ON THE JOB TRAINING REPORT

COMPETITIVE ANALYSIS OF EQUIFAX

Undertaken atINTELENET GLOBAL SERVICES PVT. LTD.

Submitted in partial fulfillment of the requirements for the award of the degree of

MASTERS OF BUSINESS ADMINISTRATIONINDUSTRY INTEGRATED

to

GAUHATI University

Under the Guidance of: Submitted by:

Session 2009 - 10

NEW DELHI INSTITUTE OF MANAGEMENT STUDIES

Institute is rated as “A” Category Best Business School by latest AIMA - Business Standard & Business India Publications Surveys & included in Top 100 B – Schools & IT -Schools by Dalal Street Investment Journal

DECLARATION

hereby declares that the Project Report entitled COMPETITIVE ANALYSIS OF

EQUIFAX is an original work and the same has not been submitted to any other Institute

for the award of any other degree. A seminar presentation of Project Report was made on

(date) _______________________ and the suggestions as approved by the faculty were

duly incorporated.

Signature of Researcher

Countersigned

Signature of faculty Guide

ACKNOWLEDGEMENT

I express my sincere thanks to, who provided me the opportunity and ambience for training, Mr. for

his able guidance throughout, Mr. and my colleagues for providing their expert guidance and

support during the training period in the organization.

I also express my sincere thanks to my Faculty guide who helped me a lot with his valuable

suggestions regarding the project.

Finally I highly thankful to my family members and friends for their moral support which plays

very important role during the project.

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PREFACE

We all know that insurance is booming sector today in the corporate scenario. Almost 4,500 year

ago in the ancient land of Babylonia, traders used to bear risk of the caravan trade by giving loans

that had to be later repaid with interest when the goods arrived safely. In 2100 BC, the code of

Hammurabi granted legal status to the practice, and that’s where ‘insurance’ made its beginning.

Life insurance had its origin in ancient Rome, where citizens formed burial clubs that would meet

the funeral expenses of its member as well as survivors by making some payments.

Insurance as we know it today was in existence since 7th century England. In fact it began taking

shape in 1688 at a rather interesting place called Lloyd’s coffee house in London, where merchants,

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ship-owners and underwriters met to discuss and transact business. But the end of 18th century,

Lloyd’s had brewed enough business to become one of the first modem insurance companies.

Insurance in India can be traced back to the Vedas. For instance, yogakshema, the name of Life

Insurance Corporation of India’s corporate headquarters, is derived from the Rig Veda. The term

suggests that a form of “community insurance” was prevalent around 1000 BC and practiced by the

Aryans.

For years thereafter, insurance remained monopoly of the public sector. It was an year of

deliberation and debate – after the RN Malhotra Committee report of 1994 become the first serious

document calling for the re-opening up of the insurance sector to private players-that the sector was

finally opened up to private players in 2001.

CONTENTS

CONTENTS PAGE

1. THE COMPANY PROFILE & FUNCTIONAL ANALYSIS

1.1 KOTAK MAHINDRA GROUP OF COMPANIES 8

1.2 LIFE TOUR OF KOTAK MAHINDRA GROUP 9

1.3 KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE 12

1.4 COMPANY’S VISION AND MISSION 13

1.5 PRODUCT RANGE OF THE COMPANY 15

1.6 SIZE IN TERMS OF MANPOWER 19

1.7 ORGANISATIONAL STRUCTURE OF COMPANY 20

1.8 MARKET SHARES OF KOTAK OLD MUTUAL Plc 21

1.9 PRESENT LEADERSHIP 21

1.10 JOB SPECIFIC ANALYSIS 21

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1.11 OFFICES OF KOTAK LIFE INSURANCE 22

2. RESEARCH PROBLEM AND PURPOSE

2.1 INTRODUCTION TO THE TOPIC 24

2.2 IMPORTANT MILESTONES IN INSURANCE INDUSTRY 25

2.3 CRITICISM OF INSURANCE INDUSTRY 25

2.4 ROLE OF LIFE INSURANCE 26

2.5 NEED OF LIFE INSURANCE 28

2.6 RESEARCH PROBLEM 31

2.7 OBJECTIVE OF THE STUDY 32

3. REVIEW OF LITERATURE 34-39

4. CURRENT SCENARIO 41-45

5. RESEARCH METHODOLOGY

5.1 TYPE OF RESEARCH 475.2 TIME OF RESEARCH 475.3 SCOPE OF RESEARCH 475.4 SAMPLING 475.5 QUESTIONNAIRE DESIGN 475.6 DATA COLLECTION 47

6. DATA ANALYSIS 49-52

6.1 COMPETITIVE ANALYSIS OF KOTAK SAFE INVESTMENT

PLAN WITH LIC MONEY PLUS AND ICICI SUPER LIFE

53-64

7. SWOT ANALYSIS 65

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8. FINDING OF THE SURVEY 66-72

9. RECOMMENDATIONS 73

10. LIMITATIONS 74

11. CONCLUSION 75

12. LEARNING SUMMARY 76

13. BIBLIOGRAPHY 78

14. QUESTIONNAIRE 79

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COMPANY PROFILE & FUNCTIONAL ANALYSIS OF THE COMPANY

KOTAK MAHINDRA GROUP OF COMPANY

Kotak Mahindra offers pragmatic, world-class solutions. Put simply, solutions with a lot of common

sense. The solutions that take care of your four basic financial needs viz a viz Earning, Saving,

Investing and Spending. Helping us to live life in the complete sense, sans worries.

THE KOTAK MAHINDRA GROUP

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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. 8264 crore, Book Value of shares at Rs. 237, PAT of Rs.

327.7 in June 2010 employs around 7,800 people in its various businesses and the Kotak Group

has over 1,300 offices, and services around 5.9 million customer accounts across India

and offices in New York, London, Dubai and Mauritius.

1) Kotak Mahindra Bank Ltd

2) KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE

3) Kotak Mahindra Capital Company Ltd

4) International subsidiaries

5) Kotak Mahindra Prime Ltd

6) Kotak Securities Ltd

KOTAK MAHINDRA ASSET MANAGEMENT COMPANY

Group Management

Mr. Uday Kotak    [Executive Vice Chairman & Managing Director]

Mr. Shivaji Dam

Mr. C. Jayaram

Mr. Dipak Gupta

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THE LIFE TOUR OF KOTAK MAHINDRA

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This

company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists

Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed

its name to Kotak Mahindra Finance Limited. Since then it's been a steady and confident journey to

growth and success.

Kotak Story

Milestones that have shaped the Kotak Mahindra Group, since 1986

Since the inception of the erstwhile Kotak Mahindra Finance Limited in 1985, it has been a steady and confident journey leading to growth and success. The milestones of Kotak Mahindra's growth story are listed below by year

2009 Kotak Mahindra Bank Ltd. opened a representative office in Dubai

Entered Ahmedabad Commodity Exchange as anchor investor.

2008 Launched a Pension Fund under the New Pension System.

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2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra

Capital Company and Kotak Securities.

2005 Kotak Group realigned joint venture in Ford Credit; their stake in

Kotak Mahindra Prime was bought out (formerly known as Kotak

Mahindra Primus Ltd) and Kotak group’s stake in Ford credit Kotak

Mahindra was sold.

Launched a real estate fund.

2004 Launched India Growth Fund, a private equity fund.

2003 Kotak Mahindra Finance Ltd. converted into a commercial bank - the

first Indian company to do so.

2001 Matrix sold to Friday Corporation.

Launched Insurance Services.

2000 Kotak Mahindra tied up with Old Mutual plc. for the Life Insurance

business.

Kotak Securities launched its on-line broking site.

Commencement of private equity activity through setting up of Kotak

Mahindra Venture Capital Fund.

1994 Kotak Securities Ltd. was incorporated

1992 Entered the Funds Syndication sector

1991 The Investment Banking Division was started. Took over FICOM,

one of India's largest financial retail marketing networks

1990 The Auto Finance division was started

1987 Kotak Mahindra Finance Ltd entered the Lease and Hire Purchase

market

1986 Kotak Mahindra Finance Ltd started the activity of Bill Discounting

KOTAK OLD MUTUAL LIFE INSURANCE KOTAK MAHINDRA OLD

MUTUAL LIFE INSURANCE LIMITED.

OFFICE ADDRESS: C-31,1st and 2nd Floor, Community Center, Janakpuri, New

Delhi - 110 058.

Tel No: 11 66084959

COMPANY WEBSITE: http://www.kotaklifeinsurance.com

A NATIONAL COMPANY

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CORPORATE OFFICE:

Kotak Mahindra Old Mutual Life Insurance Ltd.

Unit nos. 901 & 902, 9th floor,

Wing A & B, Godrej Coliseum,

Lokmanya Pan Bazar,

Behind Evrard Nagar,

Sion (E), Mumbai - 400 022

Tel : +91 22 6621 5999

Fax : +91 22 6621 5757, 6621 5858

Email : lifeexpert@kotak.com

1) KOTAK LIFE INSURANCE FALLS UNDER TERTIARY SECTOR

INDUSTRY i.e. SERVICE SECTOR.

KLI deals with various LIFE Insurance Products & Services.

Kotak Old Mutual Life Insurance deals in Service industry. Kotak life insurance deals in

insurance that pays monetary proceeds upon the death of the insured covered in the policy.

Essentially, a life insurance policy is a contract between the named insured and the

insurance company wherein the insurance company agrees to pay an agreed upon sum of

money to the insured's named beneficiary so long as the insured's premiums are current. Kotak

life insurance came into the business in 1985.

Company deals in all functional like HR , MARKETING, FINANCE etc. The project is based

on finance department of the company where company deals with different investment plans

such as ulips (unit linked insurance plans) etc. My project includes “Competitive analysis of

Ulips”.

With a large population and the untapped market area of this population insurance happens to

be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20%

annually. Together with banking services, it adds about 7 percent to the country’s GDP. In spite

of all this growth statistics of the penetration of the insurance in the country is very poor.

Nearly 80% of Indian populations are without life insurance cover and the health insurance.

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2) COMPANY’S VISION & MISSION

VISION

Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its

customers, employees and stakeholders. We aim at improving the long term value in our

relationship by continuous innovation and improvements. We do this by our three-prong

effort which strives to make Kotak Life Insurance a corporate with values.

Increase Customer Value

Kotak Life Insurance has gone to the heart of its customer's requirements and developed

products which are unique and serve the customer needs perfectly. We built a relationship of

mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance the customer

always comes first.

 Cohesive Work Environment

We form long-term partnership with our employees by offering them an invigorating work

experience. We not only demand loyalty, sincerity and values but also give it back in equal

measures. Kotak Life Insurance will like to offer its employees space to grow, innovate and

build a long-term career.

Work with Honour

Kotak Life Insurance delivers everyday services in the marketplace with the high sense of

duty and commitment. Our employees strive to build the long-term value for all those come

in contact with Kotak Life Insurance. Our consumers, distributors, employees, shareholders

and the nation have our commitment that we will uphold the values of trust, integrity and a

Sense of Honour in every thought, act and deed in order to positively contribute to

individual, society and nation growth.

MISSION

“At Kotak Life Insurance, we aim to help customers take important financial decisions at

every stage in life by offering them a wide range of innovative life insurance products, to

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make them financially independent.”

3) PRODUCT RANGE

1. Protection plan

Kotak Loan Protection Plan is a protection plan that helps share the burden of

your loan. When you take this plan along with your loan, it serves like a safety net

so that you are not worried about your family, and the repayment of your loan in

case of untimely death. This plan provides a reducing cover that is matched to your

liability with minimum paperwork.

You want to see your family secure and happy at all times. However, life is

unpredictable. To protect your loved ones from the uncertainties of life should

anything unfortunate happen to you and ensure that they are able to cope with the

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financial obligations, Kotak Life Insurance has designed Kotak Term Plan/Kotak

Preferred Term Plan. Kotak Term Plan/Kotak Preferred Term Plan is a pure risk

cover plan and truly an economical means of providing you with a high level of

financial protection, offering further reduced premiums for women. Kotak Preferred

Term Plan offers special premium rates to non-consumers of tobacco, for a sum

assured of Rs. 25 lakhs or more. In the event of death of the life insured during the

term, the beneficiary would receive the Sum Assured^ as a lump sum. It is a non-

participating plan with no maturity benefits payable.

Kotak Eternal Life Plans are participating whole life plans that provide enhanced

protection till the golden age of 99. The plans consolidates the benefits of a high

cover at lower premiums, cash lump sum benefits at desired stage and a way to care

for your spouse into one package thereby making it suitable for someone looking for

a complete whole life protection plan.

2. Retirement plan

Kotak Long Life Wealth Plus is an intelligent investment plan that helps you to

build your future net worth with power-packed features that actively monitor and

manage your investment growth. It is a unique unit-linked plan that’s designed to

assure you of a joyful and fulfilling future.

Kotak Long Life Secure Plus is a unit-linked plan that ensures your investment and

gives maximum protection to secure your family's future and their financial

independence. It gives you the dual benefit of wealth creation in the long term and

timely protection for your loved ones.

Kotak Second Innings Plan is a retirement solution that ensures maximum

allocation of your premiums. Bonus additions further enhance your retirement kitty

while diverse fund options offer flexibility to invest as per your risk appetite.

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Kotak Guaranteed Pension Builder works for your security and financial

independence by allowing you to save systematically for your golden years. At the

same time, it offers Capital Guarantee* to protect you from the uncertainty

associated with equity markets. With host of features, this plan provides flexibility

and convenience ensures a happy and secure retirement for you

The Kotak Capital Multiplier Plan is the only plan of its kind that allows you to

enjoy returns even beyond maturity. This plan is best suited for you...

1. If you are looking for an investment plan for your child and want a flexible

money-back plan that gives you the power to decide the amount and time of

withdrawals.

2. If you are planning for your retirement and require a plan that allows you to

withdraw any amount as per your need and at the same time invests your money

prudently to get you bonuses on the balance in your account.

3. If you think that from time to time you will have extra cash, which you would

like to invest in an instrument which is safe and which will get you attractive

returns.

The Kotak Retirement Income Plan is a savings plan designed to meet your post-

retirement needs. It is a plan that gives you "Jeene ki azaadi". It gives you the choice

to remain independent even after retirement.

The Kotak Retirement Income Plan is a participating plan. The plan comes in two

forms:(i) With Cover (ii) Without Cover

3. Saving and investments plan

Kotak Super Advantage is a smart investment plan that addresses your current

financial needs while building long term savings for your future. It is an ideal

investment plan providing an optimal mix of insurance and investments, thus

protecting your family against any odds and building a corpus for your future.

Equity investments although attractive are given to volatility and can often result in

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loss of capital. Therefore, as a prudent investor you would be inclined to avoid such

investments or limit your exposure to them. Keeping this in mind, we present to you

Kotak Safe Investment Plan II where you could enjoy the returns associated with

equity investments without losing sleep over the safety of your capital.ize your plan

as per your investment goals. It is a powerful combination of features bringing

benefits of high returns and protection in one single plan with utmost flexibility thus

giving you complete control over your investments.

Keeping this in mind Kotak Life Insurance brings to you Kotak Single Invest, a

hassle-free unit linked plan, where you invest once and reap the benefits throughout

the policy term. With well-defined fund options and switching facility this plan

ensures that your investments work for you and not vice versa.

To provide your family the financial security in case of unfortunate contingencies,

you require a plan that offers you life cover along with the ability to grow your

savings. Kotak Endowment Plan is a participating endowment plan that provides

you an avenue for long term regular investments to accumulate a lump sum on

maturity.

The Kotak Money Back Plan offers the key benefit of cash lump sums at periodic

intervals of five years, ensuring that you are able to meet any of your financial

obligations. Such plan not only provide life cover but also entitle you to a guaranteed

addition and bonus on maturity. Money back plans like these not only let you enjoy

regular cash flows during the policy term, they also get you a substantial life cover,

which increases every year

You have always strived to give your family the very best - emotional support,

financial security, peace of mind and more. However, fate has a way of bringing up

surprises – both pleasant and otherwise. As a breadwinner, your priority is to ensure

security and peace of mind for your entire family. Kotak Surakshit Jeevan, an

enhanced protection and long-term savings plan, makes sure your family remains

financially independent even if you are not around. It is an insurance plan that helps

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you keep pace with changing needs at every step of life, be it protection for your

family or savings for the future.

4. Child plan

Every child is different, with a unique set of dreams and aspirations. As a parent,

you would like to provide your child with all the building blocks necessary to

develop his or her potential to the fullest. This could mean extra coaching or tuition

for talented children, special training or equipment for natural athletes, or

professional training for born singers. This is where Kotak's Headstart Child

Plans come in.

The Kotak Child Advantage Plan is an investment plan designed to meet your

child's future financial needs. It's a plan that gives your child the "azaadi" to realize

his dreams. This is a participating plan.

4) SIZE (in terms of manpower & turnover)

Kotak Group and Mahindra Group had their partnership 1985 between Uday Kotak and Mr.

Mahindra. Kotak Mahindra is in business since 1985, and insurance part of their business

came into existence in the year 2001.Kotak Mahindra Old Mutual Life Insurance is a 74:26

joint venture between Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak Mahindra Old

Mutual Life Insurance is one of the fastest growing insurance companies in India and has

shown remarkable growth since its inception in 2001.

Kotak Mahindra Old Mutual is the coming together of Kotak Mahindra Finance Ltd., and

Old Mutual plc to enter the Indian insurance arena to offer a wide range of innovative life

insurance products. Established in 1985 as Kotak Capital Management Finance promoted by

Uday Kotak the company has come a long way since its entry into corporate finance. It has

dabbled in leasing, auto finance, hire purchase, investment banking, consumer finance,

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broking etc. The company got its name Kotak Mahindra as industrialists Harish Mahindra

and Anand Mahindra picked a stake in the company. Kotak Mahindra is today one of India’s

leading Financial Institutions.

Old Mutual plc is an international financial services group based in London with expanding

operations in life assurance, asset management, banking and general insurance. Old Mutual

is listed on the London Stock Exchange (where it is included on the FTSE 100 Index) and

also on the South African, Namibian, Malawi and Zimbabwe stock exchanges, with assets

under management worth $ 400 Billion as on 30th June, 2006. For customers, this joint

venture translates into a company that combines international expertise with the

understanding of the local market.

5) ORGANISATIONAL STRUCTURE

Mr. Gaurang Shah - Director

Mr. Pankaj Desai - Managing Director

Mr. G Muralidhar - Chief Operating Officer

Mr. Subhasish Ghosh - Sr. VP, Financial Institutions Group

Mr. Sugata Dutta - Head Human Resources

Ms. Elizabeth Venkataraman - Senior Vice President Marketing

Mr. Andrew Cartwright - Appointed Actuary

Mr. Suresh Agarwal - Head of Alternate channel

Mr. Shekhar Bhandari - Head of Tied channel

Mr. Anand Dewan - Head Business Impact Group (BIG)

Mr. Sandip Shrikhande - Head of Group Business

Mr. Dhiresh Rustogi - Chief Technology Officer

Mr. Sudhakar Shanbag - Chief Investment Officer

bottom level followed by Sales Manager ,Senior sales manager, Assistant branch

Manager, Branch Manager, Senior branch manager, regional manager and at top level

is country head.

6) MARKET SHARE & POSITION OF THE COMPANY

Market share of kotak life insurance in insurance sector is less than 1% but has posted high

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growth in business In terms of premium collection. Kotak Mahindra Old Mutual Life

Insurance Ltd the fiscal 2007-08, the company reported growth of 80%, moving from the

11th position to 9th. It captured a market share of 1.19% in 2007-08. Last year the company

doubled its branch network to 150 from 74.

7) PRESENT LEADERSHIP

In the course of the training in Kotak Life Insurance we happen to meet the marketing

manager Mr Sachin Choudhary Marketing Head, Mr. Rajul Kansal ABM, Senior training

manager MS. Niti. Our industrial Guide was Mr. Gurmeet Singh Deputy Sales Manager.

8) JOB SPECIFIC ANALYSIS

In Kotak life insurance I am working in finance department where company deals in

different financial products such as saving and investment plans, retirement plans, child

plans etc. Here our main task was to study the plans carefully and recruit the two financial

advisors for the company or to make any one financial investment from any client. Full

details of the terms and conditions to recruit the financial advisor have been told by our

industry guide.

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OFFICES OF KOTAK OLD MUTUAL LIFE INSURANCE in INDIA

  Ahmedabad     Jodhpur

    Anand    Kanpur

    Aurangabad     Karnal

    Bangalore     Kolhapur

    Bhavnagar     Kolkata

    Bhopal     Lucknow

    Chandigarh     Ludhiana

    Chennai     Mumbai

    Cochin     Nadiad

    Coimbatore     Nagpur

    Delhi     Nashik

    Gandhidham    NOIDA

    Gurgaon     Pune

    Guwahati     Rajkot

    Hyderabad     Surat

    Indore     Vadodara

    Jaipur     Valsad

    Jamnagar     Vapi

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RESEARCH PROBLEM & PURPOSE

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INTRODUCTION TO THE TOPIC

INSURANCE

Insurance business is divided into four classes:

1) Life Insurance

2) Fire Insurance

3) Marine Insurance and

4) Miscellaneous Insurance.

Life Insurers transact life insurance business; General Insurers transact the rest.

HISTORICAL PERSPECTIVE

The history of life insurance in India dates back to 1818 when it was conceived as a means to

provide for English Widows. Interestingly in those days a higher premium was charged for Indian

lives than the non-Indian lives as Indian lives were considered more risky for coverage.

The Oriental Assurance Company was established in 1880. The General insurance business in

India, on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first

general insurance company established in the year 1850 in Calcutta by the British.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to

charge same premium for both Indian and non-Indian lives.

With largest number of life insurance policies in force in the world, Insurance happens to be a mega

opportunity in India.

It’s a business growing at the rate of 15-20 per cent annually. This, itself, is an indicator that growth

potential for the insurance sector is immense.

Together with banking services, it adds about 7 per cent to the country’s GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance

and non-life insurance continues to be below international standards. And this part of the population

is also subject to weak social security and pension systems with hardly any old age income security

It is estimated that over the next ten years India would require investments of the order

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IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS IN INDIA:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life

insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical

information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of

protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central government

and nationalized. LIC formed by an Act of Parliament- LIC Act 1956- with a capital contribution of

Rs. 5 corers from the Government of India.

CRITICISM OF THE INSURANCE INDUSTRY

LACK OF KNOWLEDGE OF POLICYHOLDER

Insurance policies can be complex and some policy holder may not understand all the fees included

in a policy. As a result, people could buy policies at unfavorable terms. In response to these issues,

govt. often makes detailed regulations that set down minimum standards for policies and govern

how they may be advertised and sold.

REDLINING

Location is one of the variables used to set rates. Insurers are also starting to use credit “scores”,

occupation, marital status, and educational level to set rates. Many consider these practices to be

“unfair” and even racist. An interesting refutation to this is that the job of an insurance underwriter is

to properly categorize are given risk as to the likely hood that the loss will occur. Any factor that

causes are greater likelihood of loss should in theory is charge a higher rate. This is the basic

principle of insurance and must be followed for insurance companies or group to operate properly,

even for non-profit group. Thus, discrimination of potential insured by legitimate factor is central to

insurance. Therefore the only thing that can be considered legitimately “unfair” are practices that

discriminate against a given group without actual factors that show that the group is at higher risk.

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ROLE OF LIFE INSURANCE

Risks and uncertainties are part of life's great adventure, accident, illness, theft, natural disaster -

they're all built into the working of the Universe, waiting to happen.

ROLE 1: LIFE INSURANCE AS "INVESTMENT"

Insurance is an attractive option for investment. While most people recognize the risk hedging and

tax saving potential of insurance, many are not aware of its advantages as an investment option as

well. Insurance products yield more compared to regular investment options, and this is besides the

added incentives (read bonuses) offered by insurers.

You cannot compare an insurance product with other investment schemes for the simple reason that

it offers financial protection from risks, something that is missing in non-insurance products.

In fact, the premium you pay for an insurance policy is an investment against risk. Thus, before

comparing with other schemes, you must accept that a part of the total amount invested in life

insurance goes towards providing for the risk cover, while the rest is used for savings.

In life insurance, unlike non-life products, you get maturity benefits on survival at the end of the

term. In other words, if you take a life insurance policy for 20 years and survive the term, the

amount invested as premium in the policy will come back to you with added returns. In the

unfortunate event of death within the tenure of the policy, the family of the deceased will receive the

sum assured.

Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF, your

money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to your

funds will be limited. One can withdraw 50 per cent of the initial deposit only after 4 years.

The same amount of Rs 10,000 can give you an insurance cover of up to approximately Rs 5-12

lakh (depending upon the plan, age and medical condition of the life insured, etc) and this amount

can become immediately available to the nominee of the policyholder on death.

Thus insurance is a unique investment avenue that delivers sound returns in addition to protection.

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ROLE 2: LIFE INSURANCE AS "RISK COVER"

First and foremost, insurance is about risk cover and protection - financial protection, to be more

precise - to help outlast life's unpredictable losses. Designed to safeguard against losses suffered on

account of any unforeseen event, insurance provides you with that unique sense of security that no

other form of investment provides. By buying life insurance, you buy peace of mind and are

prepared to face any financial demand that would hit the family in case of an untimely demise.

To provide such protection, insurance firms collect contributions from many people who face the

same risk. A loss claim is paid out of the total premium collected by the insurance companies, who

act as trustees to the monies.

Insurance also provides a safeguard in the case of accidents or a drop in income after retirement. An

accident or disability can be devastating, and an insurance policy can lend timely support to the

family in such times. It also comes as a great help when you retire, in case no untoward incident

happens during the term of the policy.

With the entry of private sector players in insurance, you have a wide range of products and services

to choose from. Further, many of these can be further customized to fit individual/group specific

needs. Considering the amount you have to pay now, it's worth buying some extra sleep.

ROLE 3: LIFE INSURANCE AS "TAX PLANNING"

Insurance serves as an excellent tax saving mechanism too. The Government of India has offered

tax incentives to life insurance products in order to facilitate the flow of funds into productive assets.

Under Section 88 of Income Tax Act 1961, an individual is entitled to a rebate of 20 per cent on the

annual premium payable on his/her life and life of his/her children or adult children. The rebate is

deductible from tax payable by the individual or a Hindu Undivided Family. This rebate is can be

availed upto a maximum of Rs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs

60,000 a year, you can buy anything upwards of Rs 10 lakh in sum assured. (depending upon the

age of the insured and term of the policy) This means that you get a Rs 12,000 tax benefit. The

rebate is deductible from the tax payable by an individual or a Hindu Undivided Family.

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NEED OF LIFE INSURANCE

Risks and uncertainties are part of life's great adventure -- accident, illness, theft, natural disaster -

they're all built into the working of the Universe, waiting to happen.

Insurance then is man's answer to the vagaries of life. If you cannot beat man-made and natural

calamities, well, at least be prepared for them and their aftermath

Insurance is a contract between two parties - the insurer (the insurance company) and the insured

(the person or entity seeking the cover) - wherein the insurer agrees to pay the insured for financial

losses arising out of any unforeseen events in return for a regular payment of "premium".

These unforeseen events are defined as "risk" and that is why insurance is called a risk cover.

Hence, insurance is essentially the means to financially compensate for losses that life throws at

people - corporate and otherwise.

In order to calculate the amount of insurance that you require, based on your life stage and life need,

TYPES OF LIFE INSURANCE

Term Insurance Policy

Whole Life Policy

Endowment Policy

Money Back Policy

TERM INSURANCE POLICY

More of the products offered by Indian life insurers are developed and structured around these

"basic" policies and are usually an extension or a combination of these policies. So, what are these

policies and how do they differ from each other?

Term Insurance Policy

A term insurance policy is a pure risk cover for a specified period of time. What this means is that

the sum assured is payable only if the policyholder dies within the policy term. For instance, if a

person buys Rs 2 lakh policy for 15-years, his family is entitled to the money if he dies within that

15-year period.

What if he survives the 15-year period? Well, then he is not entitled to any payment; the insurance

company keeps the entire premium paid during the 15-year period.

So, there is no element of savings or investment in such a policy. It is a 100 per cent risk cover. It

simply means that a person pays a certain premium to protect his family against his sudden death.

26

He forfeits the amount if he outlives the period of the policy. This explains why the Term Insurance

Policy comes at the lowest cost.

Whole Life Policy

As the name suggests, a Whole Life Policy is an insurance cover against death, irrespective of when

it happens.

Under this plan, the policyholder pays regular premiums until his death, following which the money

is handed over to his family.

This policy, however, fails to address the additional needs of the insured during his post-retirement

years. It doesn't take into account a person's increasing needs either. While the insured buys the

policy at a young age, his requirements increase over time. By the time he dies, the value of the sum

assured is too low to meet his family's needs. As a result of these drawbacks, insurance firms now

offer either a modified Whole Life Policy or combine in with another type of policy

ENDOWMENT POLICY

Combining risk cover with financial savings, endowment policies is the most popular policies in the

world of life insurance.

In an Endowment Policy, the sum assured is payable even if the insured survives the policy term. If

the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured just as

any other pure risk cover.

A pure endowment policy is also a form of financial saving, whereby if the person covered remains

alive beyond the tenure of the policy, he gets back the sum assured with some other investment

benefits.

In addition to the basic policy, insurers offer various benefits such as double endowment and

marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its

value.

27

MONEY BACK POLICY

These policies are structured to provide sums required as anticipated expenses (marriage, education,

etc) over a stipulated period of time. With inflation becoming a big issue, companies have realized

that sometimes the money value of the policy is eroded. That is why with-profit policies are also

being introduced to offset some of the losses incurred on account of inflation.

A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum

assured is payable.

In case of death, the full sum assured is payable to the insured.

The premium is payable for a particular period of time

28

RESEARCH PROBLEM

The best way of understanding the problem is to discuses it with owns colleagues or with

those having some expertise in the matter. In an organization the researcher can seek the help

from a guide who is usually an experienced man and has several research problems in mind.

Often, the guide puts the problem in general terms and it is up to the researcher to narrow it

down and phrase the problem in operational term. In private business units, the problem is

usually marked by the administrative agencies with whom the researcher can discussed as to

how the problem originally came about and what consideration are involved in its possible

solutions.

By using the above concept throughout the two months project I have faced several problems

but the main problem behind these all problems is comparing the unit linked products of

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE with LIFE

INSURANCE CORPORATION and ICICI PRUDENTIAL LIFE INSURANCE.

Some problems which I faced in a regular manner are summarized in the following points.

1) People never get interested.

2) People already have one policy.

3) People are not much aware about ULIP.

29

OBJECTIVE OF THE STUDY:

Capture the insurance market to the desired level

Analysing ULIPs of Kotak Mahindra Old Mutual Life Insurance with Life

Insurance Corporation of India & I.C.I.C.I Prudential Life Insurance.

Promoting the sales of unit linked products of Kotak.

Increase the customer awareness regarding the life insurance being offered by the

Kotak Group.

30

REVIEW OF LITREATURE

31

A COMPARATIVE ANALYSIS OF ULIPs

(C. John Williams)

The project aims to make a detailed study of Unit Linked Insurance Plans (ULIPs) in the

Indian context, a comparative analysis of ULIPs of some well known selected companies

and in the process identify the strengths and weaknesses of IDBI FORTIS. The different

selected companies apart from IDBI FORTIS on which the project is entirely focused are

namely:

a. ICICI PRUDENTIAL

b. BAJAJ ALLIANZ

c. TATA AIG LIFE

d. LIFE INSURANCE CORPORATION OF INDIA

e. HDFC STANDARD LIFE

The comparative study is primarily based in terms of the various benefits offered viz.

Death Benefits, Health benefits, Maturity Benefits, financial benefits & other benefits.

The various parameters taken into consideration were flexibility, transparency, liquidity

and the number of funds options available. The project consists of a detailed analysis of

the comparison of various ULIPs of IDBI FORTIS with that of the selected major players

in the market. The results of the project have been an outcome of a detailed analysis of

collected secondary data and well supported by analysis of primary data collected through

a survey in the Hyderabad city. The project required me to design a questionnaire and

conduct a primary survey. The survey was mainly conducted to study the consumer

perception, opinion and awareness of various insurance products. The number of

respondents targeted was 133.The sample of respondents included was carefully selected

targeting respondents from all age groups. Also the preferences of the respondents

towards these selected insurance companies have been noted and the reasons analyzed.

32

The data gathered from the primary survey was coded in a statistical tool called as

Statistical Package for Social Science (SPSS) for analysis and to find various factors that

affect an investor decisions while choosing an investment option in this vast market.

Finally we interpreted the results of the project by combining both the primary and the

secondary data analyses then identified the areas where the company is really strong and

the areas where it needs to have a second look. We have also found out the amount to

which each of the selected companies was affected due to the market slow down in the

last one year The project also involved a complete study of the positioning strategies

adopted by IBDI FORTIS in general. This includes a detailed study of the various

advertising strategies as well.

COMPETITOR ANALYSIS

(Kirthy Shetty)

Competitor analysis should be carried out prior to applying a marketing strategy. It gives one a clear picture of what their competitors are doing and accordingly improve their product and gain an edge over others. In addition, this helps organizations to be better prepared to face the risks of the market and have a good defense mechanism against any market fluctuations. A strong brand averts any setbacks and hurdles of the future. Thus, a market survey will facilitate you to brand your product effectively.

There are plenty of options online to carry out a search on a competing product and services and understand their company's marketing strategies and their strengths and weaknesses. Market research experts will be able effectively scan and incorporate a competitor's marketing strategies and to find out the potential market for the product.

What is the importance of carrying out a research on competitors?

• Figure out the best practices in the market • Gain an understanding of your competitor's strategies • Determine what the key success factors in your industry are • Develop a better marketing plan for your product launches • Maintain a competitive edge over others by ruling out the setbacks

To excel in the pharmaceutical industry, create a strategic marketing plan based on research studies and focus on the product's unique selling proposition.

33

Innovative marketing strategies available online can be used to maximize ROI. Creating an impressive web presence goes a long way in winning over a majority share of the market. This is possible only with an understanding of strength and weaknesses of others in the industry.

http://EzineArticles.com/?expert=Kirthy_Shetty

COMPARITIVE ANALYSIS OF ULIPS IN INDIA

(Nandha Kishore)

The Life Insurance sector in India is growing at a very high rate through the Unit Linked Insurance

Plan (ULIPs). Most of the Life Insurance companies grow more than 100% every year all through

ULIPs. In this study we have compared the ULIP’s products of five leading Insurance companies,

which are hot selling products at present and also we have concentrated on the ranking of those

companies based on the some criteria like:

Minimum premium contribution

Minimum Term

Charges

Agents Commission

Returns from 11-01-05 to 11-05-05

Returns since inception Net Asset Value for all those five companies is collected.

Considering an investor wants to invest Rs.5000 every month, the charges and fund management

between each and every companies will vary. After deduction of those charges what returns will an

investor will get if he invest that amount in any of those five companies. (i.e.,)

1. ICICI Prudential

2. SBI Life

3. HDFC Standard Life

4. TATA AIG

5. Kotak Mahindra Old Mutual Life Insurance.

34

COMPARITIVE STUDY OF MUTUAL FUNDS IN INDIA

(Ansari Sheeman Ahmad)

A mutual fund is a scheme in which several people invest their money for a common

financial cause. The collected money invests in the capital market and the money, which

they earned, is divided based on the number of units, which they hold.

The mutual fund industry started in India in a small way with the UTI Act creating

what was effectively a small savings division within the RBI. Over a period of 25 years

this grew fairly successfully and gave investors a good return, and therefore in 1989, as

the next logical step, public sector banks and financial institutions were allowed to float

mutual funds and their success emboldened the government to allow the private sector to

foray into this area.

The advantages of mutual fund are professional management, diversification,

economies of scale, simplicity, and liquidity.

The disadvantages of mutual fund are high costs, over-diversification, possible tax

consequences, and the inability of management to guarantee a superior return.

The biggest problems with mutual funds are their costs and fees it include

Purchase fee, Redemption fee, Exchange fee, Management fee, Account fee &

Transaction Costs. There are some loads which add to the cost of mutual fund. Load is a

type of commission depending on the type of funds.

Mutual funds are easy to buy and sell. You can either buy them directly from the

fund company or through a third party. Before investing in any funds one should consider

some factor like objective, risk, Fund Manager’s and scheme track record, Cost factor etc.

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There are many, many types of mutual funds. You can classify funds based

Structure (open-ended & close-ended), Nature (equity, debt, balanced), Investment

objective (growth, income, money market) etc.

A code of conduct and registration structure for mutual fund intermediaries, which

were subsequently mandated by SEBI. In addition, this year AMFI was involved in a

number of developments and enhancements to the regulatory framework.

The most important trend in the mutual fund industry is the aggressive expansion

of the foreign owned mutual fund companies and the decline of the companies floated by

nationalized banks and smaller private sector players.

Reliance Mutual Fund, UTI Mutual Fund, ICICI Prudential Mutual Fund, HDFC

Mutual Fund and Birla Sun Life Mutual Fund are the top five mutual fund company in

India.

Reliance mutual funding is considered to be most reliable mutual funds in India.

People want to invest in this institution because they know that this institution will never

dissatisfy them at any cost. You should always keep this into your mind that if particular

mutual funding scheme is on larger scale then next time, you might not get the same

results so being a careful investor you should take your major step diligently otherwise

you will be unable to obtain the high returns.

36

COMPARITIVE ANALYSIS OF STOCK BROKING FIRMS

(BHAVYA KALRA)

There is growing competition between brokerage firms in post reform India. For investor

it is always difficult to decide which brokerage firm to choose.

Research was carried out to find which brokerage house people prefer and to figure out

what people prefer while investing in stock market.

This research suggest that people are reluctant while investing in stock and commodity

market due to lack of knowledge.

Main purpose of investment is returns and liquidity, commodity market is less preferred

by investors due to lack of awareness. The major findings of this study are that people are

interested to invest in stock market but they lack knowledge.

According to the data that have been collected, all the people who were contacted are

aware of share market in Bangalore.

Survey shows that of the people those who are aware of share market 90% people

have knowledge of online share trading & 10% people have no proper knowledge of

online share trading.

People like to invest more in insurance sector rather than share market.

Still 90% of people prefer to trade through online trading rather than using broker.

37

The best preferred broking firm among the people of Bangalore is Religare with 25%

followed by ICICI-Direct, India bulls, Angel Broking, Share khan, and other

respectively.

72% people are satisfied with their broking house where as 22% of the people are not

sure as they are first time investors and the remaining 6% are not satisfied.

45% of the investment decisions of the people are influenced by the economic

policies of the government followed by friends/relatives, self brokers.

CURRENT SCENARIO

38

INSURANCE MARKET - PRESENT

The insurance sector was opened up for private participation a decade back. For years

now, the private players are active in the liberalized environment. The insurance market

has witnessed dynamic changes, which include presence of a fairly large number of

insurers both life, and non-life segment. Most of the private insurance companies have

formed joint venture partnering well-recognized foreign players across the globe. The

Indian life insurance market generated total revenues of $41.36 billion in 2007, thus

Representing a compound annual growth rate (CAGR) of 11.84% for the period spanning

2000-2007. Life insurance market had a growth of $22.46 billion within a period of 7

years with a growth rate of 118.24%. Estimated life premiums rose to INR 1,470,800

million ($36.77 billion) in 2006 from INR 1,301,540 million ($32.54billion) in 2005. We

envisage that life premiums in 2011 will be $65.96 billion, a growth larger than they were

in 2007. The performance of the market is forecast to accelerate, with an anticipated

CAGR of 9.78% for the four-year period 2007-2011 expected to drive the market to a

value of $65.96 billion by the end of 2011. There would be a growth of $24.6 billion i.e.

59.48% in the next 4 years. Non-life premiums in India were $6.53 billion in 2007. Gross

written premium (GWP) in the Indian non-life insurance market reached a value of $5.75

billion in 2006, this representing an annual growth of 13.55% for the period spanning

2006-2007. Estimated non-life premiums rose from INR230 billion ($5.75 billion) in

2006 to INR261 billion ($6.53 billion) in 2007.

39

We anticipate that non-life premiums will grow by a CAGR of 9.40% between 2007-

2011. We are looking for non-life premiums to rise by $405 million over the five years to

the end of 2011 with a growth rate of 62.02%. With a huge population base and large

untapped market, insurance industry is a big opportunity area in India for national as well

as foreign investors. India is the fifth largest life insurance market in the emerging

insurance economies globally and is growing at 32-34% annually. This impressive growth

in the market has been driven by liberalization, with new players significantly enhancing

product awareness and promoting consumer education and information. The strong

growth potential of the country has also made international players to look at the Indian

insurance market. Moreover, saturation of insurance markets in many developed

economies has made the Indian market more attractive for international insurance players,

according to "Booming Insurance Market in India (2008-2011)”.

Total life insurance premium in India is projected to grow Rs 1,230,000 crore by

2010-11.

Total non-life insurance premium is expected to increase at a CAGR of 25% for

the period spanning from 2008-09 to 2010-11.

With the entry of several low-cost airlines, along with fleet expansion by existing

ones and increasing corporate aircraft ownership, the Indian aviation insurance

market is all set to boom in a big way in coming years.

Home insurance segment is set to achieve a 100% growth as financial institutions

have made home insurance obligatory for housing loan approvals.

Health insurance is poised to become the second largest business for non-life

insurers after motor insurance in next three years.

A booming life insurance market has propelled the Indian life insurance agents

into the ‘top 10 country list’ in terms of membership to the Million Dollar Round

Table (MDRT) — an exclusive club for the highest performing life insurance

agents.

CAPITAL REQUIREMENTS AND FOREIGN PARTICIPATION

Minimum capital requirement for direct life and Non-life Insurance company is INR1000

million and that for reinsurance company is INR2000 million. A maximum 26% foreign

40

equity stake is allowed in direct insurance and reinsurance companies. In the 2004-05

budget, the Government proposed for increasing the foreign equity stake to 49%.

LIFE INSURANCE CORPORATION

As is evident from its very name, it deals with insurance of human life. “Life insurance

corporation of India”- a public sector undertaking has the monopoly in this sector since its

nationalization. In our wordily life, whenever there is uncertainty, there is an involvement

of risk. The instinct for security against such risk is one of the basic motivating forces

determining human attitudes. As a squeal to this quest for Security, the concept of

insurance must have been born. The urge to provide insurance or protection against the

loss of life & property must have prompted people to make some sort of sacrifice

willingly in order to achieve security through “COLLECTIVE CO-OPERATION”, in this

sense; story of insurance is probably as old as the story of mankind. All life insurance

companies in India have to comply with the strict regulations laid out by Insurance

Regulatory and Development Authority of India (IRDA). Therefore there is no risk in

going in for private insurance players. In terms of being rated for financial strength like

international players, only ICICI Prudential is rated by Fitch India at National Insurer

Financial Strength Rating of AAA (Ind) with stable outlook indicating the highest claims

paying ability rating.

Figure 1:

41

The trend of the Indian insurance industry ($Bn) 2000-2011 (Source: The knowledge

Centre)

42

The private companies are coming out with better products which are more beneficial to

the customer. Among such products are the ULIPs or the Unit Linked Insurance Plans

which offer both life cover as well as scope for savings or investment options as the

customer desires. Further, these types of plans are subject to a minimum lock-in period of

three years to prevent misuse of the significant tax benefits offered to such plans under

the Income Tax Act. Unlike the mutual fund product that has a very simple cost structure,

ULIPs carry a greater number of costs (administration and mortality), in addition to the

others. So comparing ULIPs with mutual funds is erroneous.

Following is the list of all life insurance company granted permission by IRDA.

1. Bajaj Allianz Life Insurance Company Limited

2. Birla Sun Life Insurance Co. Ltd

3. HDFC Standard Life Insurance Co. Ltd

4. ICICI Prudential Life Insurance Co. Ltd.

5. ING Vysya Life Insurance Company Ltd.

6. Life Insurance Corporation of India

7. Max New York Life Insurance Co. Ltd

8. Met Life India Insurance Company Ltd.

9. Kotak Mahindra Old Mutual Life Insurance Limited

10. SBI Life Insurance Co. Ltd

11. Tata AIG Life Insurance Company Limited

12. Reliance Life Insurance Company Limited.

13. Aviva Life Insurance Co. India Pvt. Ltd.

14. Sahara India Life Insurance Co, Ltd.

15. Shriram Life Insurance Co, Ltd.

16. Bharti AXA Life Insurance Company Ltd.

17. Future Generali Life Insurance Company Ltd.

18. IDBI Fortis Life Insurance Company Ltd.

19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd

20. AEGON Religare Life Insurance Company Limited.

21. DLF Pramerica Life Insurance Co. Ltd.

22. Star Union Dai-ichi Life Insurance Comp. Ltd.

43

Figure 02: Market Share of Various Life Insurance companies in India

Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the

largest player in the market. Among the private sector players, ICICI Prudential Life

Insurance(JV between ICICI Bank and Prudential PLC)is the largest followed by Bajaj

Allianz Life Insurance Company Limited (JV between Bajaj Group and Allianz).

44

RESEARCH METHODOLOGY

45

TYPE OF RESEARCH:

Descriptive Research.

Time of research:

Research was conducted within a time period of June 1, to July 31, 2010.

Scope of research: Research was done in the northern and western regions of Delhi (Vijaynagar,

Shaktinagar, Rohini Sector 1, 2, 3)

SAMPLING:

Research was done under non-probabilistic sampling approach through judgmental sampling.

Sampling elements are people in Delhi having Q score of at least 3. Sample size took was 50

people.

Questionnaire design:

For research purpose questionnaire was designed with both closed and open ended questions

keeping in mind objectives of research. Questionnaires were formed under the guidance of the

industry guide.

Data Collection

a). Primary data collection:

Through self approach

b). Secondary data collection:

The companies have some data and it was given to us for calling.

Through Newspaper

Internet

46

DATA ANALYSIS

47

DATA ANALYSIS AND HYPOTHESIS TESTING

After collecting data through survey various tools were used to analysis data. These include

frequency distribution, bar-chart representation, mean.

DATA INTERPRETATION

Total sample size= 50

Table 01: Showing the frequency and percentage of gender

Gender Frequency Percentage

Male 43 86

Female 7 14

Total 50 100

Figure 03:

48

The sample has shown that we have more interaction with the males. But we also have to consider

the females.

Table 02: Showing the frequency and percentage of education

Education Frequency Percentage

PG 6 12

Graduate 31 62

12th 11 22

10th 2 4

Total 50 100

Figure 04:

49

The total population may be small but from there we can see that the education level among the

people is increasing.

Table 03: Showing the frequency and percentage of marital status

Marital Status Frequency Percentage

Married 23 46

Unmarried 27 54

Total 50 100

Figure 05:

50

Table 04: Showing the frequency and percentage of marital occupation

Occupation Frequency Percentage

Unemployed 16 32

Service 19 38

Business 12 24

Retired 3 6

Total 50 100

Figure 06:

The graph shows that that there is almost equal percentage of population in each segment except

retired. So there lies an equal opportunity in all the segment of occupation to grow our business. As

51

38%

6%24%

32%

Occupation

Service

Retired

Business

Unemployed

we have seen that the service holder are more stable in life so they are the main region where we

have to concentrate but we cannot reject the unemployed and business man.

The basic aim of the company in providing us with this assignment was to find out the people’s

perception of their brand in the market.

COMPETITIVE ANALYSIS BETWEEN KOTAK SAFE INVESTMENT,

LIC’S MONEY PLUS AND ICICI’S LIFE TIME SUPER

1. INVESTMENT FUNDS AVIALABLE:

A) KOTAK SAFE INVESTMENT PLAN

There are 6 fund options avialable-

Investment &

option

Equity (high

risk)

Debt (medium

risk)

Cash & money

market

Risk & option

return

Aggressive

Growth60%- 100% 0%-40% 0% Aggressive

Guarenteed/

Dynamic

Growth

40%-80% 20%-60% 0%-20% Aggressive

Guarenteed/

Dynamic

balanced

30%-60% 20%-70% 0%-20% Moderate

Guarenteed/

Dynamic bond----- 0%-100% 0%-20% Safe

Guarenteed/

Dynamic money

Market

----- ----- 100% Conservative

52

B. LIC MONEY PLUS :

There are 4 fund options :-

Fund

type

return

Investment in

government/

government

guaranteed

securities/

corporate

debt

Short-term

investment

Investment in

listed equity

shares

Details and

objective of

the fund for

risk

Bond Fund Not less than 80% 100% Nil Low Risk

Secured

FundNot less than 65%

Not more than

85%

Not less than

15% & not more

Than 35%

Steady

income-lower to

medium risk

Balanced

FundNot less than 50 %

Not more than

70%

Not less than

30% & not more

Than 50%

Balanced Income

Growth,

Medium risk

Growth

FundNot less than 20%

Not more than

40%

Not less than 60%

& not more than

80%

Long term

Capital growth,

High Risk

53

C. ICICI LIFE TIME SUPER : There are 6 fund options.

Fund Name & its

Objectives

Asset Allocation Minimum Maximum Potential Risk-

Reward

Flexi growth:

Long term return from

Equity portfolio of

Large, mid & small cap

Companies.

Equities & related

Securities Debt,

Money market &

Cash

80%

0%

100%

20%High

Maximiser: Long term

Capital appreciation

From an equity portfolio

Equities & equity

related securities

debt money market

& cash

75%

0%

100%

25%High

Flexi Balanced: Balance

Of capital appreciation

& stable returns from an

Equity (large, mid &

Small cap cos.) & debt

Portfolio

Equities & related

Securities Debt,

Money market &

Cash

0%

40%

60%

100%Moderate

Balancer: Balance of

Growth & steady

Returns from an equity

& debt portfolio

Equities & related

Securities Debt,

Money market &

Cash

0%

60%

40%

100%Moderate

Protector: Accumulate

Steady income at a

Lower risk

Debt instruments,

Money market &

cash

100% 100% Low

Preserver: Protection of

Capital through very

Debt instruments,

Money market &

0%

50%

50%

100%

Capital

Preservation

54

Low risk investments.

Investments upto 20% can be allocated to

this fund.

cash

2. SWITCHING CHARGE :

a) KOTAK SAFE INVESTMENT PLAN

The first four switches in a year are free. Rs. 500 will be charged for every additional

switch.

b) LIC MONEY PLUS

Switching is not available.

c) ICICI LIFE TIME SUPER

You can switch your investment between the funds at any time (provided the policy is in

force), depending on your financial priorities and investment objective. In any policy

year, 4 switches can be done free of charge. The minimum switch amount is Rs. 2000.

3. PARTIAL WITHDRAWAL:

a) KOTAK SAFE INVESTMENT PLAN

There is no surrender / partial withdrawal allowed in the first 3 policy years. Thereafter

the surrender charge / partial withdrawal charge is 3% in year 4, 2% in year 5 , 1% in year

6 and 0% from year 7 onward. No surrender / partial withdrawal charges apply to the

Top- up accounts. For the third and subsequent partial withdrawals from the Main

account in policy year an additional Rs. 500 per withdrawal will be charged.

b) LIC MONEY PLUS

You may encash the units partially after the third policy anniversary subject to the

following:

In case of minors, partial withdrawals shall be allowed from the policy

anniversary coinciding with or next following the date on which the life assured

55

attains majority (i.e. on or after 18th birthday). Partial withdrawals may be in the

form of fixed amount or in the form of fixed number of units. For 2 years’

period from the date of withdrawal, the Sum Assured under the Basic plan shall be

reduced to the extent of the amount of partial withdrawals made.

Under Regular Premium policies where less than 3 years’ premiums have been

paid and further premiums are not paid, the partial withdrawals shall not be

allowed.

Under Regular Premium policies where atleast 3 years’ premiums have been paid,

partial withdrawal will be allowed subject to a minimum balance of two

annualized premiums in the Policyholder’s Fund Value.

Under Single Premium policies, the partial withdrawal will be allowed subject to a

minimum balance of Rs. 5,000/- in the Policyholder’s Fund Value.

c) ICICI LIFE TIME SUPER

Partial withdrawals will be allowed after completion of 3 policy years and on payment of

full 3 years’ premium. The minimum partial withdrawal amount is Rs.2000.

4. GUARANTEED MATURITY VALUE :-

a) KOTAK SAFE INVESTMENT PLAN

Most investors who stay away from equity do so not because they do not want to earn

higher equity linked returns but because they fear loss of capital. To protect their money

from losses they invest in low return debt instruments. We, at Kotak Life Insurance,

having understood this concern of our investors and have developed a unique proposition

of a Guaranteed Maturity Value, underpinning your investment in equity.

This unique position arises from the fact that the plan offers an option to invest up

to 80% in equity via Guaranteed Growth Fund. On reaching maturity, the

Company would pay out the Guaranteed Maturity Value or fund value in the Main

Account, whichever is higher plus the fund value in the Top-Up Accounts. This

means that when the markets are in a bull phase, you will enjoy the market linked

returns delivered on your portfolio. However, in a bear market, your investment is

56

still safe as you are sure of getting the Guaranteed Maturity Value applies where all

premiums have been paid up-to-date at maturity and will fall away, where partial

withdrawals have been made from the Main Account.

On maturity, you can withdraw the entire maturity proceeds and the policy would

terminate. If the need is not immediate, you can just let the amount multiply. You

can also elect to receive a percentage of the maturity proceeds in cash and the

balance by way of pre-specified installments, for up to five years after maturity.

b) LIC MONEY PLUS

Not available

c) ICICI LIFE TIME SUPER

Not available

5. DEATH BENEFIT :-

a) KOTAK SAFE INVESTMENT PLAN

Life is uncertain and you would not want to take a chance when it comes to your loved

ones. Depending on your existing life cover and the need you have, this plan allows you

to choose your life cover- the sum assured on death:

High Cover: Policy Term X Annual Premium

Low Cover : Greater of (5 X Annual Premium,0.5 X Policy Term X Annual

Premium)

In the event of unfortunate death, you beneficiary would get the sum assured ( less any

partial withdrawals made from the Main Account during the 2 years immediately

preceding death. If death occurs after attainment of age 60, all the partial withdrawals

made from age 58 onwards will be set off against the sum assured) or fund value in the

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Main Account whichever is higher. Plus, if you have invested any Top-Up Premiums,

then you would get back the fund value in the Top-Up Accounts.

If Death occurs within the first five years of the policy and life insured is a minor, the

benefit payable on death will be all premiums paid (excluding rider and extra premiums)

or fund value in Main Account; whichever is higher plus fund value in Top-Up Accounts;

if any.

b) LIC’S MONEY PLUS

Higher of Sum Assured or the Fund Value of the units held in the Policyholder’s Fund

Value* shall be available as death benefit. .

*For the Life Assured of age less than 12 years before the commencement of risk, the

Fund Value of units held in the Policyholder’s Fund Value shall be paid in case of death.

c) ICICI LIFE TIME SUPER

In the unfortunate event of death during the term of the policy , the nominee shall receive

the higher of Sum Assured (net of permissible partial withdrawals) or the Fund Value.

6. PREMIMUM :-

a) KOTAK SAFE INVESTMENT PLAN

If you wish to pay off all premiums over a short period of time, instead of the full term,

we have the Limited Premium Payment option for you. This option allows you to pay off

your premiums over tenure shorter than your policy term. Under this option, you can pay

off your premium over 3, 5, 6, 7, 10 or 15 years.

b) LIC MONEY PLUS

Minimum Policy Term - 5 years

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Maximum Policy Term - 20 years

Minimum Premium - Rs.10,000 for Single Premium

Sum Assured under the Basic

Plan-

Rs.5,000 p.a. for Regular

Premium

c) ICICI LIFE TIME SUPER

No other facility.

7. TOP – UP PREMIUM :-

a) KOTAK SAFE INVESTMENT PLAN

Minimum – Rs. 10,000.

Besides regular premiums, whenever you have excess money, you can invest if by way of

Top-Up Premiums, without any commitment to bring them again in the coming year

(subject to a maximum of 25 % of the cumulative premiums paid till that date).

You can invest your surplus money across a combination of our Dynamic Funds and units

bought from this amount will be held in separate Top-Up Accounts for each Top-Up. In

the event of maturity or death, you would receive the value of these Top-Up units.

b) LIC MONEY PLUS

Not applicable.

c) ICICI LIFE TIME SUPER

Not applicable.

8. SURRENDERING THE POLICY :-

a) KOTAK SAFE INVESTMENT PLAN

Kotak Safe Investment Plan II allows you early exit options through partial withdrawal of

funds or complete surrender of the policy. With this plan, you can access the investment

after completion of the 3rd policy year, with no surrender or partial withdrawal charges

from year 7 onwards ( subject to retaining a minimum balance of one annualized basic

premium).

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You may access your moneys in the Top-Up Accounts for funds without any charges.

The Top-Up Premiums should complete a lock-in period of 3 years from the date of

investing the Top-Up Amount before you can access the investment. This condition does

not apply for the Top-Up Premium paid during the last 3 years of the policy. Top-Ups can

be made only while the premiums are being paid. Partial Withdrawals must be made from

the qualifying Top-Up accounts before accessing the Main Account.

Partial Withdrawals will be allowed only after the life insured attains the age of 18. The

Guaranteed Maturity Value will cease to apply, where partial withdrawals have been

made from the Main Account.

b) LIC MONEY PLUS :-

The surrender value, if any, is payable only after the completion of the third policy

anniversary both under Single and Regular premium Contract. The surrender value will

be the Fund Value of units held in the Policyholder’s Fund Value at the date of surrender.

There will be no Surrender charge.

If you apply for surrender of the policy within 3 years from the date of commencement of

policy, then the fund value of units shall be converted into monetary terms. No charges

shall be made thereafter and this monetary amount shall be paid on completion of 3 years

from the date of commencement of policy.

The conversion in monetary amount shall be as under:

The NAV on the date of application for surrender or the date when revival period is over

(in case of compulsory surrender), as the case may be, multiplied by the number of units

in the Policyholder’s Fund Value as on that date.

Further this monetary amount shall be transferred to Non-Unit fund and the payment of

surrender value when due shall be from this fund only.

c) ICICI LIFE TIME SUPER

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You can surrender your policy. Surrender values are available to you after deducting

surrender charges and would depend on the number of completed policy years.

Following are the Surrender values applicable after payment of full 3 years’ premium.

NO. OF COMPLETED YEARS OF

POLICY

SURRENDER VALUES AS A % OF

THE FUND VALUE

3 years 98%

4 years 99%

5 years and above 100%

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9. PLANS AT A GLANCE :-

a) KOTAK SAFE INVESTMENT PLAN

Entry age for insured life Min-0 years, Max-65 years

Term at entryMin-10 years or 18 minus age for minors whichever is

higher, Max-30 yrs.

Maturity Age Max-75 years

Regular Premium Min-Rs.18,000 annually

Limited Premium Payment Min-Rs 50,000 annually

Limited Premium Payment Term

3 pay for 10 year policy term 5,6,7 pay

for 10 to 15 years policy term 10 & 15

pay for policy term of 15years & above

Top-Up premiums/Partial Min-Rs 10,000

b) LIC MONEY PLUS –

Minimum Age at entry 0 (age last birthday)

Maximum Age at entry 65 years (age nearer birthday)

Minimum Maturity Age 18 years (completed)

Maximum Maturity Age 75 years (age nearer birthday)

Minimum Policy Term 5 years

Maximum Policy Term 20 years

Minimum Premium Rs.10,000 for Single Premium

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Sum Assured under the Basic Plan Rs.5,000 p.a. for Regular Premium

c) ICICI Life time super

Minimum/ Maximum Entry Age 0-65 years

Minimum/ Maximum Maturity Age 18-75 years

Minimum/ Maximum Policy Term 10-75 years

Premium Payment Frequency Yearly, Half-yearly, Monthly

Minimum Premium Rs. 18,000 per annum

Minimum Sum AssuredAnnual Premium x Term/2 , subject to a

of Rs.1,00,000

Tax Benefit

Premium paid for the policy and critical

illness benefit rider will be eligible for tax

benefit under section 80 C & 80 D

respectively.

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SWOT Analysis

Strengths

Rich experience of the management.

Stabilized and loyal clients.

Skilled and tactful staff.

Weakness

Insufficient office equipments.

Not all employees has his/her cabin.

Work place (back office) is quite congested.

Opportunities

Stability through increased brand awareness, market penetration and service

offerings across all categories of financial services.

Increase in customer’s wallet share.

Leveraging the latest technology for providing quality and client centric services.

Growth in economy would lead to higher demand for credit.

Threats

Increasing interest rate scenario.

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Execution risk.

Competition from local and multinational players.

Rising inflation could reduce savings and investments

Rising crude oil prices

FINDINGS OF THE SURVEY

While doing the survey I came across the following things:

Most of the people are not aware about the company. People do know about the

Kotak Mahindra Group, but they rarely have heard about the Kotak Life

Insurance.

People also complaint about the publicity of the Kotak’s life insurance. People

haven’t seen much of the advertisements of the company as compared to the other

competitors viz, ICICI, LIC etc.

Basically, people still have more faith in government-controlled companies (i.e.

L.I.C). They still are afraid of investing into the private companies, due to the bad

previous record of the private companies, various big scams done by the

companies like Sterling Tree Magnum; UTI etc. have totally changed the minds of

the people.

People are ready to invest in government companies for the security of their

investments, and don’t mind getting lesser returns. The mindsets of the people are

set towards L.I.C. (as government being involved in it.)

Also, now a day’s people are wishing to invest in the companies for a short period

only, and if they want to invest in long time period then they want flexibility in

withdrawing their money without getting charged much on withdrawing.

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People have also complaint that they haven’t seen much of the KOTAK’s life

advisors. As that of the L.I.C’s and ICICI’s etc. who regularly visit them at their

place and tell them about the various attractive latest plans regularly.

I surveyed about 50 people and came across the following facts:

After getting the questionnaire filled, I found that:

From the total of 50 people I surveyed, Kotak Life Insurances Awareness

As compared to its group name is as follows:

Figure 07:

This shows that the majorities of the people do know about the kotak as a group by Kotak

Mahindra but have rarely heard the name of Kotak Life insurance. The company needs to

advertise itself also.

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Now the Kotak life insurance awareness among the people along with the other

companies:

Figure 08:

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From the total of 50 people I surveyed only 26 people are being insured through the

various Life Insurance Companies in the market.

Figure 09:

Among the insured people the market share of the L.I.C was the maximum.

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Figure 10:

It was clearly visible from the public responses that they are better informed by agents of

life insurance companies rather than advertisement through television and outdoor

medium of advertisements.

Figure 11:

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FACTORS TO BE CONSIDERED WHILE CHOOSING A LIFE INSURANCE

GOVERNMENT/PRIVATE COMPANY

PLAN

POPULARITY

PREVIOUS RECORDS

CONSULT AN ADVISOR

GOVERNMENT/PRIVATE COMPANY PLAN

POPULARITY PREVIOUS RECORDS

CONSULT AN ADVISOR

The pie chart clearly shows the first and the foremost thing that the people will take into

consideration while taking a life insurance policy is that whether the company offering

the policy is a government based or a private company. Then they will look for its

previous records and then plan and the popularity and lastly they will consult an advisor.

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Factors considered behind taking an insurance policy.

Figure 12:

Out of the 50 people who filled up the questionnaire, 25 of them take insurance for tax planning, 13

of them use it for life cover, 7 for the return on investment, rest use it as a tool to avoid future risks.

RECOMMENDATION

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TIE UP WITH CLUBS

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE CO LTD should even make

certain clubs as their corporate agents. The main reason is that club is an organization having a large

member base across the country. Hence this can be a prospective channel for KOTAK for

distribution of their life insurance product.

TIE UP WITH ASSOCIATIONS:

Tie- ups can also be made with associations like ALL INDIA TENNIS ASSOCIATION (AITA)

for the distribution of life insurance products. The reason behind this recommendation is that such

association has a large number base and also part of the premium generation can be utilize for the

welfare of the sorts men engaged with association.

TIE UP WITH CELLULAR COMPANIES:

Tie up with companies like AIRTEL, IDEA, RELIANCE INFOCOM, HUTCH etc will definitely

serve as a win-win situation for both. This is because these companies can distribute the life

insurance products through their existing nation wide distribution network.

TIE UP WITH MUTUAL FUND COMPANIES:

Kotak should also make tie up with companies dealing into distribution of mutual funds and other

similar natured financial products and also have a wide distribution network and can provide

customers a complete investment solution under one roof.

LIMITATIONS OF THE RESEARCH FINDINGS

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LIMITATION

The data was limited due to quota sampling.

Some refusals by selected individuals among these groups and this may serve to bias the

sample in ways that are not readily evident.

The research design was a one-time survey that produced a profile of the characteristics but

couldn’t help conclude the cause and effect relationships between these characteristics.

The information may change over time in response to changing social and economic

conditions in the region.

Information collected in the study was of a self-report nature which, depending on the

subject areas being queried, may be prone to some inaccuracy as a result of less than

accurate recall, lack of information, or discomfort with self-disclosure.

We couldn’t contact many HNI’s (High network income).

CONCLUSION

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There are many organizations in the field of insurance. Kotak Life Insurance has many

competitors in this field .The products of Kotak are quite differentiable and better than

many others in many respects.

The better features of Kotak are-

GMV in Kotak Safe Investment Plan

Better fund options

High cover & low cover facilities in Death Benefit in KOTAK SAFE

INVESTMENT PLAN

Limited premium payment option

Lesser charges

Highest returns than any other organization ( 47 % last year)

Top-up Premium facility

Facility of tax free switching between funds

Easy exit options

Hence Kotak Life Insurance is offering many plans which are far better than others.

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LEARNING SUMMARYI am very lucky that I got the opportunity of working with Kotak Mahindra OM Life

Insurance Ltd- a leading player in life insurance sector. This company is come under the

category of the 3 companies which achieved its break-even point. I learnt lot from them.

The work has been carried over a span of 2 months.

The project assigned to me was “Competitive Analysis of ULIPs with special referenece

to KLI, ICICI Prudential and LIC”. They told me about insurance sector, insurance

products, insurance industry and Kotak Life Insurance. With different discussions with

group, I get an opportunity to interact with different type of people and gain knowledge

about insurance industry. So, working with this company, I got an opportunity to have the

insight of insurance sector.

The learning of working is as follows:

It gave me the excellent opportunity to learn and understand various intangible

things like thinking pattern and how to deal with different type of people to

achieve a goal.

How to identify and understand the needs and problem of the customer and how it

is solved and right solution is provided.

How to interact with the people in the corporate world.

In order to get some information out of somebody, it is important to highlight

his/her interest in the whole affair.

The practice and procedure which are followed in

insurance companies are as follows:

The whole life insurance company is based upon its human resource mainly its

life advisors.

There is great focus on the recruitment and training of life advisors.

There is a “reward and recognition” program for the performance appraisal of

sales manager and life advisors.

There is great focus on the marketing of the products. Whole marketing is done on

the basis of “Kotak as a Brand”.

There are mainly three channels through which insurance product is sold:

o Tied

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o Banccassurance

o Alternates

The operation department has also main significance in an insurance industry in

which underwriting practice is done.

The premium which is received from the customer is invested in the market

according to will of the customers to take risk which is done by investment

managers at higher level.

The management of fund is done by fund managers.

The pricing of product is done with the help of actuaries.

In marketing, mainly three things are focused:

o Product development

o Communication

o Channel development

The practices and concepts which are followed is not different from the concepts which I

learnt in my class but the main thing is its application. How different concept can be used

at different time is more important.

The main limitation which I think present in the company is its flexible working

environment and spirit of competition among employees who are paid according to their

services but these things can be proved as a great “motivational force.”

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BIBLIOGRAPHY

BOOKS AND MAGAZINES

Monthly Fact Sheet MAY 2005

Mutual fund Review MAY 2005

Study Material for AMFI exam

Investment update report of other AMC’S

Various Business Newspaper

Business today

INTERNET SITES

WWW.INVESTMSRTINDIA.COM

WWW.PERSONALFN.COM

WWW.ECONOMICTIMES.COM

WWW.KOTAK.COM

WWW.ICICIPRULIFE.COM

WWW.IMFINDIA.COM

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QUESTIONNAIRE

1. Which age group do you belong?

18 – 25 [ ]

26 – 35 [ ]

36 – 45 [ ]

46 and above [ ]

2. What is your Educational Background?

10+2 [ ]

Graduation [ ]

Post Graduation [ ]

Others [ ]

3. What is your Marital Status?

Married [ ]

Unmarried [ ]

4. What is your Annual Income?

Below 3 lacs [ ]

3 lacs – 6 lacs [ ]

6 lacs – 10 lacs [ ]

Above 10 lacs [ ]

5. What is your Occupation?

Service personnel [ ]

Businessman / woman [ ]

Retired [ ]

House-maker [ ]

Unemployed [ ]

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6. For how long are you residing in the same city?

Less than 2 years [ ]

2-5 years [ ]

More than 5 years [ ]

7. What are your various investment tools?

Equity [ ]

Insurance [ ]

Mutual funds [ ]

Commodidties [ ]

8. Which is the most significant attribute which helps you buy the insurance product / policies?

Brand Name [ ]

Amount of premium [ ]

Superior Product Feature [ ]

Returns [ ]

Security [ ]

9. Do you have any ulip product?

Yes [ ]

No [ ]

10. How do you come to know about this company?

Television advertisements [ ]

Print advertisements [ ]

Out-door advertisement [ ]

Family members [ ]

Direct Selling [ ]

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11. How much are you satisfied with this company?

Highly Satisfied [ ]

Satisfied [ ]

Unsatisfied [ ]

12. Would you be interested in to switch over to any other life insurance company?

Yes [ ]

No [ ]

13. If yes then, reason for the same?

Better Schemes offered by other companies [ ]

Better Return in other companies [ ]

Expecting better services [ ]

Shifting location [ ]

14. Have you ever recommended anybody to buy the life insurance policy, if yes then of which

company?

No [ ]

Yes, and company was…………………….

15. Which insurance plan would you like to buy?

Traditional [ ]

Unit linked(ULIP) [ ]

16. Rate the factors behind taking an insurance policy on scale 1 to 4, where 1 is equal to least important

and 4 is equal to most important.

Tax Saving [ ]

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Returns on Investment [ ]

Life cover [ ]

Risk avoidance [ ]

17. What do you know about Kotak Mahindra?

It’s a bank [ ]

It’s an insurer [ ]

It’s a securities trader [ ]

Others (please specify)…………………………………………

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