A Summer Internship REPORT


Branding and positioning of Kotak in Indian Insurance Industry (including marketing strategies, sales process and Consumer Behavior)

Submitted by: ABINASH DASH PGPBIFSM/09-11/01 Under the Supervision of

Prof S.D Sharma Faculty (A.S.B.M)

Mr. Satyajit Rath Manager Sales (Kotak Life-Secunderabad)



Branding and positioning of Kotak in Indian Insurance Industry (including marketing strategies, sales process and consumer behavior)

Submitted by: ABINASH DASH PGPBIFSM/09-11/01

A report submitted in partial fulfillment of the requirements of MBA Program of ASIAN SCHOOL OF BUSINESS MANAGENTMENT

Distribution list: Prof. S. D SHARMA (Faculty guide) Mr. SATYAJIT RATH (Company guide)



This is to certify that Abinash Dash (PGPBIFSM/0911/01), student of Asian School of Business Management, pursuing Post Graduation Program In Banking Insurance and Financial Services Management has worked under my guidance and supervision on his project entitled Branding and positioning of Kotak in Indian Insurance Industry. To the best of my knowledge this is an original piece of work.

Mr. Satyajit Rath Manager Sales

Kotak Life. student of Asian School of Business Management.Sharma Faculty of Asian School of Business Management 4 .D. Bhubaneswar. under my guidance and supervision for the partial fulfilment of the course Post Graduation Program In Banking Insurance and Financial Services Management. the thesis fulfils the requirements of the rules and regulation related to the summer internship of the institute and I am assured that the project is up to the standard both in respect to the contents and language for being referred to the examiner. Secunderabad CERTIFICATE FROM THE FACULTY GUIDE This is to certify that the project entitled Branding and positioning of Kotak in Indian Insurance Industry is a piece of work done by Abinash Dash (PGPBIFSM/09-11/01). Simultaneously. To the best of my knowledge and belief the thesis and embodies the work of the candidate himself and has been duly completed. Prof. Asian School of Business Management. S.

D Sharma(Professor of A. S.Kotak Life Secunderabad ) and Prof.M). Satyajit Rath(Manager Sales . Abinash Dash(PGPBIFSM/09-11/01) Asian School of Business Management 5 .S.B.This project has not been submitted earlier to any other institute.Bhubaneswar DECLARATION I do hereby declare that the work embodied in this project entitled Branding and positioning of Kotak in Indian Insurance Industry Carried out by me under supervision of Mr.

Firstly. guidance and support. Special thanks to Ms. Satyajit Rath (Manager Sales) for his continuous encouragement. monitored work periodically. I am thankful to all the employees of the company for their support and encouragement while completing the project. consider it as one of my duties to acknowledge their help and thank for the same. 6 . I would also like to thank all the members of my group without whom the project wouldn’t have been so value additive. S. Amrita Singh for her guidance during the training period and after. At the same time I am very thankful to Mr. my Faculty guide for facilitating me to undertake this project. Amit Sharma (ABM) for taking time out of his busy schedule and assigning us our respective task and for continuous guidance during the project. he provided necessary academic guidance.ACKNOWLEDGEMENTS While completing the project at KOTAK LIFE INSURANCE. I am also very thankful to my company guide Mr. I would like to thank Prof. clarified all doubts throughout the project and suggested ways for improvement. D SHARMA. I feel a deep sense of gratitude for all those who helped me during the tenure of my project and thus.

8 1....... Why People buy Life Insurance. Basics of Insurance…. Literature Review……………………………………………………………………..…….…………………………………………………………………17 5.TABLE OF CONTENTS Abstract…………………………………………………………………………………. Impact of Liberalization on Indian Life Insurance Sector………………. Company Profile….……………………………………………………………… 16 4.22 7. Industry Analysis….24 8...……………………………………………………….…....45 13. 21 6. .. Analysis of Consumer behavior…………………………………………………….9 2.. Comparetive Analysis……………..Product Comparison ………………………………………………………………...26 9.…………………………………………………………………………. …………………………………………………………………. 27 10.. Why Branding is Necessary.………………………………………………………………34 12.. Sales Process……………………………………………………………………….47 14... Introduction..61 Bibliography 7 ..9 3.. .………………………………………………...…………………………………………. Conclusion…………………………………………………………………………….32 11... Marketing Strategies.

Economic. Moreover it will help us understand and study the consumer behavior towards life insurance.ABSTRACT The project aims at providing the insight into the Indian Insurance Industry and Life Insurance in particular. In this process. to observe how policies are pitched to the clients. Also it will enhance our knowledge on how various marketing concepts are implemented in a company whose basic objective is sales and marketing The project will also involve the trainees to fix up the appointments through calling the prospective customers and accompany the Field Sales Officers (FSO) on their visits to the clients. The project will help us understand the basic functionalities and details involved in a sales process starting from leads generation. Social and Technological) analysis. Also it will enhance our knowledge on how various marketing concepts are implemented in a company whose basic objective is sales and marketing. the trainee will also get to read and understand some aspects of personal selling and consumer behavior. It studies the growth in the Life Insurance sector and shows how much it is expected to grow in the coming years. The competition in the Insurance Industry is determined using Porter’s Five Forces Model. opening a sales call till closing of a sales deal. 8 . The business and environmental factors which influence the Insurance Industry is studied using PEST (Political.

Yassir A. Gross premium collection is nearly 2% of GDP (Gross Domestic Product) and funds available with LIC for investment are 8% of GDP.com. foreign insurance companies have been demanding an increase in the foreign direct investment (FDI) limit to bring more capital to their Indian ventures to help expand business. which by itself should be enough incentive to further open up this sector. the LIC has not been destabilized and the objective of deregulation has been met. Business World Online. they are eating in to the shares of established public sector companies in Indian Insurance Market. “The state mammoth.1. Thus growth in Insurance sector is important for the growth of Indian economy. 2.2% for the current fiscal year. May 1 2008 3 Gasping for Capital. insurance happens to be a mega opportunity in India.marketreserch. Pitalwalla. the monopoly of big public sector companies in life insurance as well as general (non-life insurance) market has been broken. Considering the growth potential. LITERATURE REVIEW 2With the initiation of the deregulation in the Indian insurance market. 5th march 2008 Indian Insurance Industry Forecast 2009-2011. Yet nearly 80% of Indian population is without Life Insurance cover while health insurance and non-Life Insurance continues to be below international standards. INTRODUCTION 1With the largest number of Life Insurance policies in the world. 3McKinsey’s director in India and banking industry expert Leo Puri says the opening of insurance has been a smooth deregulation process. Cover Story 2 www. Stiff competition between private and state-run insurers has boosted growth in premium income and spread insurance coverage faster in the country. Faster growth in the insurance sector is crucial to raise long term funds needed to raise infrastructure like roads and ports which can help raise economic growth to double digits from the estimated 9. Employment has grown so as the insurance business.” 1 Business World. 9 . New private players have entered the market and with their innovative approaches and better use of distribution channels and technology.

com/pressrelease/insurance 5 www. reported that a large segment of rural India is still untouched because of long distances. Assocham (Associated Chambers of Commerce and Industry of India). Assocham stated that semi-urban areas would have a share of US$ 35 Billion and urban areas would account for US$ 25 Billion in the US$ 60 Billion industry.in. The other factors that would boost the growth in this sector are improving economic scenario. Anil K Agarwal.in the 10-15 percent range.ikw. President. The heavy hand of government still dominates the market. 5In 2009-10. increasing disposable incomes. Insurance is now considered a viable financial instrument to meet different needs. and other restraints.Indiaprwire. 10 . but the market share of private insurance companies remains very low -. . The marketplace is getting competitive.” Bajaj Allianz’s Ghosh. A Research Analyst at RNCOS says that the progress in the semi-urban and rural areas would largely fuel the growth in insurance sector. the life insurance sector grew by 10%.26% as against the global penetration level of 5. reported industry chamber Assocham.indiaonestop.23%.4“Consumer attitudes and perception about insurance have changed. 6Indian insurance industry is anticipated to witness a 500% growth and reach to US$ 60 Billion in the coming four years. limits on ownership. poor distribution and high return costs. 4 www.com. Life Insurance penetration (i. thanks to swelling demand in semi-urban and rural areas. premium as a percentage of GDP) in India was 2. Insurance: Indian and Foreign Firms Test Positive for Growth Steroid Significance of Life Insurance industry in India 6 www. with price controls. and rising product demands.e.

the public and private insurance players. Issue 23. They are essentially investors looking for returns. With one of the lowest insurance penetration levels in the world. Cover Story 11 . only 20% of the total insurable population of India is covered under various life insurance schemes. Till date. the insurance market in India is not yet of commensurate size. the burden of funding the growth falls on the Indian promoter. usually no sense of a long-term commitment to the business. 7 Insurance 8 Gasping Industry: Ensuring a secure future. But many private sector insurers are struggling to raise the required capital. as outlined by the previous government. However. the penetration rates of health and other non-life insurances in India is also well below the international level. Business World Online. 8“While strong Indian banks that are partners in a life insurance venture can infuse capital. Yassir A. And this is acting as an artificial constraint on the sector’s ability to raise capital. there exists significant potential for further growth in both life and general insurance business. government bodies and the regulator . Pitalwalla. Amity EduMedia. vice-president. Insurers do need access to substantial capital in order to keep up this growth despite their initial losses. industrial houses for which this is a diversification do have a capital constraint. And because of the 26 per cent FDI cap. and now not only are they earning nothing. That’s because the government has not yet raised the ceiling for foreign direct investment (FDI) in insurance companies from 26 per cent of equity to 49 per cent.work in unison to achieve the common goal. Jan 26th.7Despite a large and growing economy. they are actually losing money. 09 for Capital. Confederation of Indian Industry (CII) strongly feels that this higher growth and increase in the spread of insurance business cannot occur in isolation. Many of them have no expertise. Ambit Corporate Finance Pte. The full potential of the Indian insurance sector can be realized only if all the stakeholders .” says Vinod Wadhwani. there is one big reason for alarm.

With growth on their mind. Ernst & Young. foreign investors want faster deregulation.“Capital constraint is the reason why some of the players in the industry haven’t been able to grow their business as compared to the top four or five players. so any artificial barrier to equity infusion is not conducive to orderly growth and could. the insurance amount is available for burial and other related expenses. its growth value has been strong during the past five years and it is expected to persist throughout most of the next five years. they get back only 26% in economic benefits. Reasons that insurance companies give for buying such a policy. threaten policyholder confidence’. national leader (global financial services). in fact. 12 . management time and expertise. who have been bringing in more capital. notably the opportunity for foreign players to go up to 49% of the joint venture. (AIG) country head Sunil Mehta says: companies can require capital at any point of time and ‘sponsors go through cycles. Controversy surround the decision to insure a child's life.” While the market for Life Insurance in India is still small. As American International Group Inc. “Each time the global players invest in information technology. The huge business in so-called `juvenile policies'. Critics' view that such coverage is excessive and expensive. In the event of child's death. With initial success has come the desire for more. O’Connell Vanessa (1996) has carried out a research which discusses whether it makes sense for parents to own life insurance on a child. The Child life insurance policy provides for the child's life. The expressive research carried out on Juvenile Insurance is mostly in the United States and it looks into reasons behind buying the Juvenile Insurance and how it has proved beneficial for both the parents and as well as the child. as well as medical and other health related expenses.” says Ashvin Parekh. It offers death-benefit protection to the insured child. McKinsey’s Puri says the key issue today is ownership.

this report presents the interrelation between parental unemployment and children’s health insurance coverage. Congress in United States created the Children's Health Insurance Program (CHIP) as a way to encourage states to provide health insurance to uninsured children. Rosemarie. The survey conducted indicates that many companies 13 . 1991.As part of the Federal Balanced Budget Act of 1997. the average death benefit claimed. As per the report nearly half of the children lose their health insurance because their parents lose or change a job. The report suggest that Life insurers must develop and implement underwriting standards and procedures designed to detect and prevent the purchase of juvenile life insurance for speculative or fraudulent purposes. Paul J Boben. Jennifer B. Concern exists that. Jacob Alex Klerman (1997) in his report Health Insurance among children of unemployed parents addresses the problem of lack of health insurance for children in the United States. far exceeded the economic losses. upon the death of an insured child. Some news stories indicate that some children are murdered in order to obtain insurance payments. They found out that because of providing Health Insurance to Children it provides not only cover against medical bill but also participate in the customer health planning. In many cases. Using the data from the 1990. Senate Bill Report (United States) (2005) on Regulating Life Insurance by Labor. such as funeral expenses. some may actually be purchasing the policies with criminal intent. Bonney (2007) evaluates the State Children’s Health Insurance Program (SCHIP) and how it has given state the freedom in providing more children with coverage. and 1992 panels of the Survey of Income and Program Participation. Deborah Senn (2007) Insurance commissioner United States says that State needs stronger guidelines for Children’s Life Insurance. Commerce and Financial Institutions evaluates 100 Life Insurance Companies to survey their practices with regard to the marketing and underwriting of juvenile insurance policies. while many well-meaning adults may innocently purchase inappropriate or unnecessary amounts of life insurance on children. and maintain records of rejected applications for 10 years.

Every insurance company should focus on innovative products and train the advisors to approach prospective customers. Using the data from the Current Population Survey (CPS). Now that education is getting costlier. race. Shailesh Bhandari and Elizabeth Gifford (2005) in their paper on Children with Health Insurance investigate patterns of children’s health insurance coverage and explore the characteristics of uninsured children. Managing Director. Smitha Tripathi (2008) looks into how Higher education which used to be remarkably cheap in India is changing with remarkable swiftness. 14 . Mr. there are much more policies than ever before. The paper discusses that parents should start saving for the child education even before he or she starts going to nursery school. If you are the type who likes starting early.offering juvenile life insurance do not appear to have strong standards in place to help prevent this kind of tragedy. These policies mature when your child comes of age and the money can be used for higher education or marriage expenses. the need for planning the education of a child is an important aspect for any parent. 2007. it might be a good idea to start looking at insurance policies that matures when your child comes of age. it provides national estimates of the number and percentage of uninsured children by age. Child Insurance is one of the fastest selling insurance products of the new era. insurance companies are also realizing that it’s important to offer new schemes. The paper provides the information about the different type of child policies and which one suits you according to your need. According to Tom Menezes. family type and family income. Ian J Watts. in his work on “Life insurance for child”. June. Tata AIG Life Insurance (2006) says that Children Life insurance products not only meet the educational needs of children but also offer insurance cover. So. Considering the costs involved for pursuing higher education and also the competitive environment that a child is exposed to.

Since the opening up of the insurance sector in India. The delinquent youths who have violated the law have typical poor physical and mental stress which leads to higher medical costs. and growing at a rapid pace of 32-34 per cent annually. Of those with whom children’s trauma is discussed and perhaps debated. The government is likely to reintroduce the Insurance Bill which proposes to increase the FDI cap in private sector insurance companies from 26 per cent to 49 per cent 9www. Sanjiv Bajaj.org. February 2010 15 . most financial planners recommend that you buy a children's policy. Moreover. Kelly J Kelleher. the industry has received FDI to the tune of US$ 525.ibef. director. some will accept the advice to go for child insurance. Almost nothing remains the same like that your child dreams keep on changing. Bajaj Capital. It’s up to you to make sure that when time comes.Alison Cuellar. according to the Life Insurance Council. The author shares her personal experience that clients accept the vulnerability of their children far more readily than their own…this is just a matter of informing them of their options. It’s a changing world. Says that "Children insurance policies ensure a disciplined saving mode for the child's future”. since the returns are tax-free. The overall amount the parent’s will be committing to their insurance package is relatively inexpensive as compared to the child’s trauma. Sue Laing (2009) brings forward an often-overlooked issue." The US$ 41-billion Indian life insurance industry is considered the fifth largest life insurance 9 market. she has the means to make her dreams come true. Jennifer A Rolls and Kathleen Pajer (2008) discuss that without the Health Insurance benefits many youths will not receive timely health care. you need not worry about what the tax structure will be like 20 years down the line.6 million. Though the returns are not very high. the financial impact that a child’s illness or injury can have on family finances in her research paper Children’s trauma: an undersold safety net. David Gambrill (2008) points out the importance of Child Insurance.

most policies last many years rather than having to be renewed each year. Today. Insurance is annually renewable except for life insurance. etc. there is insurance for innumerable activities: Business. At 3000 BC.BASICS OF INSURANCE About Insurance Insurance is a precaution against a possible unwanted outcome in life and in business. in any one year. Insurance companies group together a large number of people who all feel exposed to the same possible circumstances. This means that the insurer can change both the premium and the benefits each year depending on the risk involved. Life. Life assurance is a bit different to most insurance . The company knows that. What is Life Assurance? Life assurance is the term used when the life of a person is insured. History of insurance Early insurance goes back to the Egyptian times. branching off into numerous divisions. It has large area of operation as almost all kinds of things can be insured. Auto. Chinese merchants were known to disperse their shipments among several vessels to avoid the possibility of damage or loss. Health. It is a financial product where the insured pays a premium or series of premiums in return for monetary compensation. if a particular event happens. What is General Insurance? All non-life Insurance is termed General insurance. the total premium collected from the group of people should cover the cost of the claims made by the unfortunate few who actually suffer a loss. The insurance business works on the principle of collective strength. as well as some that provided relief to banks during the 1930's and the Great Depression. do not apply. Each of those categories includes sub-categories. And "indemnity rules". A general insurance policy is valid for 1 year after which it has to be renewed. whereby you cannot get back more than you have lost. There are some insurance companies around today in the United States that provided insurance back in the mid 1700's. Travel. 16 .

worldwide insurance premiums amounted to USD 5438 bn. Global Life insurance premium collected and market share across different continents is given in Exhibit 1 10 http://www.com/Industries/Insurance/InsuranceStatistics 17 . Profitability in Life insurance improved when compared to 2008. Of this.plunkettresearch. USD 3274 bn accounted for Life and USD 2164 bn to non-Life Insurance.5%. NonLife business remained profitable despite huge hurricane losses in the United States. expanded by 9.6 percent.4%. 10While Western Europe. the largest Life market region. South and East Asia expanded by 12. non-Life premiums increased by 1. total premium volume grew by 3. While Life premiums increased by 4. The emerging market has also grown by 9. In real terms. Premiums stagnated in North America and marginally increased in Japan and Oceania.3.75 percent.5% compared to industrialized countries at 6.5%. INDUSTRY ANALYSIS Global Insurance Sector In 2009.6 percent.

That is 500% growth in 4 years. often you cannot find any person who has got 18 . Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 4% of the country's GDP while general insurance premiums to 1. In comparison. The smaller non-Life segment contributed 430 billion INR. this representing a compound annual growth rate (CAGR) of 30% for the five-year period spanning 2005-2010.15% of India's GDP. to reach respective gross premiums of $70 billion and $90 billion in 2009. millions of people are not insured. the Chinese and the South Korean markets grew with CAGRs of 39% and 6.6% over the same period. Japan and in the emerging markets • Mergers and Acquisitions • Fast growing incomes of relatively young people which need savings as old age protection. The Life segment was the market’s most lucrative in 2009. equating to the remaining 20.5% of the market’s aggregate gross premiums. Assocham (Associated Chambers of Commerce and Industry of India) has stated in a study that by 2015. writing total gross premium of 1668 billion INR. in the rural areas and small towns. equivalent to 79. Indian Insurance Sector The Indian insurance market wrote total gross premiums of $57 billion in 2009. Especially.Reasons for Growth • High economic growth • Moderate inflation • Low interest rates and • Favorable stock markets in Europe.5% of the market’s overall value. Insurance will become $90 billion industry. India has a population of over 1 billion and except few million people.

5% of the country's GDP while general insurance premiums to 0. This is where the revolution is gradually taking place as thanks to the media. The compound annual growth rate of market in the period 2010-2015 is predicted to be 10% and it is shown in Exhibit 2. naturally. The other factors that would boost the growth in this sector are improving economic scenario. the Indian Insurance market is forecast to have a value of $70 billion. Indian Life Insurance Sector Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2. Total Life Insurance premium grew 40% to nearly $10 billion in the financial year up to march 2010. Rural and semi-urban India will have a market size of $50 billion by 2015 and that is where the main growth is going to come. In 2015. now rural people are even aware about insurance. and rising product demands. in the coming years Insurance companies will try to cater this market with new insurance schemes. In India Life is roughly three to four times bigger than non-Life. increasing disposable incomes. an increase of 11 41% since 2015. 11 Source: Data monitor. And there is potential within Life since most consumers see insurance as a tax-saving-cum investment vehicle rather as then a pure cover. And that market is growing rapidly. Insurance in India. Thus. Industry Profile 19 . non-Life premiums grew 18% that year to about $7 billion.insurance in a neighborhood.65% of India's GDP.

The number of policies written at the industry level showed a growth of 18 percent. There are 23 players in the Indian Life Insurance sector with LIC (Life Insurance Corporation) as the only public player and 22 private players. The Life Insurers covered Rs 92.Life Insurance Performance in the First Half of 2006-2007 The Life Insurers underwrote a premium of Rs1. 80. 87108 crore in the comparable period of last year record a growth of 125 per cent.45 lakh lives in the social sector with a premium of Rs. 20 . In the rural sector the insurers underwrote 48 lakh policies with a premium of 3275.09lakh crore during the six months in the current financial year as against Rs. Of the total premium underwritten. 70891 crore and the private insurers for Rs. The number of lives covered by Life Insurers under the group scheme was Rs 102 crore recording a growth of 112 per cent over the previous period. The premium underwritten by the LIC and the new insurers grew by 133.42 percent respectively over the corresponding period in the previous year.65 crore. 38399 crore.87 percent and 112. LIC accounted for Rs.65 crore.

There has also been a significant improvement in the level of customer service by the existing player on account of the high level of service from new companies. 21 . This is because unlike China. which imposed severe licensing restrictions. Life Insurance Industry – Market Share The entry of new players has brought in an increased product range including insurance and pension products and therefore more choices for the customer.4% in FY 200102. the share of private players have gone up to 36% at the end of FY 2009-10 from 1.4. the single licensing norm has seen new breed of insurance companies established itself and grow market share by rapidly increasing the market base. All of this has benefited the customer. The Life Insurance market has registered a growth of 18% in terms of new business during the FY 2009-10 over previous year. IMPACT OF LIBERALIZATION ON INDIAN LIFE INSURANCE SECTOR After 9 years of opening up of the Indian Life Insurance industry to foreign joint ventures.

About Kotak Group Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate.


About Kotak life insurance Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd (KMBL), and Old Mutual plc. Kotak Life Insurance, 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. Old Mutual was established more than 150 years ago and has 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 company’s US Life business recorded sales of $4 billion at the end of 2002. Operations in the United Kingdom are focused on wealth management, through Gerard as one of the leading private client stock broking businesses in the UK.


4. WHY PEOPLE BUY LIFE INSURANCE? While taking a policy different people have different perspectives. There can not be a comprehensive list for this, below mentioned are the most probable reasons for taking up a life insurance policy. Reason No.01 - I want to save tax It’s true that Section 80 of Income Tax Act provides deduction of the amount paid as insurance premium (with some exceptions) from the assessor’s taxable income subject to limits. If the sole purpose of buying insurance is to save on tax, then it’s the costliest way to do so. If someone does this early in his/her life with policies like endowment or money back or even ULIP, their ability to create wealth diminishes by a very high degree. Reason No.02 - I want to save/invest In my opinion, this is the worst reason for someone to buy insurance. Savings is generally understood as the amount remaining with a person after he/she meets all his/her expenses and other cash needs. If one has to build wealth, savings need to be channelized into an investment with specific time horizon and goal. Insurance is preferred choice in this regard. Reason No.03 - My agent asked (forced) me to buy this policy This is one of the commonest reasons you get if you ask some one why he/she bought insurance policy. Insurance advisors are drilled to think that “insurance is always sold and never bought” and this results in an advisor selling insurance for all wrong reasons. Survival of the insurance advisor is the sole driver here and not the need of the buyer Reason No.04 - I want to plan for my retirement Insurance companies have devised these products keeping in view the tax exemption available under the Income Tax Act. Investing here gives the option to have immediate annuities or regular pension after the vesting age.


I want to provide security for my children for their education This is one of legitimate reason for which insurance is to be bought. will be asked to target their ‘natural market’ meaning their own household members.My parents told me to buy insurance This is not surprising. Reason No. It’s always advisable to take an informed decision rather than to wilt under any pressure. However. at least in their initial years. Its no secrete that insurance advisors.06 . it could be other types of lenders also like housing finance companies.My Bank asked to purchase insurance policy This means it’s only due to the pressure exerted by bank (to safeguard it’s loan. to sell the minimum number of policies to keep their license alive.09 . and friends etc.My Uncle/Aunt recommended to buy insurance If one’s uncle/aunt is retired and/or has taken up selling insurance as second innings.05 .05 . Otherwise. The advertisements one sees in TV/Newspaper which again does not say much how insurance works. The very 25 .Reason No. car finance companies etc) that one will buy insurance. given the fact that including people who graduate from the college have not much idea about the concept of insurance. Reason No. this is the right reason for which insurance is to be bought. the purpose is ok but it’ will be much better if the policies are brought with knowing the feature & the charges that are in built with the product. he/she will not get the loan. Here again insurance is bought for reasons other than the one it’s meant for. In this situation.My friends told me to buy insurance Here’s another young person who has some awareness about insurance. Reason No. the risk to be covered is not of the child but of the parents and that to remember in mind. Reason No.08 . Reason No. But even at this stage the purpose of insurance has not become very clear. relatives.I want to cover my life risk I have come across very few people giving me this reason for buying a life insurance policy.07 . Actually.

WHY BRANDING IS NECESSARY? 26 .purpose life insurance product came into existence was to provide economic security to the dependents of the breadwinner in his/her absence. 5.

Further explained analysis will elaborate the importance of branding in Indian Life Insurance industry.93% and 7.As there are 23 players in Indian Life Insurance industry. competition is increasing day by day. 6.19%.36% respectively followed by SBI life in . Market Share and Rank by New Business Premium 27 . Kotak Life is at 9th position with the market share of 1. ICICI Prudential and Bajaj Allianz are the top two private players’ having market share 8. so it is very important to establish a company’s name in consumer’s mind. COMPARATIVE ANALYSIS New Business and Market Share Among the private players only some private players have dominated the scene.

In terms of policy count the share of private players is just 12%. so there lower limit of premium is more than that of LIC’s. The reason for LIC having more no.Performance by Policy Count LIC sold the maximum number of policies in this financial year. Almost every private player prefer to take policies with high premium. of policies is low premiums. LIC accounts for 88% of the new policies sold. Performance by Policy Count 28 .

Kotak Life has presence only in 146 cities having 213 branches. The reach of insurers covering different cities and number of branches till date is given in Exhibit 6.Reach and Distribution LIC has pan India presence having 2048 branches. Presence of Insurers across India 29 .

It has to expand in terms of number of agents and should tie up with more banks and corporate agents to reach more number of customers 30 .Distribution Tie-Ups Insurers Bajaj Allianz ICICI Prudential SBI Life HDFC Standard Birla Sun Life Max New York Kotak Life Aviva ING Vysya No of Agents 125000 100000 40000 60000 35000 30000 38000 30000 22000 Corporate Agents and Brokers 400 325 45 170 220 50 80 70 150 Banc assurance and Referral 19 10 9 7 8 5 6 6 8 Co-operative Banks 50 10 NA NA 8 9 39 26 55 LIC 1100000 195 50 35 LIC has maximum number of agents that is why it has the maximum reach and leading the insurance industry whereas Kotak Life has only 12000 agents.

Customer Satisfaction The Life Insurance Corporation of India (LIC) enjoys the confidence of two out of every three customers. 31 . But customers had one sore point. Customer Satisfaction Above mentioned comparison on various parameters justify the need to have aggressive marketing strategies against competitors. they were unhappy with LIC’s cumbersome medical examination process. When it comes to money matters people still have more faith on LIC. Reason behind this is more than 50 years old legacy and the tag of a government company. Further comparison can be done on basis of various products offered by different companies.

ULIP (Unit Linked Insurance Plans) Company Fund Management Equity Exposure (%) Entry Load (%) Premium (Rs) 32 . Most of the insurers are now focusing on unit linked plans backed by impressive stock market performance.7. Most products are sold to individuals which accounts for 86% of the new business. PRODUCT COMPARISON Product Mix Insurers Bajaj Allianz ICICI Prudential SBI Life HDFC Standard Birla Sun Life Max New York Kotak life Aviva ING Vysya LIC Endowment Money Whole Child Back Life Plan √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Pension Term Plan √ √ √ √ √ √ √ √ √ √ √ √ √ √ Ulip √ √ √ √ √ √ √ Health Mortgage Plan Plan √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Although Life Insurance penetration still at 2.53% at the end of year 2004. India offers a broad range of products covering term insurance to saving related products.

35 1. Insurance sector has vital role to play in the development in the nation economy.5 2.35 90 100 90 85 100 90 70 100 100 100 100 3 6 3 4.35 1. individual returns are between 9.35 1.5 6 4.5 4.35 1.35 1.35 1.35 1. for the insurance industry to grow 33 .5 5 Any Amount Any Amount Any Amount Any Amount Any Amount Any Amount Any Amount Any Amount Any Amount Any Amount Any Amount These ULIP Plans in operation for the last year have given average returns of 13.01%. thanks many to the entry of private insurance firm. While none of them have given a negative return. 8. MARKETING STRATEGIES Applying Marketing Tool to Analyze the Insurance Industry The insurance industry is growing in leaps & bounds in the post liberalization era.Charges (FMC) Bajaj Allianz ICICI Prudential ING Vysya Met Life TATA Aig Aviva life Max new York Birla sun life Kotak life Reliance life SBI Life 1.35 1.5 3.5 4.35 1.55% and 15. India’s GDP growth zooming at 9.5%.35 1.2 % & a stable & robust economy cannot take place keeping the insurance sector growth at bay.

porter’s five forces model and PEST analysis to analyze the insurance industry of India.e. PORTER’S FIVE FORCES MODEL i) Threat of New Entrants As most of the private players enter the Insurance Industry in the form of Joint Ventures the other companies fear that they might lose out the competition because of huge capital base and the technical and financial expertise of these new entrants. As the government is planning to increase the FDI capital to 49% more foreign big players will be attracted. 34 . 1).& bring more & more people under the insurance cover an aggressive an effective marketing trategy needs to be adopted by the insurance firms. Another threat for many insurance companies is other financial services companies entering the market. I have applied two of the most effective marketing tools i.

ii) Power of Suppliers Indian Insurance Industry is still in the early stages with almost 80% of the market untapped. Corporate these days also look out for the Insurance companies as providing Insurance cover is a mean of showing to the employees that the company care about them which not only motivates them but 35 . The player which has more money in its kitty will be able to spend more money on the promotional activities and reach large number of customers which will give them the edge over the others. There is also the possibility that the player offering high salary packages will attract the high performing individuals in the Insurance Industry which will definitely boost their income level. iii) Power of Buyers Insurance Industry is always in look out for the high premium paying clients.

iv) Availability of Substitutes Insurance companies offer the same type of products thus there is limited differentiation at the product level. • Will cross-border competition increase? • How the traditional insurance meet the risk financing needs of global corporations? • Increasing dominance towards services industry. As there is not much of product differentiation insurance companies are trying to attract new customers and retain the existing ones through better customer service. • Inflation affects interest rates which affect the 36 . This is making Insurance highly attractive and lots of new players are entering resulting in lot of competition.also increase their productivity. So the substitutes are easily available in the Insurance Industry. This doesn’t pose a threat but increases the competition and attract more players. customized products and greater efficiency. But the companies focusing on Niche market have a competitive advantage as they will be able to reach more customers and provide better service. CONSIDERATION FOR INSURERS AND CORPORATIONS • Will there be opportunities for cross-border business? • Will tax & regulation be harmonized? • Will cover be available and how much will it cost. POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL (PEST) ANALYSIS DRIVER Political • FDI may go up to 49% • No War & internal instability. • Consensus across political parties • Terrorism & naxalism under Control Economic • GDP growing @ 9% plus • Strong industrial growth • Proactive anti inflationary measures practiced • Insurance is considered as priority sector. The advantage depends upon the size of the niche and the barriers on other firms to enter that segment. v) Competitive Rivalry Insurance Industry is growing at the rate of 15% annually. As it takes almost 10 years for Insurance companies to break even new players are entering in the form of Joint Ventures. 2).

• Increasing need for environmental cover.Social • Rapid Demographic Shifts • Increase in awareness among people • More fragmented & nuclear family • Increasing propensity to invest in financial instrument Technological • Advanced computation system for Modeling capabilities • Advanced software for better statistical & actuarial • Reliable & secure data exchange technology across geographic barriers • Developed web technology for more interactive & resourceful websites. • Greater need for risk management & prevention Marketing Mix policies in Insurance 37 . • Increasing need for liability & negligence cover • Insurance better priced for catastrophe and weather risk • Competitive advantage through information optimization • More focus on core competency • Small players will find it difficult to compete effectively. cost of capital and therefore insurance take-up. • Increasing demand for cover plus additional vandalism. • Increasing need for sophisticated modeling techniques. • Will the equity market remain buoyant? • What will be the frequency of major market catastrophes? • Increasing need for funded pension and securities.

there are certain common characteristics that one can cull out from the possible strategies that companies can adopt.pure term insurance and in pure annuities. A focus on 38 . Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these. As the insurance products are similar companies can position their products by providing extra features in the form of add-ons which are called riders. Here too. service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. Many companies like Kotak Life are focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only. companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in. Term Benefits or Critical Illness Benefits to the plans at nominal extra costs. However. new business underwriting. The concept of riders/optional benefits has already been a huge innovation brought about by the new players. premium payments. long term returns generated will be more relevant than just the price of the product. such as sales. claim processing and so on. not standardized insurance products. However. which has led to customization of products for individual needs.tied agency force.Different companies can choose to position themselves differently and hence the marketing mix would be different. corporate agents and brokers and this is an area where different companies will make different choices. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company. Kotak Life provides Accident Benefits. The channel options are . In case of savings oriented products. DISTRIBUTION: Different companies may however choose different channels and different geographies to focus on. policy servicing. The key to success is in providing insurance solutions. PRICE: Price is a relevant differentiator only in two segments . Disability Benefits. PRODUCT: The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans.

Various communication tools including advertising. Technology can play a crucial role in delivering the highest standards set by the company and it will be imperative for any serious player to excel in all these. They believe that satisfied customers mean more customers. Different companies will take different approaches and it would be myriad of solutions that will be found to delight the Indian customer. building trust and being innovative are key areas in which any company will have to excel in order to do well in the long road ahead. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge. To much of his chagrin. Overall. The market needs to be developed. I. Kotak Life uses word of mouth to promote its products rather than going for advertisements. But now. Delivering service. whatever. he has also got an option of withdrawing his offer within a period of 15 days (free-look period) if he is not satisfied with the policy features. coming from LIC's and GIC's. Marketing Strategies Adopted by Players in the Insurance Sector Gone were the days when the customers were forced to take up the kind of products. direct marketing and road shows will contribute to all this and different companies will take different approaches on these.generating good investment performance and keeping a tight control on costs will help in generating good long-term maturity value for customers. the Life Insurance is set for rapid changes and growth in the years ahead. the customer has been portrayed as the king and to his delight. As Insurance is product specific. the products are redesigned and customized suiting his need taking into account his paying capacity and multiple benefits. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people. SHIFT IN THE PRODUCT PORTFOLIO 39 . ADVERTISING AND PROMOTION: The level of demand is latent and will have to be activated considerably. ICICI Prudential advertises their products through hoardings and banners to catch the eyes of the customers.

The removal of 30% cap on the premium of the base policy for the health riders alone has come as a shot in the arm for many players since this is used as an Unique Selling Proposition by many private players vis-a-vis the LIC. The products are designed with a technical team of actuaries and a product development team 40 . which have added value to the risk cover at minimal cost. LIC has also started announcing riders along with the main policies dancing to the tune of the market forces. income levels. debt and gilt edged stocks. Riders are nothing but add-ons coming along with the base policies for a slightly additional premium. III. Riders can also be availed by the existing policyholders.Earlier the entire industry was revolving around traditional investment and savings oriented plans. TAPPING THE NICHE MARKETS Private insurers are concentrating much on designing attractive products by investing heavily on research. often tailor made to provide a bundle of benefits to the customers. Now the companies are coming out with Health products as they are profitable for the companies. professionals and regions on their own instead of relying on data with state insurers. VALUE FOR MONEY (VFM) The sea change since the sector opened up has been on the way the basic products have been packaged innovatively. Kotak and Birla Sun Life have launched unit linked schemes focusing on equity. Later. Tata-AIG has Health Protector Plan that allows hospital cash. This could see many non-life players going out of the business as life insurers offer a plethora of personal line products as add-ons. studying life expectancy and health statistics across age groups. surgical benefit. Unit linked products are also gaining momentum in this country. This is possible through the introduction of riders. These schemes are expected to yield better returns when compared to normal insurance schemes. The companies are coming out with many more health products to cater to various emerging categories of health insurance. As the awareness level about these unique products is much lower. II. Riders have become the major instruments for the organizations to lure the customers away from the competitors. the companies resort to educate the customers about the salient features of the products. post-hospitalization benefit and critical illness cover.

it faces stiff competition from the private players in these segments.. to ensure that the company continues.a pure protection product . is spreading the concept in India too. Similarly a Buy & Sell Agreement cover from the same company permits a business enterprise to take out a life plan on each of its partners. * Tata AIG has offered a specialized life insurance package where the insured and the employers of the insured have a say in it. are the women and the children segments. which has adopted this practice in different places across the world.to nonsmokers at much cheaper price. * The other segments. The policyholder carries the policy with himself throughout his life. * MetLife India Insurance Company has recently launched a Charitable Trust Policy in Kolkata. Though the State insurer has had a chunk of products sufficiently for a longer time.10 lacs policy for a 10 year term for a 30 year old under the preferred term plan. The innovations for the niche markets are abounded and to name a few…. which have attracted almost all the players. even if it happens to change the organizations. the intention of the company is quite appreciated. Termed as Worksite Marketing. AIG. As against an annual premium of Rs.3400 for a similar cover. which has evoked a lot of interest especially among the Marwaris business community who want to set up a temple in their name after their death.2400 on an Rs.working closely together to target the niche market. 41 . Worksite Marketing is a distribution method used to offer voluntary insurance products (employee benefits) to employees at their place of work with the sponsorship or backing of their employer. the regular term premium works out to Rs. * Any other way to promote non-smoking? Or to reward those who give up smoking? Kotak Life has taken an initiative by offering a term insurance plan . Though there are apprehensions in the industry circle about the success of the policy. traditionally done on a deduction from the payroll.

* Even the unborn child's future can be safeguarded now. . Unlike many other insurance companies. The offspring can be insured against unfortunate congenital defects. primary agricultural cooperative societies (PACS). The rural obligation on part of the new private insurance companies is incremental in nature. all the players have turned their eyes towards the rural market. and a means of developing a good relationship with the insurance regulator. NGOs and self-help groups to sell its products in the rural areas. THRUST TO THE RURAL MARKETS Thanks to the norms stipulated by the regulator IRDA. said. use of microinsurance to get the brand into a new market. It goes from 5% to 15% over the period of 5 years for life insurance and from 2% to 5% in case of general insurance. the company immediately saw the many benefits of micro-insurance including fulfillment of corporate social responsibility. Kotak Life Insurance is looking at roping in co-operative banks. IRDA stipulates the rural obligations to be met by the players over the years. IV." Mr Gaurang Shah. "We are planning to have rural tie-ups for distributing our policies. 42 . Tata-AIG entered into micro-insurance as a condition for acquiring a license to sell insurance in India. Managing Director. State owned General Insurers have started aggressively marketing these kinds of products. Towards ensuring equitable distribution of insurance policies in every nook and cranny of the country.

* Towards serving the society in a better way. debt and other instruments during the current fiscal. Accordingly. By creating goodwill about the organizations. INFUSION OF CAPITAL Players in the Insurance sector are very confident that their pace of growth will accelerate tremendously and the infusion of capital will enable them to continue with their expansion plans and achieve sustained growth.S. LIC pays 25% of the premium collected from the villagers or Rs. CAUSE RELATED MARKETING Cause Related Marketing has become the order of the day in Insurance industry. EXPANDING THE DISTRIBUTION NETWORK 43 . For instance.V.25000 whichever is lesser for undertaking developmental work in the villages. their products. the insurers are making an attempt to change the negative attitude of the people towards insurance products. * Birla Sun Life Insurance has adopted 600 villages around Renukoot and actively involved in improving the lives of the residents VII. the corporation had invested Rs 80. Last year.000 crore in equity. Tata-AIG has a tie up with Punjab National Bank and City Financial for selling VI. TAPPING UNCONVENTIONAL DISTRIBUTION CHANNELS Nevertheless all the players depend heavily on their agents force to reach out they are trying out other distribution channels also like banks and corporate agencies in addition to the channels mentioned above. Chairman. Vijayan. said Mr T.000 crore. LIC will make a total investment of Rs 90. VIII. LIC has adopted a novel way through its Bima Grams policy.

12. SALES PROCESS A sales process is a ‘roadmap’ that identifies a logical sequence of activities that are 44 .500 to 31. The sales force would be increased from 13. Aviva Life Insurance told newspersons that the company plans to add 79 branches in 2012. taking the total to 191 in the country. On the other hand Kotak Life is quantity driven and their profitability is high as compared to the leading players though their market share is less. The quantity is driven by volume and this is done through reaching maximum number of customers. entry into the pension segment. Though they are leading in terms of market share their profitability is very low because of high claim payout ratio. Network expansion. Managing Director. The companies generally adopt two types of marketing strategies one is quantity based and other is quality based.Kotak Life has already declared its extension plans. which include the opening of 500 full service branches across the country by March.000. he said. 2012. ICICI Prudential and Bajaj Allianz are the leading private players in the Insurance sector they are infusing large capital to open up various branches across India and going for the advertisements. and new products are some of the strategies chalked out by private insurer Aviva Life Insurance. The strengthening of its distribution network will enable the company to cater to a wider group of customers and provide them with efficient customer service and enhanced support. adding that the bank is also partnering with cooperative and regional rural banks in different parts of the country. Mr Bert Paterson.

· Opening a call effectively helps to create the first favorable impression. · The advisor introduces self and his company and states the purpose of the visit. STEP 2: TELEPHONE APPOINTMENT The telephone is used only to get an appointment i. an opportunity to meet the prospect.e. 45 . STEP 3: PRESENTATION In order to get in the door or win business. STEP 1: PROSPECTING Prospecting is a conscious. directed and continuous activity of seeking. sales presentation is an important part of the sales process.consistently implemented from prospecting through to closing to address and satisfy the customer’s needs. identifying and qualifying potential customers. · It is important to create a good rapport with te customer.

STEP 4: GOAL FINDING The goal finding process is based on the need analysis. STEP 5: PRESENTING A SOLUTION A solution is then worked out after understanding the needs of the client and the amount of money he/she is ready to commit.” 46 . “An objection is an opportunity and not a rejection. Taking into consideration the client’s present financial position. his needs and shortfall are identified ascertaining and understanding the financial needs of the client. STEP 6: OBJECTION HANDLING Objection is the prospects statements about why they don’t plan to buy your product or service.

the advisor moves in to close the sale.STEP 7: CLOSING After a buying signal from the customer. Beauty of referral. STEP 8: REFERRALS Referrals are an excellent source of new business.a much more receptive person at the end. sample size and results are mentioned below: QUESTIONNAIRE FOR CUSTOMERS 1) Have you taken any life insurance policy? · Yes · No 2) Given a choice. 13. ANALYSIS OF CONSUMER BEHAVIOR A survey was conducted to understand the consumer perception towards Life Insurance. so it is very important to understand the mind of the customer. Details of the survey. whom would you prefer to buy a policy from? · LIC · Any private player 3) What makes you to insure with LIC (if you prefer it)? · A government firm · Performance · Trust · Other reason 47 . As every person has his own views. methodology.

4) How much premium you pay for your insurance policy per year? · 0-10000 · 10000-30000 · 30000-50000 · More than 50000 5) What is the main reason for taking life insurance policies? · Tax benefits · Risk hedging · Mode of investment · Liquidity 6) Have you heard of ULIP plans? · Yes · No 7) Would you be investing more if insurance policies give good returns? · Yes · No 8) What according to you is the best place to put your money? · Stock market · Mutual fund · Government bond and securities · Insurance policies · Any other 9) What are your investment objectives? · Short term dividend · Long term appreciation 48 .

· Security · Liquidity · Any other 10) Are you aware that KOTAK group as a company operates in the field of life insurance and investments? · Yes · No 11) If yes. how did you come to know about it? · Friends · Newspaper · TV Shows · Any other (please specify) 12) What influences your investment plans? · Family need · Future · Advice from friends and relatives · Advertisements and promotions 13) Which mode of interaction/communication from the company would you appreciate most? · Personal · Telephonic · Online · Letters 49 .

AGE: 50 .14) How often would you like to be intimated by the company regarding the state of your life insurance policies like ULIP? · Very frequently · Frequently · Quarterly · Annually 15) Which one is the best place to get a policy from? · ICICI Life · KOTAK Life · Bajaj Allianz Life · AVIVA Life · Birla Sun Life · TATA AIG · Max Newyork Life 16) What influenced your choice in the last question? · Brand Name · Performance · Word to mouth effect · Advertisements and promotions · Trust · Other NAME: Thank you for your valuable time.

QUESTIONNAIRE FOR EXPERTS (Note: investment in insurance refers to ULIP policies) 1) Do you agree that this is the right time for insurance companies to accept investment as a part of their business · Yes · No 2) Privatization has helped the in recognizing investment a feature in insurance · Strongly agree · Agree · Disagree · Can’t say 3) Selling investment policies is easier than selling conventional life policies nowadays · Yes · No · Can’t say 4) More competition from increased number of players often lead to unethical practices to creep in · Mostly · Sometimes · Never · No unethical practice exist 5) Investment in insurance is the best place to put in your money · Yes · No 51 .

rate the following investment options in preference. what sells the product? · Trust · Brand · Advertisements · Life advisors · Distribution channel · Any other 52 . · Mutual funds · Conventional life insurance policies · Government bonds and securities · ULIP · Stock market · Any other 7) In your opinion.6) If no. what is the most important factor for people to buy insurance policies? · Tax saving tool · Risk hedging · Investment tool · Liquidity · Any other 8) Why do people refrain from buying insurance policies? · Lack of awareness · Lack of proper after sales services · Insurance is long term investment · Unavailability of customized products · Lack of transparency · Any other 9) Despite similar product features of different companies.

10) Which age group buys maximum number of life insurance policies? (Preference order) · 21-25 · 26-30 · 31-40 · 40-50 · Above 50 11) How often does a customer go. to the company with whom he has already taken a policy? · Almost every time · Often · Rarely · Never · Can’t say 12) How would you rate the performance of kotak life till now? · Exceptional · Good · Satisfactory · Below par 13) Do you feel Kotak has enough products to satisfy the needs of the customers? · Yes · No NAME: AGE: THANKS FOR YOUR VALUABLE TIME 53 . for another policy.

Both questionnaires are put into appendices. To support these assumptions a survey was carried out. 54 . Life insurance has been considered as tax saving tool. The entry of private players in insurance sector has helped in recognizing investment as an important feature of insurance. METHOD OF SURVEY Two separate questionnaires were prepared. One questionnaire was for industry expertand other was for customers. investment option and risk hedging device. INDUSTRY EXPERT SURVEY Sample taken – 32 Important results from survey: 1.ANALYSIS OF SURVEY A survey was carried out to check the mindset of the people about insurance.

2. 55 . People still buy it for its tax saving benefits. Life insurance policy is still considered as tax saving tool than any other device. ULIP is considered the best place to put money by industry expert 3.

56 . Life insurance agents are still the most important vehicle in selling of life insurance products.4. Lack of awareness and believe that insurance is long term investment refrain people from buying insurance product. 5.

They don’t want to put their money in unknown hands. 2. Most of the clients buy life insurance because it provides a very good tax saving advantage rather considering it as a risk-hedging tool.CUSTOMER SURVEY Sample taken. Long term and short tern gain has equal influence on their investment choice 57 . most people are interested in making investment in mutual fund followed by ULIP product 3.With market doing well and mutual fund giving huge return in short term.58 Important results from survey: 1. Majority of people wants security on their investment.

4. Family remains single most important influencer on the investment decision of an individual followed by secure future 58 .

Purpose and objectives of undertaking primary data collection: • It helped us to explore the market on a broader basis. Selling might be a difficult issue but getting the questionnaire being filled was not a difficult issue. I had the responsibility of getting the questionnaire filled up. In this way. • We got to know as to what is the perception of customers and experts of the industry and the company as well. I got a number of questionnaires filled by the people living in my apartment in which most of them are working. • The ground realities might be at times very different from our perception and knowledge. Most of the people we interacted had been very new to job like my friends who have been working in Bhubaneswar mostly in software firms. The list also 59 . Making an analysis from already available data might be anybody’s cup of tea but generating primary data is something what was expected from us. we got a chance to interact with a number of people. A primary survey is the best way to get a conclusion here. • SIP is meant to give the students a first hand understanding of how the actual work goes on. The learning was vital and much more than what is depicted in the questionnaire • A survey makes you better prepared to face the same challenge if given to you Again • It helps to sharpen one’s analysis skill as well • The survey always helps to check the proximity between whatever which has been read and what the ground realities are The people we interacted were broadly based from Hyderabad as far as customers are concerned. After having exhausted all our connections.

People might be interested in a similar plan if offered by LIC. • People still do not consider insurance as a need and thus do not hold this industry in very high terms. it was very clear that the brand name matters and LIC happens to be the biggest brand in India. The expert mainly included employees of Kotak life insurance.included people working as life agents in Kotak life insurance. We also questioned some of the people whom we meant to meet for sales purpose. • Private players still have a long way to go to compete with LIC as their presence is most of the areas is negligible 60 . Interestingly. it hardly matters for them that a certain private players are working in collaboration with certain firms which are much bigger than LIC. Learning from the Exercise • People are still reluctant to invest in private players when compared to LIC. • We might perceive LIC as an inefficient company which is not very good at delivering services but people which includes even the educated youth think differently( the opposite I mean) • In most of the cases.

In 2009. but still private players have a lot of scope in Indian Life Insurance Industry. Finally it can be said that though it is very tough to compete with LIC. CONCLUSION Over the past decade there has been strong consolidation trend in the Global Insurance Industry. and rising product demands are the reasons behind the growth. Kotak Life has presence only in 146 cities having 213 branches.14.9%. increasing disposable incomes. worldwide insurance premium volume grew by 3. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. In India Life is roughly three to four times bigger than non-Life. Insurance happens to be a mega opportunity in India. Whereas private players like Kotak are striving to increase its market share and growth to be among the top players in the Life Insurance sector. The compound annual growth rate of market in the period 2010-2015 is predicted to be 10% Indian Life Insurance sector grew 41% to nearly $12 bn in the financial year up to march 2009 in terms of premium collected. Among the private players only some private players have dominated the scene. LIC has pan India presence having 2048 branches. As it has almost 92% persistency rate.1%. While Life premiums increased by 4. which is highest in the market. And there is potential within Life since most consumers see insurance as a tax-saving-cuminvestment vehicle rather as then a pure cover. . Improving economic scenario. Kotak Life scores very high in terms of customer satisfaction.01%. In terms of new business premium Bajaj Allianz and ICICI Prudential are the top two private players whereas Kotak Life is at the Ninth position. With largest number of life insurance policies in force in the world. 61 . Up To January 2010 LIC’s market share increased to 80% recording a growth of 123% as compared to last year. non-Life premium increased by 2.

kotaklifeinsurance.in www.com/pressrelease/insurance www.irdaindia.com www.iaifm.com www.Indiaprwire.Bibliography: www.com www.com www.ikw.wikipedia.bimaonline.marketreserch.com www.com 62 .

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