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Bachelor of Business Administration [B.B.A.] Semester-IV

By VILAS.B.BELADIYA S.Y.B.B.A. Roll No. 03 Supervising Teacher




I declare that the project entitled A STUDY ON A INSURANCE COMPANY (Conducted on behalf of KOTAK LIFE INSURANCE LTD, VARACHHA) under the guidance of Prof. Prakash Tank submitted in partial fulfillment of the requirement for the award of the degree of Bachelor of Business Administration to Veer Narmad South Gujarat University, Surat is my original work carried out during 16 April, 2009 to 15 June, 2009, and not submitted for the award of any other degree, diploma, fellowship or other similar or prize to any other institute, organization or university by any other person.

Place: Sabargam, Surat Signature Date: (Beladiya Vilas B.) (SY.B.B.A & Roll No.03)


This is to certify that the project entitled Submitted in partial fulfillment of the requirement of VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURAT in record of bonofide general study work carried out by under my supervision.

The project or any part of it has not been previously submitted for any degree.

I/c Principal Dr. Yogesh N. Vansiya Ambaba Commerce College & MIBM, Sabargam

Date: Place:

In preparation of this report by me, I feel great pleasure because it gives me extensive practical knowledge in my career. I get idea about Indian Life Insurance Industry by this project. I express my deep sense of gratitude to My Company Guide Mr. Parth Desai (ABM), Mr. Pinal Kumbhani (SM) for his valuable guidance during my project work. I also like to all staff of Kotak Life Insurance who guide me in project work directly or indirectly to complete my training project. I am thankful to Mr. Rajesh Desai (Faculty Guide) for valuable inspiration and guidance provided me throughout the course of this project. They have patient and critically gone the subject matter. I would like to take opportunity to express my gratitude towards all of them who have contributed directly or indirectly in my project work. At last I would like to extend my deep sense of gratitude to my friends, colleagues and each individual who directly or indirectly help me during the project work.

Beladiya Vilas

Se. no 1

Particulars What is Insurance Introduction Brief history of the insurance sector Some of the milestones in life insurance Insurance sector reforms IRDA Existing Insurance companies

Page No.

Introduction of KOTAK LIFE INSURANCE Company profile Mission Vision & values Management Organization chart Build up of business Group structure of kotak mahindra bank ltd KMOM- the partnership Awards Problem Identification

Marketing Promoters Distribution Sales strategy Market share

Service Customer satisfaction Insurance solutions for individuals Stages in policy issuance

Human resource Definition of agent Procedure for becoming an agent Methods of remunerating agents Function of agents Responsibilities of agents Ethical Behaviour Employee welfare 7

Oracles online system for employee

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


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

Fire Insurance Marin insurance Life Insurance


Classification of insurance:
The insurance industry in India can broadly classify in two parts. They are. 1) Life insurance. 2) Non-life (general) insurance.

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

Benefits of life insurance:

Life insurance encourages saving and forces thrift. It is superior to a traditional savings vehicle. It helps to achieve the purpose of life assured. It can be enchased and facilitates quick borrowing. It provides valuable tax relief. Thus insurance is found to be very useful in the lives of the person both in short term and long term. Fundamental principles of life insurance contract:-


1) Principle of almost good faith: A positive duty to voluntary disclose, accurately and fully, all facts, material to the risk being proposed whether requested or not. 2) Principle of insurable interest: Relationships with the subject matter (a person) which is recognized in law and gives legal right to insure that person.

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

Brief History of the Insurance Sector in India

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and these companies were not insuring Indian natives. However, later with the efforts of eminent 13

people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Cooperative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 Crore, it rose to 176 companies with total business-in-force as Rs.298 Crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January 1956 that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 14

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


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


Non life insurance debuts with triton insurance company. 1870 Bombay mutual

life assurance society is the first Indian owned life insurer 1912 1928 The Indian Life Assurance Companies Act enacted as the first statute to regulate The Indian Insurance Companies Act enacted to enable the government to collect

the life insurance business. statistical information about both life and non-life insurance businesses. 1938 1956 Earlier legislation consolidated and amended to by the Insurance Act with the 245 Indian and foreign insurers and provident societies taken over by the central

objective of protecting the interests of the insuring public. government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 Crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907 1957 The Indian Mercantile Insurance Ltd. set up, the first company to transact all General Insurance Council, a wing of the Insurance Association of India, frames a

classes of general insurance business. code of conduct for ensuring fair conduct and sound business practices. 1968 1972 The Insurance Act amended to regulate investments and set minimum solvency The General Insurance Business (Nationalization) Act, 1972 nationalized the

margins and the Tariff Advisory Committee set up. general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.


Insurance sector reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included. 1997 2000 2001 Insurance regulator IRDA set up IRDA starts giving licenses to private insurers: Kotak Life Insurance, ICICI Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks

prudential and HDFC Standard Life insurance first private insurers to sell a policy allowed selling insurance plans.

The Insurance Regulatory and Development Authority (IRDA)

The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a strong and powerful supervisory and regulatory authority for insurance. Post nationalization, the role of Controller of Insurance diminished considerably in significance since the Government owned the insurance companies. But the scenario changed with the private and foreign companies foraying in to the insurance sector. This necessitated the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation. The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry 17

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


Existing Insurance Companies/Corporation



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

Operations in the United Kingdom are focused on wealth management, through Gerrard as one of the leading private client The OLD MUTUAL Group has the ability to cater for a variety of consumer segments and offers a comprehensive and innovative range of products for all income groups.

At Kotak Life Insurance, we aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.


Vision & values

Our Vision:Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its customers, employees and stakeholders. We aim at improving the long term value in our


relationship by continuous innovation and improvements. We do this by our three-prong effort which strives to make Kotak Life Insurance a corporate with values. Increase Customer Value: Kotak Life Insurance has gone to the heart of its customer's requirements and developed products which are unique and serve the customer needs perfectly. We built a relationship of mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance the customer always comes first. Cohesive Work Environment: We form long-term partnership with our employees by offering them an invigorating work experience. We not only demand loyalty, sincerity and values but also give it back in equal measures. Kotak Life Insurance will like to offer its employees space to grow, innovate and build a long-term career. Work with Honor: Kotak Life Insurance delivers everyday services in the marketplace with the high sense of duty and commitment. Our employees strive to build the long-term value for all those come in contact with Kotak Life Insurance. Our consumers, distributors, employees, shareholders and the nation have our commitment that we will uphold the values of trust, integrity and a Sense of Honor in every thought, act and deed in order to positively contribute to individual, society and nation growth.

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

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











Old Mutual Plc:Old Mutual was established more than 150 years ago. Old mutual plc, Is a world-class international financial service company. It owns the largest companies in the following areas in South Africa. They are: 1. Life Insurance Company 2. Asset Management Company 3. Bank 4. Non-life insurance company It has been developed into an International financial services group whose activities are focused on asset gathering and asset management. The Old Mutual Group offers a diverse range of financial services in three principal geographies: South Africa, the United States and the United Kingdom. The company is listed on the London Stock Exchange with a market capitalization of approximately $6 billion and is a member of the elite FTSE 100 index. In the 2003 rankings of the World's 500 largest corporations by Fortune magazine, Old Mutual climbed 87 places to position number 366 and was also listed as the 14th largest insurance company in the world. Old Mutual is the largest financial services business in South Africa, through its life insurance, asset management, banking and general insurance operations. The company serves 4 million life insurance policyholders and employs over 13 000 South Africans in its local operations. In the USA, Old Mutual is one of the top ten fixed annuity businesses offering an array of specialist asset management skills through its 23 asset management businesses. The companys US Life business recorded sales of $4 billion at the end of 2002. Operations in the United Kingdom are focused on wealth management, through Gerrard as one of the leading private client stock broking businesses in the UK. The Old Mutual Group has the ability to cater for a variety of consumer segments and offers a comprehensive and innovative range of products for all income groups.

Kotak Mahindra Old Mutual Life Insurance


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

44 branches in 31 cities. 7500 life advisors. 1000employees of very good quality.

Ranks 2nd in terms of average premium per policy. Ranks 4th in total advertising awareness.

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

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

2004 Indias Best Equity House in India by Finance Asia 30

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

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

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

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

Problem Identification:

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

The main of the present study of is accomplish the following objective. Proper understanding and analysis of life insurance industry. To know about brand awareness of Kotak Life Insurance and customers preference about Kotak Life Insurance. Conduct market survey on a sample selected from the entire population and derived opinion on that research. According the market survey come know about how much potential of insurance market in our city. And base on analysis of the result thus obtained make a report on that research. Training aims at recruiting maximum number of Life Advisors and to Sell the maximum policies for the company and bring the business for the company which ever is going at the particular point of time. Along with it I will be gaining the thorough knowledge of insurance sector. This will give me in more confidence in marketing products given to me. As the Kotak Life Insurance well reputed company in India its great chance for me to observed different products launch by other competitor companies like ICICI prudential, Bajaj alliance ,LIC, Max New York life etc. In all, it is to understand the overall working of the Life insurance sector. The objective behind the project is as follows: To find the right candidate. To about their family background, occupation, social relation, Qualification, Age. Finalize candidates for the IRDA training 32

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

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

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

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

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

Increased competition Today the competition in the Insurance sector has became very stiff. Currently there are 14 Life Insurance companies working in India including the LIC (life insurance Corporation of India). Today each and every company is trying to increase their Insurance Advisors so that they can increase their reach in the market. This situation has created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has became very very difficult. 33

Research always starts with a question or a problem. Its purpose is to question through the application of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studied. Marketing research is the function which links the consumer, customer and public to the marketer through informationinformation used to identify and define marketing opportunities and problems generate, refine, and evaluate marketing actions, monitor marketing actions, monitor marketing performance and improve understanding of market as a process. Marketing research specifies the information required to address these issues, designs, and the method for collecting information, manage and implemented the data collection process, analyses the results and communicate the findings and their implication. I have prepared our project as descriptive type, as the objective of the study demands the answers of the question related to find the potentiality of life insurance in Surat: How much potential is there in Surat? The Marketing Research Process As marketing research is a systemic and formalized process, it follows a certain sequence of research action. The marketing process has the following steps: Formulating the problems Developing objectives of the research Designing an effective research plan Data collection techniques Evaluating the data and preparing a research report

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


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

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



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

Kotak Mahindra Private Ltd. Kotak Mahindra Prime Limited (KMPL) is a 100% subsidiary of Kotak Mahindra Group (Kotak Group) formed to finance all passenger vehicles. The company is dedicated to financing and supporting automotive and automotive related manufacturers, dealers and retail customers. The Company offers car financing in the form of loans for the entire range of passenger cars and multi utility vehicles. The Company also offers Inventory funding to car dealers and has entered into strategic arrangement with various car manufacturers in India for being their preferred financier. As on March 31, 2005, KMP has a retail distribution network comprising of 54 branches (including representative offices) covering about 100 locations in 17 states in the country and has a wide network of Direct Marketing Associates, brokers and agencies supporting the distribution network and servicing around 113,000 customers. Kotak Mahindra Bank Ltd. Kotak Mahindra Bank Limited (KMBL) is the holding company and the flagship of the Kotak Mahindra Group. It was actually incorporated as Kotak Capital Management Finance Limited on November 2, 1985 and obtained its Certificate of Commencement of Business on February 11, 1986. It commenced operations with Bill Discounting and soon started other fundbased activities like corporate leasing & hire purchase, automobile finance and money market operations. Subsequently, it also entered the funds syndication and the Investment banking business. 37

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



Kotak life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 2000 branches (including 1,095 micro-offices) and an advisor base of over 261,000 (as on August 31, 2008). The company has 24 bank assurance partners having tie-ups with ICICI Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon Peoples Coop Bank, Ernakulam District Co-op Bank, Idukki District Co-op Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani Gramya Bank, Ratnagiri District Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative Bank, Baramati Co-operative Bank, Ballia Kshetriya Co-Operative Bank, The Haryana State Co-Operative Bank, Renuka Nagrik Sahakari Bank, Amanath Co-Operative Bank, Arvind Sahakari Bank, Bhandara Urban Co Operative Bank. SALES DISTRIBUTION:

Tied Agency: Tied Agency is the largest distribution channel of Kotak Life, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable business model. Bank assurance and Alliances: Kotak life was a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the companys sales and distribution strategy, contributing to approximately one third of companys total business. The business philosophy at B&A is to leverage distribution synergies with our partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel.


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

Now company applies the project Turning Point and in this project to decide the selection criteria for LIFE ADVISOR and life advisor is the basic requirement for sale the policy. The selection criteria for advisor are: Like: Agent age > 30 for male LA, and >25 for female Agent income 5 lakhs Agent stay in city belong > 5 years Family back ground strong. Minimum graduate Either 2 years experience or post graduate refresher


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

productive so that company to reduce the cost.

Kotak Life Insurance Company has internal strategy like, Rewards & Recognisation: SLAB LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6 NO OF POLICIES 2 4 6 10 15 20 REWARDS Reebok Travel Bag Combo Cordless Phone Vacuum Cleaner Oven Toaster Grill Nokia Xpress Music Mobile Phone Philips Home Theatre With DVD Player

Market Share:Life Insurance Companys Market share Based On premium in India.

2001-02 LIC 98% Private Players 2%

2002-03 94% 6%

2003-04 87% 13%

2004-05 78% 22%

2005-06 72% 28%

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



Indian Promoter/ Partner

Foreign Insurance

Market share based on premium

Aviva life Bajaj Allianz Birla sun life HDFC Standard ICICI Prudential ING Vysya Kotak Mahindra, Old Mutual Max New York MetLife Sahara Life Insurance SBI Life Tata AIG

Dabur Bajaj Auto Aditya Birla group HDFC ICICI Bank Vysya Bank Kotak Mahindra Bank Max India Jammu & Kashmir Bank Sahara India SBI Tata Group

Aviva, UK Allianz, Germany Sun Life, Canada Standard Life, UK Prudential, UK ING Insurance, Netherlands Old Mutual South Africa New York Life, US MetLife, US None Cardiff, France AIG, US

1.12 6.12 1.84 2.96 7.11 0.63 0.71 1.32 0.40 0.80 1.52 1.78



Customer Satisfaction

What is customer satisfaction?

Customer satisfaction refers to how satisfied customers are with the products or services they receive from a particular agency. The level of satisfaction is determined not only by the quality and type of customer experience but also by the customers expectations. A customer may be defined as someone who: has a direct relationship with, or is directly affected by your agency and Receives or relies on one or more of your agencys services or products.

Customers in human services are commonly referred to as service users, consumers or clients. They can be individuals or groups. An organization with a strong customer service culture places the customer at the centre of service design, planning and service delivery. Customer centric organizations will: determine the customers expectations when they plan listen to the customer as they design focus on the delivery of customer service activities Value customer feedback when they measure performance.

Why is it important?
There are a number of reasons why customer satisfaction is important in Insurance Sector: Meeting the needs of the customer is the underlying rationale for the existence of community service organizations. Customers have a right to quality services that deliver outcomes. 44

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

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

Insurance Solutions for Individuals:

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

Protection Helping you to grow and protect your wealth.

Savings & Investments Manage today for a better tomorrow.


Retirement The road to retirement, Make it easy

Child Plan a good future for your child.

Protection Plans:

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


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

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

Savings & Investment Plans:

Kotak Platinum Advantage plus: Youve lived life on your own terms; always done what youve believed in. You are used to having the luxury of choice and the power to control.

Kotak Smart Advantage:

Kotak Smart Advantage is an intelligent unit-linked plan that is based upon the idea of regular savings and systematic accumulation of wealth in the long term.

Kotak Safe Investment Plan:

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


Kotak Flexi Plan:

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

Kotak Platinum Advantage Plan:

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

Kotak Easy Growth Plan:

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

Kotak Capital Multiplier Plan:

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

Kotak Money Back Plan:

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

Kotak Endowment Plan:

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

Kotak Premium Return Plan:


Kotak Secure Retirement Plan:

An ideal retirement solution is one that gives you complete flexibility and peace of mind, not only while you save for your retirement but also after you retire.

Kotak Retirement Income (Unit Linked):

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

Kotak Long Life Secure Plus:

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

Kotak Long Life Wealth Plus :

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

Kotak Retirement Income Plan :

The Kotak Retirement Income Plan is a savings plan designed to meet your postretirement needs. It is a plan that gives you "Jeene ki azaadi".

Child Plans:


Kotak Head start Child Plans:

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

Kotak Child Advantage Plan:

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


Stages in Policy Issuance

1) Proposal A Proposal Stage is the First stage before the policy is issued at COPS. At this stage, the application form is received by COPS, but it is pending for issuance due to further clarifications required from the customer. 2) Login A proposal which is complete i.e., duly filled with all necessary documents attached to it & accepted by the Branch ops, is called a Login 3) Reject An Application gets rejected at the Branch Ops level due to necessary details not filled in the form or necessary documents not submitted is a Reject. It is then sent back to the Advisor for completion. 4) Issuance Issuance means a policy that is issued to the Customer by Central Ops. 5) Decline Status When a customer refuses to take a policy post login but before Issuance is called a Decline 6) Cancellation When the cheque given by the customer bounces, it amounts to cancellation of the policy.


7) Lapse A policy for which the Customer fails to pay subsequent premiums is a Lapsed Policy. 8) Free look Post issuance of the policy, the policyholder has the option to turn down the policy within 15 days from the date of issuance. This period of 15 days is called Free look Period. 9) Surrender When a customer wants to discontinue with the policy.



According to section 182 of the Indian contracts act, an agent is a person employed to do any act for another or to represent another in dealing with a third person. In the insurance industry, the term agene is ordinarily applied to a person engaged by the insurer to procure new business. The insurance act defines an insurance agent as one who is licensed under section 42 of that act and is paid by way of commission or otherwise, in consideration of his soliciting or procuring insurance business, including business relating to the continuance , renewal or revival of policies of insurance. He is, for all purposes, an authorized salesman for insurance and needs a licence. In pursuance of strengthening the human resources of the IRDA, a comprehensive induction plan for recruiting professionals with specialized qualifications and back ground was embarked upon. Eight officers in the Actuary department joined the IRDA in the months of August/September, 2007. Process of inducting more officers has also started Simultaneously. The Authority, jointly with Andhra Pradesh Government, handset up an Institute of Insurance and Risk Management (IIRM) at Hyderabad in 2002. IIRM aims to serve the learning and development needs of emerging markets in the context of their contemporary challenges. IIRM is overseen by Board of Directors headed by Chairman of the Authority. It continues to cater to the needs of the industry by way of providing diversified range of courses, including Post-Graduate Diploma in General Insurance, Life Insurance and Risk management. The IIRM courses are accredited by Chartered Insurance Institute, London. The International School for Actuarial Science (ISAS) has started functioning under the aegis of IIRM to achieve the objectives of IRDA to enhance the availability of qualified skill resources to the insurance industry.


Procedure for Becoming An Agent (1) Qualifications of the applicant.

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

(2) Practical Training

1) The applicant shall have completed from an approved institution, at least, one hundred hours practical training in life or general insurance business, as the case may be, which may be spread over three to four weeks, where such applicant is seeking licence for the first time to act insurance agent. Provided that applicant shall have completed from an approved institution, at least, one hundred fifty hours practical training in life and general insurance business, which may be spread over six to eight weeks, where such applicant is seeking licence for the first time to act as a composite insurance agent. 2) Where the applicant, referred to under sub-regulation (1), isA.

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

B. An Associate/Fellow of the Insurance Chartered Accountants of India, New Delhi; C. An Associate/Fellow of the Insurance of Coasts and Works Accountants of India, Calcutta; D. An Associate/Fellow of the Insurance of company secretaries of India, New Delhi; E. An Associate/Fellow of the actuarial Society of India, Mumbai; F. A Master of Business Administration of any Institution/University recognized by any State Government or the Central Government; or G. Possessing any professional qualification in marketing from any institution/University recognized by any State government or the Central Government55

He shall have completed, at least, fifty hours practical training from an approved institution. Provided that such applicant shall have completed from an approved institution, at least, seventy hours practical training in life and general insurance business, where such applicant is seeking license for the first time to act as a composite insurance agent. 3) An applicant, who has been granted a licence after the commencement of these regulations, before seeking renewal of licence to act as an insurance agent, shall have completed, at least twenty-five hours practical training in life or general insurance business, as the case may be, from an approved institution. Provided that such applicant before seeking renewal of licence to act as a composite insurance agent shall have completed from an approved institution, at least, fifty hours practical training in life and general insurance Business. (3) Examination. The Applicant shall have passed the pre-recruitment examination in life or general insurance business, or both, as the case may be, conducted by the Insurance Institute of India, Mumbai, or any other examination body. (4) Fees payable

1) The fees payable to the authority for issue or renewal of licence to act as insurance agent or a composite insurance agent shall be rupees two hundred and fifty. 2) The additional fees payable to the authority, under the circumstances mentioned in subsection (3) of section 42 of the act, shall be rupees one hundred. (5) Code of conduct 1) Every person holding a licence, shall adhere to the code of conduct specified below:


Every insurance agent shall,-


a. Identify himself and the insurance company of whom he is an insurance agent; b. Disclose his licence to the prospect on demand; c. Disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan; d. Disclose the scales of commission in respect of the insurance product offered for sale; e. Indicate the premium to be charged by the insurer for the insurance product offered for sale; f. Inform promptly the prospect about the acceptance or rejection of the proposal by the insurer; g. Render necessary assistance to the policyholder or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer; h. Advice every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary;


No insurance agent shall,-

a. Solicit or procure insurance business without holding a valid licence; b. Induce the prospect to omit any material information in the proposal form; c. Induce the prospect to submit wrong information in the proposal form or document submitted to the insurer for acceptance of the proposal; d. Interfere with any proposal introduced by any other insurance agent; e. Demand or receive a share of proceeds from the beneficiary under an insurance contract; 57

f. Force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination; g. Apply for fresh licence to act as an insurance agent, if his licence was earlier cancelled by the designated person, and a period of five years has not elapsed from the date of such cancellation; h. Every insurance agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulated time, by giving notice to the policyholder orally and in writing;

(6) Cancellation of licence The designated person may cancel a licence of an insurance agent, if the insurance agent suffers, at any time during the currency of the licence, from any of the disqualifications mentioned in sub-section (4) of section 42 of the act, and recover from him the licence and the identify card issued earlier. (7) Issue of duplicate licence The authority may issue a duplicate licence replace a licence lost, destroyed, or mutilated on payment a fee of rupees fifty. (8) Non-application to existing insurance agents Nothing contained in regulations 4 to 6 of these regulations shall apply to the existing agents before the commencement of these regulations. (9) Repeal and savings From the date of coming into force of the insurance regulatory and development authority (licensing of corporation agents) regulations 2002, the insurance regulatory and development authority (licensing of insurance agents) regulations 2000 or any part thereof applying to corporate agents shall cease to have any effect, except as respects things done or omitted to be done there under.


Methods of Remunerating Agents

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

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

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

Understand the prospects needs and persuade him to buy a plan of life insurance that suits his interests best

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

Keep in touch to ensure that changing circumstances are reflected in the arrangement relating to premium payments, nomination and other necessary alterations 59

Facilities quick settlement of claims Be totally honest with both the prospect and the insurer.

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

Identify himself and the insurance company of which he is an agent Disclose the licence to the prospect on demand Explain all available options to the prospect Recommend a suitable plan taking into account the needs of the prospect Explain the nature and importance of the information required in the proposal form Inform the insurer about any material facts, including habits, that could adversely affect the underwriting decision

Not to induce prospects to submit wrong information



An agent, individual or corporate, is the main component of the distribution channel for the life insurance business. He would be required to solicit and procure new life and insurance business, in a manner that is consistent with the interests of the policyholders of the insurance company. For this purpose, for this purpose, he would have to do the following.


Contact prospects for life insurance, study their needs and persuade them to buy. Complete all related formalities, including filling up proposal forms, collecting premium, arranging medical examination, collecting proofs (of age or income), reports and other information required by the underwriter.


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

Keep in touch with the policyholder to make sure that renewal premiums are paid in time. Ensure that nomination are made or changed according to changing circumstances Assist in settlement of the claim, by helping the claimants to complete the necessary formalities and requirements.


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

The benefits under the various plans of insurance offered by his insurer. The office procedures for various matters including the forms and documents. The main documents have been listed out in an earlier chapter. The forms and procedures will vary between one insurer and another.

Ethical Behavior


Some characteristics of good ethical behaviors are

Placing the best interests of the client above ones own direct or indirect benefits Holding in the strictest confidence and considering as privileged, all business and personal information pertaining to the clients affairs

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

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

Having to choose between two plans, one giving much less commission than the other Temptation to recommend discontinuance of an existing policy and taking out a new one Becoming aware of circumstances that, if known to the insurer, could adversely affect the interests of the client or the beneficiaries of the claim.






Kotak life insurance provides the best service compare to the others company. Kotak life insurance provides the services like: Online salary ship Loan Mediclaim 65

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



The field of finance refers to the concepts of time, money and risk and how they are interrelated. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important. Financial assets, known as investments, are financially managed with careful attention to financial risk management to control financial risk. Financial instruments allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly-traded corporations. The main techniques and sectors of the financial industry:Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments and methodologies, with consideration to their institutional setting.

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


Identify relevant objectives and constraints: institution or individual goals, time horizon, risk aversion and tax considerations; Identify the appropriate strategy: active v. passive hedging strategy Measure the portfolio performance Financial management is duplicate with the financial function of the Accounting profession. However, financial accounting is more concerned with the reporting of historical financial information, while the financial decision is directed toward the future of the firm. The Accounts of the Authority for the financial year 2007-08 have been audited by the Comptroller and Auditor General of India (C&AG). C&AG, in their draft separate audit report, has advised revision in the accounts due to some wrong classifications. The same has been carried out. A copy of revised accounts for the year 2007-08 is placed at Annexure. X. The revised accounts are under submission to C&AG and final report on the same is awaited.


Form A-RA
Revenue Account for the year ended March 31, 2008
Policyholders' Account (Technical Account) (Amounts in thousands of Indian Rupees) Particulars Premiums earned; net:(a) Premium (b) Re-insurance ceded (c) Re-insurance accepted Income from investments:a) Interest, Dividends and Rent- Net of amortization (b) Profit on sale/redemption of investments c) (Loss on sale/redemption of investments) (d) Transfer/Gain on revaluation/change in fair value Other Income:(a) Contribution from Shareholders Account (b) Miscellaneous income (c) Profit on sale of fixed assets (Net) Total (A) Commission Operating Expenses related to Insurance Business Provision for doubtful debts Bad debts written off Provision for tax (Fringe Benefit Tax) Provisions (other than taxation) a) For diminution in the value of investments (Net) (b) Others Total (B) Benefits paid (net) Interim Bonuses paid Change in valuation of liability in respect 70 3,223,935 1,731,712 1,942,697 419,665 18,850 10,725 1,179,924 6,683 291 11,894,148 802,032 2,403,053 499,792 1,446 927 7,857,370 591,182 1,340,790 1,033,587 (277,949) (177,602) 200,027 (44,633) 741,465 615,842 351,360 9,715,141 (201,769) 6,218,519 (111,533) 31-Mar-08 31-Mar-07

of life policies, (a) Gross (b) Amount ceded in reinsurance (c) Amount accepted in reinsurance Provision for Linked Liabilities Total (C) Surplus/(Deficit) (D) = (A) - (B) - (C) Appropriations Transfer to Shareholders' Account Transfer to Other Reserve Balance being Funds for Future Appropriations SURPLUS/(DEFICIT) AFTER APPROPRIATION SURPLUS/(DEFICIT) BROUGHT FORWARD SURPLUS/(DEFICIT) CARRIED FORWARD TO BALANCE SHEET (a) Interim Bonuses Paid b) Allocation of Bonus to Policyholders (c) Surplus/(Deficit) shown in the Revenue Account (d) Total Surplus: [(a) + (b) + (c)] 616,308 66,179 36,347 95,117 521,191 (484,844) 54,328 11,851 (484,844) (496,695) 14,323 114,584 521,191 14,662 11,851 1,208,134 5,080,268 8,020,114 650,098 1,246,757 4,221,738 5,888,160 26,513

Form A-PL
Profit and Account for the year ended March 31, 2007
Shareholders' Account (Non-Technical Account) (Amounts in thousands of Indian Rupees) Particulars Amounts transferred from Policyholders Account(Technical Account) Income from Investments (a) Interest, Dividends and Rent Net of amortization 71 96,373 65,644 14,323 31-Mar-08 31-Mar-07

b) Profit on sale/redemption of investments c) (Loss on sale/redemption of investments) Other Income (including fund management fees) Total (A) Expenses other than those directly related to the insurance business Bad debts written off Provisions (other than taxation) a) For diminution in the value of investments (Net) b) Provision for doubtful debts (c) Others Contribution to the Policyholders Fund Total (B) Profit/ (Loss) before tax Provision for taxation Current Year Earlier Year Profit/(Loss) after tax Appropriations a) Balance at the beginning of the year Add: Effect of first time adoption of Revised AS-15 Employee Benefits (b) Interim dividends paid during the year c) Proposed final dividend (d) Tax on dividend distributed (e) Transfer to reserves/other accounts Profit/(Loss) carried to the Balance Sheet -9,271 -1,554,127

16,027 -40,773

2,484 -3,874

85,950 2,382 1,179,924 1,182,306 -1,096,357 8,322 -1,104,679

64,254 413

499,792 500,205 -435,951

8,270 -444,221 -1,109,906





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

(Amounts in thousands of Indian Rupees) Particulars Sources of Funds Shareholders Funds: Share Capital Reserves and Surplus Credit/[Debit] Fair Value Change Account Sub-Total Borrowings Policyholders Funds: Credit/[Debit] Fair Value Change Account Policy Liabilities Participating Non-participating Annuities Participating 73 3,097,235 501,753 251,545 2,122,799 404,444 194,565 521 150,463 3,303,466 520,363 3,823,829 2,443,701 520,363 2,964,064 31-Mar-08 31-Mar-07

Annuities Unit-Linked Non-Participating Unit-Linked Non-Participating Insurance Reserves Participating Non-Participating Annuities Participating Annuities, Unit-Linked Non-Participating Unit-Linked Non-Participating Linked Liabilities Fair Value Change Total Provision for Linked Liabilities Sub-Total Funds for Future Appropriation:-Linked Liabilities Others Total Application of Funds Investments Shareholders Policyholders Assets Held to Cover Linked Liabilities Loans Fixed Assets Current Assets Cash and Bank Balances Advances and Other Assets Sub-Total (A) Current Liabilities Provisions Sub-Total (B) Net Current Assets (C) = (A B) 74 12,025,83 2 619,615

236 172,419

255 92,992

-96,870 11,851 747 (400,572) 6,767,957 797,222


12,645,447 16,705,503 129,246 1,009 20,659,587

7,565,179 10,045,853 14,662 1,009 13,025,588

853,836 4,026,888 12,774,710 23,168 242,790 1,248,644 444,163 1,692,807 1,551,719 70,969 1,622,688 70,119

656,985 2,975,227 7,579,841 7,245 183,626 570,984 343,225 914,209 818,943 26,729 845,672 68,537

Miscellaneous Expenditure (To the extent not written off or adjusted) Debit Balance in Profit and Loss Account (Shareholders Account) Total 2,668,077 20,659,587 1,554,127 13,025,588

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


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


Particular Current Assets Cash and Bank Balances Advances and Other Assets Sub-Total (A) Current Liabilities Provisions Sub-Total (B)

2008 1,248,644 444,163 1,692,807 1,551,719 70,969 1,622,688

2007 570,984 343,225 914,209 818,943 26,729 845,672

Working capital = Current Assets Current Liabilities

For year 2008 Working Capital = C.A C.L = 1,692,807- 914,209 = 70,119 For year 2007 Working Capital = C.A C.L = 914,209 845,672 = 68,537


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


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

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

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

CURRENT RATIO = Current Assets / Current Liabilities.

Particular Current Assets Cash and Bank Balances Advances and Other Assets Sub-Total (A) Current Liabilities Provisions Sub-Total (B)

31-MAR08 1,248,644 444,163 1,692,807 1,551,719 70,969 1,622,688

31-MAR07 570,984 343,225 914,209 818,943 26,729 845,672

For year 2008 Current Ratio = C.A / C.L = 1,692,807 / 1,622,688 = 1.04


For year 2007 Current Ratio = C.A / C.L = 914,209 / 845,672 = 1.08

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


INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest


31-MAR08 78


Profit before tax Less Interest Profit before interest & tax



96,373 999,984

65,644 370307

INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest

FOR YEAR 2008 INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest = 999,984 / 96,373 = 10.38% FOR YEAR 2007 INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest = 370,307 / 65,644 =5.64%


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

PROPRIETORY RATIO Proprietary ratio = Proprietary funds / Total assets

Particular Proprietary fund: Share capital Reserve & surplus Subtotal (A) Fixed Assets Current Assets Subtotal (B) Total (A B) 80 3,303,466 520,363 3,823,829 242,790 1,692,807 1,935,597 1,888,232 2,443,701 520,363 2,964,064 183,626 914,209 1,097,835 1,866,229 31-MAR08 31-MAR07

Proprietary ratio = Proprietary funds / Total assets

For year 2008

Proprietary ratio = Proprietary funds / Total assets = 1,888,232 / 1,935,597

= 0.98% For year 2007

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

= 1.70%

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



Financial Acumen - Holds a stable and diversified portfolio and has received some of the highest ratings in financial strength from industrys independent rating agencies. Disciplined fund management - Years of experience in asset management, and a strong track record in managing funds - backed by the acclaimed expertise of Old Mutual plc



Innovativeness - Known for being an innovator in providing world-class pragmatic financial solutions, with a constant focus on customization and flexibility Unrelenting Customer Focus - A highly committed sales force, with customer satisfaction as the key driving force - a major differentiator Transparency in Services - Daily declaration of fund performances, regular performance benchmarking, well regulated asset management, and monthly newsletter on market updates




WEAKNESSES: Industry in nascent stage. Rural areas still not covered. Not very known among Indian population. Lack of credibility among the people because Kotak being a private player. Premiums are high as compared to its competitors. Very few branches in the country. Products:

The policy doesnt have the surrender option before third year. Plan does not offer any guarantee or assured return. Product profile is not very comprehensive. Mortality, management and administrative charges are sky scrapping as
compared to its competitors.

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



The government players will become aggressive thus growth is going to be tough. Entry of other players is not ruled out. Apprehension towards Kotak being a private life insurance company. We expect the industry to rationalize in future that is mergers and acquisitions will happen, which will impact the industry and Kotak life fortunes.

Products: Past performance of these plans is not indicative of the future performance of the plan. The sum invested in the funds is subject to market risks and there can be no assurance that the objective of plan will be achieved. All benefits payable under the policy are subject to tax laws and other financial enactment, as they exist from time to time.



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

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

Kotak has vast market and very firm grip on its traditional customers and monopoly of life insurance products.

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



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

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

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


BIBLIOGRAPHY 1 2 3 4 5 Book Life insurance (IC-33) Insurance principles & practice Life insurance Marketing management Product brochure of KLI Author S. Balachandran. P.A.S.Mani. Prof. O.S.Gupta. Philip kotler. -

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