KOTAK Consumer Investment & Management Strategies About Salaried Persons for Taking Up Insurance

7/28/2019 KOTAK Consumer Investment & Management Strategies About Salaried Persons for Taking Up Insurance

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SUMMER TRAINING PROJECT REPORTON

KOTAK MAHINDRA LIFE INSURANCE

Submitted in partial fulfillment of the requirement ofBachelors of Business Administration (B.B.A)

Guru Jambheshwar University, Hisar

Consumer investment & Management strategies about salariedpersons for taking up Insurance Services

Training Supervisor: Submitted By:Jaya Monga Madhuri Mehta

2006-200906511242435

Session 2006-2009Guru Jambheshwar University

Hisar - 125001

1


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CONTENTS

PARTICULARS PAGE NO.

Certificate

EXECUTIVE SUMMARY iACKNOWLEDGEMENT ii

PREFACE iii

1. INTRODUCTION TO INSURANCE SECTOR 1

1.1 An Overview 11

1.2 Insurance opportunities in India 13

1.3 The insurance reform route 14

1.4 The road map to privatization 16

2. A BEGINNING

2.1 Insurance- what is it?

17

2.2 Life insurance needs at various life stages 19

2.3 Indian insurance industry: A perspective 22

2.4 Life insurance industry 26

3. Company Profile and its Products 29

4. RESEARCH METHODOLOGY 46

4.1 Main objective 46

4.2 Specific objectives

4.3 Scope of the Study

4.4 Research Brief

4.5 Research Design

4.6 Data Collection Method

4.7 Market Research Synopsis

46

5. LIMITATIONS OF THE STUDY

49

6. DATA ANALYSIS & INTERPRETATIONS 50

7. OBSERVATIONS 74

8. RECOMMENDATIONS77

9. LEARNINGS 78


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10. PERSPECTIVE CUSTOMERS 79

11. ANNEXURES 81

11.1 Questionnaire 82

11.2 Role of IRDA 82

12. BIBLIOGRAPHY 88


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EXECUTIVE SUMMARY

With the opening of the Insurance Sector, there is an increased level of activity in the

area of insurance in India. It is now being referred to as the Sun

rise industry with many sections of the people taking a keen interest in this field of

insurance.

What is this term called Insurance? Who needs it? Who provides it? What are its

functions and benefits? Is it a product or a service? Is it necessary? Is there any

guarantee? These and several more questions pop up in the minds of the people who

are not in very close association with this sector.

A rapid developing industry also offers a wide scope for increasing employment

opportunity and hence a lot of students of various fields have started taking a keen

interest in this industry. It is in this context that I decided to pursue my career and

therefore my project in this field of insurance.

The project assigned to me was "Consumer investment & Managementstrategies about salaried persons for taking up InsuranceServices, for Kotak Life Insurance.

I thus got an opportunity of working with Kotak Life Insurance- a leading player in

insurance consulting services. Some of the key observations (findings) of this project

were:

60% of the customers are satisfied with their existing policy. And still they are

looking forward for better policy and services.

82% customers look for a Trusted name in a company for insurance, whereas

81.5% customers look for a good plan in a company for insurance.

87.5% of the respondents are planning for investments, i.e. they all are having

positive intentions and hence are interested in buying an insurance cover. So,

working in this with Kotak Life Insurance, I thus got an opportunity to

understand the insight of Insurance sector.


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ACKNOWLEDGEMENT

A report, when prepared with true spirit goes a long way in enriching my knowledge.

I am deeply grateful to Jaya Monga for providing me his valuable insights and

guidance on the topic and the insurance sector. He thoroughly taught us the details of

project making. From selection of topic to final analysis of project he helped me a lot.

Last but not the least, I am also thankful to my family members and to my friends

who very patiently helped me out with this project.

MADHURI


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PREFACE

This very project was a part of my Summer training. As entering into a new field, the

company felt a strong need to provide me with a good training, which ended with the

completion of this project, so as to have a focused approach towards insurance sector.

This opportunity provided me an insight into the insurance sector and would be help

or input for me entering into an insurance sector.

The project included understanding the customer buying behavior with a focus on

market segmentation for Kotak Life Insurance to have an overview of customer's

perception in Delhi and their buying behavior, which would be of great insight for

Kotak Life Insurance for better penetration in the Delhi market.

Market Research is related with the genuine and objective collection, analysis &

evaluation of information about specific aspects of marketing problems so as to help

the company and its management to make right and effective decisions. Market

Research is not an end in itself; it is a means to an end the important is decision

making.

The main rationale behind the study undertaken was to provide the Kotak Life

Insurance information about customers buying behavior. To provide the company

with information as to what are the factors and the reasons that the customer (salaried

person) looks upon during a purchase of an insurance policy and what is the image of

private insurance companies in their mind through direct interaction with the

customer.


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1.

INTRODUCTION

TO

INSURANCE

SECTOR


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1.1 AN OVERVIEW

The insurance sector has a long history in India. It began in the early years of the 19 th

century. The 1st legal enactment was made in 1870. The 1 st Indian Insurance Act was

passed in 1938 and amended in 1950, when it was nationalized. However, the sector

was once again thrown open to the private sector on December 1999, followed by the

establishment of the Insurance Regulatory and Development Authority (IRDA) in

April 2000.

Though the Insurance Sector is now open for private players as a consequence of the

new liberalization policies of the Government, the existing government owned

Insurance companies will, nevertheless, continue to be in the government sector.

These existing companies will, however, have to strive for better realization of their

corporate objectives and goals to meet the demands and expectations of the public.

Quality of service and product that an industry offers must move forward with

progress in the state of the economy. As the quantum and quality of service change

over time, the levels at which customers continue to remain satisfied with the services

provided, also keep on increasing. Ultimately, the success of any industry depends

upon its positioning in the state of economy and on meeting the expectations of the

service users. (ref.bibliography)

With competition, the performance level of individual companies is expected to

increase. Segmentation is taking place within the economy with a need for socially

responsive service sector.

Globalization is the new economic reality, which is here to stay, heralding a new era

of insurance in India. With the opening of the insurance industry, India stands to gain

with the following major advantages:

Globalization will provide improved opportunities to the customer for better

products, with more reasonable and affordable pricing.

The customer will get faster servicing.

It will enhance the savings rate.


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Long-term funds for infrastructure development will be available to the Country.

It will secure for India larger inflows of foreign capital needed to sustain our

GDP growth.


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1.2 INSURANCE OPPORTUNITIES IN INDIA

Not even 25% of the insurable population has been extended the insurance cover.

Market penetration is quite low and hence the potential to exploit is very high.

Insurance premium per capita is very low ($4).

Lack of a comprehensive social security system/state benefit and welfare means

that demand for pension products should be high.

There is a huge middle class section of approximately 300 million.

Existing insurance companies score very low on the customer service front.

With steadily increasing corporate asset values, need for insurance is on the rise.

Competition can help ensure the best products with best services.

(ref.bibliography)


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1.3 THE INSURANCE REFORMS ROUTE

So, its clear that the insurance was in private hands before 1971 and was nationalized

in 1972 with all private companies merged into General Insurance Corporation of

India as the parent company with 4 subsidiaries as National Insurance Company Ltd.

with Head Office at Calcutta, New India Assurance Company Ltd. with Head Office

at Bombay, Oriental Insurance Company Ltd. with Head Office at New Delhi and

United India Insurance Company Ltd. with Head Office at Madras.

In 1993 the need for Private Insurance Companies and Multinational Companies was

felt and beginning of liberalization process started. (ref.bibliography)

April 1993R N Malhotra Committee an Insurance Sector reforms &deregulation set up.

January 94 Malhotra Committee submits report to Finance Ministry.

January 96An interim INSURANCE REGULATORYDEVELOPNEMT AUTHORITY set up thru a resolution.

September 96 INSURANCE REGULATORY DEVELOPNEMTAUTHORITY Bill drafted.

December 96

The INSURANCE REGULATORY DEVELOPNEMTAUTHORITY Bill introduced in the Parliament andreferred to a standing committee.

August 97

The INSURANCE REGULATORY DEVELOPNEMTAUTHORITY Bill is withdrawn following opposition toforeign participation in the domestic insurance sector.

November 97 Union government gives greater autonomy to LIC, GICand its 4 subsidiaries.

June 98Union Budget announces opening up of the insurancesector.

January 99Notification of IRDA is statutory authority andamendments LIC & GIC Acts.

March 99INSURANCE REGULATORY DEVELOPNEMTAUTHORITY sets the procedure for filing applications.

AprilJuly 99 3 months open window for receipt of application.

December 99 In principal approvals to be granted.


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2000 Private Insurance products hit the market.

After a long wait, however, there was light at the end of the tunnel when the Union

Cabinet first gave its nod for 26% direct foreign equity in any insurance JV, and later

allowed foreign institutional investors (FIIs) to hold 14% stake in such ventures

effectively pushing up the foreign equity proportion to 40%.


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1.4 THE ROAD MAP TO PRIVATIZATION

Insurance Regulatory Development Authority Bill was placed before

Parliament. New act to grant statutory powers to Insurance Regulatory

Development Authority to issue guidelines and regulate industry.

GIC and LIC Acts were amended. Such an amendment was crucial as the Acts

disallows any other entity to issue policies.

Guidelines for new private insurance companies were announced by Insurance

Regulatory Development Authority, which would include capital requirement,

solvency margins etc.

Legislation was framed to permit institution of brokers to operate in the

country.

Guidelines for intermediaries such as surveyors, insurance agents and

actuaries were formulated.

Invitation of business plans and applications from prospective participants,

and actuaries were formulated.


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2.

A BEGINNING


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2.1 INSURANCE- WHAT IS IT?

Man has always been in search of security and protection from the beginning of

civilization. This urge led him to the concept of insurance. The basis of insurance was

the sharing of the losses of a few amongst many. Insurance provides financial stability

and strength to the individuals and organization by the distribution of loss of a few

among many by many by building up over a period of time.

The legal definition of insurance is that, it is a contract between the insurer and

insured whereby, in consideration of payment of premium by the insured the

insurer agrees to make good any financial loss the insured may suffer due to

consideration of an insurance peril.

(ref. bibliography)

Insurance means Spreading of Losses or Sharing of Risks. Life is full of risks. For

property, there are fire risks; for shipment of goods, there are perils of sea; for

human life there are risks of death or disability; so on and so forth. The risks are

uncertain-may or may not occur. People facing common risks come together and

give their small contribution to the common fund. While it may not be possible to

tell before, which persons will suffer, but it is possible to tell how many persons

on an average out of the group will suffer loss. If any case risk occurs, loss is

made good out of common fund. In this way, all shares common risk. Insurance,

thus broadly can be understood as the process of spreading of losses of an

individual, over the group of individuals or the process of sharing of risk by those

who face common risk. People who suffer loss get relief because their loss is

made good out of common fund. People who do not suffer loss get relief because

they are free of any worry of loss.

What is life insurance?

Life insurance is an agreement or a contract between you (the insured) and an

insurer. Under the terms of a life insurance contract, the insurer promises to pay a

certain sum to someone (a beneficiary) when you die, in exchange for your

premium payments.


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Why would you need life insurance?

The most common reason for buying a life insurance is to replace the income lost

when one dies.

For e.g., say that you work, and that your income is used to support yourself and

your family. When you die, and your paychecks stop, the life insurance proceeds

can be used to continue to support the family members you've left behind.

Another common use of life insurance proceeds is to pay off any debts you leave

behind. For e.g., mortgages, car loans, medical bills, and credit card debts are

often left unpaid when someone dies. These obligations must be paid from the

assets left behind. This can deplete the resources that your family needs. Life

insurance can be used to pay off these debts, leaving your other assets intact for

your family to use.

Life insurance provides liquidity to your estate. When you die, you may leave

some liquid assets (such as cash, CDs, and savings bonds), and some illiquid

assets (such as real estate, an automobile, and stocks). Your liquid assets may not

be enough to pay all the debts that you leave behind, plus all the expenses that

arise because of your death (such as funeral expenses and estate taxes). Your

illiquid assets may have to be sold in order to meet these obligations when they

come due. This may cause a financial loss if the assets must be sold cheaply in

order to get the money on time. Life insurance can avert this situation, because

the proceeds are available almost immediately upon your death.

Life insurance creates an estate for your heirs. After your debts and expenses are

paid, there may not be much left over for your family. Life insurance can

automatically provide assets for them after your death.

Life insurance is a great way to give to charity when you die. You may have

always had a great philanthropic desire, but not the means to make it a reality.

Life insurance can do that for you.

Life insurance can be a critical component for specialized business applications,

such as funding a buy-sell agreement. Under a buy-sell agreement, life insurance


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can be used to provide cash for the purchase of a deceased owner's interest in the

business.

Finally, life insurance can be an investment vehicle. Some types of life insurance

policies may actually make money for you, as well as provide the benefits

described above. This can help you with long-term financial goals.


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2.2 LIFE INSURANCE NEEDS AT VARIOUS STAGES

OF LIFE

Your need for life insurance changes, as your life moves ahead. When you're

young, you typically have no need for life insurance, but this changes as you take

on more responsibility, and as your family grows. Then, as your responsibilities

once again begin to diminish, your need for life insurance drops off. Let's look at

how your life insurance needs change throughout your lifetime.

School days

Childhood is typically a time of no worries, no cares, and no responsibilities. A

child depends on others to take care of them, not the other way around. Although

it would be tragic, a child's death would likely have little financial impact on the

child's family. Thus, there is generally no need for life insurance at this point in

an individual's life.

A child's death does create one short-term financial problem: funeral expenses.But buying a life insurance policy just for that purpose doesn't really make sense.

Instead, think about saving the money you would spend on insurance premiums

and open a savings account, or put the money in some type of investment vehicle.

That way, the money can be used for college expenses or a first home, but it will

also be available in case of a tragedy. Alternatively, a burial policy provides

enough money for funeral expenses, at a much lower cost than a typical life

insurance policy.

Your growing family

When you have young children, your life insurance needs reach a climax. In most

any situation, life insurance for both parents is appropriate.

Single-income families are completely dependent on the income of the

breadwinner. If he or she dies without life insurance, the consequences could be

disastrous. The death of the stay-at-home spouse would necessitate costly daycare


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expenses. Both spouses should carry enough life insurance to cover the expenses

that would result from their death.

Dual-income families need life insurance, too. If one spouse dies, it is unlikely

that the surviving spouse will be able to keep up with the household expenses and

pay for childcare with the remaining income.

Moving up the ladder

For many people, career advancement means starting a new job with a new

company. At some point, you might even decide to be your own boss and start

your own business. It might not be your top priority, but it is important to review

your life insurance coverage any time you leave an employer.

Keep in mind; you probably won't be able to keep any life insurance that was

provided by your employer. If you're going to work for a new company, you

might receive a comparable life insurance benefit. But if you're going into

business for yourself, you'll need to purchase an individual life insurance policy.

Make sure the amount of your coverage is up-to-date, as well. The policy you

purchased right after you got married might not be adequate anymore, especially

if you have kids, a mortgage, and college expenses to consider. Business owners

may also have business debt to consider. If you're not incorporated, your family

would have to pay those bills if you die.

Single again

Unfortunately, divorce has become a fact of life in our society. You'll have to

make many financial decisions during this stressful time, including the decision

of what to do about your life insurance. Divorce raises both beneficiary issues and

coverage issues. And if you have children, these issues become even more

complex.

If you and your spouse have no children, it may be as simple as changing the

beneficiary on your policy and adjusting your coverage to reflect your newly

single status. However, if you have kids, you'll want to make sure that they are

provided for in the event of your death. This may involve purchasing a new


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policy and naming them as beneficiaries. The custodial and no custodial parent

will need to work out the details of this complicated situation. If you can't come

to terms, the court may make the decisions for you.

The golden years

Once your children are grown, your life insurance needs decrease. You'll live off

your retirement savings, and hopefully you have accumulated assets that can be

passed on to your heirs when you die. Not only is life insurance expensive at this

point, but also it's probably unnecessary.

One exception: if you will be leaving a large estate when you die, your heirs may

be stuck paying a hefty estate tax bill. Consider obtaining cash value life

insurance policy, because you don't actually know when you're going to die. Your

heirs can then use the death benefit to pay the IRS. If the policy is held by a trust,

the proceeds won't be included in your estate


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2.3 INDIAN INSURANCE INDUSTRY: A PERSPECTIVE

A. Life Insurance

Life insurance in its existing form came in India from United Kingdom (UK) with the

establishment of a British firm, Oriental Life Insurance Company in 1818 followed by

Bombay Life Assurance Company in 1823, the Madras Equitable Life Insurance

Society in 1829 and Oriental Life Assurance Company in 1874. Prior to 1871, Indian

lives were treated as sub-standard and charged an extra premium of 15% to 20%.

Bombay Mutual Life Assurance Society, an Indian insurer that came into existence in

1871, was the first to cover Indian lives at normal rates. The Indian Life Assurance

Companies Act, 1912 was the first statutory measure to regulate life insurance

business. Later, in 1928 the Indian Insurance Companies Act was enacted, inter alia,

to enable the government to collect statistical information about life and non-life

insurance business transacted in India by Indian and foreign insurers, including the

provident insurance societies.

In 1938, with a view to protecting the interest of insuring public, earlier legislation

was consolidated and amended by Insurance Act, 1938 with comprehensive

provisions for detailed and effective control over the activities of insurers. In order to

administer the aforesaid legislation, an insurance wing was established and attached

first with the Ministry of Commerce and then Ministry of Finance. This ministry was

administratively responsible for policy matters pertaining to insurance. The actuarial

and operational matters relating to the insurance industry were looked after by an

attached office in Shimla, headed first by Actuary to the Government of India, then by

Superintendent of Insurance and finally by the Controller of Insurance. The act was

amended in 1950, making far-reaching changes such as requirement of equity capital

for companies, carrying on life insurance business, ceilings on shareholdings I such

companies, stricter control on investment of life insurance companies, submission of

periodical returns relating to investments and such other information to the Controller

as he may call for, appointments of administrators for mismanaged companies,


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ceilings on expenses of management and agency commission, incorporation of the

Insurance Association of India and formation of councils and committees thereof.

By 1956, 154 Indian insurers, 16 non-Indian insurers and 75 provident societies were

carrying on life insurance business in India. Life insurance business was confirmed

mainly to cities and better off segments of the society.

On 19th January 1956 the management of life insurance business of 245 Indian and

foreign insurers and provident societies, then operating in India, was taken over by the

Central Government and then nationalized on 1st September 1956. An Act of

Parliament, viz. LIC Act, formed LIC in September 1956, with capital contribution of

Rs. 5 crore from the Government of India.

The then Finance Minister, Shri S.D.Deshmukh, while piloting the bill for

nationalization, outlined the objectives of LIC thus: to conduct the business with

utmost economy, in a spirit of trusteeship; to charge premium no higher than

warranted by strict actuarial considerations; to invest the funds for obtaining

maximum yield for the policy holders consistent with safety of the capital; to render

prompt and efficient service to policy-holders, thereby making insurance of

recommendations of the Administrative

Reforms Commission as under:

a. To spread life insurance much more widely and in particular to the rural areas and

to the socially and economically backward classes

b. To making mobilization of peoples savings by making insurance linked savings

adequately attractive.

c. To bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust without losing sight of the interest of

the community as a whole

d. To conduct business with utmost economy and with the full realization that money

belongs to the policyholders.

e. To act as trustees of the insured public in their individual and collective capacities.


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f. To meet various life insurance needs of the community that would arise in the

changing social and economic environment.

g. To promote amongst all agents and employees of the Corporation a sense of

participation, pride and job satisfaction through discharge of their duties withdedication towards achievement of corporate objectives.

B. General Insurance

General Insurance developed in India with industrial revolution in the West and

consequent growth of seafaring trade and commerce in the 17th century. It came to

India from UK. The 1st general insurance company, Triton Insurance Company Ltd.

was established in Calcutta in 1850 whose shares were mainly headed by British. The

1st general insurance company established by an Indian was Indian Mercantile

Insurance Company Ltd. in Bombay in 1907.

In 1957,the General Insurance Council, a wing of the Insurance Association of India

framed a code of conduct for ensuring fair conduct and sound business practices in the

general insurance industry. An administrative set-up headed by the Controller of

Insurance was set up at Delhi in 1957 with a branch office at Bombay, Calcutta, and

Madras for administrating code of conduct. Further in order to retain the business of

general insurance in India, the insurers started a reinsurance company, viz. India

Reinsurance Corporation Ltd. In 1956 to which they voluntarily ceded 10% of their

gross direct business. In 1961, by arrangement to Insurance Act, this voluntary

arrangement was formalized by notifying the Indian Guaranty and General Insurance

Company Ltd., a government company, along with the Indian Reinsurance

Corporation as Indian Reinsures. In 1968, the Insurance Act was amended to

provide for extension of social control over insurers transacting general insurance.

The amendments provided, inter alia for regulation of assets, setting up of the Tariff

Advisory Committee (TAC) under the chairmanship of Controller of Insurance.

Before the amendments of the act could be implemented, management of non-life

insurers was taken over by the Central Government in 1971 as a prelude to

nationalization. The General Insurance Business Act, 1972, nationalized general

insurance business with effect from 1.1.73.

Prior to 1973, general insurance was more cities oriented, catering to the needs of

trade and industry.107 insurers including branches of foreign companies operating


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here were amalgamated and grouped into 4 companies, viz. the National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance

Company Ltd., and the United India Assurance Company Ltd. GIC was incorporated

as a company in November, 1972 and it commenced business on January 1, 1973.

Government of India and that of 4 companies subscribe the capital of GIC by GIC.

All the 5 entities are Government companies, registered under the Companies Act.

The purpose of establishment of GIC as a holding company of the four operating

companies as stated in General Insurance Business Act is superintending, controlling,

and carrying on the business of general insurance. (ref.bibliography)


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2.4 LIFE INSURANCE INDUSTRY

Legislative issues

Based on developments over the last couple of years, it would be fair to say that the

long-term outlook for the policy regime for insurance appears positive. In many ways

the IRDA has exhibited transparency and protectiveness in attending to critical issues

this has not only provided a degree of comfort to existing and prospective insurers,

but has also laid the foundation for the orderly development of the insurance market

in India. The most obvious comparison one could make is with the banking sector

liberalization that took place a few years ago. Unlike the RBI, the IRDA has been

transparent, efficient and adequately cautions in its process of granting licenses. Thehectic lobbying and 'loophole exploitation' that firms indulged in have been thankfully

absent in the insurance business, thus far.

At a broader level, the government maintains its bullish outlook for insurance

reforms, reflected by its willingness to ensure a level playing field for private insurer

vis--vis LIC (e.g. similar tax treatment to all life insurers, similar paid up capital

requirement etc) and to minimize its intervention in operational and commercial

issues. Private players in other recently liberalized sectors (especially telecom and

banking where industry regulator and industry government disputes have severely

constrained development) could scarcely consider themselves as lucky.

Perhaps the only major issue is the cap on foreign investment, which the government

is not keen on increasing in the near future. For the longer term, it may reconsider its

stand, depending among other things, on the Indian partner's ability to continue

contributing financially and technically to the joint venture. (ref.bibliography)

Taxation policy for life insurance firms

After prolonged debate, the Finance Ministry had expressed its desire to accord

similar tax treatment to LIC and private insurers.

Co-operative Banks excluded from Insurance

Based on the strict requirements set out by the RBI for banks entry into insurance,cooperative banks would be unable to apply for direct insurance at this stage.

However, the norms for participating in non-equity insurance activities (such as


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marketing and distribution) are slightly easier and may allow some cooperative banks

to enter.

The RBI requires banks to possess a net worth of Rs. 500 crores, a capital adequacy

ratio of 10, a reasonable level of non-performing assets (NPAs), continuous netprofit for the last 3 years, and a 'satisfactory' track of subsidiaries. While capital

adequacy norms do not apply to cooperative banks, they are likely to fail on the

grounds of net worth and NPAs.

The Kerala State Cooperative Banks (KSCB) and the Maharashtra State Cooperative

Bank (MSCB) had earlier declared their interest in entering the insurance sector.

Based on RBI guidelines, however, they may have to limit their exposure to

marketing and distribution only.

Competitive developments existing insurers

Expectedly, private companies that have commenced operations have done so with a

'soft launch'. This is presumably in realization of the fact that long term resources are

better spent in consistent and well targeted promotional efforts rather than in 'big-

bang' exercise - especially for non - impulse purchase, long term financial products

such as life insurance. Treading new round carefully by patiently establishing one's

credibility and competence appears to be the preferred strategy over one that involves

a head on battle with LIC.

The other important observation based on industry developments, pertains to the role

of banks. With most banks resigning themselves to the fact that obtaining a license to

sell insurance will be difficult to come by (due to strict RBI norms), they have chosen

to participate in the industry through the banc assurance, route instead. In the Indian

context, this is significant. In the interiors of the country, public sector banks have

built up excellent penetration and enjoy the public's confidence-2 important

prerequisites for selling insurance. On the other hand, in the bigger cities, private

banks, which are constantly looking for ways to enhance customer value and

profitability (e.g. through cross selling), are likely to incorporate insurance in their

portfolio of offerings. (ref.bibliography)

The flip side to selling thru banks is that it raises the risk of channel conflicts for

insurers. In addition, financial stability could become an issue, especially in the

context of certain PSU banks. The manner in which PSU banks are privatized, and the


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extent to which the government reduces its stake, will therefore have an important

bearing on the success of banc assurance in India.


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3.

COMPANY

PROFILEAND

ITS PRODUCTS


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Kotak Mahindra is one of India's leading financial institutions was born in 1985 asKotak Capital Management Finance Limited. This company was promoted by Mr.

Uday Kotak , Mr. Sidney A. A. Pinto and Kotak & Company. Industrialists Mr.Harish Mahindra and Mr. Anand Mahindra took a stake in 1986, and that's when thecompany changed its name to Kotak Mahindra Finance Limited.

It's been a steady and confident journey to growth and success.

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.

The group has a net worth of over Rs. 2,500 crore, employs around 6,700 people inits various businesses and has a distribution network of branches, franchisees,representative offices and satellite offices across 250 cities and towns in India andoffices in New York, London, Dubai and Mauritius. The Group services over 1.6million customer accounts.


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CORPORATE IDENTITY OF

KOTAK MAHINDRA GROUP


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PRESENCE OF KOTAK MAHINDRA


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KEY GROUP COMPANIES AND THEIR BUSINESSES

Kotak Mahindra Bank

Kotak Mahindra Capital Company

Kotak Securities

Kotak Mahindra Prime

Kotak Mahindra Asset Management Company

Kotak Mahindra Old Mutual Life Insurance Limited

AWARDS Asia money awards Best Domestic Equity House in India to Kotak Investment

Banking

Euromoney awards Best Equity House in India to Kotak Investment Banking

Finance Asia awards Best Investment Bank in India to Kotak Investment

Banking

Uday Kotak awarded Entrepreneur of the Year award by Ernst & Young

CNBC India Mutual Fund of the Year award 2004 to Kotak Bond Wholesale

Plan (Growth)

Kotak Mahindra Asset Management Company adjudged the Best Wealth

Creator (Debt) for 2003 by Outlook Money


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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD.

Kotak Mahindra Bank Ltd. (74%)

Old Mutual plc (26%)


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KMOM THE PARTNERSHIP

Brand equity Domain knowledge

Entrepreneurial employees Technology

Branch network Product innovation

Knowledge of the Indian market Training expertise

Access to customer base Global perspective

Distribution associates Systems and processes

Multi-channel

Management


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KOTAK LIFE INSURANCE VISION AND APPROACH

ASPIRDATION To be among top few private players with substantialmarket presence.

Well trained and quality advisors

Consultative selling process

Complete product range

High technology support

Superior customer service

To be achieved through


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KOTAK MAHINDRA

OLD MUTUAL PROGRESS

43 Branches in 30 cities

7000 Life Advisors

980 Employees

First year premium Income

2001-02: 7 crores

2002-03: 35 crores

2003-04 : 124 crores

2004-05 : 375 crores

Ranks 2nd in terms of Average Premium per Policy

Ranks 4th in Total Advertising Awareness


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COMPETITORS

Indian partner Foreign insurer Specialization Present statusAditya Birla group Sun life, Canada Life insurance Received license

commencedoperation

HDFC Standard life, UK Life insurance Received licensecommencedoperation

ICICI Prudential, UK Life insurance Received licensecommencedoperation

ICICI Lombard, Canada Non Life insurance Received license

commencedoperation

Max India New York life, USA Life insurance Received licensecommencedoperation

Sundram Royal and SunAlliance

Non Life insurance Received licensecommencedoperation

IFFCO Tokyo Marine,Japan

Non Life insurance Received licensecommencedoperation

Tata Group AIG, USA Life insurance andNon Life insurance

Received licensecommencedoperation

Vysya Bank ING Insurance,Nether land

Life insurance Received licensecommencedoperation

Hero Group Zurich, Switzerland Life insurance Not applied

CholamandalamGroup

Undecided Life insurance Not applied

Hindustan Time Undecided Life insurance Not applied

S.Kumar J & K Non Life insurance Received licensecommencedoperation


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KOTAK PRODUCTS

For Individuals

Kotak Term Plan

Kotak Preferred Term Plan

Kotak Money Back Plan

Kotak Child Advantage Plan

Kotak Endowment Plan

Kotak Capital Multiplier Plan

Kotak Retirement Income Plan

Kotak Retirement Income Plan (unit linked)

Kotak Safe Investment Plan II

Kotak Flexi Plan

Kotak Easy Growth Plan

Kotak Premium Return Plan

For Group

Employee Benefit

Kotak Term Group Plan

Kotak Credit Term Plan

Kotak Complete Cover Group Plan

Kotak Superannuation Group Plan


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PRODUCT SUITE

11 Products

6 riders

Protection

WealthC

reatio

n

Marke

tlink

ed

Retirement

WealthC

reatio

n

Tradition

al

Kotak Term Plan

Kotak Preferred Term Plan

Kotak Premium Return Plan

Kotak Safe Investment

Plan

Kotak Flexi Plan

Kotak Easy Growth Plan

Kotak Child Advantage Plan

Kotak Endowment Plan

Kotak Money Back Plan

Kotak Capital Multiplier Plan

Kotak Retirement Income

Plan


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PRODUCT RANGE

WEALTHCREATION

Childrens marriage

and education

Unit Linked

Unit Linked

Single Premium

Capital Multiplier

ying too soon Living death Living too long

Term Assurance Plan

Preferred Term Plan

Retirement Solutions

Childrens Endowment

Money Back Plan

Endowment Plan

Limited Premium


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KOTAK UNIT-LINKED PLANS

KOTAK SAFE INVESTMEN PLAN II

KOTAK FLEXI PLAN

KOTAK EASY GROWTH PLAN


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KOTAK SAFE INVESTMENT PLAN II

It is a unit linked insurance plan in which one can invest money in six different typeof funds based on the amount of risk he/she is willing to take. In case of slump in themarket there is an assurance of getting the money invested back and hence it is saferfor one who does not try to take risk in equity market.

Term: 10 - 30 years.

Minimum Premium: Rs.10000 Mode: monthly, quarterly, half yearly and annually.

Age: 18 65 years

Riders: all riders are available.

Surrender value: available after 3rd year.

Loan: No loan available.

Additional benefits: switching, partial withdrawal, easy exit option.

Premium ceasing age: 70 years.

Maturity Benefit: sum assured or market value of units.

Death Benefit: - sum assured or market value of units.

Tax benefits :-premium paid will be qualified for deduction u/s 80C ,pay-outs if any ,will be fully tax exempted u/s sec 10(10d).

Advantages1. Capital guaranteed return in case of slump in market.2. Tax free switching available.3. Easy exit option.

Whom to be sold1. People looking for investment in equity market but hesitate to take risk.2. Debt players and aggressive investors as a secured investment option.


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KOTAK EASY GROWTH PLAN

About the planThis is a single premium, market linked insurance plan where money grows accordingto market price of the funds in which money is invested, here a person has a flexibilityto invest in aggressive growth fund, growth fund, balanced fund, bond, gilt fund,floating rate.

Features Term: no specified term a person can invest up to the age of 99 years.

Minimum Premium: Rs.50000

Mode: only one time investment

Age: 0 60 years. Sum for 5 times cover, max 75years for 1.02 timescover.

Riders: accidental death benefit, permanent disability benefit and criticalillness benefit.

Surrender value: available after first year @100% market value of units.

Loan: up to 50% of sum assured.

Additional benefits: switching, partial withdrawal, easy exit option, lifecover as per need.

Premium ceasing age: 99 years.

Maturity Benefit: no fixed maturity date at withdrawal after 1 year you

get market value of your units. Death Benefit: - sum assured or market value of units.

Tax benefits :-premium paid will be qualified for deduction u/s 80C , pay-outs if any ,will be fully tax exempted u/s sec 10(10d).

Advantages1. life cover as per need ( 5 times or 1.02 times)2. Single short investment.3. Easy exit option.

Whom to be sold

1. People looking for one time investment.2. People who dont want to go for hassles of medical tests.


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4.

RESEARCH

METHODOLOGY


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4.1 MAIN OBJECTIVE:

To determine customer-buying behavior with a focus on market segmentation for

Kotak Life Insurance.

4.2 SPECIFIC OBJECTIVES:

To determine reasons behind opting for an insurance.

To provide the company with information of customer's Insurance policy if they

have any and reasons for opting for that particular policies.

To know the most preferred policy.

To determine customers perception towards private insurance companies and

their expectation form private insurance companies.

To determine the feedback on services provided by any other insurance agent.

To study the types of benefits provided by insurance services.

To determine the use of Internet for valuable information and decision-making

process.

To know the impact of privatization of insurance sector on public.


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4.3SCOPE OF THE STUDY

The initial step was to understand the process of how to go about the project itself.

The aim was to understand better vision, mission objectives & culture of the

organization. So as to ensure that the work done is in the consonance with the main

goal of the company.

In this regard various magazines, journals and newspapers were gone through.

Various Internet sites were also looked upon which provide me with valuable input

into the Insurance Sector.

The project was strictly confined to the Delhi Region - The people contacted during

the course of this project were from different regions of Delhi. This project is a

sincere compilation of all the data and information collected by each team member.

This report can be a valuable input for the people who are involved with the Insurance

Services, in order to have an overview of customer's perception in Delhi Region.


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4.4 RESEARCH BRIEF

The first stage involved initial discussion between the various team members and thecompany in order to identify the research objectives (Rationale of the research),

which is the most difficult step in the research process.

4.5 RESEARCH DESIGN:

The research is primarily both exploratory as well as descriptive in nature. Thesources of information are both primary & secondary.

A well-structured questionnaire was prepared and personal interviews were conducted

to collect the customers perception and buying behavior, thru this questionnaire.


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4.6 DATA COLLECTION METHOD:

a. Preparation of Questionnaire:

Initially, a rough draft was prepared keeping in mind the objective of the research. A

pilot study was done in order to know the accuracy of the Questionnaire. The final

Questionnaire was arrived only after certain important changes were done.

b. Sampling Method:

Sampling method followed was judgmental sampling. The customer was selected on a

random basis from different parts of Delhi.

c. Sample size: -

The sample size was restricted to only 400, which comprised of mainly peoples from different regions

of Delhi due to time constraints.


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4.7 MARKET RESEARCH SYNOPSIS

Identification of the Objective (problem)

Initial collection of the data from secondary sources.

Identification of sample size and sampling area.

Formulation of the questionnaire.

Collection of the primary data thru fieldwork.

Analysis and interpretation of the collected data.

Preparation of the research report along with observations & recommendations.


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5.

LIMITATIONS OF

THE STUDY


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To fix an appointment especially with the corporate people was very tough and

many a time negative response was received.

The customers are sometimes bias towards the product and moreover the

customer lacks the information about insurance. So the accurate conclusions

may not be drawn on the basis of information collected.

Some of the customers due to time constraints and availability of documents

with them filled up the data sheet in a hurry, which meant that the provided

data might not be 100% true.

The numbers of respondents were limited to 400 because of time constraints &

assignments.


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6.

DATA ANALYSIS

&

INTERPRETATION


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6.1 DATA GIVES PREFERENCE OF RESPONDENTS OF

INSURANCE COMPANIES

COMPANYS

NAME

NO.OF

RESPONDENT SHARE (%)

L.I.C. 312 78

OM KOTAK 12 3

ICICI PRUDENTIAL 40 10

SBI LIFE 28 7

HDFC 8 2

TOTAL 400 100

PREFERENCE FOR INSURANCE

COMPANY

0

10

20

30

40

50

60

70

80

90

1NAME OF POLICY

PERCENTAGEOF

RESPONDENT

L.I.C.

SBI LIFEINSURANCE

ICICI- PRU

OM KOTAK

HDFC

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it is

ranked no.1 by that percent of respondents.


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6.2 DATA GIVES BENEFITS OF INSURANCE

PERCEIVED BY RESPONDENTS

BENEFITSNO.OF

RESPONDENTSSHARE (%)

Cover Future Uncertainty 220 55

Tax Deductions 80 20

Future Investment 100 25

TOTAL 400 100

BENEFITS OF INSURANCE COVER

COVER FUTURE

UNCERTANITY

TAX DEDUCTIONS

FUTURE INVESTME

INTERPRETATION

55% of the respondents believe that covering future uncertainty is the biggest

benefit of an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Tax

deduction and future investments respectively.


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6.3 DATA PROVIDES FEATURES OF INSURANCE

POLICY THAT ATTRACTED RESPONDENTS

FEATURE NO.OF

RESPONDENTS

SHARE (%)

Money Back Guarantee 60 15

Larger Risk Coverance 148 37

Easy Access to Agents 28 7

Low Premium 120 30

Companys Reputation 44 11

TOTAL 400 100

FEATURES OF INSURANCE POLICY

15%

37%

7%

11%

30%

MONEY BACK

GUAARENTEE

LARGER RISK

COVERANCE

EASY ACCESS TO

AGENTS

LOW PREMIUM

REPUTATION OF

COMPANY

INTERPRETATION

Majority of the respondent (37%) found Larger risk coverance as the most

attracted feature of the all.


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6.4 DATA PROVIDES NUMBER OF INSURANCE

POLICY TYPE RESPONDENTS

POLICY TYPE NO. OF

RESPONDENTS

SHARE (%)

LIFE POLICY 210 75

NON LIFE POLICY 70 25

BOTH 126 45

75

25

45

0

20

40

60

80

NUMBER

OF

RESPONDENT

1POLICY TYPE

NATURE OF POLICY

LIFE

POLICYNON LIFEPOLICYBOTH

INTERPRETATION

75% of the respondents have Life Insurance Policy while 45% have both.

(The % is calculated out of 280 positive response)


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6.6 DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Yes 280 70%No 120 30%

Total 400 100%

INTERPRETATION

Of the sample size of 400 surveyed respondents 70% of the respondents are

having Insurance policy.

30% of the respondents are either not having any Insurance policy at present or

their policy is already matured.

And at present 100% of the respondents are with the view that Insurance is a tool

to protect your family.

70%

30%

Yes

No


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6.7 DATA SHOWS BUYING PROCESS OF THE PEOPLE

BUYING PROCESS NO. OF

RESPONDENT

S

SHARE (%)

Customer approached Insurance

company/Agent

178 44.5%

Company/agent approached

customer

222 55.5%

Total 400 100%

INTERPRETATION

44.5% of the respondents approached the Insurance Company / Agent.

Whereas, 55.5% of the respondents were approached by the Company /Agent.

55%45%

Customer approached Insurance company/AgentCompany/agent approached customer


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6.8 DATA SHOWS REASONS BEHIND FOR INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Tax saving 226 80.71%Saving / Investment 226 80.71%

Family protection 280 100%

INTERPRETATION

80.71% of the Respondents opted for Insurance for tax saving benefits.

80.71% of the Respondents opted for saving / Investments.

But all of them, i.e. 100% of the respondents have opted for insurance for their

family protection.

80.71% 80.71%

100%

0%

10%

20%

30%

40%

50%

60%70%

80%

90%

100%

share (%)

Tax saving Saving / Investment family protection


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6.9 DATA SHOWS SATISFACTION OF RESPONDENTS

WITH RESPECT TO POLICY

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Satisfied 240 60%

Not satisfied 160 40%

Not Responded 0 0.0%

Total 280 100%

INTERPRETATION

60% of the respondents are more or less satisfied with their existing policy.

40% of the respondents are not satisfied with their existing policy.

In this case all of those who have taken a policy have responded.

0%

40%

60%

Satisfied Not satisfied Not Responded


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6.10 DATA SHOWS SATISFACTION OF +RESPONDENTS

WITH RESPECT TO SERVICE AGENT

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Satisfied 246 45%

Not satisfied 154 55%

Not Responded 0 0.0%

Total 280 100%

INTERPRETATION

45% of the respondents are satisfied with their existing service agent.

55% of the respondents are not satisfied with their existing insurance agent.

All of those who have taken a policy have responded.

55.00%45.00%

Satisfied Not satisfied


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6.11 DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Paying tax 400 100%

Not paying tax - 0%

Total 400 100%

INTERPRETATION

Of the sample size of 400 respondents, all the respondents are paying tax.

0%

100%

Paying tax Not paying tax


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6.12 DATA SHOWS RESPONDENTS INVESTMENTS

FOR TAX SAVING

INVESTMENTS NO. OF

RESPONDENTS

SHARE (%)

LIC 204 51%

NSC 133 33.25%

Bonds 129 32.25%

PPF 101 25.25%

PF 84 21%

EPF 46 11.5%

INTERPRETATION

51% of the respondents save their tax by investing in LIC, which is the highest

among all Investment. This shows that most people for getting taxes benefits

invest in LIC.

33.25% of the respondents do their tax saving by investing in NSC.

32.25% of the respondents to their tax saving by investing in bonds.

51.00%

33.25% 32.25%

25.25%21.00%

11.50%

0%

10%

20%

30%

40%

50%

60%

share (%)

LIC NSC Bonds PPF PF EPF


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6.13 DATA SHOWS RESPONDENTS PERCEPTION

ABOUT BEST FORM OF INVESTMENT FOR SECURING

THEIR FUTURE

NO. OF

RESPONDENTS

SHARE (%)

Fixed Assets 301 75.25%

Bank deposits 44 11%

Jewellery 100 25%

Securities i.e. bonds, MFs 162 40.5%

Shares 42 10.5%

Insurance 282 70.5%

INTERPRETATION

75.25% of the respondents as with the view that Fixed Assets is the best form of

investment for securing their future.

70.5% of the respondents are with the perception that Insurance is the best form

of investment for securing their future, which is one of the highest and this shows

that insurance is an important key for securing your future.

75.25%

11.00%

25.00%

40.50%

10.50%

70.50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

share (%)Fixed Assets Bank deposits

Cash & Jewellery Securities i.e. bonds, MFs

Shares Insurance


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6.14DATA SHOWS WHAT PEOPLE INTENT TO GAIN

FROM THEIR INVESTMENT

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Saving & Returns 400 100%

Security 360 90%

Tax benefits 287 71.75%

INTERPRETATION

100% of the respondents intent to gain saving and returns from their investment.

90% of the respondents intent to gain security from their investments.

Whereas, 71.75% of the respondents intent to gain tax benefits from their

investments.

100%90.00%

71.75%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

share (%)

Saving & Returns Security Tax benefits


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6.15 DATA GIVES PEOPLES PERCEPTION ON

APPROPRIATE AGE FOR BUYING INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

After 25 years 116 29%

After 35 years 42 10.5%

After 45 years 0 0%

Anytime 242 60.5%

INTERPRETATION

29% of the respondents are with the view that insurance should be bought after

the age of 25 years.

10.5% of the respondents are with the view that insurance should be buyed after

the age of 35 years.

Whereas, 60.5% of the respondents are with the view that buying of insurance do

not have any thing to do with age i.e. there is no age limitations. It can be

purchased any time according to the need.

0%

29%

10.50%60.50%

After 25 years After 35 years After 45 years Anytime


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6.16 DATA SHOWS PEOPLE OPINION ABOUT INDIAN

INSURANCE COMPANIES

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Rigid plans 268 67%

Non user friendly 118 29.5%

Unsatisfactory services 106 26.5%

Non Aggressive 143 35.75%

Satisfactory 96 24%

Good 41 10.25%

Very good 0 0%

INTERPRETATION

67% of the respondents have the opinion that Indian Insurance Companies have

Rigid plans.

29.5% feel that Indian Insurance companies are Non-user friendly.

26.5% feel that services of Indian Insurance companies are Unsatisfactory.

67.00%

29.50%26.50%

35.75%

24%

10.25%

0.00%

0%

10%

20%

30%

40%

50%

60%

70%

Inflexible plans Non user friendlyUnsatisfactory services Non AggressiveSatisfactory GoodVery good


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35.75% of the respondents are with the view that Indian Insurance companies are

Non-aggressive.

24% of the respondents feel that products and services of Indian Insurance

companies is Satisfactory.

Whereas only 10.25% feel that it is Good enough.

And according to the data, no single person has felt that it is very good.


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6.17 DATA SHOWS WHAT PEOPLE WOULD LOOK FOR

IN AN INSURANCE COMPANY

RESPONSE NO. OF RESPONDENTS SHARE (%)

A trusted name 328 82%

Friendly service &responsiveness

284 71%

Good plans 326 81.5%

Accessibility 199 49.75%

INTERPRETATION

82% customers look for a Trusted name in a company for insurance.


Friendly service & responsiveness and Accessibility are also important factors

looked by customers in a company.

82%

71%

81.50%

49.75%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

share (%)

A trusted name

Friendly service & responsiveness

Good plans

Accessibility


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6.18 DATA SHOWS PEOPLE PLANNING FOR NEW

INVESTMENTS

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Planning 350 87.5%

Not planning 50 12.5%

Total 400 100%

INTERPRETATION

Only 12.5% of the customers contacted are not planning for new investments

presently.

Whereas, 87.5% of the customers are still planning for new investments this can

be a great potential for Kotak Life Insurance to take them on their favor.

87.5%

12.5%

Planning Not planning


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6.19 DATA SHOWS PEOPLE INTERESTED IN GOING

FOR INSURANCE IF A SERVICE PROVIDER AWAY

FROM THE CITY OFFERS BETTER SERVICE &

PRODUCTS

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Yes 172 43%

No 176 44%

Uncertain 52 13%

Total 400 100%

INTERPRETATION

The interested customers i.e. 43% are ready to go for insurance even away from a

city if services and products are worthwhile, which again is a good prospect

(potential) for Kotak Life Insurance to take them on their favor.

43%

44%

13%

Yes No Uncertain


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6.20 DATA SHOWS PERCENTAGE OF PEOPLE SURFING

INTERNET

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Surf net 328 82%

Do not surf net 72 18%

Total 400 100%

INTERPRETATION

82% of the customers surveyed generally surf net.

82.00%

18.00%

Surf net Do not surf net


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6.21DATA SHOWS PERCENTAGE OF PEOPLE USING

NET FOR INFORMATION & DECISION MAKING

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Yes 289 72.25%

No 111 27.75%

Total 400 100%

INTERPRETATION

72.25% of the customer survey takes help of Internet for valuable information &

decision-making. This shows the importance of Internet in decision-making

process.

72.25%

27.75%

Yes No


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6.22 DATA SHOWS PEOPLE INTERESTED IN TAKING

HELP OF INTERNET TO MAKE A DECISION FOR

INSURANCE PLAN

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Interested 331 82.75%

Not interested 49 12.25%

Uncertain 20 5%

Total 1000 100%

INTERPRETATION

82.75% of the customer survey is interested for taking help of Internet to make a

decision for an insurance plan. This shows the essentiality of insurance

information through Internet.

5.00%

82.75%

12.25%

Interested Not interested Uncertain


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7.

OBSERVATIONS


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The general perception of the people regarding insurance is that it is a tool to

protect their family. They opt for insurance as to keep their family on a safer side,

100% of the customer surveyed was with this particular view. There are other

factors also, for which people opt for insurance such as, a tax saving device, a

saving tool.

All the customers surveyed were not having insurance policy. Only 70% of the

respondents were having an insurance policy, but it still shows that the majority

of the people are very well focused towards insurance and they are aware of the

benefits related to it.

It is seen from the survey conducted that generally the insurance company/agent

approaches the customer. But the data that 44.5% of the people themselves


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approached the insurance company/agent. This shows that in today's scenario

there is a strong need felt for having the insurance.

From the data collected it is seen that 60% of the customers are satisfied with

their existing policy. And still they are looking forward for better policy and

services.

The service provided by the agent is not up to the expectations of the customers.

Hence this area should be looked upon and sincere attempts should be made to

improve it in future.

The people generally invest in various things in order to enjoy the tax saving

benefits. Generally their investment is in LIC, NSC, BONDS, PPF, and PF.

From the survey it is seen that investment for tax savings is more in form of LIC

i.e. 51%.

People generally invest in various forms for securing their future. Such as

insurance, fixed assets, bank deposits, bonds, cash & Jewellery etc. But the

people are more attracted towards LIC. 70.5% of the respondents have invested

in Insurance for securing their future.

78% of the people contacted prefer LIC policy to any other and therefore it is

ranked no.1 by that percent of respondents.

75% of the positive respondents have Life Insurance Policy while 45% have both

Life and Non-life Insurance Policy.

With regards to purchase of insurance policy majority of the customers are with

the view that there are no age specifications for purchasing insurance policy, it

can be done at any age according to their convenience.

Now, when the private companies are emerging into the market most people are

with the opinion that Indian insurance companies does not have flexible plans,

they are non-user friendly, their service is unsatisfactory sector and they are not


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aggressive. On the other hand 24% of the customers surveyed are with the view

that Indian Insurance companies are satisfactory.

The people look for friendly service & Responsiveness, Good plans, a trusted

name & Accessibility in a company for Insurance.

87.5% of the respondents are planning for investments, i.e. they all are having

positive intentions and hence are interested in buying an insurance cover.

43% of the respondents are interested in going for insurance it service provider is

away form the city. But he should offer better services and products.

In today's scenario Internet has become an important means for getting valuable

information & decision-making. 82.75% of the respondents are interested for

taking help of Internet to make a decision for an insurance plan.

82% customers look for a Trusted name in a company for insurance, whereas



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8.

RECOMMENDATIONS


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As the people think that insurance is a tool to protect their family & a tax saving

device. They are aware of the fact & realizing its, importance. The company

should try to expand & build up its infrastructure because there is a large

potential for insurance in India.

Company should come up with its branch in Delhi. With the objective and goals

to meet the demands & expectations of the public. Because the entrance of

private players will increase the competition and it would be a tough task to

secure a good position in market.

Since Kotak Life Insurance is leading with several companies policies it should

be easy for them to penetrate into the market and secure a good position if they

pay greater attention to the service part provided to their customer and thereby

forming a long and trusted relationship.

As seen from the survey that at present 70% of the customer are having insurance

policy out of which 87.5% of the customer are planning for new investments. So

it can be a good potential for the company and they should make an attempt to

trap these customers.

43% of the customer is even ready to go for insurance if a service provider away

from their home is providing it. But intend they should provide good products

and services. The company should try to convince these customers and get them

in its favor.


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9.

LEARNINGS


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First of all it taught me and my team members what Insurance is all about.

The visit to various companies (organizations) gave us an excellent opportunity

to know, learn and understand various intangible things like their thinking

patterns, how to deal with different type of people in such a way so as to achieve

our goals.

In order to get some information of some work done out of somebody it is very

important to highlight his interest in the whole affair.

The communication skills were improved a great deal upon.

The exposure to the field, taught how to deal with the difficulties and limitationsof the market.

How to identify and understand the needs of the customers.

How to interact in the corporate world.

Last, but not the least it made me realize what an opportunity lies ahead of me in

this very field of insurance.

The project "Consumer investment & Management strategies about salaried

persons for taking up Insurance Services, for Kotak Life Insurance has been

mainly conceived with a view to have a insight of insurance sector & to provide the

company with essential factors which are looked upon by the customers as well as

buying behavior of the insurance policy.

It has been observed that people perception regarding insurance is that it is a tool to

protect their family, a tax saving device etc. People are focused towards the benefits

of the insurance & a strong need in felt for having the insurance. People are in the

process of buying policies one after the other and they do not feel the need of age

specification for purchasing insurance.


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10.PERSPECTIVE

CUSTOMERS


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1. Schemes & Policies:

Due to emergence of private insurance companies, the competition has increased

many a fold and it provides much better and flexible schemes & policies than the

existing insurance companies.

2. Service quality & Promptness:

Since private insurance companies are known for their service & promptness they

would do much better job in insurance sector than the existing ones.

3. Customer Relationship:

Customer relationship should is the need of the hour and since private companies

prime motive is the same, so naturally it would do much better with respect to

insurance services.

4. Benefits:

Well as far as benefits are concerned, customer's perception is that private insurance

companies will provide better returns, low premium rates & timely payment.

5. Returns on investment:

And without any doubt returns would be higher than the existing insurancecompanies.


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11.

ANNEXURES


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11.1 QUESTIONNAIRE

1. ARE YOU EMPLOYED?

YES NO If YES, only then proceed

2. DO YOU HAVE ANY INSURANCE POLICY?

YES NO

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE BOTH

4. WHICH COS INSURANCE POLICY YOU PREFER THE

MOST? (RANK THEM)

a) LIC

b) ICICIPRUDENTIAL

c) SBI LIFE INSURANCE

d) ING VYSYA LIFE

e) OM KOTAK MAHINDRA

f) TATA AIG LIFE

g) ANY OTHER ________ ( Specify)

5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE

POLICY?(Please Tick)

a)


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6. WHAT DO YOU THINK ARE THE BENEFITS OF

INSURANCE COVER?(RANK THEM)

a) COVER FUTURE UNCERTAINITY

b) TAX DEDUCTIONS

c) FUTURE INVESTMENT

d) ANY OTHER _________ (Specify)

7. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU

TO BUY IT?(RANK THEM)

a) LOW PREMIUM

b) LARGER RISK COVERANCE

c) MONEY BACK GUARNTEE

d) REPUTATION OF COMPANY

e) EASY ACCESS TO AGENTS

f) ANY OTHER _________ (Specify)

8.YOUR MONTHLY INCOME?

a)


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10. WHATS YOUR PERCEPTION ABOUT INSURANCE?

(RANK THEM)

a) A SAVING TOOL

b) A TAX SAVING DEVICE

c) A TOOL TO PROTECT FUTURE

11. HOW HAS/WOULD YOU BOUGHT/BUY ANINSURANCE?

a) CUSTOMER APPROCHED INSURANCE COs

b) INSURANCE COs APPROCHED CUSTOMER

12. ARE YOU SATISFIED WITH THE POLICY?

a) SATISFIED SAVING TOOL

b) NOT SATISFIED

c) NOT RESPONDING

13. ARE YOU SATISFIED WITH THE SERVICE AGENT?

a) SATISFIED SAVING TOOL

b) NOT SATISFIED

c) NOT RESPONDING

14.DO YOU PAY TAXES?

YES NO


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15. WHERE HAVE YOU INVESTED FOR TAX SAVING?

(RANK THEM)

a) LIC

b) NSC

c) BONDS

d) PPF

e) PF

f) EPF

THANK YOU

NAME:_________________________

ADDRESS:____________________________________________________

OCCUPATION:___________________


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11.2 ROLE OF IRDA

What is the IRDA Bill?

The Insurance Regulatory and Development Authority (IRDA) Bill is a legislation

that aims to give teeth to the interim IRDA. The IRDA was a multi-member board

constituted in 1999 following the recommendations of the Malhotra Committee on

insurance reforms. Passage of the IRDA Bill gave the IRDA powers to regulate the

insurance industry on the lines of the SEBI for the capital markets and to a certain

extent the RBI for the banking sector. The IRDA has been vested with the powers of

the Controller of Insurance the erstwhile regulatory the authority for the insurance

sector.

What sort powers does the IRDA Bill seek to provide the regulatory

authority?

The IRDA Bill empowers regulatory authority with sweeping powers to regulate the

insurance industry. For instance, the IRDA can prescribe prudential norms such as

solvency margins and investment guidelines for insurance companies. It clears

appointments to top posts and issues guidelines for insurance intermediaries such as

surveyors and insurance agents. Most important of all, the IRDA also has the power to

grant licenses to new companies.

Why was Bill such a controversial issue?

Along with the IRDA Bill, the government proposes to amend the LIC & GIC

Nationalization Acts, a move that permits private companies to apply for a license to

do business in India. Foreign insurance companies were allowed to hold up to 26% in

joint ventures with Indian firms. The opposition to the opening up of the insurance

sector came from 2 fronts-those who were opposed to opening up the industry in any

form and those who were opposed to the entry of foreign players.

The former point out that it was mismanagement and corruption that forced the

government and nationalize the insurance business in the 1st place, and going back to

the old days will mean a return to those evil ways. Theres apprehension that newprivate players will ignore the social sector, which will place them at unfair advantage

over LIC and GIC.


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The 2nd category was a part of the Swadeshi brigade, who feared the return of the East

India Company in an insuring avatar.

Where were the arguments put forth in favor of the IRDA Bill?

Its proponents said that the bill would improve service standards by opening the

industry to competition. It is also expected, over time, to expand the market as

experience has shown that this has happened in all countries where the sector has been

opened up. Another argument was that since insurance generates funds for long-term

investments it would go a long way in helping to provide funds for the infrastructure

sector, which require long-term funds.

IRDA Bill to clearly define Indian Co, foreign stake

The IRDA Bill clearly defines what constitutes an Indian company in the context of

the insurance sector; and this will be different from the definition of an Indian

company in the Companies Act.

Non-insurance M&A deals to be stymied, by IRDA rules

The clause in the insurance legislation that the domestic partner in a joint venture

cannot be a subsidiary of a foreign company will have implications for certain merger

and acquisition deals out-side the insurance businesses.

IRDA allows up to 76% foreign stake in insurance broking

The Insurance Regulatory and Development Authority (IRDA) has permitted up to

76% foreign equity in insurance broking.

Public Unlimited Cos in insurance ruled out. Foreign equity cap ininsurance JVs to include multilateral agency stake

Foreign investors entering the insurance sector will have to carve out the share of

multilateral agencies-such as Asian Development Bank (ADB), the International

Finance Corporation (IFC) and the Common wealth development Corporation (CDC)-

from their share of 26% foreign capital.


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No upper limit on licenses

The government will not put a cap on the licenses to be issued to private insurance

companies for setting up life & general insurance.

IRDA to use file & use practice

IRDA has adopted a practice of file and use for clearing proposals for new insurance

products. This would be subject to the insurance companies adopting proper pricing

and fair marketing practices.

There might be some cases where there may be some unwillingness on the part of the

insurer to part with the nuances of product pricing, however it is the job of the IRDA

to ensure fairness in prices. The IRDA plays a major role in the development of the

insurance industry, as it has the licensing powers for new companies. The Tariff

Advisory Committee has already come under the chairmanship of the IRDA

chairman.

7/28/2019 KOTAK Consumer Investment & Manag

Documents

KOTAK Consumer Investment & Management Strategies About Salaried Persons for Taking Up Insurance