kotak internship project report

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Delhi Institute of Advanced Studies

A constituent of GGSIPU

Plot No 6, Sector-25, Rohini

New Delhi 110085

http://www.dias.ac.in/

Summer Internship Report

Internship Report submitted as a partial requirement for the award of the two year

Master of Business Administration Program

Name: Jatin Arora

MBA 2010-2012

Telephone: 9811006218

E-mail: [email protected]

Summer Internship Supervisor

Name: Mr. Mohd. Aakif (Senior Deputy Manager)

Ph. : +91 9999254466

Mailing Address: @kotak.com

Kotak Mahindra Old Mutual Life Insurance

2nd Floor, 7, Community Centre, New Friends Colony, New Delhi- 110065

Academic Supervisor:

Mr. Vivek Vohra

Start Date for Internship: June 10th 2011.

End Date for Internship: August 10th 2011.

Report Date: August 17th 2011.

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Self Certification by the Intern

I hereby certify that I, Jatin Arora have successfully completed my internship with

Kotak Mahindra Life Insurance in the month of July and August 2011. This is also to

certify that this report is an original product and no unfair means like copying etc. have

been used for its completion.

Name: Jatin AroraSignature:

Date:

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Certificate From the Summer Internship Providing Organization

This is to certify that Mr. Jatin Arora has successfully completed his internship with us in

the month of July and August 2011. We wish him all the best for all his future endeavors.

Name of the Supervisor: Mohd. Aakif (Senior Deputy Manager)

Signature:

Date:

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Acknowledgements

No task is a single person effort, same is with this project. Thus I would like to extend my

sincere thanks to all those people who helped me in accomplishing my project.

I owe my project success to all faculty members, especially our Director Prof. S.N.

Maheshwari for providing us with this wonderful opportunity and guidance. I would like

to extend my special gratitude to Mrs. Ruchi Gupta for providing excellent facilitation for

the successful completion of this project. This project provided me a platform to increase

my knowledge and empowered me with a better understanding of concepts in the real

world scenario. And last but not the least special thanks to Kotak Mahindra LifeInsurance who accepted me in spite of my inexperience in the field and gave me the

opportunity to work and learn with them.

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Table of Contents

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Objective of the Summer Internship

S. No. Topic Page Number

1 Delhi Institute of Advanced Studies 6

2 Summer Internship Objective 7

3 Summer Internship- Abstract 7

4 Internship Organizations Profile 8-12

5 Introduction 13-15

5 Project Description 16-23

6 Project Analysis 24-53

7 Project - Conclusion & Recommendation 54-56

8 My Take Away Key Learnings 57-58

9 Annexure & References 59

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Knowledge & awareness of the corporate environment its components & functioning is a

must for tomorrows managers to be. The basic objectives of the summer internship

program for the SMART Pioneers are:

To facilitate our students in testing what they have learnt in all the foundation

courses in the very first year.

To get a feel of corporate life, its functioning & various interactional style.

To fulfill the need of the Corporate, DIAS has formed Summer Internship. The

Business School provides Corporate Internship to its students in different Organisation,

which they have to do for a minimum period of 6 weeks. A project report is presented to

the Corporate on conclusion of the summer internship and is later evaluated by the DIAScommunity.

Thus, summer internship aims at creating better managers for tomorrow in the booming

area of services & relationship technologies.

SUMMER INTERNSHIP REPORT

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Abstract

The Summer Internship was carried out at Kotak Mahindra Old Mutual Life Insurance

2nd Floor, 7, Community Centre, New Friends Colony, New Delhi- 110065

My goal was to develop the distribution channel of Kotak Mahindra by recruiting Life

Advisors for the company who provided business to the company. Moreover I had to fix

portfolios of the clients who had done investment in different policies provided by the

company in areas of life insurance and ULIP funds.

I achieved my goal through different ways. Initially I did telephonic calls and asked my

friends through which I got a list of interested candidates who were interested in

becoming Life Advisors for the company. Then I made sure that they fulfilled all the

conditions that were required for becoming a Life Advisor. After some days, I was told to

do telephonic calls directly to the clients and simultaneously bring business for the

company. Simultaneously I handled ULIP funds of the existing clients where I had to

maximize their returns by switching their investments in various funds.

The company has a cooperative environment among the employees. The employees

always remain enthusiastic and motivated for their work and are very helping in nature.

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COMPANY PROFILE

Kotak Mahindra Old Mutual Life Insurance (Kotak Life) is 74: 26 joint ventureof the

Bank with Old Mutual plc. The company was promoted by Mr. Uday Kotak, Mr. Sidney

A A Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra and Mr. Anand

Mahindra took a stake in 1986 and it is that when the company changed its name to

Kotak Mahindra Financial Limited.

It is one of Indias leading financial institutions with a group net worth of around Rs.

US$ 2.5 billion with over 15million customers and is present in 370 cities in India and

offices in New York, London, Dubai and Mauritius. Kotak Mahindra, the first and only

NBFC in India to convert to a bank, offers pragmatic, world-class solutions that take care

of four basic financial needs Earning, Saving, Investment and Spending. From

commercial banking, to stock broking, to mutual funds, to life insurance, to investment

banking, the group caters to financial needs that encompass every sphere of life.

The life insurance industrys growth is related to demographics, purchasing power,

economy growth rate, share of savings and government support through tax and fiscal

sops. All these factors were favorable to the industry in the year 2011-2012. In the

coming years, India is likely to have a growing middle and affluent class with a

burgeoning service sector contributing significantly to the growth of life insurance

industry.

Introduction of new products and focus on service delivery were primary drivers for the

growth of the private life insurers during 2011-2012. Consumer confidence in the private

sector has substantially improved over the years, and going by the current trends, it is

expected that the private sector will improve upon the perceived value to the consumer.

It comprises of following sub units which combines to form such a vast company and

group of people.

1. Kotak Securities.

2. Kotak Insurance.

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3. Kotak Mahindra bank.

4. Kotak Mutual funds.

5. Kotak Private equity.

6. Kotak Investment banking.

7. Kotak Reality funds.

.

Here is a list of year wise progress in the company:

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1986: Kotak Mahindra Financial Limited starts the activity of Bill Discounting.

1987: Enter the lease and hire purchase market.

1990: Auto financial division started.

1991: Investment Banking Division started. Take over FICOM, one of Indias largest

financial retail marketing network.

1992: Enter Funds Syndication sector.

1995: Brokerage and distribution incorporated into a separate company. Kotak Securities

Investment Banking division incorporated into a separate company Kotak Mahindra

Capital Company.

1996: Auto Financial business is hived off into a separate company.

1998: Enters Mutual Funds marketing and launch Kotak Mahindra Asset Management.

2000: Tie up with Old Mutual Plc. for life insurance.

2001: Launched insurance services.

2003: Kotak Mahindra Financial Ltd. Converted to Bank.

2004: Launched India Growth Fund, a private equity fund.

2005: Kotak Group realigned joint venture in Ford Credit; their stake in Kotak Mahindra

Prime was bought out (formerly known as Kotak Mahindra Primus Ltd) and Kotak

groups stake in Ford credit Kotak Mahindra was sold.

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2006: Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital

Company and Kotak Securities.

2008: Launched a Pension Fund under the New Pension System.

2009: Kotak Mahindra Bank Ltd. opened a representative office in Dubai and Entered

Ahmedabad Commodity Exchange as anchor investor.

2010: Ahmedabad Derivatives and Commodities Exchange, a Kotak anchored enterprise,

became operational as a national commodity exchange.

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MARKET SHARE OF FEW MAJOR PLAYERS:

Since the advent of the private players in the market, the industry has seen new and

innovative steps taken by the players in this sector. The new players have improved the

service quality of the insurance. As a result, LIC, down the years has seen the declining

phase in its career. The market share was distributed among the private players. Though

LIC still holds the 50% of the insurance sector but the upcoming natures of these private

players are enough to give more competition to LIC in the near future. LIC market share

has decreased from 95% (2002-03) to 50 %( 2010-11). The following companies have the

rest of the market share of the insurance industry.

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PIE-CHART SHOWING MARKET SHARE (2010-11)

NAME OF THE PLAYER MARKET SHARE (%)

LIC 50ICICI PRUDENTIAL 10

BIRLA SUNLIFE 4

BAJAJ ALLIANZ 4SBI LIFE 5

HDFC STANDARD 6

TATA AIG 2MAX NEW YORK 3

AVIVA 1

OM KOTAK MAHINDRA 2

RELIANCE LIFE 5

OHERS 8

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INTRODUCTION:

Kotak Life offers life insurance, deferred annuity and employee benefit products to

individuals and groups. The business is distributed through three distribution channels

viz. Tied Agency, Alternate Channels and Group Insurance. The business is value-driven

with a focus on long-term shareholder value and an aspiration to meet policyholder

expectations.

The premium income for the year 2010-2011 grew to Rs. 2975 crore (previous year Rs.

2868 crore). During the year, Kotak Life wrote 259444 policies (previous year 320735

policies) of adjusted first year annualized premium. Riders are not included in the sum

assured.

As at March 31, 2011, Kotak Life Insurance had more than 35000 active life advisors

who are continuously being trained to facilitate them to advise customers in a proper

manner. The philosophy of Kotak Life to focus on Quality life advisors has started

yielding results.

Currently, Kotak Life operates from 300 cities all over the world with a primary focus on

the middle class and affluent population. During the year 29 new branches were opened

and this expansion was in second tier cities which offer good opportunity and also

provide a window to reach to rural areas. A survey conducted by AC Nielsen ORG

MARG in September 2006 in top 8 towns placed Kotak Life at the top 6 brands among

the life insurance brands recalled.

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My objective as a Finance Intern was to help in creating awareness of insurance products

in people by analyzing their needs, handling their objections regarding insurance and then

offering right product to them. Simultaneously handling ULIP funds of the existing

clients where I had to maximize their returns by switching their investments in various

funds. The project will lead to increase the turnover of the company and the distribution

channel of the company thereby it would lead to increase the market share of the

company, to increase the reach and visibility of the company and its brand name.

Moreover I had to

To recruit the Life Advisors (agents) for the company so as to increase sales and

also to promote the brand.

To analyze the securities and portfolios of the clients.

To switch funds of the clients if the market is going down.

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PROJECT DESCRIPTION:

My project at Kotak life insurance was-

Portfolio Management

ULIP FUNDS

A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a

policy varies according to the current net asset value of the underlying investment assets.

It allows protection and flexibility in investment, which are not present in other types of

life insurance such as whole life policies. The premium paid is used to purchase units in

investment assets chosen by the policyholder.

In India investments in ULIP are covered under Section 80C of IT Act. However, the

concept of having an investment is governed by the Insurance Regulatory and

Development Authority (IRDA).

ULIP IN KOTAK MAHINDRA:

Kotak Wealth Insurance is a unit-linked insurance plan, that provides you with

investment growth to take care of your family's goals and comprehensive protection to

help your family and you meet unplanned events head on.

Advantages:

*Comprehensive triple benefit to secure your family's future

* Wide array of fund options to suit your investment needs

* Liquidity to take care of contingencies

* Convenience of shorter payment term

* Optional rider benefits to boost protection

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POLICIES OF KOTAK DIRECT:

1. KOTAK SAFE INVESTMENT PLAN (KSIP)

2. KOTAK SMART ADVANTAGE PLAN (KSAP)

3. KOTAK HEADSTART FUTURE PROTECT

Depending upon the needs & wants, clients have the option of choosing between any of

these three plans which provides them with various benefits & growth options along with

an Insurance cover.

KOTAK SAFE INVESTMENT PLAN (KSIP)

Kotak Safe Investment Plan is a Unit Linked Insurance Plan that combines the benefits of

insurance and capital market returns into one. This plan from the stable of

Kotak Life Insurance is a true reflection of the companys essence: innovation that will

benefit the investor.

What makes investing in Kotak Life Insurance truly unique is that you enjoy a

Guaranteed Maturity Value with varying degrees of equity exposure depending on your

risk appetite. So if the market value of your units is higher, you reap the benefits with the

peace of mind that whilst in a bear market your investment is under-pinned by theGuaranteed Maturity Value. And there is more, the returns are totally Tax free.

KOTAK SMART ADVANTAGE (KSAP)

Guaranteed returns of unto 275% of your first year premium at maturity

Assured bonus additions at regular intervals during he policy term to enhance your

fund value.

100% allocation of the premium from 2nd year onwards

Unique fund offering maximum opportunity for growth and choice for your

investment needs

Maximum protection for your loved ones to choose from.

KOTAK HEADSTART FUTURE PROJECT

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Every child is different. Each has their own set of dreams and aspirations. As a parent

you would like to provide your child with all the building blocks that could develop his or

her potential to the fullest. This could mean extra coaching or tuition for talented

children, special training or equipment for natural athletes or professional training for

born singers. Head start Child Plans is a specially tailored, cost-effective plan, aims to

give your children the financial means to pursue his or her dreams and live them.

COMPARISON BETWEEN VARIOUS POLICIES:

POLICY

FEATURE

KSAP KSIP HEADSTART

ENTRY AGE MIN: 0 Years

MAX:65Years

MIN:0Years

MAX:65Years

MIN:18 Years

MAX:60Years

MATURITY AGE MIN:18Years

MAX:75Years

MAX:75Years MIN:18Years

MAX:70Years

POLICY TERMS REGULAR:10/15

/20/25Years

FOR MINOR:

10Years or 18 less

entry age at last

birthday

whichever is higher

MIN: 10Years or 18

minus age at entry

for

minors; whichever

Is higher

MAX: 30Years

Min: Greater of (10

Yrs or 18 less

childs present

age)

Max: 25 Yrs.

MINIMUM

PREMIUM

REGULAR PPT:

Rs.15, 000 p.a.

LIMITED PPT:

Rs 36,000p.a.

REGULAR:

Rs.18, 000 p.a.

LIMITED PPT:

Rs 50,000 p.a.

REGULAR PPT:

Rs.15, 000 p.a.

LIMITED PPT:

Rs 25,000 p.a

for 4-10 Yrs

Rs 50,000 p.a.

for 3 Yrs

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BASIC SUMASSURED

MIN: 0.5 X

(Policy term x

annual premium.)

MAX: Any multiple

of premium,

subject to

underwriting

HIGH COVER:

Policy

term x annual

premium

LOW COVER:

Greater of(5x

annual

premium,0.5xpolicy

term x annual

premiums

MIN: 0.5 X

(Policy term x

Annual premium.)

MAX: Any multiple

of premium,

subject to

underwriting

RIDERSBENEFITSCritical IllnessBenefit

Permanent

Disability

Benefit

Accidental

Disability

Guardian

Benefit:

Premiums waiver

protection on

disability.

Accidental

Death Benefit

Preferred Term

Benefit

Life Guardian

NO RIDERSBENEFITS

Critical IllnessBenefit

Permanent

Disability Benefit

Accidental

Disability

Guardian

Benefit: Premiums

waiver protection

on disability.

Accidental Death

Benefit

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Benefit

USP OF THE VARIOUS PLANS:

PLAN KSAP KSIP HEADSTARTUSP Upto 275 %

return on first

year premium at

maturity &

assured

bonuses.

Guaranteed

Maturity Value for

all type of

Investors.

Triple Death Benefit

& Dynamic Floor

fund.

COMPARISON OF CHARGES:

POLICIES

CHARGES

KSAP KSIP HEADSTART

POLICY Rs.65p.m. at =


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ADMINISTRATION

CHARGES

commencement of

the policy, inflating

by 5%p.a.

>20000-3.5% fee of Rs.75 p.m.

in year 1and Rs 40

p.m. in year2

onwards.

>Rs.100000: No

charges

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FUND

MANAGEMENT

CHARGES

Dynamic bond fund

- 1.2%

Dynamic floor

fund- 1.75%

Opportunities fund-2%

Guaranteed/dy

namic money

market fund- 0.6%

Guaranteed/dynamic gilt fund- 1%

Guaranteed/dy

namic bond

fund- 1.2%

Guaranteed/dy

namic floating

rate fund 1.2%

Guaranteed/dy

Namic balanced

fund- 1.3%

Guaranteed/dy

namic growth

fund- 1.5%

Aggressive

growth fund- 1.6%

Dynamic

money

market fund- 0.6%

Dynamic giltFund- 1%

Dynamic

bond fund- 1.2%

Dynamic

floating rate

fund- 1.2%

Dynamic

balanced

fund-1.3%

Dynamic

growth fund- 1.5%

Aggressive

growth fund- 1.6%

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SWITCHING

CHARGES

First four switches

in a year are free.

Rs. 500 will be

charged for every

additional switch.

First four switches

in a year are free.

Rs. 500 will be

charged for every

additional switch.

First four switches

in a year are free.

Rs. 500 will be

charged for every

additional switch.

KOTAK DYNAMIC FLOOR FUND:

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In this fund the investment of the clients is mainly done in equity (0-65%) and rest

of the investment is done in debt.

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KOTAK DYNAMIC BOND FUND:

KOTAK GUARANTEED BOND FUND

In the above 2 funds the investments is done in govt. debts when the market is goin

down so as to protect the investors investments. This basically is the work of

portfolio manager as he has to assume the future risk, he has to take the market

fluctuations into consideration and invest in the govt. bonds when the market is

slow.

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KOTAK OPPORTUNITY FUND

This fund helps manager to grow the returns as this fund comes into use when the

market is going up. Again this works on the assumptions of the fund manger. When

the manager assumes that the market will be rising in the near future, he switches

the clients funds into the opportunity fund, to reap maximum returns. This

maximizes the clients returns. The manager invests 100% of the clients

investments in this fund.

Learnings

We learnt a lot about switching of the funds. The crux of the switching was the

timing of the switch. Our manager had a no. in his mind of the Sensex. He always

seeked the time when to maximize the returns of the clients. When the market was

hovering around 16000 he switched the Bond funds to Opportunity funds

considering the market will rise in future along with the clients returns. And when

he knew the market is almost at its peak he switched the Opportunity funds to Bond

funds.

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COMPETITIVE ANALYSIS WITH HDFC-STANDARD LIFE:

HDFC Standard Life Insurance Company is a joint venture between India's largesthousing finance provider, HDFC and Europe's largest mutual life assurance company The

Standard Life Assurance Company (U. K).

Standard Life, UK , founded in 1825, has been at the forefront of the UK insurance

industry for 175 years by combining sound financial judgment with integrity and

reliability.

It is the Largest Mutual Life company in Europe and has total assets of Rs. 10607

crore.

Training activities for agents/advisors.

As per IRDA guidelines, 50hrs training is compulsory.

Both online & classroom training are available.

Training is compulsory with both part-time & full time Options.

An objective based exam is conducted by IRDA, the minimum qualification

required is-

12th pass for urban areas

10th pass for rural areas.

Commission Structure.

Depends on the product, like on savings

20-40% Ist year premium.

On investment 2%

On pension 7.5%

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Modes & ways through which the company recruits agents.

Direct contacts.

Newspaper adds.

Consultants.

Member of the company can introduce a new member.

CURRENT AGENT FORCE

2000-3000 in NOIDA.

Top 5 USPs (Unique Selling Proposition) Of HDFC Std. Life

Best insurer according to Outlook.

Well supported by foreign Ist private sector life insurance Company to be granted

a license.

Declared bonus every year from the day of incorporation (only company.)

Provides fast service to the customers in terms of claim

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TRADITIONAL PLANS

Traditional Plans are Life Insurance plans provided by Kotak Mahindra Life Insurance

along with ULIP.

LIFE INSURANCE

Life insurance is a contract under which the insurer (Insurance Company) in

Consideration of a premium paid undertakes to pay a fixed sum of money on the

death of the insured or on the expiry of a specified period of time, whichever is

earlier. In case of life insurance, the payment for life insurance policy is certain. The

Event insured against is sure to happen only the time of its happening is not known.

So life insurance is known as Life Assurance. The subject matter of insurance islife of human being. Life insurance provides risk coverage to the life of a person. On

death of the person insurance offers protection against loss of income and

compensate the titleholders of the policy.

Roles of Life Insurance

Life insurance as an investment:Insurance products yield morethan any other investment instruments and it also provides added

incentives or bonus offered by insurance companies.

Life insurance as risk cover:Insurance is all about risk cover andprotection of life. Insurance provides a unique sense of security that no

other form of invest can provide.

Life insurance as tax planning:Insurance serves as an excellent

tax saving mechanism too.

Importance of Life Insurance

Protection against untimely death:

Life insurance provides protection to the dependents of the life insured and

the family of the assured in case of his untimely death. The dependents or

family members get a fixed sum of money in case of death of the assured.

Saving for old age:

After retirement the earning capacity of a person reduces. Life insurance

enables a person to enjoy peace of mind and a sense of security in his/her old

age.

Promotion of savings:

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Life insurance encourages people to save money compulsorily. When life

policy is taken, the assured is to pay premiums regularly to keep the policy inforce and he cannot get back the premiums, only surrender value can be

returned to him. In case of surrender of policy, the policyholder gets the

surrendered value only after the expiry of duration of the policy.

Initiates investments:

Life Insurance Corporation encourages and mobilizes the public savings and

channelizes the same in various investments for the economic developmentof the country. Life insurance is an important tool for the mobilization and

investment of smal l savings.

Credit worthiness:

Life insurance policy can be used as a security to raise loans. It improves the

credit worthiness of business.

Social Security: Life insurance is important for the society as a whole also. Life insurance

enables a person to provide for education and marriage of children and for

construction of house. It helps a person to make financial base for future.

Tax Benefit:

Under the Income Tax Act, premium paid is allowed as a deduction from the

total income under section 80C.

Traditional Plan under Life Insurance

The Kotak Capital Multiplier Plan is a plan that allows you to enjoy returns even

beyond maturity. This plan is best suited for you...

If you are looking for an investment plan for your child combined with

insurance and want a flexible money-back plan that gives you the power to decide

the amount and time of withdrawals.

If you are planning for your retirement and require a retirement plan that

allows you to withdraw any amount as per your need and at the same time invests

your money prudently to get you bonuses on the balance in your account.

If you think that from time to time you will have extra cash, which you would

like to invest in an instrument which is safe and which will get you attractivereturns.

Advantages

Freedom of extending the policy term beyond the maturity date.

Additional 10% life-cover over and above the original life-cover throughout

the policy term.

Get a free ATM card to withdraw your maturity proceeds with ease

Accumulate more through the bonuses declared regularly by the company.

Invest your surplus monies top-up premium.

Key Features30
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Maturity Benefit:

This is a participating plan and you are entitled to the higher of the basic sumassured or the Accumulation Account on maturity along with the balance in

the Supplementary Accumulation Account.

Early maturity benefits available after at least 3 years:

The higher of Guaranteed Cash value* and Special Cash value^ plus thehigher of Guaranteed Cash Value* in respect of lump sum injections and the

Special Cash Value^ in respect of lump sum injections.

Ill health Early Maturity Benefits:

Higher of Guaranteed Cash Value* and Accumulation Account plus Higher

of Guaranteed Cash Value* in respect of Lump sum Injections and

Supplementary Accumulation Account.*Guaranteed Cash Value = 30% of all the premiums paid excluding the first

year's premium and additional premium, if any. The value of the bonus will be

included in cash value.Special Cash Value will be as per the discretion of the company.

Death Benefit: During the build-up phase. In the event of unfortunate death, your beneficiary

would get the higher of basic sum assured (less premiums due but not paid)or Accumulation Account. In addition, 10% of the basic sum assured and the

higher of all lump sum injections made and the Supplementary Accumulation

Account will also be paid.During the withdrawal phase. In the event of unfortunate death, your

beneficiary would get 10% of the basic sum assured upto 75 years of life

assured's age and the balance in the Accumulation Account (into which the

Supplementary Accumulation Account is added).

Top-Up Premiums:

In case you have any surplus funds you may invest them at anytime in thepolicy. This facility of lump sum injections allows you to augment your

savings in the build-up phase, in addition to the regular premiums. A

Supplementary Accumulation Account is created to hold these lump sums.

Funds in Top-Up Account continue to earn bonus at the same rate as that ofthe Accumulation Account.

15 year withdrawal period:

If you do not see any immediate utilization of your maturity proceeds, youcould let it stay invested with us for a maximum of 15 years after the maturity

of the plan and it could function like a fixed deposit offering returns and

liquidity to withdraw all your funds.

In the event that you do not withdraw the entire amount, you can leavebehind the full amount or at least 50% of the Accumulation Account balance.

You may make one or more partial withdrawals each year, for the next 15

years or till the age of 75, whichever is earlier. You can withdraw amounts asper your need; subject to an upper limit of 25% of the Net Vesting Value

(NVV). The NVV is the basic sum assured or Accumulation Account,

whichever is higher after deducting the immediate withdrawals on the date ofmaturity. At anytime during this post maturity phase, you still have the

flexibility to withdraw funds in full and terminate the insurance policy

Additional Life Cover:

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In the build-up phase there is an additional life cover of 10% of the basic sum

assured and of the Critical Illness Benefit, if opted for. This 10% covercontinues even in the withdrawal phase for a period of 15 years or till you

reach the age of 75, whichever is earlier.

Automatic Cover Maintenance: In case you miss your premium payment, Automatic Cover Maintenance

facility will ensure that your insurance cover is in force. This facility is

available after 3 completed policy years.

Rider Benefits:

You can choose from any of the following riders:

Term / Preferred Term Benefit (KTB UIN No: 107C003V02, KPTB UIN

No: 107C013V01) Accidental Death Benefit (ADB UIN No: 107C001V01)

Permanent Disability Benefit (PDB UIN No: 107C002V01)

Critical Illness Benefit (CIB UIN No: 107C004V02)

Life Guardian Benefit (LGB UIN No: 107C012V01) Accidental Disability Guardian Benefit (ADGB UIN No: 107C011V01)

Tax Benefits

Section 80C, 10(10D) of Income Tax Act, 1961 would apply. Premium paid

for Critical Illness Benefit qualify for a deduction under Section 80D. Tax

benefits are subject to change in tax laws. You are advised to consult your taxadvisor for details.

S W O T A N A L Y S I S O F K O T A K L I F E I N S U R A N C E :

Strengths:

Automatic cover maintenance provided by the company gives the customers, a

chance of paying the premium even when their due date is over without much

hassle and without lapsing of the policy. This helps the company in attracting the

customers.

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The company provides a healthy return of nearly 8% which is highest in the

insurance industry. This can attract customers for even traditional plans like KEP,

KCMP, etc.

The company follows a sound promotion policy on internet, schemes, and

promotional gifts etc. which are attracting customers.

Weaknesses:

The product mix is not according to the market leaders like LIC, ICICI Prudential,

etc. These companies have lot of variants even in a single type of product

according to the need and financial capacity of the customer.

Premium rates are not so competitive. They are usually very high in comparison

to other companies. Till the term is ten years, its premium rate, in comparison to

the returns it gives, is very high as compared to LIC.

Unwillingness of the sales force to forward the promotional offers to the existing

clients acts as a barrier in maintaining relations with customers and business

growth.

The promotional strategies are not that effective as that of the competitors.

Opportunities:

The company has its main customer base in the upper segment of the market. In

country like India, where maximum of the population is of working type with

moderate salary, that to with low insurance penetration, the opportunities are great

in this segment. So, the company should look for the middle segment and the rural

market as their future target segment to gain a healthy position in the market

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Since, in the present situation, with increasing awareness of people towards

medical insurance and general insurance, the company should expand its horizon

in this area also.

The company has a very wide and open market to be covered.

Low share of other organized players.

Still, only 6% OF Indias population is insured. They can target the uninsured

people especially targeting rural sector.

Threats:

Due to firm belief of the people in LIC, changing their attitudes for a private

company like Kotak Life Insurance is difficult. So it is the major threat to the

company.

Due to the presence of private players like ICICI Prudential, HDFC life, Bajaj

Allianz etc., which are much older in the market in comparison to Kotak life,

gaining the market share is very difficult.

RBI infrastructure and flexi bonds are proving to be great threats, along with

mutual funds, to life insurance policies as they are giving better returns along with

easy liquidity options. RBI infrastructure and flexi bonds are even providing 6.5%

tax free returns.

Entry of NBFCs also posed a big threat.

FUTURE GROWTH PROSPECTS OF

COMPANY

IN the total market share, LIC has reduced its share from 91% to 50%. This means that

private insurance players have got more margins in their hands which have increased

from 9% to 50% in the last 5 years only.

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Kotak Mahindra Bank completed 8 years as a scheduled commercial bank in 2010. The

Bank opened its 100th branch in January 2007. As on March 31, 2011, the Bank has built

a network of over 2000 full fledged branches spread across 300 cities and towns. The

Bank proposes to have around 200 full-fledged branches by mid next year. Kotak

Mahindra Capital Company and Kotak Securities continued to report good financial

performance on the back of strong capital markets and the robust overall economic

growth.

The life insurance subsidiary, Kotak Mahindra Old Mutual Life Insurance continued its

growth momentum but posted an accounting loss. The premium income for the year grew

to Rs. 2975 crore (previous year Rs. 2868 crore). During the year, Kotak Life wrote over

259444 policies (previous year 320735 policies) of adjusted first year annualizedpremium. Riders are not included in the sum assured.

The group continues to have a significant presence in distribution of mutual funds and is

among the top three distributors of mutual funds in India.

CONCLUSION

The insurance industry has come a long way since the year 2000, when the government

opened up the market to private players also. In India, people are finally beginning to

realize the importance of insurance. With life expectancy growing and 94% of the

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population having no social security or old age pension plans, insurance provides a useful

vehicle to save up for later stage in life.

Although the endowment and money back plans are the major sold plans but the current

flavor is the unit linked plans, which provides covers as well as the opportunity to invest

through the same product.

The Indian insurance industry is witnessing a plethora of changes as customers are given

more options to choose from custom-made products, better transparency, improved

technologies and processes and better service standards. Government and industry action

in insurance are more mutually receptive than ever before. Indias enormous population,

continuously developing infrastructure facilities and globally visible corporate success

add to the countrys promising prospect for insurers looking for huge demands and

alternatives to already tapped market. However, one area where the companies are not

upbeat right now is the rural market. IRDA regulations specify that companies must log

five percent of the business from socially weaker sections and rural areas in the 1 st year,

10 percent in the next year and 15 percent in the 3rd year.

Moreover, from the project we can also conclude that there are many things which the

company should take care before designing the products. People generally look for their

financial status before investing their money anywhere and then look for the product and

its reliability. So, while designing the product company should take care of these basic

factors.

UNDER THIS PROJECT:

No. of customers met : more than 250

No. of customers called (phone) : 500

No. of forms filled : more than 50

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Kotak life insurance is a fastest growing private life insurance company in India with a

market share of 2%. ICICI is the no. one private life insurance co. with a market share of

10%. Birla sun life stands second in private life insurance companies with a market share

of 4%. Looking at the private sector, ICICI Prudential has been the dominant player

because the amount of gap between the market shares is huge.

If we analyze in all sectors of life insurance then LIC has been the most dominant

player since 1956. The impact of LIC has been so much in both rural and urban

areas that people use the term LIC instead of life insurance.

Kotak life faces a big challenge in front of them so as to stay in the race with Life

insurance Corporation (LIC) because with the entrance of other companies like

ICICI, Max New York, HDFC Standard Life & Birla Sun Life, the competition

has become tougher.

But insurance is also growing day by day, India has a population of 1.2 billion

and only 6% of the population is insured. This means insurance is an upcoming

industry but Kotak life has to work a lot on their strategies to overcome LIC.

RECOMMENDATIONS AND SUGGESTIONS

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During the exposure of 2 months I had in the insurance industry via KOTAK LIFE, it

helped me to develop the basic understanding of how this industry works and the

work experience & knowledge gained has also helped me to give the

recommendations as stated below:

Insurance is a business of credibility. As they are in service marketing, proper

care of the customers before and after buying the product is an important criterion

of competing in the market. So proper Customer Relationship Management

techniques should be adopted by the company.

As we know nearly 70% of the present countrys population belongs to rural areas

and our company has its bases in urban area only, the company should take

majors to tap the rural market also.

In comparison to the market leaders like LIC, ICICI Prudential, etc. the company

has very few product variants. However, to resist the competition in the market,

company should try to increase its product mix so that it can cater the need of the

maximum proportion of the population.

Implementation of proper technology should be done. It can adopt VSAT

technology or can implement payment of premium through ATM and customers

should be revealed about their due premium through SMS and emails.

The company should look for proper advertising and sales promotion tools so as

to achieve its aspiration of being one of the top 5 insurance companies in India.

The company should try to change the perception of the people that insurance is

all about getting discount in tax, they should be made to realize that it is a great

way of saving for the future too.

KEY LEARNINGS

How to recruit insurance advisors and convince them for the job profile.

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Managerial Communication & Etiquettes

Time Management i.e. reaching the organization on time and leaving accordingly

Practical aspects of Customer Relationship Management

Communication gap shouldnt exist between different levels of management so asto ensure maximum efficiency of the employees

For gaining a competitive edge over the competitors, we need to increase the

product mix

How the information is carried out from middle level management to corporate

level management and vice-versa

How to switch funds of the customers in ULIP at the time of fluctuating Sensex

How to fix the appointment, prepare ourselves, present, sale and follow up

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Annexure & References (including Web references)

various business newspapers

magazines

www.amfindia.com

www.kotaklifeinsurance.com

www.investmsrtindia.com

www.personalfn.com

www.economictimes.com

www.stockindia.com

www.irdaindia.org

Annual report of Kotak life insurance and HDFC standard life insurance
http://www.amfindia.com/http://www.kotaklifeinsurance.com/http://www.investmsrtindia.com/http://www.personalfn.com/http://www.economictimes.com/http://www.stockindia.com/http://www.irdaindia.org/http://www.amfindia.com/http://www.kotaklifeinsurance.com/http://www.investmsrtindia.com/http://www.personalfn.com/http://www.economictimes.com/http://www.stockindia.com/http://www.irdaindia.org/

kotak internship project report

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