INTRODUCTION Analysis of employee mobility is a vital part of the management process. The obtaining and recording of costs, number of people leaving, types of employees who are terminating, why they are separating from the company, are all indicative factors to the management of its quality of operation. Without this analysis, management is overlooking one of the most important factors of production with which it must cope. The nature of the employees also has important effects. The relationship between employee characteristics and the pattern of employee separations can have profound effects on organizational goals. Mobility of employees among organizations and between functional submits within a given organization, confronts managers with many interrelated and knotty problems. An attempt made to study the employee separation or employees mobility in Kotak Life Insurance 1
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INTRODUCTION
Analysis of employee mobility is a vital part of the management process. The
obtaining and recording of costs, number of people leaving, types of employees
who are terminating, why they are separating from the company, are all indicative
factors to the management of its quality of operation. Without this analysis,
management is overlooking one of the most important factors of production with
which it must cope.
The nature of the employees also has important effects. The relationship between
employee characteristics and the pattern of employee separations can have
profound effects on organizational goals.
Mobility of employees among organizations and between functional submits
within a given organization, confronts managers with many interrelated and
knotty problems.
An attempt made to study the employee separation or employees mobility in
Kotak Life Insurance
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REVIEW OF LITERATURE
Employee turnover is defined as the ratio of the number of workers that had to be
replaced in a given time period to the average number of workers
The Chartered Institute of Personnel and Development is the United Kingdom's
leading professional body for those involved in the management and
development. It has done a lot of surveys and research on the subject and has
given the below inferences.
In a human resources context, turnover or labor turnover is the rate at which an
employer gains and loses employees. Simple ways to describe it are "how long
employees tend to stay" or "the rate of traffic through the revolving door."
Turnover is measured for individual companies and for their industry as a whole.
If an employer is said to have a high turnover relative to its competitors, it means
that employees of that company have a shorter average tenure than those of other
companies in the same industry. High turnover can be harmful to a company's
productivity if skilled workers are often leaving and the worker population
contains a high percentage of novice workers.
Turnover levels vary very considerably from industry to industry. The highest
levels of turnover (20.4%) are found in private sector organisations. Successive
CIPD surveys of labour turnover show that the highest levels are typically found
in retailing, hotels, catering and leisure, call centres and among other lower paid
private sector services groups. The public sector has an average turnover rate of
13.5%.
Turnover levels also vary from region to region. The highest rates are found
where unemployment is lowest and where it is unproblematic for people to secure
desirable alternative employment.
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The study has also answered the below mentioned questions
1. When does employee turnover become problematic?
2. Measuring employee turnover
3. Measuring employee retention
4. Costing employee turnover
5. Why do people leave organizations?
6. Premature departure
7. Investigating why people leave
The following suggestions were offered for improving employee retention
1. Job previews
2. Make line managers accountable
3. Career development and progression
4. Consult employees
5. Be flexible
6. Avoid the development of a culture of 'presenteeism'
7. Job security
8. Treat people fairly
9. Defend your organization
This project answers the above questions and enumerates in detail the suggestions
offered by the employees in reference to Kotak Life Insurance.
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INDUSTRY PROFILE
The concept of insurance (i.e. That which displays the characteristics of insurance
in the sense of a transfer of risk of loss due to a fortuitous uncertain event in lieu
of payment of consideration/premium), is a marine insurance contract on a ship
“The Santa Clara” dated 1347 in Genoa. The policy is in the Italian language and
appears in the form a maritime loan to avoid the canon (church) prohibition
against usury.
The earliest insurance contracts did not appear in the form of a modern insurance
contract, but rather was drafted in the form of either a fictional sale or loan, until
the insurance contract proper was recognized and accepted.
The earliest insurers were merchants underwriting risks for fellow merchants, on a
part time basis.
Until the 1800-1900’s premiums were not determined by statistics kept etc. as in
the modern sense, but was often arrived at as a result of haggling.
Insurance Industry
First Learn about Insurance may be described as a social device to reduce or
eliminate risk of life and property. Under the plan of insurance, a large number of
people associate themselves by sharing risk, attached to individual.
The risk, which can be insured against include fire, the peril of sea, death,
incident, & burglary. Any risk contingent upon these may be insured against at a
premium commensurate with the risk involved.
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Insurance is actually a contract between 2 parties whereby one party called insurer
undertakes in exchange for a fixed sum called premium to pay the other party
happening of a certain event.
DEFINITION:
A promise of compensation for specific potential future losses in exchange for a
periodic payment, Insurance is designed to protect the financial well-being of an
individual, company or other entity in the case of unexpected loss
Insurance is broadly classified into two categories namely-
1) Life insurance
2) General insurance
Life insurance is the insurance taken against the life of the person, where as
general insurance includes insurance on assets.
Prior to a decade the life insurance was completely under the control of
government; private companies’ entrance added an advantage such as more
services to their customers,
Private insurance companies are MetLife, Bajaj Allianz, Tata AIG
INTRODUCTION
The Concept Of Insurance
The business of insurance is related to the protection of the economic value of an
asset for which a normal life time exists during which it is expected to perform.
However if the asset gets Damaged, Destroyed or is made non functional by the
occurrence of some unfortunate event the owner of the assets suffers .Insurance is
a mechanism to reduce the financial implications of such consequences.
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The mechanism involves people who are exposed to the same risk come together
and agree that if any one of the members suffers a loss the others will share the
loss and make good the loss. Thus people facing common risk come together and
make their contribution towards a common fund whose amount is determined
beforehand on the basis of past data and experiences.
The fundamental underlying principle of insurance is
1. Losses must be definite and discreet in time and place
2. Losses must not be fortuitous accidental in nature and beyond the control of
the insured
3. Losses must be large enough to cause a financial burden
4. Losses must be measurable or calculable and a monetary amount should be
determined to compensate the loss
5. Past history of the specific losses should exist to help the actuaries to estimate
frequency severity and costs involved and determine fair rates of insurance.
6. The cost of insurance should be affordable by the parties and should be a
fraction of the value of the insured Item.
Thus we see that a large number of homogenous units (people, companies,
entitles) with a similar potential for loss exposure must be available for insurance
and this is generally referred to as The Law of large numbers.
Life Insurance
Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear
risk of the caravan trade by giving loans that had to be later repaid with interest
when the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal
status to the practice. That, perhaps, was how insurance made its beginning.
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Life insurance had its origins in ancient Rome, where citizens formed burial clubs
that would meet the funeral expenses of its members as well as help survivors by
making some payments.
As European civilization progressed, its social institutions and welfare practices
also got more and more refined. With the discovery of new lands, sea routes and
the consequent growth in trade, Medieval guilds took it upon themselves to
protect their member traders from loss on account of fire, shipwrecks and the like.
Since most of the trade took place by sea, there was also the fear of pirates. So
these guilds even offered ransom for members held captive by pirates. Burial
expenses and support in times of sickness and poverty were other services
offered. Essentially, all these revolved around the concept of insurance or risk
coverage. That's how old these concepts are, really.
In 1347, in Genoa, European maritime nations entered into the earliest known
insurance contract and decided to accept marine insurance as a practice.
The first step...
Insurance as we know it today owes its existence to 17th century England. In fact,
it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee
House in London, where merchants, ship-owners and underwriters met to discuss
and transact business. By the end of the 18th century, Lloyd's had brewed enough
business to become one of the first modern insurance companies.
Insurance and Myth...
Back to the 17th century. In 1693, astronomer Edmond Halley constructed the.
First mortality table to provide a link between the life insurance premium and the
average life spans based on statistical laws of mortality and compound interest. In
1756, Joseph Dodson reworked the table, linking premium rate to age.
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Enter companies...
The first stock companies to get into the business of insurance were chartered in
England in 1720. The year 1735 saw the birth of the first insurance company in
the American colonies in Charleston, SC.
In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance
corporation in America for the benefit of ministers and their dependents.
However, it was after 1840 that life insurance really took off in a big way. The
trigger: reducing opposition from religious groups.
The growing years...
The 19th century saw huge developments in the field of insurance, with newer
products being devised to meet the growing needs of urbanization and
industrialization.
In 1835, the infamous New York fire drew people's attention to the need to
provide for sudden and large losses. Two years later, Massachusetts became the
first state to require companies by law to maintain such reserves. The great
Chicago fire of 1871 further emphasized how fires can cause huge losses in
densely populated modern cities. The practice of reinsurance, wherein the risks
are spread among several companies, was devised specifically for such situations.
There were more offshoots of the process of industrialization. In 1897, the British
government passed the Workmen's Compensation Act, which made it mandatory
for a company to insure its employees against industrial accidents.
With the advent of the automobile, public liability insurance, which first made its
appearance in the 1880s, gained importance and acceptance?
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In the 19th century, many societies were founded to insure the life and health of
their members, while fraternal orders provided low-cost, members-only insurance.
Even today, such fraternal orders continue to provide insurance coverage to
members as do most labor organizations. Many employers sponsor group
insurance policies for their employees, providing not just life insurance, but
sickness and accident benefits and old-age pensions. Employees contribute a
certain percentage of the premium for these policies.
Life Insurance in India
Although insurance in its present form has been brought to India by the British
and other colonial powers the concept of collective co-operation to share a
particular risk is as old as the dawn of human civilization.
India was a major trading power in ancient times and some examples of sharing
risks can be found such as ships carried cargo of several traders together instead
of a single individual. In the Mogul army a life annuity was granted to the family
on the demise of a soldier against some regular contribution in his life time. The
Joint family system of India is also an embodiment of the same concept.
Early attempts
Life insurance in its modern form came to India from England in 1818 with the
formation of the Oriental Life Insurance Company in Kolkata and with the
passage of time Indians were also covered by this company. By 1868 there were
285 companies operating in India and were primarily into insuring the European
lives, those Indians who were offered were charged an extra premium of 15 to
20% and treated as substandard lives.
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First Indian Company
The first insurance company under the title "the Bombay life insurance society"
started its operations in 1870 and started insuring lives of Indians at standard
rates. Later "oriental Govt. life insurance co." was established in 1874 which
emerged as the leading insurance company in India.
Pre Independence history
With the various freedom movements various leaders encouraged domestic life
insurance companies to enter the fray. In 1914 there were only 44 companies and
in 1940 this number grew to 195.From here on the growth of life insurance was
quiet steady except in 1947-48 during the partition of India.
Nationalization of Insurance Business 1956
After Independence our nation was moving towards a Socialistic pattern of
society and with the main aim of spreading the concept to rural areas and to
channel the money into nation building activities the government of India
Nationalized the life insurance business and formed "The Life Insurance
Corporation of India" by merging about 250 life insurance companies. The Life
Insurance Corporation of India started functioning from 1.9.1956 and is today the
largest insurer in the country with one central office, seven zonal offices and over
2048 branch offices with a workforce of 125000 employees and over 800000 life
insurance agents.
Evaluate your life insurance needs
Life Insurance is one of the most popular savings/ investment vehicles in India.
Ironically, it’s probably the least understood too. An insurance policy offers much
more than just tax planning and investment returns. It offers the ability to plan for
unforeseen events that could affect family's financial profile adversely.
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Factors to consider:
Financial profile and needs are different from person to person, and the same is
true for insurance needs.
However, irrespective of the differences, the number of dependents PH has and
their financial needs are the most important factors to consider.
Issues to consider while evaluating the above factors include:
1) The wealth, income and expense levels of PH dependents,
2) Their significant foreseeable expenses,
3) The inheritance PH would leave on them, and
4) The lifestyle PH wants to provide for them.
How much insurance does a person need?
Obviously the above factors mean nothing to the insurance planning process
unless they are quantified.
Globally, the time-tested approach used by insurance and financial planners is the
capital needs analysis method.
When should you re-evaluate?
Whenever any of the factors discussed above change.
In Step 2, understand the key concepts underlying life insurance.
Risk cover versus investment returns:
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Insurance options range from policies with low premium that offers a PH almost
no returns to those with high premium that effectively offer post-tax returns of
around 8% to 9.5% p.a.
These returns are at the lower end of fixed-income returns available today and
hence are relatively unattractive.
I recommend PH buy an insurance policy skewed towards investment returns only
if you are in the high-tax bracket, prefer to invest in low-risk, fixed-income
options and have exhausted all the other such investment options available.
See Financial Investment Options and Government Schemes Directory for details
of low-risk, fixed-income investment options available.
Whole life versus limited period:
As PH grow older, he may not have as many dependents (his children would
become self-dependent) or his wealth may reach a level where it can support his
dependents’ financial needs in the event of his death.
These possibilities bring us to the interesting question on whether he should
insure himself, for whole life or for a limited term. Obviously, the cost of
insurance for the latter is lower.
I recommend him to insure for whole life only if he never expect his wealth to
reach a level where it can support the financial needs of his dependents.
Tax Planning:
The premium paid for an LIC policy also qualifies for tax rebate under Section 88
of the Income Tax Act. The maximum premium amount that can qualify for
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rebate is Rs60, 000 per annum and you get a rebate equivalent to 20% of the
premium paid, from your tax liability for the year.
In step 3, deals about steps in selecting a life insurance policy.
Understand how much insurance PH need:
This is the single most important factor to evaluate before PH select a life
insurance policy. For this, he must consider the current expense profile of his
dependents and the current wealth level of his family. Also, consider what is his
dependent’s risk tolerance level is. Is he adequately Insured, this planning tool can
take him step-by-step in addressing this issue.
Selecting Premium Paying Term (PPT):
How long he want to pay his insurance premium for? Key factors this decision
could depend upon are -
1) How many years he see himself earning a regular income
2) The level of his regular savings
3) The amount he can commit to paying regularly as insurance premium
4) How long he want to be insured versus how long he expects to pay a premium
for?
Other important questions to ask besides understanding how much insurance he
need and letting his premium-paying term, he need to consider some other
Key factors, such as -
1) Does he want to participate in bonus/ profit share?
2) What is the primary objective of his seeking insurance –
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3) Mainly risk cover, mostly investment returns?
4) Does he want accident cover?
For a detailed understanding of the factors he need to consider while selecting a
life insurance policy, and the rationale for the same, use Insurance Planner.
This planning tool will also take him step by step and arrive him at a shortlist of
life insurance policies appropriate for him, based on his personal profile.
To understand life insurance terms, he can read The Basics of Life Insurance is as
follows....
What is life Insurance?
Life insurance is a contract for payment of money to the person assured (or to the
person entitled to receive the same) on the occurrence of the event insured
against.
Usually the contract provides for -
Payment of an amount on the date of maturity or at specified periodic intervals or
at death, if it occurs earlier.
Periodical payment of insurance premium by the assured, to the corporation who
provides the insurance.
Who can buy a life insurance policy?
Any person above 18 years of age, who is eligible to enter into a
Valid contract. Subject to certain conditions, a policy can be taken on the life of a
spouse or children.
What is a Whole Life Policy?
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When most people think of life insurance, they think of a traditional whole life
policy. These are the simplest policies to understand: You pay a fixed premium
every year based on your age and other factors, you earn interest on the policy's
cash value as the years roll by, and your beneficiaries get a fixed benefit after you
die. The policy takes you into old age for the same premium you started out with.
Whole life insurance policies are valuable because they provide permanent
protection and accumulate cash values that can be used for emergencies or to
meet specific objectives. The surrender value gives you an extra source of
retirement money if you need it.
What is an Endowment policy?
Unlike whole life, an endowment life insurance policy is designed primarily to
provide a living benefit and only secondarily to provide life insurance protection.
Therefore, it is more of an investment than a whole life policy. Endowment life
insurance pays the face value of the policy either at the insured's death or at a
certain age or after a number of years of premium payment.
Endowment life insurance is a method of accumulating capital for a specific
purpose and protecting this savings program against the saver's
premature death. Many investors use endowment life insurance to fund
anticipated financial needs, such as college education or retirement.
Premium for an endowment life policy is much higher than those for a whole life
policy.
What is a Money Back policy ?
This is basically an endowment policy for which a part of the sum assured is paid
to the policyholder in the form of survival benefits, at fixed intervals, before the
maturity date. The risk cover on the life continues for the full sum assured even
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after payment of survival benefits and bonus is also calculated on the full sum
assured. If the policyholder survives till the end of the policy term, the survival
benefits are deducted from the maturity value.
What is An Annuity Scheme?
Annuity schemes are those wherein your regular contributions over a period of
time (or a one-time contribution) accumulate to form a corpus with the insurer.
This corpus is used to yield you a regular income that is paid to you until death
starting from your desired retirement age. Some annuity schemes have the option
to pay your survivors a lump sum amount upon your death in addition to the
regular income you receive while you are alive.
What are With Profit and Without Profit Plans?
The insurer distributes its profits among it policyholders every year in the form of
a bonus/ profit share. An insurance policy can be "with" or “Without” profit. In
the former, any bonus declared is allotted to the policy and is paid at the time of
maturity/ death (with the contracted amount). In a “without” profit plan, the
contracted amount is paid without any profit share. The premium rate charged for
a “with” profit policy is therefore higher than for a "without" profit policy.
What is Bonus?
An insurer distributes its profits among it policyholders every year in the form of
a Bonus. Bonuses are credited to the account of the policyholder and paid at the
time of maturity. Bonus is declared as a certain amount per thousand of sum
assured. The term "bonus" is used interchangeably with "with profit".
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What are guaranteed Additions?
In some policies, the insurer guarantees the bonus/ profit declared as a certain
amount per thousand of sum assured. This assured bonus will be credited to the
policyholder irrespective of the performance of insurance company and is known
as Guaranteed Additions. Guaranteed Additions will be payable at the end of the
term of the policy or early death of the policyholders.
What are Loyalty Additions?
In some policies, over and above Guaranteed Additions, the insurer will declare
and credit to the policyholder, an additional amount per thousand of sum assured
every 5 years, depending on its performance. This additional amount is known as
Loyalty Addition.
What are Survival Benefits?
In some policies, a part of the sum assured is paid to the policyholder in the form
of Survival Benefits, at fixed intervals before the maturity date. The risk cover for
life continues for the full sum assured even after payment of survival benefits and
bonus is also calculated on the full sum assured. If the policyholder survives till
the end of the term, the survival benefits will be deducted from maturity value.
What are Accident Benefits?
On payment of an additional premium of Re1 per Rs1000 of Sum Assured per
year, the assured is entitled to the following benefits:-
In case of accidental death, the nominee shall receive double the sum assured.
In case of total and permanent disability due to accident, risk coverage continues
without further payment of premium. In addition, an amount equal to the sum
assured is paid to the assured in monthly installments spread over 10 years.
However, subsequent accidental death will not entitle the nominee for double the
sum assured.
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What are Disability Benefits?
If the assured becomes totally and permanently disabled due to any accident, he
need not pay future premiums and his policy shall remain in force for the full Sum
Assured.
What are the various modes of payment for premium?
Premiums, other than single premiums, can be paid by the policyholders to the
insurer in yearly, half-yearly, quarterly or monthly installments or through a
Salary Savings Scheme. If the mode of payment is yearly or half-yearly, some
insurers give a rebate of 3% and 1.5% respectively on
the premium. If the mode of payment is monthly, some insurers charge an
additional 5% (this additional charge is waived for the Salary Saving Scheme).
What is Salary Savings Scheme?
Salary Savings Scheme provides for payment of premiums through monthly
deductions by the employer from the salary of employees. For this scheme, the
additional charge of 5% of the premium usually added for the monthly mode of
payments will be waived.
What loans are available against life insurance policies?
At present loans are granted on unencumbered polices as follows -
Up to 90% of the Surrender Value for policies, where the premium due is fully
paid-up, and
Up to 85% of the Surrender Value for policies where the premium due is partly
paid-up.
The minimum amount for which a loan can be granted under a policy is Rs150.
The rate of interest charged is 10.5% p.a., payable half-yearly. Loans are not
granted for a period shorter than six months, or on the security of lost policies (the
assured must have the duplicate policies) or on policies issued under certain plans.
Certain types of policies are, however, without loan facility.
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What is Surrender Value?
The cash value payable by the insurer on termination of the policy contract at the
desire of the policyholder before the expiry of policy term is known as the
surrender value of the policy. Generally, a policy can be
surrendered provided the policy is kept in force for at least 3 years. The bonus is
also added to the surrender value if the policy has been in force, in most cases, for
at least 5 years.
What is a Death Claim?
The claim is usually payable to the nominee/assignee or the legal successor, as the
case may be. However, if the deceased policyholder has not nominated/assigned
the policy or not made a will, the claim is payable to the holder of a Succession
Certificate or such evidence of title from a Court of Law.
What is Nomination/Assignment of a Policy?
When the policy money becomes due for payment on the death of the
policyholder, it can be paid only to that person who is legally entitled to give a
valid and effective discharge to the corporation. If the policy bears nomination,
the claim is settled in favor of the nominee. Similarly, if the policy is assigned, the
assignee receives the claim amount. It should be noted that an assignment of a
policy automatically cancels the existing nomination. Hence, when such a policy
is reassigned in favor of the policyholder, it is necessary to make fresh
nomination.
What are Medical and Non-Medical Schemes?
Life insurance is normally offered after a medical examination of the life to be
assured. However, to facilitate greater spread of insurance and also as a measure
of relaxation, some insurers do offer insurance cover without any medical
examination, subject to certain conditions.
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How do you effect a Change of Address and Transfer of Policy Records?
When a policyholder wants to change his address in the insurer’s records, notice
of such change should be given to the Branch office servicing his policy. Policy
records can be transferred from the Branch Office that services the policy to any
other Branch Office nearest to the policyholder’s place of residence. The correct
address facilitates better services and quicker settlement of claims.
When does a policy lapse?
When the premium is not paid within the days of grace provided after the due
date, the policy lapses. The grace period in case of yearly, half-yearly and
quarterly modes of payment is one month and in case of the monthly mode of
payment, it is 15 days.
How can a lapsed policy be revived?
A lapsed policy may be revived during the lifetime of the assured, but within a
period of 5 years from the due date of the first unpaid premium and before the
date of maturity. Revival of a lapsed policy is considered either on non-medical or
medical basis depending upon the age of the life assured at the time of revival and
the sum to be revived. If the revival of the policy is completed by payment of
over-due premium within 14 days from the expiry of the grace period, only the
late fee for one month has to be paid.
Can a policy be altered?
No alteration is permissible in the policy document - the evidence of contract,
unless both the parties to the contract agree. After the policy is issued, a
policyholder in a number of cases finds the terms not suitable to him/her and
desires to change them to suit his/her convenience. As all insurers also realize that
insurance is a long term contract, certain changes under given circumstances
might necessitate an alteration of the contract. Keeping in view the basic
principles of insurance and administrative convenience, most insurers permit
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some alterations. Though, it is generally found that as a rule, insurers do not
permit alterations resulting in lower rates of premier and within the 1st year from
the commencement of the policy.
What is the difference between Life Insurance and General Insurance?
A Life Insurance deals with various plans connected with the life of a person,
whereas all kinds of non life insurance policies are issued by the General
Insurance companies.
What are the documents to be executed at the time of taking insurance?
A Proposal form should be filled in by the person taking insurance without
concealing any material facts. The values for which insurance is to be taken is
also decide by the party taking insurance. No bills, documentary proofs are taken
by the insurance companies at the time of taking insurance, as the insurance is a
contract of utmost good faith.
Premium is to be given along with the proposal form for completing the insurance
transaction after which the insurance company issues the cover note or policy.
Insurance Sector Reforms
Why it became Inevitable Despite the phenomenal success of The Life Insurance
Corporation of India the government and the public at large were not satisfied
with it and by signing the GATT accord the Government of India was committed
to open up the insurance sector to both domestic and international firms.
A committee under the chairmanship of late Mr. R.N Malhotra was formed (ex
governor RBI) and came to conclude that the monopoly of LIC lead to the lack of
sensitivity towards policy holders and only 22% of the insurable population was
insured.
The committee thus recommended a number of measures to revamp LIC and to
allow foreign companies to operate in India with an Indian partner. It felt that this
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would lead to a greater scope in product innovation and service improvement as
well.
In 1999 the Insurance Regulatory and Development Authority Bill was passed by
the government to facilitate the growth and regulate the newly opened insurance
sector and to guarantee the investments made by the people.
On August 15, 2000 the sector was finally opened for foreign sector participation.
Deregulation came with certain conditions:
Firstly, all new foreign players entering the Indian market must set up a joint
venture with a local company.
Secondly, the maximum share the foreign player can hold is 26%, with the local
company (or companies) holding the balance. Regulators are currently
reconsidering the foreign equity cap of 26%.
Proactive steps taken by the IRDA for development of the market:
1) Market regulation by prudential norms.
2) Registration of players who have the necessary financial strength to withstand the
demands of a growing and nascent market.
3) Implementation of a solvency regime that ensures continuous financial stability.
4) Presence of an adequate number of insurers to provide competition and choice to
the customers.
5) Development of market capacity by asking insurers to retain bulk Of the premium
within the country and to exhaust local market Capacity before reinsuring abroad.
In today’s highly competitive financial services environment, effective
organizations will employ technology in a strategic role to achieve competitive
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edge. Technology will play an increasing role in aiding design and administering
of products, as well in efforts to
Build life-long customer relationships.
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COMPANY PROFILE
Corporate Identity
Kotak Mahindra Bank Ltd. (KMBL)
Kotak was set up in 1994. 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.
With the liberalization of the Indian economy and the opening up of the
financial markets, the Company diversified and started offering a wider spectrum
of financial services.
Old Mutual plc.
Old Mutual plc. Is a leading financial services provider in the world,
providing a broad range of financial services in the area of insurance, asset
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management and banking. It is a leading life insurer in South Africa, with more
than 30% market share. The partnership with Old Mutual plc. Provides the Kotak
Mahindra group with an international perspective and expertise in the life
insurance business.
The Joint Venture
The joint venture OM Kotak Mahindra Life Insurance started off with an
initial net worth of Rs. 150 crore, with 74:26 stake between KMBL and OM. .The
Life Insurance business offers KMBL with an opportunity to leverage its core
strengths of Wealth Management and Retail Distribution.
OM Kotak Mahindra Life Insurance
Kotak Mahindra Old Mutual Life Insurance Limited was established in 2000 as a
joint venture between Kotak Mahindra Bank Ltd. - KMBL (74%) and Old Mutual
plc, London (26%)
Total assets managed by the Kotak Mahindra Group are around USD 9.4 billion.
It is amongst the few banks in India to have a non-profitable asset level of just
0.33%
KMBL was the first non-banking financial company (NBFC) to receive a retail
bank license in 2003
In the life insurance market, Kotak Life Insurance registered an adjusted premium
(single premium: 1/10) growth of over 53% from financial year 2005-06 to
financial year 2006-07
Kotak Life Insurance, with 100 branches in over 68 cities, and a work force of
over 4,100 employees, is a company with a high level of brand awareness
Kotak Life Insurance aspires to a spiralling growth with a strong focus on the
customer, products, mapping of geographic distribution channels and fund
performance
Member of the Swiss Life Network since 2003
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Kotak Mahindra Old Mutual Life Insurance is a 76:24 joint venture between
Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak Mahindra Old Mutual Life
Insurance is one of the fastest growing insurance companies in India and has
shown remarkable growth since its inception in2001.
Old Mutual, a company with 160 years experience in life insurance, is an
international financial services group listed on the London Stock Exchange and
included in the FTSE 100 list of companies, with assets under management worth
$ 400 Billion as on 30th June, 2006. For customers, this joint venture translates
into a company that combines international expertise with the understanding of
the local market.
The Kotak Mahindra Group
Kotak Mahindra is one of India's leading financial conglomerates, 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
corporates.
The group has a net worth of over Rs. 5,609 crore, employees around 17,100
people in its various businesses and has a distribution network of branches,
franchisees, representative offices and satellite offices across 344 cities and towns
in India and offices in New York, London, Dubai, Mauritius and Singapore. The
Group services around 3.6 million customer accounts.
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management
Finance Limited. This company was promoted by Uday Kotak, Sidney A. A.
Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand
Mahindra took a stake in 1986, and that's when the company changed its name to
Kotak Mahindra Finance Limited.
26
Since then it's been a steady and confident journey to growth and success.
198
6
Kotak Mahindra Finance Limited starts the activity of Bill
Discounting
198
7
Kotak Mahindra Finance Limited enters the Lease and Hire
Purchase market
199
0The Auto Finance division is started
199
1
The Investment Banking Division is started. Takes over FICOM,
one of India's largest financial retail marketing networks
199
2Enters the Funds Syndication sector
199
5
Brokerage and Distribution businesses incorporated into a
separate company - Kotak Securities. Investment Banking
division incorporated into a separate company - Kotak Mahindra
Capital Company
199
6
The Auto Finance Business is hived off into a separate company -
Kotak Mahindra Prime Limited (formerly known as 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 Group's entry into information distribution.
199
8
Enters the mutual fund market with the launch of Kotak Mahindra
Asset Management Company.
200
0
Kotak Mahindra ties up with Old Mutual plc. for the Life
Insurance business.
Kotak Securities launches its on-line broking site (now
27
www.kotaksecurities.com). Commencement of private equity
activity through setting up of Kotak Mahindra Venture Capital
Fund.
200
1
Matrix sold to Friday Corporation
Launches Insurance Services
200
3
Kotak Mahindra Finance Ltd. converts to a commercial bank - the
first Indian company to do so.
200
4Launches India Growth Fund, a private equity fund.
200
5
Kotak Group realigns joint venture in Ford Credit; Buys Kotak
Mahindra Prime (formerly known as Kotak Mahindra Primus
Limited) and sells Ford credit Kotak Mahindra.
Launches a real estate fund
200
6
Bought the 25% stake held by Goldman Sachs in Kotak Mahindra
Capital Company and Kotak Securities
Types of benefits:
Coverage available:
Group Life
Accidental Death & Dismemberment (rider)
Accidental Lump Sum Disability (rider)
Critical Illness (rider)
Credit Life
Group Gratuity Scheme
Group Superannuation Scheme
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SPECIAL ADVANTAGES:
Market leader in brokerage, car finance & investment banking
Dedicated to developing unique products with a special focus on product and
service quality
Among the first to offer group insurance products in the Indian market
Extensive nationwide coverage through a direct sales force, brokers, spotters
and frontline sales managers in more than 68 cities
Kotak Life Insurance's value proposition is based on strong corporate
relationships, superior products, extensive marketing skills and quality of
service
The objective of Kotak Life Insurance is to build long-term sustainable business under
regular premium and sustain fund performance in the capital guaranteed segment.
Kotak mahindra deals with different products namely
| | | | BANKING INVESTMENT LOANS CORPORATE
& & & &
SEVICES INSURANCE BORROWINGS INSTITUTIONAL
BANKING A/C LIFE INSURANCE CAR FINANCE CORPORATE
DEMAT MUTUAL FUNDS HOME LOANS FINANCE,
DEPOSITS SHARE TRADING LOANS ON PROPERTY
N R I SERVICES GOLD PERSONAL LOANS TREASURY
CONVINIENCE BANKING REAL ESTATE EQUITIES
Individual Kotak Smart AdvantageKotak Eternal Life Plans Kotak Platinum Advantage
Plan Kotak Headstart Child Plans Kotak Sukhi Jeevan Plan Kotak Privileged Assurance
PlanKotak Term PlanKotak Preferred Term Plan Kotak Money Back PlanKotak Child Advantage PlanKotak Endowment Plan Kotak Capital Multiplier Plan Kotak Retirement Income Plan Kotak Retirement Income Plan
(Unit-linked) Kotak Safe Investment Plan II Kotak Flexi Plan Kotak Easy Growth Plan