assume them. Data is analyzed to fairly accurately project the rate of future claims

based on a given risk. Actuarial science uses statisticsand probabilityto analyze the risks

associated with the range of perils covered, and these scientific principles are used to

determine an insurer's overall exposure. Upon termination of a given policy, the amount

of premium collected and the investment gains thereon minus the amount paid out in

claims is the insurer's underwriting profiton that policy.

An insurer's underwriting performance is measured in its combined ratio. The loss ratio

(incurred losses and loss-adjustment expenses divided by net earned premium) is added

to the expense ratio (underwriting expenses divided by net premium written) to determine

the company's combined ratio. The combined ratio is a reflection of the company's

overall underwriting profitability. A combined ratio of less than 100 percent indicates

underwriting profitability, while anything over 100 indicates an underwriting loss.

Insurance companies also earn investment profits on float. Float or available reserve

is the amount of money, at hand at any given moment that an insurer has collected in

insurance premiums but has not been paid out in claims. Insurers start investing insurance

premiums as soon as they are collected and continue to earn interest on them until claims

are paid out.


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Naturally, the float method is difficult to carry out in an economically depressed

period. Bear markets do cause insurers to shift away from investments and to toughen up

their underwriting standards. So a poor economy generally means high insurance

premiums. This tendency to swing between profitable and unprofitable periods over time

is commonly known as the "underwriting" or insurance cycle.

Finally, claims and loss handling is the materialized utility of insurance. In managing the

claims-handling function, insurers seek to balance the elements of customer satisfaction,

administrative handling expenses, and claims overpayment leakages.

Investment Management

Investment operations are often considered incidental to the business of insurance, and

have traditionally viewed as secondary to underwriting. In the past risk management was

the most important part of business, whereas today the focus has shifted to fund

management. Investment income is a large component of insurance revenues, skilful and

careful management of funds. Insurance is a business of large numbers and generates

huge amount of funds over time.. Insurance companies are among the largest institutional

investors in the world. Assets managed by insurance companies are estimated to account

for over 40% of the worlds top ten asset managers.

Returns on investments influence the premium rates and bonuses and hence

investment income will continue to be an important component of insurance company

profits. In life insurance, benefits from insurance profits accrue directly to policy holders

when it is passed on to him in the form of a bonus. In non life insurance the benefits are

indirect and mostly by the creation of an investment portfolio. Investment income has to


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compensate for underwriting results which are increasingly under pressure. In the case of

insurance, the difference between revenue and the expenses is known as operating

surplus.

Revenue = Premium

Expenses = (Sum of Claims + Commission payable on procurement of

business + Operating expenses)

Operating Surplus = (Revenue Expenses)

Net investment income includes income from trading in and holding stock market

securities including government securities, special deposits with the central government,

loans to several public utilities and service providers in state government.

Insurance premium collected is converted in a pool of fund then divided in to four

expenses.

To pay the expenses of the management

To pay agency commission

To pay for the claims

Surplus money will be invested in govt. securities

Various types of life insurance policies:

Endowment policies : This type of policy covers risk for a specified period, and

at the end of the maturity sum assured is paid back to policyholder with the

bonuses during the term of the policy.


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Money back policies: This type of policy is for periodic payments of partial

survival benefits during the term of the policy as long as the policy holder is alive.

Group insurance : This type of insurance offers life insurance protection under

group policies to various groups such as employers employees, professionals, co-

operatives etc it also provides insurance coverage for people in certain approved

occupations at the lowest possible premium cost.

Term life insurance policies: This type of insurance covers risk only during the

selected term period. If the policy holder survives the term, risk cover comes to an

end. These types of policies are for those people who are unable to pay larger

premium required for endowment and whole life policies. No surrender, loan or

paid up values are in such policies.

Whole life insurance policies: This type of policy runs as long as the

policyholder is alive and is covered for the entire life of the policyholder. In this

policy the insured amount and the bonus is payable only to nominee on the death

of policy holder.

Joint life insurance policies : These policies are similar to endowment policies in

maturity benefits and risk cover, but joint life policies cover two lives

simultaneously such as married couples. Sum assured is payable on the first death

and again on the death of survival during the term of the policy.

Pension plan : a pension plan or annuity is an investment over a certain number of

years but does not provide any life insurance cover. It offers a guaranteed income

either for a life or certain period.


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Unit linked insurance plan : ULIP is a kind of insurance plan which provides life

cover as well as return on premium paid over a certain period of time. The

investment is denoted as units and represented by the value called as net asset

value (NAV).

Chapter-4

Data Analysis


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Data analysis of customer satisfaction

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

INTERPRETATION_-

This shows the annual income of the people which is as follows:-

32% of the people surveyed has salary more than 2 lakh.

50% of the people surveyed have salary between 2 to 4 lakh.

14% of the people surveyed have salary between 4 to 5 lakh.

4% of the people surveyed have salary less than 5 lakh.

Statement 2 :- People want to Invest their surplus Money.


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INTERPRETATION-

This shows in what type they would like to make investment in:-

55% of the people want to have their investment made in terms of fixed

deposits.

23% of the people want to have their investment made in mutual funds .

17% of the people want to have their investment made in stocks.

5% of the people want to have their investment made in real estates.

Statement 3 :- Benefits required by the people regarding theirInvestments

INTERPRETATION-

This shows in what benefits they require regarding their investments:-

25% of the people derive their benefits through savings.

40% of the people derive their benefits through higher return on investment.

12% of the people derive their benefits through tax rebates they get in

calculation of income during the year.

30% of the people derive their benefits to recover risk in investment made in

other sources.


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Statement 4:- Expectations from the Life InsuranceCompanies.

INTERPRETATION-

This shows in what expectations they want from insurance companies regarding

their investments:-

20% of the people want higher return when they make investment in

insurance companies.

13% of the people want higher liquidity through their investment.

52% of the people want security of making safety in future prospects of life.

15% of the people want that the company should ask for lower premium.

Statement 5:- Preference among various Insurance Plans

INTERPRETATION-


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Interpretation-

This shows about customer awareness about insurance companies.

100% of the customers know about LIC.

90% of the customers know about ICICI.

50% of the customers know about TATA AIG.

43% of the customers know about Kotak life insurance

67% of the customers know about SBI Life.

10% of the customers know about Bajaj Allianz.

Statement 7:- Occupation Group

INTERPRETATION-

This shows the occupation group of people who were surveyed:

15% of the people belonged to government job.

52% of the people belonged to private jobs.

21% of the people belonged to business.

12% of the people belonged to other category.


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Statement 8:- Peoples interest of investing in KLI

INTERPRETATION-

This shows the peoples interest in Kotak Mahindra life Insurance:-

28% of the people said they are interested in knowing Kotak Mahindra

Life insurance.

17% of the people said they are partially interested in knowing Kotak

Mahindra Life insurance.

55% of the people said they have no interest in Kotak Mahindra Life

insurance.

Statement 9:- Medium to select KLI.

INTERPRETATION-

This shows what the medium to select Kotak life insurance was:-


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12% of the people said they go with agent knowledge and information.

25% of the people said they go with relatives.

42% of the people said they go with advertisement.

21% of the people said they would go with other sources.

Statement 10 : Would you like to work for kotak life insurance ?

INTERPRETATION-

This shows the peoples interest who would like to work with Kotak life insurance.

83% of the people said they would like to work with Kotak Life

insurance.

17%of the people said they wouldnt like to work with Kotak life

insurance.


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SWOT ANALYSIS

Albert Humphrey advocated the six categories which are the deciding factor of a

companys future, those things are:

1. Product (what are we selling?)

2. Process (how are we selling it?)

3. Customer (to whom are we selling it?)

4. Distribution (how does it reach them?)

5. Finance (what are the prices, costs and investments?)

6. Administration (and how do we manage all this?)

provide a framework by which SWOT issues can be developed into actions and managed

using teams.

Depending on pretext and situation, a SWOT analysis can produce issues which very

readily translate into (one of the six) category actions, or a SWOT analysis can produce

issues which overlay a number of categories. Or a mixture. Whatever, SWOT essentially

tells you what is good and bad about a business or a particular proposition. If it's a

business, and the aim is to improve it, then work on translating: into actions (each within

one of the six categories) that can be agreed and owned by a team or number of teams.

Strengths (maintain, build and leverage)

Opportunities (priorities and optimize)

Weaknesses. (remedy or exit)

Threats (counter)

The swot analysis of the KOTAK LIFE INSURANCE IS:


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STRENGTHWEAKNESSES

End-user sales control and direction.

Right products, quality and

reliability.

Superior product performance

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