Professional Documents
Culture Documents
DECLARATION
I Deepak Gupta, studying in Hindu Institute Of Management Sonepat, do hereby declare that this project titled Comparative study of Kotak Mahindra Life Insurance Ltd. with TATA AIG, has been prepared by me, under the guidance of Mr. Suraj Kumar. This is after undergoing the training in Kotak Mahindra Life Insurance Ltd., which is in partial fulfillment of Masters Of Business Administration, MDU UniversityRohtak. I further declare that this project report has not been submitted earlier to any other University or Institute for the award of any degree or diploma.
Date-_____________
Deepak Gupta
ACKNOWLEDGEMENTS
The satisfaction and euphoria that accompany the successful completion of any task would be incomplete without mentioning the people who made it possible, whose consistent guidance and encouragement crowned the efforts with success. I would consider it my privilege to express my gratitude and respect to Mr. Suraj Kumar for having accorded me the opportunity to learn in their organization. I cannot forget the contribution of the staff of Kotak Mahindra Life Insurance Ltd., as I troubled them through my queries at every stage of their work and I really appreciate the patience with which they resolved my doubts amidst their busy schedule, I express my sincere thanks to all of them. I would also like to thank my Mentor Mrs. Monisha Vashishta of Hindu Institute of Management for his motivation and guidance, which were pivotal in completion of the project. I would express my thanks and gratitude to my project guides Dr. Rohit Garg And Mrs. Monisha Vashishta for their able guidance and support throughout the tenure of the project.
Deepak Gupta
EXECUTIVE SUMMARY
The Indian Life Insurance Company has seen a remarkable shift since the time of establishment of the first company, Oriental Life Insurance Company in 1823. At the time of Independence and thereafter, there were more than 200 companies operating in India and not all of them on sound ethical principles. Many factors combined together to prompt the then Government to nationalize the life insurance industry in 1956 to form the Life Insurance Corporation of India. Insurance sector was once a monopoly, with LIC as the only company, a public sector enterprise. But nowadays the market opened up and there are many private players competing in the market. There are thirteen private life insurance companies who have entered the industry. The study in the first part gives detail information on the on-job training provided the competitive analysis of product of Kotak Mahindra Life Insurance Ltd. with Tata AIG Insurance. The paper begins by analyzing the current scenario in the industry characterized by problems with distribution, low investor awareness, concentration of corporate investors, investor awareness and diversity of products in order to minimize the risk by adopting risk management techniques. At last this project also suggests some recommendation that can help these companies in increasing there market share, awareness, product diversity and improvement in penetration and distribution. In the end I recommend certain steps that SEBI and IDRA should take in order to build investor confidence and trust.
TABLE OF CONTENTS
Sr. No. PARTICULARS
DECLARATION PREFACE ACKNOWLEDGEMENTS CHAPTER-1 INDUSTRY PROFILE
PAGE NO.
6 7-8 9-15
CHAPTER-2
COMPANY PROFILE
Kotak Mahindra Life Insurance Tata AIG Insurance
19-22
DATA COLLECTION OBJECTIVE OF STUDY FOCUS OF PROBLEM SAMPLING Sampling size Sampling technique
CHAPTER-4
PRODUCTS
Kotak Mahindra Life Insurance
36-45
FUND ALLOCATION RIDERS MAJOR COMPETITORS COMPETITIVE ANALYSIS GROWING OPPORTUNITY ON JOB TRAINING SWOT Analysis CHAPTER-5 CHAPTER-6 CHAPTER-7 CHAPTER-8 CHAPTER-9 ANALYSIS & INTERPRETATION FINDINGS RECOMMENDATIONS CONCLUSION ANNEXURE Questionnaire CHAPTER-10 BIBLIOGRAPHY
84
INDUSTRY PROFILE
The insurance industry has faced many challenges over the last decade including: Globalization is pushing companies to operate in different continents forcing them to enter into new partnerships in order to improve efficiencies Competition between the various players has resulted in increased merger and acquisition activities driving industry convergence and value chain decomposition The customer is more knowledgeable and demanding than ever before and this is forcing companies to perform process integration, operational restructuring and technology upgrades Insurance companies are moving beyond their traditional business models and are searching for the right combination of technology and processes to remain profitable. Companies are investing more in information technology in order to alter their business models and processes.
HISTORY OF INSURANCE
In some sense we can say that insurance appears simultaneously with appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help? Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union). Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "Whenever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. Separate insurance contracts were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks.
LIFE INSURANCE
Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy. Essentially, a life insurance policy is a contract between the named insured and the insurance company wherein the insurance company agrees to pay an agreed upon sum of money to the insured's named beneficiary so long as the insured's premiums are current. With a large population and the untapped market area of this population insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20% annually. Together with banking services, it adds about 7 percent to the countries GDP. Nearly 80% of Indian populations are without life insurance cover and the health insurance. This is an indicator that growth potential for the insurance sector is immense in India. Since then the insurance industry has gone through many changes. The liberalization of the industry the insurance industry has never looked back and today stand as one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. Insurance is the business of providing protection against financial aspects of risk, such as those to property, life health and legal liability. It is one method of a greater concept known as risk management which is the need to mange uncertainty on account of exposure to loss, injury, disadvantage or
destruction.
Insurance is the method of spreading and transfer of risk. The fortunate many who are exposed to some or similar risk shares loss of the unfortunate. Insurance does not protect the assets but only compensates the economic or financial loss. In insurance the insured makes payment called premiums to an insurer, and in return is able to claim a payment from the insurer if the insured suffers a defined type of loss. This relationship is usually drawn up in a formal legal contract. Insurance companies also earn investment profits, because they have the use of the premium money from the time they receive it until the time they need it to pay claims. This money is called the float. When the investments of float are successful they may earn large profits, even if the insurance company pays out in claims every penny received as premiums.
CLASSIFICATION OF INSURANCE
The insurance industry in India can broadly classify in two parts. They are.
INSURANCE
LIFE INSURANCE
GENERAL INSURANCE
Insurable Interest : Ordinarily, the proposer of a life insurance contract should have an insurable interest in the life of the life insured. The law of life insurance on insurable interest in India is in a state of chaos. Though the roots of the doctrine of insurable interest lie in the English law but at the same time, various developments taking place in other parts of the world also have to be looked into and the changing social conditions have to be taken into account to redefine the doctrine of insurable interest. Based on these excerpts, it is clear that insurable interest depends upon the facts of each case no clear legal framework exists to define insurable interest. Whether a relationship as proposer life assured creates an insurable interest has to be seen viewed whether this familial affection will provide adequate social and legal safeguards against premeditated homicide by the proposer to procure substantial life insurance proceeds. That is,
no moral hazard should exist when a life insurance contract is intended to be purchased. Examples of relationships where insurable interest exist between proposer and life assured are: self proposing on his / her life, parent child, husband wife. Trust trustee, employer employee and creditor debtor.
Utmost Good Faith: A life insured knows about the state of his / her health better than anyone else. What may not be unraveled in a medical examination may well be in the know of the life insured. Hence, life insurance contracts are postulated on the belief that the life insured will reveal all the relevant particulars in utmost good faith when applying for an insurance contract. That is, non disclosure of material facts that may have guided the insurer to decline or offer on different terms an insurance contract, will give the right to an insurer to repudiate an insurance claim when the insured event occurs.
policyholder, pays the premium. For determining whether future premiums can be paid to keep the contract alive, ability of the proposer is considered. All tax benefits as well as maturity proceeds are available to the proposer.
b) Life Assured : The life assured, as known as the life insured, is the
person on whose life the policy is taken. Mortality or risk premium is charged based on the age of the life assured. As stated above, an insurable interest should exist between the proposer and life assured.
c) Nominee : Where the proposer and life assured are the same persons,
it is mandatory to nominate a person to receive the benefits of the insurance policy in the event the proposer deceased before the policy matures. A nominee has to be a real person, i.e. artificial bodies like company and trust cant become nominee.
d) Appointee : If the nominee is a minor, an appointee is required to act
(real persons and artificial bodies are acceptable as assignees) who then becomes the owner of the policy and is entitled to receive policy benefits. As a result of an assignment, an assignee supersedes the policyholder who has assigned the policy.
COMPANY PROFILE-
Insurance
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between KotakMahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance, we aim to helpcustomers take important financial decisions at every stage in life by offering them awide range of innovative life insurance products, to make them financially independent.
MANAGEMENT
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.
(NDDB), MDS Switchgear Limited and Nicholas Piramal India Limited and Ion Exchange Ltd. Prior to Kotak Life Insurance, he held the position of VPFinance 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.
Mr.
Development)
Mr. Arun Patil is the Vice President - Sales & Management Development with Kotak Life Insurance. A post- graduate with Law qualifications, he has over 25 years' experience in life insurance industry. He joined as a Direct Recruit Officer in L.I.C. and worked in various departments such as Sales, Marketing, I.T., Publicity, Housing & Branch Administration all across the country. On foreign deputation to Fiji Islands for 5 years, Mr. Patil substantially increased the market-share of LIC in competitive environment. After heading LIC's premier Mumbai Division, he joined the then ICICI Ltd. as a member of the insurance venture team and later worked for Tata AIG Insurance Company as Head of Sales Development. Widely traveled all over the country & the world several times for insurance related work, Mr. Patil presently has responsibilities to enhance the skills, knowledge, productivity, and professionalism of the sales-force, with special emphasis on developing
MILE STONES
- KOTAK LIFE INSURANCE
Kotak Life Insurance, aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life Kotak Mahindra Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd.(KMBL), and Old insurance products, to make them financially independent. Jeene Ki Azaadi.
A Lifetime of Value
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. 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 The Auto Finance division is started 1991 The Investment Banking Division is started. Takes over
FICOM, one of Indias largest financial retail marketing networks 1992 Enters the Funds Syndication sector 1995 Brokerage and Distribution businesses incorporated into a separate company - Kotak Securities. Investment Banking division incorporated into a separate company - Kotak Mahindra Capital Company 1996 The Auto Finance Business is hived off into a separate company Kotak Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Groups entry into information distribution. 1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak Securities launches kotakstreet.com - its on-line broking site. Formal commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund. 2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to bank
Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of around Rs.1, 700 crore and employs over 4,000 employees in its various businesses. With a presence in 74 cities in India and offices in New York, London, Dubai and Mauritius, it services a customer base of over 5, 00,000.
ORGANISATION STRUCTURE
SALES HEAD
MARKETIN G HEAD
HR & ADMIN
APPOINTED
ACTUARY
CIO
FINANCE
The Finance section is operated centrally by Head Office which is Bombay headed by CFO - Mr. G. Murlidharan and further sub-divided into categories like Vice Presidents of different departments. These departments are: CPC & Group Ops, Internal Control, MIS, Accounts & Compliance, Underwriting, Branch Operations.
CFO & COO
Internal control
MIS
Underwri - ting
Branch operation
MANAGERS
MANAGERS
MANAGERS
MANAGERS
MANAGERS
EXEC. FINANCE
EXEC. FINANCE
EXEC. FINANCE
EXEC. FINANCE
EXEC. FINANCE
SALES
The Sales Department is divided on the basis of region. Each region is thereafter divided into categories like Alternate Channel, Tied Channel and Group Business. The Sales dept is headed by Mr. Pankaj Desai, Alternate Channel Head Mr. Suresh Agarwal, Tied Channel Head MR. Subbaiah K P, Group Business Head Group Business Head Mr. Sandeep Srikhande. Subdivided into categories like Regional Managers, Area Managers and others.
SALES HEAD
TIED CHANNEL RM
REGIONAL MANAGER
AREA MANAGER
REGIONAL HEAD
AREA MANAGERS
MARKETING
The Marketing Department is headed by Mr. Rahul Sinha from Head Office.
MARKETIN G HEAD
HEAD
PRODUCT MANAGER S
REGIONAL MARKETIN G
MANAGER
Zonal Manager
Branch Manager
Sales Manager
Sales Manager
HR Department
Operations Department
General Staff
RESEARCH METHODOLOGY
RESEARCH
RESEARH IS SEARCH FOR KNOWLEDGE OR RESEARCH IS SYSTEMATIC EFFORTS TO GAIN KNOWLEDGE.
RESEARCH DESIGN
A RESEARCH DESIGN IS THE FRAMEWORK OR PLAN FOR A STUDY WHICH IS USED AS A GUIDE IN COLLECTING AND ANALYZING THE DATA COLLECTED. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper research design. It specifies the methods and procedures for acquiring the information needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods.
Descriptive research design Exploratory research design Experimental research design In this project I have used descriptive research design because it describes new ideas and events.
TYPE OF DATA COLLECTION There are two types of data used. They are primary and secondary data. Primary data is defined as data that is collected from original sources for a specific purpose. Secondary data is data collected from indirect sources. PRIMARY SOURCES These include the survey or questionnaire method, telephonic interview as well as the personal interview methods of data collection. In this project I have used questionnaire and telephonic interview as primary source. SECONDARY SOURCES These include books, the internet, company brochures, product brochures, the company website, competitors websites etc, newspaper articles etc. In this project I have used internet, company brochures, product brochures, and the company website as a secondary source.
OBJECTIVES OF STUDY
Title of the study "Comparative Analysis of Kotak Mahindra Life Insurance and Tata AIG Insurance".
Objective: To find the market share of Kotak and Tata AIG Insurance
To suggest additions to the current product portfolio To recognize the popular insurance plans To suggest ideal policy term and premium for insurance To showcase the consumers willingness to spend on life insurance To showcase the factors that motivate purchase of insurance policies To understand the awareness level of consumers about unit linked insurance plans of Kotak Mahindra Life Insurance.
There are following problem associated with this project report: To find the market share of Kotak and Tata AIG Insurance
To suggest additions to the current product portfolio To recognize the popular insurance plans To suggest ideal policy term and premium for insurance To showcase the consumers willingness to spend on life insurance To showcase the factors that motivate purchase of insurance policies To understand the awareness level of consumers about unit linked insurance plans of Kotak Mahindra Life Insurance.
SAMPLING
Sampling refers to the method of selecting a sample from a given universe with a view to draw conclusions about that universe. A sample is a representative of the universe selected for study. Convenience sampling is used in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth. As the name implies, the sample is selected because they are convenient. This non probability method is often used during preliminary research efforts to get a gross estimate of the results, without incurring the cost or time required to select a random sample
SAMPLE SIZE
The sample size for the survey conducted was 100 respondents.
SAMPLING TECHNIQUE
Convenience sampling technique was used in the survey conducted.
PLAN OF ANALYSIS
Tables were used for the analysis of the collected data. The data is also neatly presented with the help of statistical tools such as graphs and pie charts. Percentages and averages have also been used to represent data clearly and effectively.
INDIVIDUAL
Kotak Headstart Child Plans Kotak Sukhi Jeevan Plan Kotak Privileged Assurance Plan Kotak Term Plan Kotak Preferred Term Plan Kotak Money Back Plan Kotak Child Advantage Plan Kotak Endowment Plan Kotak Capital Multiplier Plan Kotak Retirement Income Plan Kotak Retirement Income Plan Kotak Safe Investment Plan II Kotak Flexi Plan Kotak Easy Growth Plan Kotak Premium Return Plan Riders
GROUP
Kotak Term Grouplan Kotak Credit-Term Grouplan Kotak Complete Cover Grouplan Kotak Gratuity Grouplan Kotak Superannuation Grouplan
1.
2.
Step 1: Choose from the Regular Premium With Cover and Without Cover Options or the Single Premium plan based on your need for protection from the harsh uncertainties of life and the investment markets Step 2: Decide the amount of savings (premiums) you may wish to allocate to building your retirement kitty and aiming for healthy cash flows in your golden years Step 3: Choose the retirement (vesting) age between the age of 45 and 75 years. Step 4: Select the fund options to balance your risk profile and the tenure of investment. Step 5: Opt for any of the rider benefits in the regular premium versions to enhance flexibility and boost benefits.
4.
What
is
Kotak
Preferred
Term
Plan?"
The Kotak Preferred Term Plan is designed to provide you with reduced premium rates for a sum assured of Rs.10 lakhs and above.
1) Males over the age of 18 years, who do not use tobacco in any form. 2) Females over the age of 18 years.
"What value-adds can you opt for?" You may avail of the following non-participating value-adds for a nominal premium at the time of taking your policy, subject to aggregate premium on all value-adds (except Critical Illness Benefit) not exceeding 30% of the basic Kotak Term Plan premium.
Accidental Death Benefit Permanent Disability Benefit Critical Illness Benefit
5.
What is Kotak Money Back Plan?" The Kotak Money Back Plan not only covers your life, it also assures you a certain percent of the sum assured as cash payment at regular intervals of every 5 years. It is a savings plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset etc. This is a participating plan (with profits). "Who can avail of this Plan?" Minimum ageHOW OLD DO YOU HAVE TO BE TO AVAIL OF 18 years THIS PLAN? Maximum age60 years FOR WHAT TERM CAN I AVAIL OF THIS 15, 20 & 25 PLAN? years WHAT IS THE MAXIMUM AGE THAT THE 75 years PLAN CAN COVER YOU TILL? "What are the advantages of this plan?" 1. The plan not only covers your life but also provides you with a survival benefit payout every 5 years.
2. In the unfortunate event of death of life insured, the beneficiary would receive the death benefit. The death benefit keeps increases by 7% of the sum assured every year. 3. On maturity, you would receive the sum of the Survival Benefit, Bonus addition* and Guaranteed addition**. 4. The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works hard for you. 5. The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term. 6. You have the benefit of a 15-day free look period. 7. You have the option of paying premiums quarterly, half yearly or yearly. "What value-adds can you opt for?" You may avail of the following value-ads for a nominal premium at the time of taking the plan, subject to the aggregate premium on all value-ads not exceeding 30% of the basic Kotak Money Back Plan premium.
Term Benefit/ Preferred Term Benefit Accidental Death Benefit Critical Illness Benefit Life Guardian Benefit Accidental Disability Guardian Benefit
6.
Here is Kotak Flexi Plan which is designed to do just this. It comes to you with the option of investing in six professionally managed funds, allowing you to allocate your investment in a combination of one or more funds, switch between them and take charge of your investments. The plan aims to earn efficient returns over the long term and helps you plan for your financial goals, with the comfort of a Guaranteed Maturity Value. More importantly, it ensures that your loved ones are protected, if any unfortunate events were to take place.a plan that gives you complete control. "Why should you invest in Kotak Flexi Plan?" Kotak Flexi Plan is an ideal option if:
You want a comprehensive long term solution for managing your finances. You want insurance to be an important part of your portfolio to protect your loved ones. You are cautious with investments in the equity markets due to the fear of loss of capital. You think that financial concepts require lot of time to grasp and are probably best left to the experts.
7.
plan.
Mode WHAT IS THE MINIMUM Quarterly PREMIUM THAT I NEED TO PAY Half Yearly AND AT WHAT INTERVALS CAN Annually I PAY THEM? Single Premium WHAT IS THE MAXIMUM AGE THAT THE PLAN CAN COVER 70 years YOU TILL?
"What are the advantages of this plan?" 1. It is a low-cost insurance plan. 2. You can choose between a regular premium payment option or a single premium payment option.
In case you opt for the regular premium payment option, you may pay your premiums either annually, or in half yearly or quarterly installments. 3. Your Kotak Term Plan can be converted into any other plan offered by Kotak Life Insurance (except for another Term plan) provided there are at least 5 years before cover ceases*. 4. In case you forget to pay your premium by the due date, you are entitled to a grace period of 30 days from the date of unpaid premiums. 5. In case of a financial emergency, you have the option to surrender the policy provided you have taken the single premium payment option*. "What value-adds can you opt for?" You may avail of the following non-participating value-adds for a nominal premium at the time of taking your policy, subject to aggregate premium on all value-adds (except Critical Illness Benefit) not exceeding 30% of the basic Kotak Term Plan premium.
Accidental Death Benefit Permanent Disability Benefit Critical Illness Benefit
ICICI Prudentials ultimate promise is financial security. A strong brand certainly boosts sale, but without customer-friendly, innovative products, even the best brand would not last long. ICICI Prudentials product range has been developed on the understanding that different people have their own sets of needs at various stages of their lives. It has thus built a flexible portfolio of products that can be customized to cater to varying needs of people at each stage, and thus ensure protection in every step of life. The companys philosophy has been to help customers understand their financial needs and work closely with them to customize a product that would meet. Advisors can offer a complete range of products Savings plans, Child plans, Market-linked plans, Protection plans, and Retirement plans and tailor a flexible solution to meet customers changing needs at every stage of life. In fact, ICICI Prudential was the first to unbundle product benefits, pioneering the concept of riders and soon after introduce comprehensive market-linked and retirement plans. ICICI Prudential has launched a handful of products that are analyzed below: ICICI Prudential's life insurance products may be loosely categorized under three forms: pure life insurance products without an investment angle to them; a product that is a mix of a cumulative investment scheme and an insurance product; and, finally, standard products such as money-back and endowment policies.
Policy-holders are required to pay a one-time premium based on a target sum assured. At maturity, the policy-holder gets the sum assured and guaranteed additions that work out to a compound return of 4.5 per cent the sum assured. The insurance part of the package comes in the form of death benefits that are paid in the case of the demise of the policy-holder. The size of the death benefit is linked to the number of years left for the policy to expire. On maturity date, the maturity value is also paid in addition to the death benefits that would have been paid earlier.
LIFE GUARD POLICIES: The Company offers two pure life insurance
products that have an umbrella name, Life Guard. One of them involves a one-time premium for which there are no maturity benefits. The other requires regular premium payments that are returned at the end of the policy. Life Guard offers absolutely no investment-related return and is suitable for individuals looking for an unadulterated insurance package.
SAVINGS SOLUTIONS
Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of protection.
Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options.
Save n Protect is a traditional endowment savings plan that offers life protection along with adequate returns
CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a childs marriage, expenses for a childs higher education or purchase of an asset.
LifeTime and LifeTime II offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options Preserver, Protector, Balancer and Maximiser.
LifeLink Super is a single premium Unit Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market.
Premier Life is a limited premium paying plan that offers customers life insurance cover till age of 75.
InvestShield Life is a Unit Linked plan that provides capital guarantee on the invested premiums and declared bonus interest.
InvestShield Cash is a Unit Linked plan that provides capital guarantee on the invested premiums and declares bonus interest along with flexible liquidity options.
InvestShield Gold is a Unit Linked plan that provides capital guarantee on the invested premiums and declares bonus interest along with limited premium payment terms.
PROTECTION SOLUTIONS
LifeGuard is a protection plan, which offers life cover at very low cost. It is available in 3 options level term assurance with return of premium and single premium.
HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.
CHILD PLANS
SmartKid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the childs life. SmartKid plans are also available in unit-linked form both single premium and regular premium.
RETIREMENT SOLUTIONS
ForeverLife is a retirement product targeted at individuals in their thirties. SecurePlus Pension is a flexible pension plan that allows one to select between 3 levels of cover.
LifeTime Pension II is a regular premium market-linked pension plan. LifeLink Pension II is single premium market linked pension plan. InvestShield Pension is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses
Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and payout stages.
HEALTH SOLUTIONS
Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policy holder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover
Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions.
ICICI PRU GROUP TERM PLAN: ICICI Prus flexible group term
solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.
accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.
2. Accident Benefit: This rider option pays the sum assured under the
in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death
4. Waiver of Premium: In case of total and permanent disability due
to an accident, the premiums are waived till maturity. This rider is available with Secure Plus and Cash Plus.
FUND ALLOCATION
Basically the entire funds collected from customers are distributed in different funds in order to earn more and to give the better return to investor. There are following type of funds under which ICICI Pru. Invest:--
FLEXI GROWTH
FLEXI BALANCER
MAXIMISER
FUND SOURC E
Basically the entire funds collected from customers are distributed in different funds in order to earn more and to give the better return to investor. There are following type of funds under which Kotak Life Insurance Invest there money:--
AGGRESSIVE
DYNAMIC
EQUITY
FUND SOURC E
PRESERVER
BALANCER
DEBTS RIDERS
RIDERS
The Riders/ Value-adds are additional benefits that can be added to the basic individual plans at a minimal additional cost. All riders have to be taken at the time of commencement of the basic plan and the rider term has to be equal to the term of the basic plan only. There are following type of riders: 1.
In the event of death during the term of this benefit, the beneficiary would receive an additional death benefit amount, which is over and above the sum assured. The maximum term benefit you can avail of is equal to the basic sum assured. Where the Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply, subject to meeting eligibility requirements.
2.
This benefit provides an additional amount (over and above the basic sum assured) to the beneficiary in the event of the accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).
3.
This benefit provides financial support in case of your permanent disability due to an accident. The amount payable is over and above the basic sum assured and would be paid out as an annuity. The maximum Permanent Disability Benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).
Permanent disability is defined as a permanent and immediate inability to work, the permanent loss of use of two limbs or a total and permanent loss of sight.
4.
This benefit can be taken with the basic life insurance plan to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency. The maximum Critical Illness Benefit that you can avail of is equal to half the basic sum assured subject to maximum of Rs. 20 lakhs. The list of critical illnesses is: 1. Heart attack 2. Cancer 3. Stroke 4. Coronary artery by-pass graft surgery (CABG) 5. Kidney failure 6. Major organ transplants 7. Paralysis 8. Loss of limbs 9. Aorta surgery 10.Major burns 11.Heart valve surgery 12.Blindness
5.
6.
ACCIDENTAL DISABILITY GUARDIAN BENEFIT: This benefit can be availed of, only in a case where the life insured and the proposer are two different individuals. In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy
MAJOR COMPETITORS
Earlier only LIC is present in market. And there is monopoly situation which is dangerous to insurance fields. But as soon as globalization started the new private companies like- kotak, ICICI Pru., HDFC life insurance etc companies enter in there market and competition increase in the market. The major competitors in insurance sector are as follows.
Life insurance companies:NAME OF THE COMPANY ALLIANZ BAJAJ LIFE INSURANCE CO. LTD . 2. BIRLA SUN LIFE INSURANCE CO. LTD 3. HDFC STANDARD LIFE INSURANCE CO. LTD 4. TATA AIG INSURANCE CO. LTD 5. ING VYSYA LIFE INSURANCE COMPANY PVT. LTD.
S.No 1.
Logo
6.
7.
8.
9.
11. TATA AIG LIFE INSURANCE COMPANY LIMITED 12 AMP SANMAR ASSURANCE COMPANY LTD.
13
Non-life insurance companies:S.No. NAME OF THE COMPANY BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. ICICI LOMBARD GENERAL Logo
1.
2.
3.
NATIONAL INSURANCE
4.
5.
6.
RELIANCE GENERAL
7.
8.
9.
UNITED INDIA INSURANCE
10.
11.
CO. LTD. Cholamandalam General Insurance Co. Ltd. HDFC-Chubb General Insurance
12.
COMPETITIVE ANALYSIS
LIFE INSURANCE CORPORATION OF INDIA (LIC)
LIC has an excellent money back policy which provides for periodic payments of partial survival benefits as long as the policy holder is alive. 20% of the sum assured is payable after 5, 10, 15 and 20 years and the balance 40% is payable at the 20th year along with accrued bonus. (www.lic.com) For a 25 years term , 15% of the sum assured becomes payable after 5,10,15 and 20 years and the balance 40% plus the accrued bonus becomes payable at the 25th year. An important feature of these types of policies is that in the event of the death of the policy holder at any time within the policy term the death claim comprises of full sum assured without deducting any of the survival benefit amounts which have already been paid. The bonus is also calculated on the full sum assured. LIC offers 66 different plans; plans are formulated for specific occasions whole life plans, term assurance plans, money back plan for women, child plans, plans for the handicapped individuals, endowment assurance plans, plans for high worth individuals, pension plans, unit linked plans, special plans, social security schemes diversified portfolio of products. KOTAK could diversify its product portfolio. It could add more plans for high worth individuals and women.
There are however some drawbacks to investing in LIC. The allocation charges are higher. Therefore the money invested in the fund is lower than what KOTAK will invest. This is true across all policies. KOTAK covers its costs over the policy term whereas LIC charges a high amount for the first five years and then charges a very nominal amount from the 6th year onwards. The investment benefit is not as high as KOTAK.
ICICI PRUDENTIAL
ICICI Prudential is a stiff competitor for KOTAK. The company is a merger between ICICI Bank which is the biggest private bank in India and Prudential Plc which is a global life insurance company. The company has an investment plan which is market related Invest Shield Life. In this plan even if the market falls, the premium will be returned to investors. It is a guaranteed plan which ensures the company carefully invests your money. The stock market performance of ICICI Prudential is much better than KOTAK. The returns on the growth fund were 46.28% compared to the 39.59% offered by KOTAK. Customers are attracted by higher returns and this is a plus point for Prudential. However the charges are very high in the plans offered by ICICI Prudential. It is 35% during the first year, 15% in the next year and 3% from the third year onwards. Also a higher minimum premium of Rs. 8000 is charged. Hence the policies are not accessible to the lower strata of the society.
business premium income. The company has a capital base of 520 crores as on 31st July, 2006. Its Flexi Life Line Plan offers life long insurance cover till the policy holder is 100 years of age. There are guaranteed returns of 3% p.a. net of policy charges after every 5 years from the eleventh policy year onwards. However the charges are very high. The initial charges for the first year are 65%. Hence the fund value is greatly reduced.
BAJAJ ALLIANZ
Bajaj Allianz is a joint venture between Allianz AG with over 110 years of experience in over 70 countries and Bajaj Auto, a trusted automobile manufacturer for over 55 years in the Indian market. Together they are committed to offering you financial solutions that provide all the security you need for your family and yourself. Bajaj Allianz is the number one private life insurer for the year 2005 2006. It is leading by 78 crores. It has experienced a whopping growth of 216% in the last financial year. The company has sold 13, 00,000 policies and is backed by 550 offices across India. It offers travel insurance, motor insurance, home insurance, health and corporate insurance. The mortality charges are lower than KOTAK. The entry age could be zero years which allow even new born babies to be insured. (Source: www.bajajallianz.com)
TATA AIG
Tata Aig is a joint venture between the Tata group and American International Group Inc. In one of the plans the company offers hospital cash benefit wherein it will pay Rs. 2500 per day in case of hospitalization and Rs.12.5 lakhs in case the person suffers from any critical illness. Annual premium is much less (about Rs. 6712) to avail such a good benefit. Charges are relatively low compared to KOTAK for some policies. The company offers high coverage plans at low cost. There is a plan even for a policy term of 1 year. Your family can continue to enjoy their current lifestyle even in the case of something happening to you. These plans are very flexible and KOTAK could adopt this idea of insuring individuals for short periods of time. For example; there is a family of four. The only earning member is the father. He has just taken a loan from a bank of 20 lakhs to purchase a new home. He is able to repay the loan with his current salary in 15 years. The problem arises if something were to happen to him within these fifteen years. Not only will the family face the emotional and financial loss of their father but they will also have to repay the home loan or risk being homeless.
SA M
9 months
U M
U M
A M
9 months
Goal sheet
S M
9 months
Stability period
NON -SOURCING
Area manage r
9 months
Branch manage r
9 months
NOTE
Regional manager
After Unit Manager it is necessary to complete Goal Sheet. It goal sheet target is not achieved then next promotion cant be gained. There are following contents in goal sheet: o Waited received premium(WRP) o No. of cases. o Active advisers.
Strengths
Rich experience of the management. Stabilized and loyal clients. Skilled and tactful staff.
Weaknesses
Insufficient office equipments. Not all employees have his/her cabin. Work place (back office) is quite congested.
Opportunities
Stability through increased brand awareness, market penetration and service offerings across all categories of financial services. Increase in customers wallet share. Leveraging the latest technology for providing quality and client centric services. Growth in economy would lead to higher demand for credit.
Threats
Increasing interest rate scenario. Execution risk. Competition from local and multinational players. Rising inflation could reduce savings and investments
Strengths
Joint venture of ICICI Bank And Prudential. Large spread & experienced staff with great efficiency. Wide distribution channel. Faith. Sufficient funds. Variety of policies: o Term assurance plan o Personal pension plan o Money back plan o Children plan. o Endowment assurance plan. o Unit linked endowment plan. Largest user of computer server. The company provides better policies for customer.
weaknesses:
Lack in customer service. Long procedure for policies. Staff is UN experienced.
Lack of communication because sometimes get lost on the way or become in effective.
opportunities:
Insurance sector is growing; therefore new opportunities will be available for business growth. Healthy competition is growing.
Threats:
New private companies would start from scratch & are in position to computerize from beginning by keeping their expenses in control and employ only technically qualified and trained personal, so they would work at a minimum cost in comparison to ICICI Pru.
Main threats are competitors Like Kotak Life Insurance.
Interpretation From the survey it was found that 20% of the respondents have an average annual income up to 1 lakh,, 55% have annual income of 1 lakh to 3 lakh,,15% of the respondents have an average annual income from 3 lakh to
5 lakh and 10% of the respondents have an average annual income above 5 lakh.
TABLE-2 `
NO. OF MEMBERS BELOW 3 MEMBERS 3-5 MEMBERS ABOVE 5 MEMBERS TOTAL
FAMILY SIZE
PERCENTAGE 55% 30% 15% 100%
Interpretation -
From the survey it was found that 55% of the respondents are below 3 members, 30% of the respondents are between 3 to 5 members and 15% of the respondents are above 5 members. TABLE-3 ACCORDING TO YOU LIFE INSURANCE IS
PARTICULAR TAX SAVING PLAN RISK COVERAGE FINANCIAL SECURITY ALL THE ABOVE TOTAL NO OF RESPONDENTS 20 25 15 40 100 PERCENTAGE 20% 25% 15% 40% 100%
45 40 35 RESONDENTS 30 25 20 15 10 5 0 TAX SAVING PLAN RISK COVERAGE FINANCIAL SECURITY ALL THE ABOVE Series1
Interpretation -From the survey it was found that amongst 100 respondents
25% of the respondents say risk coverage. 20% of the respondents say tax savings. 15% of the respondents say financial security. and 40% of the respondents say all of the above. TABLE-4 HAVE YOU TAKEN THE PRODUCT OF KOTAK LIFE INSURANCE ?
NO OF RESPONDENTS 65 35 100
Interpretation -
From the survey it was found that 65% of the respondents say that they have taken the Kotak Life Policy and 35% of the respondents say that they have not taken the Kotak Product.
60 50 RESPONDENTS 40 30 20 10 0 KSIP PLAN MONEY BACK PLAN CHILDREN PLAN PENSION PLAN
PLANS
Interpretation -
From the survey it was found that 55% of the respondents say KSIP Plan, 12% of the respondents say Money Back Plan, 25% of the respondents say Children Plan and rest of the respondents says Pension Plan. TABLE-6 IN WHICH OF THE PRIVATE COMPANY DO YOU WANT TO INVEST YOUR MONEY?
NAME OF COMPANY ICICI PRUDENTIAL KOTAK LIFE INSURANCE TATA AIG BAJAJ ALLIANZ OTHER TOTAL NO OF RESPONDENTS 25 40 7 18 10 100 PERCENTAGE 25% 40% 7% 18% 10% 100%
ICICI PRUDENTIAL KOTAK LIFE INSURANCE TATA AIG BAJAJ ALLIANZ OTHER
Interpretation -
From the survey it was found that 25% of the respondents say ICICI Pru., 40% of the respondents say Kotak Life Insurance., 18% of the respondents say Bajaj Allianz.and rest of the respondents says Other Insurance Companies.
NO OF RESPONDENTS 23 37 8 20 100
Interpretation -
From the survey it was found that 25% of the respondents say ICICI Pru Provide the best service, 40% of the respondents say Kotak Life Insurance provide the best services to them, 20% of the respondents say Bajaj Allianz provide best service and rest of the respondents says Other Insurance Companies provide better services.
FINDINGS On an analysis and evaluation of the data collected from the respondents the following findings were found. a) Kotak Life Insurance provides the best services to its customer. b) Most of the people still want to invest there money in ICICI and Bajaj Allianz. c) Kotak Life Insurance Product Provide all benefit to there customer like tax saving, investment opportunity, pension plans etc.
d)
KSIP Plan is largest selling product of Kotak Life and can bit any company.
e) Insurance provides is tax saving products under sec 80c and under sec 80 (80)c. f) Insurance is the boom sector. g) It provide GMV(Guaranty Maturity Value) in case of loss in share market
RECOMMENDATIONS
Since Kotak Life Insurance co. ltd is the largest in terms of FDI invested, in terms of work force, in terms of market share, in terms of no. of customers. All these positive stands of the company place at the number one position. On second aspect whatever amount of money Kotak life insurance save, can be used to increase the no. of policies, which will helpful to increase the market share of the company. Since the customers think about the companies in the industry, when they invest money in the life insurance industry. So its necessary to increase the market share of the company. There are some recommendations.
OPEN SOME MORE BRANCHES IN SEMI URBAN AND RURAL AREA Kotak Llife Insurance has almost its branches in urban area or metros. So in order to increase the no. of customer, Kotak Life Insurance should increase the approach towards potential customers. For that it has to increase the branches in the semi
urban cities like C, D grade cities. And the rural marketing is the best option for Kotak to increase its base in the market
IMPROVE CUSTOMER SERVICES In order to take the advantage of being industry leader in private sector, Kotak Life Insurance has to improve its customer services. According to my experience in the company, a good number of customers forget to pay their premium at time so it causes a big loss to the company. BRING SOME UNIT LINKED LIFE INSURANCE PLANS IN THE MARKET Being a market leader doesnt ensure the leadership in the future. Since after increment in FDI from 26% to 49% all player will have the opportunity to capture the market share. So in order to maintain its position Kotak Life Insurance should -Introduce some new market linked insurance plan, which will give a competitive advantage to the Kotak Life Insurance against its competitors. TRAINED THE FINANCIAL ADVISORS MORE
EFFICIENTLY
In the changed scenario, more efficient training will be needed, so Kotak Life INsurance should provide good and efficient training to their financial advisors. Because they are the one who interact directly with the customers. So good training will give them the right way to deal with the potential customers.
CONCLUSION
Kotak life insurance is one of the worlds largest life insurance companies. It has businesses spread out across the globe. It currently ranks number 7 amongst the insurers in India (Source: annual premium provided by the company) The company faces a large amount of competition. To sustain itself it must promote its products through advertising and improve its selling techniques. Consumers must be aware of the new plans available at Kotak. The medium of advertising used could be television since most of its competitors use this tool to promote their products. The company must be promoted as an Indian company since consumers seem to have more trust in investing in Indian firms. The unit linked concept must be specifically promoted. The general perception of life insurance has to change in India before progress is made in this field. People should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings. Kotak could tap the rural markets with cheaper products and smaller policy terms. There are individuals who are willing to pay small amounts as
premium but the plans do not accept premiums below a certain amount. It was usually found that a large number of males were insured compared to females. Individuals below the age of 30 (mostly male) were interested in investment plans. This was a general conclusion drawn during prospecting clients.
ANNEXURE
NAME DATE .. ..
Q: 1 WHAT IS YOUR ANNUAL INCOME? A UP TO 1 LAKH 3 LAKH TO 5 LAKH Q: 2 FAMILY SIZES A BELOW 5 MEMBERS ABOVE 10 MEMBERS Q: 3 ACCORDING TO YOU LIFE INSURANCE IS A: TAX SAVING PLAN FINANCIAL SECURITY RISK COVERAGE ALL THE ABOVE 5-10 MEMBERS 1 LAKH TO 3 LAKH 5 LAKH & MORE
A:
YES
NO
Q: 5 WHICH PLAN DO YOU PREFER IN THE KOTAK LIFE INSURANCE? A: INVEST PLAN CHILDREN PLAN WHOLE LIFE PLAN PENSION PLAN
Q: 6 IN WHICH OF THE PRIVATE COMPANY DO YOU WANT TO INVEST YOUR MONEY? A: ICICI PRUDENTIAL TATA AIG OTHERS Q: 7 WHICH OF THE COMPANY PROVIDE BEST OF THE SERVICES TO CUSTOMERS ? A: ICICI PRUDENTIAL TATA AIG OTHERS KOTAK LIFE INSURANCE BAJAJ ALLIANG KOTAK LIFE INSURANCE BAJAJ ALLIANG
BIBLIOGRAPHY
BOOKS AND JOURNALS
-MARKETING MANAGEMENT PHILIP KOTLER ,Tata McGraw Hill Publication ,12th EDITION
MARKETING RESEARCH WESTFALL BOYD, Stiffler Publication,12th EDITION SALES MANAGEMENT THOMSON ,J.K. Publication, 6th EDITION.
MAGAZINES
BUSINESS INDIA JULY 2007 UDYOG VYPAR PATRIKA. (HALF YEARLY )EDITION PITCH MAGAZINE.JAN 2007
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