A REPORT On

“Potential of Life insurance Industry in Surat Market”

Under the Guidance of

COMPANY GUIDE

Mr. Jignesh Madhwani

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TABLE OF CONTENTS
Contents Acknowledgements List of Tables List of Illustrations/Diagrams Executive Summary Chapter 1: introduction  Objective  Limitation  Research Mythology  Data Collection Chapter 2: Life Insurance Industry  Industry profile  important milestones in the life insurance business  Insurance sector reforms  IRDA Chapter 3: Contribution of Life Insurance Industry  Contribution of Life Insurance in the Economy  Flow of Insurance Industry in India  Structure of life Insurance Industry  Life Insurance industry  Aggregation of Long Term Savings  Spread of financial services in rural Areas  Long term funds for infrastructure Development of Capital Markets/Economic Growth  Employment generation  Special Features  Growth Potential  Phase of transition Chapter 4:Company Profile  Management  Area of Business  KMOM progress till date  KMOM-the partnership and Lineage  Products  Hierarchy of KMOM of Surat branch Chapter 5: Survey  Data interpretation , editing and coding  Graph analysis Page No. 5 6 7 9 10 15 17 19 22 23 24 29 31 32 36 36 37 40 41 42 43 44 45 46 47 47 49 51 56 65 66 69 71 72 73 73

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Chapter 6: Finding and Suggestion Chapter 7: Conclusion Chapter 8: References Chapter 9: Annexure

83 84 85 86

Acknowledgement
In preparation of this report by me, I feel great pleasure because it gives me extensive practical knowledge in my career. I get idea about Indian Life Insurance Industry by this project. I express my deep sense of gratitude to My Company Guide Mr. Jignesh Madhavani for his valuable guidance during my project work. I also like to all staff of Kotak Life Insurance who guide me in project work. I am thankful to Mr. Vikas Singh (Faculty Guide) for valuable inspiration and guidance provided me through out 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.

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Chirag Patel List of Tables
Name of Tables Page no 38 • Potential of Life Insurance sector 38 • Market share of LIC and all private player 39 • Individual Market share of Insurance company 41 • Total asset of Life Insurance companies 41 • Total premium generated 41 • The future premium income Generated will be 44 • Untimely death benefit to policy holder in the past 73 • Age vise classification 74 • Gender wise classification 75 • Income wise classification 76 • No of member having insurance 77 • How many person having insurance in family 78 • Different policy bought by customers 79 • Fully insured and under insured
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• persons Market share of different life insurance policy 80 List of Illustrations/Diagrams Name of Illustrations/Diagrams • • • • • • Kotak : Area of Business Age vise classification Gender wise classification Income wise classification No of member having insurance How many person having insurance in family • Different policy bought by customers • Fully insured and under insured persons • Market share of different life insurance Page No 57 73 74 75 76 77 78 79 80 5 .

Chapter 1:  Introduction 6 .

Previously people felt that “Insurance is only for classes not for masses” but now the picture is vice-versa. Amongst the above-mentioned areas insurance is one sector. The same instinct that prompts modern businessmen today to 7 .Executive Summary The service industry is one of the fastest growing sectors in India today. The insurance business of non-life companies was not much in problems but the major problem was with life insurance. These sectors really have a lot of responsibility towards the economy. but the picture then was completely different.Telecom. Life Insurance Corporation of India had monopoly for more than 45 years. The upcoming sectors which are really showing the graph towards upwards are . and Insurance. Banking. which took a lot of time in positioning itself. The story of insurance is probably as old as the story of mankind.

However. 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. Life Insurance in its modern form came to India from England in the year 1818. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Starting as Indian enterprise with highly patriotic motives. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870. Bharat 8 .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. the foreign life insurance companies started insuring Indian lives. and covered Indian lives at normal rates. later with the efforts of eminent people like Babu Muttylal Seal. Though the concept of insurance is largely a development of the recent past.

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. The United India in Madras. The formation of IRDA. National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko. The Indian Mercantile. General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. developments started to take 9 . In 1907.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 Life Insurance Companies Act. In the year 1912. in Calcutta. entrance of private life insurance companies into India with one foreign partner. putting the Indian companies at a disadvantage. Prior to 1912 India had no legislation to regulate insurance business. and the Provident Fund Act were passed. But the Act discriminated between foreign and Indian companies on many accounts. compulsory training of Insurance agents etc. house of the great poet Rabindranath Tagore.

Tax Consultants. Bank’s Daily Collection Agents etc. 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. the main idea behind targeting the above profile is strong client network which is really very important for an insurance company. This shows the scope for private insurance companies have great opportunities to cover the market and can 10 . They are the link between the customers and the management or company. Postal agents. their problem handling ability. Channel partners are those who are going to be into direct selling of company’s products i. The main idea behind company’s Questionnaire Survey is to find out and analyze the proper profile that can be recruited by company as a channel partner.e.place. Company has been focusing on some of the profile that can be very beneficial for the company. They are selected on some grounds like their network of people. The project title is “Potential of Life Insurance Industry in Surat Market”. For example Chartered Accountants. convincing power and lot many things. the insurance policies. These channel partners are people with different profiles.

New private players have entered the market and with their innovative approaches and better use of distribution channels and technology. the market share of LIC has come down to 71. the monopoly of big public sector companies in life insurance market has been broken. and TATA AIG.4% in life insurance market while the private players have captured around 17% market in the general insurance segment. With the initiation of the deregulation in the Indian insurance market.insure the customer. Birla Sun life. 11 . It also includes the leading competitors in the life insurance and general insurance segments along with their market shares. Since the deregulation has been put in to place. they are eating in to the shares of established public sector companies in Indian Insurance Market. Kotak Life Insurance Bajaj Allianz. This report includes the key private players in the insurance market such as ICICI Prudential.

Chapter 2  Objective  Limitation  Methodology  Data collection 12 .

 To know about brand awareness of Kotak Life Insurance and customer’s preference about Kotak Life Insurance. Objective: The main of the present study of is accomplish the following objective.  According the market survey come know about how much potential of insurance market in our city.1.  And base on analysis of the result thus obtained make a report on that research.  Conduct market survey on a sample selected from the entire population and derived opinion on that research. Training aims at recruiting maximum number of Life Advisors and to Sell the maximum policies for the  13 .  Proper understanding and analysis of life insurance industry.

In all. Age. occupation.  The objective behind the project is as follows:  To find the right candidate.  Finalize candidates for the IRDA training 14 . it is to understand the overall working of the Life insurance sector.LIC.company and bring the business for the company which ever is going at the particular point of time. Max New York life etc. social relation.  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 .  Along with it I will be gaining the thorough knowledge of insurance sector. Qualification. This will give me in more confidence in marketing products given to me.  To about their family background.

15 . Most of the people are not aware about the importance and the necessity of the insurance in their life. So today also there is always a rush to buy an Insurance Policy only at the end of the financial year like January.5: 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. February and March making the other 9 months dry for this business. 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.

 Increased competition – Today the competition in the Insurance sector has became very stiff. Post office deposits and Public provident fund. Nowadays most of the modern Unit Linked Insurance Plans gives returns which are many times more than that of bank Fixed deposits. They are not aware of the modern Unit Linked Insurance Plans which are offered by most of the Private sector players. This situation has 16 . Currently there are 14 Life Insurance companies working in India including the LIC (life insurance Corporation of India). Today each and every company is trying to increase their Insurance Advisors so that they can increase their reach in the market. They are still under the perception that if they take Insurance they will get only 5-6% returns which is not true nowadays. National saving certificate. 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.  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. Insurance does not give good returns – Still today people think that Insurance does not give good returns.

Its purpose is to question through the application of the scientific method. monitor marketing actions. refine. RESEARCH METODOLOGY Research always starts with a question or a problem. monitor marketing performance and improve understanding of market as a process.created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has became very very difficult. and evaluate marketing actions. 17 .information used to identify and define marketing opportunities and problems generate. Marketing research specifies the information required to address these issues. It is a systematic and intensive study directed towards a more complete knowledge of the subject studied. and the method for collecting information. designs. customer and public to the marketer through information. Marketing research is the function which links the consumer.

18 . 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 There are two types of data collection method use in my project report. it follows a certain sequence of research action. – Primary data – Secondary data.manage and implemented the data collection process. analyses the results and communicate the findings and their implication. 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. I have prepared our project as descriptive type.

I decided on Secondary data collection method was used by referring to various websites. tele-calling.For my project. 19 . magazines. I decided on primary data collection method for observing working of company and approaching customers directly in the field. 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. journals and daily newspapers for collecting information regarding project under study. cold calling. books.

we decided primary data collection method because our study nature does not permit to apply observational method.DATA COLLECTION After the research methodology. We conducted 200 sample of survey in our project. 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. In our live project. There are two types of data collection method – primary data and secondary data. 20 . research problem in marketing has been identified and selected. the next step is together the requisite data.

Chapter: 3     Industry profile: important milestones in the life insurance business Insurance sector reforms The Insurance Regulatory and Development Authority (IRDA) 21 .

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. The story of insurance is probably as old as the story of mankind. 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.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 same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. Though the concept of insurance is largely a development of the recent past. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on 22 .

General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. The Indian Mercantile.Indian Soil. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. 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. house of the great poet Rabindranath Tagore. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870. insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Starting as Indian enterprise with highly patriotic motives. The United India in Madras. Prior 23 . National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. in Calcutta. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. In 1907. and covered Indian lives at normal rates. later with the efforts of eminent people like Babu Muttylal Seal. the foreign life insurance companies started insuring Indian lives.

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-inforce 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-

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Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long-term contracts and during the currency of the policy it requires a variety of services need was felt in the later 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 Crores of New Business in 1957 the corporation crossed 1000.00 Crores only in the year 1969-70, and

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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, Ahmedabad, 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

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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.

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

1850Non 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.

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Association of India. The General insurance business in India. set up. company to transact all classes of general insurance business.. LIC Act. a wing of the Insurance and sound business practices. Some of the important milestones in the general insurance business in India are: 1907 1957 conduct 1968 up. on the other hand. viz. the first general insurance company established in the year 1850 in Calcutta by the British. frames a code of conduct for ensuring fair The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set . 1972 The General Insurance Business (Nationalization) Act. LIC formed by an Act of Parliament. 5 Crore from the Government of India. with a capital contribution of Rs. 1956. the first General Insurance Council. 1972 nationalized the general insurance business in India with effect from 1st January 1973. can trace its roots to the Triton Insurance Company Ltd.1956 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. 107 insurers amalgamated and grouped into four companies’ viz. the National Insurance 28 The Indian Mercantile Insurance Ltd.

headed by former Finance Secretary and RBI Governor R. GIC incorporated as a company. the New India Assurance Company Ltd. Malhotra Committee. 29 .. N. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. the Oriental Insurance Company Ltd. was formed to evaluate the Indian insurance industry and recommend its future direction.Company Ltd.. Malhotra. Insurance sector reforms In 1993. the committee submitted the report and some of the key recommendations included. and the United India Insurance Company Ltd. 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.

1938 had provided for setting up of the Controller of Insurance to act as a strong and powerful supervisory and regulatory authority for insurance. independent and autonomous Insurance Regulatory Authority was felt. the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation. 1997 2000 Insurance regulator IRDA set up IRDA starts giving licenses to private insurers: Kotak first private insurers to sell a policy Life Insurance ICICI prudential and HDFC Standard Life insurance 2001 Royal Sundaram Alliance first non life insurer to sell Banks allowed to sell insurance plans. Post nationalization. the role of Controller of Insurance diminished considerably in significance since the Government owned the insurance companies. This necessitated the need for a strong. 30 . As the enacting of legislation would have taken time. a policy 2002 The Insurance Regulatory and Development Authority (IRDA) The Insurance Act. But the scenario changed with the private and foreign companies foraying in to the insurance sector.

1938. to regulate. The Act has defined certain terms. 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies. 31 . some of the most important ones are as follows appointed day means the date on which the Authority is established under the act. the Life Insurance Corporation Act. Authority means the established under this Act. promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act. 1956 and the General insurance Business (Nationalization) Act. by notification in the Official Gazette specify. Different dates may be appointed for different provisions of this Act. The act extends to the whole of India and will come into force on such date as the Central Government may. 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 Insurance Regulatory and Development Authority Act.

1956 (b) in which the aggregate holdings of equity shares by a foreign company. 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. general insurance business or reinsurance business. either by itself or through its subsidiary companies or its nominees. 1938 or the Life Insurance Corporation Act. Words and expressions used and not defined in this Act but defined in the Insurance Act. 32 . Paid up capital in such Indian insurance company (c) whose sole purpose is to carry on life insurance business.Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by the Central Government through Resolution No. do not exceed twenty-six per cent. 1996. 17(2)/ 94-lns-V dated the 23rd January. "Indian insurance company" means any insurer being a company (a) which is formed and registered under the Companies Act.

Chapter: 4        Contribution of Life Insurance Sector in the Economy FLOW OF Insurance Industry in India STRUCTURE OF INSURANCE INDUSTRY: Snap Shot Industry Aggregation of Long Term Savings Spread of financial services in rural Areas Long term funds for infrastructure Development of Capital Markets/ 33 .

Opened up sector 34 .Economic Growth     Employment generation Special Futures Growth Potential Phase of transition FLOW OF Insurance Industry in India • Structure of Insurance Industry: Snap Shot • Contribution to Indian Economy • Special Features STRUCTURE OF INSURANCE INDUSTRY: Snap Shot Historical Perspective (i) Prior to 1956 242 companies operating (ii) 1956 .2001 Nationalization – LIC monopoly player – Government control (iii) 2001 -.

ICICI Prudential Life Insurance Co. (BSLI) 3. • (a) LIC – Fully owned by Government (b) Postal Life Insurance • (ii) Private players 1. ING Vysya Life Insurance Co. Ltd. Pvt. MetLife India Insurance Co. (HDFC STD LIFE) 4. Sahara India Life Insurance Co. Pvt. (TATA AIG) 11. (MNYL) 7. HDFC Standard Life Insurance Co. Ltd. SBI Life Insurance Co. (SAHARA LIFE) 14. 9. (METLIFE) 8. TATA AIG Life Insurance Co. Max New York Life Insurance Co. Ltd. Bajaj Allianz Life Insurance Co.Industry Snap Shot . Reliance Life Insurance 12. Shriram Sunlam 35 . (ICICI PRU) 5. Ltd. Ltd. 2. Kotak Mahindra Old Mutual Life Insurance Co. (AVIVA) 13. (ING VYSYA) 6. Birla Sun Life Insurance Co. Ltd. Ltd. Ltd. Ltd. Aviva Life Insurance Co. Ltd. Ltd. (SBI LIFE) 10.Contd. Ltd.

• (iii) Other likely players – PNB Life Insurance. Axa Bharti Enterprises Potential of the Insurance sector: Total population Total population of Insurable class 1.1 billion 253 millions Total population insured 88. Market share: 2001-02 2002-03 LIC 98% Private Player 2% s 94% 6% 87% 13% 78% 22% 72% 28% 2003-04 2004-05 200506 36 .5 millions Source: Financial Express-Delhi.

Source: Financial ExpressDelhi Market Share 37 .Industry growth rate at 36% (2004-05) with premium income From new business.

Company Indian Promoter/ Partner Dabur Bajaj Auto Aditya Birla group HDFC ICICI Bank Vysya Bank Foreign Insurance Aviva. UK Allianz. US MetLife. US None Cardiff. Netherland s Kotak Old Mutual Mahindra South Bank Africa New York Life.84 2.11 0. Old Mutual Max New Max India York MetLife Jammu & Kashmir Bank Sahara Sahara Life India Insurance SBI Life SBI Tata AIG Tata Group ING Insurance.71 1. France AIG. UK Market share based on premium 1.32 0.40 0.78 38 .52 1. Germany Sun Life.96 7. Canada Standard Life.12 6.80 1. US 0. UK Prudential.63 Aviva life Bajaj Allianz Birla sun life HDFC Standard ICICI Prudentia l ING Vysya Kotak Mahindra .12 1.

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 39 .

52.a.12000 Cr 2007-2008 1. (iv) At this growth rate. (vi)The industry has the potential to increase the share to 20%.450Cr 2003-2004 3.33.708 Cr 2003-2004 66.608Cr 2004-2005 4.000 Cr (iii) Industry is growing @ 19 p.000 Cr 2006-2007 1.23.(i) Total Assets of Life Insurance Companies 2002-2003 2.000 Cr Aggregation of Long Term Savings (ii) Total Premium generated 2002-2003 57.000 Cr (v) Life Insurance funds account for 15% of household savings.80. 40 . the future premium income generated will be 2005-2006 94.278 Cr 2004-2005 79.

4 lakhs 2004-05 42.000 cr • Social security .No.1 lakhs 41 .55 lakhs Sum assured 46.No.Spread of financial services in rural areas and amongst socially underprivileged • IRDA Regulations provide certain minimum business to be done (i) In rural areas (ii) In the socially weaker sections • Life Insurance offices are spread over nearly 1400 centers. of lives covered 2003-04 17.24 lakhs in rural areas. • Presence of representative in every tensile – deeper penetration in rural areas. • Policies sold in rural areas (2004-05) . • Insurance agents numbering over 6. of policies .

600 crore is anticipated in the next 5 years (Source : SSKI India) • Tenure of funding required for infrastructure normally ranges from 10 to 20 years. • An investment of 6. • Major portion of these funds are routed through debt/private equity participation 42 . • Estimates of funds required for development of infrastructure vary widely. 19. qualitative improvement in infrastructure is essential.Long term funds for infrastructure • For GDP to grow at 8 to 10%.

Benefits to Policy Holders 2002-2003 20. •Annual Investment of around 9000 Crores in capital markets.200 Cr 2004-2005 28.800 Cr 2003-2004 24. 40.000 crore. Present level of investments is over Rs.900 Crores • Helps inculcate a sense of security by protecting earning of people in case of untimely death. •Contribution to Five Year Plans9th Plan 2.000 Crores).900 Crores Last Two Years 1. 70. (Mark to Market basis around 80.700 Cr EMPLOYMENT GENERATION 43 . 30.Development of Capital Markets/ Economic Growth •Industry also contributes in economic development through investments in capital market.

• Many of these openings are in rural sectors. of agents on 31st March 2004 – 15. training establishments provide extra employment opportunities. corporate agents.59 lakhs •Brokers.• Life insurance industry provides increased employment opportunities. 2005 is around 2 lakhs. • Many agents depend on insurance for their Livelihood–No. 44 . • Employees in insurance sector as on 31st March.

SPECIAL FEATURES • Tax clubbing of various savings short term and long term into same bracket have a bias towards short term savings. long term savings more than 10 years deserve special consideration under tax regime. More prone to inflationary pressures • Clearly. • Distinction between the short term savings and long term savings is critical from investor’s point of view. 45 .

PHASE OF TRANSITION • Life Insurance industry is under the phase of infancy after 50 years of monopoly • Competition from within and other sectors of financial market • Needs environmental support till it reaches a comfort zone 46 .GROWTH POTENTIAL At present insurance penetration in India is quite low – 2.26% of GDP.

the Partnership and Lineage Products  Hierarchy of KMOM Life Insurance Ltd. (Surat Branch) 47 .Chapter: 5    Company profile Management Areas of Business    KMOM.Progress till date KMOM.

The company’s US Life business recorded sales of $4 billion at the end of 2002. through its life insurance.Is a world-Class international financial services company. asset management. The company serves 4 million life insurance policyholders and employs over 13 000 South Africans in its local operations. In the USA. Kotak Group entered into the life insurance business in 2001.COMPANY PROFILE Stock broking businesses in the UK. is a joint venture between Kotak Mahindra Bank Ltd. 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. Kotak Mahindra Old Mutual Life Insurance Ltd. through Gerrard as one of the leading private client 48 . OLD MUTUAL is the largest financial services business in South Africa.Kotak Mahindra Bank is the parent company of the group. Kotak Group was established in 1985. It was established in South Africa before 160 years. (24%) Old Mutual plc. Operations in the United Kingdom are focused on wealth management. banking and general insurance operations. (76%) and Old Mutual plc.

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: 49 .

UDAY KOTAK is the CEO of the company. Mr. Gaurang Shah is the Managing Director of Kotak Mahindra Old Mutual Life Insurance Limited.” MANAGEMENT MR. 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.“At Kotak Life Insurance. He has also done his Company Secretary ship from the Institute of Company Secretaries of India. Mr. Gaurang Shah has been with the Kotak Group for the past eight years where he has held different positions of great 50 . to make them financially independent. Other Top Management persons are as follows:Mr. Gaurang Shah (Managing Director) Mr. Gaurang Shah is a Chartered Accountant and a Cost and Works Accountant.

Mr. Shah will focus on developing new lines of businesses and leveraging the company's existing competencies and network to steer Kotak Life Insurance on its ongoing growth path with even greater thrust. Murlidhar is a Chief Financial Officer and 51 . Shah has been previously associated with Kotak Mahindra Primus since its inception and has contributed towards its growth to become a Rs. personal loans. The Retail Assets include commercial vehicles. Mr. Before coming to Kotak Life Insurance.2000 Cr plus business. stands at over 21 years. several of those in building the retail finance business. At Kotak Life Insurance. Mr. G Murlidhar (Chief Financial Officer) Mr. car loans and loans against shares. Gaurang Shah was Group Head of Retail Assets for Kotak Mahindra Bank. Mr.responsibility and juggled multiple tasks effectively. structured products. His cumulative experience. primarily in financial services. Shah has a commendable expertise in managing a large number of employees.

he oversees all aspects of Finance including Operations. 52 . Mr. Regulatory. and graduate member of the Institute of Cost & Works Accountants of India. Mr.Company Secretary of Kotak Life Insurance. he held the position of VP-Finance at Gujarat Glass Ltd. As Chief Financial Officer at Kotak Life Insurance. Finance. Internal Control. Accounts and Treasury. Murlidhar possesses over 20-year work experience and has earlier worked with National Dairy Development Board (NDDB). an associate member of the Institute Of Company Secretaries of India. MDS Switchgear Limited and Nicholas Piramal India Limited and Ion Exchange Ltd. Prior to Kotak Life Insurance. Murlidhar is an associate member of the Institute of Chartered Accountants of India.

Tech (Mechanical) degree from IIT Mumbai and has also completed his Post Graduate Diploma in Business Management from IIM-Ahmedabad.Sales at Kotak Life Insurance. Fergusson. After completing 5 years there. Vaidya set up the private banking business and private equity fund for the Kotak group. Mr. 53 .Sales) Mr. He started his career as a Management Consultant at A. Nandip Vaidya is the Vice President .F. Vaidya holds a B. he moved onto various positions within the Kotak Mahindra group starting from Car Financing (Kotak Mahindra Finance Ltd) to Stock broking & Distribution of investment products/ Mutual funds (Kotak Securities). Nandip Vaidya (Vice President . Mr.Mr.

Sales & Management Development) Mr. Eksteen de Waal is the Sales Training Head of Kotak Life Insurance. Head of Agency Marketing and finally Head of Banc assurance with Old Mutual Bank. He worked for Sanlam Life in South Africa for 3 years before joining Old Mutual more than 20 years ago. He has over 23 years' experience in the Life Insurance Industry. Eksteen started with Old Mutual as a Legal Adviser and after that held various positions.Mr. Arun Patil (Vice President . Project Leader for implementing a new Sales Process with McKinsey's. served as Head of Old Mutual's Training Division. He sold life assurance for some time. In addition he played a role in the wider Industry.graduate in Law and practiced Law as well as lectured at South African Universities before joining the Life Insurance Industry. In this time Eksteen pioneered the introduction of 54 . He was Vice-President of the South African Insurance Institute for two years as well as Vice-President of the Financial Planning Institute for three years. He joined on secondment from Old Mutual South Africa for a period of two years. Head of Old Mutual's Trust Company. Eksteen is a post. Head of Conventions and Motivation.

It's been a steady and confident journey to growth and success. A. 55 . Sidney A. Harish Mahindra and Mr. Uday Kotak. Anand Mahindra took a stake in 1986. working in the USA and England and also implemented Training Programme in Namibia. and that's when the company changed its name to Kotak Mahindra Finance Limited. Mr. Malawi and Kenai. He has traveled widely during his career. Pinto and Kotak & Company. Zimbabwe. Industrialists Mr. This company was promoted by Mr. AREAS OF BUSINESS Kotak Mahindra one of India's leading financial institutions was born in 1985 as Kotak Capital Management Finance Limited.the CFP qualification into South Africa. His current role is to substantially upgrade the level of Training and assist in the implementation of Performance Management Systems in Kotak Life Insurance.

offering complete financial solutions that encompass every sphere of life. Kotak Group has agreed to buy 25% stake held by Goldman Sachs in KMCC and KS subject to regulatory approvals. to life insurance. Kotak Group acquired the 40% stake in Kotak Mahindra Prime held by Ford Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak Mahindra (FCKM) held by Kotak Group. Kotak Mahindra is one of India's leading financial institutions. In March 2006. the group caters to the financial needs of individuals and corporate. From commercial banking. 56 . to mutual funds. to investment banking.In October 2005. to stock broking.

000 employees across its various businesses servicing around one million four hundred thousand customer accounts through a distribution network of branches.The group has a net worth of around Rs.2. Dubai and Mauritius. 57 .000 crore and employs around 6. representative offices and satellite offices across 216 cities and towns in India and offices in New York. franchisees. London.

brokers and agencies supporting the distribution network and servicing around 113. 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. The company is dedicated to financing and supporting automotive and automotive related manufacturers. As on March 31. 2005.KOTAK GROUP IS INVOLVED IN THE FOLLOWING AREAS OF BUSINESS:- Kotak Mahindra Prime Ltd. 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. The Company offers car financing in the form of loans for the entire range of passenger cars and multi utility vehicles.000 customers. 58 . Kotak Mahindra Prime Limited (KMPL) is a 100% subsidiary of Kotak Mahindra Group (Kotak Group) formed to finance all passenger vehicles. dealers and retail customers.

Advisory Services and Fixed Income Securities and Principal Business. As a full service Investment Bank. Kotak Investment Bank is a full service Investment Bank bringing to its clients the global reach and the local knowledge and skills of Kotak Mahindra. Kotak Investment Banking* (KIB) is India's premier Investment Bank Kotak Investment Banking (KIB) and Kotak Institutional Equities represent the securities business of the Kotak Mahindra Group ** (KI). Its strength lies in understanding the clients' businesses backed by a strong research team and an extensive distribution network. It is also the first Indian Investment Bank to be registered with the Securities & Futures Authority in the UK (through our wholly owned subsidiary) and the National Association of Securities and Dealers in the USA. 59 . Kotak Investment Baking’s core business areas include Equity Issuances.Kotak Mahindra Capital Company Ltd. Mergers & Acquisitions. which spans a wide variety of investors across the country.

It’s the first Indian Investment Bank to be appointed by the Government of India as a Co-lead Manager in their international divestment of Gas Authority of India Ltd through a GDR offering. 60 . Kotak Mahindra Bank Limited (KMBL) is the holding company and the flagship of the Kotak Mahindra Group. 1985 and obtained its ‘Certificate of Commencement of Business on February 11. It commenced operations with Bill Discounting and soon started other fund-based activities like corporate leasing & hire purchase. Kotak Mahindra Bank Ltd. Kotak Investment Bank today well positioned in an increasing globalize environment to provide full service to its clients based either in India or overseas. 1986. It was actually incorporated as Kotak Capital Management Finance Limited on November 2. it also entered the funds syndication and the Investment banking business. automobile finance and money market operations. Subsequently.

return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. through Kotak Mahindra Inc. Services offered include GDR and ADR trading and broking. KMMF offers schemes catering to investors with varying risk. a wholly owned subsidiary of KMBL.000 investors in various schemes. U.K. Kotak Mahindra was the first Indian group to be registered with the Securities and Futures Authority. through Kotak Mahindra U. 35.K.Kotak Mahindra Asset Management Company Kotak Mahindra Asset Management Company (KMAMC). with a branch in Dubai. These companies are subsidiaries of Kotak Mahindra Capital Company (KMCC) – the Investment Banking Division of the Group. placement of Indian securities and advisory services. Also. International Subsidiaries Kotak Mahindra International Limited (KMIL) is the international arm of the Kotak Mahindra Group and was incorporated in 1994 in Mauritius. is the asset manager for Kotak Mahindra Mutual Fund (KMMF). USA. debt syndication. KMAMC started operations in December 1998 and has over 1. Kotak Mahindra is the first Indian group registered in the US 61 . Today the international operations also cover the United Kingdom. Limited and in the USA.

Depository Participant with National Securities Depository Limited (NSDL) and Central Depository Services Ltd. is one of India’s largest brokerage and distribution house. The Private client group (PCG) of the Company provides value added investment advisory services to high net worth individuals. sectoral research and company specific equity research combined with a strong and well networked sales force which helps deliver current and up to date market information and news. (CDSL) provides dual benefit services wherein the 62 . Kotak Securities Kotak Securities Ltd. portfolio management. The investment product range offered by PCG covers equity investment and equity trading.. Over the years Kotak Securities has been one of the leading investment service providers catering to the needs of various investor categories both institutional and non-institutional. Kotak Securities Ltd. trusts.. IPO’s and Mutual funds. equity derivatives.providing service to both Institutional investors and High Net worth Clients in the US for their investments into Indian markets. subsidiary of Kotak Mahindra Bank Ltd.. The Company has a full fledged research division involved in macro economic studies. NRI investors. corporate and Banks.

Kotak Securities Ltd. also an Approved Intermediary under the Securities Lending Scheme. the funds of the investors are managed by a highly competent team comprising of Equity Strategist. 1997.investors can use the brokerage services of the Company for executing the transactions and the depository services for settling them. facilitates clients to borrow and lend securities. technical and derivatives analysts. 63 . a Portfolio Manager and a team of equity.. Under the Portfolio Investment Scheme offered by the Company.

• • First year premium income: 2001-02: 7 Crores 2002-03: 35 Crores 2003-04: 124 Crores 2004-05: 375 Crores 64 . • Ranks 2nd in terms of average premium per policy. Ranks 4th in total advertising awareness. • 7500 life advisors. • 1000employees of very good quality.KMOM – PROGRESS TILL DATE • 44 branches in 31 cities.

KMOM – THE PARTNERSHIP AND LINEAGE A 26%-74% JOINT VENTURE BETWEEN KOTAK MAHINDRA AND OLD MUTUAL KOTAK LIFE INSURANCE Brand equity Entrepreneurial employees Branch network Knowledge of the Indian market Access to customer base Distribution associates OLD MUTUAL PLC Domain knowledge Technology Product innovation Training expertise Global perspective System and processes Multi channel management 65 .

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. Old Mutual is the largest financial services business in South Africa. Life Insurance Company 2. In the 2003 rankings of the World's 500 largest corporations by Fortune magazine. through its life insurance. is a world-class international financial service company. Asset Management Company 3. the United States and the United Kingdom. Old Mutual climbed 87 places to position number 366 and was also listed as the 14th largest insurance company in the world. Non-life insurance company It has been developed into an International financial services group whose activities are focused on asset gathering and asset management.Old Mutual was established more than 150 years ago. It owns the largest companies in the following areas in South Africa. asset management. banking and 66 . Bank 4. The Old Mutual Group offers a diverse range of financial services in three principal geographies: South Africa. They are: 1. Old mutual plc.

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. Operations in the United Kingdom are focused on wealth management. PRODUCTS Term Plans 67 . The company’s US Life business recorded sales of $4 billion at the end of 2002. through Gerrard as one of the leading private client stock broking businesses in the UK.general insurance operations. 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. The company serves 4 million life insurance policyholders and employs over 13 000 South Africans in its local operations. In the USA.

Kotak Term Assurance Plan Kotak Preferred Term Plan Endowment Plans Kotak Endowment Plan Kotak Money Back Plan Kotak Child Advantage Plan Kotak Capital Multiplier Plan Kotak Retirement Income Plan Kotak Premium Return Plan Unit Linked Plans Kotak Retirement Income Plan (Unit-linked) Kotak Safe Investment Plan II Kotak Flexi Plan Kotak Easy Growth Plan Kotak Privilege Assurance Plan Group Employee Benefits Kotak Term Grouplan Kotak Credit-Term Grouplan Kotak Complete Cover Grouplan Kotak Gratuity Grouplan Kotak Superannuation Group Plan 68 .

Rural Kotak Gramin Bima Yojana HIERARCHY OF KMOM LIFE INSURANCE LIMITED (SURAT BRANCH) 69 .

Branch manager Assistant BM Branch Operations In charge (BOE) Sales Manager Operation Executive Assistant SM Life advisor Operations Chapter: 5 70 .

 Data interpretation of the Survey  Graph analysis 71 .

Age Wise Clasification 45 40 35 No. of Customers 30 25 20 15 10 5 0 18-25 26-30 Years 31-45 46 & Above 44 22 11 23 72 .

Gender MALE FEMALE No of Member 66 34 AGE 18-25 26-30 31-45 46 to above No Of Members 11 22 44 23 73 .

Gender wise clasification 70 60 50 No. of Customers 40 30 20 10 0 MALE FEMALE Years 66 34 74 .

of Customers 30 25 20 15 10 5 0 2 to 4 5 to 8 8 to aboce No of members 48 40 12 Family member 2-4 5-8 8 to above No of Member 40 48 12 75 .Members 50 45 40 35 No.

Income 40K -70K 70K-1 Lake 1 Lake to 3 Lakes 3 Lacks No of Members 17 41 28 14 76 .

of Customers 14 Insurable Member 42% Uninsurable member 58% 77 .A) 41 28 17 No.Income Wise Classification 45 40 35 30 25 20 15 10 5 0 40 k to 70k 70k to 1 Lake 1 Lake to 3 3 Lake to Lakes Above Income (P.

NO OF MEMBER HAVING INSURANCE NO 58% YES 42% Only 42%people having insurance in surat so it is potential for insurance company to capture to all that market 78 .

of Customers 25 20 15 10 5 0 40 28 21 18 11 Self Spouse Children Parents All Among that 42% people who having insurance. they have insurance 40% for self 28%for spouse 21% for children and 18% for their parents and 11% for all family member.40 35 30 No. Having insurance self spouse children parents all No of members 40 28 21 18 11 Different policy bought bye customers 79 .

of Customers 25 20 15 10 5 0 Birla Sunlife SBI HDFC Bajaj Alliance TATA AIG Kotak Mahindr a ING Vyasya Max Newyork Met Life Term Plan Endowment Whole life Money Back Retirement Child Plan Unit Link Plan Different Plans 80 .35 LIC 30 ICICI No.

Under insurable persons 82% Fully insurable persons 18% Potential of life insurance Under Insured 82% Fully Insured 18% Only 42 % people having life insurance but among them 82% people are underinsurance and only 18% people are fully insured according to them income 81 .

Insurance Plan Term Plan Money back Plan Endowment Plan Child Plan Unit link Plan Market Share 39% 14% 15% 8% 24% Market share of diffrent Insurance plan Unitlink plan 24% Child Plan 8% Endownment Plan 15% Term Plan 39% Moneyback Plan 14% 82 .

Chapter 6: Finding Suggestion   83 .

also its very help full for insurance sector so they should take necessary step for capture this potential. they have insurance 40% for self 28%for spouse 21% for children and 18% for their parents and 11% for all family member. • Only 42% people having insurance in Surat in that 42% there are 82 % people are under insured and other 18% people are fully insured according to their income so that is also plus point for insurance sector to capture the market 84 .Finding and Suggestion • According the survey only 42% people are insured in Surat so reaming other part is potential for insurance sector. • Among that 42% people who having insurance.

85 .  Make insurance policy which can buy any one so we can insured them through this type of life insurance policy.  Most number of people wants Guaranteed Returns so company must focus on this for the customer investment.Chapter 7 Conclusion  All the insurance company must advertise more in the market because not all people know more about life Insurance policy.

kotaklifeinsurance. Websites visited: www. the following references were made: -  Insurance chronicle.com  www.google . January 2006 Special issue “Insurance Industry 2006”.8 References In order to obtain more information regarding the present study and to substantiate it with theoretical proof.com  86 .

Chapter 9: Annexure Questionnaire 1) Name ______________________________ 2) Age 1) 18-25 2)26 to 30 3) 31 to 45 4) 46 to above 3) Gender 1) male ____) female____ 4) Occupation: 1) Service 2) Business 3) Professional 4 ) other 5) Family member 1) 2 to 4 2) 5 to 8 3) 8 to above 6) Do u have a life insurance? Yes_______ No_______ 87 .

Which is it? Company’s name LIC ICICI Prudential Birla Sunlife SBI Life HDFC Standard Life Bajaj Alliance TATA AIG Kotak Mahindra ING Vysya Max Newyork Met Life Reliance Shri Ram Sahara Term plan Endow ment Whole life Money back Retire Child ment Plan Unit link Plan 7) What is your annual income? 1) 40 K to 70 K 2) 70 K to 1 lake 3) 1 lake to 3 lakes 4) 3 lakes to above 88 .If yes.

89 .

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