PROJECT REPORT ON

“A STUDY OF KOTAK MAHINDRA BANK LIFE INSURANCE

IN KALYAN CITY”
Semester VI

Academic Year 2021-22

A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
B.Com(B&I)
Under the Faculty of Commerce
By
Name of the Learner

Roll No.
Under the Guidance of
Asst. Prof. Name of the Guiding Teacher

Saket College of Arts, Science and Commerce, Kalyan East

UNIVERSITY OF MUMBAI
 PROJECT REPORT ON

“A STUDY OF KOTAK MAHINDRA BANK LIFE INSURANCE

IN KALYAN CITY”
Semester VI

Academic Year 2021-22

A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
B.Com(B&I)
Under the Faculty of Commerce
By
Name of the Learner

Roll No.
Under the Guidance of
Asst. Prof. Name of the Guiding Teacher

Saket College of Arts, Science and Commerce, Kalyan East

UNIVERSITY OF MUMBAI
 SAKET GYANPEETH’S

SAKET COLLEGE OF ARTS, SCIENCE & COMMERCE

(Affiliated to University of Mumbai)

NAAC Accredired B Grade

Department of B.Com(B&I)

CERTIFICATE
This is to Certify that
YASH GAWANDE

Has Completed the Project Work Entitled

Submitted the same in the Partial Completion of B.Com(B&I) Degree

under our Supervision in Saket College of Arts, Science and Commerce
in the Academic Year 2021-22.

Head of the Department

Internal Examiner External Examiner Principal

 Certificate

This is to certify that Ms/Mr _____________________________________has

worked and duly completed her/his Project Work for the degree of B.Com(B&I)
under the Faculty of Commerce and her/his project is entitled, “Title of the
project” under my supervision.

I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree or
Diploma of any University.
It is her/ his own work and facts reported by her/his personal findings and
investigations.

Asst. Prof. Mr. Ajay Shelar

Name and Signature of

Guiding Teacher

Date of submission:
 Declaration

I the undersigned Miss / Mr. Name Of The Learner here by, declare
that the work embodied in this project work titled “Title of the
project”,forms my own contribution to the research work carried out
under the guidance of Asst . Prof . Ajay Shelar is a result of my own
research work and has not been previously submitted to any other
University for any other Degree/ Diploma to this or any other
University.

Wherever reference has been made to previous works of others, it has

been clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.

Name and Signature of the learner

Certified by
Asst. Prof. _______
Name and signature of the Guiding Teacher
 Acknowledgment

To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels

and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to
do this project.

I would like to thank my Principal Dr. Vasant Barhate for providing

the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator Asst. Prof .Athira M

K , for her moral support and guidance.

I would also like to express my sincere gratitude towards my project

guide Name of the Guide whose guidance and care made the project
successful.

I would like to thank my College Library, for having provided various

reference
books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.
 INDEX

Sr. No. Particular Page No.

 CHAPTER – I
INTRODUCTION
INTRODUCTION
The story of insurance is probably as old as the story of mankind. Tendency of a human being
to secure themselves against loss and disaster has been from the starting of world. They 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 as per records.

Kotak Mahindra Bank Life Insurance is a subsidiary of Kotak Mahindra Group, one of
India's leading financial institutions. The company provides a wide range of life insurance
products to cater to the diverse needs of its customers.

Kotak Mahindra Bank Life Insurance offers various types of life insurance policies,
including term insurance, ULIPs, endowment plans, and child plans. These policies provide
financial security to individuals and their families in the event of unforeseen circumstances
such as death, disability, or critical illness.

The company has a strong distribution network with over 1,200 branches and more than
50,000 agents spread across India. It also offers online services, making it convenient for
customers to buy and manage their policies.

Kotak Mahindra Bank Life Insurance has received several awards and accolades for its
customer service and innovative products. The company has been rated as one of the top life
insurance companies in India by various independent agencies and publications.

In this study, we can analyze the performance of Kotak Mahindra Bank Life Insurance in terms
of its financial stability, market share, customer satisfaction, and product offerings.
Additionally, we can evaluate the effectiveness of the company's distribution network and
online services. By studying these factors, we can gain a better understanding of the company's
overall performance and position in the Indian life insurance market.

To further analyze Kotak Mahindra Bank Life Insurance, we can examine the company's
financial performance. The company's annual reports can provide insight into its
profitability, revenue growth, and asset quality. Additionally, we can compare the company's
financial performance to other leading life insurance companies in India to determine its
competitive position.

We can also study the market share of Kotak Mahindra Bank Life Insurance and its competitors
in the Indian life insurance market. This analysis can help identify areas where the company
may need to improve its market position, such as expanding its product offerings or increasing
its distribution network.

Customer satisfaction is another critical factor that can influence the success of Kotak
Mahindra Bank Life Insurance. We can examine customer feedback and reviews to assess
the quality of the company's customer service, claims processing, and overall customer
experience.

Finally, we can analyze the company's product offerings to determine their suitability for
different customer segments. For instance, we can evaluate the competitiveness of the
company's term insurance plans, ULIPs, and child plans compared to other life insurance
companies in India.

Overall, a comprehensive study of Kotak Mahindra Bank Life Insurance can provide valuable
insights into the company's performance and help identify areas where it can improve to
maintain its competitive position in the Indian life insurance market.
1.1SELECTION OF PROBLEM

Low customer retention: One of the most significant problems for life insurance companies
is low customer retention. Customers may decide to switch to other insurance providers if
they feel dissatisfied with the services or if they find a better deal elsewhere.

Lack of customer awareness: Many customers may not be aware of the various types of life
insurance policies and the benefits they offer. Kotak Mahindra Bank's life insurance division
may need to invest in more education and awareness campaigns to help customers
understand their options and make informed decisions.

Increased competition: The life insurance industry is highly competitive, and Kotak
Mahindra Bank's life insurance division may need to develop innovative products and
services to stay ahead of its competitors.

Regulatory changes: Changes in regulations can also affect the operations of life insurance
companies. Kotak Mahindra Bank's life insurance division may need to stay updated with the
latest regulatory changes and adapt their policies and procedures accordingly.

Technology disruption: Technology is rapidly changing the landscape of the life insurance
industry, and companies like Kotak Mahindra Bank's life insurance division may need to
keep up with the latest trends and technologies to remain relevant and competitive.

Inadequate distribution network: Life insurance companies rely on a strong distribution

network to reach customers and sell their products. Kotak Mahindra Bank's life insurance
division may face challenges in expanding its distribution network or finding the right
partners to sell its policies.

Claims management: Efficient claims management is crucial for customer satisfaction and
loyalty. Delayed or rejected claims can damage the company's reputation and customer trust.
Kotak Mahindra Bank's life insurance division may need to invest in improving its claims
management processes to ensure quick and fair settlement of claims.

Underwriting and risk assessment: Life insurance companies need to accurately assess the
risks associated with each policy to determine premiums and payouts. Kotak Mahindra
Bank's life insurance division may face challenges in underwriting and risk assessment,
particularly for complex policies or for customers with pre-existing health conditions.
Fraud prevention: The insurance industry is vulnerable to fraud, and life insurance
companies need to invest in fraud prevention measures to protect themselves and their
customers. Kotak Mahindra Bank's life insurance division may need to enhance its fraud
detection and prevention systems to minimize the risk of financial losses.

Changing customer preferences: Customer preferences and expectations are constantly

evolving, and life insurance companies need to adapt to these changes to remain relevant.
Kotak Mahindra Bank's life insurance division may need to conduct regular market research
to understand changing customer needs and preferences and adjust its products and services
accordingly.
 1.2HISTORY

Kotak Mahindra Life Insurance Company Limited is a private life insurance company in India.
The company was founded in 2001. It provides insurance to 45.4 million customers and has 287
branches in around 148 cities and towns in India with 73,000 agents.

Corporate history

The Kotak Mahindra Group was founded in 1985 as a provider of financial services. In
February 2003, Kotak Mahindra Finance Ltd (KMFL), the Group's flagship company, received
banking license from the Reserve Bank of India (RBI) to conduct banking operations in the
country and was renamed as Kotak Mahindra Bank, the parent company of Kotak Life
Insurance. The company started operations in 2001 on a 74:26 joint venture between Kotak
Mahindra Bank Ltd and Old Mutual Plc. In 2017, Kotak Mahindra Bank bought Old Mutual's
26 percent stake in the life insurance joint venture for Rs 1,293 crore, subject to approvals,
making the life insurance company fully owned by Kotak Mahindra Group.

Kotak Life Insurance's products include rural plans, term plans, savings, children, retirement,
and investment plans at nominal premium rates to be affordable by individual investment
requirements that can cater to their lifetime requirements, and each insurance plan is
designed to provide maximum protection in addition to benefits and to keep in mind the
different sections of society. To facilitate the sale of its products the company has a network
of branch offices distributed across the country, individual agents, insurance agencies and
offices, and individual and firm brokers for claim settlements and these products are also
available online through aggregators and the company website.

In 2019, Kotak Life Insurance and Instantpay collaborated to introduce insurance to first-
time consumers and digitally empower society's semi-urban sections on various insurance
products. As per the agreement, the latter will use its vast network of more than 1 lakh
merchants to introduce Kotak Life Insurance's products through its InstantPay portal or app,
which currently has an annual premium as low as Rs 200.

In 2020, the company launched Kotak Health Shield, providing benefits like daily
hospitalisation cash benefit, waiver of premium on being diagnosed with minor conditions, and
income benefit on being diagnosed with major illnesses and forayed into the comprehensive
health insurance segment.
 In 2023, Kotak Life Insurance launched a short-term insurance product, Kotak Protect India,
which was targeted at adult customers below 35 years of age. The product has a coverage
term ranging from 1 year to 5 years.

The company currently has 49 products including 19 group products and 30 retail products,
and additionally offers 19 rider options (as on March 2023). As on Feb 2023, it had more
than 280 branches in around 148 cities in India and more than 73,000 advisors.

Some of the major landmarks of the company from the date of its inception are:

2017- Became a 100% owned entity after Kotak Bank bought out the minority share of Old
Mutual plc.

2014- Total assets under management (AUM) stood at Rs 12,104 crore (US$ 1.93 billion) by
the end of March 31, 2014.

2013- Total assets under management (AUM) stood at Rs 10,964 crore (US$ 1.75 billion) by
the end of March 31, 2013.

2010- Launching its e-insurance portal.

2009- Reports 39 percent growth in gross premium for the financial year 2008-09
 1.3 Brief Profile on the Study Area

The study area of Kotak Mahindra Bank's life insurance division is the life insurance
industry in India. Kotak Mahindra Bank is a leading private sector bank in India that offers a
wide range of financial products and services, including life insurance.

Kotak Mahindra Bank's life insurance division offers various life insurance products such as
term insurance, endowment plans, unit-linked insurance plans (ULIPs), and retirement plans.
These products are designed to provide financial security to individuals and their families in
case of unforeseen circumstances such as death, disability, or critical illness.

The life insurance industry in India is growing rapidly, with an increasing number of
individuals realizing the importance of life insurance and purchasing policies. However, the
industry is also highly competitive, with many players offering similar products and services.
To stay ahead of the competition, Kotak Mahindra Bank's life insurance division needs to
continually innovate and improve its products and services, while also keeping a close eye
on changing customer preferences and regulatory changes.

Overall, the study area of Kotak Mahindra Bank's life insurance division is focused on
providing high-quality life insurance products and services to customers in India, while also
navigating the challenges and opportunities presented by the dynamic and competitive life
insurance industry.

The life insurance industry in India is regulated by the Insurance Regulatory and
Development Authority of India (IRDAI), which sets guidelines and standards for insurers
and agents. The IRDAI also monitors the financial performance of insurers and takes action
against companies that fail to comply with regulations.

Kotak Mahindra Bank's life insurance division operates through a network of branches and
agents across India, with a strong focus on digital channels and online sales. The division
also offers customer support through various channels such as phone, email, and chat, to
ensure that customers receive timely and efficient service.

The study area of Kotak Mahindra Bank's life insurance division also includes risk
management and underwriting practices. The division has a team of underwriters who assess
the risk associated with each policy and determine the appropriate premiums and payouts.
The division also has a robust risk management framework in place to ensure that it can
identify and mitigate potential risks.
In addition, the study area of Kotak Mahindra Bank's life insurance division also includes
marketing and branding strategies. The division runs various marketing campaigns and events
to promote its products and services and build brand awareness. The division also invests in
customer engagement programs to build long-term relationships with customers and enhance
customer loyalty.

Overall, the study area of Kotak Mahindra Bank's life insurance division is multifaceted and
encompasses various aspects such as product development, sales and distribution, risk
management, customer service, and marketing. By focusing on these areas and continuously
improving its offerings, Kotak Mahindra Bank's life insurance division aims to become a
leading player in the Indian life insurance industry.
1.4Definition/s of Related Aspects

Life insurance: Life insurance is a contract between an individual and an insurance company,
where the individual pays premiums in exchange for the insurer's promise to pay a sum of
money to the individual's designated beneficiary in case of the individual's death.

Term insurance: Term insurance is a type of life insurance that provides coverage for a
specified period, typically 10-30 years. If the insured individual dies during the term of the
policy, the insurer pays a death benefit to the designated beneficiary.

Endowment plans: Endowment plans are a type of life insurance that provides both death
benefit and savings benefits. The policyholder pays premiums, and the insurer invests the
money to generate returns. If the insured individual dies during the policy term, the
designated beneficiary receives a death benefit. If the insured individual survives the policy
term, the policyholder receives a lump sum payment at the end of the policy term.

Unit-linked insurance plans (ULIPs): ULIPs are a type of life insurance that combines the
benefits of insurance and investment. The policyholder pays premiums, and the insurer
invests the money in a variety of investment options such as equity, debt, or a combination
of both. The policyholder has the flexibility to choose the investment options and can switch
between them as per their preference. If the insured individual dies during the policy term,
the designated beneficiary receives a death benefit. If the insured individual survives the
policy term, the policyholder receives the accumulated value of the investments.

Retirement plans: Retirement plans are a type of life insurance that provides financial
security to individuals after they retire. The policyholder pays premiums, and the insurer
invests the money to generate returns. At the end of the policy term or retirement, the
policyholder receives a lump sum payment or regular payments, which can be used to
support their living expenses.

Underwriting: Underwriting is the process of assessing the risk associated with an insurance
policy and determining the appropriate premiums and payouts. Underwriters use various
factors such as age, health condition, occupation, and lifestyle habits to evaluate the risk and
determine the cost of the policy.

Claims management: Claims management is the process of handling insurance claims and
ensuring timely and fair settlement. Claims management involves verifying the authenticity
of the claim, assessing the extent of the loss, and determining the amount of the payout.
 Customer service: Customer service is the process of providing assistance and support to
customers before, during, and after the purchase of a life insurance policy. Good customer
service can enhance customer satisfaction and loyalty.

Marketing: Marketing is the process of promoting and selling life insurance products and
services to potential customers. Marketing involves various activities such as advertising,
sales promotion, public relations, and direct marketing.

Risk management: Risk management is the process of identifying, assessing, and mitigating
potential risks associated with life insurance policies. Effective risk management can help
minimize financial losses and enhance the company's financial stability.
1.5Different Concepts Pertaining to the Problem

Digital transformation: One of the key challenges faced by Kotak Mahindra Bank's life
insurance division is the need to embrace digital transformation. With the increasing use of
technology in the insurance industry, the division needs to adopt new digital tools and
platforms to enhance customer engagement, streamline operations, and improve efficiency.

Competition: The Indian life insurance industry is highly competitive, with many players
vying for market share. Kotak Mahindra Bank's life insurance division needs to develop
innovative products and services and adopt effective marketing strategies to stay ahead of the
competition.

Regulatory compliance: The life insurance industry in India is highly regulated, with strict
guidelines and standards set by the Insurance Regulatory and Development Authority of
India (IRDAI). Kotak Mahindra Bank's life insurance division needs to ensure that it
complies with all regulatory requirements and guidelines to avoid penalties and reputational
damage.

Risk management: The life insurance industry involves a high level of risk, including
mortality risk, investment risk, and operational risk. Kotak Mahindra Bank's life insurance
division needs to have a robust risk management framework in place to identify and mitigate
potential risks and ensure the company's financial stability.

Customer retention: Retaining customers is critical to the long-term success of Kotak

Mahindra Bank's life insurance division. The division needs to develop effective customer
retention strategies, such as personalized services, loyalty programs, and superior customer
service, to ensure that customers stay with the company over the long term.

Product innovation: The life insurance industry is constantly evolving, with new products
and services being introduced all the time. Kotak Mahindra Bank's life insurance division
needs to continuously innovate and introduce new products and services to meet the
changing needs of customers and stay ahead of the competition.

Sales and distribution: Sales and distribution are critical to the success of Kotak Mahindra
Bank's life insurance division. The division needs to have an effective sales and distribution
strategy in place to reach potential customers and convert them into loyal customers. This
may involve developing partnerships with banks, brokers, and other distributors, as well as
leveraging digital channels to reach customers.
Overall, these concepts are essential to understanding the challenges faced by Kotak
Mahindra Bank's life insurance division and developing effective strategies to address them.

CHAPTER – II
RESEARCH METHODOLOGY
2.1 OBJECTIVE
The objectives of the present study are as following:

Proper understanding and analysis of life insurance industry.

To know about brand awareness of Kotak Life Insurance and customer’s preference
about Kotak Life Insurance.

Conduct market survey on a sample selected from the entire population and derive
opinion on that research.

To help company in establishing a network of Life Insurance Advisors and to promote

the benefits those are provided by Kotak Life Insurance to its Life Insurance
Advisors.

To offer suggestions based upon findings.

2.2 Nature of study

● The study focuses on Kotak Mahindra Bank's life insurance division.

● It examines the policies and products offered by the division.

● It evaluates the performance and financial results of the division.

● The study is focused on the specific context of Kotak Mahindra Bank's life insurance
division and the Indian market for life insurance.

● It aims to identify the strengths and weaknesses of the division, evaluate its competitive
position in the market, and assess the opportunities and challenges it faces.

● The study may also consider the opinions and experiences of stakeholders such as
customers, employees, and industry experts.
All the findings and conclusions are based on the survey done in the working area within time limit. I
tried to select a sample representative of the whole group during my job training. I have collected data
from 100 respondents for studying Customer Buying Behaviour and Market Segmentation, selected
randomly from different areas in Jaipur such as:

Public places like shopping centers, malls, restaurants etc.

Employees of Government Departments

Employees of Private Firms

Business / Self Employed

For recruitment of Life insurance Advisors, I have collected data from 200 respondents from following
groups:

▪ Chartered Accountants

▪ Tax Consultants

▪ Businessmen

▪ Share Brokers

▪ Lawyers

▪ Working Professionals

▪ House Wives

▪ Retired Persons
2.3 RESEARCH DESIGN

Research was initiated by examining the secondary data to gain insight into the problem. The primary
data is evaluated on the basis of the analysis of the secondary data.

2.4 DEVELOPING THE RESEARCH PLAN

The data for this research project has been collected through self administration. Due to time limitation
and other constraints direct personal interview method is used. A structured questionnaire was framed as
it is less time consuming, generates specific and to the point information, easier to tabulate and interpret.
Moreover respondents prefer to give direct answers. In questionnaires open ended and closed ended, both
the types of questions has been used.

2.5 COLLECTION OF DATA

Secondary Data: It was collected from internal sources. The secondary data was collected on the basis of
organizational file, official records, news papers, magazines, management books, preserved information
in the company’s database and website of the company.

Primary data: Individual respondents, Chartered Accountants, Tax Consultants, Insurance Agents, Auto
loan providers were personally visited and interviewed. They were the main source of Primary data. The
method of collection of primary data was direct personal interview through a structured questionnaire.

2.6 SAMPLING PLAN

Since it is not possible to study whole population, it is necessary to obtain representative samples from
the population to understand its characteristics.

▪ Sampling Units: Individual respondents for studying Customer Buying Behaviour and Market
Segmentation, selected randomly from different areas in Jaipur, like various shopping malls and markets,
Government Offices. Chartered Accountants, Tax Consultants, Lawyers, Business Men, Professionals and
House Wives of Jaipur for recruitment of Life Insurance Advisors

▪ Sample Technique: Random Sampling

▪ Research Instrument: Structured Questionnaire

▪ Contact Method: Personal Interview

2.7 SAMPLE SIZE

The Sample Size Taken For The Current Study is 50

▪ Study of Customer Buying Behaviour and Market Segmentation: 50 respondents

▪ Recruitment of Life Insurance Advisors for Kotak Life Insurance: 50 respondents

DATA COLLECTION INSTRUMENT DEVELOPMENT

The mode of collection of data is based on Survey Method and Field Activity. Primary data collection is
based on personal interview. I have prepared the questionnaire according to the necessity of the data to be
collected.

The research is confined to certain parts of Jaipur and does not necessarily show a pattern applicable to all
of country.

Some respondents were reluctant to divulge personal information which can affect the validity of all
responses.

In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The
environmental changes are vital to be considered in order to assimilate the findings.
INDIAN INSURANCE INDUSTRY

Life insurance came to India from England in 1818 when oriental life insurance company started in
Calcutta by Europeans. After this many insurance companies had been started in India. But these
companies were looking after only the needs of European community established in India. Indian people
were not being insured by these companies. First Indian life insurance company came as Bombay mutual
life insurance assurance. Second company was Bharat insurance company came in 1896. After this the
united India in Madras, national Indian and national insurance in Calcutta and the co-operative
assurance in Lahore were established in 1906.

To regulate Indian insurance business first insurance act came in 1912 as life insurance company act and
provident fund act. These acts consist of premium rates tables and periodical valuations of companies.
In the first two decade of 20th century many life insurance companies were started. So the insurance act
came in 1938 to governing life and non life insurance companies and to provide strict state control. In
1956 the life insurance business in India was nationalized. In 1956 life insurance corporation of India
(LIC) was created to spreading life insurance much more widely particularly in rural areas. In that year
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. In 1957 the business of LIC of sum
assured of 200crores, 1000crores in 1970, and 7000crores in 1986.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:

In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous
body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in
April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer
satisfaction through increased consumer choice and lower premiums, while ensuring the financial
security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for
application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority
has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000
onwards framed various regulations ranging from registration of companies for carrying on insurance
business to protection of policyholders’ interests.

Role of IRDA:
Protecting the interests of policyholders.

Establishing guidelines for the operations of insurers and brokers.

Specifying the code of conduct, qualifications and training for insurance intermediaries and agents.

Promoting efficiency in the conduct of insurance business.

Regulating the investment of funds by insurance companies.

Specifying the percentage of business to be written by insurers in rural sectors.

Handling disputes between insurers and insurance intermediaries.

Changing perception of Indian customers:

Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they
demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of
changing aspirations and growing demand of Indian consumers.

For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and
was practically forced onto consumers on a “Take-it-As-it-basis”. All that got changed with passage of
IRDA act in 1999. New insurance companies have come into existence leading to open competition and
hence better products for customers.

Indian customers have become very sensitive to Coverage / Premium as well as the Products (read Risk
Solution), that is given to them. There are not ready to accept any product, no matter even if that is
coming from the market leader, should that product is not serving the purpose. A case in point is ULIP
Product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and
Liability Insurance in the Non-life segment are new age Avatar. The new products are constantly being
demanded by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk
Under-writers) and Brokers to respond.

Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section.
Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere
Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now
Indian customers are aware of insurance industry and insurance products provided by companies. They
have become more sensitive. They would not accept any type of insurance product unless it fulfills their
requirements and needs. In historic day’s customers looking at insurance products as a life cover which
can provide security against any unacceptable events, but now customers look at insurance products as
an investment as well as life cover. So today’s customers wants good return from the insurance
companies. The Indian customer’s forms the pivot of each company’s strategy.
 Investment of Indian household savings (as a % in different sector)

BANK DEPOSITS 39

CORP. BANKS 2

SHARES AND DEBENTURES 1

MUTUAL FUNDS 2

NBFC’S 3

GOVT. BONDS 13

INSURANCE 13

PF/ RETIRE FUNDS 21

CURRENCY 6

Changing face of Indian insurance industry:

After the Insurance Regulatory and Development Authority Act have been passed there has been
establishment of many private insurance companies in India. Previously there was a monopoly
business for Life Insurance Corporation of India (L.I.C.) who was the only life-insurance company for
the people till 2000. L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of
private life insurance companies there is a great competition in Indian market now. Everyone is trying
to capture the fresh market here and penetrate it with aggressive marketing strategies. Today
lifeinsurance is not only limited up to just life risk cover and maturity period bonuses but changed to
greater return from the investments. With the introduction of the unit linked insurance policies these
companies are investing the money in different investment instruments like shares, bonds,
debentures, government and other securities. People are demanding for higher returns with the life
risk cover and private companies are giving 30- 40% average growth per annum.
 These life-insurance companies have every kind of policies suiting every need right from financial
needs of, marriage, giving birth and rearing up a child, his education, meeting daily financial needs of
life, pension solutions after retirement. These companies have every aspects and needs of our life
covered along with the deathbenefit.
In India only 25% of the population has life insurance. So Indian life- insurance market is the target
market of all the companies who either want to extend or diversify their business. To tap the Indian
market there has been tie-ups between the major Indian companies with other International insurance
companies to start up their business. The government of India has set up rules that no foreign
insurance company can set up their business
individually here and they have to tie up with an Indian company and this foreign insurance company
can have an investment of only 24% of the total start-up investment.

Indian insurance industry can be featured by:

Low market penetration.

Ever growing middle class component in population.

Growth of customer’s interest with an increasing demand for better insurance products.

Application of information technology for business.

Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has more than a dozen private players, each of
which are making strides in raising awareness levels, introducing innovative products and increasing
the penetration of life insurance in the vastly underinsured country. Several of private insurers have
introduced attractive products to meet the needs of their target customers and in line with their
business objectives. The success of their effort is that they have captured over 28% of premium
income in five years.
The biggest beneficiary of the competition among life insurers has been the customer. A
wide range of products, customer focused service and professional advice has become the mainstay
of the industry, and the Indian customer’s forms the pivot of each company’s strategy. Penetration
of life insurance is beginning to cut across socioeconomic classes and attract people who have
never purchased insurance before.
Life insurance is also now being regarded as a versatile financial planning tool. Apart from
the traditional term and saving insurance policies, industry has seen the entry and growth of unit
linked products. This provides market linked returns and is among the most flexible policies
available today for investment. Now products are priced, flexible, and realistic and sustain so people
in better position to understand the risk and benefits of the product and they are accepting these
innovative products.

So it is clear that the face of life insurance in India is changing, but with the changes come a
host of challenges and it is only the credible players with a long term vision and a robust business
strategy that will survive. Whatever the developments, the future and the opportunities in this
industry will surely be exciting.
The number of companies in Insurance particularly in Life Insurance has changed drastically now the
number is in 17. List of them are mentioned as below :
1. ICICI Prudential Life Insurance
2. TATA AIG Life Insurance
3. Max New York Life Insurance
4. AVIVA Life Insurance
5. Bharti AXA Life Insurance
6. Kotak Mahindra Life Insurance
7. Reliance Life Insurance
8. SBI Life Insurance
9. HDFC Standard Life Insurance
10. Birla Sun Life Insurance
11. Sahara Life Insurance
12. ING Vysya Life Insurance

Increasing growth since liberalization:

YEA LIC (in billion Rs.) PRIVATE PLAYER

FY 03 110 10

FY 04 120 20

FY 05 130 40

FY 06 140 60

FY 07 240 160

Possibilities for insurance companies in India:

Further deregulation of the market.

Greater concern for the customers.
Newer products and services.
Competition and quality consciousness.
Cost effective operations.
Restructuring of the public sector.
Consolidation of domestic insurance markets.
 Technology driven shift in product design.
Actual operations and distribution.
Convergence of financial services.

GLOBAL INSURANCE INDUSTRY

Globally, insurers increasingly are pressured by the demands of their clients. The development of
global insurance industry over the past few years was influenced by booming stock markets which
enabled considerable capital gains to be made in non life business. Increase in insurers equity capital
increased underwriting capacity, while demand did not develop at the same pace, resulting in decrease
in insurance policies prices. The stock market boom of the past few years led to demand for unit linked
insurance products.

The global insurance industry is growing at rapid pace. Most of the markets are undergoing
globalization. Lot of mergers and acquisition are taking place in the insurance world. The rapidity in
the industry, technological improvement has resulted in pressures on a few economic parameters.
The world insurance industry is at peak of its globalization process.

Global insurance market is increasing by an average of six percent per year since 1990.
Insurance companies have collected $2443.7 billion premium worldwide according to the global
development of premium volume in 144 countries in 2005. $1521.3 has been generated as life
insurance premium and $922.7 as non life insurance premium. The US accounted for 35% of global
life and non life premium, Japan had global share of 21%, andU K was having 10% of global share.

Influence on Indian Insurance Industry:

In this era of globalization, insurance companies face a dynamic global environment. Dramatic changes
are taking place owing to the internationalization of activities, appearance of new risk, new types of
covers to match with new risk situations, and unconventional and innovative ideas on customer
services. Low growth rates in developed markets, changing customers needs, and the uncertain
economic conditions in the developing world are exerting pressure on insurer’s resources and testing
their ability to survive. Now the existing insurers are facing difficulties from non-traditional competitors
those are entering the retail market with new approaches and through new channels.
India has a rapidly growing middle class and this section can afford to buy insurance
products. This shows the attraction that the Indian market holds for foreign insurers who have been
putting pressure on developing countries as well as on India to open up its market.
 Life Insurance Penetration as a % of GDP

United Kingdom 8.9

Japan 8.3

Korea 7.3

United States 4.1

Malaysia 3.6

India 3.0

China 1.8

Brazil 1.3

Source: www.indianinsuranceresearch.com

INSURANCE AND ECONOMY

Indian economy is growing in reference to global market. Business of insurance with its
unique features has a special place in Indian economy.

It is a highly specialized technical business and customer is the most concern people in this
business, therefore this business is able to spur the growth of infrastructure and act as a
catalyst in the overall development of Indian economy.

The high volumes in the insurance business help spread risk wider, allowing a lowering of the
rates of the premium to be charged and in turn, raising profits. When there is a bigger base,
the probabilities become more predictable, and with system wide risks balanced out, profits
improve. This explains the current scenario of mergers, acquisitions, and globalization of
insurance.

Insurance is a type of savings. Insurance is not only important for tax benefits, but also for
savings and for providing security. It can be serving as an essential service which a welfare
state must make available to its people.

Insurance play a crucial role in the commercial lives of nations and act as the lubricants of
economic activities. Insurance firms help to spread the potentially financial consequences of
risk among the large number of entities, to mobilize and distribute savings for productive
use, facilitate investment, support and encourage external trade, and protect economic
entities against external risk.
Insurance and economic growth mutually influences each other. As the economy grows, the living
standards of people increase. As a consequence, the demand for life insurance increases. As the assets
of people and of business enterprises increase in the growth process, the demand for general
insurance also increases. In fact, as the economy widens the demand for new types of insurance
products emerges. Insurance is no longer confined to product markets; they also cover service
industries. It is equally true that growth itself is facilitated by insurance. A well-developed insurance
sector promotes economic growth by encouraging risk-taking. Risk is inherent in all economic activities.
Without some kind of cover against risk, some of these activities will not be carried out at all. Also
insurance and more particularly life insurance is a mobilizer of long term savings and life insurance
companies are thus able to support infrastructure projects which require long term funds. There is
thus a mutually beneficial interaction between insurance and economic growth. The low income
levels of the vast majority of population have been one of the factors inhibiting a faster growth of
insurance in India. To some extent this is also compounded by certain attitudes to life. The economy
has moved on to a higher growth path. The average rate of growth of the economy in the last three
years was 8.1 per cent. This strong growth will bring about significant changes in the insurance
industry.
At this point, it is important to note that not all activities can be insured. If that were possible,
it would completely negate entrepreneurship. Professor Frank Knight in his celebrated book
“Risk Uncertainty and Profit” emphasized that profit is a consequence of uncertainty. He
made a distinction between quantifiable risk and non-quantifiable risk. According to him, it is
non- quantifiable risk that leads to profit. He wrote “It is a world of change in which we live,
and a world of uncertainty. We live only by knowing something about the future; while the
problems of life or of conduct at least, arise from the fact that we know so little. This is as true
of business as of other spheres of activity”. The real management challenges are uninsurable
risks. In the case of insurable risks, risk is avoided at a cost.

FUNCTIONING OF INSURANCE INDUSTRY

Insurer’s Business Model:
Profit = Earned Premium + Investment Income – Incurred Loss – Underwriting expenses

Insurers make money in two ways:

1. Through Underwriting, the processes by which insurers select the risks to insure and decide
how much in premiums to charge for accepting those risks, and

2. By investing the premiums they collect from insured.

The most difficult aspect of the insurance business is the underwriting of policies. Using a wide
assortment of data, insurers predict the likelihood that a claim will be made against their policies and
price products accordingly. To this end, insurers use actuarial science to quantify the risks they are
willing to assume and the premium they will charge to assume them. Data is analyzed to fairly
accurately project the rate of future claims based on ag iven risk. Actuarial science uses statistics and
probability to analyze the risks associated with the range of perils covered, and these scientific
principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the
amount of premium collected and the investment gains thereon minus the amount paid out in claims
is the insurer's underwriting profit on that policy.

An insurer's underwriting performance is measured in its combined ratio. The loss ratio (incurred
losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio
(underwriting expenses divided by net premium written) to determine the company's combined ratio.
The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio
of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an
underwriting loss.

Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount
of money, at hand at any given moment that an insurer has collected in insurance premiums but has
not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected
and continue to earn interest on them until claims are paid out.

Naturally, the “float” method is difficult to carry out in an economically depressed period. Bear
markets do cause insurers to shift away from investments and to toughen up their underwriting
standards. So a poor economy generally means high insurance premiums. This tendency to swing
between profitable and unprofitable periods over time is commonly known as the "underwriting" or
insurance cycle.

Finally, claims and loss handling is the materialized utility of insurance. In managing the claims-
handling function, insurers seek to balance the elements of customer satisfaction, administrative
handling expenses, and claims overpayment leakages.

Investment Management

Investment operations are often considered incidental to the business of insurance, and have
traditionally viewed as secondary to underwriting. In the past risk management was the most
important part of business, whereas today the focus has shifted to fund management. Investment
income is a large component of insurance revenues, skilful and careful management of funds.
Insurance is a business of large numbers and generates huge amount of funds over time. These funds
arise out of policyholder funds in the case of life insurance, and technical and free reserves in the non-
life segments. Time lag between the procurement of premium and the payment of claim provides an
interval during which the funds can be deployed to generate income. Insurance companies are among
the largest institutional investors in the world. Assets managed by insurance companies are estimated
to account for over 40% of the world’s top ten asset managers.
Returns on investments influence the premium rates and bonuses and hence investment
income will continue to be an important component of insurance company profits. In life insurance,
benefits from insurance profits accrue directly to policy holders when it is passed on to him in the
form of a bonus. In non life insurance the benefits are indirect and mostly by the creation of an
investment portfolio. Investment income has to compensate for underwriting results which are
increasingly under pressure. In the case of insurance, the difference between revenue and the
expenses is known as operating surplus.

Revenue = Premium
Expenses = (Sum of Claims + Commission payable on procurement of business +
Operating expenses)

Operating Surplus = (Revenue – Expenses)

Net investment income includes income from trading in and holding stock market securities including
government securities, special deposits with the central government, loans to several public utilities
and service providers in state government.

Insurance premium collected is converted in a pool of fund then divided in to four

expenses.

To pay the expenses of the management

To pay agency commission

To pay for the claims

Surplus money will be invested in govt. securities

Requirements of an insurance risk

Insurance normally insure only pure risks .However, not all pure risk is insurable .certain requirements
usually must be fulfilled before a pure risk can be privately insured .From the view point of the insurer,
there are ideally six requirement of an insurable risk:

There must be a large number of exposure units

 The loss must be accidental and unintentional

The loss must be determinable and measurable

The loss should not be catastrophic

The chance of loss must be calculable

The premium must be economically feasible

Comparison of Insurance with other Similar Factors

1. Insurance and Gambling compared

Insurance is often erroneously confused with gambling .There are twoi mportant
differences between them .First , gambling creates a new
speculative risk ,while insurance is a technique for handling an alreadye xisting pure risk .thus ,if you
bet Rs 300 on a horse ,a new speculative technique is created ,but if you pay Rs 300 to an insurer for
fire insurance
,the risk of fire is already present and is transferred to the insurer by ac ontract.
No new risk is created by the transaction.
The second difference between insurance and gambling is that gambling is socially
unproductive, because the winner’s gain comes at the expense of the loser .In contract; insurance is
always socially productive, because neither the insurer nor the insured is placed in a position where
the gain of the winner comes at the expense of the loser. The insurer and the insured have a
common interest in the prevention of a loss. Both parties win if the loss does occur .Moreover,
consistent gambling transaction generally never restore the losers to their former financial
position .In contract ,insurance contracts restore the insured’s financially in whole or in part if a loss
occurs.
2. Insurance and Hedging compared
The concept of hedging is to transferring the risk to the speculator through purchase of future
contracts .An insurance contract, however, is not the same thing as hedging .Although both technique
are similar in that risk is transferred by a contract, and no new risk is created, there are some
important difference between them. First, an insurance transaction involves the transfer of insurable
risks, because the requirement of an insurable risk generally can be met .However, hedging is a
technique for handling risks that are typically uninsurable ,such as protection against a decline in the
price agriculture products and raw materials.
A second difference between insurance and hedging is that insurance and hedging is that
insurance can reduce the objective risk of an insurer by application of the law of large numbers. As
the number of exposure units increases, the insurer’s prediction of future losses improves, because
the relative variation of actual loss from expected loss will decline .thus, many insurance
transactions reduce objective risk. In contract, hedging typically involves only risk transfer , not risk
reduction .The risk of adverse price fluctuation is transferred because of superior knowledge of
market conditions .The risk is transferred, not reduced, and prediction of loss generally is not based
on the law of large numbers.

Various types of life insurance policies:

Endowment policies: This type of policy covers risk for a specified period, and at the end of
the maturity sum assured is paid back to policyholder with the bonuses during the term of
the policy.
Money back policies: This type of policy is for periodic payments of partial survival benefits
during the term of the policy as long as the policy holder is alive.

Group insurance: This type of insurance offers life insurance protection under group policies
to various groups such as employers employees, professionals, cooperatives etc it also
 provides insurance coverage for people in certain approved occupations at the lowest
possible premium cost.

Term life insurance policies: This type of insurance covers risk only during the selected term
period. If the policy holder survives the term, risk cover comes to an end. These types of
policies are for those people who are unable to pay larger premium required for
endowment and whole life policies. No surrender, loan or paid up values are in such
policies.

Whole life insurance policies: This type of policy runs as long as the policyholder is alive and
is covered for the entire life of the policyholder. In this policy the insured amount and the
bonus is payable only to nominee on the death of policy holder.

Joint life insurance policies: These policies are similar to endowment policies in maturity
benefits and risk cover, but joint life policies cover two lives simultaneously such as married
couples. Sum assured is payable on the first death and again on the death of survival during
the term of the policy.

Pension plan: a pension plan or annuity is an investment over a certain number of years but
does not provide any life insurance cover. It offers a guaranteed income either for a life or
certain period.

Unit linked insurance plan: ULIP is a kind of insurance plan which provides life cover as well
as return on premium paid over a certain period of time. The investment is denoted as units
and represented by the value called as net asset value (NAV).

DISTRIBUTION OF INSURANCE PRODUCTS

Insurance has to be sold the world over. The Touch point with the ultimate customer is the distributor
or the producer and the role played by them in insurance markets is critical. It is the distributor who
makes the difference in terms of the quality of advice for choice of product, servicing of policy post
sale and settlement of claims. In the Indian market, with their distinct cultural and social ethics, these
conditions will play a major role in shaping the distribution channels and their effectiveness. In today's
scenario,insurance companies must move from selling insurance to marketing an essential financial
product. The distributors have to become trusted financial advisors for the clients and trusted business
associates for the insurance Companies.

Challenges for insurance companies and intermediaries in India-

Building faith about company in the mind of clients.

Building personal credibility with the clients.

 Different distribution channels in India:

A multi-channel strategy is better suited for the Indian market. Indian insurance market is a
combination of multiple markets. Each of the markets requires a different approach. Apart from
geographical spread the socio- cultural and economic segmentation of the market is very wide,
exhibiting different traits and needs. Different multi-distribution channels in India are asf ollows:

Agents: Agents are the primary channel for distribution of insurance. The public and private
sector insurance companies have their branches in almost all parts of the country and have
attracted local people to become their agents. Today's insurance agent has to know which
product will appeal to the customer, and also know his competitor's products to be an
effective salesman who can sell his company, the product, and himself to the customer. To
the average customer, every new company is the same. Perceptions about the public sector
companies are also cemented in his mind. So an insurance agent can play an important role
to create a good image of company.

Banks: Banks in India are all pervasive, especially the public sector banks. Many insurance
companies are selling their products through banks. Companies which are bank owned, they
are selling their products through their parent bank. The public sector banks, with their
vast branch networks, are helpful to insurance companies. This channel of selling
insurance is known as Bank assurance.

INSURANCE COMPANY ASSOCIATE BANKS

ICICI Prudential ICICI Bank, Bank of India, Citibank,

Allahabad Bank, Federal Bank, South
Indian Bank, Punjab and Maharashtra

Cooperative Bank

SBI Life State Bank of India

Birla Sun Life Deutsche Bank, Citibank, Bank of

Rajasthan, Andhra Bank

ING Vysya Bank Vysya Bank

Aviva Life Insurance ABN Amro Bank, Canara Bank

HDFC Standard Life HDFC Bank, Union Bank, Indian Bank

 Met Life Karnataka Bank, J&K Bank

Source: Hindu Business Line, January 08, 2007

Brokers: Now a day’s different financial institution are selling insurance. These financial
institutions are known as brokers. They are taking some underwriting charges from the
insurance companies to sell their insurance products.

Corporate agents: Corporate agency is a cross selling type of channel.

Insurance companies’ tie-up with business houses in other industries to sell insurance either
to their employees or their customers. Insurance industry, during the past 2 years has
witnessed a number of such strategic tie-ups and alliances. Corporate agents have become
a major force to reckon with in distributing insurance products. Such as- Bajaj Allianz tied up
with Maruti Udyog and Ford for auto insurance and Tata AIG life has tied up with Tata tea,
Khaitan’s Williamson major and bridge foundation for selling rural policies.

Internet: In this technological world internet is also a channel of selling insurance. This can
be as direct marketing.

Augmented product: An insurance company can provide different types ofs ervices to differentiate
their products- Post sales services.
Branches in different places for customers.
Customer complaint management.
Payment option convenient to customers.

The entry of private players and their foreign partners has given domestic players a tough time,
because the opening up of the sector has not brought in only foreign players, but also professional
techniques and technologies. The present scene in India is such that everyone is trying to put in the
best efforts. There are marketing strategies more for survival than growth. But the most important
gift of privatization is the introduction of customer- oriented services. Utmost care is being taken to
maximize customer satisfaction.

Success of an insurance company depends on four important functions:

Identification of markets: Identification of markets means need to understand the trends in

culture and businesses constantly, through conducting research and analysis. Insurance
companies can take this job on their own or assign it to an external agency. Relying on an
external agency can be risky due to the questionable loyalty of the agents.

Assessment of risks (of the insured and the insurance corporation) and estimation of
losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and
settling claims is foremost an important area for achieving overall efficiency in operations.
 The quality of assessing the risk and estimation of losses has the largest claim on the
performance of an insurance company. Well trained, experienced and expert hands are
needed for theo perations.

Penetration into and exploitation of markets: Market penetration or exploitation of a

company can be identified with the growth in number of policies in each type of insurance,
growth rate in earnings or turnover, company’s market share, increase in number of
branches and divisions etc. Efforts of the company as a whole and that of the divisions and
branches are assessed to measure the effectiveness.

Control over investment and operating costs: Control over resources such as men,
machines, and materials at each level of the organization provides measures of efficiency of
a unit as well as the organization. Investment control and expense control are dealt
separately and the effectiveness of management’s’ decisions at various levels is to be
assessed separately.

To find best prospects:

Allocating marketing strategies against market potential.

Estimating potential for specific products within local markets.

Identifying high opportunity areas.

Measuring agency performance relative to market potential.

Optimizing your agency network against market potential.

Attributes to develop marketing strategies:

Channel data: - Useful to know future buying preferences, learning about products and
purchase channels.

Consumer attitudes.

Consumption data: - Useful to evaluate annual premiums, number of annuities owned, value
of annuities, and with which company the current policy is held.

Effective Strategies for Insurance Agents:

Learn how to construct a mental image for success.

Learn how to find a proper perspective and how to turn off all the signals that cause people
not to buy from you.
 Learn how to get and set more appointments.

Learn how to convert a new lead into sales.

Learn how to act when you meet a client for the first time.

COMPANY PROFILE

(About Kotak Mahindra Old Mutual Life Insurance)

Kotak Mahindra is in business since 1985 as a partnership between Uday Kotak and Mr. Mahindra,
and insurance part of their business came intoe xistence in the year 2001.

Evolution of Insurance business in Kotak Mahindra business is like this:-

YEA SIGNIFICANT CHANGES BUSINESS DEVELOPMENT

1985 Trade Finance

1986 Corporate Finance

1990 Car Finance

1991 Investment Banking

1992 Goldman Sachs Brokerage and Distribution

 1995 Ford Credit Commercial Vehicle

1997 Consumer Finance

1998 Mutual Fund

2001 Old Mutual Plc Life Insurance

2003 Bank

KMOM- The Partnership and Lineage

A 26% - 74% Joint Venture Between

As stated above Kotak Mahindra Life Insurance has Joint venture with Old Mutual plc.

Old Mutual Plc is the 12th largest Insurance Company in the world. It has its base of over 4 million life
assurance policyholders. It has one of the best “Payouts” among insurers in the world. It has one of the
best “Solvency Ratios” among insurers in the world. A FTSE 100 financial services group and ranks as a
Fortune Global 500 company.The Old Mutual group manages in excess of 239 billion pounds in funds
(Dec’06). The company is 160 years old and has prominent presence in the United States and the
United Kingdom.

Now the question arises that why for the business in India of life insurance Kotak Mahindra chose Old
Mutual plc and vice versa.

Features of Kotak Mahindra and Old Mutual plc at a glance:

KOTAK MAHINDRA OLD MUTUAL plc

Brand Equity Domain Knowledge

Branch Network Technology

 Entrepreneur Employees Product Innovation

Knowledge of Indian Market Training Expertise

Access to customer base Global Perspectives

Distribution Associates System and Process

Multi Channel Working System

PRODUCTS

Term Plans

Kotak Term Assurance Plan

Kotak Preferred Term Plan

Endowment Plans

Kotak Endowment Plan

Kotak Money Back Plan

Kotak Child Advantage Plan

Kotak Capital Multiplier Plan

Kotak Retirement Income Plan

Kotak Premium Return Plan

Unit Linked Plans

Kotak Retirement Income Plan (Unit Linked)

Kotak Safe Investment Plan II

Kotak Flexi Plan

Kotak Easy Growth Plan

 Kotak Privilege Assurance Plan

Group

Employee Benefits

Kotak Term Group Plan

Kotak Credit-Term Group Plan

Kotak Complete Cover Group Plan

Kotak Gratuity Group Plan

Kotak Superannuation Group Plan

Rural

Kotak Gramin Bima Yojna

If we look at the status of Kotak Life Insurance’s market share in comparison of other private
company in comparison of premium earned:-

No. INSURE Market Share (%)

1 Bajaj Allianz 7.56

2 ICICI Prudential 7.35

3 HDFC Standard Life 2.87

4 SBI Life 2.31

5 Birla Sun Life 1.89

6 Tata AIG 1.29

7 Max New York 1.23

8 Aviva 1.14

9 Kotak Mahindra Old Mutual 1.11

10 ING Vysya 0.79

11 Reliance Life 0.54

12 Met Life 0.40

13 Sahara Life 0.06

14 Shriram Life 0.03

If we talk the growth of Insurance industry’s private players in recent years, the data will
reflect:-

Structure of Kotak Life Insurance

 Managing Director: GAURANG SHAH

CFO: G.MURALIDHAR

Vice President (Training and Management Development): ARUN PATIL

Vice President (HR): SUGATTA DUTTA

Vice President (Distribution Development and Planning)
KAMLESH VORA

Appointed Actuary : JOHN BRYCE

Its hierarchy in Kotak Life Insurance is like this:

MANAGI
NG

DIRECTO
R

CFO

APPOIN T
MARKETI TRAININ
SALES HR & ED
NG CIO G
HEAD ADMIN. ACTUAR
HEAD HEAD
Y

HIERARCHY OF KMOM LIFE INSURANCE

LIMITED (JAIPUR BRANCH)

 REGIONAL MANAGER

BRANCH OPERATIONS
AREA MANAGE R
INCHARGE

OPERATION
SALES MANAGE R
EXECUTIVE

ASST.
SALES OPERATIONS
MANAGE R

LIFE ADVISOR

DATA ANALYSIS

CUSTOMER BUYING BEHAVIOUR & MARKET

SEGMENTATION FOR LIFE INSURANCE PRODUCTS

1.
3. No. of Respondents Holding Kotak Life Insurance Policy:

4.
5.

6.
7.

8.
9.
RECOMMENDATIONS

Networking is needed to be made broad as the number of branches with Kotak Life Insurance
is only 75 and only 7 states are touched by the company so, there is a huge untapped
market available for Kotak Life.

Marketing in terms of the media via advertisements on Television to small commercials on

FM, hoardings and signage etc. has to be made because there were respondents who
haven’t even heard about Kotak Life Insurance.

Awareness camp for sub-urban area should be focused.

State and Central Government employees should be targeted because of reasons like:

➢ They don’t have Life Insurance cover other than that provided byt heir respective
employers and LIC.

➢ Most of them are underinsured.

➢ They have a stable source of income and social security.

Kotak Life Insurance recruits its advisors mainly through personal reference, through
advertisement and through walk-in interviews. They must also recruit them though
placement agencies on trial basis.

Kotak Life Insurance must build its reputation by focusing on service quality.
Better service quality. Better service quality may be in the form:

➢ Issuing policy in time.

➢ Providing claims in time.

➢ Making customers aware about their status of policy.

CONCLUSIONS
 During the data collected, it has been found that people have great awareness about various
companies but a lot more has to be done, especially by smaller companies like Kotak Life
Insurance to establish their market presence.

People are beginning to look beyond LIC for their insurance needs and are willing to trust private
players with their hard earned money.

People in general have been influenced by the marketing activities of insurance companies. A high
penetration of print, radio and TV ad campaigns over the years is beginning to have its impact now.

Another important trend was in terms of people viewing insurance as a tax saving and investment
instrument as much as protective one.

The general satisfaction levels among public with regards to policy and agents still requires
improvement. Here lies the opportunity for a relatively new comer like Kotak Life Insurance. LIC has
never been known for prompt service or customer oriented methods but Kotak Life Insurance can
build its reputation based on these factors.

QUESTIONNAIRE
Q 1) Do you have any life insurance policy?

a) YES b) NO

Q 2) Are you aware about the Life Insurance products or will prefer to purchase
the Life Insurance products of (mark √):

LIC

ICICI Prudential Life Insurance

HDFC Standard Life Insurance

SBI Life Insurance

Kotak Life Insurance

TATA AIG Life Insurance

Reliance Life Insurance

Q3) Which company’s insurance policy do you have?

Q4) Term of your insurance policy?

 a) < 5 years b) 5 – 10 years

an
b) c) 10 – 20 years d) y

other

Q5) What do you think are the benefits of Life Insurance?

a) Covers future uncertainty

b) Tax Savings

c) Investments

d) Comprehensive investment and risk coverage instrument

Q6) Which feature of Life Insurance policy will you consider while buying?

a) Money Back Guarantee

b) Larger Risk Coverage

c) Low Premium

d) Company’s Credibility

e) Easy Access to Agents

Q7) How have you bought / would buy a Life Insurance policy?

a) Customer approaching insurance company / agent

b) Insurance company / agent approaching the customer

Q8) Are you satisfied with your Life Insurance policy?
a) Highly Satisfied b) Satisfied

c) Not So Satisfied d) Not

Responding

Q9) According to you, what is the right age to buy insurance?

a) < 25 years years b) 25 – 35

c) 35- 45 years d) > 45 years

e) Anytime