Delhi Institute of Advanced Studies

A constituent of GGSIPU
Plot No 6, Sector-25, Rohini
New Delhi – 110085
http://www.dias.ac.in/

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

Master of Business Administration Program

Name: Jatin Arora

MBA 2010­2012

Telephone: 9811006218

E­mail: a.jatin@ymail.com

Summer Internship Supervisor

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

Ph. : +91 9999254466

Mailing Address: @kotak.com

Kotak Mahindra Old Mutual Life Insurance

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

Academic Supervisor:

Mr. Vivek Vohra

Start Date for Internship: June 10th 2011.

                                          End Date for Internship: August 10th 2011.

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 Report Date: August 17th 2011.

Self Certification by the Intern

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

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

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

been used for its completion.

Name: Jatin Arora

Signature:

Date:

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 Certificate From the Summer Internship Providing Organization 

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

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

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

                                        

    

Signature:

Date:

Acknowledgements

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

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

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

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

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

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

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

world   scenario.   And   last   but   not   the   least   special   thanks   to   “Kotak   Mahindra   Life

Insurance” who accepted me in spite of my inexperience in the field and gave me the

opportunity to work and learn with them.

Table of Contents

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S. No. Topic Page Number

1 Delhi Institute of Advanced Studies 6

2 Summer Internship Objective 7

3 Summer Internship­ Abstract 7

4 Internship Organization’s Profile 8­12

5 Introduction 13­15

5 Project – Description 16­23

6 Project – Analysis 24­53

7 Project ­ Conclusion & Recommendation 54­56

8 My Take Away – Key Learning’s 57­58

9 Annexure & References 59

Objective of the Summer Internship

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Knowledge & awareness of the corporate environment it’s components & functioning is a

must  for  tomorrow’s  managers  to  be.  The  basic  objectives   of the   summer   internship

program for the SMART Pioneers are:

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

courses in the very first year.

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

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

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

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

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

community. 

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

area of services & relationship technologies. 

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 SUMMER INTERNSHIP REPORT

Abstract 

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

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

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

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

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

company in areas of life insurance and ULIP funds.

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

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

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

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

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

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

maximize their returns by switching their investments in various funds.

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

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

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COMPANY PROFILE

Kotak Mahindra Old Mutual Life Insurance (Kotak Life) is 74: 26 joint venture of the
Bank with Old Mutual plc. The company was promoted by Mr. Uday Kotak, Mr. Sidney
A A Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra and Mr. Anand
Mahindra took a stake in 1986 and it is that when the company changed its name to
Kotak Mahindra Financial Limited.

It is one of India’s leading financial institutions with a group net worth of around Rs. US$

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

in New York, London, Dubai and Mauritius. Kotak Mahindra, the first and only NBFC in
India to convert to a bank, offers pragmatic, world-class solutions that take care of four
basic financial needs – Earning, Saving, Investment and Spending. From commercial
banking, to stock broking, to mutual funds, to life insurance, to investment banking, the
group caters to financial needs that encompass every sphere of life.

The life insurance industry’s growth is related to demographics, purchasing power,

economy growth rate, share of savings and government support through tax and fiscal
sops. All these factors were favorable to the industry in the year 2011-2012. In the
coming years, India is likely to have a growing middle and affluent class with a
burgeoning service sector contributing significantly to the growth of life insurance
industry.
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Introduction of new products and focus on service delivery were primary drivers for the
growth of the private life insurers during 2011-2012. Consumer confidence in the private
sector has substantially improved over the years, and going by the current trends, it is
expected that the private sector will improve upon the perceived value to the consumer.

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

1. Kotak Securities.

2. Kotak Insurance.

3. Kotak Mahindra bank.

4. Kotak Mutual funds.

5. Kotak Private equity.

6. Kotak Investment banking.

7. Kotak Reality funds.

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

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

1987: Enter the lease and hire purchase market.

1990: Auto financial division started.

1991: Investment Banking Division started. Take over FICOM, one of India’s largest
financial retail marketing network.

1992: Enter Fund’s Syndication sector.

1995: Brokerage and distribution incorporated into a separate company. Kotak Securities
Investment Banking division incorporated into a separate company Kotak Mahindra
Capital Company.

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

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

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

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2001: Launched insurance services.

2003: Kotak Mahindra Financial Ltd. Converted to Bank.

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

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

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

group’s stake in Ford credit Kotak Mahindra was sold.

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

Company and Kotak Securities.

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

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

Ahmedabad Commodity Exchange as anchor investor.

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

became operational as a national commodity exchange.

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MARKET SHARE OF FEW MAJOR PLAYERS:

Since the advent of the private players in the market, the industry has seen new and
innovative steps taken by the players in this sector. The new players have improved the
service quality of the insurance. As a result, LIC, down the years has seen the declining
phase in its career. The market share was distributed among the private players. Though
LIC still holds the 50% of the insurance sector but the upcoming natures of these private
players are enough to give more competition to LIC in the near future. LIC market share
has decreased from 95% (2002-03) to 50 %( 2010-11). The following companies have the
rest of the market share of the insurance industry.

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PIE-CHART SHOWING MARKET SHARE (2010-11)

NAME OF THE PLAYER MARKET SHARE (%)

LIC 50
ICICI PRUDENTIAL 10
BIRLA SUNLIFE 4
BAJAJ ALLIANZ 4
SBI LIFE 5
HDFC STANDARD 6
TATA AIG 2
MAX NEW YORK 3
AVIVA 1
OM KOTAK MAHINDRA 2
RELIANCE LIFE 5
OHERS 8

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INTRODUCTION: 

Kotak Life offers life insurance, deferred annuity and employee benefit products to
individuals and groups. The business is distributed through three distribution channels
viz. Tied Agency, Alternate Channels and Group Insurance. The business is value-driven
with a focus on long-term shareholder value and an aspiration to meet policyholder
expectations.

The premium income for the year 2010-2011 grew to Rs. 2975 crore (previous year Rs.
2868 crore). During the year, Kotak Life wrote 259444 policies (previous year 320735
policies) of adjusted first year annualized premium. Riders are not included in the sum
assured.

As at March 31, 2011, Kotak Life Insurance had more than 35000 active life advisors
who are continuously being trained to facilitate them to advise customers in a proper
manner. The philosophy of Kotak Life to focus on ‘Quality’ life advisors has started
yielding results.

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Currently, Kotak Life operates from 300 cities all over the world with a primary focus on
the middle class and affluent population. During the year 29 new branches were opened
and this expansion was in second tier cities which offer good opportunity and also
provide a window to reach to rural areas. A survey conducted by AC Nielsen – ORG
MARG in September 2006 in top 8 towns placed Kotak Life at the top 6 brands among
the life insurance brands recalled.

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

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

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

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

funds. The project will lead to increase the turnover of the company and the distribution
channel of the company thereby it would lead to increase the market share of the
company, to increase the reach and visibility of the company and its brand name.
Moreover I had to

 To recruit the Life Advisors (agents) for the company so as to increase sales and
also to promote the brand.

 To analyze the securities and portfolios of the clients.

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

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PROJECT DESCRIPTION:

My project at Kotak life insurance was-

“Portfolio Management”

ULIP FUNDS

A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a
policy varies according to the current net asset value of the underlying investment assets.
It allows protection and flexibility in investment, which are not present in other types of
life insurance such as whole life policies. The premium paid is used to purchase units in
investment assets chosen by the policyholder.

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In India investments in ULIP are covered under Section 80C of IT Act. However, the
concept of having an investment is governed by the Insurance Regulatory and
Development Authority (IRDA).

ULIP IN KOTAK MAHINDRA:

Kotak Wealth Insurance is a unit-linked insurance plan, that provides you with
investment growth to take care of your family's goals and comprehensive protection to
help your family and you meet unplanned events head on.

Advantages:
* Comprehensive triple benefit to secure your family's future
* Wide array of fund options to suit your investment needs
* Liquidity to take care of contingencies
* Convenience of shorter payment term
* Optional rider benefits to boost protection

POLICIES OF KOTAK DIRECT:

1. KOTAK SAFE INVESTMENT PLAN (KSIP)

2. KOTAK SMART ADVANTAGE PLAN (KSAP)
3. KOTAK HEADSTART FUTURE PROTECT
Depending upon the needs & wants, clients have the option of choosing between any of
these three plans which provides them with various benefits & growth options along with
an Insurance cover.

KOTAK SAFE INVESTMENT PLAN (KSIP)

Kotak Safe Investment Plan is a Unit Linked Insurance Plan that combines the benefits of
insurance and capital market returns into one. This plan from the stable of
Kotak Life Insurance is a true reflection of the company’s essence: innovation that will
benefit the investor.

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What makes investing in Kotak Life Insurance truly unique is that you enjoy a
Guaranteed Maturity Value with varying degrees of equity exposure depending on your
risk appetite. So if the market value of your units is higher, you reap the benefits with the
peace of mind that whilst in a bear market your investment is under-pinned by the
Guaranteed Maturity Value. And there is more, the returns are totally Tax free.

KOTAK SMART ADVANTAGE (KSAP)

 Guaranteed returns of unto 275% of your first year premium at maturity
 Assured bonus additions at regular intervals during he policy term to enhance your
fund value.
 100% allocation of the premium from 2nd year onwards
 Unique fund offering maximum opportunity for growth and choice for your investment
needs
 Maximum protection for your loved ones to choose from.

KOTAK HEADSTART FUTURE PROJECT

Every child is different. Each has their own set of dreams and aspirations. As a parent you
would like to provide your child with all the building blocks that could develop his or her
potential to the fullest. This could mean extra coaching or tuition for talented children,
special training or equipment for natural athletes or professional training for born singers.
Head start Child Plans is a specially tailored, cost-effective plan, aims to give your
children the financial means to pursue his or her dreams and live them.

COMPARISON BETWEEN VARIOUS POLICIES:

POLICY KSAP KSIP HEADSTART

FEATURE
ENTRY AGE MIN: 0 Years MIN:0Years MIN:18 Years
MAX:65Years MAX:65Years MAX:60Years
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MATURITY AGE MIN:18Years MAX:75Years MIN:18Years
MAX:75Years MAX:70Years

POLICY TERMS REGULAR:10/15 MIN: 10Years or 18 Min: Greater of (10

/20/25Years minus age at entry Yrs or 18 less
FOR MINOR: for child’s present
10Years or 18 less minors; whichever age)
entry age at last Is higher Max: 25 Yrs.
birthday MAX: 30Years
whichever is higher
MINIMUM REGULAR PPT: REGULAR: REGULAR PPT:
PREMIUM
Rs.15, 000 p.a. Rs.18, 000 p.a. Rs.15, 000 p.a.
LIMITED PPT: LIMITED PPT: LIMITED PPT:
Rs 36,000p.a. Rs 50,000 p.a. Rs 25,000 p.a
for 4-10 Yrs
Rs 50,000 p.a.
for 3 Yrs
BASIC SUM MIN: 0.5 X HIGH COVER: MIN: 0.5 X
ASSURED
(Policy term x Policy (Policy term x
annual premium.) term x annual Annual premium.)
MAX: Any multiple premium MAX: Any multiple
of premium, LOW COVER: of premium,
subject to Greater of(5x subject to
underwriting annual underwriting
premium,0.5xpolicy
term x annual
premiums

RIDERS Critical Illness NO RIDERS Critical Illness

BENEFITS Benefit BENEFITS Benefit

Permanent Permanent
Disability Disability Benefit
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 Benefit
Accidental
Accidental Disability
Disability Guardian
Guardian Benefit: Premiums
Benefit: waiver protection
Premiums waiver on disability.
protection on
disability. Accidental Death
Benefit
Accidental
Death Benefit

Preferred Term
Benefit

Life Guardian
Benefit

USP OF THE VARIOUS PLANS:

PLAN KSAP KSIP HEADSTART

USP Upto 275 % Guaranteed Triple Death Benefit
return on first Maturity Value for & Dynamic Floor
year premium at all type of fund.
maturity & Investors.
assured
bonuses.

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COMPARISON OF CHARGES:

POLICIES KSAP KSIP HEADSTART

CHARGES
POLICY Rs.65p.m. at =<Rs.20000 -7% <Rs100000: flat
ADMINISTRATION commencement of >20000-3.5% fee of Rs.75 p.m.
CHARGES the policy, inflating in year 1and Rs 40
by 5%p.a. p.m. in year2
onwards.
>Rs.100000: No
charges
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FUND Dynamic bond fund Guaranteed/dy Dynamic
MANAGEMENT - 1.2% namic money money
CHARGES Dynamic floor market fund- 0.6% market fund- 0.6%
fund- 1.75%
Opportunities fund- Guaranteed/dy Dynamic gilt
2% namic gilt fund- 1% Fund- 1%

Guaranteed/dy Dynamic
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 namic bond bond fund- 1.2%
fund- 1.2%

Guaranteed/dy Dynamic
namic floating floating rate
rate fund – 1.2% fund- 1.2%

Guaranteed/dy Dynamic
Namic balanced balanced
fund- 1.3% fund-1.3%

Guaranteed/dy Dynamic
namic growth growth fund- 1.5%
fund- 1.5%

Aggressive Aggressive
growth fund- 1.6% growth fund- 1.6%

SWITCHING First four switches First four switches First four switches
CHARGES in a year are free. in a year are free. in a year are free.
Rs. 500 will be Rs. 500 will be Rs. 500 will be
charged for every charged for every charged for every
additional switch. additional switch. additional switch.

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KOTAK DYNAMIC FLOOR FUND:

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

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KOTAK DYNAMIC BOND FUND:

KOTAK GUARANTEED BOND FUND

In the above 2 funds the investments is done in govt. debts when the market is goin
down so as to protect the investors investments. This basically is the work of
portfolio manager as he has to assume the future risk, he has to take the market
fluctuations into consideration and invest in the govt. bonds when the market is
slow.

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KOTAK OPPORTUNITY FUND

This fund helps manager to grow the returns as this fund comes into use when the
market is going up. Again this works on the assumptions of the fund manger. When
the manager assumes that the market will be rising in the near future, he switches
the client’s funds into the opportunity fund, to reap maximum returns. This
maximizes the client’s returns. The manager invests 100% of the client’s
investments in this fund.

Learning’s

We learnt a lot about switching of the funds. The crux of the switching was the
timing of the switch. Our manager had a no. in his mind of the Sensex. He always
seeked the time when to maximize the returns of the clients. When the market was
hovering around 16000 he switched the Bond funds to Opportunity funds
considering the market will rise in future along with the client’s returns. And when
he knew the market is almost at its peak he switched the Opportunity funds to Bond
funds.

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 COMPETITIVE ANALYSIS WITH HDFC-STANDARD LIFE:

HDFC Standard Life Insurance Company is a joint venture between India's largest
housing finance provider, HDFC and Europe's largest mutual life assurance company The
Standard Life Assurance Company (U. K).
Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance
industry for 175 years by combining sound financial judgment with integrity and
reliability.
It is the Largest Mutual Life company in Europe and has total assets of Rs. 10607
crore.

Training activities for agents/advisors.

 As per IRDA guidelines, 50hrs training is compulsory.
 Both online & classroom training are available.
 Training is compulsory with both part-time & full time Options.
 An objective based exam is conducted by IRDA, the minimum qualification
required is-
12th pass for urban areas
10th pass for rural areas.

Commission Structure.
Depends on the product, like on savings
20-40% Ist year premium.
 On investment 2%
 On pension 7.5%

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Modes & ways through which the company recruits agents.
 Direct contacts.
 Newspaper adds.
 Consultants.
 Member of the company can introduce a new member.

CURRENT AGENT FORCE

2000-3000 in NOIDA.

Top 5 USP’s (Unique Selling Proposition) Of HDFC Std. Life

 Best insurer according to Outlook.
 Well supported by foreign Ist private sector life insurance Company to be granted
a license.
 Declared bonus every year from the day of incorporation (only company.)
Provides fast service to the customers in terms of claim

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 TRADITIONAL PLANS

Traditional Plans are Life Insurance plans provided by Kotak Mahindra Life Insurance
along with ULIP.

LIFE INSURANCE
Life insurance is a contract under which the insurer (Insurance Company) in
Consideration of a premium paid undertakes to pay a fixed sum of money on the
death of the insured or on the expiry of a specified period of time, whichever is
earlier. In case of life insurance, the payment for life insurance policy is certain. The
Event insured against is sure to happen only the time of its happening is not known.
So life insurance is known as ‘Life Assurance’. The subject matter of insurance is
life of human being. Life insurance provides risk coverage to the life of a person. On
death of the person insurance offers protection against loss of income and
compensate the titleholders of the policy.

Roles of Life Insurance

 Life insurance as an investment:Insurance products yield more

than any other investment instruments and it also provides added
incentives or bonus offered by insurance companies.

 Life insurance as risk cover:Insurance is all about risk cover and

protection of life. Insurance provides a unique sense of security that no
other form of invest can provide.

 Life insurance as tax planning:Insurance serves as an excellent

tax saving mechanism too.

Importance of Life Insurance

Protection against untimely death:

 Life insurance provides protection to the dependents of the life insured and
the family of the assured in case of his untimely death. The dependents or
family members get a fixed sum of money in case of death of the assured.

Saving for old age:

 After retirement the earning capacity of a person reduces. Life insurance
enables a person to enjoy peace of mind and a sense of security in his/her old
age.

Promotion of savings:
 Life insurance encourages people to save money compulsorily. When life

30
 policy is taken, the assured is to pay premiums regularly to keep the policy in
force and he cannot get back the premiums, only surrender value can be
returned to him. In case of surrender of policy, the policyholder gets the
surrendered value only after the expiry of duration of the policy.

Initiates investments:
 Life Insurance Corporation encourages and mobilizes the public savings and
channelizes the same in various investments for the economic development
of the country. Life insurance is an important tool for the mobilization and
investment of small savings.

Credit worthiness:
 Life insurance policy can be used as a security to raise loans. It improves the
credit worthiness of business.

Social Security:
 Life insurance is important for the society as a whole also. Life insurance
enables a person to provide for education and marriage of children and for
construction of house. It helps a person to make financial base for future.

Tax Benefit:
 Under the Income Tax Act, premium paid is allowed as a deduction from the
total income under section 80C.

Traditional Plan under Life Insurance

The Kotak Capital Multiplier Plan is a plan that allows you to enjoy returns even
beyond maturity. This plan is best suited for you...

 If you are looking for an investment plan for your child combined with
insurance and want a flexible money-back plan that gives you the power to decide
the amount and time of withdrawals.
 If you are planning for your retirement and require a retirement plan that
allows you to withdraw any amount as per your need and at the same time invests
your money prudently to get you bonuses on the balance in your account.
 If you think that from time to time you will have extra cash, which you would
like to invest in an instrument which is safe and which will get you attractive
returns.
Advantages
 Freedom of extending the policy term beyond the maturity date.
 Additional 10% life-cover over and above the original life-cover throughout
the policy term.
 Get a free ATM card to withdraw your maturity proceeds with ease
Accumulate more through the bonuses declared regularly by the company.
 Invest your surplus monies top-up premium.
Key Features
31
Maturity Benefit:
 This is a participating plan and you are entitled to the higher of the basic sum
assured or the Accumulation Account on maturity along with the balance in
the Supplementary Accumulation Account.
Early maturity benefits available after at least 3 years:
 The higher of Guaranteed Cash value* and Special Cash value^ plus the
higher of Guaranteed Cash Value* in respect of lump sum injections and the
Special Cash Value^ in respect of lump sum injections.
Ill health Early Maturity Benefits:
 Higher of Guaranteed Cash Value* and Accumulation Account plus Higher of
Guaranteed Cash Value* in respect of Lump sum Injections and
Supplementary Accumulation Account.
*Guaranteed Cash Value = 30% of all the premiums paid excluding the first
year's premium and additional premium, if any. The value of the bonus will be
included in cash value.
Special Cash Value will be as per the discretion of the company.
Death Benefit:
 During the build-up phase. In the event of unfortunate death, your beneficiary
would get the higher of basic sum assured (less premiums due but not paid)
or Accumulation Account. In addition, 10% of the basic sum assured and the
higher of all lump sum injections made and the Supplementary Accumulation
Account will also be paid.
During the withdrawal phase. In the event of unfortunate death, your
beneficiary would get 10% of the basic sum assured upto 75 years of life
assured's age and the balance in the Accumulation Account (into which the
Supplementary Accumulation Account is added).
Top-Up Premiums:
 In case you have any surplus funds you may invest them at anytime in the
policy. This facility of lump sum injections allows you to augment your
savings in the build-up phase, in addition to the regular premiums. A
Supplementary Accumulation Account is created to hold these lump sums.
Funds in Top-Up Account continue to earn bonus at the same rate as that of
the Accumulation Account.
15 year withdrawal period:
 If you do not see any immediate utilization of your maturity proceeds, you
could let it stay invested with us for a maximum of 15 years after the maturity
of the plan and it could function like a fixed deposit offering returns and
liquidity to withdraw all your funds.
In the event that you do not withdraw the entire amount, you can leave
behind the full amount or at least 50% of the Accumulation Account balance.
You may make one or more partial withdrawals each year, for the next 15
years or till the age of 75, whichever is earlier. You can withdraw amounts as
per your need; subject to an upper limit of 25% of the Net Vesting Value
(NVV). The NVV is the basic sum assured or Accumulation Account,
whichever is higher after deducting the immediate withdrawals on the date of
maturity. At anytime during this post maturity phase, you still have the
flexibility to withdraw funds in full and terminate the insurance policy
Additional Life Cover:
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  In the build-up phase there is an additional life cover of 10% of the basic sum
assured and of the Critical Illness Benefit, if opted for. This 10% cover
continues even in the withdrawal phase for a period of 15 years or till you
reach the age of 75, whichever is earlier.

Automatic Cover Maintenance:

 In case you miss your premium payment, Automatic Cover Maintenance
facility will ensure that your insurance cover is in force. This facility is
available after 3 completed policy years.
Rider Benefits:
 You can choose from any of the following riders:
Term / Preferred Term Benefit (KTB – UIN No: 107C003V02, KPTB – UIN
No: 107C013V01)
 Accidental Death Benefit (ADB – UIN No: 107C001V01)
 Permanent Disability Benefit (PDB – UIN No: 107C002V01)
 Critical Illness Benefit (CIB – UIN No: 107C004V02)
 Life Guardian Benefit (LGB – UIN No: 107C012V01)
 Accidental Disability Guardian Benefit (ADGB – UIN No: 107C011V01)
Tax Benefits
 Section 80C, 10(10D) of Income Tax Act, 1961 would apply. Premium paid
for Critical Illness Benefit qualify for a deduction under Section 80D. Tax
benefits are subject to change in tax laws. You are advised to consult your tax
advisor for details.

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

Strengths:
 Automatic cover maintenance provided by the company gives the customers, a
chance of paying the premium even when their due date is over without much
hassle and without lapsing of the policy. This helps the company in attracting the
customers.

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  The company provides a healthy return of nearly 8% which is highest in the
insurance industry. This can attract customers for even traditional plans like KEP,
KCMP, etc.
 The company follows a sound promotion policy on internet, schemes, and
promotional gifts etc. which are attracting customers.

Weaknesses:
 The product mix is not according to the market leaders like LIC, ICICI Prudential,
etc. These companies have lot of variants even in a single type of product
according to the need and financial capacity of the customer.
 Premium rates are not so competitive. They are usually very high in comparison
to other companies. Till the term is ten years, its premium rate, in comparison to
the returns it gives, is very high as compared to LIC.
 Unwillingness of the sales force to forward the promotional offers to the existing
clients acts as a barrier in maintaining relations with customers and business
growth.
 The promotional strategies are not that effective as that of the competitors.

Opportunities:
 The company has its main customer base in the upper segment of the market. In
country like India, where maximum of the population is of working type with
moderate salary, that to with low insurance penetration, the opportunities are great
in this segment. So, the company should look for the middle segment and the rural
market as their future target segment to gain a healthy position in the market

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  Since, in the present situation, with increasing awareness of people towards
medical insurance and general insurance, the company should expand its horizon
in this area also.
 The company has a very wide and open market to be covered.
 Low share of other organized players.
 Still, only 6% OF India’s population is insured. They can target the uninsured
people especially targeting rural sector.

Threats:
 Due to firm belief of the people in LIC, changing their attitudes for a private
company like Kotak Life Insurance is difficult. So it is the major threat to the
company.
 Due to the presence of private players like ICICI Prudential, HDFC life, Bajaj
Allianz etc., which are much older in the market in comparison to Kotak life,
gaining the market share is very difficult.
 RBI infrastructure and flexi bonds are proving to be great threats, along with
mutual funds, to life insurance policies as they are giving better returns along with
easy liquidity options. RBI infrastructure and flexi bonds are even providing 6.5%
tax free returns.
 Entry of NBFC’s also posed a big threat.

FUTURE GROWTH PROSPECTS OF

COMPANY

IN the total market share, LIC has reduced its share from 91% to 50%. This means that
private insurance players have got more margins in their hands which have increased
from 9% to 50% in the last 5 years only.

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Kotak Mahindra Bank completed 8 years as a scheduled commercial bank in 2010. The
Bank opened its 100th branch in January 2007. As on March 31, 2011, the Bank has built
a network of over 2000 full fledged branches spread across 300 cities and towns. The
Bank proposes to have around 200 full-fledged branches by mid next year. Kotak
Mahindra Capital Company and Kotak Securities continued to report good financial
performance on the back of strong capital markets and the robust overall economic
growth.

The life insurance subsidiary, Kotak Mahindra Old Mutual Life Insurance continued its
growth momentum but posted an accounting loss. The premium income for the year grew
to Rs. 2975 crore (previous year Rs. 2868 crore). During the year, Kotak Life wrote over
259444 policies (previous year 320735 policies) of adjusted first year annualized
premium. Riders are not included in the sum assured.

The group continues to have a significant presence in distribution of mutual funds and is
among the top three distributors of mutual funds in India.

CONCLUSION

The insurance industry has come a long way since the year 2000, when the government
opened up the market to private players also. In India, people are finally beginning to
realize the importance of insurance. With life expectancy growing and 94% of the

36
population having no social security or old age pension plans, insurance provides a useful
vehicle to save up for later stage in life.
Although the endowment and money back plans are the major sold plans but the current
flavor is the unit linked plans, which provides covers as well as the opportunity to invest
through the same product.

The Indian insurance industry is witnessing a plethora of changes as customers are given
more options to choose from custom-made products, better transparency, improved
technologies and processes and better service standards. Government and industry action
in insurance are more mutually receptive than ever before. India’s enormous population,
continuously developing infrastructure facilities and globally visible corporate success
add to the country’s promising prospect for insurers looking for huge demands and
alternatives to already tapped market. However, one area where the companies are not
upbeat right now is the rural market. IRDA regulations specify that companies must log
five percent of the business from socially weaker sections and rural areas in the 1 st year,
10 percent in the next year and 15 percent in the 3rd year.

Moreover, from the project we can also conclude that there are many things which the
company should take care before designing the products. People generally look for their
financial status before investing their money anywhere and then look for the product and
its reliability. So, while designing the product company should take care of these basic
factors.

UNDER THIS PROJECT:

No. of customers met : more than 250

No. of customers called (phone) : 500
No. of forms filled : more than 50

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Kotak life insurance is a fastest growing private life insurance company in India with a
market share of 2%. ICICI is the no. one private life insurance co. with a market share of
10%. Birla sun life stands second in private life insurance companies with a market share
of 4%. Looking at the private sector, ICICI Prudential has been the dominant player
because the amount of gap between the market shares is huge.

 If we analyze in all sectors of life insurance then LIC has been the most dominant
player since 1956. The impact of LIC has been so much in both rural and urban
areas that people use the term LIC instead of life insurance.
 Kotak life faces a big challenge in front of them so as to stay in the race with Life
insurance Corporation (LIC) because with the entrance of other companies like
ICICI, Max New York, HDFC Standard Life & Birla Sun Life, the competition
has become tougher.
 But insurance is also growing day by day, India has a population of 1.2 billion and
only 6% of the population is insured. This means insurance is an upcoming
industry but Kotak life has to work a lot on their strategies to overcome LIC.

RECOMMENDATIONS AND SUGGESTIONS

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During the exposure of 2 months I had in the insurance industry via KOTAK LIFE, it
helped me to develop the basic understanding of how this industry works and the
work experience & knowledge gained has also helped me to give the
recommendations as stated below:
 Insurance is a business of credibility. As they are in service marketing, proper care
of the customers before and after buying the product is an important criterion of
competing in the market. So proper Customer Relationship Management
techniques should be adopted by the company.
 As we know nearly 70% of the present country’s population belongs to rural areas
and our company has its bases in urban area only, the company should take
majors to tap the rural market also.
 In comparison to the market leaders like LIC, ICICI Prudential, etc. the company
has very few product variants. However, to resist the competition in the market,
company should try to increase its product mix so that it can cater the need of the
maximum proportion of the population.
 Implementation of proper technology should be done. It can adopt VSAT
technology or can implement payment of premium through ATM and customers
should be revealed about their due premium through SMS and emails.
 The company should look for proper advertising and sales promotion tools so as
to achieve its aspiration of being one of the top 5 insurance companies in India.
 The company should try to change the perception of the people that insurance is
all about getting discount in tax, they should be made to realize that it is a great
way of saving for the future too.

KEY LEARNINGS

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 How to recruit insurance advisors and convince them for the job profile.
 Managerial Communication & Etiquettes
 Time Management i.e. reaching the organization on time and leaving accordingly
 Practical aspects of Customer Relationship Management
 Communication gap shouldn’t exist between different levels of management so as
to ensure maximum efficiency of the employees
 For gaining a competitive edge over the competitors, we need to increase the
product mix
 How the information is carried out from middle level management to corporate
level management and vice-versa
 How to switch funds of the customers in ULIP at the time of fluctuating Sensex
 How to fix the appointment, prepare ourselves, present, sale and follow up

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 Annexure & References (including Web references)

 various business newspapers

 magazines

 www.amfindia.com

 www.kotaklifeinsurance.com

 www.investmsrtindia.com

 www.personalfn.com

 www.economictimes.com

 www.stockindia.com

 www.irdaindia.org

 Annual report of Kotak life insurance and HDFC standard life insurance

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