A PROJECT REPORT ON Promotions and sales of Kotak life insurance SUBMITTED TO MAEER s MIT SCHOOL OF BUSINESS BY ANSHU PANDEY

Roll No. 260140 Batch No. 26 IN PARTIAL FULFILLMENT OF POST GRADUATE DIMPLOMA IN MANAGEMENT (PGDM) MONTH, 2008-10 MAEER s MIT SCHOOL OF BUSINESS PUNE

Table of CONTENTS

Chapter No.

Title Declaration from student Certificate from organization Certificate from Guide Acknowledgement List of Tables and Graphs Executive summary

Page No. V Vi Vii Viii 14-27 ix 1-9 1-2 3-4

I 1.1 1.2

Introduction Background of the study

Important milestones in the life Insurance business in India

1.3 1.4 1.5

Company profile Need of the study Scope of the study

5-6 7 8

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1.6 II 2.1 2.2 2.2 2.3 2.3.1 2.3.2 2.4 2.4.2 2.4.3 2.4.4 2.5 2.6 2.7

Objectives of the study Research Methodology Research design Primary data Secondary data Sample design Population Sample size Method of data collection Instrument for data collection Drafting of a questionnaire Testing of questionnaire / Pilot survey Field work Data- analysis techniques Limitations

9 10-12 11 11 11 11 11 11 12 12 12 12 12 13 13

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III IV VI

Data Processing and Analysis Findings and Conclusions Recommendations Bibliography Appendices / annexure Questionnaire/s

14-27 28 29 30 31 31

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DECLARATION

I, Mr ANSHU PANDEY here by declare that this project report is the record of authentic work carried out by me during the period from 27th April,2009 to 27th June,2009 and has not been submitted to any other University or Institute for the award of any degree / diploma etc.

Signature Name of the student Date

CERTIFICATE

This is to certify that Mr / Ms-------------------------------------- of MAEERs MIT School of Business has successfully completed the project work titled ------------------------------------ in partial fulfillment of requirement for the completion of PGDM course as prescribed by the MAEERs MIT School of Business.

This project report is the record of authentic work carried out by him/her during the period from ------- to -------. He/She has worked under my guidance. Signature Name Project Guide (Internal) Date: Counter signed by Signature Name Director

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Acknowledgement

It gives me immense pleasure in presenting this project report on promotion and sales of life insurance from Kotak Old Mutual Life Insurance Company ltd, near Shorab Hall, Pune. I express my deep sense of gratitude to My Company Guide Mr. Sushil Choudhary for his valuable guidance during my project work. I would also like to all staff of Kotak Life Insurance who guide me in project work.

I am thankful to Mr. N.J.Chavan (Faculty Guide) for valuable inspiration and guidance provided by him throughout the course of this project. They have patient and critically gone the subject matter. I would like to take opportunity to express my gratitude towards all of them who have contributed directly or indirectly in my project work.

Anshu Pandey

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Executive Summary

The purpose of this project is to enhance academic inputs by getting practical exposure to the corporate world in the field of marketing. Further understand various management practices in the field of marketing. The work includes data collection, interpretation and analysis of data, meeting new suspects and convincing them to become financial advisors of the company. Intense follow up and informative presentation were required to finally close the sales. The process includes data collection through various activities, cold calling and meeting them personally and finally convincing them to be a part of Kotak Old Mutual Life Insurance. The places of visits were post office, shopping malls, residential societies, local shops, private firms, banks etc. during this process I was able to understand various Insurance practices and strategies for the highly competitive insurance market. Main objective was marketing channel development through market survey and further convincing probable prospects to become financial advisors for Kotak Old Mutual Life Insurance. Research methodology used was descriptive and survey method was used to interact with major potential customers. Simple sample methods with 200 respondents were used with a flow of questionnaire with structured questions. Will to earn extra income and availability of time were considered while becoming financial consultants. Sales and promotional activities were done to attract financial consultants.

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11Background of the study

The service industry is one of the fastest growing sectors in India today. The upcoming sectors which are really showing the graph towards upwards are - Telecom, Banking, and Insurance. These sectors really have a lot of responsibility towards the economy. Amongst the above-mentioned areas insurance is one sector, which took a lot of time in positioning itself. The insurance business of non-life companies was not much in problems but the major problem was with life insurance. Life Insurance Corporation of India had monopoly for more than 45 years, but the picture then was completely different. Previously people felt that Insurance is only for classes not for masses but now the picture is vice-versa. 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 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 an 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
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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 formation of IRDA, entrance of private life insurance companies into India with one foreign partner, compulsory training of Insurance agents etc. developments started to take place. And this was the time when these companies started searching for proper channel partners who can help the organization in expanding its network and business in India. Channel partners are those who are going to be into direct selling of companys products i.e. the insurance policies. They are the link between the customers and the management or company. These channel partners are people with different profiles. They are selected on some grounds like their network of people, their problem handling ability, convincing power and lot many things.

1.2 Important milestones in the life Insurance business in India

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. 1968- The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1999 - The Insurance Regulatory and Development Authority Act, is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected there with 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).

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CONTRIBUTION TO INDIAN ECONOMY

(i) Life Insurance is the only sector which garners long term savings.

(ii) Spread of financial services in rural areas and amongst socially less privileged.

(iii) Long term funds for infrastructure.

(iv) Strong positive correlation between development of capital markets and insurance/pension sector.

(v) Employment generation.

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1.3 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 companys US Life business recorded sales of $4 billion at the end of 2002.

Operations in the United Kingdom are focused on wealth management; 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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MANAGEMENT:

MR. UDAY KOTAK is the CEO of the company.

Mr. Gaurang Shah (Managing Director)

Mr. G Murlidhar (Chief Financial Officer)

Mr. Nandip Vaidya (Vice President - Sales)

Mr. Arun Patil (Vice President - Sales & Management

Development)

1.4 Need of study

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Increase channel distribution by recruiting financial advisors and further promote kotak old mutual life insurance products.

To find different methods adopted by insurance industries to recruit financial consultants.

To promote Kotak Old mutual Life Insurance products.

To determine the perception of financial consultants.

To find the right candidate. Finalize candidates for the IRDA training.

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1.5 Scope:

The project will help the company to understand the perception of people about life insurance and financial advisors by exploring the views about the organization of various respondents in Pune city. This study can be applied to various metro cities. This study can only be used in sales and marketing channel development department of insurance industry. This project will help organization to understand consumer behavior and hence promote life insurance products in the Pune city. Respondents had different demographics from various places in Pune city. Hence this study is applicable to complete Pune city. This study is restricted to sales and promotion only.

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1.6 Objective
Present study is to accomplish the following objective.

To know about brand awareness of Kotak Life Insurance and customers preference about Kotak Life Insurance.

To understand the recruitment procedure of financial advisors.

To determine the perception of financial consultants.

To understand the sales process and structure of Insurance industry.

To promote Kotak Old Mutual Life Insurance.

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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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2.1Research design Research design used consists of survey research studies which can lead to wider scope and detailed information can be obtained. The study is carried out to know the characteristics of group such as age, sex, occupation, education, and income. There are two types of data collection method use in my project report.

Primary data Secondary data.

2.2 Primary data collection method - 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, working house wives, retired people in Pune city for company.

2.2 Secondary data collection method - By referring to various websites, books, magazines, journals and daily newspapers for collecting information regarding project under study. 2.3 Sample Design: Sample design used was based on availability of the respondents. Various places for availability of the respondents were identified and accordingly field work was conducted. 2.4 Population: It was mainly consisted of working class, retired people and housewives. Large portion of the population consisted of age group above 25 years of age. 2.5 Sample size: Sample size consisted of 200 respondents distributed over various parts of Pune city.Though the sample size is small but has been collected from various parts of the city hence could work as
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focus group for complete pune city. Further my colleagues were also working on the same project and hence the company could collect a large amount of data.

2.6 Instruments of data collection: The instruments used for survey was questionnaire. This is most widely and effectively used tool. Further telephonic conversation and other promotion activity on the field was used. The Questionnaire was efficient enough for proper assessment and fulfilling the objectives of research. 2.7 Methods of data collection: 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. The respondents were interviewed and asked the questions from the questionnaire to collect the necessary information. This method is effective and reveals more information about the respondents. 2.8 Drafting the questionnaire: The questionnaire was drafted to know the perception of the sample size towards Kotak Old Mutual life Insurance. Simple questions designed in a structured and systematic format helped to fetch quick response from the respondents. It consisted Of 12 questions regarding age occupation, mobile, household income, number of years in Pune city and education etc. the question was drafted under senior marketing channel manager.

2.9 Field Work: Work was to meet respondents at various identified location across the city. Collecting required information and providing information about kotak products and opportunities.

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2.10Data Analysis: It includes scaling method to analyze the perception of the respondents about kotak products. Further graphical analysis was done to help interpret the data in the required format.

2.11 Limitation: y y y y The project was limited to 2 months. Sample size was just 200 respondents. Restricted only to Pune city. As the process is time consuming, vast area could not be covered.

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Data Processing and analysis

Table No.1: Age wise consideration for Financial Consultants. Sr.no. Category no. respondents 1 2 3 4 18-23yr 24-29yr 30-35yr 35 above Total 200 100% 40 70 60 20% 35% 30% 15% of Percentage

& 30

Interpretation Age has considerable influence on the willingness of individuals to become a financial consultant.

Findings: During the project it was found that individuals in the age group of 22-52 year were interested in additional source of income than the other age group. Probably, the reason could be responsibilities and urge to have a parallel source of income.

Suggestion: Hence this is the age group which we need to target for promotion and sales of Life Insurance products.

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Graph:

18-23yr 24-29yr 30-35yr 35 & above

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Table no 2. Educational qualification wise consideration for Financial Consultants.

sr.no.

Category
th

no. respondents

of Percentage

1 2 3 4

Below 10 10th 12th

4 15 24 119 34

2% 8% 12% 61% 17%

Graduation Post

graduation Total 200 100

Interpretation: Qualification of an individual is a major consideration for becoming a financial consultant as there is a minimum level of qualification standards required by the IRDA. Hence this activity help understand the availability of eligibility criteria among respondents.

Findings: 90% of the respondents belong to 12 th and above in education.

Suggestions: Hence promotion should be done about financial consultants in an extensive way since the target market is huge.
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Graph:

Below 10th 10th 12th Graduation Post graduation

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Table no.3 Occupation wise consideration of Financial consultants.

sr.no.

occupation no.

of Percentage

respondents 1 2 3 student Salaried Self employed 4 House wives 5 Retired Total 9 200 5% 100 38 19% 13 38 102 7% 19% 50%

Interpretation: The occupation of an individual help perceive the capability of a person to provide time for the job. Except self employed rest all have good prospects of becoming financial consultants.

Findings: Above data states that 50% of the respondents are self employed therefore it will be difficult for them to provide time.

Suggestion: Promotion should be done among the salaried, housewives and retired people for better results.

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Graph:

student Salaried Self employed House wives Retired

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Table no.4 income wise consideration for financial consultants.

sr.no.

family Income

no.

of Percentage

respondents 1 Less 1lakh 2 3 4 1.2-2.5 lakh 2.5-4.2lakh More 4.2lakh Total 200 100 62 62 31% 31% 24% Than 28 14%

than 48

Interpretation: This is required to know whether the product or offering is affordable by the customer. Further it also helps in recruiting efficient financial Advisors as such income people can only have such contacts who can afford our products.

Findings: The above graph depicts that more than 62% households have income more than 2.4 lakh.

Suggestions: Hence the product and offerings should be promoted in the segment having income group of 2.4 lakh and above.

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Graph:

Less Than 1lakh 1.2-2.5 lakh 2.5-4.2lakh More than 4.2lakh

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Table no.5 Are you insured?

sr.no.

category no.

of Percentage

respondents 1 2 yes No total 60 140 200 30% 70% 100%

Interpretation: Though there is a huge competition in Insurance Industry still there is a huge market which needs to be explored.

Findings: The above data states that 70% of the market are still not having any life Insurance policy.

Suggestions: Increase channel distribution to reach the untapped market.

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Graph:
160

140

120

100

80

yes No

60

40

20

0 1 2

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Table no. 6 would you like to earn with Kotak Old Mutual Life Insurance?

sr.no.

category no.

of Percentage

respondents 1 2 No yes total 20 180 200 10% 90% 100%

Interpretation: People are aware of kotak Oldmutual Life Insurance and they are willing to earn extra income.

Findings: 90% of the repondents are willing to work with kotak Oldmutual Life Insurance.

Suggestion: Hence promote about the Business opportunity and facilities provided to Financial Advisors.

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Graph:
200 180 160 140 120 100 80 60 40 20 0 1 2 yes No

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Table no.7 Willingness to become Financial Consultants?

sr.no.

Willingness no.

of Percentage

respondents 1 2 interested Not interested 3 cannot say Total 26 200 13% 100% 70 104 35% 52%

Interpretation: Hence they are found to be skeptical about the job. Hence they are not aware of the facilities provided to financial advisors by Kotak Old Mutual Life Insurance.

Findings: Above data states that only 35% of the respondents are interested in the job of financial consultants and 65% come in not sure segment.

Suggestions: Facilities and benefits of the Job should be promoted to change the perception of the people.

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Graph:

interested Not interested cannot say

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Findings and Conclusion:

SPECIFIC FINDINGS: 1) During the project it was found that individuals in the age group of 22-52 year were interested in additional source of income than the other age group. Probably, the reason could be responsibilities and urge to have a parallel source of income. 2) 90% of the respondents belong to 12 th and above in education. 3) Above data states that 50% of the respondents are self employed therefore it will be difficult for them to provide time. 4) The above graph depicts that more than 62% households have income more than 2.4 lakh. 5) The above data states that 70% of the market are still not having any life Insurance policy. 6) 90% of the repondents are willing to work with kotak Oldmutual Life Insurance. 7) Above data states that only 35% of the respondents are interested in the job of financial consultants and 65% come in not sure segment.

There is a huge scope for growth in Insurance Industry as 70% of the market still needs to be explored. There is a huge competition where majority of them are trying to increase their market share. People are not aware about the facilities provided to Financial consultants as most of them are skeptical about becoming Financial consultants. Only 35% of the respondents are willing to become financial consultants. Majority of the respondents who were interested in the job offer were of age 30 and above. More than 90% of the people are willing to work and earn extra income with Kotak Oldmutual Life insurance. Few respondents who were already working in Financial field as tax consultants, bankers, Investors were already aware of insurance products and its benefits.
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Recommendations:
These recommendations are based on the analysis done during the summer training. There is a lack of awareness about the role of financial advisors. People still believe that the job of financial consultants is a tedious job of a sales man and will require huge efforts from their side. Hence they should be made aware of the various benefits of being a financial advisor, like: y y y Alternate source of income Sales Manager Support in case of Kotak Life insurance. Work timing flexibility and various other incentive schemes.

Further people need to be informed that Life Insurance not only provides worry free life but also have various other benefits like: y y y Tax benefits High Investment returns Secured Life

In Indian market where life Insurance means LIC and other private players there is a huge competition for kotak to sustain itself. Hence a continuous promotion and advertising strategy is required to attain above objectives. This can be done through: y y y y y y y Hoardings and banners Help desks in various companies, malls and societies. Leaflets distribution with complete information. Sponsoring public events and communicating information. Organizing events in school and colleges for data collection. Using Media for advertisement. Using existing advisors for promotion.

Further, continuous efforts are needed to generate relevant data. Feedbacks form the existing consultants will help understand the problems faced by them. These problems should be improved and the job should be promoted accordingly.
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Bibliography Websites for reference: www.kotak.com www.google.com

Books referred: Marketing Management Philip Kotler

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Annexure
Questionnaire Good Morning sir/madam, I am Anshu Pandey, a student of MITSOB. This survey is to understand consumer perception about life insurance advisors and Kotak life insurance products. Please help me in completing this research work by providing these relevant information 1. Name: 2. Age: 3. Marital Status: 4. What is your educational qualification? Below 10th graduate 10th Post graduate 12th

5.

What is your current occupation? Salaried Housewives Student Retired Self employed

6. What is your current family annual income? <100000 >4200000 120000 250000 250000 420000

7. Are you insured? Yes No

8. would you like to earn with Kotak Old Mutual Life Insurance? Yes No

9. Would you like to become Financial consultant? Yes No

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