project report of iftekhar hussain

PROJECT REPORTOPERATIONAL FUNCTIONING OF INSURANCE COMPANY

KOTAK MAHINDRA LIFE INSURANCE JODHPURSubmitted for COURSE OF BBA under project work

Submitted by:-

IFTEKHAR HUSSAIN BBA FINAL(2009-10)

Submitted to:-

JAI NARAIN VYAS UNIVERSITY

KOTAK MAHINDRA LIFE INSURANCE

CONTENTS

___________________________________________________________________________ IFTEKHAR HUSSAIN 2


TABLE OF CONTENTS

Sr.No.1.

SECTIONExecutive Summary

DESCRIPTATIONBrief Summary on the Project About Insurance Sector

PAGE.No 6 10

2.

IntroductionSector Introduction

3.

Project DetailsObjectives Research Methodology Coverage Limitations

Purpose, Scope and other Details

51

4. 5. 6.

Desk Report

Based on Secondary Data Data analysis and Presentation

54 77 87

Survey Findings Conclusion & Suggestions

7.

AppendixBlank Questionnaire List of Contacts Product Literature

90



ACKNOWLEDGEMENT



ACKNOWLEDGEMENT

It is a great pleasure and privilege for me to present this Summer Training Project Report titled RECRUITMENT OF ADVISOR

I would like to express my gratitude to the director of BBA Mr. Pradeep Muradia for having given me an opportunity to do a project in KOTAK MAHINDRA LIFE INSURANCE . A sincere thanks to Mr. Deepak Tanwar without whose guidance the project would not have possible.

My silent applause for all the Sales Team Managers, without whose support and active guidance this project would not have been possible. I also thank all the employees of KOTAK MAHINDRA LIFE INSURANCE for their kind cooperation.

IFTEKHAR HUSSAIN



EXECUTIVE SUMMARY



EXECUTIVE SUMMARYObjectives of the study :To study the profile of Recruitment of Advisor from different localities of .

Profiles involved knowing: Demographic background, Educational background, Experience background, and Industry background.

To identify successful Advisor and study their success patterns.

Identifying involved: Setting Success Parameters for Recruitment of Advisors. Measuring the Business Performance with Business Parameters.

Research Methodology:

Sample Selection and Sampling Technique:

Questionnaire was used to obtain the required information. Personal information was taken. Determining Success Parameters of Advisors. ___________________________________________________________________________ IFTEKHAR HUSSAIN 7


Research Findings:The following tables summarize the findings:

Bachelor Qualification of Recruitment of AdvisorS.No 1 2 3 4 QUALIFICATION Bachelor in Commerce Bachelor in Science Bachelor in Arts Bachelor in Engineering PERCENTAGE 40% 18% 37% 5%

Age Distribution of AdvisorS.No 1 2 3 4 AGE GROUP Below 25 years 26 years-28 years 29 years-32 years 33 years & Above PERCENTAGE 7% 20% 42% 31%

Work field Experience of AdvisorS.No 1 2 3 4 5 6 7 SECTOR Banking & Finance Medical Science Information Technology Pharmaceuticals Telecommunications Teaching Others PERCENTAGE 21% 0.1% 15% 13% 12% 17% 20%



Conclusions:

Advisors who are P.GS are around 35 % and 65 % are graduates only. Most of the Advisors are B.Coms. Maximum age of Advisors fall above the 30 age group. 2 Advisors are turnout out of 10 . About 50 % of Advisors are able to achieve the yearly targets of annualized premiums and around 35 % of Advisors fall short of the yearly targets by 20 %.



SECTOR INTRODUCTION



SECTOR INTRODUCTIONINSURANCE IN INDIAThe insurance sector in India has come a full circle from being an open competitive market to Nationalization and back to a liberalized market again.Tracing the developments in the Indian Insurance Sector reveals the 360-degree turn witnessed over a period of almost two Centuries.

A brief history of the insurance sectorThe business of Life Insurance in India in its existing from started in India in the year 1818 with the establishment of the Oriental Life insurance Company in Calcutta. Some of the important milestones in the Insurance business in India are : 1818 :The British introduce life Insurance to India ,with the establishment of the Oriental life Insurance Company in Calcutta. 1850 : Non-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 Statical information about both Life and Non-Life Insurance Business. 1938 : Earlier legislation consolidated and amended to by the Insurance act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and Foreign Insurers and Provident societies taken over by the Central Government and Nationalized .LIC formed by an act of Parliament , 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 : ___________________________________________________________________________ IFTEKHAR HUSSAIN 11


1907: The India Mercantile Insurance Ltd.Set up,the first company to transact all classes of General Insurance business. 1957 : General Insurance Council, a wing of the Insurance Association 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 (Nationalisation)Act,1972 nationalised the amalgamated and grouped into four companies viz.the National Insurance 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. 1993: Mahotra Committee, headed by former RBI Governer R.N.Malhotra, set up to draw up a blue print for insurance sector reforms. 1994 :Malhotra Committee recommends re-entry of private players,autonomy to PSU insurers. 1997: Insurance regulator IRDA (Insurance Regulatory and Developmentary Authority)Set up. 2000 : IRDA starts giving licences to private insurers;ICICI Prudential and HDFC standard Life first private life insurers to sell a policy. 2001 : Royal Sundaram Alliance first non-life insurer to sell a policy. 2002 : Banks allowed to sell insurance plans; as TPAs enter the scene,insurers start setting nonolife claims in the cashless mode.

Insurance Sector ReformsIn 1993 ,Malhotra Committee, headed by former Finance Secretary and RBI Governor

R.N.Malhotra,was formed to evaluate the Indian Insurance Industry and recomanded 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 vfor the requirements of the company keeping in mind the structural changes currently underway and recognizing that insurance ia 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:



I) Structure

Government stake in the insurance companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.

II) Competition Private Companies with a minimum paid up capital of Rs.1 bn. should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only on State Level Life Insurance Company should be allowed to operate in each state.

III) Regulatory Body: The Insurance Act should be changed. An insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finace Ministry)should be made independent.



IV) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50% GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time)

V) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans Computerisation of operations and updating of technology to be carried out in the insurance industry.

The committee emphasised that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition.But at the same time ,the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry .Hence ,it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores.The committee felt the need to provide greater autonomy to insurance companies in order to improve their perfomance and enable them to act as independent companies with economic motives.For this purpose ,it had proposed setting up an independent regulatory body.



The Insurance Regulatory and Development AuthorityReforms in the Insurance sector were initiated with the passage of the IRDA bill in parliament in December 1999.The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDAs on line service for issue and renewal of license to agents.The approval of instituations for imparting training to agents has also ensured that the insurance companies would have trained workforce of insurance agents in place to sell their products ,which are expected to be introduced by early next year. Since being set up as independent stautory body the IRDA has put in a framework of globally compatible regulations.in the private sector 12 life insurance and 6 general insurance companies have been registered.



Duties, Powers and functions of IRDA

Section 14 of IRDA Act , 1999 lays down the duties, powers and functions of IRDA.

1.Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; 2.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; 3.Specifying requisite qualifications, code of conduct and partial training for intermediary or insurance intermediaries and agents; 4.Specifying the code of conduct for surveyors and loss assessors; 5.Promoting efficiency in the conduct of insurance business; 6.Promoting and regulating professional organizations connected with the insurance and reinsurance business; 7.Levying fees and other charges for carrying out the purposes of this Act; 8.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; 9.Specfying the form and manner in which books of account shall be maintained and insurers and other insurance shall render statement of accounts intermediaries; 10.Regulating investment of funds by insurance companies; 11.Regulating maintenance of margin of solvency; 12.Adjudication of disputes between insurers and intermediaries or insurance intermediaries; 13.Supervising the functioning of the Tariff Advisory Committee; 14.Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f); 15.Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and exercising such other powers as may be prescribed. ___________________________________________________________________________ IFTEKHAR HUSSAIN 16


PLAYERS IN INDIAN LIFE INSURANCE MARKET



PRESENT PLAYERS IN THE LIFE INSURANCE IN INDIAN MARKET As on 31st March 2003

S.No

INSURER

WEBSITE

INDIAN PROMOTER

FOREIGN PROMOTER Allianz AG AMP,Australia Sun Life Financial,Canada Aviva Plc Standard Life

1 2 3

Allianz Bajaj Life Insurance AMP Sanmar Assurance Birla Sun Life Insurance

Allianzbajaj.co.in Ampsanmar.com Birlasunlife.com

Bajaj Auto Sanmar Group Aditya Birla Group

4 5

Aviva Life Insurance HDFC Standard Life Insurance

Avivaindia.com Hdfcinsurance.com

Dabur India HDFC

6

ICICI Prudential Life Insurance

Icicipruelife.com

ICICI

Prudential Plc

7 8

ING Vysya Life Insurance Life Insurance Corporation

Ingvysyalife.com Licindia.com

Vysya Bank Government of India

ING Group None

9

Max New York Life Insurance

Maxnewyorklife.co m Metlifeindia.com

Max India

New York Life

10

Met Life India Insurance

J&K Bank, Pallonji & Co.

Metropolitan Life Insurance Old Mutual Plc

11

OM Kotak Mahindra Life

Omkotakmahindra. com

Kotak Mahindra Finance State Bank of India

12

SBI Life Insurance

Sbilife.co.in

Cardiff (arm of BNP Paribas) American International Group

13

Tata-AIG Life Insurance

Tata-aig.com

Tata Group



List Of Private insurance Companies.

Insurance Industry in the year 2000-2001 had 16 new entrants, (Foreign players entering the Indian insurance sector with their Indian partners)

Life Insurance List:S.No. Registration Date of Number 1. 101 104 105 Reg. 23.10.2000 HDFC Standard Life Insurance Company Ltd. 15.11.2000 Max New York Life Insurance Co. Ltd. 24.11.2000 ICICI Prudential Life Insurance Company Ltd. 10.01.2001 Om kotak Mahindra Life Insurance Co. Ltd. 31.01.2001 Birla Sun Life Insurance Company Ltd. 12.02.2001 Tata Aig Life Insurance Company Ltd. 30.03.2001 SBI Life Insurance Company Ltd. 02.08.2001 ING Vysya Life Insurance Company Pvt. Ltd. 03.08.2001 Allianz Bajaj Life Insurance company Ltd. 06.08.2001 MetLife India Insurance Company Pvt. Ltd. 03.01.2002 AMP SANMAR Assurance Company Ltd. Name of the company

2. 3.

4.

107 109 110 111 114

5. 6. 7. 8.

9.

116

10.

117

11

121



12

AVIVA Life insurance Company Ltd.

Genneral Insurance ListS.no Registration . 1. number 102 Date of Reg. 23.10.2000 Royal Sundaram Alliance Insurance Company Ltd. 2. 103 23.10.2000 Reliance General Insurance Company Ltd. 04.12.2000 IFFCO Tokyo General Insurance Co. Ltd. 22.01.2001 TATA AIG General Insurance Company 108 02.05.2001 Ltd. Bajaj Allianz General Insurance Company Ltd. 03.08.2001 ICICI Lombard General Insurance Company Ltd. 7 8 9 Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation Ltd HDFC-Chubb General Insurance Co. Ltd Name of the Company

3

106

4 5.

113 115

6.



PUBLIC SECTOR VS PVT SECTOR DISTRIBUTION OF INDIVIDUAL NEW BUSINESS PREMIUM UNDERWRITTEN

Private 12%

Private

LIC

LIC 88%



STATISTICS LIFE INSURANCELife industry grows at 10.5 % in 2003-04

With a spurt in business underwritten in March, 2004 at Rs .5,670.07 crore, the life insurance industry underwrote first year premium of Rs.18, 710.15 crore during the fiscal 200304,recording a growth of 10.48 percent over the previous year.

In terms of policies, the insurers exhibited a growth of 12.83 percent with 286.27 lakh policies. The shares of premium of private insurers increased to 12.96 percent as against 5.66 percent in the year 2002-03. Individually all the private insurers increased their market share over the previous year. Further, the private insurers recorded a growth of 153 percent in terms of first year (including single) premium underwritten by them.

Cumulatively the 12 private players underwrote premium of Rs.2, 425.46 crore. Amongst the private players ICICI Prudential led with a market share of 4.01 percent followed by Birla Sun Life at 2.40 percent

LIC underwrote premium of Rs.16, 284.68 crore during the year under reporting. LICs market share for 2003-04 was 87.04 percent. The business underwritten by LIC under the Varishtha Pension Beema Yojna, announced by the Govt. of India in July, 2003, was Rs.6070.50 crore towards 3,32,748 policies. This premium has not been included in the first year premium figures. In terms of no. Of policies, LIC contributed 94.21 percent. Interestingly, 30 percent of the business for the year was underwritten in the month of March 2004, with private insurers and LIC underwriting business of 31 percent and 30 percent respectively in the said month.



The premium underwritten by the private players for 16,57,636 individual policies stood at Rs.2, 048.66 crore. In case of LIC, the premium underwritten under 2,69,51,919 individual policies was Rs.12, 636.86 crores.

A comparison of the individual single premium underwritten by the private players and LIC reveals a decline of 3.42 percent and 61.29 percent at Rs.287.97 crore and Rs.1, 164.71 crore

respectively. The decline was on account of the impact of the change in the provisions of section 10(10D) of the income tax act.

Under the group schemes the premium underwritten by the private players and LIC stood at Rs.376.79 crore and Rs.3, 647.82 crore with lives covered at 17,35,315 and 45,10,429 respectively. The market share of the private insurers and LIC, in terms of premium underwritten per group insurance, was 9.36 percent and 90.64 percent respectively. LIC covered 72 percent of the lives under the various group schemes. Amongst the private players, SBI life covered 12.38 percent of the lives. The total no. of life covered under the various group schemes was 62,45,744.



First Year & Single Premium Financial Year 2004 05 (Provisional)Insur er Premium Market Share No. of Policies/Schemes Market Share Lives covered Group Schemes Mar ket Sha re Mar ch 05 Allia nz Bajaj 2004 05 2003 -04 % Gro wth 200405 200304 Mar ch 05 2004 -05 200304 % Growt h

200405 0.65

Mar ch 05

2004-05

2004 05

6,5 73. 59

2,2 6,3 28. 38. 92 17, 97 0.5 15, 62 9.1 4 89

18 3.5 0

0.96

0.37

43, 02 92 2,3 88

1,8 5,3 50 3,0 99

1,15, 964

59.8 3

45, 82 9

1,01,7 97

1.6 3

ISP

1,9 52. 51

INSP

4,5 72. 63

40, 69 9

1,8 2,1 94

GSP

0.7 6

1

78 1

GNS P

48. 45

11 1.6 9

5

56

45, 82 9

1,01,0 16


KOTAK MAHINDRA LIFE INSURANCEING Vysy a

2,7 40. 59

7,2 1,7 60. 65. 66 92

31 1.1 5

0.39

0.10

31, 75 1

90, 97 6

10,9 76

728. 86

0.32

5,4 01

6,613

0.1 11

53.ISP

82. 26

7,9 35

12, 11 5

86

INSP

2,6 43. 45

7,0 88. 81

23, 81 3

78, 85 3

GSP

24. 52

68. 29

1

91

163

GNS P

18. 76

21. 30

3

7

5,3 10

6,450


KOTAK MAHINDRA LIFE INSURANCEAMP [San mar

688 .07

2,7 63 88. 1.5 16 2

34 1.5 0

0.15

0.04

9,4 39

46, 28 2

16,3 44

183. 17

0.16

1,7 72

60,341

0.9 7

ISP

INSP

541 .45

2,4 33. 27

9,4 23

46. 25 0

1.1GSP

1,189

107 .93

10 7.9 3

5

5

89

GNS P

38. 69

24 6.9 6

11

27

58 3

59,152


KOTAK MAHINDRA LIFE INSURANCESBI Life

8,0 68. 07

19, 7,1 59 88.

17 2.5 4

1.05

0.42

26, 37 4

86, 49 5

17,7 46

387. 41

0.30

2,0 1,9 47

7,73,2 23

12. 38

0.0 08 8

ISP

1,1 48. 05

3,1 49. 27

1,7 91

7,8 47

INSP

2,4 87. 14

5,3 08. 71

24, 41 7

78, 09 9

GSP

2,8 28. 66

7,3 81. 00

4

26

24, 23 2

73,109

GNS P

1,6 04. 22

3,7 51. 10

16 2

52 3

1,7 7,7 15

700,11 4


KOTAK MAHINDRA LIFE INSURANCETata AIG

3,7 28. 36

18, 5,2 01 20.

24 5.0 7

0.96

0.31

24, 97 7

1,6 1,9 67

91,4 87

77.0 4

0.57

19, 42 8

1,89,5 87

3.0 4

5.4 84 7

ISP

INSP

2,0 13. 12

12, 38 7.0 7

24, 96 9

1,6 1,8 97

GSP

54. 68

48 5.9 2

1

9,5 81

95,939

GNS P

1,6 60. 57

5,1 42. 47

8

69

9,8 47

93,648


KOTAK MAHINDRA LIFE INSURANCEHdfc Stan dard

5,3 77. 56

20, 12, 93 93

61. 88

1.12

0.76

35, 44 2

2,0 3,2 05

1,24, 837

62.7 8

0.71

20, 14 2

58,335

0.9 3

3.2 1.3 6 8

ISP

1,2 96. 59

6,2 52. 06

2,6 00

38, 58 1

INSP

3,9 74. 79

13, 04 5.0 8

32, 83 2

1,6 4,5 23

GSP

106 .18

1,6 36. 12

10

10 1

20, 14 2

58,335

GNS P


KOTAK MAHINDRA LIFE INSURANCEICIC I Prud ential

17, 364 .23

75, 36, 09 41

10 6.2 3

4.01

2.15

95, 68 3

4,3 6,1 96

2,44, 434

78.4 5

1.52

18, 19 4

45,926

0.7 4

1.0 0.6 3 7

ISP

2,3 72. 03

12, 00 5.0 0

1,4 14

10, 41 7

INSP

14, 461 .00

62, 21 1.0 0

94, 23 5

4,2 5,6 94

GSP

10. 50

16 7.3 3 28 73 12, 08 3 38,852

GNS P

520 .70

70 7.7 0

6

12

6,1 11

7,074


KOTAK MAHINDRA LIFE INSURANCEBirla Sunli fe

20, 233 .76

44, 12, 98 95

24 7.2 0

2.40

0.77

43, 59 1

1,5 5,5 98

64,7 58

140. 28

0.54

53, 59 5

1,98,3 13

3.1 8

6.1 6.7 9 9

ISP

702 .58

1,9 41. 33

5,7 29

28, 45 4

INSP

10, 580 .59

26, 74 1.5 7

37, 80 6

1,2 6,9 90

GSP

35. 82

39 2.9 0

31 4

3,107

GNS P

8,9 14. 77

15, 91 0.3 9

56

15 4

53, 28 1

1,95,2 06


KOTAK MAHINDRA LIFE INSURANCEAviv a

1,7 78. 53

7,7 1,3 13. 46. 84 63

47 2.8 3

0.41

0.08

14, 52 3

71, 00 1

17,0 23

317. 09

0.25

36, 92 1

88,857

1.4 2

ISP

65. 12

49 5.4 5

80

72 2

INSP

1,6 85. 61

7,1 54. 35

14, 43 4

70, 25 2

GSP

GNS P

27. 80

64. 04

9

27

36, 92 1

88,857


KOTAK MAHINDRA LIFE INSURANCEMax New York

2,6 38. 08

13, 6,7 14 31.

95. 34

0.70

0.40

27, 68 1

1,4 5,5 81

77,5 31

87.7 7

0.51

2,6 93

1,17,8 79

1.8 9

8.8 37 0

ISP

24. 59

17 8.3 5

31

20 3

INSP

2,6 00. 41

12, 56 0.3 7

27, 64 0

1,4 5,2 98

GSP

GNS P

13. 09

41 0.0 8

10

80

2,6 93

1,17,8 79


KOTAK MAHINDRA LIFE INSURANCEOM Kota k

5,7 63. 08

12, 3,5 71 20.

26 0.9 9

0.68

0.21

12, 23 2

51, 07 1

32,7 67

55.8 6

0.18

11, 56 5

52,924

0.8 5

0.1 96 9

ISP

2,1 25. 80

2,4 14. 74

34 3

59 0

INSP

3,2 32. 17

9,2 73. 18

11, 88 4

50, 45 3

GSP

GNS P

405 .11

1,0 22. 27

5

28

11, 56 5

52,924


KOTAK MAHINDRA LIFE INSURANCEMet Life

509 .95

2,3 76 38. 9.8 16 8

20 3.7 0

0.12

0.05

5,6 27

25, 12 4

11,2 27

123. 78

0.09

22, 98 2

41,520

0.6 6

ISP

9.9 7

50. 49

52

27 3

INSP

478 .03

2,2 36. 42

5,5 63

24, 83 2

GSP

GNS P

21. 95

51. 25

12

19

22, 98 25

41,520

Priva te Total

75, 463 .88

2,4 95, 2,5 81 46. 2.9 35 3

15 3.1 5

12.9 6

5.66

3,7 0,4 12

16, 58, 84 6

8,25, 094

101. 05

5.79

4,4 0,4 69

17,35, 315

27. 78


KOTAK MAHINDRA LIFE INSURANCELIC

4,9 1,5 43. 76

16, 15, 28, 97, 46 67

1.9 3

87.0 4

94.3 4

76, 26, 36 2

2,6 9,6 8,0 69

2,45, 45,5 80

9.87

94.21

9,4 3,8 23

45,10, 429

72. 22

8.6 6.1 7 5

ISP

65, 669 .85

1,1 6,4 71. 78

1,3 6,8 94

2,3 0,6 07

INSP

2,8 7,1 25. 35

11, 47, 21 4.8 0

74, 85, 57 4

2,6 7,2 1,3 12

GSP

1,3 8,7 48. 56

3,6 4,7 82. 09

3,8 94

16, 15 0

9,4 3,8 23

45,10, 429

GNS P


KOTAK MAHINDRA LIFE INSURANCEGran d Total

5,6 7,0 07. 64

18, 16, 71, 93, 01 48

10. 48

100. 00

100. 00

79, 96, 77 4

2,8 6,2 6,9 15

2,53, 70,6 74

12.8 3

100.00

13, 84, 29 2

62,45, 744

10 0.0 0

5.0 9.0 2 8

Note:1) LICs business figures do not include Varishta Pension Bima Yojana.

2) % Growth has been computed over previous year. ISP Individual Single Premium

INSP - Individual Non-Single Premium GSP Group Single Premium GNSP Group Non Single Premium.



THE LIFE INSURANCE MARKET IN INDIA



THE LIFE INSURANCE MARKET IN INDIAAn informal estimate has been made by various experts to assess the existing insurance market in India in terms of premium income .Out of an insurable population of 300 million, 50 million have the capacity to pay a premium of US $ 300(Rs.10500) per year, 100 million, have the capacity to pay US $ 200 (Rs.7000) per year and 150 million have the capacity to pay US $ 100 (Rs.3500) per year. On this basis the total annual insurance premium would be US $ 50 billion (Rs.1750 bn). The official national income (GDP) naturally excludes finance available in the parallel economy. India has an amorphous middle class of about 300 million people who can afford to buy life, health and disability and pension plan products. Out of this only 20% have insurance and that too covers only 25% of their needs and financial capacity. The remaining 80% have to insurance cover .The life insurance market of India, therefore, is practically untapped.

A BRIEF COMPARISON OF INDIAN LIFE INSURANCE WITH DEVELOPED COUNTRIESThe low level of penetration of life insurance in India compared to other developed nations can be judged by a comparison of per capita life premium.

Country JAPAN UK USA INDIA

Life Premium Per Capita US $ IN 1994 3,817 1,280 964 4

Clearly, there is considerable scope to raise per capita life premium if the market is effectively tapped. With an insurable population of 300 million, per capita life premium can be raised to a ___________________________________________________________________________ IFTEKHAR HUSSAIN 39


level of US $ 200-$ 300 and hence the market can expand by 50 to 75 times over the existing size. Secondary life premium as a percentage of GDP is very low in India as the follwing comparative date reveals:

Country Japan UK US India

Life Premium as % GDP in 1994 10.10 9.10 7.31 1.29

India has traditionally been a highly savings oriented country6 often described as being on par with the thrifty Japan. Needless to say, if the insurance market is properly tapped, it is possible to raise life premium as a percentage of GDP from the existing level of 1.29%to 10%-on par with Japan. This will bring an eight-fold increase in the existing volume of life premium. Thirdly, life premium as a percentage of GDS (gross domestic saving) is very low in India as the following comparative data adequately demonstrates.

Country UK S.AFRICA JAPAN FRANCE US S.KOREA INDIA

Life Premium as % of GDS 52.50 51.55 32.46 26.20 25.20 21.92 5.95

It is possible to raise life premiu8m as a percentage of GDS In India from the existing levels. The big question is whether the players are able to effectively exploit the potential by creating and marketing attractive insurance products with high rates of return on premium investments. This



would help deepen the market as the same family could opt for different schemes catering to different needs.

Fourthly, GDS as a percentage of GDP is very low in India. Contrary to the fact that the culture of saving is inherent in the Indian way of life, is another fact that is not sufficiently harnessed by motivation.

Consider this comparative data, which illustrates this point:

Country

GDS as % of GDP 1993 1994 51.3 41.4 37.6 35.5 33.9 24.4 1995 55.6 42.2 37.2 27.0 24.5 22.5 1996 NA NA NA NA NA NA

Singapore China Malaysia Korea Hong Kong India

48.5 41.5 35.4 35.4 14.6 21.4

The rapid growth of East Asias tiger economies is mainly due to the high rate of savings in these countries. Savings provide resources for high levels of investment which in turn acts to fuel overall growth. The result-sustained GDP growth rates of more than 8% over the last decade. The low rate of savings in India must increase to the levels that china has attained where GDS as a percentage of GDP in the last three years was around 42%. Such an increase will considerably broaden the size of the existing life insurance market.



DESK REPORT



DESK REPORTAt KOTAK Life Insurance Company Ltd polices are sold by a network of around 30,000 Insurance Advisors. These Advisors work in individual capacity and are not in the rolls of the company. They are remunerated in the form of commissions, which varies up to 40% of first year premium. This wide network of ICCs has to be managed efficiently and kept productive. All sales aspects from planning to implementation follow a hierarchy, which can be depicted in the form of: -

Country Head Regional Sales Head Zonal Manager Branch Sales Manager Sales Manager Assistant Sales Manager Agency Manager Unit Manager Advisor



Managing Life Insurance Care Consultants at KOTAK Life Insurance Company Ltd.The Advisors of the company who are managed by Unit Manager who handle the recruitment stage up to their career as insurance Advisors of the Company. In a broad spectrum UMs job is to maintain the Advisors Productivity i.e. motivate the Advisors to bring in business not only as per the targets but also beyond the targeted figures.

Understanding the Role, Functions and Recruitment of UMs at KOTAK Life Insurance Company Ltd.

Recruitment:Recruitment is carried out through screening interview, where the candidates qualitative aspects like experience in the insurance sector, team management skills, socializing qualities, influencing capabilities are considered and rated according to ones personally and communication skills. On induction in to the company as Advisor, Candidates have to pass through three stages a brief description is given below:

TRAINEE STAGE:

Advisors who are at this level are undergoes in training for a period of 15 days, as follows: -

General Training Product Training

: :

7 days 7 days

Total Training Period

:

15 days



Expectations & Responsibilities as Trainee Advisor:

The First 7 days of the General Training involves:

a. b. c. d. e. f.

Gaining Knowledge of Life Insurance. Learning Prospecting of Agency. Learning Sales Management Skills. Learning Performance Reviews Skills. Learning to Selling Policies. Learning to master Prospecting & Motivation.



The Next 7 days involves Product Training:Module DAY 1 1.Company Introduction 4 KOTAK 4 Prudential 4 Vision 4 Competitions 2.Prospecting 4 Prospecting Sources. 4 Survey Form 3.Save nProtect 4 Feature 4 Positioning 4 Premium Calculation 4 IRR 4 Benefit Illustration 4.Riders 4 ADBR Feature & Positioning 4 ABR Feature & Positioning 4 CIBR-Feature & Positioning 4MSAR-Features and Positioning CD + Advisor Manual 3 hours PPT Presentation from BPS Prospecting wheel CD 1 hour 1 hour Group Formation, Expectation mapping. 2 hours Subject Methodology Duration



Module DAY 2 Review of Day 1

Subject

Methodology

Duration

Quiz, Premimum Calculation with all the Riders.

Advisor Manual Exercise Book

20 min

2.Cash Plus

4 Feature 4 Positioning 4 Premium Calculation 4 IRR 4 Benefit Illustration

Cd Advisor Manual

1 hour

3.Smart Kid

4 Feature 4 Positioning 4 Premium Calculation 4 IRR 4 Benefit Illustration

PPT Advisor Manual CD

1 Hour

4.Life Guard

Return of Premium WROP SP

PPT Advisor Manual CD

1 hours

4 Feature 4 Positioning 4 Premium Calculation 4 Benefit Illustration 5.Assure Invest & Re Assure 4 Feature 4 Positioning 4 Rates 6.scripts 4 Telescripts for Natural Market 4 Telescripts for Review of Prospecting Telecalling CD 2 hours PPT Advisor Manual HOUR



Leads 4 Telescripts for cold calls 4 Role Plays Module DAY 3 1.Sales Presenter 4 Intro to Sales Presenter 4About me 4 About Company 4x-y Concept 4 Areas of Specialization 4 Role Plays 2.Client Profile 4 Client Profile Review 4 Role Plays (SP+ CP) 3.Tele Calling Session 1 hour 3 hours Cd + Trainer takes through each slide 3 hours Subject Methodology Duration



Module DAY 4 1.Financial Markets

Subject

Methodology

Duration

4 Intro to Financial Markets 4 Money Market 4 Capital Market 4 Financial Instruments 4 Mutual Funds

CD

2 hours

2.Life time

4 Features 4 Positioning 4 Benefit Illustration 4 Comparison with MF & Traditional Insurance Plans

CD

2 hours

3.Lifelink

1.Features 2.Positioning 3.Benefit Illustration

1.PPT CD- FROM Feb 1st week new one

2 hours

4.Telecalling Session

1 hour



Module DAY 5 1.Retirement Solutions

Subject

Methodology

Duration

4 Why Retirement Solutions 4 Working of Annuity Plan

CD

1 hour

2.Forever Life

4 Features 4 Positioning 4 Premium Calculation 4 Benefit Illustration

CD

2 hour

3.LifetimePension

4 Features 4 Positioning 4 Benefit Illustration

CD

1 hour

4.Life Link Pension

4 Features 4 Positioning 4 Benefit Illustration

CD

1 hour

5.Telecalling Session

1 hour

Module DAY 6 1.Underwriting

Subject

Methodology

Duration

4 Rating of the plans 4 Age Proofs 4 Financial

CD

3 hours



Underwriting 4 Jet Underwriting Female Underwriting 4 Student Underwriting 4 NRI Insurance 4 Keyman Insurance 2.Sales Process 4 Advisor Customer Interface 4 Advisor Branch Interface 4 Jet Case 4 Standard Medical Case 4 Medical Case 4 XRT 4 AMR 4 claims CD 1 hours

3.Application Form

Application Form Filling

Case Studies

1 hours

4.Wwbsite training + Alsatian 5.My Business Plan 4 Goal Setting Exercise 4 Usage 6.AMJ 7.Distribution of Certificates & Prizes

CD + PPT

hours

15 Minutes

1 hour hour



Duties and Obligations

Advisors shall Life Insurance business in a planned manner through Unit Manager under Supervision by the company, and in consonance with the objectives of the company. Advisors shall render policy to the customer to their Satisfaction. Advisors shall ensure that they conduct their work/business in accordance with the provision of the code of conduct laid down by the IRDA and in accordance with the rules and regulations that may be laid down by the company and the IRDA from time to time.

The minimum business targets, which ADVISORS are required to achieve during 1 year is 12 Standard Policies on different lives.

Standard Policies with minimum Annualized Premium of Rs 18,000/-

Analysis of Recruitment of Advisors of 8 weeks (60 days)

Period

At the end of week after completion Training 1st week 2nd week 3rd week 4th week 5th week 6th week 7 week 8th weekth

Minimum No. Of Candidates Screened & Selected 2 4 6 8 10 11 12 14

Minimum No. Of Candidates in Training

Minimum No Of Candidates Licensed

No Of Active Advisors

1 2 3 4 5 6 7 8

2 4 6 8 10 11 12 14

-1 2 3 5 7 8 10

--1 2 2 3 4 5



SWOT ANALYSIS OF BANCASSURANCE



To make a swot Analysis on Bancassurance a new distribution channel of selling Life Insurance Policies.

An Understanding of the Distribution of Life Insurance ProductInsurance Business in India and also globally is carried out through various distribution channels. The chart given below depicts the worldwide trend in selling insurance through various mediums.

Various channels of selling Life Insurance Worldwide

Corporate Agents, 30%

Career AgentsCareer Agents, 40%

Affiliated Brokers, 5% Banks, 2% Personel producing general agents, 23%

Personel producing general agents Banks Affiliated Brokers

Corporate Agents

It can be observed from the above chart that in most of the countries maximum Life Insurance products are sold through Agents. The global average of obtaining business through agency form is around 83%(40+23). In India too Agents are the major channels of selling Life insurance is around 90%. For Instance LIC sells its products through a wide network of Agents (approx

1,20,000). Post Liberalization of the insurance industry Private Insurance Companies have also followed the same path of selling business through agency but are also developing new channels such as Bancassurance and corporate agency. Hence it becomes imperative to efficiently manage such large chunk of agents efficiently and productively. ___________________________________________________________________________ IFTEKHAR HUSSAIN 54


BANCASSURANCEBancassurance in its simplest form is the distribution of insurance products through a banks Distribution channels. In concrete terms bancassurance, which is also known as Allfinanz describes a package of financial services that can fulfill both banking and insurance needs at the same time. It takes various forms in various countries depending upon the demography and economic and legislative climat6e of that country. Demographic profile of the country decides the kind of products bancassurance shall be dealing in with, economic situation will determine the trend in terms of turnover, market share, etc., whereas legislative climate will decide the periphery within which the bancassurance has to operate.

The motives behind bancassurance also vary. For banks it is a means of product diversification and a source of additional fee income. Insurance companies see bancassurance as a tool for increasing their market penetration and premium turnover. The customer sees bancassurance as A bonanza in term of reduced price, high quality product and delivery at doorsteps. Actually, everybody is a winner here.

The need for banks to enter insuranceThere are several reasons why banks should seriously consider Bancassurance, the most important of which is increased return on assets (ROA). One of the best ways to increase ROA, assuming a constant asset base, is through fee income. Banks that build fee income can cover more of their operating expenses, and one way to build fee income is through the sale of insurance products. Banks that effectively cross-sell financial product can leverage their distribution and processing capabilities for profitable expense ratios.

By leveraging their strengths and finding ways to overcome their weakness, banks could change the face of insurance distribution. Sale of personal line insurance products through banks meets an important set of customer needs. Most large retail banks engender a great deal of trust in broad segments of consumers, which they can leverage in selling them personal line insurance products ___________________________________________________________________________ IFTEKHAR HUSSAIN 55


.In addition a banks branch network allows the face to-face contact that is so important in the sale of personal insurance.

Another advantage banks have over traditional insurance distributors is the lower cost per sales lead made possible by their sizeable, loyal customer base. Banks also enjoy significant brand awareness within their geographic regions, again providing for a lower per-lead cost when advertising through print, radio and / or television. Banks that make the most of these advantages are able to penetrate their customer base and markets for above-average market share.

Other bank strengths are their marketing and processing capabilities. Banks have extensive experience in marketing to both existing customers (for retention and cross selling) and noncustomers (for acquisition and awareness). They also have access to multiple communications channels, such as statement inserts, direct mail, ATMs, telemarketing etc. Banks proficiency in using technology has resulted in improvements in transaction processing and customer service.

By successfully mining their customer databases, leveraging their reputation and distribution systems (branch, phone and mail) to make appointments, and utilizing sales techniques and margins and products tailored to the middle market, European banks have more than doubled the conversion rates of insurance leads into sales and have increased sales productivity to a ratio benefits to insurers.

Insurers have much to gain from marketing through banks, personal-lines carriers have found it difficult to grow using traditional agency systems because price competition has driven down margins and increased the compensation demands of successful agents. Over the last decade, life agents have sold fewer and larger policies to a more upscale client base. Middle income consumers, who comprise the bulk of bank customers, get little attention from most life agents .By capitalizing on bank relationships, insurers will recapture much of this under served market. Most insurers that have tried to penetrate middle income markets through alternative channels such as direct mail have not done well. Clearly, a change in approach is necessary. As with any initiative requires a clear understanding of what must be done, how it will be done whom. The place to begin is to segment the strengths that the bank and insurer bring to the business opportunity. ___________________________________________________________________________ IFTEKHAR HUSSAIN 56


Collaboration is the keyIn their natural and traditional roles and with their current skills, neither banks nor insurance companies could effectively mount a bancassurance start-up alone. Collaboration is the key to making this new channel work. Banks bring a variety of capabilities to the table. Most obviously, they own proprietary databases that can be tapped for middle market warm leads. In addition, they can leverage their name recognition and reputation at both local and regional levels. Strong players also excel at managing multiple distribution channels, cross selling banking products, and using direct mail. However, most banks lack experience in several areas critical to successful bancassurance strategies: in particular, developing insurance products, selling through face-to-face push channels underwriting, and managing long-tail insurance products. Where banks usually fall short, a strong insurer will excel. Most have substantial product and underwriting experience, strong "push-"channel capabilities, and investment management expertise. On the other hand, they tend to lack experience or ability in the areas where banks prevail. They have little or no background in managing low-cost distribution channels; they often lack local and regional name recognition and reputation; and they seldom possess access to or experience with the middle market.

Bancassurance in India A swot AnalysisEven though, banks and insurance companies in India are yet to exchange their wedding rings, Bancassurance as a means of distribution of insurance products is already in force in some form or the other. Banks are selling personal accident and Baggage Insurance directly to their credit card members as a value addition to their products. Banks also participate in the distribution of mortgage linked insurance products like fire, motor or cattle insurance to their customers. Banks can straightaway leverage their existing capabilities in terms of database and face-to face contact to market insurance products to generate some income for themselves, which hitherto was not thought of.



Once bancassurance is embraced in India with full force, a lot will be at stake ./huge capital investment will be required to create infrastructure particularly in IT and telecommunications, a call center have to be created to generate new ideas and products. It is therefore essential to have a SWOT analysis done in the context of bancassurance experiment in India.

StrengthsIn a country of 1 Billion people ,sky is the limit for personal lines insurance products.There is a vast untapped potential waiting to be mined particularly for life insurance products.There are more than 900 million lives waiting to be given a life cover (total number of individual life policies sold in 1998-99 was just 91.73 Million).There are about 200 million households waiting to be approached for a householders policy.Millions of people traveling in and out of India can be tapped for overseas mediclaim and travel insurance policies.After discounting the population below poverty line the middle market segment is the second largest in the world after china.The insurance companies worldwide are eyeing on this,why not we preempt this move by doing it ourselves?

Our other strength lies in a huge pool of skilled professional whether it is banks or insurance companies who may be easily relocated for any bancassurance venture.LIC and GIC both have a good range of personal line products already lined up,therefore R & D efforts to creat new products will be minimal in the beginning.Additionally.GIC with 4200 operating offices and LIC with 2048 branch offices are almost already omnipresent,which is so essential for the development of any bancassurance project.

Viability of Bancassurance

Bancassurance Provides : Corporate Clients :Banks can utilize their existing clientele,which includes corporate as also retail clients to market insurance products.Depending on the relationship with its clients it would become easier to ___________________________________________________________________________ IFTEKHAR HUSSAIN 58


influence the insurance purchase decisions of its clients it would become easier to influence the insurance purchase decisions of its clients.Customers too,having banked with a particular bank for a long period response a sense of trust and faith in the bank.

Customer database :Customer database raw information on the customers spending habits,investment purchase can prove to be a goldmine .Such information channelised in the right manner can help work out marketing strategies and arrive at result oriented decision targeting prospects.

Perssonalised Service :Since banks have direct contacts with customers,the service area can be tackled easily.Customers,other than their day-to day financial requirements can also get assistance for premimum payment,surrender,transfer of policies and many more.

Rural penetration :The existing wide network of banks in rural areas can be utilized for selling insurance products .Penetration in to the rural areas too becomes easier for banks.Having been accustomed to the customers choices banks are in a better position to understand the needs of the customers andsell tailor made policies.Customers too,considering their long-standing relationship with banks,find them trustworthier.Servicing of policies wouls also become easier.

Cross-selling products :Banks in their normal course of functions lend finance in the form of loans for cars,or for buying a house to clients.They can combine insurance products and sell as a package.In the current scenario banks can cross sell their products along with the insurance products.



Fee based service :Insurance products can be sold as a fee based service.In an age where banks are trying to venture into selling mutual funds and other financial products besides stock broking etc,selling insurance products could also give an additional boost to the banks bottomline.

Cheaper than agents :Bancassurance ,may work out to be cheaper compared to companies appointing agents for selling insurance products.This is particularly the bankswide network and the reach they have compared to the agents.

WeaknessesThe IT culture is unfortunately missing completely in all of the future collabortion i.e banks,GIC & LIC.A late awakeing seems to have dawned upon but it is a case ot too late and too little.Elementary IT requirement like networking (LAN) is not in place even in the headquaters of these institutions,when the need today is of wide area network (WAN) AND VAST AREA NETWORK (van).Internet connection is not available even to the managers of operating offices.The middle class population that we are eyeing at is today overburdended,first by inflantionary pressures on their pockets and then by the tax net.Where is the money left to think of insurance ?Fortunately,LIC schemes get IT exemptions but personal line products from GIC (Mediclaim already has this benefit)like householder,travel,etc.also need to be given tax exemption to further the cause of insurance and to increase domestic revenue for the country. Another drawback is the inflexibility of the products i.e it cannot be tailor made to the requirements of the customer.For a bancassurance venture to succeed it is extremely essential to have in-bulit flexibility so as to make the product attractive to the customer.



OpportunitiesBanks database is enormous even though the good will may not be the same as in case of their European counterparts. This database has to be dissected variously and various homogeneous groups are to bge churned out in order to position the bancassurance products. With a good IT infrastructure, this can really do wonders. Other developing economies like Malaysia, Thailand and Singapore have already7 taken a leap in this direction and they are not doing badly. There is already an atmosphere created in the country for liberalization and there appears to be a political consensus also on the subject. Therefore, RBI or IRA should have no hesitation in allowing the marriage of the two to take place. This can take the from of merger or acquisition or setting up a joint venture or creating a subsidiary by either partty or just the working collaboration between banks and insurance companies.

ThreatsSuccess of bancassurance venture requires change in approach, thinking and work culture on the part of everybody involved. Our work force at every level are so well entrenched in their classical way of working that there is a definite that of resistance to any change that bancassurance may set in. Any relocation to a new company or subsidiary or change from one work to a different kind of work will be resented with vehemence.

Another possible threat may come from non-response from the target customers .This happened in USA in 1980s after the enactment of garn-St Germine Act .Arush of joint ventures took place between banks and insurance companies and all these failed due to the non-response from the target customers .US banks have now again (Since late 1990s)Turned their attention to insurance mainly life insurance.

The investors in the capital may turn their face off in case of return on capital .Since banks and insurance companies have major portion of their income comeing from the investments,the return from bancassurance must at least match those returns .Also if the investments,the return from bancassurance must at least match those returns .Also if the unholy alliances are allowed to take



place there will be fierce competition in the market resulting in lower prices and the bancassurance venture may never break-even.

Looking AroundHardly 20% of all US banks were selling insurance in 1998 against almost 70% to 920% in many W. European countries. Market penetration of bancassurance in new life businesses in Europe ranges between 30% in U.K. to nearly 70% in France. Almost 100% banks in France are selling insurance products. In 1991 Nationale Nederlanden of Netherlands merged with Post Bank, the banking subsidiary of the post office to create the ING Group a. new dimension to the bancassurance i.e. harnessing the databank of the post office as well. CNP, the largest indpendent insurance company in Fraqnce has developed its product distribution through post offices. The merger of Winterthur, the largest Swiss insurance company with through post offices. The merger of Winterthur Group has resulted in some of the largest financial conglomerates in the world.

Despite the phenomenal success of bancassurance inEurope, property and casualty products have not made many inroads. In Spain, Belgium, Germany and France where more than 50% of all new life premiums are generated by bancurance, only about 6% P & C business comes from banks in Spain 5% in Belgium, 4% in France and Italy.

A recent study by Boston Consulting Group and Bank Administration Institue in USA claims that if banks made a major commitment to insurance and a more narrowly targeted commitment to investors, within 5 years they could increase retail revenues by nearly 50%. It further states that-

Banks could capture 10% to 14% of the total US Insurance and investment market by selling products to 20% of their existing customes. Banks existing infrastructure enables them to ooperate at expense levels that are 30% to 50% lower than those of traditional insurers. Bancassurances Bank-branch based sales system sells 3 to 5 timjes as many insurance policies as a conventional as a conventional insurance sales and distribution force.



By simplifying bancassurance products each back office bank employee can quintuple managing policies compared to traditional insures. gradually. As happened in France, Italy, Germany, Canada banks were allowed first only to distribute to insurance products for a fee. This itself amounted to substantial income for banks since they were not carrying the risks and products development was also left to insurance companies Lessons we should take a leaf from the experienced players and develop bancaasurance only. This seems fair since each player should contribute toward s something in which he excels; banks in mass distribution and insurance companies in risk management . After stabilization, the roles may be expanded in opposite directions. We need to develop innovative products and services. CISB in Canada relieves the customer of having to report and resolve auto claims. The bank assumes responsibility for the process, even phone the police for the customer at the time of the accident.Banco Bilbao Vizcaya of Spain who offer a term of life policy with simple premium payments and a clear contract that is designed to be sold ,issued and signed at the point of sale within 15 minutes provides another example. Banks and insurance companies in India wishing to purse high aspiration insurance strategic would do well to learn from European bancassurers, who have decades of experience managing insurance subsidiaries. Some of them Lloyds TSB in the U.K., Credit Africole in France and Spains Banco Bilbao Vizcaya are delivering outstanding results. These banks have profitably sold insurance products to more than a fourth of their customers while generating more than 20% on sales. Credit Agricole, the second largest life insurer in France, with $11 Billions of premium in force, employs only 170 people in its insurance subsidiary. It is able to limit overhead by harnessing the banks existing resources and capabilities.

Obstacles and success factorsEven insurers and banks that seem ideally suited for a bancassurance partnership can run into problems during implementation. The most common obstacles to success are poor manpower management, lack of a sales culture within the bank, no involvement by the branch manager, insufficient product promotions, failure to integrate marketing plans, marginal database expertise, poor sales channel linkages, inadequate incentives, resistance to change, negative attitudes toward insurance and unwieldy marketing start.Conversely, bancassurance bventures that succeed tend to have certain things in common. Factors that appear to be critical to success ___________________________________________________________________________ IFTEKHAR HUSSAIN 63


include strategies consistent with the banks vision, knowledge of target customers needs, defined sales process for introducing insurance services, simple yet complete product offerings, st6rong service delivery mechanism, Quality administration, synchronized planning across all business lines and subsidiaries, complete integration of insurance with other bank products and services, extensive and high-quality training, sales management tracking system for reporting on agents time and results of bank referrals and relvant and flexsible database systems.

FinallyThe creation of bancassurance operations has a material impact on the financial services industry at large .Banks, insurance companies and traditional fund management houses are converging towards a model of global retail financial institution offering a wide arry of products .It leads to the creation of one-stop shop where a customer can apply for mortages ,pensions,savings and insurance products.

Discovery comes from looking at the same thing as everyone else but seeing something different .Banks desire to increase fee income has them looking at insurance .Insurance carriers and banks can become part of the vision through strategic partnerships.Now is the time to position your company for the new millennium of insurance product distribution.



SURVEY FINDINGS



SURVEY FINDINGS

Profiles of Advisors working with KOTAK Mahindra Life Insurance Company Ltd.

Graduation Backgrounds of Advisors

B.Com. 40%

B.Sc. 37%B.Sc.

B.E.

B.A. 18%

B.E. 5%

B.A. B.Com.

If the results of the sample is applied to the total number of Advisors, The result shows that about 40% of Advisors are Commerce background, 37% of Advisors are Science Graduates,18% of Advisors are of Arts Background and 5% are from Engineering background.



Qualification breakup of B.Com

B.Com 53%

B.Com+M.B.A 36%

B.Com+M.A. 2%

B.Com+ M.Com 3% B.Com+Others 6%

B.Com+M.B.A

B.Com+ M.Com

B.Com+Others

B.Com+M.A.

B.Com

The above Pie Chart depicts that of the 40% of Advisors who are B.coms, 36% are Post Graduate with Masters in Business Administration, further 11% Advisors have their other master degrees.



Qualification breakup of B.Sc.

B.Sc.+M.B.A

B.Sc.+Others

B.Sc.

B.Sc.+M.A.

B.Sc.+M.A. 2% B.Sc. 35% B.Sc.+M.B.A 55%

B.Sc.+Others 8%

The above Pie Chart depicts that of the 37% of Advisors who are B.Sc,58% are Post graduates with Masters in Business Administration, further 10% Advisors have their other master degrees.



Qualification Breakup of Arts

B.A.+M.A. 5% B.A.+M.B.A. 40%

B.A. 43%

B.A.+Others 12%

B.A.+M.B.A.

B.A.+Others

B.A.

B.A.+M.A.

The above Chart depicts that of the 18% of Advisors who are B.A,40% are Post graduates with Masters in business Administration, further 12% of Advisors have their other masters degree, and 5% of Advisors are Masters in Arts.



Age group wise distribution of Advisors

Below 25 7% 33 - above 31%

25 - 28 20%

29 - 32 42%

Below 25

25 - 28

29 - 32

33 - above

The above Pie Charts Depicts that 42% of Advisors are in the age group of 25-30 years, 31% are of advisors is above 30 years of age group. Thus the above chart reflects that 73% of Advisors are in the 30s.



Percentage of Advisors M.B.A.

Below 25 11% 33 - above 20% 25 - 28 27% 29 - 32 42%

Below 25 25 - 28 29 - 32 33 - above

The above graph depicts that only 11% Advisors are MBAs and lie in the age group of below 25 years,20% of advisors are MBAs and lie in the age group of above 33 years and 69% of Advisors are MBAs are MBAs lie in age group of 25 years to 32 years.



Industry Background of Advisors

Others 18% Telecom 17%

Banking & Finance 21% Insurance 12%

IT 19%

Pharma 13%

Banking & Finance

Insurance

IT

Pharma

Telecom

Others

The above pie chatrt depicts there is almost an even distribution of the sectors: the Advisors come from.It is seen that 21% of advisors are from Banking and Finance Sector ,only 12% from Insurance Sector and non financial sector contributes maximum with 67%.



Experience wise Distribution of Advisorsless than 3yrs. 14%

10 yrs. above 22%

7 - 9 yrs. 25%less than 3yrs. 4 - 6 yrs.

4 - 6 yrs. 39%

7 - 9 yrs.

10 yrs. - above

The above Pie Chart Depicts 39% of Advisors are having experience of 4 to 6 yrs, 25% Advisors are having experience of 7 to 9 yrs,22 % of Advisors are having 10 yrs and above, where only 14% are having less than 3 yrs of experience.



ANALYSIS OF SUCESSFUL ADVISORSThe performance of Advisors was measured with certain parameters to determine their success. The parameters were as follows:

Number of Policies Sold Average Annualized Premium Collection

PERFORMANCE OF ADVISORS50 45

43

PERCENTAGE OF ADVISORS

40 35 30 25 20 15 10 5 0 5001 to 6000 6001 to 7000 7001 to 8000 8001 to 9000 9001 to 10000 10001 & above

2918 4 5 1

AVERAGE ANNUALIZED PREMIUM COLLECTED



PERFORMANCE OF ADVISORS40 37 35

30

PERCENTAGE

25

23 19

20

15 10 10 5 5 1 0 250 - 300 301 - 350 351 - 400 401 - 450 451 - 500 501 - 550 551 - 600 601 - above

4 1

NUMBER OF POLICIES



SUGGESTION



SUGGESTIONSBased on the Research findings following suggestions can be made. Advisor should be in regular touch with his /her Unit Manager. Advisor should be attending the meeting regularly. Advisor should visit office regularly and update the knowledge. A structure layout for growth opportunities for Advisors should be developed within theorganization. The Advisors who achieve the targets should be rewarded with additional monetary and non-monetary benefits. Promote and motivate the inactive Advisors. Do work in challenging form. Provide the technique how to work in the field. Brochures and Product Plans required in Hindi Version. Advisors also allowed to office in absence of Unit Manager. Branch Manager also takes direct feed back from the advisors. Advisors Party should be quaterly and Gift distribution in that seminar. Mobile Phone should be in vibration mode in office time.



APPENDIX



APPENDIXPERSONAL INFORMATIONName Address : : ... ... ... ... Gender Age Martial Status Contact No E-mail : : : Male/Female . Single/Married

: ..Mobile. No . : .. :

No of Adults in your family

No of Children in your family : Occupation Dependent Student Business Service : [ [ [ [ ] ] ] (Approx monthly income..) ] (Monthly income.)

Academic Background

: .



Previous Work Field

:

Banking & Finance Medical science Information Technology Lawyer Teaching Others

[ [ [ [ [ [

] ] ] ] ] ]

Specify ..

Total Work Experience

: Less than 2 years [ ] ]

More than 2 years [ Willingness : Positive/Negative.

Specify. : ..

Date

THANK YOU for you kind co-operation & patience.



BIBLIOGRAPHY

1) KOTAK life Insurance Product Brochures 2) KOTAK Life Insurance Manual 3) www.kotaklife.com 4) www.irdaindia.org 5) www.bimaonline.org 6) www.einsuranceprofessional.com 7) IRDA Journal 8) Outlook Money Books 9) The Laymans guide to Insurance.


project report of iftekhar hussain

Documents

build fee

general insurance

pie chart

fee based

insurance

capita life

life insurance

life insurance