life insurance kotak
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A
REPORT
On
Potential of Life insurance Industry in Surat Market
Under the Guidance of
COMPANY GUIDE
Mr. Jignesh Madhwani
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TABLE OF CONTENTSContents Page No.Acknowledgements 5List of Tables 6 List of Illustrations/Diagrams 7 Executive Summary 9Chapter 1: introduction 10
Objective 15
Limitation 17
Research Mythology 19
Data Collection 22
Chapter 2: Life Insurance Industry 23 Industry profile 24
important milestones in the life insurance business 29
Insurance sector reforms 31
IRDA 32
Chapter 3: Contribution of Life Insurance Industry 36
Contribution of Life Insurance in the Economy 36
Flow of Insurance Industry in India 37
Structure of life Insurance Industry 40
Life Insurance industry 41
Aggregation of Long Term Savings 42
Spread of financial services in rural Areas 43
Long term funds for infrastructure Development of CapitalMarkets/Economic Growth
44
Employment generation 45
Special Features 46
Growth Potential 47
Phase of transition 47
Chapter 4:Company Profile 49
Management 51
Area of Business 56
KMOM progress till date 65 KMOM-the partnership and Lineage 66
Products 69
Hierarchy of KMOM of Surat branch 71
Chapter 5: Survey 72
Data interpretation , editing and coding 73
Graph analysis 73
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Chapter 6: Finding and Suggestion 83Chapter 7: Conclusion 84Chapter 8: References 85Chapter 9: Annexure 86
Acknowledgement
In preparation of this report by me, I feel great pleasure
because it gives me extensive practical knowledge in my career. I
get idea about Indian Life Insurance Industry by this project.
I express my deep sense of gratitude to My Company Guide
Mr. Jignesh Madhavani for his valuable guidance during my
project work. I also like to all staff of Kotak Life Insurance who
guide me in project work.
I am thankful to Mr. Vikas Singh (Faculty Guide) for
valuable inspiration and guidance provided me through out thecourse of this project. They have patient and critically gone the
subject matter.
I would like to take opportunity to express my gratitude
towards all of them who have contributed directly or indirectly in
my project work.
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Chirag PatelList of Tables
Name of Tables Page no
Potential of Life Insurance sector 38
Market share of LIC and all private
player
38
Individual Market share of
Insurance company
39
Total asset of Life Insurance
companies
41
Total premium generated 41
The future premium incomeGenerated will be
41
Untimely death benefit to policyholder in the past 44
Age vise classification 73
Gender wise classification 74
Income wise classification 75
No of member having insurance 76
How many person having insurancein family
77
Different policy bought bycustomers
78
Fully insured and under insured 79
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persons
Market share of different life
insurance policy
80
List of Illustrations/Diagrams
Name of Illustrations/Diagrams Page
No Kotak : Area of Business 57
Age vise classification 73 Gender wise classification 74
Income wise classification 75
No of member having insurance 76
How many person having insurance infamily
77
Different policy bought by customers 78
Fully insured and under insured
persons
79
Market share of different life insurance 80
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Chapter 1:
Introduction
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Executive Summary
The service industry is one of the fastest growing sectors in India
today. The upcoming sectors which are really showing the graph
towards upwards are - Telecom, Banking, and Insurance. These
sectors really have a lot of responsibility towards the economy.
Amongst the above-mentioned areas insurance is one sector,
which took a lot of time in positioning itself. The insurancebusiness of non-life companies was not much in problems but the
major problem was with life insurance. Life Insurance
Corporation of India had monopoly for more than 45 years, but
the picture then was completely different. Previously people felt
that Insurance is only for classes not for masses but now the
picture is vice-versa.
The story of insurance is probably as old as the story of mankind.
The same instinct that prompts modern businessmen today to
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secure themselves against loss and disaster existed in primitive
men also. They too sought to avert the evil consequences of fire
and flood and loss of life and were willing to make some sort of
sacrifice in order to achieve security. Though the concept of
insurance is largely a development of the recent past, particularly
after the industrial era past few centuries yet its beginnings
date back almost 6000 years.
Life Insurance in its modern form came to India from England in
the year 1818. Oriental Life Insurance Company started by
Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that
period were brought up with the purpose of looking after the needs
of European community and these companies were not insuring
Indian natives. However, later with the efforts of eminent people
like Babu Muttylal Seal, the foreign life insurance companies
started insuring Indian lives. But Indian lives were being treated
as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded
the birth of first Indian life insurance company in the year 1870,
and covered Indian lives at normal rates. Starting as Indianenterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat
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Insurance Company (1896) was also one of such companies
inspired by nationalism. The Swadeshi movement of 1905-1907
gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and
the Co-operative Assurance at Lahore were established in 1906. In
1907, Hindustan Co-operative Insurance Company took its birth
in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile,
General Assurance and Swadeshi Life (later Bombay Life) were
some of the companies established during the same period. Prior
to 1912 India had no legislation to regulate insurance business. In
the year 1912, the Life Insurance Companies Act, and the
Provident Fund Act were passed. The Life Insurance Companies
Act 1912 made it necessary that the premium rate tables and
periodical valuations of companies should be certified by an
actuary. But the Act discriminated between foreign and Indian
companies on many accounts, putting the Indian companies at a
disadvantage.
The formation of IRDA, entrance of private life insurance
companies into India with one foreign partner, compulsory
training of Insurance agents etc. developments started to take
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place. And this was the time when these companies started
searching for proper channel partners who can help the
organization in expanding its network and business in India.
Channel partners are those who are going to be into direct selling
of companys products i.e. the insurance policies. They are the link
between the customers and the management or company. These
channel partners are people with different profiles. They are
selected on some grounds like their network of people, their
problem handling ability, convincing power and lot many things.
The main idea behind companys Questionnaire Survey is to find
out and analyze the proper profile that can be recruited by
company as a channel partner. Company has been focusing on
some of the profile that can be very beneficial for the company.
For example Chartered Accountants, Tax Consultants, Postal
agents, Banks Daily Collection Agents etc. the main idea behind
targeting the above profile is strong client network which is really
very important for an insurance company.
The project title is Potential of Life Insurance Industry
in Surat Market. This shows the scope for private insurance
companies have great opportunities to cover the market and can
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insure the customer. With the initiation of the deregulation in the
Indian insurance market, the monopoly of big public sector
companies in life insurance market has been broken. New private
players have entered the market and with their innovative
approaches and better use of distribution channels and
technology, they are eating in to the shares of established public
sector companies in Indian Insurance Market. Since the
deregulation has been put in to place, the market share of LIC has
come down to 71.4% in life insurance market while the private
players have captured around 17% market in the general
insurance segment. This report includes the key private players in
the insurance market such as ICICI Prudential, Kotak Life
Insurance Bajaj Allianz, Birla Sun life, and TATA AIG. It also
includes the leading competitors in the life insurance and general
insurance segments along with their market shares.
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Chapter 2
Objective
Limitation
Methodology
Data collection
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1. Objective:
The main of the present study of is accomplish the followingobjective.
Proper understanding and analysis of life insurance
industry.
To know about brand awareness of Kotak Life
Insurance and customers preference about Kotak Life
Insurance.
Conduct market survey on a sample selected from the
entire population and derived opinion on that research.
According the market survey come know about how
much potential of insurance market in our city.
And base on analysis of the result thus obtained make a
report on that research.
Training aims at recruiting maximum number of Life
Advisors and to Sell the maximum policies for the
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company and bring the business for the company which
ever is going at the particular point of time.
Along with it I will be gaining the thorough knowledge
of insurance sector. This will give me in more
confidence in marketing products given to me.
As the Kotak Life Insurance well reputed company in
India its great chance for me to observed different
products launch by other competitor companies like
ICICI prudential, Bajaj alliance ,LIC, Max New York
life etc. In all, it is to understand the overall working of
the Life insurance sector.
The objective behind the project is as follows:
To find the right candidate.
To about their family background, occupation, socialrelation, Qualification, Age.
Finalize candidates for the IRDA training
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5:Limitation:
Some of the difficulties and limitations faced by me
during my training are as follows:
Lack of awareness among the people This is the
biggest limitation found in this sector. Most of the people are
not aware about the importance and the necessity of the
insurance in their life. They are not aware how useful life
insurance can be for their family members if something
happens to them.
Perception of the people towards Insurance sector
People still consider insurance just as a Tax saving device. So
today also there is always a rush to buy an Insurance Policy only
at the end of the financial year like January, February and
March making the other 9 months dry for this business.
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Insurance does not give good returns Still today
people think that Insurance does not give good returns. They are
not aware of the modern Unit Linked Insurance Plans which are
offered by most of the Private sector players. They are still under
the perception that if they take Insurance they will get only 5-6%
returns which is not true nowadays. Nowadays most of the
modern Unit Linked Insurance Plans gives returns which are
many times more than that of bank Fixed deposits, National
saving certificate, Post office deposits and Public provident fund.
Lack of awareness about the earning opportunity in
the Insurance sector People still today are not aware about
the earning opportunity that the Insurance sector gives. After the
privatization of the insurance sector many private giants have
entered the insurance sector. These private companies in order
to beat the competition and to increase their Insurance Advisors
to increase their reach to the customers are giving very high
commission rates but people are not aware of that.
Increased competition Today the competition in the
Insurance sector has became very stiff. Currently there are 14
Life Insurance companies working in India including the LIC
(life insurance Corporation of India). Today each and every
company is trying to increase their Insurance Advisors so that
they can increase their reach in the market. This situation has
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created a scenario in which to recruit Life insurance Advisors
and to sell life Insurance Policy has became very very difficult.
RESEARCH METODOLOGY
Research always starts with a question or a problem. Its purpose
is to question through the application of the scientific method. It is
a systematic and intensive study directed towards a more complete
knowledge of the subject studied. Marketing research is the
function which links the consumer, customer and public to the
marketer through information- information used to identify and
define marketing opportunities and problems generate, refine, and
evaluate marketing actions, monitor marketing actions, monitor
marketing performance and improve understanding of market as a
process.
Marketing research specifies the information required to address
these issues, designs, and the method for collecting information,
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manage and implemented the data collection process, analyses the
results and communicate the findings and their implication.
I have prepared our project as descriptive type, as the objective of
the study demands the answers of the question related to find the
potentiality of life insurance in Surat: How much potential is
there in Surat?
The Marketing Research ProcessAs marketing research is a systemic and formalized process, it
follows a certain sequence of research action. The marketing
process has the following steps:
Formulating the problems
Developing objectives of the research
Designing an effective research plan
Data collection techniques
Evaluating the data and preparing a research report
There are two types of data collection method use in my project
report.
Primary data
Secondary data.
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For my project, I decided on primary data collection method for
observing working of company and approaching customers
directly in the field, tele-calling, cold calling, campaigning and
through references to know their interest in business with company
in my project and also make questionnaire for creating database
of business class people is Surat city for company.
I decided on Secondary data collection method was used by
referring to various websites, books, magazines, journals and
daily newspapers for collecting information regarding project
under study.
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DATA COLLECTION
After the research methodology, research problem in
marketing has been identified and selected; the next step is
together the requisite data. There are two types of data collection
method primary data and secondary data.
In our live project, we decided primary data collection
method because our study nature does not permit to apply
observational method. In survey approach we had selected a
questionnaire method for taking a customer view because it is
feasible from the point of view of our subject & survey purpose.
We conducted 200 sample of survey in our project.
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Chapter: 3
Industry profile:
important milestones in the life insurance
business
Insurance sector reforms
The Insurance Regulatory and
Development Authority (IRDA)
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Brief History of the Insurance Sector in India
The business of life insurance in India in its existing form started
in India in the year 1818 with the establishment of the Oriental
Life Insurance Company in Calcutta.
The story of insurance is probably as old as the story of mankind.
The same instinct that prompts modern businessmen today to
secure themselves against loss and disaster existed in primitive
men also. They too sought to avert the evil consequences of fire
and flood and loss of life and were willing to make some sort of
sacrifice in order to achieve security. Though the concept of
insurance is largely a development of the recent past, particularly
after the industrial era past few centuries yet its beginnings
date back almost 6000 years.
Life Insurance in its modern form came to India from England in
the year 1818. Oriental Life Insurance Company started by
Europeans in Calcutta was the first life insurance company on
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Indian Soil. All the insurance companies established during that
period were brought up with the purpose of looking after the needs
of European community and these companies were not insuring
Indian natives. However, later with the efforts of eminent people
like Babu Muttylal Seal, the foreign life insurance companies
started insuring Indian lives. But Indian lives were being treated
as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded
the birth of first Indian life insurance company in the year 1870,
and covered Indian lives at normal rates. Starting as Indian
enterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat
Insurance Company (1896) was also one of such companies
inspired by nationalism. The Swadeshi movement of 1905-1907
gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and
the Co-operative Assurance at Lahore were established in 1906. In
1907, Hindustan Co-operative Insurance Company took its birth
in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile,
General Assurance and Swadeshi Life (later Bombay Life) were
some of the companies established during the same period. Prior
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to 1912 India had no legislation to regulate insurance business. In
the year 1912, the Life Insurance Companies Act, and the
Provident Fund Act were passed. The Life Insurance Companies
Act 1912 made it necessary that the premium rate tables and
periodical valuations of companies should be certified by an
actuary. But the Act discriminated between foreign and Indian
companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in
insurance business. From 44 companies with total business-in-
force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the
mushrooming of insurance companies many financially unsound
concerns were also floated which failed miserably. The Insurance
Act 1938 was the first legislation governing not only life insurance
but also non-life insurance to provide strict state control over
insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act1938 was introduced in the Legislative Assembly. However, it was
much later on the 19th of January 1956 that life insurance in India
was nationalized. About 154 Indian insurance companies, 16 non-
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Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two
stages; initially the management of the companies was taken over
by means of an Ordinance, and later, the ownership too by means
of a comprehensive bill. The Parliament of India passed the Life
Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more
widely and in particular to the rural areas with a view to reach all
insurable persons in the country, providing them adequate
financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch
offices, apart from its corporate office in the year 1956. Since life
insurance contracts are long-term contracts and during the
currency of the policy it requires a variety of services need was felt
in the later years to expand the operations and place a branch
office at each district headquarter. Re-organization of LIC took
place and large numbers of new branch offices were opened. As a
result of re-organization servicing functions were transferred to
the branches, and branches were made accounting units. It workedwonders with the performance of the corporation. It may be seen
that from about 200.00 Crores of New Business in 1957 the
corporation crossed 1000.00 Crores only in the year 1969-70, and
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it took another 10 years for LIC to cross 2000.00 crore mark of
new business. But with re-organization happening in the early
eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum
Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices,
100 divisional offices, 7 zonal offices and the corporate office.
LICs Wide Area Network covers 100 divisional offices and
connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line
premium collection facility in selected cities. LICs ECS and ATM
premium payment facility is an addition to customer convenience.
Apart from on-line Kiosks and IVRS, Info Centers have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With
a vision of providing easy access to its policyholders, LIC has
launched its SATELLITE SAMPARK offices. The satellite offices
are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life
insurance business. The same motives which inspired our
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forefathers to bring insurance into existence in this country inspire
us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in
providing security to their families.
Some of the important milestones in the life
insurance business in India are:
1850Non life insurance debuts with triton insurance company.
1870 Bombay mutual life assurance society is the first Indian
owned life insurer
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.
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1956 245 Indian and foreign insurers and provident societies
taken over by the central government and nationalized. LIC
formed by an Act of Parliament, viz. LIC Act, 1956, with a capital
contribution of Rs. 5 Crore from the Government of India.
The General insurance business in India, on the other hand, can
trace its roots to the Triton Insurance Company Ltd., the first
general insurance company established in the year 1850 in
Calcutta by the British. Some of the important milestones in the
general insurance business in India are:
1907 The Indian Mercantile Insurance Ltd. set up, the first
company to transact all classes of general insurance business.
1957 General Insurance Council, a wing of the InsuranceAssociation of India, frames a code of conduct for ensuring fair
conduct and sound business practices.
1968 The Insurance Act amended to regulate investments and set
minimum solvency margins and the Tariff Advisory Committee set
up.
1972 The General Insurance Business (Nationalization) Act,
1972 nationalized the general insurance business in India with
effect from 1st January 1973. 107 insurers amalgamated and
grouped into four companies viz. the National Insurance
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Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd. and the United India Insurance
Company Ltd. GIC incorporated as a company.
Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance
Secretary and RBI Governor R. N. Malhotra, was formed to
evaluate the Indian insurance industry and recommend its future
direction.
The Malhotra committee was set up with the objective of
complementing the reforms initiated in the financial sector. The
reforms were aimed at creating a more efficient and competitive
financial system suitable for the requirements of the economy
keeping in mind the structural changes currently underway and
recognizing that insurance is an important part of the overall
financial system where it was necessary to address the need for
similar reforms In 1994, the committee submitted the report
and some of the key recommendations included.
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1997 Insurance regulator IRDA set up
2000 IRDA starts giving licenses to private insurers: Kotak
Life Insurance ICICI prudential and HDFC Standard Life
insurance first private insurers to sell a policy
2001 Royal Sundaram Alliance first non life insurer to sell
a policy 2002 Banks allowed to sell insurance plans.
The Insurance Regulatory and Development
Authority (IRDA)
The Insurance Act, 1938 had provided for setting up of the
Controller of Insurance to act as a strong and powerful
supervisory and regulatory authority for insurance. Post
nationalization, the role of Controller of Insurance diminished
considerably in significance since the Government owned the
insurance companies.
But the scenario changed with the private and foreign companies
foraying in to the insurance sector. This necessitated the need for
a strong, independent and autonomous Insurance Regulatory
Authority was felt. As the enacting of legislation would have taken
time, the then Government constituted through a Government
resolution an Interim Insurance Regulatory Authority pending the
enactment of a comprehensive legislation.
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The Insurance Regulatory and Development Authority Act, 1999 is
an act to provide for the establishment of an Authority to protect
the interests of holders of insurance policies, to regulate, promote
and ensure orderly growth of the insurance industry and for
matters connected therewith or incidental thereto and further to
amend the Insurance Act, 1938, the Life Insurance Corporation
Act, 1956 and the General insurance Business (Nationalization)
Act, 1972 to end the monopoly of the Life Insurance Corporation
of India (for life insurance business) and General Insurance
Corporation and its subsidiaries (for general insurance business).
The act extends to the whole of India and will come into force on
such date as the Central Government may, by notification in the
Official Gazette specify. Different dates may be appointed for
different provisions of this Act.
The Act has defined certain terms; some of the most important
ones are as follows
appointed day means the date on which the Authority is
established under the act. Authority means the established under
this Act.
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Interim Insurance Regulatory Authority means the Insurance
Regulatory Authority set up by the Central Government through
Resolution No. 17(2)/ 94-lns-V dated the 23rd January, 1996.
Words and expressions used and not defined in this Act but defined
in the Insurance Act, 1938 or the Life Insurance Corporation Act,
1956 or the General Insurance Business (Nationalization) Act,
1972 shall have the meanings respectively assigned to them in
those Acts
A new definition of "Indian Insurance Company" has been
inserted. "Indian insurance company" means any insurer being a
company (a) which is formed and registered under the Companies
Act,
(b) in which the aggregate holdings of equity shares by a foreign
company, either by itself or through its subsidiary companies or its
nominees, do not exceed twenty-six per cent. Paid up capital in
such Indian insurance company (c) whose sole purpose is to carry
on life insurance business, general insurance business or re-
insurance business.
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Chapter: 4
Contribution of Life Insurance
Sector in the Economy
FLOW OF Insurance Industry in
India
STRUCTURE OF INSURANCE
INDUSTRY: Snap Shot
Industry
Aggregation of Long Term
Savings
Spread of financial services in rural
Areas
Long term funds for infrastructure
Development of Capital Markets/
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Economic Growth
Employment generation
Special Futures Growth Potential
Phase of transition
FLOW OF Insurance Industry in India
Structure of Insurance Industry: Snap Shot
Contribution to Indian Economy
Special Features
STRUCTURE OF INSURANCEINDUSTRY: Snap Shot
Historical Perspective(i) Prior to 1956 242 companies operating(ii) 1956 - 2001 Nationalization LIC monopoly
player Government control(iii) 2001 -- Opened up sector
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Industry
Snap Shot - Contd. (a) LIC Fully owned by Government
(b) Postal Life Insurance
(ii) Private players -1. Bajaj Allianz Life Insurance Co. Ltd.2. Birla Sun Life Insurance Co. Ltd. (BSLI)
3. HDFC Standard Life Insurance Co. Ltd. (HDFC STDLIFE)
4. ICICI Prudential Life Insurance Co. Ltd. (ICICIPRU)
5. ING Vysya Life Insurance Co. Ltd. (ING VYSYA)6. Max New York Life Insurance Co. Ltd. (MNYL)
7. MetLife India Insurance Co. Pvt. Ltd. (METLIFE)8. Kotak Mahindra Old Mutual Life Insurance Co. Ltd.9. SBI Life Insurance Co. Ltd. (SBI LIFE)10. TATA AIG Life Insurance Co. Ltd. (TATA AIG)
11. Reliance Life Insurance12. Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)
13. Sahara India Life Insurance Co. Ltd. (SAHARALIFE)
14. Shriram Sunlam
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(iii) Other likely players PNB Life Insurance, AxaBharti Enterprises
Potential of the Insurance sector:
Source: Financial Express-Delhi.
Market share:
2001-02 2002-03 2003-04 2004-05 2005-
06LIC
98% 94% 87% 78% 72%
PrivatePlayers
2% 6% 13% 22% 28%
Total population 1.1 billion
Total population ofInsurable class
253 millions
Total populationinsured
88.5 millions
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Industry growth rate at 36% (2004-05) with premium incomeFrom new business.
Source: Financial Express-
Delhi
Market Share
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Company IndianPromoter/Partner
ForeignInsurance
Market share based onpremium
Aviva life Dabur Aviva, UK 1.12BajajAllianz
BajajAuto
Allianz,Germany
6.12
Birla sunlife
AdityaBirlagroup
Sun Life,Canada
1.84
HDFCStandard
HDFC Standard Life, UK
2.96
ICICIPrudentia
l
ICICIBank
Prudential,UK
7.11
INGVysya
VysyaBank
INGInsurance,Netherland
s
0.63
KotakMahindra
, OldMutual
KotakMahindra
Bank
Old MutualSouth
Africa
0.71
Max NewYork
Max India New YorkLife, US
1.32
MetLife Jammu &Kashmir
Bank
MetLife,US
0.40
Sahara
LifeInsurance
Sahara
India
None 0.80
SBI Life SBI Cardiff,France
1.52
Tata AIG TataGroup
AIG, US 1.78
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CONTRIBUTION TO INDIAN
ECONOMY
(i) Life Insurance is the only sector whichgarners
long term savings(ii) Spread of financial services in rural areas
andamongst socially less privileged
(iii) Long term funds for infrastructure(iv) Strong positive correlation between
development of capital markets and insurance/pension sector(v) Employment generation
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Aggregation of Long Term Savings(i) Total Assets of Life Insurance Companies
2002-2003 2003-2004 2004-2005 2,80,450Cr 3,52,608Cr 4,23,000 Cr
(ii) Total Premium generated
2002-2003 2003-2004 2004-2005
57,708 Cr 66,278 Cr 79,000 Cr
(iii) Industry is growing @ 19 p.a.
(iv) At this growth rate, the future premiumincome generated will be
2005-2006 2006-2007 2007-200894,000 Cr 1,12000 Cr 1,33,000 Cr
(v) Life Insurance funds account for 15% of
household savings.
(vi)The industry has the potential to increase theshare to 20%.
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Spread of financial services in ruralareas and amongst socially
underprivileged
IRDA Regulations provide certain minimum business to be done
(i) In rural areas
(ii) In the socially weaker sections
Life Insurance offices are spread over nearly
1400 centers.
Presence of representative in every tensile
deeper penetration in rural areas.
Insurance agents numbering over 6.24 lakhs
in rural areas.
Policies sold in rural areas (2004-05) - No. of
policies - 55 lakhs Sum assured 46,000 cr
Social security - No. of lives covered 2003-04
17.4 lakhs 2004-05 42.1 lakhs
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Long term funds for
infrastructure
For GDP to grow at 8 to 10%, qualitative improvement in
infrastructure is essential.
Estimates of funds required for development of infrastructure
vary widely.
An investment of 6, 19,600 crore is anticipated in the next 5
years (Source : SSKI India)
Tenure of funding required for infrastructure
normally ranges from 10 to 20 years.
Major portion of these funds are routed through debt/private
equity participation
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Development of Capital Markets/Economic Growth
Industry also contributes in economic development through
investments in capital market. Present level of investments is over
Rs. 40,000 crore. (Mark to Market basis around 80,000 Crores).
Annual Investment of around 9000 Crores in capital markets.
Contribution to Five Year Plans9th Plan 2, 30,900 Crores Last
Two Years 1, 70,900 Crores
Helps inculcate a sense of security by protecting earning of
people in case of untimely death. Benefits to Policy Holders
2002-2003 2003-2004 2004-200520,800 Cr 24,200 Cr 28,700 Cr
EMPLOYMENT GENERATION
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Life insurance industry provides increased
employment opportunities.
Employees in insurance sector as on 31st March,
2005 is around 2 lakhs.
Many agents depend on insurance for their
LivelihoodNo. of agents on 31st March 2004
15.59 lakhs
Brokers, corporate agents, training establishments
provide extra employment opportunities.
Many of these openings are in rural sectors.
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SPECIAL FEATURES
Tax clubbing of various savings short term and long term intosame bracket have a bias towards short term savings.
Distinction between the short term savings and long term savings
is critical from investors point of view. More prone to inflationary
pressures
Clearly, long term savings more than 10 years deserve special
consideration under tax regime.
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GROWTH POTENTIAL
At present insurance penetration in India is quite low
2.26% of GDP.
PHASE OF TRANSITION
Life Insurance industry is under the phase of infancy after 50
years of monopoly
Competition from within and other sectors of financial market
Needs environmental support till it reaches a comfort zone
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Chapter: 5
Company profile
Management
Areas of Business
KMOM- Progress till date
KMOM- the Partnership and
Lineage
Products
Hierarchy of KMOM Life
Insurance Ltd. (Surat Branch)
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COMPANY PROFILE
Stock broking businesses in the UK. Kotak Group was established
in 1985.Kotak Mahindra Bank is the parent company of the group.
Kotak Group entered into the life insurance business in 2001.
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture
between Kotak Mahindra Bank Ltd. (76%) and Old Mutual plc.
(24%) Old Mutual plc.Is a world-Class international financial
services company. It was established in South Africa before 160
years.
OLD MUTUAL is the largest financial services business in South
Africa, through its life insurance, asset management, banking and
general insurance operations. The company serves 4 million life
insurance policyholders and employs over 13 000 South Africans
in its local operations.
In the USA, OLD MUTUAL is one of the top ten fixed annuity
businesses offering an array of specialist asset management skills
through its 23 asset management businesses. The companys US
Life business recorded sales of $4 billion at the end of 2002.
Operations in the United Kingdom are focused on wealth
management, through Gerrard as one of the leading private client
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The OLD MUTUAL Group has the ability to cater for a variety of
consumer segments and offers a comprehensive and innovative
range of products for all income groups.
Mission:
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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 make
them financially independent.
MANAGEMENT
MR. UDAY KOTAK is the CEO of the company.
Other Top Management persons are as follows:-
Mr. Gaurang Shah (Managing Director)
Mr. Gaurang Shah is the Managing Director of Kotak
Mahindra Old Mutual Life Insurance Limited.
Mr. Gaurang Shah is a Chartered Accountant and a Cost and
Works Accountant. He has also done his Company Secretary
ship from the Institute of Company Secretaries of India. Mr.
Gaurang Shah has been with the Kotak Group for the past
eight years where he has held different positions of great
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responsibility and juggled multiple tasks effectively. His
cumulative experience, primarily in financial services, stands
at over 21 years, several of those in building the retail finance
business. At Kotak Life Insurance, Mr. Shah will focus on
developing new lines of businesses and leveraging the
company's existing competencies and network to steer Kotak
Life Insurance on its ongoing growth path with even greater
thrust. Mr. Shah has a commendable expertise in managing a
large number of employees.
Mr. Shah has been previously associated with Kotak Mahindra
Primus since its inception and has contributed towards its
growth to become a Rs.2000 Cr plus business. Before coming
to Kotak Life Insurance, Gaurang Shah was Group Head of
Retail Assets for Kotak Mahindra Bank. The Retail Assets
include commercial vehicles, personal loans, structured
products, car loans and loans against shares.
Mr. G Murlidhar (Chief Financial Officer)
Mr. Murlidhar is a Chief Financial Officer and
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Company Secretary of Kotak Life Insurance. Mr.
Murlidhar is an associate member of the Institute of
Chartered Accountants of India, an associate
member of the Institute Of Company Secretaries of
India, and graduate member of the Institute of Cost
& Works Accountants of India. Mr. Murlidhar
possesses over 20-year work experience and has
earlier worked with National Dairy Development
Board (NDDB), MDS Switchgear Limited and
Nicholas Piramal India Limited and Ion Exchange
Ltd. Prior to Kotak Life Insurance; he held the
position of VP-Finance at Gujarat Glass Ltd.
As Chief Financial Officer at Kotak Life Insurance, he oversees
all aspects of Finance including Operations, Regulatory,
Internal Control, Finance, Accounts and Treasury.
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Mr. Nandip Vaidya (Vice President - Sales)
Mr. Nandip Vaidya is the Vice President - Sales at Kotak Life
Insurance. Mr. Vaidya holds a B.Tech (Mechanical) degree from
IIT Mumbai and has also completed his Post Graduate Diploma in
Business Management from IIM-Ahmedabad.
He started his career as a Management Consultant at A.F.
Fergusson. After completing 5 years there, he moved onto various
positions within the Kotak Mahindra group starting from Car
Financing (Kotak Mahindra Finance Ltd) to Stock broking &
Distribution of investment products/ Mutual funds (Kotak
Securities). Mr. Vaidya set up the private banking business and
private equity fund for the Kotak group.
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Mr. Arun Patil (Vice President - Sales & Management
Development)
Mr. Eksteen de Waal is the Sales Training Head of Kotak Life
Insurance. He joined on secondment from Old Mutual South
Africa for a period of two years. Eksteen is a post- graduate in
Law and practiced Law as well as lectured at South AfricanUniversities before joining the Life Insurance Industry. He has
over 23 years' experience in the Life Insurance Industry. He
worked for Sanlam Life in South Africa for 3 years before joining
Old Mutual more than 20 years ago. Eksteen started with Old
Mutual as a Legal Adviser and after that held various positions.
He sold life assurance for some time, served as Head of Old
Mutual's Training Division, Head of Old Mutual's Trust Company,
Project Leader for implementing a new Sales Process with
McKinsey's, Head of Conventions and Motivation, Head of Agency
Marketing and finally Head of Banc assurance with Old Mutual
Bank. In addition he played a role in the wider Industry. He wasVice-President of the South African Insurance Institute for two
years as well as Vice-President of the Financial Planning Institute
for three years. In this time Eksteen pioneered the introduction of
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the CFP qualification into South Africa. He has traveled widely
during his career, working in the USA and England and also
implemented Training Programme in Namibia, Zimbabwe, Malawi
and Kenai. His current role is to substantially upgrade the level of
Training and assist in the implementation of Performance
Management Systems in Kotak Life Insurance.
AREAS OF BUSINESS
Kotak Mahindra one of India's leading financial institutions was
born in 1985 as Kotak Capital Management Finance Limited. This
company was promoted by Mr. Uday Kotak, Mr. Sidney A. A.
Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra
and Mr. Anand Mahindra took a stake in 1986, and that's when the
company changed its name to Kotak Mahindra Finance Limited.
It's been a steady and confident journey to growth and success.
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In October 2005, Kotak Group acquired the 40% stake in Kotak
Mahindra Prime held by Ford Credit International (FCI) and FCI
acquired the stake in Ford Credit Kotak Mahindra (FCKM) held
by Kotak Group.
In March 2006, Kotak Group has agreed to buy 25% stake held by
Goldman Sachs in KMCC and KS subject to regulatory approvals.
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.
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The group has a net worth of around Rs.2,000 crore and employs
around 6,000 employees across its various businesses servicing
around one million four hundred thousand customer accounts through
a distribution network of branches, franchisees, representative offices
and satellite offices across 216 cities and towns in India and offices in
New York, London, Dubai and Mauritius.
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KOTAK GROUP IS INVOLVED IN THE FOLLOWING
AREAS OF BUSINESS:-
Kotak Mahindra Prime Ltd.
Kotak Mahindra Prime Limited (KMPL) is a 100% subsidiary of
Kotak Mahindra Group (Kotak Group) formed to finance all
passenger vehicles. The company is dedicated to financing and
supporting automotive and automotive related manufacturers,
dealers and retail customers. The Company offers car financing in
the form of loans for the entire range of passenger cars and multi
utility vehicles. The Company also offers Inventory funding to car
dealers and has entered into strategic arrangement with variouscar manufacturers in India for being their preferred financier.
As on March 31, 2005, KMP has a retail distribution network
comprising of 54 branches (including representative offices)
covering about 100 locations in 17 states in the country and has a
wide network of Direct Marketing Associates, brokers andagencies supporting the distribution network and servicing around
113,000 customers.
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Kotak Mahindra Capital Company Ltd.
Kotak Investment Banking* (KIB) is India's premier Investment
Bank
Kotak Investment Banking (KIB) and Kotak Institutional Equities
represent the securities business of the Kotak Mahindra Group **
(KI),
Kotak Investment Bank is a full service Investment Bank bringing
to its clients the global reach and the local knowledge and skills of
Kotak Mahindra. As a full service Investment Bank, Kotak
Investment Bakings core business areas include Equity Issuances,
Mergers & Acquisitions, Advisory Services and Fixed Income
Securities and Principal Business.
Its strength lies in understanding the clients' businesses backed by
a strong research team and an extensive distribution network,
which spans a wide variety of investors across the country. It is
also the first Indian Investment Bank to be registered with the
Securities & Futures Authority in the UK (through our wholly
owned subsidiary) and the National Association of Securities andDealers in the USA.
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Its the first Indian Investment Bank to be appointed by the
Government of India as a Co-lead Manager in their international
divestment of Gas Authority of India Ltd through a GDR offering.
Kotak Investment Bank today well positioned in an increasing
globalize environment to provide full service to its clients based
either in India or overseas.
Kotak Mahindra Bank Ltd.
Kotak Mahindra Bank Limited (KMBL) is the holding company
and the flagship of the Kotak Mahindra Group. It was actually
incorporated as Kotak Capital Management Finance Limited on
November 2, 1985 and obtained its Certificate of Commencement
of Business on February 11, 1986.
It commenced operations with Bill Discounting and soon started
other fund-based activities like corporate leasing & hire purchase,
automobile finance and money market operations. Subsequently, it
also entered the funds syndication and the Investment banking
business.
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Kotak Mahindra Asset Management Company
Kotak Mahindra Asset Management Company (KMAMC), a
wholly owned subsidiary of KMBL, is the asset manager for Kotak
Mahindra Mutual Fund (KMMF). KMAMC started operations in
December 1998 and has over 1, 35,000 investors in various
schemes. KMMF 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.
International Subsidiaries
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. Today the internationaloperations also cover the United Kingdom, through Kotak
Mahindra U.K. Limited and in the USA, through Kotak Mahindra
Inc. USA. These companies are subsidiaries of Kotak Mahindra
Capital Company (KMCC) the Investment Banking Division of
the Group. Services offered include GDR and ADR trading and
broking, debt syndication, placement of Indian securities and
advisory services. Kotak Mahindra was the first Indian group to
be registered with the Securities and Futures Authority, U.K. Also,
Kotak Mahindra is the first Indian group registered in the US
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providing service to both Institutional investors and High Net
worth Clients in the US for their investments into Indian markets.
Kotak Securities
Kotak Securities Ltd., subsidiary of Kotak Mahindra Bank Ltd., is
one of Indias largest brokerage and distribution house. Over the
years Kotak Securities has been one of the leading investment
service providers catering to the needs of various investor
categories both institutional and non-institutional.
The Private client group (PCG) of the Company provides value
added investment advisory services to high net worth individuals,
NRI investors, trusts, corporate and Banks. The investment
product range offered by PCG covers equity investment and equity
trading, equity derivatives, portfolio management, IPOs andMutual funds. The Company has a full fledged research division
involved in macro economic studies, sectoral research and
company specific equity research combined with a strong and well
networked sales force which helps deliver current and up to date
market information and news.
Kotak Securities Ltd., Depository Participant with National
Securities Depository Limited (NSDL) and Central Depository
Services Ltd. (CDSL) provides dual benefit services wherein the
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investors can use the brokerage services of the Company for
executing the transactions and the depository services for settling
them.
Under the Portfolio Investment Scheme offered by the Company,
the funds of the investors are managed by a highly competent team
comprising of Equity Strategist, a Portfolio Manager and a team
of equity, technical and derivatives analysts.
Kotak Securities Ltd., also an Approved Intermediary under the
Securities Lending Scheme, 1997, facilitates clients to borrow and
lend securities.
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KMOM PROGRESS TILL DATE
44 branches in 31 cities.
7500 life advisors.
1000employees of very good quality.
Ranks 2nd in terms of average premium per
policy.
Ranks 4th in total advertising awareness.
First year premium income:
2001-02: 7 Crores
2002-03: 35 Crores
2003-04: 124 Crores
2004-05: 375 Crores
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KMOM THE PARTNERSHIP AND LINEAGE
A 26%-74% JOINT VENTURE BETWEEN
KOTAK MAHINDRA AND OLD MUTUAL
KOTAK LIFE INSURANCEBrand equity
Entrepreneurial employees
Branch network
Knowledge of the Indian market
Access to customer base
Distribution associates
OLD MUTUAL PLC
Domain knowledge
Technology
Product innovation
Training expertise
Global perspective
System and processes
Multi channel management
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Old Mutual was established more than 150 years ago. Old
mutual plc. is a world-class international financial service
company. It owns the largest companies in the following areas in
South Africa. They are:
1. Life Insurance Company
2. Asset Management Company
3. Bank
4. Non-life insurance company
It has been developed into an International financial services
group whose activities are focused on asset gathering and asset
management. The Old Mutual Group offers a diverse range of
financial services in three principal geographies: South Africa, the
United States and the United Kingdom. The company is listed on
the London Stock Exchange with a market capitalization of
approximately $6 billion and is a member of the elite FTSE 100
index. In the 2003 rankings of the World's 500 largest
corporations by Fortune magazine, Old Mutual climbed 87 places
to position number 366 and was also listed as the 14th largest
insurance company in the world.
Old Mutual is the largest financial services business in South
Africa, through its life insurance, asset management, banking and
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general insurance operations. The company serves 4 million life
insurance policyholders and employs over 13 000 South Africans
in its local operations.
In the USA, Old Mutual is one of the top ten fixed annuity
businesses offering an array of specialist asset management skills
through its 23 asset management businesses. The companys US
Life business recorded sales of $4 billion at the end of 2002.
Operations in the United Kingdom are focused on wealth
management, through Gerrard as one of the leading private client
stock broking businesses in the UK.
The Old Mutual Group has the ability to cater for a variety of
consumer segments and offers a comprehensive and innovative
range of products for all income groups.
PRODUCTS
Term Plans
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Kotak Term Assurance Plan
Kotak Preferred Term Plan
Endowment Plans
Kotak Endowment Plan
Kotak Money Back Plan
Kotak Child Advantage Plan
Kotak Capital Multiplier Plan
Kotak Retirement Income Plan
Kotak Premium Return Plan
Unit Linked Plans
Kotak Retirement Income Plan (Unit-linked)
Kotak Safe Investment Plan II
Kotak Flexi Plan
Kotak Easy Growth Plan
Kotak Privilege Assurance Plan
Group
Employee Benefits
Kotak Term Grouplan
Kotak Credit-Term Grouplan
Kotak Complete Cover Grouplan
Kotak Gratuity Grouplan
Kotak Superannuation Group Plan
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Rural
Kotak Gramin Bima Yojana
HIERARCHY OF KMOM LIFE INSURANCE LIMITED
(SURAT BRANCH)
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Branch manager
Assistant BM Branch Operations In
charge (BOE)
Sales Manager
OperationExecutive
Assistant SM Operations
Life advisor
Chapter: 5
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Data interpretation of the Survey
Graph analysis
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72
11
22
44
23
0
5
10
15
20
25
30
35
40
45
No.ofCustomers
18-25 26-30 31-45 46 & Above
Years
Age Wise Clasification
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Gender No of Member
MALE 66
FEMALE 34
AGE No Of Members
18-25 11
26-30 22
31-45 4446 to above 23
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74
66
34
0
10
20
30
40
50
60
70
No.ofCustomers
MALE FEMALE
Years
Gender wise clasification
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Family member No of Member
2-4 40
5-8 48
8 to above 12
75
40
48
12
0
5
10
15
20
25
30
35
40
45
50
No
.ofCustomers
2 to 4 5 to 8 8 to aboce
No of members
Members
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Income No of Members40K -70K 17
70K-1 Lake 41
1 Lake to 3 Lakes 28
3 Lacks 14
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Insurable Member Uninsurable member42% 58%
77
17
41
28
14
0
5
10
15
20
25
30
35
40
45
No.ofCustomers
40 k to 70k 70k to 1 Lak e 1 Lak e to 3
Lakes
3 Lake to
Above
Income (P.A)
Income Wise Classification
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Only 42%people having insurance in surat so it is potential forinsurance company to capture to all that market
78
NO OF MEMBER HAVING INSURANCE
YES
42%
NO
58%
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Among that 42% people who having insurance, they haveinsurance 40% for self 28%for spouse 21% for children and 18%
for their parents and 11% for all family member.
Having insurance No of members
self 40
spouse 28children 21
parents 18
all 11
Different policy bought bye customers
79
40
28
2118
11
0
5
10
15
20
25
30
35
40
No.ofCustomers
Self Spouse Children Parents All
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80
0
5
10
15
20
25
30
35
No.ofCu
stomers
Term Plan Endowment Whole life Money Back Retirement Child Plan Unit Link
Plan
Different Plans
LIC
ICIC
Birl
Sun
SBI
HDF
Baja
Allia
TAT
AIG
KotMah
aING
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Only 42 % people having life insurance but among them 82%people are underinsurance and only 18% people are fully insuredaccording to them income
Under insurable persons Fully insurable persons82% 18%
81
Potential of life insurance
Fully Insured
18%
Under Insured
82%
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Insurance Plan Market Share
Term Plan 39%
Money back Plan 14%
Endowment Plan 15%Child Plan 8%
Unit link Plan 24%
82
Market share of diffrent Insurance plan
Endownment Plan
15%
Moneyback Plan
14%
Term Plan
39%
Unitlink plan
24% Child Plan
8%
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Chapter 6:
Finding
Suggestion
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Finding and Suggestion
According the survey only 42% people are insured in
Surat so reaming other part is potential for insurance
sector.
Among that 42% people who having insurance, they
have insurance 40% for self 28%for spouse 21% for
children and 18% for their parents and 11% for all
family member, also its very help full for insurance
sector so they should take necessary step for capture
this potential.
Only 42% people having insurance in Surat in that
42% there are 82 % people are under insured and
other 18% people are fully insured according to their
income so that is also plus point for insurance sector to
capture the market
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Chapter 7
Conclusion
All the insurance company must advertise more in the marketbecause not all people know more about life Insurance
policy.
Most number of people wants Guaranteed Returns socompany must focus on this for the customer investment.
Make insurance policy which can buy any one so we caninsured them through this type of life insurance policy.
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8 References
In order to obtain more information regarding the present study
and to substantiate it with theoretical proof, the following
references were made: -
Insurance chronicle, January 2006 Special issue
Insurance Industry 2006.
Websites visited:
www.kotaklifeinsurance.com
www.google .com
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Chapter 9:
Annexure
Questionnaire
1) Name ______________________________
2) Age
1) 18-25 2)26 to 30 3) 31 to 45 4) 46 to above
3) Gender 1) male ____) female____
4) Occupation:
1) Service 2) Business 3) Professional 4 ) other
5) Family member
1) 2 to 4 2) 5 to 8 3) 8 to above
6) Do u have a life insurance?
Yes_______ No_______
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If yes,Which is it?
Companys
name
Term
plan
Endow
ment
Whole
life
Money
back
Retire
ment
Child
Plan
Unit
linkPlan
LIC
ICICIPrudential
Birla Sunlife
SBI Life
HDFC
StandardLife
BajajAlliance
TATA AIG
KotakMahindra
ING Vysya
MaxNewyork
Met Life
Reliance
Shri Ram
Sahara
7) What is your annual income?1) 40 K to 70 K 2) 70 K to 1 lake 3) 1 lake to 3 lakes 4) 3 lakes toabove
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