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1. ACKNOWLEDGEMENT I feel delighted in expressing my gratitude towards Mr. Sugatta Dutta(HR manager) for giving me an opportunity to undergo Summer Training in an esteemed organization like kotak life insurance. I would like to express my sincere thanks to my project guide- Mr. Akhilesh Jasuja who had given me constant cooperation, guidance and provided all the facilities required in completing this project. This project is my first exposure to industrial environment and was indeed great learning experience. I have tried my level best for fulfilling this project. I would also like to express my sincere thanks towards Dr. Harsh Purohit, Banasthali University, who has always encouraged and helped us throughout our training. Last but not the least, I would like to pay sincere thanks to kotak Mahindra group for giving me the opportunity of summer training. Sugandha Gulati


TABLE OF CONTENT S.NO. 1. 2. CONTENT ACKNOWLEDGEMENT 2.1 KOTAK MAHINDRA GROUP 2.2 OLD MUTUAL plc 2.3 KOTAK MAHINDRA BANK 2.4OLD MUTUAL KOTAK MAHINDRA LIFE INSURANCE Ltd 2.4a) company profile 2.4b) vision and mission 2.4c) values 2.4d) objectives and philosophy 2.4e) private competitors of company 2.4f) products offered 2.4g) management team 2.4h) recent press releases 3.1 INSURANCE 3.2 HISTORY 3.3 MEANING AND CLASSIFICATION 3.4 FUNCTIONS 3.5 FUNCTIONING 3.6 IRDA OBJECTIVES AND LIMITATIONS SCOPE OF THE PROJECT DATA COLLECTION RESEARCH METHEDOLOGY CHANGING PERCEPTION AND FACES 8.1) changing perception of Indian customers 8.2)changing face of Indian insurance industry CUSTOMER BUYING BEHAVIOUR—THE STUDY FINDINGS RECOMMENDATIONS CONCLUSION BIBLIOGRAPHY ANNEXURES PAGE NO. 3 5 7 8 10 11 13 14 15 17 18 20 21 25 29 30 31 32 33 34 35 36 37 40 50 51 52 53 54


4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.


2.1 ABOUT KOTAK MAHINDRA Kotak Mahindra one of India's leading financial institutions was born in 1985 as Kotak Capital Management Finance Limited. This 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 that's when the company changed its name to Kotak Mahindra Finance Limited. It’s been a steady and confident journey to growth and success.


Takes over FICOM. Investment Banking division incorporated into a separate company . one of India’s largest financial retail marketing networks 1992 Enters the Funds Syndication sector 1995 Brokerage and Distribution businesses incorporated into a separate company . for the Life Insurance business.Kotak Securities. The launch of Matrix Information Services Limited marks the Group’s entry into information distribution. Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited. for financing Ford vehicles.its on-line broking site.Kotak Mahindra Capital Company 1996 The Auto Finance Business is hived off into a separate company . Kotak Securities launches kotakstreet.1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 enters the Lease and Hire Purchase market 1990 The Auto Finance division is started 1991 The Investment Banking Division is started. 1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company. 2000 Kotak Mahindra ties up with Old Mutual plc.Kotak Mahindra Primus Limited. Formal commencement of private equity activity through setting up of Kotak Mahindra Venture Capital . 2001 Matrix sold to Friday Corporation Launches Insurance Services 6 .

2 ABOUT OLD MUTUAL Old Mutual was established more than 150 years ago and has developed into an International financial services group whose activities are focused on 7 .KOTAK JOURNEY SO FAR… 2.

Gherda as Chairman and Uday Kotak as Executive Vice Chairman & Managing Director.3 About kotak Mahindra bank The Kotak Mahindra group is a financial organization established in 1985 in India.M. The bank is headed by K. through its life insurance. In February 2003. a non-banking financial company. The company’s US Life business recorded sales of $4 billion at the end of 2002. asset management. Old Mutual is the largest financial services business in South Africa. the United States and the United Kingdom. It was previously known as the Kotak Mahindra Finance Limited. 2. is the first company in the Indian banking history to convert to a bank. Kotak Mahindra Finance Ltd. Old Mutual climbed 87 places to position number 366 and was also listed as the 14th largest insurance company in the world. Old Mutual is one of the top ten fixed annuity businesses offering an array of specialist asset management skills through its 23 asset management businesses. The company serves 4 million life insurance policyholders and employs over 13 000 South Africans in its local operations.asset gathering and asset management. In the USA. Kotak Mahindra Finance Ltd. banking and general insurance operations. The company is listed on the London Stock Exchange with a market capitalization of approximately $6 billion and is a member of the elite FTSE 100 index. In the 2003 rankings of the World's 500 largest corporations by Fortune magazine. The Old Mutual Group offers a diverse range of financial services in three principal geographies: South Africa. Shankar Acharya is the chairman of board of Directors in the company. the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). 8 .

Nariman Point. Mumbai 9 .The Bank has its registered office at Nariman Bhavan.

Singapore. Dubai and Mauritius. 213people in its various businesses and has 216 branches across 153 cities. franchisees.. San Francisco. Kotak Life Insurance employs around 6. New York. with offerings across personal financial services. The Kotak Group has a net worth of Rs. asset management and life insurance.509 cr and has a distribution network through branches. corporate and investment banking and markets. Old Mutual is a 10 . Old Mutual plc Old Mutual plc is an international savings and wealth management company based in the UK. helping them takes important financial decisions at every stage in life and stay financially independent. A Company that combines its international strengths and local advantages to offer its customers a wide range of innovative life insurance products. stock broking.7 million customer accounts. its affiliates and Old Mutual plc. representative offices and satellite offices across cities and towns in India and offices in London.4 OLD MUTUAL KOTAK MAHINDRA LIFE INSURANCE Ltd Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26 joint venture between Kotak Mahindra Bank Ltd. Originating in South Africa in 1845. 7. The company is one of the fastest growing insurance companies in India and has shown remarkable growth since its inception in 2000. servicing around 6.2. commercial banking. The Kotak Mahindra Group is one of India’s leading banking and financial services organizations.

Kotak Group entered into the life insurance business in 2001. OM Kotak Mahindra Life Insurance Company Limited (OMKM). This company was promoted by Mr.. The group has a balanced portfolio of businesses offering Asset Management. (24%) Old Mutual plc is a world-Class international financial services company. is a joint venture between Kotak Mahindra Bank Ltd.Global 500 and FTSE 100 Company. Kotak Mahindra one of India's leading financial institutions was born in 1985 as Kotak Capital Management Finance Limited. banking and general insurance 11 . Pinto and Kotak & Company. With. Mr. brokers (including banks) and direct. At OMKM. (76%) and Old Mutual plc. 2.(KMBL). is a joint venture between Kotak Mahindra Bank Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. through its life insurance. listed in UK.Malawi and Zimbabwe stock exchange. Europe and the United States. Sidney A. Old Mutual is largest South African Life Insurer. asset management. The total assets under management as on 31st December 2001 was US$ 208 billion. to make them financially independent. with a focus on South Africa.Harish Mahindra and Mr. Old Mutual has a multi-layered distribution network comprising of Life Advisors. It was established in South Africa before 160 years. Banking and General Insurance Services in over 40 countries.. Jeene Ki Azaadi. Life Assurance. and Old Mutual plc.Namibian. Uday Kotak. Old Mutual is listed on London Stock Exchange (where it is included on the FTSE 100 Index) and also on the South African. Anand Mahindra took a stake in 1986. OLD MUTUAL is the largest financial services business in South Africa. South Africa and other 3 African exchanges. 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. Industrialists Mr. A.4a) COMPANY PROFILE Kotak Group was established in 1985. and that's when the company changed its name to Kotak Mahindra Finance Limited.Kotak Mahindra Bank is the parent company of the group. and a growing presence in Asia Pacific.

Cohesive Work Environment: We form long-term partnership with our employees by offering them an invigorating work experience. to make them financially independent. sincerity and values but also give it back in equal measures. Our employees strive to build the long12 . “At Kotak Life Insurance. We not only demand loyalty. Operations in the United Kingdom are focused on wealth management. At Kotak Life Insurance the customer always comes first. innovate and build a long-term career. The company’s US Life business recorded sales of $4 billion at the end of 2002.operations. Kotak Life Insurance will like to offer its employees space to grow. We do this by our three-prong effort which strives to make Kotak Life Insurance a corporate with values.” Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its customers. Work with Honor:Kotak Life Insurance delivers everyday services in the marketplace with the high sense of duty and commitment. In the USA. The company serves 4 million life insurance policyholders and employs over 13 000 South Africans in its local operations. 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. Increase Customer Value: Kotak Life Insurance has gone to the heart of its customer's requirements and developed products which are unique and serve the customer needs perfectly. 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. We built a relationship of mutual trust and benefit to serve the Indian customer. employees and stakeholders. 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. We aim at improving the long term value in ouR relationship by continuous innovation and improvements. through Gerrard as one of the leading private client.

integrity and a Sense of Honor in every thought.term value for all those come in contact with Kotak Life Insurance.4c) Objective and philosophy of the company “Understand and actively promote the financial interests of clients. expectations and personal situation form the basis of our counseling and service. “service to society” . distributors. We take time and care in the process of striking a balance between the feasible and the desirable. society and nation growth. act and deed in order to positively contribute to individual. 2. shareholders and the nation have our commitment that we will uphold the values of trust. employees. Our consumers.” We see your needs through your eyes.4b) Vision and mission of the company Our vision is to be a market leader in offering innovative products and services that help Businesses achieve simplified growth and The company has a corporate mission of certain goals in respect of “customer satisfaction”.which are meant to create a good image of the organization . We take your time too. 2.” employee development”. your ideas. It is essential to understand we build a relationship of mutual 13 . between the required and the tolerable.

4e) Private competitors of the company Insurer Sahara life Met life Reliance life ING vyasa Kotak Mahindra Mutual shriramlife Bajaj Alliaz Aviva Max newyork Tata AIG Birla sun life SBI life ICICI prudential HDFC standard life Market share 2. Customer First. Boundary less. and have become the keystones of our success.86 1. We understand that it is the absolute returns and not relative return to some volatile index.23 1.87 14 .89 2.29 1. and Passion.35 2.14 1.06 0.31 7.79 Old 1.40 0. Thesevalues shine forth in all we do. Ownership.03 7.11 0. We are committed to the safety of invested capital.4d) Values of the company:- Every member of the Kotak Group team is committed to 5 core values: Integrity.54 0. 2. which is important to our clients.

2. They believe in offering life time value for customers.4f) Kotak Life Insurance Plans: Kotak Mahindra Life Insurance’s main aim is to help customers take important financial decisions at every stage in life. Protection Plans: Kotak Loan Protection Plan Kotak Term/Preferred Term Plan Kotak Eternal Life Plan Retirement Plans: Kotak Secure Retirement Plan Kotak Retirement Income (Unit Linked) Kotak Long Life Secure Plus Kotak Long Life Wealth Plus 15 . They are offering to the customers a wide range of original life insurance product plans. Below are given links to Kotak Life Insurance plans.

Kotak Retirement Income Plan Savings & Investment Plans: Kotak Platinum Advantage Plus Kotak Smart Advantage Plan Kotak Safe Investment Plan Kotak Flexi Plan Kotak Platinum Advantage Plan Kotak Easy Growth Plan Kotak Capital Multiplier Plan Kotak Money Back Plan Kotak Endowment Plan Kotak Premium Return Plan Kotak Surakshit Jeevan Plan Child Plans: Kotak Headstart Child Plans Kotak Child Advantage Plan Group Plans: Kotak Group Shield Kotak Group Assure Kotak Term Grouplan 16 .


Kotak Life Insurance now has 216 branches across the country. Gorakhpur is among the fastest growing cities in the country and Kotak Life Insurance is keen to match the growing pace of the city. 18 .2.: Kotak Life Insurance opens branch in Gorakhpur Gorakhpur. March 25. the company operates in 22 districts through a strong network of branches. brokers.4h) RECENT PRESS RELEASES OF KOTAK LIFE INSURANCE CO. its first in this vibrant and historic city. LTD. The Gorakhpur branch offers customers a comprehensive suite of life insurance and personal financial planning solutions. With the inauguration of this branch. The new branch will help the company cater to the needs of customers. In Uttar Pradesh. 2010: Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life Insurance). regional distributors and bancassurance partners. one of India’s leading Life Insurance Companies today inaugurated its branch office in Gorakhpur.

one of India’s leading Life Insurance Companies today inaugurated its branch office in Aligarh. 18. its first in this vibrant industrial and educational hub. Kotak Life Insurance now has 215 branches across the country. Growth of 39% in Q3-FY10 Mumbai. 19 . 2010: Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life Insurance). Kotak Life Insurance now has 215 branches across the country. regional distributors and bancassurance partners. In Uttar Pradesh. its first in this vibrant industrial and educational hub.5 crores. the company operates in 22 districts through a strong network of branches. having recorded phenomenal growth in both traditional sectors such as manufacturing and non traditional sectors such as retail. The Aligarh branch offers customers a comprehensive suite of life insurance and personal financial planning solutions. With the inauguration of this branch. With the inauguration of this branch. Kotak Life Insurance is keen to match the growing pace of the city. The company recorded growth of 39 per cent in Total Received Premium Income to Rs. Aligarh is witnessing an economic resurgence. 511. Kotak Life Insurance is keen to match the growing pace of the city. brokers. and. 2010: Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life Insurance). Kotak Life Insurance Records Profit of 18. In Uttar Pradesh. February 25.52 crores in the period Oct-Dec 2009 (unaudited). February 2. brokers. regional distributors and bancassurance partners. 711. one of India’s leading Life Insurance Companies today inaugurated its branch office in Aligarh. 2010: Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life Insurance) announced a profit of Rs. Kotak Life Insurance opens branch in Aligarh Aligarh.64 crores in the corresponding period previous year. and. Aligarh is witnessing an economic resurgence. February 25. The Aligarh branch offers customers a comprehensive suite of life insurance and personal financial planning solutions. having recorded phenomenal growth in both traditional sectors such as manufacturing and non traditional sectors such as retail. the company operates in 22 districts through a strong network of branches.62 crore during the period Oct-Dec 2009 from Rs.Kotak Life Insurance opens branch in Aligarh Aligarh.

Under the plan of insurance. 20 .2 crores in the corresponding period last year. a large number of people associate themselves by sharing risk. which can be insured against include fire. 299. Renewal income witnessed a 59 per cent jump and grew to Rs.1 INSURANCE Insurance may be described as a social device to reduce or eliminate risk of life and property. The risk.The Individual New Business Premium has grown from Rs. death. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. attached to individual. incident.3 crores in the period Oct-Dec 2009. & burglary. Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event. the peril of sea. 3. a growth of 22 per cent. 233.5 crores in the period Oct-Dec 2008 to Rs. 372 crores in the Oct-Dec 09 period from Rs. 247.

due to accidental events. are made good. Every business is exposed to different types of risks such as fire. Insurance is nothing but socialization of risks. burglary.2 Brief History of the Insurance Sector in India 21 . large numbers of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few. 3. theft.Insurance is a contract whereby.. Insurance companies indemnify the loss of the insured. the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. With the help of Insurance. accident. etc. Some of the risks can be transferred to specialized institutions known as Insurance companies. in return for the payment of premium by the insured.

later with the efforts of eminent 22 . The traders of England devised a way whereby the loss of goods would be compensated by every trader putting in some amount as per their financial strength so that a single party may not be the loser. 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 story of insurance is probably as old as the story of mankind. yet in India the first insurance company was established in 1818 with the advent of Europeans widows. leading to a huge loss to the party sending the goods. Though the concept of insurance is largely a development of the recent past. During the transportation of goods. 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. This is the earlier concept of insurance. 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. This concept is taking shape for the last 300 years. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. there were chances of the ship being drowned in the rough sea conditions or attacked by the pirates.The evaluation of insurance dates back as early as the commencement of trade between two countries in England. 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. The name of the company was Oriental Life Insurance Company. Life Insurance in its modern form came to India from England in the year 1818. especially between the European countries.

General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period.44 Crore. 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. and covered Indian lives at normal rates. Hindustan Co. initially the management of the companies was taken over by means of an Ordinance. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. Prior to 1912 India had no legislation to regulate insurance business.22. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. and the Provident Fund Act were passed. From 44 companies with total business-in-force as Rs. it rose to 176 companies with total business-in-force as Rs.people like Babu Muttylal Seal. But the Act discriminated between foreign and Indian companies on many accounts. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. However. in Calcutta. About 154 Indian insurance companies.operative Insurance Company took its birth in one of the rooms of the Jorasanko. house of the great poet Rabindranath Tagore. the Life Insurance Companies Act. 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. and later. The first two decades of the twentieth century saw lot of growth in insurance business. Starting as Indian enterprise with highly patriotic motives. the ownership too by means of a comprehensive bill. Nationalization was accomplished in two stages. insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870. The Indian Mercantile. National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. the foreign life insurance companies started insuring Indian lives. 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. In the year 1912. The 23 . putting the Indian companies at a disadvantage.298 Crore in 1938. The United India in Madras. In 1907. it was much later on the 19th of January 1956 that life insurance in India was nationalized.

LIC’s ECS and ATM premium payment facility is an addition to customer convenience. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. 100 divisional offices. leaner and closer to the customer. LIC’s Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. Hyderabad.00 Crore of New Business in 1957 the corporation crossed 1000. and it took another 10 years for LIC to cross 2000. The satellite offices are smaller. and the Life Insurance Corporation of India was created on 1st September LIC had 5 zonal offices.00 Crore only in the year 1969-70. LIC has launched its SATELLITE SAMPARK offices. Today LIC functions with 2048 fully computerized branch offices.organization of LIC took place and large numbers of new branch offices were opened. But with re-organization happening in the early eighties. With a vision of providing easy access to its policyholders. Pune and many other cities. Info Centers have been commissioned at Mumbai. 7 zonal offices and the corporate office. Chennai. As a result of re-organization servicing functions were transferred to the branches. Apart from on-line Kiosks and IVRS. New Delhi. 24 . 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. LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. Bangalore.00 Crore mark of new business. Kolkata. It may be seen that from about 200. It worked wonders with the performance of the corporation. From then to now. and branches were made accounting units. Re. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. by 1985-86 LIC had already crossed 7000. 33 divisional offices and 212 branch offices.00 Crore Sum Assured on new policies.Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956. Ahmadabad. apart from its corporate office in the year 1956. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future.

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in which the share could be collected from the members either after the loss or in advance. This is an exemplary sign of humanity and insurance therefore serves the mankind to a great extent. which would otherwise be unthinkable. profession. then the loss will be shared by others and minimized in order to enable the individual member recover from the loss and cover his ground. congregate and some to an agreement that if any individual member suffers a loss. The concept of insurance has been extended beyond the coverage of tangible assets. and his family vulnerable. travel or any other pursuits are subject to unforeseen and uncalled for hazards or dangers. Similarly the different kinds of risks can be identified and separate groups can be formed to counter such risks and reduce the impact to a manageable proportion. At this critical juncture. be it life. since monetary aspect is involved. Exporters run the risk of importers in other country defaulting as well as losses due to sudden fluctuations in the currency exchange rates.3. economic policies 26 . The benefit that an individual enjoys in his life by owning a car or a house or a factory can be snatched by sudden accident which can render even the individual immobile. business. at the time of admission to the group. his/her loss financially. People. Every individual in the world and all activities connected with him/her. a point most of the individuals tend to overlook. who are in similar trade and are exposed to the same risks. The concept of insurance is quite simple.3 MEANING OF INSURANCE Insurance is a mechanism that ensures an individual to thrive on adverse consequences by compensating the individual. Now such is for tangible assets. only insurance helps him not only to survive but also recover his loss and continue his life in a normal manner.

Classification of insurance: The insurance industry in India can broadly classify in two parts. These are insured. In some countries even the voice of a singer.turmoil. were lost fully or partially. even though the advantage of spread may not be available in these cases. 1) Life insurance:Life insurance can be defined as “life insurance provides a sum of money if the person who is insured dies while the policy is in effect”. which is the source of such income. through the help of the fortune many. Doctors run the risk of being charged with negligence and can subsequently liable for damages. They are. The purpose of insurance is a safeguard against such misfortunes few. Satisfaction of economic needs requires generation of income from some source. The first Indian owned Life Insurance Company. legs of a footballer can be insured. 1912 was the first statuary measure to regulate the life insurance business in 27 . In 1818 British introduced to India. the income too would stop. beyond the capacity of individuals to bear. The life insurance act. who were exposed to the same risk. These risks are now insured. with the establishment of the oriental life insurance company in Calcutta. the Bombay mutual life assurance society was set up in 1870. The amount in questions can be fairly large. If the property. Thus the essence of insurance is to share losses and substitute certainty by uncertainty. 1) Life insurance. Thus insurance is extended to intangible assets. permanently or temporarily. 2) Non-life (general) insurance. but saved from the misfortune.

℘It is superior to a traditional savings vehicle. Fundamental principles of life insurance contract:1) Principle of almost good faith: “A positive duty to voluntary disclose. accurately and fully. with comprehensive provisions for detailed effective control over insurance. 2) Principle of insurable interest: “Relationships with the subject matter (a person) which is recognized in law and gives legal right to insure that person”. 1938. ℘It provides valuable tax relief. 2) Non-life (general) Insurance:Triton insurance co. ℘It can be enchased and facilitates quick borrowing. Following the opening up of the insurance sector. ℘It helps to achieve the purpose of life assured. Ltd. the earlier legislation was consolidated and amended by the insurance act. ltd was the first general insurance company to be established in India in 1850. all facts. Thus insurance is found to be very useful in the lives of the person both in short term and long term. which was stabilized in 1907. 12 private sector companies have entered the life insurance business. also allowing the private Companies to have foreign equity up to 26%.India.. Benefits of life insurance: ℘Life insurance encourages saving and forces thrift. The union government had opened the insurance sector for private participation in 1999. 28 . The first insurance company to be set up by an Indian was Indian mercantile insurance co. In 1983. whose shares were mainly held by the British. There emerged many a player on the Indian scene thereafter. material to the risk being proposed whether requested or not”.

29 . DEFINITIONS OF INSURANCE: GENERAL DEFINITION: In the words of JOHN MAGEE “ Insurance is a plea by which by which large no of people associate themselves and transfer to the share holder of all risk that attach to individual“ FUNDAMENTAL DEFINITION: In words of DS HAUSELL “Insurance may be defined as a social device providing financial compensation of for the effects of misfortune.The general insurance business was nationalized after the promulgation of General Insurance Corporation (GIC) OF India undertook the post-nationalization general insurance business. the payment being made from the accumulated contribution of all parties participating in the scheme” CONTRACTUAL DEFINITION: In the words of JUSTICE TANDEL “Insurance is a contract in which a sum of money is paid to the assured as consideration of insurers incurring the risk of paying a large sum upon a contingency.

4 FUNCTIONS OF INSURANCE: Primary functions  Provides protection: insurance cannot check the happening of risk but can provide for losses of risk. Secondary functions  Prevention of losses: insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions. which helps to change from uncertainty to certainty. which give rise to risk.  Contribute towards development of large industries.  Provide certainty: insurance is a device.  Assessment of risk: insurance determines the probable volume of risk by evaluating various factors. by paying small amount of insurance against large risk and uncertainty.  Collective bearing of risk: insurance is a device to share the financial losses of few among many others.3. 30 .  Small capital to cover large risk: insurance relieves the businessman from security investment.

insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. An insurer's underwriting performance is measured in its combined ratio.5 FUNCTIONING OF INSURANCE INDUSTRY Insurer’s Business Model: Profit = Earned Premium + Investment Income – Incurred Loss – Underwriting expenses Insurers make money in two ways: 1. The most difficult aspect of the insurance business is the underwriting of policies. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. By investing the premiums they collect from insured. the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. Upon termination of a given policy. insurers predict the likelihood that a claim will be made against their policies and price products accordingly. Through Underwriting. Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money. at hand at any given moment that an insurer has collected in insurance premiums but has not been paid out in claims. A combined ratio of less than 100 percent indicates underwriting profitability. The combined ratio is a reflection of the company's overall underwriting profitability. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered. and 2.3. the processes by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks. while anything over 100 indicates an underwriting loss. Using a wide assortment of data. To this end. and these scientific principles are used to determine an insurer's overall exposure. Insurers start 31 .

based in Hyderabad. promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. to regulate. Mission of IRDA as stated in the act is "to protect the interests of the policyholders. It was formed by an act of Indian Parliament known as IRDA Act 1999. and not the market regulator Securities and Exchange Board of India. 3. 32 .6 The Insurance Regulatory and Development Authority (IRDA) The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India. the Government of India ruled that the Unit Linked Insurance Plans (ULIPs) will be governmed by IRDA.investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out." In 2010. which was amended in 2002 to incorporate some emerging requirements.

thus it does not necessarily show a pattern applicable to all of country. To know of customer preferences in various grounds for buying life insurance. I made every possible attempt to make this project a successful one. OBJECTIVES The objectives of the present study has both primary and secendory objectives . • Basic terminologies were not clear to individuals. o To know about brand awareness of Kotak Life Insurance and customer’s preference about Kotak Life Insurance. o To understand customer behavior for life insurance products. 33 . Secendory objective o To recommend suggestions based upon findings LIMITATIONS While doing this project. Apart from the above limitations. • Some respondents were reluctant to divulge personal information which can affect the validity of all responses. • Secendory data used might change or fluctuate.4. I face certain limitations and they are: • The research could not be conducted in a very vast area. Primary objectives : o Proper understanding and analysis of life insurance industry.

It will help individuals. organization as well as future project makers in a wide manner. Scope of the project: The project on “customer buying behavior for life insurance products” has a wide scope in the society. • It will lend a hand to the employees of the organization who does not know anything about the company they are working with in. • It will enhance the knowledge of the reader related to the organization .5. • It will also help the future project doers as it contains the sufficient information about the company. Some of them are mentioned here: • It will help the organization to realize the importance of customer preferences. 34 .

– Primary data – Secondary data Primary Source refers to the information gathered by the research analyst. the first source of information. Sample size sample size of the study conducted was 100 respondents with different profiles. To conduct the survey. books. interviews. i. There are several sources of primary data which includes questionnaires. etc. journals and daily newspapers for collecting information regarding project under study. magazines. To collect the information about the company and insurance. DATA COLLECTION There are two types of data collection method use in my project report. survey.6. Secondary data collection methodwas used by referring to various websites. secendary data was used because it could not be possible to collect primary data for that. JUSTIFICATION: Both primary as well as secendory data are used in making this project a successful one. Tools used Graphs and pie charts are used to display the data collected from primary sources 35 . primary data collection was done in which questionnaire was used as the main source..e.

36 . Moreover respondents prefer to give direct answers. restaurants etc. RESEARCH DESIGN All the findings and conclusions are based on the survey done in the working area within time limit. Business / Self Employed. I have collected data from 100 respondents for studying Customer Buying Behaviour and selected randomly from different areas in rohtak and hissar such as Public places like shopping centers. RESEARCH METHODOLOGY TITLE To determine customer buying behavior with a focus on market segmentation for Kotak Life Insurance. Employees of Private Firms. A structured questionnaire was framed as it is less time consuming. malls. The data for this research project has been collected through self administration. generates specific and to the point information. easier to tabulate and interpret. Employees of Government Departments . I tried to select a sample representative of the whole group during my job training.7. Due to time limitation and other constraints direct personal interview method is used.

Insurance Product was underwritten and was practically forced onto consumers on a “Take-it-As-itbasis”. which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond. Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers. that is given to them. Indian customers have become very sensitive to Coverage / Premium as well as the Products. they demand and seek necessary changes. New insurance companies have come into existence leading to open competition and hence better products for customers. All that got changed with passage of IRDA act in 1999.1 Changing perception of Indian customers Indian Insurance consumers are like Indian Voters. In historic day’s customers looking at insurance products as a life cover which can provide security against any unacceptable events. They would not accept any type of insurance product unless it fulfills their requirements and needs. no matter even if that is coming from the market leader. Indian consumers were at receiving end. Now Indian customers are aware of insurance industry and insurance products provided by companies. they are soft but when time is right and ripe. The new products are constantly being demanded by Indian consumers. but now customers look at 37 . should that product is not serving the purpose.8. A case in point is ULIP Product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the Non-life segment are new age Avatar. There are not ready to accept any product. They have become more sensitive. For historical years.

So today’s customers wants good return from the insurance companies. But after the introduction of private life insurance companies there is a great competition in Indian market now.I.C.) who was the only life-insurance company for the people till 2000. Today life-insurance is not only limited up to just life risk cover and maturity period bonuses but changed to greater return from the investments. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. 8. debentures. The Indian customer’s forms the pivot of each company’s strategy. In India only 25% of the population has life insurance. These life-insurance companies have every kind of policies suiting every need right from financial needs of. government and other securities. People are demanding for higher returns with the life risk cover and private companies are giving 30. products as an investment as well as life cover. To tap the Indian market there has been tie-ups between the major Indian companies with other International insurance companies to start up their business. bonds.C. Previously there was a monopoly business for Life Insurance Corporation of India (L. giving birth and rearing up a child.4% of the market share in 2006. • Ever growing middle class component in population. his education. • Growth of customer’s interest with an increasing demand for better 38 .40% average growth per annum. still holds 71. The government of India has set up rules that no foreign insurance company can set up their business individually here and they have to tie up with an Indian company.2 Changing face of Indian insurance industry: After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. So Indian lifeinsurance market is the target market of all the companies who either want to extend or diversify their business. meeting daily financial needs of life. Indian insurance industry can be featured by: • Low market penetration. These companies have every aspects and needs of our life covered along with the death-benefit. L. With the introduction of the unit linked insurance policies these companies are investing the money in different investment instruments like shares. pension solutions after retirement.I.

introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. the future and the opportunities in this industry will surely be exciting. So it is clear that the face of life insurance in India is changing. Apart from the traditional term and saving insurance policies. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. List of them are mentioned as below:1. customer focused service and professional advice has become the mainstay of the industry. AVIVA Life Insurance 6. industry has seen the entry and growth of unit linked products. The number of companies in Insurance particularly in Life Insurance has changed drastically now the number is in 17. the Indian life insurance industry has more than a dozen private players. Max New York Life Insurance 5. Bajaj Allianz Life Insurance 2. Whatever the developments. The success of their effort is that they have captured over 28% of premium income in five years. • Application of information technology for business. ICICI Prudential Life Insurance 3. each of which are making strides in raising awareness levels. The biggest beneficiary of the competition among life insurers has been the customer. products. but with the changes come a host of challenges and it is only the credible players with a long term vision and a robust business strategy that will survive. Now products are priced. Bharti AXA Life Insurance 39 . This provides market linked returns and is among the most flexible policies available today for investment. A wide range of products. and realistic and sustain so people in better position to understand the risk and benefits of the product and they are accepting these innovative products. Life insurance is also now being regarded as a versatile financial planning tool. Penetration of life insurance is beginning to cut across socio-economic classes and attract people who have never purchased insurance before. • Rebate from government in the form of tax incentives to be insured. and the Indian customer’s forms the pivot of each company’s strategy. Today.TATA AIG Life Insurance 4.

HDFC Standard Life Insurance 11. Reliance Life Insurance 9.7.Birla Sun Life Insurance 12. Kotak Mahindra Life Insurance 8.SaharaLifeInsurance 13.ING Vysya Life Insurance And so on… 40 . SBI Life Insurance 10.

9. CUSTOMER BUYING BEHAVIOUR The Study This study. covered almost 100 individual of different strata. The study covered 100 individuals INSURED 52 UNINSURED 48 41 . which was conducted in the city of Hissar and Rohtak (Haryana). The data so collected was grouped according to the company of the consumer's choice from where they have purchased the product and result was thus generalized.


OCCUPATION Business class Service class Others PERCENTAGE 25 50 25 Thus the overall penetration of companies in to the psyche of consumer buying preference (based on the customer's purchase of a company's life insurance policy) is given in the graph as under: 43 .

1. 72. 1.56% Max New York.58% Om Kotak Mahindra. But the picture may take the different shape if we analyze it from the different perspective. which has got the maximum preference over other products. as per the respondents. 7.79% ICICI Prudential.3%. 2.From the above graph it is clear that when it comes to preference of the life insurance policy of particular company it is LIC. This is to be note that out of total surveyed (100).9% were from SBI. demographical perspective.9% were from LIC.53 % Birla Sun life. 0. companies 44 . 4. 51.78 ING Vyasya.3% were found insured and out of this 51.09% were from HDFC. 4.e. i. 0.36% Tata AIG. Consider the graphs below: (figures given in percentage) Figure Figure [a]: [b]: Preference Preference of MALE towards different of FEMALE towards different companies. 3.48% Bajaj Allianz.

Figure [c]: Preference of SERVICE class people towards different companies Figure [d] : Preference of BUSINESS class people towards different companies The most important thing which is to be considered here is that customer try to segregate the life insurance companies not on the basis of brand of the company (in most of the case it has been found). The data revealed by the study was telling some different story. which is for the preference of male for any of the company. but they demarcate it on the basis of ownership of the company. Former had 75% preference for LIC whereas later had 80% preference for LIC. whether it is government owned or privately owned company. Taking Figure [c] and Figure [d] under consideration where the graph is showing the preference on the basis of occupation customers are into. Considering Figure [a]. Figure [c] is for those customers who were found to be in service and Figure [d] is for those who had their own business. whereas is we consider Figure [b] the preference graph is showing the different trend as here only 66% of female is only interested in LIC. as the percentage of LIC preference in business class was much lower than the figure for service class. it was found that 75% of the male has got the preference for LIC rather than any other life insurance company. 45 .


Figure 3 Figure 4 47 .

Figure 5 Figure 6 48 .

Figure 7 Figure 8 49 .

ANALYSIS OF THE QUESTIONNAIRE From the survey conducted on 100 people mainly from Rohtak and Hissar district. they all demanded the security for the money and according to them no company can give better security then LIC as it is government owned. which acted as the universe of this survey. Company’s credibility is the most important factor that attracted the respondents to go towards the company. we can very rightly say that although many people are shifting towards private players but still most of them can only believe on LIC as it is government owned. according to them it doesn't matter who is the owner of the company. what they want at the end is return and good service. Very few of them consider insurance as tax savings or just investment. Insurance companies as well as the agents are doing appreciating work as 55% of the insured persons have been approached by them instead of customers aaproaching the insurance companies. if we talk of customer satisfaction . And same was the case with the person who were married. Most of the population considers it as investment with risk cover. Even if in certain type of life insurance policy they may not be getting the same high return which they would have got while investing in other "private" companies they are much happier and satisfied while investing in LIC as it gives them peace of mind. Most of the people prefer the policy term of 10-20 years. then the task is a bit disappointing as 40% of the customers are not satisfied by the insurance companies 50 . It was found during the collection of data. people who were into service are those kind of customer who don't want to carry any risk while investing and thus had their preference for the LIC because according to them LIC is more secured than any company because of its government owned condition. Whereas reverse was the case with customer who had their own business.

Policy term 58% people want to buy policy for a term of 10-20 years. only 52 of them are insured. Age 51% people perceive that policy can be brought any time. Of the survey conducted on 100 people. Preference of customers for the company is also very less. There is no specified age for that. FINDINGS It was a great experience for me to do such a project with a survey in the market. Many points were found while doing this project It was found that many persons do not even know the name of the company. Premium payment 33% people want to pay half yearly premium 51 . Many such things were learnt which I never earlier thought of.10. It was amazing to see that every customer had different views about different things and they have different reasons behind there different perceptions. Perception on insurance 47% people consider it as both investment and risk cover. Satisfaction 40% people are not at all satisfied with the insurance companies. Feature 37% people buy the policy of a company by seeing its credibility.

RECOMMENDATIONS During the data collected. Kotak can also tie up with colleges and Institutes all over India where students who want to start their business can be encouraged. The main reason is that club is an organization having a large member base across the country. People in general have been influenced by the marketing activities of insurance companies. Kotak Mahindra Old Mutual Life Insurance Ltd should make certain clubs as their corporate agents. The reason behind this recommendation is that such association has a large number base and also part of the premium generation can be utilized for the welfare of the sorts men engaged with association. it has been found that people have great awareness about various companies but a lot more has to be done. radio and TV ad campaigns over the years is beginning to have its impact now. Another important trend was in terms of people viewing insurance as a tax saving and investment instrument as much as protective one. especially by smaller companies like Kotak Life Insurance to establish their market presence.11. Tie up can also be made with associations like All India Tennis Association (AITA) for the distribution of life insurance products. A high penetration of print. 52 . Here lies the opportunity for a relatively new comer like Kotak Life Insurance. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. LIC has never been known for prompt service or customer oriented methods but Kotak Life Insurance can build its reputation based on these factors. The general satisfaction levels among public with regards to policy and agents still requires improvement. Company can form this tie up for a limited time periods where college placement cell would be involved for the selection of the students. The company must increase its sales channel to reach more and more number of people.

So Insurance companies can build their reputation by providing prompt service or customer oriented methods. People have started understanding significance of insurance needs and are willing to trust even private companies with their hard earned money. Here lies the opportunity for a relatively new comers. CONCLUSION The insurance sector in India has become stronger in terms of the no. A high penetration of print. “WITH NEW OPPORTUNITIES UNFOLDING INSURANCE SECTOR. The general satisfaction levels among public with regards to policy and agents still requires improvement. INDIA IS EMERGING AS A GLOBAL POWER IN INSURANCE SERVICES IN THE COMING YEARS” During the data collected. especially by smaller companies to establish their market presence. People in general have been influenced by the marketing activities of insurance companies. It has become Globally competitive and diverse aiming at higher efficiency. 53 . Another important trend was in terms of people viewing insurance as a tax saving and investment instrument as much as protective one. of customers. THE Insurance sector has improved manifolds in terms of services. it has been found that people have some awareness about various companies but a lot more has to be done.13. radio and TV ad campaigns over the years is beginning to have its impact now. Exposure to worldwide competition and reforms in has led to the emergence of better quality products and services. Reforms have changed the face of Indian Insurance Sector.

com/LIFEINSURANCE • www..linkedin. 13th Edition ./insurance/ • • 54 .com www.. pg 208-210. Life and Health Insurance./ • www.indiatimes... edition 2007 • Kenneth Black Jr.irdaindia.indianinsuranceresearch.indiastat. Life www. BIBLIOGRAPHY • McGill' Individual life › Insurance Companies www./Kotak-Life- Insurance.. .indiahousing.wikipedia. pg 103-104 • • www. life insurance.

15. ANNEXURES QUESSTIONNAIRE Q 1) Do you have any life insurance policy? a) YES b) NO Q 2) Are you aware about the Life Insurance products or will prefer to purchase the Life Insurance products of • HDFC Standard Life Insurance • SBI Life Insurance • Kotak Life Insurance • TATA AIG Life Insurance • Reliance Life Insurance • ICICI prudential • LIC • Any other Q3) Which company’s insurance policy do you have? __________________________________________________________________ Q4) Term of your insurance policy? a) < 5 years b) 5 – 10 years c) 10 – 20 years d) any other Q5) What do you think are the benefits of Life Insurance? a) Covers future uncertainty b) Tax Savings c) Investments d) Comprehensive investment and risk coverage instrument Q6) Which feature of Life Insurance policy will you consider while buying? a) Money Back Guarantee 55 .

what is the right age to buy insurance? a) < 25 years b) 25 – 35 years c) 35. Professional.b) Larger Risk Coverage c) Low Premium d) Company’s Credibility e) Easy Access to Agents Q7) How have you bought / would buy a Life Insurance policy? a) Customer approaching insurance company / agent b) Insurance company / agent approaching the customer Q8) Are you satisfied with your Life Insurance policy? a) Highly Satisfied b) Satisfied c) Not So Satisfied Q9) According to you.45 years d) > 45 years e) Anytime Q10) How would you like to pay the premium amount? a)yearly b)quarterly c)half yearly d)single premium Respondent’s Profile : NAME: AGE: GENDER: • EDUCATIONAL QUALIFICATION: PROFESSION: (Business. Service. Any Other) ANNUAL HOUSEHOLD INCOME 56 .

>10 lakhs) 57 . 2-5 lakhs. 5-10 lakhs.(<2 lakhs.