A

PROJECT REPORT
ON GENERAL TRAINING AT

“KOTAK LIFE INSURANCE LTD”

BY

VARUN BAWA

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Se. no Particulars Page No.
1 What is Insurance
 Introduction
 Brief history of the insurance sector
 Some of the milestones in life insurance
 Insurance sector reforms
 IRDA
 Existing Insurance companies
2 Introduction of KOTAK LIFE INSURANCE
 Company profile
 Mission
 Vision & values
 Management
 Organization chart
 Build up of business
 Group structure of kotak mahindra bank ltd
 KMOM- the partnership
 Awards
 Problem Identification

3 Marketing
 Promoters
 Distribution
 Sales strategy
 Market share
4 Service
 Customer satisfaction
 Insurance solutions for individuals
 Stages in policy issuance
5 Human resource
 Definition of agent
 Procedure for becoming an agent
 Methods of remunerating agents
 Function of agents
 Responsibilities of agents
 Ethical Behaviour
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 Employee welfare
 Oracles online system for employee
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 • INTRODUCTION
Life insurance is a form of insurance that pays monetary proceeds upon the
death of the insured covered in the policy. Essentially, a life insurance policy is a contract
between the named insured and the insurance company wherein the insurance company
agrees to pay an agreed upon sum of money to the insured's named beneficiary so long as the
insured's premiums are current.
With a large population and the untapped market area of this population
insurance happens to be a very big opportunity in India. Today it stands as a business
growing at the rate of 15-20% annually. Together with banking services, it adds about 7
percent to the country’s GDP. In spite of all this growth statistics of the penetration of the
insurance in the country is very poor. Nearly 80% of Indian populations are without life
insurance cover and the health insurance. This is an indicator that growth potential for the
insurance sector is immense in India.
It was due to this immense growth that the regulations were introduced in
the insurance sector and in continuation “Malhotra Committee” was constituted by the
government in 1993 to examine the various aspects of the industry. The key element of the
reform process was participation of overseas insurance companies with 26% capital. Creating
a more competitive financial system suitable for the requirements of the economy was the
main idea behind this reform.
Since then the insurance industry has gone through many changes. The
liberalization of the industry the insurance industry has never looked back and today stand as
one of the most competitive and exploring industry in India. The entry of the private players
and the increased use of the new distribution are in the limelight today. The use of new
distribution techniques and the IT tools has increased the scope of the industry in the longer
run.
Insurance is the business of providing protection against financial aspects of
risk, such as those to property, life health and legal liability. It is one method of a greater
concept known as risk management –which is the need to mange uncertainty on account of
exposure to loss, injury, disadvantage or destruction.
The business of insurance is related to the protection of the economic
values of assets. Every asset has a value. The asset would have been created through the

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efforts of the owner. The asset is valuable to the owner, because he expects to get some
benefit from it. The benefit may be an income or in some other form.
In India, insurance began in 1818 with life insurance being transacted by an
English company. The first insurance company was the Bombay mutual assurance society ltd,
formed in 1870 in Mumbai. Insurance helps to reduce the consequences of adverse situation.
Insurance is the method of spreading and transfer of risk. The fortunate many who are
exposed to some or similar risk shares loss of the unfortunate. Insurance does not protect the
assets but only compensates the economic or financial loss.
In insurance the insured makes payment called “premiums” to an insurer,
and in return is able to claim a payment from the insurer if the insured suffers a defined type
of loss. This relationship is usually drawn up in a formal legal contract.
Insurance companies also earn investment profits, because they have the
use of the premium money from the time they receive it until the time they need it to pay
claims. This money is called the float. When the investments of float are successful they may
earn large profits, even if the insurance company pays out in claims every penny received as
premiums. In fact, most insurance companies pay out more money than they receive in
premiums. The excess amount that they pay to policyholders is the cost of float. An insurance
company will profit if they invest the money at a greater return than their cost of float.
An insurance contract or policy will set out in detail the exact
circumstances under which a benefit payment will be made and the amount of the premiums.
Marine insurance is the oldest type of insurance and one of the earliest
records of a marine policy relates to a Mediterranean voyage in 1347. This was followed by
life insurance some 300 years later. Fire insurance, however, did not begin until after the
Great fire of London in 1666. In India all the three insurance developed as under:

 Fire Insurance
 Marin insurance
 Life Insurance

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Classification of insurance:
The insurance industry in India can broadly classify in two parts. They are.

1) Life insurance.
2) Non-life (general) insurance.

1) Life insurance:-
Life insurance can be defined as “life insurance provides a sum of money if the
person who is insured dies while the policy is in effect”.
In 1818 British introduced to India, with the establishment of the oriental life
insurance company in Calcutta. The first Indian owned Life Insurance Company; the Bombay
mutual life assurance society was set up in 1870. The life insurance act, 1912 was the first
statuary measure to regulate the life insurance business in India. In 1983, the earlier
legislation was consolidated and amended by the insurance act, 1938, with comprehensive
provisions for detailed effective control over insurance. The union government had opened
the insurance sector for private participation in 1999, also allowing the private
Companies to have foreign equity up to 26%. Following the opening up of the
insurance sector, 12 private sector companies have entered the life insurance business.

Benefits of life insurance:

℘ Life insurance encourages saving and forces thrift.
℘ It is superior to a traditional savings vehicle.
℘ It helps to achieve the purpose of life assured.
℘ It can be enchased and facilitates quick borrowing.
℘ It provides valuable tax relief.

Thus insurance is found to be very useful in the lives of the person both in short
term and long term.
Fundamental principles of life insurance contract:-

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1) Principle of almost good faith:
“A positive duty to voluntary disclose, accurately and fully, all facts, material to the
risk being proposed whether requested or not”.

2) Principle of insurable interest:

“Relationships with the subject matter (a person) which is recognized in law and gives
legal right to insure that person”.

2) Non-life (general) Insurance:-

Triton insurance co. ltd was the first general insurance company to be
established in India in 1850, whose shares were mainly held by the British. The first general
insurance company to be set up by an Indian was Indian mercantile insurance co. Ltd., which
was stabilized in 1907. There emerged many a player on the Indian scene thereafter.
The general insurance business was nationalized after the promulgation of General
Insurance Corporation (GIC) OF India undertook the post-nationalization general insurance
business.

• Brief History of the Insurance Sector in India

The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire and
flood and loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the recent past,
particularly after the industrial era – past few centuries – yet its beginnings date back almost
6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and these
companies were not insuring Indian natives. However, later with the efforts of eminent

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people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian
lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums
were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of
first Indian life insurance company in the year 1870, and covered Indian lives at normal rates.
Starting as Indian enterprise with highly patriotic motives, insurance companies came into
existence to carry the message of insurance and social security through insurance to various
sectors of society. Bharat Insurance Company (1896) was also one of such companies
inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance
companies. The United India in Madras, National Indian and National Insurance in Calcutta
and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-
operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the
great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and
Swadeshi Life (later Bombay Life) were some of the companies established during the same
period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912,
the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life
Insurance Companies Act 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 Crore, it rose to 176
companies with total business-in-force as Rs.298 Crore in 1938. During the mushrooming of
insurance companies many financially unsound concerns were also floated which failed
miserably. The Insurance Act 1938 was the first legislation governing not only life insurance
but also non-life insurance to provide strict state control over insurance business. The demand
for nationalization of life insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January 1956 that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the
19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,

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1956, with the objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing them adequate
financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long-term contracts and
during the currency of the policy it requires a variety of services need was felt in the later
years to expand the operations and place a branch office at each district headquarter. Re-
organization of LIC took place and large numbers of new branch offices were opened. As a
result of re-organization servicing functions were transferred to the branches, and branches
were made accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 Crore of New Business in 1957 the corporation crossed
1000.00 Crore only in the year 1969-70, and it took another 10 years for LIC to cross
2000.00 Crore mark of new business. But with re-organization happening in the early
eighties, by 1985-86 LIC had already crossed 7000.00 Crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the corporate office. LIC’s Wide Area Network covers 100
divisional offices and connects all the branches through a Metro Area Network. LIC has tied
up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at
Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives which
inspired our forefathers to bring insurance into existence in this country inspire us at LIC to
take this message of protection to light the lamps of security in as many homes as possible
and to help the people in providing security to their families.

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 • Some of the important milestones in the life insurance business in
India are

• 1850 Non life insurance debuts with triton insurance company. 1870 Bombay
mutual life assurance society is the first Indian owned life insurer
• 1912 The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
• 1928 The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
• 1938 Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
• 1956 245 Indian and foreign insurers and provident societies taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 Crore from the Government of India.

The General insurance business in India, on the other hand, can trace its
roots to the Triton Insurance Company Ltd., the first general insurance company established
in the year 1850 in Calcutta by the British. Some of the important milestones in the general
insurance business in India are:

• 1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
• 1957 General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
• 1968 The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
• 1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the
general insurance business in India with effect from 1st January 1973. 107 insurers
amalgamated and grouped into four companies’ viz. the National Insurance Company
Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd.
and the United India Insurance Company Ltd. GIC incorporated as a company.

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 • Insurance sector reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI

Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and
recommend its future direction.
The Malhotra committee was set up with the objective of complementing
the reforms initiated in the financial sector. The reforms were aimed at “creating a more
efficient and competitive financial system suitable for the requirements of the economy
keeping in mind the structural changes currently underway and recognizing that insurance is
an important part of the overall financial system where it was necessary to address the need
for similar reforms” In 1994, the committee submitted the report and some of the key
recommendations included.
 1997 Insurance regulator IRDA set up
 2000 IRDA starts giving licenses to private insurers: Kotak Life Insurance, ICICI
prudential and HDFC Standard Life insurance first private insurers to sell a policy
 2001 Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks
allowed selling insurance plans.

• The Insurance Regulatory and Development Authority (IRDA)

The Insurance Act, 1938 had provided for setting up of the Controller
of Insurance to act as a strong and powerful supervisory and regulatory authority for
insurance. Post nationalization, the role of Controller of Insurance diminished considerably in
significance since the Government owned the insurance companies.
But the scenario changed with the private and foreign companies
foraying in to the insurance sector. This necessitated the need for a strong, independent and
autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would
have taken time, the then Government constituted through a Government resolution an
Interim Insurance Regulatory Authority pending the enactment of a comprehensive
legislation.
The Insurance Regulatory and Development Authority Act, 1999 is an
act to provide for the establishment of an Authority to protect the interests of holders of
insurance policies, to regulate, promote and ensure orderly growth of the insurance industry

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and for matters connected therewith or incidental thereto and further to amend the Insurance
Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business
(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India
(for life insurance business) and General Insurance Corporation and its subsidiaries (for
general insurance business).
The act extends to the whole of India and will come into force on such date
as the Central Government may, by notification in the Official Gazette specify. Different
dates may be appointed for different provisions of this Act.
The Act has defined certain terms; some of the most important ones are as
follows:
Appointed day means the date on which the Authority is established under
the act. Authority means the established under this Act.
Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by
the Central Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd January,
1996.
Words and expressions used and not defined in this Act but defined in the
Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General Insurance
Business (Nationalization) Act, 1972 shall have the meanings respectively assigned to them
in those Acts
A new definition of "Indian Insurance Company" has been
inserted. "Indian insurance company" means any insurer being a company
(a) Which is formed and registered under the Companies Act, 1956
(b) in which the aggregate holdings of equity shares by a foreign company, either by itself or
through its subsidiary companies or its nominees, do not exceed twenty-six percent, Paid up
capital in such Indian insurance company
(c) Whose sole purpose is to carry on life insurance business, general insurance business or
re-insurance business?

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• Existing Insurance Companies/Corporation

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 • INTRODUCTION ABOUT KOTAK LIFE INSURANCE
COMPANY PROFILE

Stock broking businesses in the UK. Kotak Group was established in 1985.Kotak
Mahindra Bank is the parent company of the group. Kotak Group entered into the life
insurance business in 2001. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture
between Kotak Mahindra Bank Ltd. (76%) and Old Mutual plc. (24%) Old Mutual plc is a
world-Class international financial services company. It was established in South Africa
before 160 years.
OLD MUTUAL is the largest financial services business in South Africa, through its
life insurance, asset management, banking and general insurance operations. The company
serves 4 million life insurance policyholders and employs over 13 000 South Africans in its
local operations.
In the USA, OLD MUTUAL is one of the
top ten fixed annuity businesses offering an array of specialist asset management skills through its 23 asset
management businesses. The company’s US Life business recorded sales of $4 billion at the end of 2002.

Operations in the United Kingdom are focused on wealth management,

through Gerrard as one of the leading private client

The OLD MUTUAL Group has the ability to cater for a variety of consumer
segments and offers a comprehensive and innovative range of products for all income groups.

• Mission

“At Kotak Life Insurance, we aim to help customers 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.”

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 • Vision & values

℘ Our Vision:-

Kotak Life Insurance has a deep rooted commitment to improve the quality of life of
its customers, employees and stakeholders. We aim at improving the long term value in our
relationship by continuous innovation and improvements. We do this by our three-prong
effort which strives to make Kotak Life Insurance a corporate with values.

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Increase Customer Value:
Kotak Life Insurance has gone to the heart of its customer's requirements and developed
products which are unique and serve the customer needs perfectly. We built a relationship of
mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance the customer
always comes first.

Cohesive Work Environment: -

We form long-term partnership with our employees by offering them an invigorating
work experience. We not only demand loyalty, sincerity and values but also give it back in
equal measures. Kotak Life Insurance will like to offer its employees space to grow, innovate
and build a long-term career.

Work with Honor: -

Kotak Life Insurance delivers everyday services in the marketplace with the high sense of
duty and commitment. Our employees strive to build the long-term value for all those come
in contact with Kotak Life Insurance. Our consumers, distributors, employees, shareholders
and the nation have our commitment that we will uphold the values of trust, integrity and a
Sense of Honor in every thought, act and deed in order to positively contribute to individual,
society and nation growth.

℘ Our values:-
Every member of the Kotak Group team is committed to 5 core values: Integrity,
Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we
do, and have become the keystones of our success.

• MANAGEMENT
We at Kotak Life Insurance work as a team and have a flat management structure.
Our top management has many years of experience which has helped guide the company into
a position of leadership.

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KOTAK MAHINDRA OLD MUTAL PLC KOTAK LIFE
BANK INSURANCE
( 74% ) ( 26% ) ( 100% )

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Old Mutual Plc:-
Old Mutual was established more than 150 years ago. Old mutual plc, Is a
world-class international financial service company. It owns the largest companies in the
following areas in South Africa.

They are:
1. Life Insurance Company
2. Asset Management Company
3. Bank
4. Non-life insurance company
It has been developed into an International financial services group whose activities
are focused on asset gathering and asset management. The Old Mutual Group offers a diverse
range of financial services in three principal geographies: South Africa, the United States and
the United Kingdom. The company is listed on the London Stock Exchange with a market
capitalization of approximately $6 billion and is a member of the elite FTSE 100 index. In the
2003 rankings of the World's 500 largest corporations by Fortune magazine, Old Mutual
climbed 87 places to position number 366 and was also listed as the 14th largest insurance
company in the world.
Old Mutual is the largest financial services business in South Africa, through its life
insurance, asset management, banking and general insurance operations. The company serves
4 million life insurance policyholders and employs over 13 000 South Africans in its local
operations.
In the USA, Old Mutual is one of the top ten fixed annuity businesses
offering an array of specialist asset management skills through its 23 asset management
businesses. The company’s US Life business recorded sales of $4 billion at the end of 2002.
Operations in the United Kingdom are focused on wealth management, through
Gerrard as one of the leading private client stock broking businesses in the UK.
The Old Mutual Group has the ability to cater for a variety of consumer
segments and offers a comprehensive and innovative range of products for all income groups.

Kotak Mahindra Old Mutual Life Insurance

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• A 26%-74% Joint venture between Old Mutual plc and KotaK Mahindra Bank Ltd.
• Started operations May 2001
• 209% growth in premium income (year ending March 2005)
• Presence in 55 cities across the country
• More than 1,60,000 policies issue (year ending March 2005)
• More than 7000 Life Advisors ( year ending March 2005)
• Over 1000 professional employees (year ending March 2005)

 44 branches in 31 cities.
 7500 life advisors.
 1000employees of very good quality.
 Ranks 2nd in terms of average premium per policy.
 Ranks 4th in total advertising awareness.
 First year premium income:

2001-02: 7Crores
2002-03: 35Crores
2003-04: 125Crores
2005-06: 373Crores
2006-07: 396Crores
2007-08: 614Croeres

AWARDS

2003
 Best equity House in India by Euro Money
 Best Equity House in India by Asia Money

2004
 India’s Best Equity House in India by Finance Asia

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  Best Equity House in India by Euro Money
 Best Equity House in India by Asia Money
 Best India Equity House by IFR

2005
 Best Broker in India by Finance Asia
 Best Equity House in India by Euro money

2006
 Ranked no.1 in six categories in the Annual Euro money Private Banking
Survey Poll for 2006 for India
 Best Investment Bank in India by Finance Asia
 Ranked #1 in the league table for Book runner/Lead Manager in public equity
offerings in terms of the value of transaction completed during fiscal 2006
according to Prime Database
 Best Broker In India by Finance Asia
 Topped the best Mutual Fund House in the NDTV Business Leadership
Awards2006
 Best Bond Fund Group Over Three Years by Lipper Fund Awards India
 Ranked the best debt fund over 5 years by lipper for the Kotak Bond Regular
Plan
 Ranked ICRA- MFRI and was the recipient of the Silver Awards by ICRA for the
‘Kotak Bond Regular Plan’

2007
 Most Popular Inventor Relation Website for the Asia/Pacific Region Conducted by IR
Global Rankings
 Emerged winner in 16 categories in the Euro money Private Banking Poll2007,
including the Best local Private Bank.

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 Problem Identification:
The basic step of any research is to find out the problem of the company, the problem
may be inside in the company or outside of the company. “Well Defined problem is half
solved”. The researcher has defined the problem of the organization which is converted in to
the study topic.
“To study the organizational activities of all the department with the help of
secondary as well as primary data collection method”

Objective:
The main of the present study of is accomplish the following objective.
 Proper understanding and analysis of life insurance industry.
 To know about brand awareness of Kotak Life Insurance and customer’s
preference about Kotak Life Insurance.
 Conduct market survey on a sample selected from the entire population and
derived opinion on that research.
 According the market survey come know about how much potential of
insurance market in our city.
 And base on analysis of the result thus obtained make a report on that
research.
 Training aims at recruiting maximum number of Life Advisors and to Sell the
maximum policies for the company and bring the business for the company
which ever is going at the particular point of time.
 Along with it I will be gaining the thorough knowledge of insurance sector.
This will give me in more confidence in marketing products given to me.
 As the Kotak Life Insurance well reputed company in India it’s great chance
for me to observed different products launch by other competitor companies
like ICICI prudential, Bajaj alliance ,LIC, Max New York life etc. In all, it is
to understand the overall working of the Life insurance sector.
 The objective behind the project is as follows:
 To find the right candidate.

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  To about their family background, occupation, social relation, Qualification,
Age.
 Finalize candidates for the IRDA training

Limitation:

Some of the difficulties and limitations faced by me during my training are as follows:

 Lack of awareness among the people – This is the biggest limitation

found in this sector. Most of the people are not aware about the importance and the
necessity of the insurance in their life. They are not aware how useful life insurance
can be for their family members if something happens to them.

 Perception of the people towards Insurance sector – People still

consider insurance just as a Tax saving device. So today also there is always a rush to
buy an Insurance Policy only at the end of the financial year like January, February
and March making the other 9 months dry for this business.

 Insurance does not give good returns – Still today people think that
Insurance does not give good returns. They are not aware of the modern Unit Linked
Insurance Plans which are offered by most of the Private sector players. They are still
under the perception that if they take Insurance they will get only 5-6% returns which
is not true nowadays. Nowadays most of the modern Unit Linked Insurance Plans
gives returns which are many times more than that of bank Fixed deposits, National
saving certificate, Post office deposits and Public provident fund.

 Lack of awareness about the earning opportunity in the Insurance

sector – People still today are not aware about the earning opportunity that the
Insurance sector gives. After the privatization of the insurance sector many private
giants have entered the insurance sector. These private companies in order to beat the
competition and to increase their Insurance Advisors to increase their reach to the
customers are giving very high commission rates but people are not aware of that.

 Increased competition – Today the competition in the Insurance sector

has became very stiff. Currently there are 14 Life Insurance companies working in

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 India including the LIC (life insurance Corporation of India). Today each and every
company is trying to increase their Insurance Advisors so that they can increase their
reach in the market. This situation has created a scenario in which to recruit Life
insurance Advisors and to sell life Insurance Policy has became very very difficult.

RESEARCH METODOLOGY

Research always starts with a question or a problem. Its purpose is to question

through the application of the scientific method. It is a systematic and intensive study
directed towards a more complete knowledge of the subject studied. Marketing research is the
function which links the consumer, customer and public to the marketer through information-
information used to identify and define marketing opportunities and problems generate,
refine, and evaluate marketing actions, monitor marketing actions, monitor marketing
performance and improve understanding of market as a process.

Marketing research specifies the information required to address these issues, designs, and
the method for collecting information, manage and implemented the data collection process,
analyses the results and communicate the findings and their implication.
I have prepared our project as descriptive type, as the objective of the study demands
the answers of the question related to find the potentiality of life insurance in Surat: How
much potential is there in Surat?

The Marketing Research Process

As marketing research is a systemic and formalized process, it follows a certain sequence of
research action. The marketing process has the following steps:
 Formulating the problems
 Developing objectives of the research
 Designing an effective research plan
 Data collection techniques
 Evaluating the data and preparing a research report

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There are two types of data collection method use in my project report.
– Primary data
– Secondary data.

For my project, I decided on primary data collection method for observing working of
company and approaching customers directly in the field, tele-calling, cold calling,
campaigning and through references to know their interest in business with company in my
project and also make questionnaire for creating database of business class people is Surat
city for company.
I decided on Secondary data collection method was used by referring to various
websites, books, magazines, journals and daily newspapers for collecting information
regarding project under study.

DATA COLLECTION
.
In our live project, we decided primary data collection method because our study
nature does not permit to apply observational method. In survey approach we had selected a
questionnaire method for taking a customer view because it is feasible from the point of view
of our subject & survey purpose. We conducted 200 sample of survey in our project.

31
32
 Marketing practice tends to be seen as a creative industry, which includes
advertising, distribution and selling. It is also concerned with anticipating the customers'
future needs and wants, which are often discovered through market research. Seen from a
systems point of view, sales process engineering views marketing as a set of processes that
are interconnected and interdependent with other functions, whose methods can be improved
using a variety of relatively new approaches

Promoters:

℘ Kotak Mahindra Private Ltd.

Kotak Mahindra Prime Limited (KMPL) is a 100% subsidiary of Kotak

Mahindra Group (Kotak Group) formed to finance all passenger vehicles. The company is
dedicated to financing and supporting automotive and automotive related manufacturers,
dealers and retail customers. The Company offers car financing in the form of loans for the
entire range of passenger cars and multi utility vehicles. The Company also offers Inventory
funding to car dealers and has entered into strategic arrangement with various car
manufacturers in India for being their preferred financier.

As on March 31, 2005, KMP has a retail distribution network comprising of

54 branches (including representative offices) covering about 100 locations in 17 states in the
country and has a wide network of Direct Marketing Associates, brokers and agencies
supporting the distribution network and servicing around 113,000 customers.

℘ Kotak Mahindra Bank Ltd.

Kotak Mahindra Bank Limited (KMBL) is the holding company and the
flagship of the Kotak Mahindra Group. It was actually incorporated as Kotak Capital
Management Finance Limited on November 2, 1985 and obtained its ‘Certificate of
Commencement of Business on February 11, 1986.

It commenced operations with Bill Discounting and soon started other fund-
based activities like corporate leasing & hire purchase, automobile finance and money market
operations. Subsequently, it also entered the funds syndication and the Investment banking
business.

33
 ℘ Old Mutual Plc
It has been developed into an International financial services group whose
activities are focused on asset gathering and asset management. The Old Mutual Group offers
a diverse range of financial services in three principal geographies: South Africa, the United
States and the United Kingdom. The company is listed on the London Stock Exchange with a
market capitalization of approximately $6 billion and is a member of the elite FTSE 100
index. In the 2003 rankings of the World's 500 largest corporations by Fortune magazine, Old
Mutual climbed 87 places to position number 366 and was also listed as the 14th largest
insurance company in the world.
Old Mutual is the largest financial services business in South Africa, through
its life insurance, asset management, banking and general insurance operations. The company
serves 4 million life insurance policyholders and employs over 13 000 South Africans in its
local operations.
In the USA, Old Mutual is one of the top ten fixed annuity businesses offering an array
of specialist asset management skills through its 23 asset management businesses. The
company’s US Life business recorded sales of $4 billion at the end of 2002.
Operations in the United Kingdom are focused on wealth management,
through Gerrard as one of the leading private client stock broking businesses in the UK.

• Distribution

34
 Kotak life has one of the largest distribution networks amongst private life
insurers in India. It has a strong presence across India with over 2000 branches (including
1,095 micro-offices) and an advisor base of over 261,000 (as on August 31, 2008).

The company has 24 bank assurance partners having tie-ups with ICICI
Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon Peoples Co-
op Bank, Ernakulam District Co-op Bank, Idukki District Co-op Bank, Ratnagiri Sindhudurg
Gramin Bank, Solapur Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin
Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani Gramya Bank,
Ratnagiri District Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative
Bank, Baramati Co-operative Bank, Ballia Kshetriya Co-Operative Bank, The Haryana State
Co-Operative Bank, Renuka Nagrik Sahakari Bank, Amanath Co-Operative Bank, Arvind
Sahakari Bank, Bhandara Urban Co Operative Bank.

• SALES DISTRIBUTION:

Tied Agency:

Tied Agency is the largest distribution channel of Kotak Life, comprising a

large advisor force that targets various customer segments. The strength of tied agency lies in
an aggressive strategy of expanding and procuring quality business. With focus on sales &
people development, tied agency has emerged as a robust, predictable and sustainable
business model.

Bank assurance and Alliances:

Kotak life was a pioneer in offering life insurance solutions through banks and
alliances. Within a short span of two years, and with nearly a large number of partners, B &
A has emerged as a vital component of the company’s sales and distribution strategy,
contributing to approximately one third of company’s total business. The business philosophy
at B&A is to leverage distribution synergies with our partners and add value to its customers
as well as the partners. Flexibility, adaptation and experimenting with new ideas are the
hallmarks of this channel.

• SALES STRETAGY

35
 Kotak life insurance has a great strategy for sales department. Company has a three
type of strategy for sales and that are as follow:

℘ COMPANY STRETEGY:

Now company applies the project “Turning Point” and in this project to decide the selection
criteria for LIFE ADVISOR and life advisor is the basic requirement for sale the policy. The
selection criteria for advisor are:

Like:-

℘ Agent age > 30 for male LA, and >25 for female
℘ Agent income 5 lakhs
℘ Agent stay in city belong > 5 years
℘ Family back ground strong.
℘ Minimum graduate
℘ Either 2 years experience or post graduate refresher

EXTERNAL STRETEGY:

36
Kotak life insurance external strategy is “To make limited branches but, to perform

productive” so that company to reduce the cost.

INTERNAL STRETEGY:

Kotak Life Insurance Company has internal strategy like,

℘ Rewards & Recognisation:

SLAB NO OF POLICIES REWARDS

LEVEL 1 2 Reebok Travel Bag Combo
LEVEL 2 4 Cordless Phone
LEVEL 3 6 Vacuum Cleaner
LEVEL 4 10 Oven Toaster Grill
LEVEL 5 15 Nokia Xpress Music Mobile Phone
LEVEL 6 20 Philips Home Theatre With DVD Player

• Market Share:-

Life Insurance Company’s Market share Based On premium in India.

2001-02 2002-03 2003-04 2004-05 2005-06

LIC
98% 94% 87% 78% 72%
Private
Players 2% 6% 13% 22% 28%

Industry growth rate at 36% (2004-05) with premium income From new Business.

37
 Company Indian Foreign Market share
Promoter/ Insurance based on
Partner premium
Aviva life Dabur Aviva, UK 1.12
Bajaj Allianz Bajaj Auto Allianz, Germany 6.12

Birla sun life Aditya Birla group Sun Life, Canada 1.84

HDFC Standard HDFC Standard Life, UK 2.96

ICICI Prudential ICICI Bank Prudential, UK 7.11

ING Vysya Vysya Bank ING Insurance, 0.63

Netherlands
Kotak Mahindra, Kotak Mahindra Old Mutual South 0.71
Old Mutual Bank Africa
Max New York Max India New York Life, US 1.32

MetLife Jammu & Kashmir MetLife, US 0.40

Bank
Sahara Life Sahara India None 0.80
Insurance
SBI Life SBI Cardiff, France 1.52
Tata AIG Tata Group AIG, US 1.78

38
39
 Customer Satisfaction

What is customer satisfaction?

Customer satisfaction refers to how satisfied customers are with the products or services they
receive from a particular agency. The level of satisfaction is determined not only by the
quality and type of customer experience but also by the customer’s expectations.

A customer may be defined as someone who:

• has a direct relationship with, or is directly affected by your agency and

• Receives or relies on one or more of your agency’s services or products.

Customers in human services are commonly referred to as service users, consumers or

clients. They can be individuals or groups.

An organization with a strong customer service culture places the customer at the centre of
service design, planning and service delivery. Customer centric organizations will:

• determine the customers expectations when they plan

• listen to the customer as they design
• focus on the delivery of customer service activities
• Value customer feedback when they measure performance.

Why is it important?

There are a number of reasons why customer satisfaction is important in Insurance Sector:

• Meeting the needs of the customer is the underlying rationale for the existence of
community service organizations. Customers have a right to quality services that
deliver outcomes.

40
 • Organizations that strive beyond minimum standards and exceed the expectations of
their customers are likely to be leaders in their sector.
• Customers are recognized as key partners in shaping service development and
assessing quality of service delivery.

The process for measuring customer satisfaction and obtaining feedback on organizational
performance are valuable tools for quality and continuous service improvement.

• Insurance Solutions for Individuals:

Kotak Life Insurance offers a range of innovative, customer-centric products that meet the
needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to
create a customized solution for each policyholder.

Protection Savings & Investments

Helping you to grow and protect Manage today for a better
your wealth. tomorrow.

Retirement Child
The road to retirement, Make it Plan a good future for your
easy child.

41
 • Protection Plans:

℘ Kotak Loan Protection Plan:

Kotak Loan Protection Plan is a protection plan that helps share the burden of your loan.

℘ Kotak Term/Preferred Term Plan:

The Kotak Term/Preferred Term Plan is a pure risk cover plan that provides you with a
high level of protection at nominal costs.

℘ Kotak Eternal Life Plans :

Kotak Eternal Life Plans are participating whole life plans that provide enhanced
protection till the golden age of 99.
• Savings & Investment Plans:

℘ Kotak Platinum Advantage plus:

You’ve lived life on your own terms; always done what you’ve believed in. You are used
to having the luxury of choice and the power to control.
℘ Kotak Smart Advantage:
Kotak Smart Advantage is an intelligent unit-linked plan that is based upon the idea of
regular savings and systematic accumulation of wealth in the long term.

℘ Kotak Safe Investment Plan:

Kotak Safe Investment plan is the ideal investment plan for you with its unique “Seal of
Guarantee” offer that not just gives you the best of bull markets but also eliminates any capital
loss in falling markets.

℘ Kotak Flexi Plan:

Kotak flexi plan offers you an ideal market-linked investment plan that helps you create
your own financial future by offering you the flexibility and control over your money.

℘ Kotak Platinum Advantage Plan:

42
 Kotak Platinum Advantage Plan features capital protection, embedded investment
advice, life cover and aggressive market linked growth options.

℘ Kotak Easy Growth Plan:

Kotak Easy Growth plan, a single premium investment plan that generates value for you
for whole life as well as provides protection to your family in case of unforeseen events.

℘ Kotak Capital Multiplier Plan:

The Kotak Capital Multiplier Plan is the only plan of its kind that allows you to enjoy
returns even beyond maturity.

℘ Kotak Money Back Plan:

This plan offers the key benefit of cash lump sums at periodic intervals of five years
ensuring that you are able to meet any of your financial obligations.

℘ Kotak Endowment Plan:

Kotak Endowment Plan is a participating endowment plan that provides you an avenue
for long term regular investments to accumulate a lump sum on maturity.

℘ Kotak Premium Return Plan:

The premium Return Plan will get you the dual benefit of a risk cover and savings, with
minimal paperwork and procedures.

℘ Kotak Sukhi Jeevan Plan:

Sukhi Jeevan is a long-term savings and protection plan that keeps pace with your
changing needs at every step of life.

• Retirement Plans:
℘ Kotak Secure Retirement Plan:
An ideal retirement solution is one that gives you complete flexibility and peace of mind,
not only while you save for your retirement but also after you retire.

℘ Kotak Retirement Income (Unit Linked):

Kotak Retirement Income Plan is an ideal retirement solution that gives you complete
flexibility and peace of mind, not only while you save for your retirement but also after you
retire.

43
℘ Kotak Long Life Secure Plus:
Kotak Long Life Secure Plus is a unit-linked plan that ensures your investment gives
maximum protection to secure your family's future and their financial independence

℘ Kotak Long Life Wealth Plus :

Kotak Long Life Wealth Plus is an intelligent investment plan that helps you builds your
future net worth with power-packed features that actively monitor and manage your
investment growth

℘ 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".

• Child Plans:

℘ Kotak Head start Child Plans:

The head start child plans are specially tailored, cost effective plans that aim to give your
children the financial means to pursue his or her dreams

℘ Kotak Child Advantage Plan:

The Kotak Child Advantage Plan is an investment plan designed to meet your child's
future financial needs.

44
 • Stages in Policy Issuance

1) Proposal

A Proposal Stage is the First stage before the policy is issued at COPS. At this stage, the
application form is received by COPS, but it is pending for issuance due to further
clarifications required from the customer.

2) Login

A proposal which is complete i.e., duly filled with all necessary documents attached to it &
accepted by the Branch ops, is called a Login

3) Reject

An Application gets rejected at the Branch Ops level due to necessary details not filled in the
form or necessary documents not submitted is a Reject. It is then sent back to the Advisor for
completion.

4) Issuance

Issuance means a policy that is issued to the Customer by Central Ops.

45
5) Decline Status

When a customer refuses to take a policy post login but before Issuance is called a Decline

6) Cancellation

When the cheque given by the customer bounces, it amounts to cancellation of the policy.

7) Lapse

A policy for which the Customer fails to pay subsequent premiums is a Lapsed Policy.

8) Free look

Post issuance of the policy, the policyholder has the option to turn down the policy within 15
days from the date of issuance. This period of 15 days is called Free look Period.

9) Surrender

When a customer wants to discontinue with the policy.

46
47
 • DEFINITION OF AN AGENT

According to section 182 of the Indian contracts act, an ‘agent’ is a person employed to
do any act for another or to represent another in dealing with a third person. In the insurance
industry, the term “agene” is ordinarily applied to a person engaged by the insurer to procure
new business. The insurance act defines an insurance agent as one who is licensed under
section 42 of that act and is paid by way of commission or otherwise, in consideration of his
soliciting or procuring insurance business, including business relating to the continuance ,
renewal or revival of policies of insurance. He is, for all purposes, an authorized salesman for
insurance and needs a licence.

In pursuance of strengthening the human resources of the IRDA, a comprehensive

induction plan for recruiting professionals with specialized qualifications and back ground
was embarked upon. Eight officers in the Actuary department joined the IRDA in the months
of August/September, 2007. Process of inducting more officers has also started
Simultaneously.

The Authority, jointly with Andhra Pradesh Government, handset up an Institute of

Insurance and Risk Management (IIRM) at Hyderabad in 2002. IIRM aims to serve the
learning and development needs of emerging markets in the context of their contemporary
challenges. IIRM is overseen by Board of Directors headed by Chairman of the Authority. It
continues to cater to the needs of the industry by way of providing diversified range of
courses, including Post-Graduate Diploma in General Insurance, Life Insurance and Risk
management. The IIRM courses are accredited by Chartered Insurance Institute, London. The
International School for Actuarial Science (ISAS) has started functioning under the aegis of
IIRM to achieve the objectives of IRDA to enhance the availability of qualified skill
resources to the insurance industry.

48
 • Procedure for Becoming An Agent

(1) Qualifications of the applicant.

The applicant shall possess the minimum qualification of a pass in 12 th
standard or equivalent examination conducted by any recognized Board/Institution, where the
applicant resides in place with a population of five thousand or more as per the last census,
and a pass in 10th standard or equivalent examination from a recognized Board/Institution if
the applicant resides in any other place.

(2) Practical Training

1) The applicant shall have completed from an approved institution, at least,
one hundred hours’ practical training in life or general insurance business, as the case may
be, which may be spread over three to four weeks, where such applicant is seeking licence for
the first time to act insurance agent.
Provided that applicant shall have completed from an approved institution,
at least, one hundred fifty hours’ practical training in life and general insurance business,
which may be spread over six to eight weeks, where such applicant is seeking licence for the
first time to act as a composite insurance agent.

2) Where the applicant, referred to under sub-regulation (1), is-

A. An Associate/Fellow of the Insurance Institute of India,Mumbai;

B. An Associate/Fellow of the Insurance Chartered Accountants of India, New Delhi;
C. An Associate/Fellow of the Insurance of Coasts and Works Accountants of India,
Calcutta;
D. An Associate/Fellow of the Insurance of company secretaries of India, New Delhi;
E. An Associate/Fellow of the actuarial Society of India, Mumbai;
F. A Master of Business Administration of any Institution/University recognized by any
State Government or the Central Government; or
G. Possessing any professional qualification in marketing from any institution/University
recognized by any State government or the Central Government-

49
 He shall have completed, at least, fifty hours’ practical training from an approved institution.
Provided that such applicant shall have completed from an approved institution, at least,
seventy hours’ practical training in life and general insurance business, where such applicant
is seeking license for the first time to act as a composite insurance agent.

3) An applicant, who has been granted a licence after the commencement of

these regulations, before seeking renewal of licence to act as an insurance agent, shall have
completed, at least twenty-five hours’ practical training in life or general insurance business,
as the case may be, from an approved institution.

Provided that such applicant before seeking renewal of licence to act as a composite
insurance agent shall have completed from an approved institution, at least, fifty hours’
practical training in life and general insurance Business.

(3) Examination.
The Applicant shall have passed the pre-recruitment examination in life or
general insurance business, or both, as the case may be, conducted by the Insurance Institute
of India, Mumbai, or any other examination body.

(4) Fees payable

1) The fees payable to the authority for issue or renewal of licence to act as insurance
agent or a composite insurance agent shall be rupees two hundred and fifty.

2) The additional fees payable to the authority, under the circumstances mentioned in
sub-section (3) of section 42 of the act, shall be rupees one hundred.

(5) Code of conduct

1) Every person holding a licence, shall adhere to the code of conduct specified below:

i. Every insurance agent shall,-

50
 a. Identify himself and the insurance company of whom he is an insurance agent;

b. Disclose his licence to the prospect on demand;

c. Disseminate the requisite information in respect of insurance products offered for sale
by his insurer and take into account the needs of the prospect while recommending a
specific insurance plan;

d. Disclose the scales of commission in respect of the insurance product offered for sale;

e. Indicate the premium to be charged by the insurer for the insurance product offered
for sale;

f. Inform promptly the prospect about the acceptance or rejection of the proposal by the
insurer;

g. Render necessary assistance to the policyholder or claimants or beneficiaries in

complying with the requirements for settlement of claims by the insurer;

h. Advice every individual policyholder to effect nomination or assignment or change of

address or exercise of options, as the case may be, and offer necessary assistance in
this behalf, wherever necessary;

ii. No insurance agent shall,-

a. Solicit or procure insurance business without holding a valid licence;

b. Induce the prospect to omit any material information in the proposal form;

c. Induce the prospect to submit wrong information in the proposal form or document
submitted to the insurer for acceptance of the proposal;

d. Interfere with any proposal introduced by any other insurance agent;

e. Demand or receive a share of proceeds from the beneficiary under an insurance

contract;

51
 f. Force a policyholder to terminate the existing policy and to effect a new proposal
from him within three years from the date of such termination;

g. Apply for fresh licence to act as an insurance agent, if his licence was earlier
cancelled by the designated person, and a period of five years has not elapsed from
the date of such cancellation;

h. Every insurance agent shall, with a view to conserve the insurance business already
procured through him, make every attempt to ensure remittance of the premiums by
the policyholders within the stipulated time, by giving notice to the policyholder
orally and in writing;

(6) Cancellation of licence

The designated person may cancel a licence of an insurance agent, if the
insurance agent suffers, at any time during the currency of the licence, from any of the
disqualifications mentioned in sub-section (4) of section 42 of the act, and recover from him
the licence and the identify card issued earlier.

(7) Issue of duplicate licence

The authority may issue a duplicate licence replace a licence lost, destroyed, or
mutilated on payment a fee of rupees fifty.

(8) Non-application to existing insurance agents

Nothing contained in regulations 4 to 6 of these regulations shall apply to
the existing agents before the commencement of these regulations.

(9) Repeal and savings

From the date of coming into force of the insurance regulatory and
development authority (licensing of corporation agents) regulations 2002, the insurance
regulatory and development authority (licensing of insurance agents) regulations 2000 or any
part thereof applying to corporate agents shall cease to have any effect, except as respects
things done or omitted to be done there under.

52
 • Methods of Remunerating Agents

1. A life insurance agent works on commission basis. He is paid a percentage of the

premium collected through his agency. Section 40a(1) of the insurance act stipulates that the
maximum amount which can be paid to a life insurance agent, by way of commission or
remuneration in any form, shall be 35% of the first year’s premium,71/2% of the second and
third year’s renewal premium and 5% of subsequent renewal premium.

2. The insurance act provides, in section 44, for payment of commission on renewal
premium even after termination of the agency. The commission will be limited to a rate not
exceeding 4%. To be eligible for this, the agent should have been an agent with that insurer
for at least (1) five years and policies for at least Rs 50ooo are in force one year before
termination of agency or (2) 10 years. This commission will be payable to the heirs of the
agent after the agent’s death. This is a unique facility which few other professions enjoy.

• FUNCTION OF AN AGENT

1. The agent’s main function is to solicit and procure life insurance business for the
insurer, which has appointed him for that purpose. At the same time, he is trusted by the
prospect to advice him suitably, keeping his circumstances and needs in mind. He is thus, in
the unique roll of a person trusted by both parties to the transaction. His would require him to

• Understand the prospect’s needs and persuade him to buy a plan of life insurance that
suits his interests best

• Complete the formalities ( paper work, medical examination ) necessary to get the
policy expeditiously

• Keep in touch to ensure that changing circumstances are reflected in the arrangement
relating to premium payments, nomination and other necessary alterations

53
• Facilities quick settlement of claims

• Be totally honest with both the prospect and the insurer.

2. The regulation framed by the IRDA lays down a code of conduct which incorporates
some of these concepts. The code says interalia that the agent shall

• Identify himself and the insurance company of which he is an agent

• Disclose the licence to the prospect on demand

• Explain all available options to the prospect

• Recommend a suitable plan taking into account the needs of the prospect

• Explain the nature and importance of the information required in the proposal form

• Inform the insurer about any material facts, including habits, that could adversely
affect the underwriting decision

• Not to induce prospects to submit wrong information

• RESPONSIBILITIES OF AN AGENT:

1. An agent, individual or corporate, is the main component of the distribution channel

for the life insurance business. He would be required to solicit and procure new life and
insurance business, in a manner that is consistent with the interests of the policyholders of the
insurance company. For this purpose, for this purpose, he would have to do the following.

54
• Contact prospects for life insurance, study their needs and persuade them to buy.

• Complete all related formalities, including filling up proposal forms, collecting

premium, arranging medical examination, collecting proofs (of age or income), reports and
other information required by the underwriter.

2. After having sold a new insurance policy, the agent has to ensure that the policy
continues, without a lapse, till it becomes a claim. The conservation of the policy is in the
interests of all the three persons concerned, the insurer, the policyholder and the agent. For
this purpose, he has to

• Keep in touch with the policyholder to make sure that renewal premiums are paid in
time.

• Ensure that nomination are made or changed according to changing circumstances

• Assist in settlement of the claim, by helping the claimants to complete the necessary
formalities and requirements.

3. In order that he may perform all these tasks well, the agent has to be familiar with

• The benefits under the various plans of insurance offered by his insurer.

• The office procedures for various matters including the forms and documents. The
main documents have been listed out in an earlier chapter. The forms and procedures will
vary between one insurer and another.

55
• Ethical Behavior

1. Some characteristics of good ethical behaviors are

• Placing the best interests of the client above one’s own direct or indirect benefits

• Holding in the strictest confidence and considering as privileged, all business and
personal information pertaining to the client’s affairs

• Making full and adequate disclosure of all facts to enable clients make informed
decisions

2. There could be a likelihood of ethics being compromised in the following situations

• Having to choose between two plans, one giving much less commission than the other

• Temptation to recommend discontinuance of an existing policy and taking out a new

one

• Becoming aware of circumstances that, if known to the insurer, could adversely affect
the interests of the client or the beneficiaries of the claim.

56
EMPLOYEE WELFARE:

57
58
 ORACLES ONLINE SYSTEM FOR EMPLOYEES.

Kotak life insurance provides the best service compare to the others company. Kotak
life insurance provides the services like:

 Online salary ship

 Loan
 Mediclaim

59
  Taxation
Most important thing is that company provide loan employee when they
are in trouble. They give a loan of basic amount multiply with 6 times of basic. And loan
amount fulfill all payment in 20 month at the 8% rate p.a.

60
61
 The field of finance refers to the concepts of time, money and risk and how they are
interrelated. Banks are the main facilitators of funding through the provision of credit,
although private equity, mutual funds, hedge funds, and other organizations have become
important. Financial assets, known as investments, are financially managed with careful
attention to financial risk management to control financial risk. Financial instruments allow
many forms of securitized assets to be traded on securities exchanges such as stock
exchanges, including debt such as bonds as well as equity in publicly-traded corporations.

The main techniques and sectors of the financial industry:-

Finance is used by individuals (personal finance), by governments (public finance),
by businesses (corporate finance), as well as by a wide variety of organizations including
schools and non-profit organizations. In general, the goals of each of the above activities are
achieved through the use of appropriate financial instruments and methodologies, with
consideration to their institutional setting.

Corporate finance

Managerial or corporate finance is the task of providing the funds for a

corporation's activities. For small business, this is referred to as SME finance. It generally
involves balancing risk and profitability, while attempting to maximize an entity's wealth and
the value of its stock.
Long term funds are provided by ownership equity and long-term credit, often in
the form of bonds. The balance between these forms the company's capital structure. Short-
term funding or working capital is mostly provided by banks extending a line of credit.
Another business decision concerning finance is investment, or fund
management. An investment is an acquisition of an asset in the hope that it will maintain or
increase its value. In investment management – in choosing a portfolio – one has to decide
what, how much and when to invest. To do this, a company must:

62
  Identify relevant objectives and constraints: institution or individual goals, time
horizon, risk aversion and tax considerations;
 Identify the appropriate strategy: active v. passive – hedging strategy
 Measure the portfolio performance

Financial management is duplicate with the financial function of the

Accounting profession. However, financial accounting is more concerned with the reporting
of historical financial information, while the financial decision is directed toward the future
of the firm.

The Accounts of the Authority for the financial year 2007-08 have been audited
by the Comptroller and Auditor General of India (C&AG). C&AG, in their draft separate
audit report, has advised revision in the accounts due to some wrong classifications. The
same has been carried out. A copy of revised accounts for the year 2007-08 is placed at
Annexure. X. The revised accounts are under submission to C&AG and final report on the
same is awaited.

63
 Form A-RA
Revenue Account for the year ended March 31, 2008
Policyholders' Account (Technical Account)
(Amounts in thousands of Indian Rupees)

Particulars 31-Mar-08 31-Mar-07

Premiums earned; net:-
(a) Premium 9,715,141 6,218,519
(b) Re-insurance ceded (201,769) (111,533)
(c) Re-insurance accepted — —
Income from investments:-
a) Interest, Dividends and Rent- Net of 615,842 351,360
amortization
(b) Profit on sale/redemption of investments 1,033,587 200,027
c) (Loss on sale/redemption of investments) (277,949) (44,633)
(d) Transfer/Gain on revaluation/change in fair value (177,602) 741,465
Other Income:-
(a) Contribution from Shareholders’ Account 1,179,924 499,792
(b) Miscellaneous income 6,683 1,446
(c) Profit on sale of fixed assets (Net) 291 927
Total (A) 11,894,148 7,857,370

Commission 802,032 591,182

Operating Expenses related to Insurance 2,403,053 1,340,790
Business
Provision for doubtful debts — —
Bad debts written off — —
Provision for tax (Fringe Benefit Tax) 18,850 10,725
Provisions (other than taxation)
a) For diminution in the value of investments — —
(Net)
(b) Others — —
Total (B) 3,223,935 1,942,697

Benefits paid (net) 1,731,712 419,665

Interim Bonuses paid — —
Change in valuation of liability in respect

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of life policies,
(a) Gross 1,208,134 1,246,757
(b) Amount ceded in reinsurance — —
(c) Amount accepted in reinsurance — —
Provision for Linked Liabilities 5,080,268 4,221,738
Total (C) 8,020,114 5,888,160
Surplus/(Deficit) (D) = (A) - (B) - (C) 650,098 26,513

Appropriations
Transfer to Shareholders' Account 14,323 —
Transfer to Other Reserve — —
Balance being Funds for Future Appropriations 114,584 14,662
SURPLUS/(DEFICIT) AFTER 521,191 11,851
APPROPRIATION
SURPLUS/(DEFICIT) BROUGHT (484,844) (496,695)
FORWARD
SURPLUS/(DEFICIT) CARRIED FORWARD
TO
BALANCE SHEET 36,347 (484,844)
(a) Interim Bonuses Paid — —
b) Allocation of Bonus to Policyholders 95,117 54,328
(c) Surplus/(Deficit) shown in the Revenue 521,191 11,851
Account
(d) Total Surplus: [(a) + (b) + (c)] 616,308 66,179

Form A-PL
Profit and Account for the year ended March 31, 2007
Shareholders' Account (Non-Technical Account)
(Amounts in thousands of Indian Rupees)

Particulars 31-Mar-08 31-Mar-07

Amounts transferred from Policyholders’
Account(Technical Account) 14,323 —
Income from Investments
(a) Interest, Dividends and Rent
— Net of amortization 96,373 65,644

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b) Profit on sale/redemption of investments 16,027 2,484
c) (Loss on sale/redemption of investments) -40,773 -3,874
Other Income (including fund management — —
fees)

Total (A) 85,950 64,254

Expenses other than those directly related
to the insurance business 2,382 413

Bad debts written off — —

Provisions (other than taxation) — —
a) For diminution in the value of
investments (Net) — —
b) Provision for doubtful debts — —
(c) Others — —
— Contribution to the Policyholders Fund 1,179,924 499,792

Total (B) 1,182,306 500,205

Profit/ (Loss) before tax -1,096,357 -435,951
Provision for taxation
— Current Year — —
— Earlier Year 8,322 8,270

Profit/(Loss) after tax -1,104,679 -444,221

Appropriations
a) Balance at the beginning of the year -1,554,127 -1,109,906
Add: Effect of first time adoption of Revised
AS-15 — Employee Benefits -9,271 -1,563,398 —
(b) Interim dividends paid during the year
c) Proposed final dividend — —
(d) Tax on dividend distributed — —
(e) Transfer to reserves/other accounts — —

Profit/(Loss) carried to the Balance Sheet -2,668,077 -1,554,127

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 Form A-BS
Balance Sheet as at March 31, 2008

(Amounts in thousands of Indian Rupees)

Particulars 31-Mar-08 31-Mar-07

Sources of Funds
Shareholders’ Funds:
Share Capital 3,303,466 2,443,701
Reserves and Surplus 520,363 520,363
Credit/[Debit] Fair Value Change Account — —
Sub-Total 3,823,829 2,964,064

Borrowings — —
Policyholders’ Funds:
Credit/[Debit] Fair Value Change Account 521 150,463
Policy Liabilities
– Participating 3,097,235 2,122,799
– Non-participating 501,753 404,444
– Annuities Participating 251,545 194,565

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– Annuities Unit-Linked Non-Participating 236 255
– Unit-Linked Non-Participating 172,419 92,992

Insurance Reserves
– Participating — —
– Non-Participating — -96,870
– Annuities Participating 36,347 11,851
– Annuities, Unit-Linked Non-Participating — 747
– Unit-Linked Non-Participating — (400,572)
Linked Liabilities 12,025,83 6,767,957
2
Fair Value Change 619,615 797,222
Total Provision for Linked Liabilities 12,645,447 7,565,179

Sub-Total 16,705,503 10,045,853

Funds for Future Appropriation:-Linked 129,246 14,662
Liabilities
Others 1,009 1,009

Total 20,659,587 13,025,588

Application of Funds
Investments
– Shareholders’ 853,836 656,985
– Policyholders’ 4,026,888 2,975,227

Assets Held to Cover Linked Liabilities 12,774,710 7,579,841

Loans 23,168 7,245
Fixed Assets 242,790 183,626
Current Assets
Cash and Bank Balances 1,248,644 570,984
Advances and Other Assets 444,163 343,225
Sub-Total (A) 1,692,807 914,209
Current Liabilities 1,551,719 818,943
Provisions 70,969 26,729
Sub-Total (B) 1,622,688 845,672
Net Current Assets (C) = (A – B) 70,119 68,537

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Miscellaneous Expenditure
(To the extent not written off or adjusted) — —
Debit Balance in Profit and Loss Account
(Shareholders’ Account) 2,668,077 1,554,127

Total 20,659,587 13,025,588

INTERPRETATION:

We can easily understand to show the above balance sheet in year 2007 company’s
total balance 13,025,588, while in year 2008 company’s total balance increase and become it
20,659,587. It means company’s balance Increase is 7,633,999.

WORKING CAPITAL MANAGEMENT

Working capital refers to that part of the firm’s capital which is required for
financing short-term or current assets, such as, cash, marketable securities, debtors,
inventories, bills receivable etc. the assets of this type are relatively temporary in nature.
Unfortunately, there is much disagreement among financiers, accountant, economics and
businessmen as to the exact meaning of the team “working capital”
However, working capital is also known as circulating capital or short term
capital. Working capital can be derived by the deference between current assets and current
liabilities of the firm.
GROSS WORKING CAPITAL= TOTAL CURRENT ASSETS

WORKING CAPITAL= CURRENT ASSETS – CURRENT LIABILITIES

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Particular 2008 2007
Current Assets
Cash and Bank Balances 1,248,644 570,984
Advances and Other Assets 444,163 343,225
Sub-Total (A) 1,692,807 914,209
Current Liabilities 1,551,719 818,943
Provisions 70,969 26,729
Sub-Total (B) 1,622,688 845,672

Working capital = Current Assets – Current Liabilities

For year 2008

Working Capital = C.A – C.L
= 1,692,807- 914,209
= 70,119

For year 2007

Working Capital = C.A – C.L
= 914,209 – 845,672
= 68,537

RATIO ANALYSIS:

Ratio analysis isn't just comparing different numbers from the balance sheet,
income statement, and cash flow statement. It's comparing the number against previous years,
other companies, the industry, or even the economy in general. Ratios look at the

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relationships between individual values and relate them to how a company has performed in
the past, and might perform in the future.

Ratio analysis is the method or process by which the relationship of items or group
of items in the financial statement are computed, determined and presented.

CURRENT RATIO:

Meaning:

This ratio compares the current assets with the current liabilities. It is also known as ‘working
capital ratio’ or ‘solvency ratio’. It is expressed in the form of pure ratio.
E.g. 2:1

CURRENT RATIO = Current Assets / Current Liabilities.

Particular 31-MAR- 31-MAR-

08 07
Current Assets
Cash and Bank Balances 1,248,644 570,984
Advances and Other Assets 444,163 343,225
Sub-Total (A) 1,692,807 914,209
Current Liabilities 1,551,719 818,943
Provisions 70,969 26,729
Sub-Total (B) 1,622,688 845,672

For year 2008

Current Ratio = C.A / C.L

= 1,692,807 / 1,622,688
= 1.04

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For year 2007

Current Ratio = C.A / C.L

= 914,209 / 845,672
= 1.08

℘ INTERPRETATION
The current ratio in the year 2008 has decrease the current ratio as compare
to the year 2008 in steadily it indicates good liquidity of current assets.

TURNOVER RATIO / INTEREST COVERAGE RATIO / ACTIVITY RATIO

INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest

Particular 31-MAR- 31-MAR-

08 07

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Profit before tax 1,096,357 435,951
Less
Interest 96,373 65,644
Profit before interest & tax 999,984 370307

INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest

FOR YEAR 2008

INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest

= 999,984 / 96,373

= 10.38%

FOR YEAR 2007

INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest

= 370,307 / 65,644

=5.64%

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℘ INTERPRETATION:

The current ratio in the year 2008 has decrease the current ratio as compare the year
2007 it mean that company has done less investment in interest coverage ratio or turnover
ratio.

PROPRIETORY RATIO

Proprietary ratio = Proprietary funds / Total assets

Particular 31-MAR- 31-MAR-

08 07
Proprietary fund:
Share capital 3,303,466 2,443,701
Reserve & surplus 520,363 520,363
Subtotal (A) 3,823,829 2,964,064
Fixed Assets 242,790 183,626
Current Assets 1,692,807 914,209
Subtotal (B) 1,935,597 1,097,835
Total (A – B) 1,888,232 1,866,229

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Proprietary ratio = Proprietary funds / Total assets

For year 2008

Proprietary ratio = Proprietary funds / Total assets

= 1,888,232 / 1,935,597
= 0.98%

For year 2007

Proprietary ratio = Proprietary funds / Total assets
= 1,866,229 / 1,097,835
= 1.70%

℘ INTERPRETATION:

The current ratio in the year 2008 has decrease the current ratio as compare the year
2007. It means that company has done loss situation in proprietary ratio.

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 STRENGTHS:

I. Financial Acumen - Holds a stable and diversified portfolio and has received some
of the highest ratings in financial strength from industry’s independent rating
agencies.
II. Disciplined fund management - Years of experience in asset management, and a
strong track record in managing funds - backed by the acclaimed expertise of Old
Mutual plc
III. Innovativeness - Known for being an innovator in providing world-class pragmatic
financial solutions, with a constant focus on customization and flexibility
IV. Unrelenting Customer Focus - A highly committed sales force, with customer
satisfaction as the key driving force - a major differentiator
V. Transparency in Services - Daily declaration of fund performances, regular
performance benchmarking, well regulated asset management, and monthly
newsletter on market updates

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 WEAKNESSES:

 Industry in nascent stage.

 Rural areas still not covered.
 Not very known among Indian population.
 Lack of credibility among the people because Kotak being a private player.
 Premiums are high as compared to its competitors.
 Very few branches in the country.
 Products:
» The policy doesn’t have the surrender option before third year.
» Plan does not offer any guarantee or assured return.
» Product profile is not very comprehensive.
» Mortality, management and administrative charges are sky scrapping as
compared to its competitors.

OPPORTUNITIES:

 Liberalization of Indian economy.

 As the industry is growing the whole market is virgin.
 The whole private sector is opened to be trapped even though the competition is fierce
from government owned insurance companies.
 It’s a volume business that is even if the company has few good corporate the
turnover cease to increase by manifold.
 Products:
» Preserver funds look good due to comfortable liquidity in the economy and
there is little chance hike in short-term rate by RBI.
» Finance minister unveiled a budget favoring consumer spending, boosting
demand and therefore higher economic growth.

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• THREATS

 The government players will become aggressive thus growth is going to be tough.
 Entry of other players is not ruled out.
 Apprehension towards Kotak being a private life insurance company.
 We expect the industry to rationalize in future that is mergers and acquisitions will
happen, which will impact the industry and Kotak life fortunes.
 Products:
» Past performance of these plans is not indicative of the future performance of
the plan.
» The sum invested in the funds is subject to market risks and there can be no
assurance that the objective of plan will be achieved.
» All benefits payable under the policy are subject to tax laws and other
financial enactment, as they exist from time to time.

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79
 • CONCLUSION

After overhauling the all situation that boosted a number of Pvt. Companies associated with
multinational in the Insurance Sector to give befitting competition to the established
behemoth Kotak in private sector, we come at the conclusion that

• There are very tough competitions among the private insurance companies on the
level of new trend of advertising to lull a major part of Customers.
• Kotak is not left behind in the present race of advertisement.
• The entry of more Pvt. Players in the Insurance Sector has expanded the product
segment to meet the different level of the requirement of the customers. It has brought
about greater choice to the customers.
• Kotak has vast market and very firm grip on its traditional customers and monopoly
of life insurance products.

IRDA is also playing very comprehensive role by regulating norms mandating to private
players in this sector, that increases the confidence level of the customers to the private
players.

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 Suggestions

The study has provided with the useful data from the respondents. There has a lot to be
recommended. Following are the recommendations:

• There is a need for better promotion for the investment products & services. The
bank should advertise its products through television because it will reach to the
masses.
• More returns should be provided on Insurance plans.

As the bank provides the Insurance facility to its customers. It should provide this facility by
tie up with the other Insurance organizations as well. The main reason is that, the entire
customers do not want Insurance of only one company. They should have choice while
selecting a suitable Insurance plans. This will definitely add to the goodwill & profit for the
bank.

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 • BIBLIOGRAPHY

Sr.no Book Author

1 Life insurance (IC-33) S. Balachandran.

2 Insurance principles & practice P.A.S.Mani.

3 Life insurance Prof. O.S.Gupta.

4 Marketing management Philip kotler.

5 Product brochure of KLI -

• Web sites

• www.kotak.com
• www.licindia.com
• www.irda.org
• www.lifeinsure.com

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