life advisor as a career
TRANSCRIPT
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Summer Training Project ReportSummer Training Project Report
PROJECT TOPIC:PROJECT TOPIC:
LIFE ADVISOR AS CAREERLIFE ADVISOR AS CAREER
Name of the organizationName of the organization
MASTER OF BUSINESS ADMINISTRATIONMASTER OF BUSINESS ADMINISTRATION
SessionSession:: 2007 092007 09
Submitted BySubmitted By:: Hemant GoyalHemant Goyal
Project GuideProject Guide:: Mr. Atin SinghMr. Atin Singh
The NIS AcademyThe NIS Academy
(Affi. To Annamalai University, Chennai)(Affi. To Annamalai University, Chennai)
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ACKNOWLEDGEMENTACKNOWLEDGEMENT
This report bears the imprint of many persons, who have helped me in
numerous ways in writing this report. It gives me great pleasure in
presenting this report to the Annamalai University,Annamalai University, ChennaiChennai via TheThe
NIS AcademyNIS Academy. I would like to take this opportunity to extend my
heartful gratitude to all those who helped me in presenting this report.
Their contribution no matter big or small has contributed immensely
towards completion of this report.
I fall short of words to express my gratitude to KOTAKKOTAK
MAHINDRA OLD MUTUAL LIFE INSURANCEMAHINDRA OLD MUTUAL LIFE INSURANCE for giving me the
opportunity to work in this prestigious organization. I acknowledge my
deep sense of gratitude to Mr. ATIN JAINMr. ATIN JAIN for his generous guidance &
advice before & during the course of this work & also in analyzing the
work.
I have also received valuable guidance and help from the entire
Teaching staff, especially from Miss. RidhimaMiss. Ridhima and others who all are
members of Department of Management, The NIS Academy,Agra.
My overriding debt is to my parents who provide me with the
moral support & inspiration to prepare this report.
Hemant GoyalHemant Goyal
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STUDENTS DECLARATIONSTUDENTS DECLARATION
I, HEMANT GOYAL here by declare that this project report entitled LIFE
ADVISOR AS CAREER , has been completed based on actual study carried
out by me in KOTAK MAHINDRA LIFE INSURANCE.
I am presenting an authentic report of my work, carried out under
the guidance ofMr. ATIN SINGH , which is required in the partial
ful fi llment f or degree o f M.B.A. a ff il ia ted t o ANNAMALAI
UNIVERSITY, CHENNAI.
This research report is original & the information, data & fact
furnished their in are actual, based on study carri ed out by me.
HEMANT GOYAL HEMANT GOYAL
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CONTENTSCONTENTS
1.1. INTRODUCTIONINTRODUCTION
1.1 General introduction
1.2 Objective of the study
1.3 Industry profile
a. Origin and development of the industry
b. Growth and present status of the industry
2.2. INTRODUCTION TO THE COMPANYINTRODUCTION TO THE COMPANY
2.1 Origin of the Organization
2.2 Current Financial Performance of the organization
2.3 Present status of the organization
2.4 Company profile
3. IRDA
4.4. LIFE ADVISORS AND THEIR ROLE ASLIFE ADVISORS AND THEIR ROLE AS
A BUSINESS PARTNERA BUSINESS PARTNER
4.1 Pre sale role
4.2 Post sale role
4.3 Opportunity of a life time4.4 Procedure for becoming an advisor
4.5 Documents necessary to be an advisor
4.6 Reward & recognition
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5.5. MARKET RESEARCH AND RECRUITMENTMARKET RESEARCH AND RECRUITMENT
OF FINANCIAL ADVISORSOF FINANCIAL ADVISORS
5.1 On the job training
5.2 Objectives
5.3 Target
6. RESEARCH METHODOLOGY
7. OPERATION OF THE PROJECT
7.1 Work profile
7.2 Overall learning from the project
8. OBSERVATION
8.1 Training
8.2 Career
9. RECOMMENDATIONS & CONCLUSION
10.APPENDIX
10.1 Customer information form
10.2 Family member detail
10.3 Questionnaire
10.4 Feedback of people during survey
11. BIBLIOGRAPHY
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1.1 GENERAL INTRODUCTION1.1 GENERAL INTRODUCTION
WHAT IS INSURANCE?WHAT IS INSURANCE?
The business of insurance is related to the protection of the
economic values of the assets. Every asset has a value. The asset would
have been created through the efforts of the owner. The asset is valuable
to the owner, because he expects to get some benefits from it. The benefit
may be an income or some thing else. It is a benefit because it meets some
of his needs. In the case of a factory or a cow, the product generated by is
sold and income generated. In the case of a motor car, it provides comfort
and convenience in transportation. There is no direct income.
Every asset is expected to last for a certain period of time
during which it will perform. After that, the benefit may not be available.
There is a life-time for a machine in a factory or a cow or a motor car.
None of them will last forever. The owner is aware of this and he can so
manage his affairs that by the end of that period or life-time, a substitute
is made available. Thus, he makes sure that the value or income is not
lost. However, the asset may get lost earlier. An accident or some other
unfortunate event may destroy it or make it non-functional. In that case,
the owner and those deriving benefits there from, would not have been
ready. There is an adverse or pleasant situation. Insurance is a mechanism
that helps to reduce the effect of such adverse situations.
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HISTORY OF INSURANCEHISTORY OF INSURANCE
The business of insurance started with marine business.Traders, who used to gather in the Lloyds coffee house in London,
agreed to share the losses to their goods while being carried by ships. The
losses used to occur because of pirates who robbed on the high seas or
because of bad weather spoiling the goods or sinking the ship. The first
insurance policy was issued in 1583 in England. In India, insurance began
in 1870 with life insurance being transacted by an English company, the
European and the Albert. The first Indian insurance company was the
Bombay Mutual Assurance Society Ltd, formed in 1870. This was
followed by the Oriental Life Assurance Co. in 1874, the Bharat in 1896
and the Empire of India in 1897.
Later, the Hindustan Co-operative was formed in Calcutta,
the United India in Madras, the Bombay Life in Bombay, the National in
Calcutta, the New India in Bombay, and the Jupiter in Bombay and the
Lakshmi in New Delhi. These were all Indian companies, started as a
result of the Swadeshi Movement in the early 1900s by the year 1956,
when the life insurance business was nationalized and the Life InsuranceCorporation of India (LIC) was formed on 1st September 1956, there were
170 companies and 75 provident fund societies transacting life insurance
business in India. After the amendments to the relevant laws in1999, the
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L.I.C. did not have the exclusive privilege of doing life insurance business
in India. By 31/03/2002, eleven new insurers had been registered and had
begun to transact life insurance business in India.
Life InLife Insurance Industry Overviewsurance Industry Overview
FYP Rs CroresFYP Rs Crores
The Life Insurance Industry has grown by 27% p.a. over the last
5 years and by about 62% in the first eleven months of 2006 -07
2001-02 2002-03 2003-04 2004-05 2005-06 till Feb
2007
LIC 14,843 15,976 16,285 19,786 25,645 43,573
Private
Sector 273 986 2,422 5,587 10,253 14,365
Total 15,116 16,962 18,707 25,343 35,898 57,938
Source IRDA Journal (April 2007)
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In IndiaIn India
The Insurance premium as a % of GDP in 2005 increased to 3.14% and is
set to touch 4% in 2006. (Source Lifeline 26th Dec 2006)
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The Life Insurance Industry has grown by 27% p.a. over the last 5 years
and by about 62% in the first eleven months of 2006 -07 ( April 06 to Feb
2007) LIC has 75.2% of the market share and the Pvt. Players have 24.8 %
The Insurance premium as a % of GDP in 2005 increased to 3.14% and is
set to touch 4% in 2006
PURPOSE & NEED OF INSURANCEPURPOSE & NEED OF INSURANCE
Assets are insured, because they are likely to be destroyed,
through accidental occurrences. Such possible occurrences are called
perils. Fire, flood, breakdowns, lightning, earthquakes, etc, are perils. If
such perils can cause damage to the asset, we say that the asset is exposed
to that risk. Perils are the events. Risks are the consequential loses or
damages. The risk to an owner of a building, because of the peril of an
earthquake, may be a few lakhs or a few crores of rupees, depending on
the cost of the building and the contents in it. The risk only means that
there is a possibility of loss or damage. The damage may or may not
happen. Insurance is done against the contingency that it may happen.
There has to be an uncertainty about the risk. Insurance is relevant only if
there are uncertainties. If there is no uncertainty about the occurrence of
an event, it cannot be insured against. In the case of a human being, death
is certain, but the time of death is uncertain. In the case of a person who is
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terminally ill, the time of death is not uncertain, through not exactly
known. He cannot be insured.
Insurance does not protect the asset. It does prevent its loss
due to the peril. The peril cannot be avoided through insurance. The peril
can sometimes be avoided, through better safety and damage control
management. Insurance only tries to reduce the impact of the risk on the
owner of the asset and those who depend on that asset. It only
compensates the losses- and that too, not fully.
Only economic consequences can be insured. If the loss is not
financial, insurance may not be possible. Examples of non-economic
losses are love affection of parents, leadership of managers, sentimental
attachments to family heirlooms, innovative and creative abilities, etc.
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HOW INSURANCE WORKSHOW INSURANCE WORKS
The mechanism of insurance is very simple. People who are
exposed to the same risks come together and agree that, if anyone of them
suffers a loss, the others will share the loss and make good to the person
who lost. All people who send goods by ship are exposed to the same
risks, which are related to water damage, ship sinking, piracy, etc. those
owning factories are not exposed to these risks, but they are exposed to
different kinds of risks like, fire, hailstorms, earthquakes, lightning,
burglary, etc. like this, different kinds of risks can be identified and
separate groups made, including those exposed to such risks. By this
method, the heavy loss that anyone of them may suffer (all of them may
not suffer such losses at the same time) is divided into bearable small
losses by all. In other words, the risk is spread among the community and
the likely big impact on one is reduced to smaller manageable impacts on
all.
If a Jumbo Jet with more that 350 passengers crashes, the
loss would run into several crores of rupees. No airline would be able to
bear such loss. It is unlikely that many Jumbo Jets will crash at the same
time. If 100 airline companies flying Jumbo Jets, come together into an
insurance pool, whenever one of the Jumbo Jets in the pool crashes, the
loss to be borne by each airlines would come down to a few lakhs of
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rupees. Thus, insurance is a business of sharing.
There are certain principles, which make it possible for
insurance to remain a fair arrangement. The first is that it is difficult for
any one individual to bear the consequences of the risks that he is
exposed to. It will become bearable when the community shares the
burden. The second is that the peril should occur in an accidental manner.
Nobody should be in a position to make the risk happen. In other words,
none in the group should set fire to his assets and ask others to share the
costs of the damage. This would be taking unfair advantage of an
arrangement put into place to protect people from the risks they are
exposed to. The occurrence has to be random, accidental, and not the
deliberate creation of the insured person.
The manner in which the loss is to be shared can be
determined before-hand. It may be proportional to the risk that eachperson is exposed to. This would be indicative of the benefits he would
receive if the peril befell him. The share could be collected from the
members after the loss has occurred or the likely shares may be collected
in advance, at the time of admission to the group. Insurance companies
collect in advance and create a fund from which the losses are paid.
The collection to be made from each person in advance is
determined on assumptions. While it may not be possible to tell
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beforehand, which person will suffer, it may be possible to tell, on the
basis of past experiences, how many persons, on an average, may suffer
losses. The following two examples explain the above concept of
insurance.
Example-1Example-1
In a village, there are 400 houses, each valued at Rs. 20,000. Every year, on
the average, 4 houses get burnt, resulting into a total loss of Rs. 80,000. If
all the 400 owners come together and contribute Rs. 200 each, the
common fund would be Rs. 80,000. This would be enough to pay Rs.
20,000 to each of the 4 owners whose houses got burnt. Thus, the risk of 4
owners is spread over 400 house-owners in the village.
Example-2Example-2
There are 1000 persons who are all aged 50 and are healthy. It is expected
that of these, 10 persons may die during the year. If the economic value of
the loss suffered by the family of each dying person is taken to be Rs.
20,000, the total loss would work out to Rs. 2,00,000. If each person in the
group contributed Rs. 200 a year, the common fund would be Rs.
2,00,000. This would be enough to pay Rs. 20,000 to the family of each of
the ten persons who die. Thus the risks in the case of 10 persons are
shared by 1000 persons.
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THE HUMAN ASSETTHE HUMAN ASSET
A human being is an income generating asset. Ones manual
labour, professional skills and business acumen are the assets. This asset
also can be lost through unexpectedly early death or through sickness
and disabilities caused by accidents. Accidents may or may not happen.
Death will happen, but the timing is uncertain.
If it happens around the time of ones retirement, when it
could be expected that the income will normally cease, the person
concerned could have made some other arrangements to meet the
continuing needs. But if it happens much earlier when the alternate
arrangements are not in place, there can be losses to the person and
dependents. Insurance is necessary to help those dependent on the
income.
A person, who may have made arrangements for his needs
after his retirement, also would need insurance. This is because the
arrangements would have been made on the basis of some expectations
like, likely to live for another 15 years, or that children will look after him.
If any of these expectations do not become true, the original arrangement
would become inadequate and there could be difficulties. Living too long
can be as much a problem as dying too young. Both are risks, which need
to be safeguarded against. Insurance takes care.
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THE BUSINESS OF INSURANCETHE BUSINESS OF INSURANCE
Insurance companies are called insurer. The business of
insurance is to (a) bring together persons with common insurance
interests (sharing the same risks), (b) collect the share or contribution
(called premium) from all of them, and (c) pay out compensations (called
claims) to those who suffer. The premium is determined on the same lines
as indicated in the examples above, but with some further refinements.
In India, Insurance business is classified primarily as life and
non-life or general. Life Insurance includes all risks related to the lives of
human beings and general insurance covers the rest. General insurance
has three classifications viz., Fire (dealing with all fire related risks),
Marine (dealing with all transport related risks and ships) and
Miscellaneous (dealing with all others like liability, fidelity, motor, crop,
personal accident, etc). Personal accident and sickness insurance, which
are related to human beings, is classified as non-life in India, but is
classified as life, in many other countries. What is Non-Life in India is
termed Property and Casualty in some other countries.
The business of insurance is nothing but one of sharing. It
spreads losses of an individual over the group of individuals who are
exposed to similar risks. People who suffer loss get relief because their
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loss is made good. People who do not suffer loss are relieved because
they were spared the loss.
The insurer is in the position of a trustee as it is managing
the common funds, for and on behalf of the community of policyholders.
It has to ensure that nobody is allowed to take undue advantage of the
arrangement. That means that the management of the insurance business
requires care to prevent entry (into the group) of people whose risks are
not of the same kind as well as paying claims on losses that are not
accidental. The decision to allow entry is the process of underwriting of
risk. Underwriting includes assessing the risk, which means, making an
evaluations of how much is the exposure to risk. The premium to be
charged depends on this assessment of the risk. Both underwriting and
claim settlement have to be done with great care.
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INSURANCE AS A SOCIAL SECURITY TOOLINSURANCE AS A SOCIAL SECURITY TOOL
The United Nations Declaration of Human Rights 1948
provides that Everyone has a right to a standard of living adequate for
the health and wellbeing of himself and his family, including food,
clothing, housing and medical care and necessary social services and the
right to security in the event of unemployment, sickness, disability,
widowhood or other lack of livelihood in circumstances beyond his
control.
When the bread winner dies, to that extent, the familys income
dies. The economic condition of the family is affected, unless other
arrangements come into being to restore the situation. Life insurance
provides such an alternate arrangement.
If this did not happen, another family would be pushed into
the lower strata of society. The lower strata create a cost on society. Poor
people cost the nation by way of subsidies and doles and so on. Poor
people also cost by way of larger growth in population, poor education
and vagaries in behavior of children.
Life insurance tends to reduce such costs. In this sense, the
life insurance business is complimentary to the States efforts in social
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management.
Under a socialistic system the responsibility of full security
would be placed upon the State to find resources for providing social
security. In the capitalistic society, provisions of security are largely left to
the individuals. The society provides instruments, which can be used in
securing this aim. Insurance is one of them.
In a capitalistic society too, there is a tendency to provide some
social security by the State3 under some schemes, where members are
required to contribute e.g. Social Security Scheme in U.K.
In India, social security finds a place in our Constitution.
Article 41 requires the State, within the limits of its economic capacity
and development, to education and to provide public assistance incase of
unemployment, old age, sickness and disablement and in other cases of
undeserved want. Part of the States obligations to the poorer sections met
through the mechanism of life insurance.
As per the law and the directions of the regulatory authorities,
insurance companies in India are obliged to extend insurance benefits to
economically weaker sections of the society in the unorganized sector.
Details of these schemes are given in subsequent chapters.
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ROLE OF INSURANCE IN ECONOMIC DEVELOPMENTROLE OF INSURANCE IN ECONOMIC DEVELOPMENT
As per the law and the directions of the regulatory authorities,
insurance companies in India are obliged to extend insurance benefits to
economically weaker sections of the society in the unorganized sector. For
economic development, investments are necessary, which are made out of
savings. A life insurance company is a major instrument for the
mobilization of savings of people, particularly from the middle and lower
income groups. These savings are channeled into investments for economic
growth. All good life insurance companies have huge funds, accumulated
through the payments of small amounts pf premium of individuals. These
funds are invested in ways that contribute substantially for the economic
development of the countries in which they do business. All life insurance
companies get huge amount of funds in the form of premium from the
investors. Every premium represents a risk that is covered by that
premium. In effect, therefore these vast amounts represent pooling of risks.
The funds are collected and held in trust for the benefit of the
policyholders. Apart from investments, business and trade benefits
through insurance. Without insurance, trade and commerce will find it
difficult to face the impact of major banks, would collapse if the factory,
financed by it, is reduced to ashes by terrible fire. Insurers cover also the
loss to financiers, if their debtors default.
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ADVANTAGES OF LIFE INSURANCEADVANTAGES OF LIFE INSURANCE
Many people perceive about life insurance as an investment or
a means of saving, which is not entirely correct. When a person saves, the
amount of funds at any time is equal to the amount set aside in the past,
plus interest. This happens in a fixed deposit of a bank, in national
savings certificates, in mutual funds, etc. even if there no loss, the
available fund at any time is the amount invested plus appreciation. In
life insurance, however the funds available is not the total of the savings
already made i.e. the premium paid, but the amount one wishes to have
at the end of the savings period say 20 or 30 years. Thus, one is paying
from his savings, for the later, only as long as he/she lives or for a lesser
period if so chosen. Thus there is no substitute to life insurance which
provides this kind of benefits.
Following are few more of the benefits which no other saving instrument
can provide the investor with:
In the event of death, the settlement is easy. The heirs can collect theIn the event of death, the settlement is easy. The heirs can collect the
moneys quicker, because of the facility of nomination and assignment.moneys quicker, because of the facility of nomination and assignment.
The facility of nomination is now available for some bank accounts.The facility of nomination is now available for some bank accounts.
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There is a certain amount of compulsion to go through the plan ofThere is a certain amount of compulsion to go through the plan of
savings. In other forms, if one changes the original plan of savings,savings. In other forms, if one changes the original plan of savings, there is no loss. In insurance, there is a loss.there is no loss. In insurance, there is a loss.
Creditors cannot claim the life insurance moneys. They can beCreditors cannot claim the life insurance moneys. They can be
protected against attachments by courts.protected against attachments by courts.
There are tax benefits, both in income tax and in capital gains.There are tax benefits, both in income tax and in capital gains.
Marketability and liquidity are better. A life insurance policy isMarketability and liquidity are better. A life insurance policy is
property and can be transferred or mortgaged. Loans can be raisedproperty and can be transferred or mortgaged. Loans can be raised
against the policy.against the policy.
The following tenets help agents to believe in the benefits of life
insurance: Such faith will enhance their determination to sell and their
perseverance
Life cover: Insurance provides life cover along with high returns. This
can be considered as a major advantage of insurance over mutual
funds.
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Tax Benefits: The government provides some tax incentives to all those
who invest in insurance products by the way of premiums. Tax relief
in income tax and wealth tax can be availed on the premium paid for
life insurance. This is another area where this sector has an upper hand
over mutual funds. Sec 80C and sec10 (10D) are related to premium
payments and withdrawal.
Returns: Insurance sector provides high return as well as capital
guarantee. For example- investment shield life, guarantees all your
investment premiums, along with the accrued bonus interest.
Transparency: Private players in insurance are mainly concentrating
on Unit Linked products because it provides both life cover and also
serves the investment purpose and also it provides the transparency
for the customers, that is, customers can know exactly where their
money is invested and how much he/she is going to get.
Flexibility: We can increase or decrease our annual contribution. The
maximum decrease in the contribution can be up to 20 % of the initial
contribution chosen at the time of inception of the policy. There is no
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limit in increasing the contribution. Increase the death benefit or
decrease the
sum assured, if necessary.
Security of capital: Investment shield life, invest shield cash, invest
shield gold is a market linked plan that provides capital guarantee on
the investment premiums and declared bonus interest.
Financial security: If a policy holder looses his life, who is the sole
breadwinner of the family, the insurance company
guarantees the financial protection of that family by providing the
family the sum assured.
Medical benefits: Protects the insured against financial loss in the
event of 9 specified critical illnesses. Benefits are payable to the
insured for medical expenses prior to death. Provide financial support
in the event of medical emergency, ensuring benefits are payable to thelife assured for medical expenses incurred for surgical procedures.
Cover is offered against 43 surgical procedures.
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Switching Free: If at a later stage if our financial priorities changes,
we can switch between the various investment option at any time.
There is a provision of 4 free switches every policy year.
Top-up: Whenever we have surplus amount we can top-up our fund
and utilize the opportunity.
Sovereign: The government is giving the guarantee that if the
company fails then they will print the currency and provide to the
insured the amount paid by them.
Compulsory Savings: Insurance serves as savings and investment,
insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured. For the purpose of availing
income-tax exemptions also, people invest in insurance. Life
insurance encourages long term saving. By paying a small premium
in easy installment for a long period a handsome saving can be
achieved.
Loan provided: Loan can be obtained against a policy assured
whenever required. After the policy has acquired a surrender value,
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we can avail of a loan under the policy. An interest will be charged on
the loan, as per the prevailing rate at that time.
1.2 OBJECTIVES OF THE STUDY1.2 OBJECTIVES OF THE STUDY
To determine reasons behind opting for an insurance.
To find out the Kotak Life Insurance Plan in Agra City.
To study of Different Traditional Plans in Kotak Life Insurance Co.
To know the most preferred policy.
To find out benefits of Endowment Plans for Urban Person.
To find out the future aspects of Kotak Life Insurance Plan
To determine the feedback on services provided by any other
insurance agent.
To study the types of benefits provided by insurance services.
To study of complete security to policyholders.
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1.3 INDUSTRY PROFILE1.3 INDUSTRY PROFILE
a.a. Origin and development of the industryOrigin and development of the industry
Almost 4,500 years 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. That, perhaps, was
how insurance made its beginning.
Life insurance had its origins in ancient Rome, where citizens
formed burial clubs that would meet the funeral expenses of its members
as well as help survivors by making some payments.
As European civilization progressed, its social institutions and
welfare practices also got more and more refined. With the discovery of
new lands, sea routes and the consequent growth in trade, medieval
guilds took it upon themselves to protect their member traders from loss
on account of fire, shipwrecks and the like.
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Since most of the trade took place by sea, there was also the fear of
pirates. So these guilds even offered ransom for members held captive by
pirates. Burial expenses and support in times of sickness and poverty
were other services offered. Essentially, all these revolved around the
concept of insurance or risk coverage. Thats how old these concepts are,
really.
In 1347, in Genoa, European maritime nations entered into the
earliest known insurance contract and decided to accept marine
insurance as a practice.
The first step.The first step.
Insurance as we know it today owes its existence to 17 th century
England. In fact, it began taking shape in 1688 at a rather interesting place
called Lloyds Coffee House in London, where merchants, sgip-owners
and underwriters met to discuss and transact business. By the end of the
18th century, Lloyds had brewed enough business to become one of the
first modern insurance companies.
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In India.In India.
Insurance in India can be traced back to the Vedas. For instance,
yogashema, the name of Life Insurance Corporation of Indias 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.
Burial socities of the kind found in ancient Rome were formed in the
Buddhist period to help families build houses, protect widows and
children.
Bombay Mutual Assurance Society, the first Indian life assurance
society, was formed in 1870. Other companies like oriental, Bharat and
Empire of India were also set up in the 1870-90s. It was during the
swadeshi movement in the early 20th century that insurance witnessed a
big boom in India with several more companies being set up.
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As these companies grew, the government began to exercise control
on them. The Insurance Act was passed in 1912, followed by a detailed
and amended Insurance Act of 1938 that looked into investments,
expenditure and management of these companies funds.
By the mid-1950s, there were around 170 insurance companies and
80 provident fund societies in the countrys life insurance scene.
However, in the absence of regulatory systems, scams and irregularities
were almost a way of life at most of these companies.
As a result, the Government decided nationalize the life assurance
business in India. The Life Insurance Corporation of India was set up in
1956 to take over around 250 life companies.
For years thereafter, insurance remained a monopoly of the public
sector. It was only after seven years of deliberation and debate after the
RN Malhotra Committee report of 1994 became 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.
The Insurance regulatory & Development Authority, an
autonomous insurance regulator set up in 2000, has extensive powers to
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life insurance is to cover you against financial losses arising out of sudden
death or disability. It also offers returns and tax savings. Life insurance,
as an instrument, is hence a good marriage of risk cover, returns and tax
benefits.
Insurance does not give good returns
Insurance is different from routine investment options. A fixed deposit or
even a National Savings Certificate may apparently fetch more returns
than a life insurance policy. But thats not a fair straight-line comparison.
If monetary returns are evaluated in isolation, a fixed deposit {FD}
offering 9.5% might look very good in this depressed market. But
insurance offers other benefits along with returns.
Look at security for instance. If you invest in an FD and happen to die,
your nominee can only the amount of the FD. If you live, you will get
back the sum of the FD with the sum of the FD with the desired interest.
Compare this to a life insurance policy. For a sum of Rs. 5,000 invested in
a FD, you would get the same amount at the end of the year whereas for a
small insurance premium of say Rs 5,000 per annum, you could buy
yourself a cover of around Rs 50,000 to Rs 2 lakhs depending on your age
and type of policy. If you happen to die during the tenure of the policy,
your family members would get Rs 50,000 to Rs 2 lakhs as a benefit. In
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case you live, you will get back the entire sum assured with may be a
decent return.
*Condition apply
Evaluate the two options. For a small notional loss in returns, you
are running the risk of leaving your loved ones uncared for if something
happened to you. On the other hand, with an insurance policy, peace of
mind will never be an issue. Thats something money can seldom buy.
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2.1 ORIGIN OF THE ORGANIZATION2.1 ORIGIN OF THE ORGANIZATION
THE KOTAK MAHINDRA GROUPTHE KOTAK MAHINDRA GROUP
Kotak Mahindra is one of the Indias leading financial
institutions, offering a diverse range of financial solution thatencompasses every sphere of the life. From corporate finance to retail
finance, stock broking, mutual funds, life insurance, investment banking,
the group truly understands the financial needs of individual as well as
established corporate clients. With over two decades of experience in
providing financial services and a wide range of financial solutions.
Kotak Mahindra has constantly added value to life.
Kotak Mahindra group was incorporated in 1985 as Kotak
Capital Management Finance Limited. This company was promoted by
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Mr. Uday Kotak, S.A.A. Pinto and Kotak & Company. Industrialists Mr.
Harish Mahindra and Mr. Anand Mahindra took a stake in 1986, and
that's when the company changed its name to Kotak Mahindra Finance
Limited (KMFL).
Kotak Mahindra has international partnership with Goldman
Sachs (one of the worlds largest investment bank and brokerage firm),
Ford Credit (one of the worlds largest dedicated automobile financiers),
and Old Mutual (a large insurance, banking and asset management
conglomerate).
In February 2003, the company was given the license to carry
on banking business by the Reserve Bank of India. It was the first
company in India to convert to a Bank. The company has been in retail
lending since mid 1990s. With the conversion into a bank, retail liabilities,
treasury and corporate banking segments have been added.
As on March 31, 2006, the group has a net worth of over Rs.
2,500 crore, employs around 6,700 people in its various businesses and
has a distribution network of branches, franchisees, representative offices
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and satellite offices across 250 cities and towns in India and offices in
New York, London, Dubai and Mauritius. The Group services over 1.6
million customer accounts.
VISION OF KOTAK MAHINDRA GROUPVISION OF KOTAK MAHINDRA GROUP
The global Indian financial services brand:The global Indian financial services brand:
Customer will enjoy the benefits of dealing with a global Indian brand
that best understand their needs and delivers customized pragmatic
solutions across their platforms. It will be a world-class Indian financial
services group. Technology and best practices will be Indian
benchmarked along international lines while its understanding of
customer will be uniquely.
The most preferred employer in financial services:The most preferred employer in financial services:
A culture of empowerment and a spirit of enterprise attract bright minds
with an enterprise streak to join us and stay with us. Working with a
home grown, professionally-managed company, which has partnership
with international leaders, gives our people a perspective that is universal
as well as unique.
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The most trusted financial services company:The most trusted financial services company:
Create an ethos of trust across our constituents. Adhering to high
standards of compliance and corporate governance will be an integral
part of building trust.
Value creation:Value creation:
Value creation rather than size alone will be our business driver.
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KOTAK MAHINDRA GROUP OF COMPANIESKOTAK MAHINDRA GROUP OF COMPANIES
KOTAK MAHINDRA GROUPKOTAK MAHINDRA GROUP
STRATEGIC BUSINESS UNITSSTRATEGIC BUSINESS UNITS
AssetAsset
Finance SBUFinance SBUWealthWealth
ManagementManagement
SBUSBU
Kotak MahindraKotak Mahindra
CapitalCapitalCompany Ltd.Company Ltd.
Knowledge &
Skills SBU
Kotak SecuritiesKotak Securities
Ltd.Ltd.
Kotak MahindraKotak Mahindra
Venture Capital FundVenture Capital FundKotak MahindraKotak Mahindra
AMCAMC
Kotak Mahindra
Primus Ltd.
Insurance
SBU
Kotak MahindraKotak MahindraBank Ltd.Bank Ltd.
Kotak MahindraKotak Mahindra
(UK) Ltd.(UK) Ltd.Kotak MahindraKotak Mahindra
(International)(International)Kotak Mahindra Inc.Kotak Mahindra Inc.
Om KotakOm KotakMahindra LifeMahindra Life
InsuranceInsurance
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ASSET FINANCE SBUASSET FINANCE SBU
Kotak Mahindra Bank Limited:Kotak Mahindra Bank Limited:
The Kotak Mahindra Groups flagship company, Kotak Mahindra Finance
Ltd which was established in 1985, was converted into a bank Kotak
Mahindra Bank Ltd in March 2003 becoming the first Indian company to
convert into a Bank. Its banking operations offers a central platform for
customer relationships across the groups various businesses. The bankhas a presence in the Commercial Vehicles, Retail Finance, Corporate
Banking, Treasury and Housing Finance.
Kotak Mahindra Primus Limited (KMPL):Kotak Mahindra Primus Limited (KMPL):
Kotak Mahindra Primus Limited (KMPL) is India's largest dedicated car
finance company. Incorporated in 1996 as a joint venture between Kotak
Mahindra Bank Limited and Ford Credit International Inc., KMPL has
financed over 75,000 new and used non-Ford passenger vehicles since its
inception. KMPL offers its services to non-Ford passenger car buyers
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through hire-purchase, loan and lease plans. Today KMPL is present in
over 40 locations through a strong network of brokers, direct marketing
associates and its own sales team. It is the preferred financier for global
brands like Toyota, Hyundai, Daewoo and General Motors in India.
With strong systems and control support of Ford, strategic tie-ups and
subvention programs with leading car manufacturer, KMPL has been able
to consolidate its position as the largest dedicated car finance company in
India. Its annual exceed rs.850 crore and it reaches out to a customer base
of over 60,000 all over the country.
WEALTH MANAGEMENT SBUWEALTH MANAGEMENT SBU
Kotak Securities Limited:Kotak Securities Limited:
Kotak Securities Ltd. is one of India's largest brokerage and securities
distribution house in India. Set up in 1994, by Mr. Uday Kotak, it has
equity participation from Goldman Sachs L.L.P. (25%) and is a corporate
member of both the BSE and NSE. It conducts stock broking, distribution
of various financial products - including private and secondary placement
of debt and equity, mutual funds and fixed deposits. It also offers
portfolio management. Over the years Kotak Securities has been one of
the leading investment broking houses catering to the needs of both
institutional and non-institutional investor categories with presence all
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over the country through franchisees and co-coordinators. Kotak
Securities Ltd. offers online (through www.kotaksecurities.com) and
offline services based on well-researched expertise and financial products
to the non-institutional investors.
Kotak Mahindra Asset Management Company:Kotak Mahindra Asset Management Company:
Kotak Mahindra Asset Management Company Limited (KMAMC), a
wholly owned subsidiary of KMFL, is the asset manager for Kotak
Mahindra Mutual Fund (KMMF). KMAMC started operations in
December 1998 and has over 1,15,000 investors in various schemes.
KMMF manages funds in excess of Rs 10,000 crores and offers schemes
catering to investors with varying risk-return profiles and was the first
fund house in the country to launch a dedicated gilt scheme investing
only in government securities.
The Mutual Funds mission is to offer a family of schemes for
building investor wealth. The family of schemes will comprise of diverse
portfolio to suit different risk/ reward expectations of investors. Kotak
Mahindra Mutual Fund offered Indias first dedicated Gilt fund-KGilt.
Kotak Mahindra Venture Capital Fund:Kotak Mahindra Venture Capital Fund:
The era of economic liberalization in India has seen an influx of top class
technocrats exposed to the global environment who have not only the
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technical expertise, but also the entrepreneurial spirit, to put them to
practice in start-ups as well as in ongoing ventures. They desire support
in the form of capital of their enterprise and they offer an opportunity to
investors with the promise of a worthwhile return. Kotak Mahindra
Venture Capital Fund (KMVCF or the Fund), sponsored by Kotak
Mahindra Finance Limited, was formed to meet the needs of the modern-
day entrepreneur. This is the Group's formal foray into the venture
capital/private equity arena. KMVCF is a SEBI registered VCF, with KMFL
as the principal investor, and 30 other private investors. KMFL is the
Investment Manager of the Fund. The Group's inherent strengths and
expertise in the capital markets shall be leveraged to assist the our
investee companies in areas such as: Financial Planning and Structuring
Resource Raising - From Institutional and Non- Institutional Investors
M&A - To Facilitate (Identify, Negotiate And Conclude) Growth through
Acquisitions Equity Research Franchise in TMT Sectors.
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Kotak Mahindra (International) Limited:Kotak Mahindra (International) Limited:
Kotak Mahindra International Limited (KMIL) is the international arm
of the Kotak Mahindra Group and was incorporated in 1994, in
Mauritius with a branch in Dubai. International operations now cover
the United Kingdom through Kotak Mahindra (UK) Limited and the
U.S.A. through Kotak Mahindra Incorporated, U.S.A. Services offered
include GDR trading and broking, debt syndication, placement of
Indian securities and advisory services. Kotak Mahindra was the first
and is currently the only Indian group to be registered with the
Standards and Futures Association (SFA), UK and the National
Association of Securities Dealers, U.S.A.
KNOWLEDGE & SKILLS SBUKNOWLEDGE & SKILLS SBU
Kotak Mahindra Capital Company:Kotak Mahindra Capital Company:
Kotak Mahindra Capital Company (KMCC), a company with unlimited
liability, was incorporated in 1996 as a joint venture with Goldman
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Sachs Group L.L.P. KMCC focuses on five key areas - Capital Markets,
Corporate Advisory, Mergers & Acquisitions, and Structured.
Finance and International Operations. KMCC has advised
some of the largest telecom and cement deals in India. KMCC is a
leading player in the field of M&As, disinvestments and business
restructuring; debt and equity placements both in primary and
secondary markets and cross-border fund raising. In the year 1999-2000
KMCC pioneered the first book built IPO in India, which ushered in
international standards & practices in the Indian Capital markets.
KMCC is also an RBI-approved Primary Dealer in government
securities. KMCC was ranked as the highest mobiliser of debt and
equity from the Indian Public markets for 1999-2000 (source: Prime
Database) and is amongst the top three investment Banks in the country.
INSURANCE SBUINSURANCE SBU
Om Kotak Mahindra Life Insurance:Om Kotak Mahindra Life Insurance:
Kotak Mahindra Finance Limited has now embarked upon a new vista in
the financial services arena with an entry into the recently liberalized
Insurance sector. OM Kotak Mahindra Insurance Company Pvt. Ltd.
represents KMFL's Life Insurance venture, a 74:26 joint venture with Old
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Mutual plc, U.K. Kotak Mahindra Finance Limited believes that Life
Insurance is a logical expansion of its existing financial services business.
The Life Insurance business also offers Kotak Mahindra with an
opportunity to leverage its core strengths of Wealth Management and
Retail Distribution. Old Mutual plc is a leading financial services provider
in the world, providing a broad range of financial services in the area of
insurance, asset management and banking. It is a leading life insurer in
South Africa, with more than 30% market share. The partnership with Old
Mutual plc, provides the Kotak Mahindra group with an international
perspective and expertise in the life insurance business. Om Kotak
Mahindra life Insurance Co Private Limited (OMKM) has received the
certificate to start a Life Insurance business from The Insurance
Regulatory and Development Authorities (IRDA) on 10/01/2001.
JOURNEY TO GROWTH AND SUCCEESS OF KOTAK MAHINDRAJOURNEY TO GROWTH AND SUCCEESS OF KOTAK MAHINDRA
GROUPGROUP
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1986 Kotak Mahindra Finance Limited starts the activity of Bill
Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and
Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over
FICOM, one of Indias largest financial retail marketing
networks
1992 Enters the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into
a separate company -Kotak Securities. Investment
Banking division incorporated into a separate company
Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate
company - Kotak Mahindra Prime Limited (formerly
known as Kotak Mahindra Primus Limited). Kotak
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Mahindra takes a significant stake in Ford Credit Kotak
Mahindra Limited, for financing Ford vehicles. The
launch of Matrix Information Services Limited marks the
Groups entry into information distribution.
1998 Enters the mutual fund market with the launch of Kotak
Mahindra Asset Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc. For the LifeInsurance business. Kotak Securities launches its on-line
broking site (now www.kotaksecurities.com).
Commencement of private equity activity through setting
up of Kotak Mahindra Venture Capital Fund.
2001 Matrix sold to Friday corporation Launches insurance
Services
2003 Kotak Mahindra Finance Ltd. converts to a commercial
bank the first Indian company to do so.
2004 Launches India Growth Fund, a private equity fund
2005 Kotak Group realigns joint venture in Ford Credit; Buys
Kotak Mahindra Prime (formerly known as Kotak
Mahindra Primus Limited) and sells Ford credit Kotak
Mahindra. Launches a real estate fund
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2006 Restructuring Ford and Goldman Jvs
BOARD OF DIRECTORS OF KOTAK MAHINDRABOARD OF DIRECTORS OF KOTAK MAHINDRA
GROUPGROUP
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2.2 CURRENT FINANCIAL PERFORMANCE OF KOTAK2.2 CURRENT FINANCIAL PERFORMANCE OF KOTAK
MAHINDRA GROUPMAHINDRA GROUP
Kotak Investment Banking was ranked no. 1 in the league table s for
Book Runners/ Lead Managers in public equity offerings on the basis
of value of transactions during 2005-06 as per PRIME Database. It also
topped the Bloomberg M&A league tables for calendar year 2005.
Kotak Securities with a market share of 8.5% in FY06 (6.3% in FY05),
clocked average daily volumes of over Rs. 2,400 crore during FY06 (Rs.
1,060 crore in FY05).
Total assets managed/ advised by the Group were Rs. 18,650 crore (Rs.
9,740 crore as on March 31, 2005).
Kotak Life Insurance total premium income was Rs. 621.9 crore in
FY06 (Rs. 466.2 crore in FY05). First year premium income adjusted for
single premium at 1/10 th up 82% to Rs. 351.0 crore.
The group employee strength was over 6,700 as on March 31, 2006
(around 4,400 employees as on March 31, 2005).
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2.3 PRESENT STATUS OF THE ORGANIZATION2.3 PRESENT STATUS OF THE ORGANIZATION
Kotak Mahindra Group in India has market share of 2.2%. It has ability to
enter in the adjacent market, which will help it to grow further in
financial sector of India. Kotak Mahindra is a financial firm in India
fulfilling the financial need of the public. Kotak Mahindra Group came
into being in 1985 as Kotak Capital Management Finance Limited and the
name changed to Kotak Mahindra Finance Ltd.Kotak Mahindra Finance Ltd. in 1986 when Harish
Mahindra and Anand Mahindra took it. From bill discounting activity in
1986 it had entered into the Lease and Hire Purchase market in 1987. The
auto Finance division was started in 1990. In the year 1998 KotakMahindra ventures into mutual fund market with the launch of KotakKotak
Mahindra Asset Management CompanyMahindra Asset Management Company. It got tied up with Old Mutual
plc. and the Life Insurance BusinessLife Insurance Business in the year 2000. Year 2003 saw the
conversion of Kotak Mahindra Finance Ltd. into a commercial Bank. It is
the first Indian Company to do so. In 2004 it launched a private equity
fund named India Growth Fund. Like all other years the 2006 was also
very fruitful for this group as it bought 25% stake held by Golden Sachs
in Kotak Mahindra Capital Company and Kotak Securities.
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AREAS IN WHICH KOTAK GROUP DEALSAREAS IN WHICH KOTAK GROUP DEALS
Trade finance
Corporate finance
Car Finance
Investment Banking
Securities
Commercial Vehicle
Consumer Finance
Mutual Funds
Life Insurance
Bank
Stock Broking
Kotak Reality Fund
Kotak Private Equity
Kotak Mahindra International
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2.4 COMPANY PROFILE2.4 COMPANY PROFILE
The company assigned to me is Kotak Life Insurance Company. It is
in to selling life insurance products. Kotak Life Insurance Company is a
74%-26% joint venture between Kotak Mahindra Bank and Old Mutual
plc. Kotak Life Insurance started its operations from May 2001 after
receiving approval from Insurance Regulatory Development Authority
(IRDA). At present it is growing at a tremendous pace. Now we can say
there is no close competitor to Kotak Life Insurance.
It has total share capital of Rs.340 crore. Presence in 50 cities with
74 branches, 19,066 life advisors, 222 corporate agents, 120 brokers, 100
direct sales agent ( March 2007). The company is regarded as a quality
player in the Indian market. It has a market share of about 4% in private
sector and 1.1% in total industry. The company is ranked No. 1 in average
premium per policy and has 88% persistency. It has a wide range of
flexible products that meet the needs of Indian customer at every step in
life.
The company mainly depends on advisors. The advisors are
considered as the brand ambassadors of the company or the business
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partner who doesnt have to invest to get returns but just work with the
company to make money. Advisors main job is to sell policy and in return
the advisors get huge return like high commission, rewards, recognition
etc. He is, for all purposes, an authorized salesman for insurance.
Advisors can become the Sales Manager of the company if they
fulfill the set target of the branch.. Sales Manager will get a fixed salary
and the commission on the policies sold by his advisor and the
commission of the policies which he has already sold.
The Kotak Mahindra Bank Ltd.The Kotak Mahindra Bank Ltd.
In February 2003, Kotak Mahindra Finance Ltd, was given a license by
RBI. The license was to carry on banking business.This approval creates
banking history since Kotak Mahindra Finance Ltd. is the first NBFC in
India to convert to a bank.
Performance of the groupPerformance of the group
Net worth of the group over Rs. 3100 crores (Dec. 2006)
Net NPA 0.22% ( Dec. 2006)
Consolidated PAT ( group)- Rs. 342.46 crores ( 2005 06) PAT
( group) Rs.367.91 crores ( Apr. to Dec. 06)
Asset Under Management ( group)- Rs.22,730 crores (Dec. 2006)
No. of employees over 9,600 ( Dec. 2006)
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Distribution network 300 cities and towns in India, as well as offices in
London, Dubai, Mauritius and New York
Over 20 Lakh customer accounts
Old Mutual PLCOld Mutual PLC
Old Mutual plc. is a 161 years old, world-class international financial
services company
[ Business spread -US 57%, Europe 22%, SA 18%, Others 3%]
With Skandia acquisition
3rd largest UK Insurer
8th largest European Insurer
Old Mutual plc. owns some of the largest companies in the followingOld Mutual plc. owns some of the largest companies in the following
areas in South Africaareas in South Africa
No. 1 - Life Insurance Company
No. 1 - Asset Management Company
No. 4 - Bank
No. 2 - Non-Life Insurance Company
Base of over 40 lakh life assurance policyholders
One of the best Payouts among insurers in the world
One of the best solvency ratios among insurers in the world
A FTSE 100 company ranked 35th and a Fortune Global 500 company
(ranked 230th July 2006)
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Listed on the London stock exchange with secondary listings in
Johannesburg and Stockholm
The Old Mutual group manages in excess of $400 billion in funds (2006)
Vision - To build a premier international savings and wealth management
group
KMOM The PartnershipKMOM The Partnership
The partnership between the two happens because of the following reasons-
Kotak Life InsuranceKotak Life Insurance
Brand equityBrand equity
Entrepreneurial employeesEntrepreneurial employees
Branch networkBranch network
Knowledge of the Indian marketKnowledge of the Indian market
Distribution associatesDistribution associates
Access to customer baseAccess to customer base
Old MutualOld Mutual
Domain knowledgeDomain knowledge
TechnologyTechnology
Product innovationProduct innovation
Training expertiseTraining expertise
Global perspectiveGlobal perspective
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Systems and processesSystems and processes
Multi-channel managementMulti-channel management
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Sales DeliverySales Delivery
Focused Segment Channel Mapping
Tied agencyTied agency
Alternate Distribution ChannelsAlternate Distribution Channels
Banc assurance
Corporate Agency
Brokers
GroupGroup
Direct Sales ForceDirect Sales Force
TIED AGENCYTIED AGENCY
It has well trained and quality Life Advisor team which target
urban households. They have consultative selling approach and complete
Product Range. They also provide superior customer service.
ALTERNATE DISTRIBUTIONALTERNATE DISTRIBUTION
As a channel partner Bancassurance includes Kotak Mahindra
Bank and 24 more co- operative banks across the nation. It also include
Corporate Agencies which are Business houses with large distribution
networks like Cholamandalam and Brokers like Bajaj Capital, Karvy, IL
& FS, Anand Rathi.
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GroupGroup
Group products distributed through Brokers and Customer
relationship officers. Prestigious clients like Sutherland Global services,
Toyota Kirloskar Motors Pvt. Ltd. Product range include Insurance
products like group term and EDLI as well as gratuity and
superannuation solutions.
Direct Sales ForceDirect Sales Force
Life advisors directly contact with the customers and do their
business.
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IRDAIRDA
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITYINSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
ACT, 1999ACT, 1999
It is an act to provide for the establishment of an authority to
protect the interests of holder of insurance policies, to regulate, promote
and ensure orderly growth of the insurance industry and for mattersconnected therewith or incidental thereto and further to amend the
Insurance Act, 1938; the Life Insurance Corporation Act, 1956; and the
General Insurance Business Act, 1972.
The Authority replaces the Controller under Insurance Act, 1938. It
states that, if Authority is superseded by the Central Government,
the Controller of Insurance may be appointed till such time as
Authority is reconstituted.
Section 2(f) defines an intermediary to include insurance brokers, re-
insurance brokers, insurance consultants, surveyors and loss assessors.
The authority has the power and function to satisfy qualifications, code
of conduct and practical training for intermediaries and agents.
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DUTIES, POWERS AND FUNCTIONS OF IRDADUTIES, POWERS AND FUNCTIONS OF IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers andSection 14 of IRDA Act, 1999 lays down the duties, powers and
functions of IRDA...functions of IRDA...
Subject to the provisions of this Act and any other law for the time
being in force, the Authority shall have the duty to regulate, promote
and ensure orderly growth of the insurance business and re-insurance
business.
Without prejudice to the generality of the provisions contained in Sub
section-1, the powers and functions of the Authority shall include, -
(a) Issue to the applicant a certificate of registration, renew, modify,
withdraw, suspend or cancel such registration.
(b) Protection of the interests of the policy holders in matters
concerning assigning of policy, nomination by policy holders,
insurable interest, settlement of insurance claim, surrender value
of policy and other terms and conditions of contracts of
insurance.
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(c) Specifying requisite qualifications, code of conduct and
practical training for intermediary or insurance intermediaries
and agents.
(d) Specifying the code of conduct for surveyors and loss assessors.
(e) Promoting efficiency in the conduct of insurance business.
(f) Promoting and regulating professional organizations connected
with the insurance and re-insurance business.
(g) Levying fees and other charges for carrying out the purposes of
this Act.
(h) Calling for information from, undertaking inspection of,
conducting enquiries and investigations including audit of the
insurers, intermediaries, insurance intermediaries and other
organizations connected with the insurance business.
(i) Control and regulation of the rates, advantages, terms and
conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the Tariff
Advisory Committee under section 64U of the Insurance Act, 1938
(4 of 1938).
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(j) Specifying the form and manner in which books of account shall
be maintained and statement of accounts shall be rendered by
insurers and other insurance intermediaries.
(k) Regulating investment of funds by insurance companies.
(l) Regulating maintenance of margin of solvency.
(m) Adjudication of disputes between insurers and intermediaries or
insurance intermediaries.
(n) Supervising the functioning of the Tariff Advisory Committee.
(o) Specifying the percentage of premium income of the insurer to
finance schemes for promoting and regulating professional
organizations referred to in clause (f).
(p) Specifying the percentage of life insurance business and general
insurance business to be undertaken by the insurer in the rural or
social sector.
(q) Exercising such other powers as may be prescribed.
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LIFE ADVISORS AND THEIR ROLE AS A BUSINESSLIFE ADVISORS AND THEIR ROLE AS A BUSINESS
PARTNERPARTNER
A Life Advisor according to the Insurance Act is one who is
licensed under Section 42 of that Act and is paid by way of commission or
otherwise, in consideration of his soliciting or procuring insurance
business relating to the continuance, renewal or revival of policies of
insurance.
Life Advisors main function is to solicit and procure life
insurance business for the insurer, which has appointed him for that
purpose.
At the same time, he is trusted by the prospect to advise him
suitably keeping his circumstances and needs in mind.
He is thus, in a unique role of a person trusted by both parties
to the transaction.
Life Advisor is bound by the terms of appointment of the
insurer and is expected to procure business for the insurer.
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4.1 PRE SALES ROLE4.1 PRE SALES ROLE
Tele calling for Suspecting of prospects.
Fixing of appointments with prospects.
Need analysis of the client.
Re-fixing appointment for presenting solutions.
Closing sales with cheque and other document
collection.
Taking 3-4 references from the client.
Submission of applications at the branch front desk.
4.2 POST SALES ROLE4.2 POST SALES ROLE
Track logins to achieve issuals of policy.
Setting up medical appointment and accompany the client to
medicals (wherever required).
Complete any other documentation or medical formalities as
required.
Reminders to customers for next payment due to avoid
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lapsation.
4.34.3 OPPORTUNITY OF A LIFE TIMEOPPORTUNITY OF A LIFE TIME
As a business partner of Kotak Life Insurance life advisor have agood opportunity for the life time. For this business no capital investment
is required you can choose your own working hours. Be your own boss
and write your own pay cheque. You have unlimited earning potential
and you become representative of a strong trusted brand.
A life advisor must have qualities like self confidence, initiative,
resourceful etc. He must have wide social circle and interpersonal skills.
He must have sufficient time to invest in the business. In this field only
that person can work which has urge to earn more and more money.
To its life advisors company provides wide range of products, world class
training and refreshers and technology backed customer service. They are
continuously monitored, mentored and supported by the senior staff. The
company has attractive payments, benefits, rewards and recognition.
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SPECIAL REWARDS AND HONOURS
Million Dollar Round Table Membership
Special Honours Programs
Exclusive Seminars
Ongoing Contests
Foreign Trips
AS A LIFE ADVISOR YOU CAN ALSO ACHIEVE
Money in hand
Status in Society
Prestige
Long term economic security
Foreign trips
Job satisfaction
Network of contacts
Gratitude of families
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Goodwill of customers
4.4 PROCEDURE FOR BECOMING AN ADVISOR4.4 PROCEDURE FOR BECOMING AN ADVISOR
The insurance Act, 1938 lays down that an insurance agent must
possess a license under sections 42 of the Act. The license is to be
issued by the IDRA. A license issued by the IDRA will be valid for
three years.
The qualifications necessary :
a. Be at least 18 years old.
b. Have passed at least the 12th standard or equivalent
examination.
Have to underground at least 100 hours practical training in life or
General Insurance business.
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Have to pass the pre- recruitment examination conducted by the
Institute of India or any other examination body recognized by the
IDRA.
At Kotak Life Insurance, advisors are believed as ambassadors to
the customers. They are a key source of business for the organization, and
are continuing link with the clients.
This is why the company takes a lot of care in recruiting and
developing the advisors force, so that they continue to set higher
standards of quality in service and salesmanship. To cater to the needs of
the knowledge oriented market place, company look for graduates
people. Prior sales experience is an added benefit.
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4.5 DOCUMENTS NECESSARY TO BE AN ADVISOR4.5 DOCUMENTS NECESSARY TO BE AN ADVISOR
Educational proofEducational proof
10th Standard Markssheet/ School Leaving for Advisor from
Rural Area.
12th Standard Markssheet/ School/ College Leaving for Advisor
from Rural Area.
Graduation/ Post Graduation Completion Certificate.
School/ College Leaving Certificate.
Bonafide/ Character Certificate given by school/ college.
For CA/ICWA/CS/MBA: Copy of the Membership
Certificate provided by the Institute. MBA should have
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been done from a AICTE Recognized Institute.
For diploma courses Marks sheet/ Certificate
mentioning 3 yrs.
Age proofAge proof
Birth Certificate
Marksheet
Passport
School/ College Leaving Certificate
Driving Licence
Insurance Policy of any life insurance company
PAN Card
ID Card issued by Defence Dept.
Domicile Certificate where DOR was proved on the
basis of the school or birth certificate.
PF statement from employers which states the date of
birth.
Marriage Certificate and Baptism Certificate issued by
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Church.
Address proofAddress proof
Voter ID
Ration card
Utility bill electricity/ water/ gas (less than 3 months)
Telephone bill
Bank pass book showing last 3 months transactions
Bank statement/ credit card statement (less than
3months)
Passport
Driving Licence
Self declaration for candidate staying on rent with
permanent address proof
Insurance Policy Certificate of any life insurance
company
House allotment letter/ leave licence/ rent agreement
with permanent address proof
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Copy of PF/PPF statement
ESIS card/ statement
Employers certificate for Govt.
Seven Passport size Photos
A demand draft of Rs.1,000
4.6 Reward & Recognition4.6 Reward & Recognition
Kotak Life Insurance advisors are constantly recognized and
rewarded for their performance. Numerous contests all year round
promote healthy competition amongst advisors and recognition for their
efforts.
Rewards include Tip, Incentive and Bonus which is over & above
the basic earning. It can be immediate or deferred. Rewards are always
based upon a qualification criteria and it has a Rational Appeal.
Recognition includes Letter of Appreciation, Convention,
Felicitation etc and it has an emotional appeal. It addresses need for
belonging, esteem & actualization
Reward & Recognition combined are important performance
management tools. Most effective when used together.
Reward & Recognition is a Five Level Program. Rewards are in form
of Reward Points and they are redeemable at www.mykotaklife.com
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.Reward points are based on commission earned. Recognition supports
are in form of stationery & Executive Accessories.
On www.mykotaklife.com 33 lach+ reward points are uploaded
and 2 lach reward points are redeemed. The website is accessible to all the
life advisors for each branch independently. It maintains records of
commissions, reward program, policy database, customer database, PTS
and smart agents.
My Kotak Life TowerMy Kotak Life Tower
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The reward program is divided in five levels. From top to bottom theyThe reward program is divided in five levels. From top to bottom they
are are
Hall Of Fame
The Annual Elite Program
The Monthly Star Program
The Countdown Program
Program Governor
Program GovernorProgram Governor
To Be Announced.
Hall Of FameHall Of FameTo Be Announced.
The Annual ElitesThe Annual Elites
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Annual recognition program is held from January to December.
It recognizes international accreditation. It gives weightage to both 51
Club and MDRT. Rewards are given every January and the Kotak
Elites Konclave Konvention is held every year in Jan / Feb where all
the selected candidates come. This Konclave is happen for one week
and all the expenses are paid by the company.
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The Monthly Star ProgramThe Monthly Star Program
The program has two qualification periods leading to two
regionally held conventions and it leads to Star Status & Invitation to
Conventions. This program has three stages.
MEGAMEGA
EARN Rs 45000/- commission in any month
WIN 4% Reward Points + An Assured Gift
SUPERSUPER
EARN Rs 30000/- commission in any month
WIN 3% Reward Points + An Assured Gift
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STARSTAR
EARN Rs 15000/- commission in any month
WIN 2% Reward Points + An Assured Gift
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Points to rememberPoints to remember
Your qualification is on commission earned
For example, If Mr. Rahul Sinha, our Life Advisor earns
25,000 commission in April he is a STAR
25000 may have
15000 on account of business logged & converted in
April
5000 on account of business logged in March, converted
in April
5000 on account of business logged earlier than March,converted in March but commission paid in April
His total commission paid out in April = 25000
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If Rahul Sinha does this thrice between April September 06, say,
April, June and September, he will be coming to the regional
convention.
He will earn reward points in the month he qualified, i.e.,
April, June and September
He will receive his executive accessories and stationery before
coming to convention
He will receive his certificate and medal in the convention
His status will be valid till March 07
If he does it again between October March 07, he enjoys to
come to a second convention again!
You earn reward points only when you WIN in that
Month
Even if you have the status, the points keep coming to
you on WINNING in the month
You can be participating in the Monthly Program from
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DAY 1 in the company (parallel to your Countdown
program)
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Points to rememberPoints to remember
If an LA does 5.1 Lakh of CPI in 25 days with 11 policies
He will get all benefits of STAR, Trail blaze, Blast off and Launch
pad
If an LA does 2.5 lakhs of CPI in 42 days with 10 policies but
missed Launch pad,
He will get all benefits of Orbit, Trail blaze and Blast off
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From now on, The LA kit will be handed over only when the Life
Advisor completes at least one of the five layers
Executive Stationery will be handed over only once between Trail
blaze and Orbit
For any other question, please contact the program administrator
or your local marketing representative
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MARKET RESEARCH AND RECRUITMENT OFMARKET RESEARCH AND RECRUITMENT OF
FINANCIAL ADVISORSFINANCIAL ADVISORS
5.1 ON THE JOB TRAINING5.1 ON THE JOB TRAINING
Working with Kotak Life Insurance can be considered as an
excellent career path for any SIP student
because we are getting an opportunity to work in a company which is
presently the leader in the insurance industry. It is an opportunity for us
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to start our career in a better way. This can be achieved if we perform
according to the companys standard and do something which is
beneficial for the company in the near future.
Some of the benefits of working with Kotak Life Insurance as a
Management Trainee are:
Learning Experience.
A clear career path.
All round support from the company, our company guide and world
class training.
A comprehensive benefit package in the long run, this is because we
have a chance to get a job as soon as we complete our studies.
5.2 OBJECTIVES5.2 OBJECTIVES
At Kotak Life Insurance the company understands the
importance of training in a dynamic business environment. We go
through both generic and specific, professional programs that help us
remain well informed and knowledgeable about the companys products
in the market. There is a further focus on soft skills such as
communication, managing long term relationships and selling skills,
which are very relevant in a service-driven industry like life insurance.
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State of the art infrastructure training facilities coupled with an
excellent faculty, guarantee an exceptional learning environment. For us
who are totally new in the corporate world, Kotak Life Insurance offers us
convenient training which will be very helpful while entering into the
field for recruitment of advisors.
Theoretical training is given with practical appointment
settings with potential customers, gives us a feeling of how the business
will work from the very first day, although, the sales manager and the
management provide continuous support to us in achievingindependence towards getting advisors and the policies.
Our On the job training is to recruit life advisors and to increase
their distribution network and market share.
By the on the job training we are getting to know about the
procedures, the people to target and how to convince the prospects to
become the financial advisor for the company and also how to make sales
out of them.
5.3 TARGET5.3 TARGET
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The main target of On the job training is to market research &
need analysis of financial advisor for the company within the specified
period provided to us. The basic dimensions for an advisor is that he
should be at least 12th
pass, but the company is mainly targeting on CA`s,
Tax Consultants, Teachers, Sales executives, share brokers, House wives,
Government employees, Graduates, retired
and VRS people.
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RESEARCH METHODOLOGYRESEARCH METHODOLOGY
1. Data base collectionData base collection::
Collect data from various sources as much as possible.
Segment the data and concentrate on one or twosegments.
2. Tele callingTele calling::
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Call the customers from the data base and fix the appointment
so that we could explain about the offer provided by the company to the
prospective customer in detail.
3. Mass BOP (Business Opportunity Presentation)Mass BOP (Business Opportunity Presentation)::
We have decided to organize mass BOP on a particular day in
the company by inviting as many prospective customers as possible and
explain why should they join Kotak Life Insurance and what are the
benefits they are going to receive.
4.4. ActivitiesActivities::
We conducted various activities at different places in Agra.
When conducting these activities we randomly selected people present at
the location and got the questionnaire filled from them. If we found theperson filling up the questionnaire suitable enough to become a Financial
Advisor with the company, then we told them about the business
opportunity with the company.
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We conducted these activities at various places; few of
them are Malls, Parks, Societies, etc.
Few of the places where we got good responses were as followsFew of the places where we got good responses were as follows::
Pacific Mall
TDI Mall
Saket Mall
Subhash Park
Radha Swami Co-Operative Housing Society
Mangalam Estate Society
EVENTEVENT
In order to do our project on an extensive scale, we conducted
an event at the Malls in Agra.
The schedule for this event was as follows:
Day 1: 20th July, 2007
Time: 4:00 p.m. to 7:30 p.m.
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Location: Pacific Mall
Day 2: 21st July, 2007
Time: 4:00 p.m. to 7:30 p.m.
Location: TDI Mall
When conducting this event we had put up a kiosk at the above
said locations. Then we selected people randomly and got the
questionnaires filled. Later we invited these people to attend the seminar
at the companys branch office (New Vriendawan Tower, Sanjay Place).
The seminar was held on 22nd and 23rd July, 2007 at 6:00 p.m.
The duration of the seminar was approximately 45 minutes,
which was conducted by a qualified trainer of the company. In this
seminar the trainer gave a presentation to these people regarding the
Insurance Industry and Kotak Life Insurance.
Later these people were given an offer of becoming a Life
Advisor with the company. The cases of people found interested were
closed as soon as possible after filing the customer information form and
personal history form. The rest were pitched for the sale of any of the
companys products as per his/her requirement.
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DATA ANALYSISDATA ANALYSIS
In order to analyze the data, we followed Likert Rating Scale
Method. In this method we have given scores to different questions [Q3
to Q11] as per their importance, and analyzed the data on individual as
well as segment basis. Any person can get maximum score of 27 and
minimum of 15. Any person getting a score in between 21 to 27 is
considered to be a suitable prospect for becoming a Financial Advisor for
the company. Also the average score of each segment is calculated and the
segment which has got the maximum average score is considered to be
the segment which has to be focused upon and tapped on an extensive
scale.
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OPERATION OF THE PROJECTOPERATION OF THE PROJECT
7.1 WORK PROFILE7.1 WORK PROFILE
For the First 18 Days, I approached the people and asked them to
fill up the Questionnaire and explained them the Opportunitywith Kotak Life Insurance.
For the Remaining Days, I phoned the people and explained the
opportunity of being a partner of the company.
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I Called the Interested Respondents to the Office Place and
explained them the whole detail.
I also went to Prospects House and explained the detail of
Opportunity.
Among all whom I met, Converted 5 Prospects into Life Advisors.
During the Survey, 100 People were Contacted, which comprises of:During the Survey, 100 People were Contacted, which comprises of:
Housewives = 10%
CA / Finance =25%
Businessmen = 23%
Professionals = 18%
Service Class = 24%
The Number of People, who has taken that OpportunityThe Number of People, who has taken that Opportunity::
Housewives = 1
CA / Finance = 1
Businessmen = 0
Professionals = 1
Service Class = 2
7