A Project Report on Kotak Insurance

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A

PROJECT REPORT

ON GENERAL TRAINING AT

KOTAK LIFE INSURANCE LTD

BY

VARUN BAWA

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Se. no Particulars Page No.

1 What is Insurance

Introduction

Brief history of the insurance sector

Some of the milestones in life insurance

Insurance sector reforms

IRDA

Existing Insurance companies

2 Introduction of KOTAK LIFE INSURANCE

Company profile

Mission

Vision & values

Management

Organization chart

Build up of business

Group structure of kotak mahindra bank ltd

KMOM- the partnership

Awards

Problem Identification

3 Marketing

Promoters

Distribution

Sales strategy

Market share

4 Service

Customer satisfaction

Insurance solutions for individuals

Stages in policy issuance

5 Human resource

Definition of agent

Procedure for becoming an agent

Methods of remunerating agents

Function of agents

Responsibilities of agents

Ethical Behaviour

Employee welfare

Oracles online system for employee


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efforts of the owner. The asset is valuable to the owner, because he expects to get some

benefit from it. The benefit may be an income or in some other form.

In India, insurance began in 1818 with life insurance being transacted by an

English company. The first insurance company was the Bombay mutual assurance society ltd,

formed in 1870 in Mumbai. Insurance helps to reduce the consequences of adverse situation.

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. In fact, most insurance companies pay out more money than they receive in

premiums. The excess amount that they pay to policyholders is the cost of float. An insurance

company will profit if they invest the money at a greater return than their cost of float.

An insurance contract or policy will set out in detail the exact

circumstances under which a benefit payment will be made and the amount of the premiums.

Marine insurance is the oldest type of insurance and one of the earliest

records of a marine policy relates to a Mediterranean voyage in 1347. This was followed by

life insurance some 300 years later. Fire insurance, however, did not begin until after the

Great fire of London in 1666. In India all the three insurance developed as under:

Fire Insurance

Marin insurance

Life Insurance

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Classification of insurance:

The insurance industry in India can broadly classify in two parts. They are.

1) Life insurance.

2) Non-life (general) insurance.

1) Life insurance:-

Life insurance can be defined as life insurance provides a sum of money if the

person who is insured dies while the policy is in effect.

In 1818 British introduced to India, with the establishment of the oriental life

insurance company in Calcutta. The first Indian owned Life Insurance Company; the Bombay

mutual life assurance society was set up in 1870. The life insurance act, 1912 was the first

statuary measure to regulate the life insurance business in India. In 1983, the earlier

legislation was consolidated and amended by the insurance act, 1938, with comprehensive

provisions for detailed effective control over insurance. The union government had opened

the insurance sector for private participation in 1999, also allowing the private

Companies to have foreign equity up to 26%. Following the opening up of the

insurance sector, 12 private sector companies have entered the life insurance business.

Benefits of life insurance:

Life insurance encourages saving and forces thrift.

It is superior to a traditional savings vehicle.

It helps to achieve the purpose of life assured.

It can be enchased and facilitates quick borrowing.

It provides valuable tax relief.

Thus insurance is found to be very useful in the lives of the person both in short

term and long term.

Fundamental principles of life insurance contract:-

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1) Principle of almost good faith:

A positive duty to voluntary disclose, accurately and fully, all facts, material to the

risk being proposed whether requested or not.

2) Principle of insurable interest:

Relationships with the subject matter (a person) which is recognized in law and gives

legal right to insure that person.

2) Non-life (general) Insurance:-

Triton insurance co. ltd was the first general insurance company to be

established in India in 1850, whose shares were mainly held by the British. The first generalinsurance company to be set up by an Indian was Indian mercantile insurance co. Ltd., which

was stabilized in 1907. There emerged many a player on the Indian scene thereafter.

The general insurance business was nationalized after the promulgation of General

Insurance Corporation (GIC) OF India undertook the post-nationalization general insurance

business.

Brief History of the Insurance Sector in India

The business of life insurance in India in its existing form started in India in the year

1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

The story of insurance is probably as old as the story of mankind. The same instinct

that prompts modern businessmen today to secure themselves against loss and disaster

existed in primitive men also. They too sought to avert the evil consequences of fire and

flood and loss of life and were willing to make some sort of sacrifice in order to achieve

security. Though the concept of insurance is largely a development of the recent past,

particularly after the industrial era past few centuries yet its beginnings date back almost

6000 years.

Life Insurance in its modern form came to India from England in the year 1818.

Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance

company on Indian Soil. All the insurance companies established during that period were

brought up with the purpose of looking after the needs of European community and these

companies were not insuring Indian natives. However, later with the efforts of eminent

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people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian

lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums

were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of

first Indian life insurance company in the year 1870, and covered Indian lives at normal rates.

Starting as Indian enterprise with highly patriotic motives, insurance companies came into

existence to carry the message of insurance and social security through insurance to various

sectors of society. Bharat Insurance Company (1896) was also one of such companies

inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance

companies. The United India in Madras, National Indian and National Insurance in Calcutta

and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-

operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the

great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and

Swadeshi Life (later Bombay Life) were some of the companies established during the same

period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912,

the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life

Insurance Companies Act 1912 made it necessary that the premium rate tables and periodical

valuations of companies should be certified by an actuary. But the Act discriminated between

foreign and Indian companies on many accounts, putting the Indian companies at a

disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 Crore, it rose to 176

companies with total business-in-force as Rs.298 Crore in 1938. During the mushrooming of

insurance companies many financially unsound concerns were also floated which failed

miserably. The Insurance Act 1938 was the first legislation governing not only life insurance

but also non-life insurance to provide strict state control over insurance business. The demand

for nationalization of life insurance industry was made repeatedly in the past but it gathered

momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the

Legislative Assembly. However, it was much later on the 19th of January 1956 that life

insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian

companies and 75 provident were operating in India at the time of nationalization.

Nationalization was accomplished in two stages; initially the management of the companies

was taken over by means of an Ordinance, and later, the ownership too by means of a

comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the

19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,

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1956, with the objective of spreading life insurance much more widely and in particular to the

rural areas with a view to reach all insurable persons in the country, providing them adequate

financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its

corporate office in the year 1956. Since life insurance contracts are long-term contracts and

during the currency of the policy it requires a variety of services need was felt in the later

years to expand the operations and place a branch office at each district headquarter. Re-

organization of LIC took place and large numbers of new branch offices were opened. As a

result of re-organization servicing functions were transferred to the branches, and branches

were made accounting units. It worked wonders with the performance of the corporation. It

may be seen that from about 200.00 Crore of New Business in 1957 the corporation crossed

1000.00 Crore only in the year 1969-70, and it took another 10 years for LIC to cross

2000.00 Crore mark of new business. But with re-organization happening in the early

eighties, by 1985-86 LIC had already crossed 7000.00 Crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional

offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers 100

divisional offices and connects all the branches through a Metro Area Network. LIC has tied

up with some Banks and Service providers to offer on-line premium collection facility in

selected cities. LICs ECS and ATM premium payment facility is an addition to customer

convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at

Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many

other cities. With a vision of providing easy access to its policyholders, LIC has launched its

SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the

customer. The digitalized records of the satellite offices will facilitate anywhere servicing and

many other conveniences in the future.

From then to now, LIC has crossed many milestones and has set unprecedented

performance records in various aspects of life insurance business. The same motives which

inspired our forefathers to bring insurance into existence in this country inspire us at LIC to

take this message of protection to light the lamps of security in as many homes as possible

and to help the people in providing security to their families.

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Some of the important milestones in the life insurance business in

India are

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 statistical information about both life and non-life insurance businesses.

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

objective of protecting the interests of the insuring public.

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

central government and nationalized. LIC formed by an Act of Parliament, viz. LIC

Act, 1956, with a capital contribution of Rs. 5 Crore from the Government of India.

The General insurance business in India, on the other hand, can trace its

roots to the Triton Insurance Company Ltd., the first general insurance company established

in the year 1850 in Calcutta by the British. Some of the important milestones in the general

insurance business in India are:

1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of general insurance business.

1957 General Insurance Council, a wing of the 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 (Nationalization) Act, 1972 nationalized the

general insurance business in India with effect from 1st January 1973. 107 insurers

amalgamated and grouped into four companies viz. the National Insurance 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.

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Insurance sector reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI

Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and

recommend its future direction.

The Malhotra committee was set up with the objective of complementing

the reforms initiated in the financial sector. The reforms were aimed at creating a more

efficient and competitive financial system suitable for the requirements of the economy

keeping in mind the structural changes currently underway and recognizing that insurance is

an important part of the overall financial system where it was necessary to address the need

for similar reforms In 1994, the committee submitted the report and some of the key

recommendations included.

1997 Insurance regulator IRDA set up

2000 IRDA starts giving licenses to private insurers: Kotak Life Insurance, ICICI

prudential and HDFC Standard Life insurance first private insurers to sell a policy

2001 Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks

allowed selling insurance plans.

The Insurance Regulatory and Development Authority (IRDA)

The Insurance Act, 1938 had provided for setting up of the Controller

of Insurance to act as a strong and powerful supervisory and regulatory authority for

insurance. Post nationalization, the role of Controller of Insurance diminished considerably in

significance since the Government owned the insurance companies.

But the scenario changed with the private and foreign companies

foraying in to the insurance sector. This necessitated the need for a strong, independent and

autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would

have taken time, the then Government constituted through a Government resolution an

Interim Insurance Regulatory Authority pending the enactment of a comprehensive

legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an

act to provide for the establishment of an Authority to protect the interests of holders of

insurance policies, to regulate, promote and ensure orderly growth of the insurance industry

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and for matters connected therewith or incidental thereto and further to amend the Insurance

Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business

(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India

(for life insurance business) and General Insurance Corporation and its subsidiaries (for

general insurance business).

The act extends to the whole of India and will come into force on such date

as the Central Government may, by notification in the Official Gazette specify. Different

dates may be appointed for different provisions of this Act.

The Act has defined certain terms; some of the most important ones are as

follows:

Appointed day means the date on which the Authority is established under

the act. Authority means the established under this Act.

Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by

the Central Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd January,

1996.

Words and expressions used and not defined in this Act but defined in the

Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General Insurance

Business (Nationalization) Act, 1972 shall have the meanings respectively assigned to them

in those Acts

A new definition of "Indian Insurance Company" has been

inserted. "Indian insurance company" means any insurer being a company

(a) Which is formed and registered under the Companies Act, 1956

(b) in which the aggregate holdings of equity shares by a foreign company, either by itself or

through its subsidiary companies or its nominees, do not exceed twenty-six percent, Paid up

capital in such Indian insurance company

(c) Whose sole purpose is to carry on life insurance business, general insurance business or

re-insurance business?

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Existing Insurance Companies/Corporation

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INTRODUCTION ABOUT KOTAK LIFE INSURANCE

COMPANY PROFILE

Stock broking businesses in the UK. Kotak Group was established in 1985.Kotak

Mahindra Bank is the parent company of the group. Kotak Group entered into the life

insurance business in 2001. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture

between Kotak Mahindra Bank Ltd. (76%) and Old Mutual plc. (24%) Old Mutual plc is a

world-Class international financial services company. It was established in South Africa

before 160 years.

OLD MUTUAL is the largest financial services business in South Africa, through its

life insurance, asset management, banking and general insurance operations. The companyserves 4 million life insurance policyholders and employs over 13 000 South Africans in its

local operations.

In the USA, OLD MUTUAL is one of the

top ten fixed annuity businesses offering an array of specialist asset management skills through its 23 asset

management businesses. The companys US Life business recorded sales of $4 billion at the end of 2002.

Operations in the United Kingdom are focused on wealth management,

through Gerrard as one of the leading private client

The OLD MUTUAL Group has the ability to cater for a variety of consumer

segments and offers a comprehensive and innovative range of products for all income groups.

Mission

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

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

make them financially independent.

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Vision & values

Our Vision:-

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

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

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

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

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Increase Customer Value:

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

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

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

always comes first.

Cohesive Work Environment: -

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

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

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

and build a long-term career.

Work with Honor: -

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

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

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

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

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

society and nation growth.

Our values:-

Every member of the Kotak Group team is committed to 5 core values: Integrity,

Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we

do, and have become the keystones of our success.

MANAGEMENT

We at Kotak Life Insurance work as a team and have a flat management structure.

Our top management has many years of experience which has helped guide the company into

a position of leadership.

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KOTAK MAHINDRA OLD MUTAL PLC KOTAK LIFE

BANK INSURANCE

( 74% ) ( 26% ) ( 100% )

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Old Mutual Plc:-

Old Mutual was established more than 150 years ago. Old mutual plc, Is a

world-class international financial service company. It owns the largest companies in the

following areas in South Africa.

They are:

1. Life Insurance Company

2. Asset Management Company

3. Bank

4. Non-life insurance company

It has been developed into an International financial services group whose activities

are focused on asset gathering and asset management. The Old Mutual Group offers a diverse

range of financial services in three principal geographies: South Africa, the United States and

the United Kingdom. The company is listed on the London Stock Exchange with a market

capitalization of approximately $6 billion and is a member of the elite FTSE 100 index. In the

2003 rankings of the World's 500 largest corporations by Fortune magazine, Old Mutual

climbed 87 places to position number 366 and was also listed as the 14th largest insurance

company in the world.

Old Mutual is the largest financial services business in South Africa, through its life

insurance, asset management, banking and general insurance operations. The company serves

4 million life insurance policyholders and employs over 13 000 South Africans in its local

operations.

In the USA, Old Mutual is one of the top ten fixed annuity businesses

offering an array of specialist asset management skills through its 23 asset management

businesses. The companys US Life business recorded sales of $4 billion at the end of 2002.

Operations in the United Kingdom are focused on wealth management, through

Gerrard as one of the leading private client stock broking businesses in the UK.

The Old Mutual Group has the ability to cater for a variety of consumer

segments and offers a comprehensive and innovative range of products for all income groups.

Kotak Mahindra Old Mutual Life Insurance

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A 26%-74% Joint venture between Old Mutual plc and KotaK Mahindra Bank Ltd.

Started operations May 2001

209% growth in premium income (year ending March 2005)

Presence in 55 cities across the country

More than 1,60,000 policies issue (year ending March 2005)

More than 7000 Life Advisors ( year ending March 2005)

Over 1000 professional employees (year ending March 2005)

44 branches in 31 cities.

7500 life advisors.

1000employees of very good quality.

Ranks 2nd in terms of average premium per policy.

Ranks 4th in total advertising awareness.

First year premium income:

2001-02: 7Crores

2002-03: 35Crores

2003-04: 125Crores

2005-06: 373Crores

2006-07: 396Crores

2007-08: 614Croeres

AWARDS

2003

Best equity House in India by Euro Money

Best Equity House in India by Asia Money

2004

Indias Best Equity House in India by Finance Asia

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Best Equity House in India by Euro Money

Best Equity House in India by Asia Money

Best India Equity House by IFR

2005

Best Broker in India by Finance Asia

Best Equity House in India by Euro money

2006

Ranked no.1 in six categories in the Annual Euro money Private Banking

Survey Poll for 2006 for India

Best Investment Bank in India by Finance Asia

Ranked #1 in the league table for Book runner/Lead Manager in public equity

offerings in terms of the value of transaction completed during fiscal 2006

according to Prime Database

Best Broker In India by Finance Asia

Topped the best Mutual Fund House in the NDTV Business Leadership

Awards2006

Best Bond Fund Group Over Three Years by Lipper Fund Awards India

Ranked the best debt fund over 5 years by lipper for the Kotak Bond Regular

Plan

Ranked ICRA- MFRI and was the recipient of the Silver Awards by ICRA for the

Kotak Bond Regular Plan

2007

Most Popular Inventor Relation Website for the Asia/Pacific Region Conducted by IR

Global Rankings

Emerged winner in 16 categories in the Euro money Private Banking Poll2007,

including the Best local Private Bank.

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Problem Identification:

The basic step of any research is to find out the problem of the company, the problem

may be inside in the company or outside of the company. Well Defined problem is half

solved. The researcher has defined the problem of the organization which is converted in to

the study topic.

To study the organizational activities of all the department with the help of

secondary as well as primary data collection method

Objective:

The main of the present study of is accomplish the following objective.

Proper understanding and analysis of life insurance industry.

To know about brand awareness of Kotak Life Insurance and customers

preference about Kotak Life Insurance.

Conduct market survey on a sample selected from the entire population and

derived opinion on that research.

According the market survey come know about how much potential of

insurance market in our city.

And base on analysis of the result thus obtained make a report on that

research.

Training aims at recruiting maximum number of Life Advisors and to Sell the

maximum policies for the company and bring the business for the company

which ever is going at the particular point of time.

Along with it I will be gaining the thorough knowledge of insurance sector.

This will give me in more confidence in marketing products given to me.

As the Kotak Life Insurance well reputed company in India its great chance

for me to observed different products launch by other competitor companies

like ICICI prudential, Bajaj alliance ,LIC, Max New York life etc. In all, it is

to understand the overall working of the Life insurance sector.

The objective behind the project is as follows:

To find the right candidate.

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To about their family background, occupation, social relation, Qualification,

Age.

Finalize candidates for the IRDA training

Limitation:

Some of the difficulties and limitations faced by me during my training are as follows:

Lack of awareness among the people This is the biggest limitation

found in this sector. Most of the people are not aware about the importance and the

necessity of the insurance in their life. They are not aware how useful life insurance

can be for their family members if something happens to them.

Perception of the people towards Insurance sector People still

consider insurance just as a Tax saving device. So today also there is always a rush to

buy an Insurance Policy only at the end of the financial year like January, February

and March making the other 9 months dry for this business.

Insurance does not give good returns Still today people think that

Insurance does not give good returns. They are not aware of the modern Unit Linked

Insurance Plans which are offered by most of the Private sector players. They are still

under the perception that if they take Insurance they will get only 5-6% returns which

is not true nowadays. Nowadays most of the modern Unit Linked Insurance Plans

gives returns which are many times more than that of bank Fixed deposits, National

saving certificate, Post office deposits and Public provident fund.

Lack of awareness about the earning opportunity in the Insurancesector People still today are not aware about the earning opportunity that the

Insurance sector gives. After the privatization of the insurance sector many private

giants have entered the insurance sector. These private companies in order to beat the

competition and to increase their Insurance Advisors to increase their reach to the

customers are giving very high commission rates but people are not aware of that.

Increased competition Today the competition in the Insurance sector

has became very stiff. Currently there are 14 Life Insurance companies working in

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India including the LIC (life insurance Corporation of India). Today each and every

company is trying to increase their Insurance Advisors so that they can increase their

reach in the market. This situation has created a scenario in which to recruit Life

insurance Advisors and to sell life Insurance Policy has became very very difficult.

RESEARCH METODOLOGY

Research always starts with a question or a problem. Its purpose is to question

through the application of the scientific method. It is a systematic and intensive study

directed towards a more complete knowledge of the subject studied. Marketing research is the

function which links the consumer, customer and public to the marketer through information-

information used to identify and define marketing opportunities and problems generate,

refine, and evaluate marketing actions, monitor marketing actions, monitor marketing

performance and improve understanding of market as a process.

Marketing research specifies the information required to address these issues, designs, and

the method for collecting information, manage and implemented the data collection process,

analyses the results and communicate the findings and their implication.

I have prepared our project as descriptive type, as the objective of the study demands

the answers of the question related to find the potentiality of life insurance in Surat: How

much potential is there in Surat?

The Marketing Research Process

As marketing research is a systemic and formalized process, it follows a certain sequence of

research action. The marketing process has the following steps:

Formulating the problems

Developing objectives of the research

Designing an effective research plan

Data collection techniques

Evaluating the data and preparing a research report

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There are two types of data collection method use in my project report.

Primary data

Secondary data.

For my project, I decided on primary data collection method for observing working of

company and approaching customers directly in the field, tele-calling, cold calling,

campaigning and through references to know their interest in business with company in my

project and also make questionnaire for creating database of business class people is Surat

city for company.

I decided on Secondary data collection method was used by referring to various

websites, books, magazines, journals and daily newspapers for collecting information

regarding project under study.

DATA COLLECTION

.

In our live project, we decided primary data collection method because our study

nature does not permit to apply observational method. In survey approach we had selected a

questionnaire method for taking a customer view because it is feasible from the point of view

of our subject & survey purpose. We conducted 200 sample of survey in our project.

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Marketing practice tends to be seen as a creative industry, which includes

advertising, distribution and selling. It is also concerned with anticipating the customers'

future needs and wants, which are often discovered through market research. Seen from a

systems point of view,sales process engineering views marketing as a set of processes that

are interconnected and interdependent with other functions, whose methods can be improved

using a variety of relatively new approaches

Promoters:

Kotak Mahindra Private Ltd.

Kotak Mahindra Prime Limited (KMPL) is a 100% subsidiary of Kotak

Mahindra Group (Kotak Group) formed to finance all passenger vehicles. The company is

dedicated to financing and supporting automotive and automotive related manufacturers,

dealers and retail customers. The Company offers car financing in the form of loans for the

entire range of passenger cars and multi utility vehicles. The Company also offers Inventory

funding to car dealers and has entered into strategic arrangement with various car

manufacturers in India for being their preferred financier.

As on March 31, 2005, KMP has a retail distribution network comprising of

54 branches (including representative offices) covering about 100 locations in 17 states in the

country and has a wide network of Direct Marketing Associates, brokers and agencies

supporting the distribution network and servicing around 113,000 customers.

Kotak Mahindra Bank Ltd.

Kotak Mahindra Bank Limited (KMBL) is the holding company and the

flagship of the Kotak Mahindra Group. It was actually incorporated as Kotak Capital

Management Finance Limited on November 2, 1985 and obtained its Certificate of

Commencement of Business on February 11, 1986.

It commenced operations with Bill Discounting and soon started other fund-

based activities like corporate leasing & hire purchase, automobile finance and money market

operations. Subsequently, it also entered the funds syndication and the Investment banking

business.

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Old Mutual Plc

It has been developed into an International financial services group whose

activities are focused on asset gathering and asset management. The Old Mutual Group offers

a diverse range of financial services in three principal geographies: South Africa, the UnitedStates and the United Kingdom. The company is listed on the London Stock Exchange with a

market capitalization of approximately $6 billion and is a member of the elite FTSE 100

index. In the 2003 rankings of the World's 500 largest corporations by Fortune magazine, Old

Mutual climbed 87 places to position number 366 and was also listed as the 14th largest

insurance company in the world.

Old Mutual is the largest financial services business in South Africa, through

its life insurance, asset management, banking and general insurance operations. The company

serves 4 million life insurance policyholders and employs over 13 000 South Africans in its

local operations.

In the USA, Old Mutual is one of the top ten fixed annuity businesses offering an array

of specialist asset management skills through its 23 asset management businesses. The

companys US Life business recorded sales of $4 billion at the end of 2002.

Operations in the United Kingdom are focused on wealth management,

through Gerrard as one of the leading private client stock broking businesses in the UK.

Distribution

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Kotak life has one of the largest distribution networks amongst private life

insurers in India. It has a strong presence across India with over 2000 branches (including

1,095 micro-offices) and an advisor base of over 261,000 (as on August 31, 2008).

The company has 24 bank assurance partners having tie-ups with ICICI

Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon Peoples Co-

op Bank, Ernakulam District Co-op Bank, Idukki District Co-op Bank, Ratnagiri Sindhudurg

Gramin Bank, Solapur Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin

Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani Gramya Bank,

Ratnagiri District Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative

Bank, Baramati Co-operative Bank, Ballia Kshetriya Co-Operative Bank, The Haryana State

Co-Operative Bank, Renuka Nagrik Sahakari Bank, Amanath Co-Operative Bank, Arvind

Sahakari Bank, Bhandara Urban Co Operative Bank.

SALES DISTRIBUTION:

Tied Agency:

Tied Agency is the largest distribution channel of Kotak Life, comprising a

large advisor force that targets various customer segments. The strength of tied agency lies in

an aggressive strategy of expanding and procuring quality business. With focus on sales &

people development, tied agency has emerged as a robust, predictable and sustainable

business model.

Bank assurance and Alliances:

Kotak life was a pioneer in offering life insurance solutions through banks and

alliances. Within a short span of two years, and with nearly a large number of partners, B &

A has emerged as a vital component of the companys sales and distribution strategy,

contributing to approximately one third of companys total business. The business philosophy

at B&A is to leverage distribution synergies with our partners and add value to its customers

as well as the partners. Flexibility, adaptation and experimenting with new ideas are the

hallmarks of this channel.

SALES STRETAGY

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Kotak life insurance has a great strategy for sales department. Company has a three

type of strategy for sales and that are as follow:

COMPANY STRETEGY:

Now company applies the project Turning Point and in this project to decide the selection

criteria forLIFE ADVISORand life advisor is the basic requirement for sale the policy. The

selection criteria for advisor are:

Like:-

Agent age > 30 for male LA, and >25 for female

Agent income 5 lakhs

Agent stay in city belong > 5 years

Family back ground strong.

Minimum graduate

Either 2 years experience or post graduate refresher

EXTERNAL STRETEGY:

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Kotak life insurance external strategy is To make limited branches but, to perform

productive so that company to reduce the cost.

INTERNAL STRETEGY:

Kotak Life Insurance Company has internal strategy like,

Rewards & Recognisation:

SLAB NO OF POLICIES REWARDS

LEVEL 1 2 Reebok Travel Bag Combo

LEVEL 2 4 Cordless Phone

LEVEL 3 6 Vacuum Cleaner

LEVEL 4 10 Oven Toaster Grill

LEVEL 5 15 Nokia Xpress Music Mobile Phone

LEVEL 6 20 Philips Home Theatre With DVD Player

Market Share:-

Life Insurance Companys Market share Based On premium in India.

2001-02 2002-03 2003-04 2004-05 2005-06

LIC

98% 94% 87% 78% 72%

Private

Players 2% 6% 13% 22% 28%

Industry growth rate at 36% (2004-05) with premium income From new Business.

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38

Company Indian

Promoter/

Partner

Foreign

Insurance

Market share

based on

premium

Aviva life Dabur Aviva, UK 1.12

Bajaj Allianz Bajaj Auto Allianz, Germany 6.12

Birla sun life Aditya Birla group Sun Life, Canada 1.84

HDFC Standard HDFC Standard Life, UK 2.96

ICICI Prudential ICICI Bank Prudential, UK 7.11

ING Vysya Vysya Bank ING Insurance,

Netherlands

0.63

Kotak Mahindra,

Old Mutual

Kotak Mahindra

Bank

Old Mutual South

Africa

0.71

Max New York Max India New York Life, US 1.32

MetLife Jammu & Kashmir

Bank

MetLife, US 0.40

Sahara Life

Insurance

Sahara India None 0.80

SBI Life SBI Cardiff, France 1.52

Tata AIG Tata Group AIG, US 1.78


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Organizations that strive beyond minimum standards and exceed the expectations of

their customers are likely to be leaders in their sector.

Customers are recognized as key partners in shaping service development and

assessing quality of service delivery.

The process for measuring customer satisfaction and obtaining feedback on organizational

performance are valuable tools for quality and continuous service improvement.

Insurance Solutions for Individuals:

Kotak Life Insurance offers a range of innovative, customer-centric products that meet the

needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to

create a customized solution for each policyholder.

ProtectionHelping you to grow and protect

your wealth.

Savings & InvestmentsManage today for a better

tomorrow.

Retirement

The road to retirement, Make it

easy

Child

Plan a good future for your

child.

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Protection Plans:

Kotak Loan Protection Plan:

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

Kotak Term/Preferred Term Plan:

The Kotak Term/Preferred Term Plan is a pure risk cover plan that provides you with a

high level of protection at nominal costs.

Kotak Eternal Life Plans :

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

protection till the golden age of 99.

Savings & Investment Plans:

Kotak Platinum Advantage plus:Youve lived life on your own terms; always done what youve believed in. You are used

to having the luxury of choice and the power to control.

Kotak Smart Advantage:Kotak Smart Advantage is an intelligent unit-linked plan that is based upon the idea of

regular savings and systematic accumulation of wealth in the long term.

Kotak Safe Investment Plan:

Kotak Safe Investment plan is the ideal investment plan for you with its unique Seal of

Guarantee offer that not just gives you the best of bull markets but also eliminates any capital

loss in falling markets.

Kotak Flexi Plan:Kotak flexi plan offers you an ideal market-linked investment plan that helps you create

your own financial future by offering you the flexibility and control over your money.

Kotak Platinum Advantage Plan:

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Kotak Platinum Advantage Plan features capital protection, embedded investment

advice, life cover and aggressive market linked growth options.

Kotak Easy Growth Plan:Kotak Easy Growth plan, a single premium investment plan that generates value for you

for whole life as well as provides protection to your family in case of unforeseen events.

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

returns even beyond maturity.

Kotak Money Back Plan:This plan offers the key benefit of cash lump sums at periodic intervals of five years

ensuring that you are able to meet any of your financial obligations.

Kotak Endowment Plan:Kotak Endowment Plan is a participating endowment plan that provides you an avenue

for long term regular investments to accumulate a lump sum on maturity.

Kotak Premium Return Plan:The premium Return Plan will get you the dual benefit of a risk cover and savings, with

minimal paperwork and procedures.

Kotak Sukhi Jeevan Plan:

Sukhi Jeevan is a long-term savings and protection plan that keeps pace with your

changing needs at every step of life.

Retirement Plans:

Kotak Secure Retirement Plan:An ideal retirement solution is one that gives you complete flexibility and peace of mind,

not only while you save for your retirement but also after you retire.

Kotak Retirement Income (Unit Linked):Kotak Retirement Income Plan is an ideal retirement solution that gives you complete

flexibility and peace of mind, not only while you save for your retirement but also after you

retire.

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

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

Kotak Long Life Wealth Plus :Kotak Long Life Wealth Plus is an intelligent investment plan that helps you builds your

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

investment growth

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

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

Child Plans:

Kotak Head start Child Plans:The head start child plans are specially tailored, cost effective plans that aim to give your

children the financial means to pursue his or her dreams

Kotak Child Advantage Plan:The Kotak Child Advantage Plan is an investment plan designed to meet your child's

future financial needs.

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Stages in Policy Issuance

1) Proposal

A Proposal Stage is the First stage before the policy is issued at COPS. At this stage, theapplication form is received by COPS, but it is pending for issuance due to further

clarifications required from the customer.

2) Login

A proposal which is complete i.e., duly filled with all necessary documents attached to it &

accepted by the Branch ops, is called a Login

3) Reject

An Application gets rejected at the Branch Ops level due to necessary details not filled in the

form or necessary documents not submitted is a Reject. It is then sent back to the Advisor for

completion.

4) Issuance

Issuance means a policy that is issued to the Customer by Central Ops.

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5) Decline Status

When a customer refuses to take a policy post login but before Issuance is called a Decline

6) Cancellation

When the cheque given by the customer bounces, it amounts to cancellation of the policy .

7) Lapse

A policy for which the Customer fails to pay subsequent premiums is a Lapsed Policy.

8) Free look

Post issuance of the policy, the policyholder has the option to turn down the policy within 15days from the date of issuance. This period of 15 days is called Free look Period.

9) Surrender

When a customer wants to discontinue with the policy.

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DEFINITION OF AN AGENT

According to section 182 of the Indian contracts act, an agent is a person employed to

do any act for another or to represent another in dealing with a third person. In the insurance

industry, the term agene is ordinarily applied to a person engaged by the insurer to procure

new business. The insurance act defines an insurance agent as one who is licensed under

section 42 of that act and is paid by way of commission or otherwise, in consideration of his

soliciting or procuring insurance business, including business relating to the continuance ,

renewal or revival of policies of insurance. He is, for all purposes, an authorized salesman for

insurance and needs a licence.

In pursuance of strengthening the human resources of the IRDA, a comprehensive

induction plan for recruiting professionals with specialized qualifications and back ground

was embarked upon. Eight officers in the Actuary department joined the IRDA in the months

of August/September, 2007. Process of inducting more officers has also started

Simultaneously.

The Authority, jointly with Andhra Pradesh Government, handset up an Institute of

Insurance and Risk Management (IIRM) at Hyderabad in 2002. IIRM aims to serve the

learning and development needs of emerging markets in the context of their contemporary

challenges. IIRM is overseen by Board of Directors headed by Chairman of the Authority. It

continues to cater to the needs of the industry by way of providing diversified range of

courses, including Post-Graduate Diploma in General Insurance, Life Insurance and Risk

management. The IIRM courses are accredited by Chartered Insurance Institute, London. The

International School for Actuarial Science (ISAS) has started functioning under the aegis of

IIRM to achieve the objectives of IRDA to enhance the availability of qualified skill

resources to the insurance industry.

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Procedure for Becoming An Agent

(1) Qualifications of the applicant.

The applicant shall possess the minimum qualification of a pass in 12 th

standard or equivalent examination conducted by any recognized Board/Institution, where the

applicant resides in place with a population of five thousand or more as per the last census,

and a pass in 10th standard or equivalent examination from a recognized Board/Institution if

the applicant resides in any other place.

(2) Practical Training

1) The applicant shall have completed from an approved institution, at least,

one hundred hours practical training in life or general insurance business, as the case may

be, which may be spread over three to four weeks, where such applicant is seeking licence for

the first time to act insurance agent.

Provided that applicant shall have completed from an approved institution,

at least, one hundred fifty hours practical training in life and general insurance business,

which may be spread over six to eight weeks, where such applicant is seeking licence for the

first time to act as a composite insurance agent.

2) Where the applicant, referred to under sub-regulation (1), is-

A. An Associate/Fellow of the Insurance Institute of India,Mumbai;

B. An Associate/Fellow of the Insurance Chartered Accountants of India, New Delhi;

C. An Associate/Fellow of the Insurance of Coasts and Works Accountants of India,

Calcutta;

D. An Associate/Fellow of the Insurance of company secretaries of India, New Delhi;

E. An Associate/Fellow of the actuarial Society of India, Mumbai;

F. A Master of Business Administration of any Institution/University recognized by any

State Government or the Central Government; or

G. Possessing any professional qualification in marketing from any institution/Universityrecognized by any State government or the Central Government-

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He shall have completed, at least, fifty hours practical training from an approved institution.

Provided that such applicant shall have completed from an approved institution, at least,

seventy hours practical training in life and general insurance business, where such applicant

is seeking license for the first time to act as a composite insurance agent.

3) An applicant, who has been granted a licence after the commencement of

these regulations, before seeking renewal of licence to act as an insurance agent, shall have

completed, at least twenty-five hours practical training in life or general insurance business,

as the case may be, from an approved institution.

Provided that such applicant before seeking renewal of licence to act as a composite

insurance agent shall have completed from an approved institution, at least, fifty hours

practical training in life and general insurance Business.

(3) Examination.

The Applicant shall have passed the pre-recruitment examination in life or

general insurance business, or both, as the case may be, conducted by the Insurance Institute

of India, Mumbai, or any other examination body.

(4) Fees payable

1) The fees payable to the authority for issue or renewal of licence to act as insurance

agent or a composite insurance agent shall be rupees two hundred and fifty.

2) The additional fees payable to the authority, under the circumstances mentioned in

sub-section (3) of section 42 of the act, shall be rupees one hundred.

(5) Code of conduct

1) Every person holding a licence, shall adhere to the code of conduct specified below:

i. Every insurance agent shall,-

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a. Identify himself and the insurance company of whom he is an insurance agent;

b. Disclose his licence to the prospect on demand;

c. Disseminate the requisite information in respect of insurance products offered for sale

by his insurer and take into account the needs of the prospect while recommending a

specific insurance plan;

d. Disclose the scales of commission in respect of the insurance product offered for sale;

e. Indicate the premium to be charged by the insurer for the insurance product offered

for sale;

f. Inform promptly the prospect about the acceptance or rejection of the proposal by the

insurer;

g. Render necessary assistance to the policyholder or claimants or beneficiaries in

complying with the requirements for settlement of claims by the insurer;

h. Advice every individual policyholder to effect nomination or assignment or change of

address or exercise of options, as the case may be, and offer necessary assistance in

this behalf, wherever necessary;

ii. No insurance agent shall,-

a. Solicit or procure insurance business without holding a valid licence;

b. Induce the prospect to omit any material information in the proposal form;

c. Induce the prospect to submit wrong information in the proposal form or document

submitted to the insurer for acceptance of the proposal;

d. Interfere with any proposal introduced by any other insurance agent;

e. Demand or receive a share of proceeds from the beneficiary under an insurance

contract;

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f. Force a policyholder to terminate the existing policy and to effect a new proposal

from him within three years from the date of such termination;

g. Apply for fresh licence to act as an insurance agent, if his licence was earlier

cancelled by the designated person, and a period of five years has not elapsed from

the date of such cancellation;

h. Every insurance agent shall, with a view to conserve the insurance business already

procured through him, make every attempt to ensure remittance of the premiums by

the policyholders within the stipulated time, by giving notice to the policyholder

orally and in writing;

(6) Cancellation of licence

The designated person may cancel a licence of an insurance agent, if the

insurance agent suffers, at any time during the currency of the licence, from any of the

disqualifications mentioned in sub-section (4) of section 42 of the act, and recover from him

the licence and the identify card issued earlier.

(7) Issue of duplicate licence

The authority may issue a duplicate licence replace a licence lost, destroyed, or

mutilated on payment a fee of rupees fifty.

(8) Non-application to existing insurance agents

Nothing contained in regulations 4 to 6 of these regulations shall apply to

the existing agents before the commencement of these regulations.

(9) Repeal and savings

From the date of coming into force of the insurance regulatory and

development authority (licensing of corporation agents) regulations 2002, the insurance

regulatory and development authority (licensing of insurance agents) regulations 2000 or any

part thereof applying to corporate agents shall cease to have any effect, except as respects

things done or omitted to be done there under.

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Methods of Remunerating Agents

1. A life insurance agent works on commission basis. He is paid a percentage of the

premium collected through his agency. Section 40a(1) of the insurance act stipulates that the

maximum amount which can be paid to a life insurance agent, by way of commission or

remuneration in any form, shall be 35% of the first years premium,7 1/2% of the second and

third years renewal premium and 5% of subsequent renewal premium.

2. The insurance act provides, in section 44, for payment of commission on renewal

premium even after termination of the agency. The commission will be limited to a rate notexceeding 4%. To be eligible for this, the agent should have been an agent with that insurer

for at least (1) five years and policies for at least Rs 50ooo are in force one year before

termination of agency or (2) 10 years. This commission will be payable to the heirs of the

agent after the agents death. This is a unique facility which few other professions enjoy.

FUNCTION OF AN AGENT

1. The agents main function is to solicit and procure life insurance business for the

insurer, which has appointed him for that purpose. At the same time, he is trusted by the

prospect to advice him suitably, keeping his circumstances and needs in mind. He is thus, in

the unique roll of a person trusted by both parties to the transaction. His would require him to

Understand the prospects needs and persuade him to buy a plan of life insurance that

suits his interests best

Complete the formalities ( paper work, medical examination ) necessary to get the

policy expeditiously

Keep in touch to ensure that changing circumstances are reflected in the arrangement

relating to premium payments, nomination and other necessary alterations

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Facilities quick settlement of claims

Be totally honest with both the prospect and the insurer.

2. The regulation framed by the IRDA lays down a code of conduct which incorporates

some of these concepts. The code says interalia that the agent shall

Identify himself and the insurance company of which he is an agent

Disclose the licence to the prospect on demand

Explain all available options to the prospect

Recommend a suitable plan taking into account the needs of the prospect

Explain the nature and importance of the information required in the proposal form

Inform the insurer about any material facts, including habits, that could adversely

affect the underwriting decision

Not to induce prospects to submit wrong information

RESPONSIBILITIES OF AN AGENT:

1. An agent, individual or corporate, is the main component of the distribution channel

for the life insurance business. He would be required to solicit and procure new life and

insurance business, in a manner that is consistent with the interests of the policyholders of the

insurance company. For this purpose, for this purpose, he would have to do the following.

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Contact prospects for life insurance, study their needs and persuade them to buy.

Complete all related formalities, including filling up proposal forms, collecting

premium, arranging medical examination, collecting proofs (of age or income), reports and

other information required by the underwriter.

2. After having sold a new insurance policy, the agent has to ensure that the policy

continues, without a lapse, till it becomes a claim. The conservation of the policy is in the

interests of all the three persons concerned, the insurer, the policyholder and the agent. For

this purpose, he has to

Keep in touch with the policyholder to make sure that renewal premiums are paid in

time.

Ensure that nomination are made or changed according to changing circumstances

Assist in settlement of the claim, by helping the claimants to complete the necessary

formalities and requirements.

3. In order that he may perform all these tasks well, the agent has to be familiar with

The benefits under the various plans of insurance offered by his insurer.

The office procedures for various matters including the forms and documents. The

main documents have been listed out in an earlier chapter. The forms and procedures will

vary between one insurer and another.

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Ethical Behavior

1. Some characteristics of good ethical behaviors are

Placing the best interests of the client above ones own direct or indirect benefits

Holding in the strictest confidence and considering as privileged, all business and

personal information pertaining to the clients affairs

Making full and adequate disclosure of all facts to enable clients make informed

decisions

2. There could be a likelihood of ethics being compromised in the following situations

Having to choose between two plans, one giving much less commission than the other

Temptation to recommend discontinuance of an existing policy and taking out a new

one

Becoming aware of circumstances that, if known to the insurer, could adversely affect

the interests of the client or the beneficiaries of the claim.

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ORACLES ONLINE SYSTEM FOR EMPLOYEES.

Kotak life insurance provides the best service compare to the others company. Kotak

life insurance provides the services like:

Online salary ship

Loan

Mediclaim

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Taxation

Most important thing is that company provide loan employee when they

are in trouble. They give a loan ofbasic amount multiply with 6 times of basic. And loan

amount fulfill all payment in 20 month at the 8% rate p.a.

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The field offinance refers to the concepts oftime, money and riskand how they are

interrelated. Banks are the main facilitators of funding through the provision of credit,

although private equity, mutual funds, hedge funds, and other organizations have become

important. Financial assets, known as investments, are financially managed with careful

attention to financial risk management to control financial risk. Financial instruments allow

many forms of securitized assets to be traded on securities exchanges such as stock

exchanges, including debt such asbonds as well as equity in publicly-traded corporations.

The main techniques and sectors of the financial industry:-

Finance is used by individuals (personal finance), by governments (public finance),

by businesses (corporate finance), as well as by a wide variety of organizations including

schools and non-profit organizations. In general, the goals of each of the above activities are

achieved through the use of appropriate financial instruments and methodologies, with

consideration to their institutional setting.

Corporate finance

Managerial orcorporate finance is the task of providing the funds for a

corporation's activities. For small business, this is referred to as SME finance. It generally

involves balancing risk and profitability, while attempting to maximize an entity's wealth and

the value of its stock.

Long term funds are provided by ownership equity and long-term credit, often in

the form ofbonds. The balance between these forms the company's capital structure. Short-

term funding orworking capital is mostly provided by banks extending a line of credit.

Another business decision concerning finance is investment, or fund

management. An investment is an acquisition of an asset in the hope that it will maintain or

increase its value. In investment management in choosing a portfolio one has to decide

what, how much and when to invest. To do this, a company must:

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Identify relevant objectives and constraints: institution or individual goals, time

horizon, risk aversion and tax considerations;

Identify the appropriate strategy: active v. passive hedging strategy

Measure the portfolio performance

Financial management is duplicate with the financial function of the

Accounting profession. However,financial accounting is more concerned with the reporting

of historical financial information, while the financial decision is directed toward the future

of the firm.

The Accounts of the Authority for the financial year 2007-08 have been audited

by the Comptroller and Auditor General of India (C&AG). C&AG, in their draft separate

audit report, has advised revision in the accounts due to some wrong classifications. The

same has been carried out. A copy of revised accounts for the year 2007-08 is placed at

Annexure. X. The revised accounts are under submission to C&AG and final report on the

same is awaited.

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of life policies,

(a) Gross 1,208,134 1,246,757

(b) Amount ceded in reinsurance

(c) Amount accepted in reinsurance

Provision for Linked Liabilities 5,080,268 4,221,738

Total (C) 8,020,114 5,888,160

Surplus/(Deficit) (D) = (A) - (B) - (C) 650,098 26,513

Appropriations

Transfer to Shareholders' Account 14,323

Transfer to Other Reserve

Balance being Funds for Future Appropriations 114,584 14,662

SURPLUS/(DEFICIT) AFTER

APPROPRIATION

521,191 11,851

SURPLUS/(DEFICIT) BROUGHT

FORWARD

(484,844) (496,695)

SURPLUS/(DEFICIT) CARRIED FORWARD

TO

BALANCE SHEET 36,347 (484,844)

(a) Interim Bonuses Paid

b) Allocation of Bonus to Policyholders 95,117 54,328

(c) Surplus/(Deficit) shown in the Revenue

Account

521,191 11,851

(d) Total Surplus: [(a) + (b) + (c)] 616,308 66,179

Form A-PL

Profit and Account for the year ended March 31, 2007Shareholders' Account (Non-Technical Account)

(Amounts in thousands of Indian Rupees)

Particulars 31-Mar-08 31-Mar-07

Amounts transferred from Policyholders

Account(Technical Account) 14,323

Income from Investments

(a) Interest, Dividends and Rent

Net of amortization 96,373 65,644

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b) Profit on sale/redemption of investments 16,027 2,484

c) (Loss on sale/redemption of investments) -40,773 -3,874

Other Income (including fund management

fees)

Total (A) 85,950 64,254

Expenses other than those directly related

to the insurance business 2,382 413

Bad debts written off

Provisions (other than taxation)

a) For diminution in the value of

investments (Net)

b) Provision for doubtful debts

(c) Others

Contribution to the Policyholders Fund 1,179,924 499,792

Total (B) 1,182,306 500,205

Profit/ (Loss) before tax -1,096,357 -435,951

Provision for taxation

Current Year

Earlier Year 8,322 8,270

Profit/(Loss) after tax -1,104,679 -444,221

Appropriations

a) Balance at the beginning of the year -1,554,127 -1,109,906

Add: Effect of first time adoption of Revised

AS-15 Employee Benefits -9,271 -1,563,398

(b) Interim dividends paid during the year

c) Proposed final dividend

(d) Tax on dividend distributed

(e) Transfer to reserves/other accounts

Profit/(Loss) carried to the Balance Sheet -2,668,077 -1,554,127

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Form A-BS

Balance Sheet as at March 31, 2008

(Amounts in thousands of Indian Rupees)

Particulars 31-Mar-08 31-Mar-07

Sources of Funds

Shareholders Funds:

Share Capital 3,303,466 2,443,701

Reserves and Surplus 520,363 520,363

Credit/[Debit] Fair Value Change Account Sub-Total 3,823,829 2,964,064

Borrowings

Policyholders Funds:

Credit/[Debit] Fair Value Change Account 521 150,463

Policy Liabilities

Participating 3,097,235 2,122,799

Non-participating 501,753 404,444 Annuities Participating 251,545 194,565

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Annuities Unit-Linked Non-Participating 236 255

Unit-Linked Non-Participating 172,419 92,992

Insurance Reserves

Participating

Non-Participating -96,870

Annuities Participating 36,347 11,851

Annuities, Unit-Linked Non-Participating 747

Unit-Linked Non-Participating (400,572)

Linked Liabilities 12,025,83

2

6,767,957

Fair Value Change 619,615 797,222

Total Provision for Linked Liabilities 12,645,447 7,565,179

Sub-Total 16,705,503 10,045,853

Funds for Future Appropriation:-Linked

Liabilities

129,246 14,662

Others 1,009 1,009

Total 20,659,587 13,025,588

Application of Funds

Investments

Shareholders 853,836 656,985

Policyholders 4,026,888 2,975,227

Assets Held to Cover Linked Liabilities 12,774,710 7,579,841

Loans 23,168 7,245

Fixed Assets 242,790 183,626

Current Assets

Cash and Bank Balances 1,248,644 570,984

Advances and Other Assets 444,163 343,225

Sub-Total (A) 1,692,807 914,209

Current Liabilities 1,551,719 818,943

Provisions 70,969 26,729

Sub-Total (B) 1,622,688 845,672

Net Current Assets (C) = (A B) 70,119 68,537

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Miscellaneous Expenditure

(To the extent not written off or adjusted)

Debit Balance in Profit and Loss Account

(Shareholders Account) 2,668,077 1,554,127

Total 20,659,587 13,025,588

INTERPRETATION:

We caneasily understand to show the above balance sheet in year 2007 companys

total balance 13,025,588, while in year 2008 companys total balance increase and become it

20,659,587. It means companys balance Increase is 7,633,999.

WORKING CAPITAL MANAGEMENT

Working capital refers to that part of the firms capital which is required for

financing short-term or current assets, such as, cash, marketable securities, debtors,

inventories, bills receivable etc. the assets of this type are relatively temporary in nature.

Unfortunately, there is much disagreement among financiers, accountant, economics and

businessmen as to the exact meaning of the team working capital

However, working capital is also known as circulating capital or short term

capital. Working capital can be derived by the deference between current assets and current

liabilities of the firm.

GROSS WORKING CAPITAL= TOTAL CURRENT ASSETS

WORKING CAPITAL= CURRENT ASSETS CURRENT LIABILITIES

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relationships between individual values and relate them to how a company has performed in

the past, and might perform in the future.

Ratio analysis is the method or process by which the relationship of items or groupof items in the financial statement are computed, determined and presented.

CURRENT RATIO:

Meaning:

This ratio compares the current assets with the current liabilities. It is also known as working

capital ratio or solvency ratio. It is expressed in the form of pure ratio.

E.g. 2:1

CURRENT RATIO = Current Assets / Current Liabilities.

Particular 31-MAR-

08

31-MAR-

07

Current Assets

Cash and Bank Balances 1,248,644 570,984

Advances and Other Assets 444,163 343,225

Sub-Total (A) 1,692,807 914,209

Current Liabilities 1,551,719 818,943

Provisions 70,969 26,729

Sub-Total (B) 1,622,688 845,672

For year 2008

Current Ratio = C.A / C.L

= 1,692,807 / 1,622,688

= 1.04

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For year 2007

Current Ratio = C.A / C.L

= 914,209 / 845,672

= 1.08

INTERPRETATION

The current ratio in the year 2008 has decrease the current ratio as compare

to the year 2008 in steadily it indicates good liquidity of current assets.

TURNOVER RATIO / INTEREST COVERAGE RATIO / ACTIVITY RATIO

INTEREST COVERAGE RATIO = Profit before Interest and Tax / Interest

Particular 31-MAR-

08

31-MAR-

07

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Profit before tax 1,096,357 435,951

Less

Interest 96,373 65,644

Profit before interest & tax 999,984 370307


FOR YEAR 2008


=999,984 / 96,373

= 10.38%

FOR YEAR 2007


= 370,307 / 65,644

=5.64%

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INTERPRETATION:

The current ratio in the year 2008 has decrease the current ratio as compare the year

2007 it mean that company has done less investment in interest coverage ratio or turnover

ratio.

PROPRIETORY RATIO

Proprietary ratio = Proprietary funds / Total assets

Particular 31-MAR-08

31-MAR-07

Proprietary fund:

Share capital 3,303,466 2,443,701

Reserve & surplus 520,363 520,363

Subtotal (A) 3,823,829 2,964,064

Fixed Assets 242,790 183,626

Current Assets 1,692,807 914,209

Subtotal (B) 1,935,597 1,097,835Total (A B) 1,888,232 1,866,229

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For year 2008


= 1,888,232 / 1,935,597

= 0.98%

For year 2007


= 1,866,229 / 1,097,835

= 1.70%

INTERPRETATION:

The current ratio in the year 2008 has decrease the current ratio as compare the year

2007. It means that company has done loss situation in proprietary ratio.

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STRENGTHS:

I. Financial Acumen - Holds a stable and diversified portfolio and has received some

of the highest ratings in financial strength from industrys independent rating

agencies.

II. Disciplined fund management- Years of experience in asset management, and a

strong track record in managing funds - backed by the acclaimed expertise of Old

Mutual plc

III. Innovativeness- Known for being an innovator in providing world-class pragmatic

financial solutions, with a constant focus on customization and flexibility

IV. Unrelenting Customer Focus - A highly committed sales force, with customer

satisfaction as the key driving force - a major differentiator

V. Transparency in Services - Daily declaration of fund performances, regular

performance benchmarking, well regulated asset management, and monthly

newsletter on market updates

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WEAKNESSES:

Industry in nascent stage.

Rural areas still not covered.

Not very known among Indian population.

Lack of credibility among the people because Kotak being a private player.

Premiums are high as compared to its competitors.

Very few branches in the country.

Products:

The policy doesnt have the surrender option before third year.

Plan does not offer any guarantee or assured return.

Product profile is not very comprehensive.

Mortality, management and administrative charges are sky scrapping as

compared to its competitors.

OPPORTUNITIES:

Liberalization of Indian economy.

As the industry is growing the whole market is virgin.

The whole private sector is opened to be trapped even though the competition is fierce

from government owned insurance companies.

Its a volume business that is even if the company has few good corporate the

turnover cease to increase by manifold.

Products:

Preserver funds look good due to comfortable liquidity in the economy and

there is little chance hike in short-term rate by RBI.

Finance minister unveiled a budget favoring consumer spending, boosting

demand and therefore higher economic growth.

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THREATS

The government players will become aggressive thus growth is going to be tough.

Entry of other players is not ruled out.

Apprehension towards Kotak being a private life insurance company.

We expect the industry to rationalize in future that is mergers and acquisitions will

happen, which will impact the industry and Kotak life fortunes.

Products:

Past performance of these plans is not indicative of the future performance of

the plan.

The sum invested in the funds is subject to market risks and there can be no

assurance that the objective of plan will be achieved.

All benefits payable under the policy are subject to tax laws and other

financial enactment, as they exist from time to time.

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CONCLUSIONCONCLUSION

After overhauling the all situation that boosted a number of Pvt. Companies associated with

multinational in the Insurance Sector to give befitting competition to the established

behemoth Kotak in private sector, we come at the conclusion that

There are very tough competitions among the private insurance companies on the

level of new trend of advertising to lull a major part of Customers.

Kotak is not left be

A Project Report on Kotak Insurance

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