The evaluation of insurance dates back as early as the commencement of
trade between two countries in England, especially between the European
countries. During the transportation of goods, there were chances of the ship
being drowned in the rough sea conditions or attacked by the pirates, leading
to a huge loss to the party sending the goods. The traders of England devised
a way whereby the loss of goods would be compensated by every trader
putting in some amount as per their financial strength so that a single party
may not be the loser. This is the earlier concept of insurance. This concept is
taking shape for the last 300 years, yet in India the first insurance company
was established in 1818 with the advent of Europeans widows. The name of
the company was Oriental Life Insurance Company.
With largest number of life insurance policies in force in the world,
Insurance happens to be a mega opportunity in India. It's a business growing
at the rate of 15-20 per cent annually and presently is of the order of Rs 450
billion. Together with banking services, it adds about 7 per cent to the
country's GDP. Gross premium collection is nearly 2 per cent of GDP and
funds available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover
while health insurance and non-life insurance continues to be below
international standards. And this part of the population is also subject to
weak social security and pension systems with hardly any old age income
security. This itself is an indicator that growth potential for the insurance
sector is immense.
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A well-developed and evolved insurance sector is needed for economic
development as it provides long term funds for infrastructure development
and at the same time strengthens the risk taking ability. It is estimated that
over the next ten years India would require investments of the order of one
trillion US dollar. The Insurance sector, to some extent, can enable
investments in infrastructure development to sustain economic growth of the
country.
Insurance is a federal subject in India. There are two legislations that govern
the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance
sector in India has come a full circle from being an open competitive market
to nationalisation and back to a liberalised market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn
witnessed over a period of almost two centuries.
Insurance :
Insurance is a mechanism that ensures an individual to thrive on adverse
consequences by compensating the individual, his/her loss financially. Every
individual in the world and all activities connected with him/her, be it life,
profession, business, travel or any other pursuits are subject to unforeseen
and uncalled for hazards or dangers. The benefit that an individual enjoys in
his life by owning a car or a house or a factory can be snatched by sudden
accident which can render even the individual immobile, and his family
vulnerable. At this critical juncture, only insurance helps him not only to
survive but recover his loss and continue his life in a normal manner, which
would otherwise be unthinkable.
The concept of insurance is quite simple. People, who are in similar trade
and are exposed to the same risks, congregate and some to an agreement that
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if any individual member suffers a loss, then the loss will be shared by
others and minimized in order to enable the individual member recover from
the loss and cover his ground. Similarly the different kinds of risks can be
identified and separate groups can be formed to counter such risks and
reduce the impact to a manageable proportion, in which the share could be
collected from the members either after the loss or in advance, at the time of
admission to the group. This is an exemplary sign of humanity and insurance
therefore serves the mankind to a great extent; a point most of the
individuals tend to overlook, since monetary aspect is involved. Now such is
for tangible assets.
Life Insurance
The head or the breadwinner of the family generally supports the family for
their basic needs, such as, food, clothing and shelter, by bringing income at a
regular interval. So long as he or she lives and the income is received
steadily, the family is secure; but untimely death or disability of that person
puts the family in a very difficult situation, and sometimes in stark poverty.
Uncertainly of death is inherent in human life.
It is the uncertainty that is the risk, which gives rise to the necessity for some
from of protection against the financial loss arising from death. Insurance
substitutes this uncertainty by certainty.
The primary purpose of Life Insurance is the protection of the family.
Insurance in it's various forms protects against such misfortune by having
the losses of the unfortunate few paid by the contribution of the many who
are exposed to the same risk. This is the essence of insurance the sharing of
losses and substitutes of certainty for uncertainty.
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LIFE INSURANCE
With such a large population and the untapped market area of this
population Insurance happens to be a very big opportunity in India. Today it
stands as a business growing at the rate of 15-20 per cent annually. Together
with banking services, it adds about 7 per cent to the country's GDP .In spite
of all this growth the statistics of the penetration of the insurance in the
country is very poor. Nearly 80% of Indian populations are without Life
insurance cover and the Health insurance. This is an indicator that growth
potential for the insurance sector is immense in India. It was due to this
immense growth that the regulations were introduced in the insurance sector
and in continuation ―Malhotra Committee‖ was constituted by the
government in 1993 to examine the various aspects of the industry. The key
element of the reform process was Participation of overseas insurance
companies with 26% capital. Creating a more efficient and competitive
financial system suitable for the requirements of the economy was the main
idea behind this reform. Since then the insurance industry has gone
through many sea changes .The competition LIC started facing from these
companies were threatening to the existence of LIC.since the liberalization
of the industry the insurance industry has never looked back and today stand
as the one of the most competitive and exploring industry in India. The entry
of the private players and the increased use of the new distribution are in the
limelight today. The use of new distribution techniques and the IT tools has
increased the scope of the industry in the longer run.
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Meaning
Life insurance is a contract for payment of a sum of money to the person
assured (or failing him/her, to the person entitled to receive the same) on the
happening of the event insured against. Usually the contract provides for the
payment of an amount on the date of maturity or at specified dates at
periodic intervals or an unfortunate death, if it occurs earlier. Among other
things, the contract also provides for the payment of premium periodically to
the Corporation by the assured. Life insurance is universally acknowledged
to be an institution, which eliminates 'risks', substituting certainty for
uncertainty and comes to the timely aid of the family in the unfortunate
event of the death or of total permanent disability of the breadwinner. By
and large, life insurance is civilization's partial solution to financial
uncertainties caused by untimely death.
Definitions
1 . Tindall Justice, ―The act or system of insuring against death; a
contract by which the insurer undertakes, in consideration of the
payment of a premium (usually at stated periods), to pay a stipulated
sum in the event of the death of the insured or of a third person in
whose life the insured has an interest.‖
2 . Poter Hary, ―Insurance paid to named beneficiaries when the
insured person dies; ‗in England they call life insurance life
assurance'"
Objectives of life Insurance
There are many reasons for investing in life insurance policies, such as:
Protection for the Family
The most important objective of life insurance is to provide financial
protection for the family in case of an unexpected and premature
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death of its breadwinner. The purpose is to protect the dependents
against the loss of earning power of the insured through death or
disability. Those who have insured their lives for an adequate sum can
live in peace and comfort, free of the gnawing worry of what would
happen to their families in the event of their sudden and premature
death. Life insurance has long been recognized as a necessary and
essential element in a family's total financial program.
Regular Savings
Saving is not a physical need, unlike hunger or sleep. Many of us
may not save unless there is compulsion to do so. For such people, life
insurance is a compulsory, regular savings scheme, especially the
monthly salary savings schemes.
Even if you do not subscribe to the salary savings scheme, you can
issue standing instructions to your bankers to pay the premium
regularly without reference to you.
The element of savings in a life insurance contract should be
understood in a proper perspective. Typically, life insurance is made
available on the basis of equated periodical payments. In the initial
years, you tend to pay more compared to the risk factor. Strictly,
speaking, the 'savings' aspect in a life insurance policy should not be
compared with other pure savings media.
Tax Benefits
There is a tax rebate under Section 88 on life insurance premium.
Many investors, especially those in higher tax brackets, used to buy
life insurance mainly to take advantage of these tax benefits.
Additional tax benefits are available under Section 80DD and Section
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80CCC applicable to specific schemes. Hence, attractiveness from the
tax angle has come down.
Advantages of Life Insurance
Protection against risk of untimely death.
Protection during old age
Forced savings
Educational requirements and charity
Nomination and assignment
Marketability and suitability for borrowing.
Loans from the Insurance Company
Tax benefits
Protection to wife and children
Importance of Insurance:
a)
Beneficial to an individual:
1)Insurance provides security and safety. In case of life insurance payment is
made when death occurs or the term of insurance is expired.
2.)Insurance affords peace of mind. A sense of security removes all tensions
and fears. It stimulate to more and better work. By means of insurance much
of the uncertainty that centers round the modern life may be eliminated.
3.)Insurance eliminates dependency. The insurance provides adequate
amount to the dependents at the early death of the property owner to pay off
the unpaid loan.
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4.) Insurance eliminated dependency. In the event of death of the bread
winner of the family or destruction of property, the family suffers a lot. The
insurance assists the family and provides adequate amount at the time of
need.
5) Life Insurance encourages saving. Systematic saving is possible because
regular premium are required to be compulsorily paid. Unlike bank deposits
the deposited insurance premiums can not be withdrawn. Life Insurance is
the best media of saving.
6) Life Insurance provides profitable investment. The elements of
investment i.e. regular saving capital formation and return of the capital are
observed in life insurance. In India in insurance policies carry the exemption
from the income tax and estate duty.
7.)Life Insurance fulfills the needs of a person. The need of a person may be
divided into (i) Family needs, (ii) old age needs, (iii) re-adjustment needs
and(iv) special needs including needs for education, marriage settlement of
children etc. (v) clean up funds for ritual ceremonies, payment of taxes etc.
Insurance comes to help for meeting requirements.
(b) Beneficial to Business:
Insurance has been useful of the business society in more than one way.
(i) It reduces uncertainty of business losses. As a huge number of
properties are employed in commerce and industry equally great risks are
involved in day to day functioning. The owner of the business might foresee
contingencies that would bring great loss. By purchasing a policy he can be
sured of his earnings.
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(ii) Business efficiency is increased with insurance. A businessman gets
free from unnecessary botherations and can devote more care and energy to
maximize his profits.
(iii)Keyman indemnification. Persons having expertise, experience, ability
to control the business are most important for the employers. Death of such
persons prove a more serious loss then that by fire. The compensation to the
dependents of such employers require adequate provision which can be met
by purchasing lifepolicies.
(iv) Addition in credit. The business can obtained loan by pledging the
policy as collateral security for the the loan. As the assets are insured
therefore, in the event of loss the compensation can be paid.
(v)Business Continuation. The partnership business may be discontinued at
the death of a partner. The insurance policy provide adequate funds at the
time of death therefore, the legal representative can be paid easily.
(vi)Employee Welfare. Provision for welfare for employees can be made by
the life insurance in case of accident or sickness benefit and pensions.
(c) Beneficial to Society:
(i) Wealth of society is protected. Insurance provides loss of human
wealth. Loss of damage of property can also be indemnified by the insurance
company.
(ii) Economic growth of the company. As insurance provides protection
against loss of property thus, if any such damage arise the assets can be
replaced without loss of production thus,Economic development of the
country is not effected.
(iii) Accelerate the production growth. Adequate capital from Insurance
company can accelerate production circle in the country. Economic growth
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of the country is not only assured but the process of growth is accelerated
which is more essential in a country like India where the population is
increasing very fast.
(iv) Reduction in inflation. The insurance company in the form of premium
get lot of money supply from the public which insurance corporation put
into production thus the money which would have come into circulation
might have gone for productive purposes.
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TYPES OF PLANS OR POLICIES
On the basis of insurance objective, basic plans offered by insurers can be
classified under three broad categories: Pure insurance products (term plan),
pure investment products (pension plan) and investment-cum-insurance
products (endowment, money-back, whole-life and unit-linked insurance
plans). Increasingly, insurers are launching hybrid variants of these plain-
vanilla plans.
1. Term plan
Term plans are the purest from of insurance. These are no-frills
policies that cover only the risk of your dying. In the event of your
death during the policy term, your nominees receive the cover
amount---in insurance parlance, the ‗sum assured'; you get no benefits
if you survive the policy term. Since the entire premium paid by you -
--the cost of buying insurance cover---on term policies goes towards
covering the risk of your life, insurers offer you this cover at the least
cost.
2. Endowment plans
While term plans covers just the risk of death, endowment plans also
offer some return on the premium is paid by you. So, if you die during
the policy term, your nominee gets the sum assured plus some returns;
if you survive the policy term, you still get back the sum assured and
returns. As much as this ―money if you die, money if you live ―
philosophy is an enticing proposition, it comes at a price; high
premiums, which drag down the returns from endowment plans, to
barely 4-6 per cent a year. In an endowment plan, you pay premiums
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for a pre-defined tenure and sum assured. The premium will depend
upon your age, the sum assured, the plans tenure and the nature of
returns. A portion of the premium paid by you is invested by the
insures on your behalf. Another portion goes towards your cover and a
third towards meeting the insurer's administrative expenses, which
lowers the effective yield on your investment in endowment plans.
3. Money back plans
Money back plans are variant of endowment plans, with one basic
difference: unlike endowment plans, where the survival benefits are
distributed at the end of the policy term, the pay back in money -back
plans is staggered through the policy term. Typically, a part of the
sum assured is returned to you at periodic intervals through the policy
tenure.
4. Whole-life plan
The three categories of insurance plans mentioned above provide you
life cover for a defined period, up to a certain age (generally, 70
years), Whole-life plan, on other hand, provide you cover through
your lifetime---the only class of insurance policies to do so. Typically,
whole-life plan are structured such that the policyholder has the option
to pay premium up to a certain age (referred to as the ‗maturity age'
which is generally 80-100 years) or for a specified period. On
reaching maturity age, the insurer gives you the option to either
continue with the cover through the lifetime (for which no further
premiums will have to be paid) or encash the maturity benefits (sum
assured plus bonuses). Some insurers do give the option to encash the
bonus during the term per it self, which can serve as a useful income
stream during your later years, if you so desire.
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5. Unit-linked insurance plans
In insurance-cum investment plans of the kind listed above, you have
little say in where your money is invested. Your insurer too is
governed by certain investment restrictions: it can invest just 10 per
cent of the premium paid by you in equities; the greater chunk of 90
percent has to be invested in debt paper. While such restrictions are
intended to insure safety of your investment, they also lead to rigidity
in investment are rein in your returns to low single digits. Unit-linked
insurance plans get around such restrictions, by giving you greater
control over where your premium is invested.
Think of them as insurance plans that double as mutual funds. The
annual premium you pay on unit-linked plans is linked to the sum
assured and the policy tenure. You can switch from one plan to
another free of cost once a year (a nominal amount is charged for
additional switches). So, if you think stocks are going cheap, you can
move to the growth plan; or, if you think stocks are overvalued, you
can move your money to the income plan. You can switch from one
plan to another free of cost once a year (a nominal amount is charged
for additional switches). So, if you think stocks are going cheap, you
can move to the growth plan; or, if you think stocks are overvalued,
you can move your money to the income plan.
6. Pension plan
Pension plan differ from the five types of the insurance plan
mentioned above in the fundamental way; not all of them of life over.
So, why we are talking about them here
Because pension plan feature among the bevy of products offered by
insurers and are pitched as retirement planning a schemes, similar to
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other investment-based insurance plans. Pension plans are investment
options that let you set up an income stream in your post-retirement
years by routing your savings through an insurer, who invests it on
your behalf for a free. The precise returns you will get depend upon
several factors: your age begin when you investing, the contribution
you make, your investment preferences based on your risk profile, the
age at which you want the money to start coming back to you, and the
number of years for which you want the returns.
FUNCTIONS OF INSURANCE
a) Primary Functions
(i)
Certainty of Compensation of Loss: Insurance provides certainty
of payment at the uncertainty of loss. The element of uncertainty is
reduced by better planning and administration. The insurer charges
premium for providing certainty. Life is always full of risks. Life
without risks and uncertainties is unthinkable. Man has always
encountered risks of various types since the inception of
civilization. Minor risks can be ignored but the major risks cannot
be ignored and their avoidance is desirable. One of the ways or
techniques of meeting the risks loss prevention and insurance.
Insurance removes all uncertainties and the assured is given
certainty of payment of loss. The insurer charges premium for
providing the said certainty.
(ii) Insurance provides protection: The risk will occur or not, when will
occur, how much loss will be there? There are uncertainties of happenings of
time and amount of loss. The main function of the insurance is to provide
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protection against the probable chances of loss. The insurance cannot check
the happening of risk. The insurer gives certainty of payment of loss to the
assured by charging premium.
(iii)Risk sharing: Risk is uncertain and therefore, the arising from the risk is
also uncertain. All business concerns face the problem of risk and if the
concern is big enough the handling of risk becomes a specialized function.
Risk and insurance are interwoven with each other. Insurance, as a device is
the outcome of the existence of various risks in our day to day life. It does
not eliminate risks but it reduce the financial loss caused by risks. Insurance
speeds the whole loss over the large number of persons who are exposed by
a particular risk.
(b)
Secondary Function
(i) Prevention of loss: Prevention is always better than
cure. Prevention
of loss is by far the best solution to the problem of risk. It is the most
effective and cheapest method to avoid the unfortunate consequences. By
having the fire resistant construction, observing safety instructions,
installation of automatic sparker system etc. fore can be prevented. Similarly
better roads, better lights and better traffic regulations automobile accidents
can be prolonged. But some times prevention of protection is not always
possible and effective. When prevention fails other methods must be
adopted. The insurance joins hands with those institutions which are actively
engaged in preventing the losses of the society. Reduction in loss causes
lesser payment to the assured and so more saving is possible which will
assist in reducing the premium. Lesser premium invites more business and
more business in its turn results in lesser share to the assured. Reduced
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premiums stimulate more business and more and better protection to the
insured
(ii) It provides capital: It provides capital to the society. For planned
development of a country there is great need for huge amount of capital. The
accumulated funds are invested in providing proper infrastructure and in
investing in productive channel. Now a day, the insurance companies are
rendering positive help in the development of trade, commerce and
industries of a country through different scheme of investment. A country's
natural resources can be exploited with long term and huge amount of
investment by the insurance companies.
(iii) Adequate Financial cover: The need of insurance is largely felt to give
a cover to the rural areas and to the socially and economically backward
classes with a view to reach all insurable person in the country and provide
them adequate financial cover against death at a reasonable cost.
(iv) Mobilisation of Savings: In insurance the savings of masses is collected
by insurance corporations.
(v)Investment: When funds are invested the interest of the community is
kept in mind.
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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 recognising
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:
I) STRUCTURE
Government stake in the insurance Companies to be brought
down to 50%.
Government should take over the holdings of GIC and its
subsidiaries so that these subsidiaries can act as independent
corporations.
All the insurance companies should be given greater freedom to
operate.
II) COMPETITION
Private Companies with a minimum paid up capital of Rs.1bn
should be allowed to enter the sector.
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No Company should deal in both Life and General Insurance
through a single entity.
Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.
Postal Life Insurance should be allowed to operate in the rural
market.
Only one State Level Life Insurance Company should be
allowed to operate in each state.
III) REGULATORY BODY
The Insurance Act should be changed.
An Insurance Regulatory body should be set up.
Controller of Insurance- a part of the Finance Ministry- should
be made independent
IV) INVESTMENTS
Mandatory Investments of LIC Life Fund in government
securities to be reduced from 75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any
company (there current holdings to be brought down to this
level over a period of time)
V) CUSTOMER SERVICE
LIC should pay interest on delays in payments beyond 30 days.
Insurance companies must be encouraged to set up unit linked
pension plans.
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Computerisation of operations and updating of technology to be
carried out in the insurance industry.
The committee emphasised that in order to improve the customer services
and increase the coverage of insurance policies, industry should be opened
up to competition. But at the same time, the committee felt the need to
exercise caution as any failure on the part of new players could ruin the
public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating
the minimum capital requirement of Rs.100 crores. The committee felt the
need to provide greater autonomy to insurance companies in order to
improve their performance and enable them to act as independent companies
with economic motives. For this purpose, it had proposed setting up an
independent regulatory body
The Insurance Regulatory and Development Authority.
Reforms in the Insurance sector were initiated with the passage of the IRDA
Bill in Parliament in December 1999. The IRDA since its incorporation as a
statutory body in April 2000 has fastidiously stuck to its schedule of framing
regulations and registering the private sector insurance companies. Since
being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. The other decision taken
simultaneously to provide the supporting systems to the insurance sector and
in particular the life insurance companies was the launch of the IRDA online
service for issue and renewal of licenses to agents. The approval of
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institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in
place to sell their products which are expected to be introduced by early next
year. Since being set up as an independent statutory body the IRDA has put
in a framework of globally compatible regulations. In the private sector
151ife insurance and 15 non-life insurance companies have been registered.
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ENTRY OF PRIVATE PLAYERS
The introduction of private players in the industry has added to the colors in
the dull industry. The initiatives taken by the private players are very
competitive and have given immense competition to the on time monopoly
of the market LlC. Since the advent of the private players in the market the
industry has seen new and innovative steps taken by the players in this
sector. The new players have improved the service quality of the insurance.
The following companies are present in the Life Insurance Industry in India.
Bajaj Allianz Life Insurance Company Limited.
Birla Sun Life Insurance Co. Ltd
HDFC Standard Life Insurance Co. Ltd
ICICI Prudential Life Insurance Co. Ltd
ING Vysya Life Insurance Company Pvt. Ltd.
Life Insurance Corporation. of India
Max New York Life Insurance Co. Ltd
Met Life India Insurance Company Pvt. Ltd.
Kotak Mahindra Old Mutual Life Insurance Limited
SBI Life Insurance Co. Ltd
Tata AIG Life Insurance Company Limited
Reliance Life Insurance Company Limited.
Aviva Life Insurance Co. India Pvt. Ltd.
Sahara India Life Insurance Co, Ltd.
Shriram Life Insurance Co, Ltd.
Bharti AXA Life Insurance Company Ltd.
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SCENARIO OF INDIAN INSURANCE INDUSTRY
1. Insurance Market in India
India with about 200 million middle class household shows a huge
untapped potential for players in the insurance industry. Saturation of
markets in many developed economies has made the Indian market
even more attractive for global insurance majors. The Insurance sector
in India has come to a position of very high potential and
competitiveness in the market.
Innovative products and aggressive distribution have become the say
of the day. Indian's have always seen life insurance as a tax saving
device, are now suddenly turning to the private sector that are
providing them new products and variety for their choice.
Life insurance industry is waiting for a big growth as many Indian and
foreign companies are waiting in the line for the green signal to start
their operations. The Indian consumer should be ready now because
the market is going to give them an array of products, different in
price, features and benefits. How the customer is going to make his
choice will determine the future of the industry.
2. Customer Service
Consumers remain the most important center of the insurance sector.
After the entry of the foreign players the industry is seeing a lot of
competition and thus improvement of the customer service in the
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industry. Computerization of operations and updating of technology
has become imperative in the current scenario. Foreign players are
bringing in international best practices in service through use of latest
technologies. The one time monopoly of the LIC and its agents are
now going through a through revision and training programmers to
catch up with the other private players. Though lot is being done for
the increased customer service and adding technology to it but there is
a long way to go and various customer surveys indicate that the
standards are still below customer expectation levels.
3. Distribution channels
Till date insurance agents still remain the main source through which
insurance products are sold. The concept is very well established in
the country like India but still the increasing use of other sources is
imperative. It therefore makes sense to look at well-balanced,
alternative channels of distribution.
LIC has already well established and have an extensive distribution
channel and presence. New players may find it expensive and time
consuming to bring up a distribution network to such standards.
Therefore they are looking to the diverse areas of distribution channel
to have an advantage. At present the distribution channels that are
available in the market are:
Direct selling
Corporate agents
Group selling
Brokers and cooperative societies
Banc assurance
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To make all these channels a success the companies have to be very
alert and skillful to know how to use these channels in a proper way.
Banc assurance is on of the most upcoming channels of distribution
and therefore is being discussed in details.
4. Bancasurance
India has an extensive bank network established over the years. What
Insurance companies have to do is to just take advantage of the
customers' long-standing trust and relationships with banks. This is a
mutually beneficial situation as banks can also expand their range of
products on offer to customers, while the insurance company will also
earn profits from the exposure. Another advantage is that banks, with
their network in rural areas, help to fulfill rural and social obligations
stipulated by the Insurance Regulatory and Development Authority
(IRDA) recently. Insurance companies should see bancassurance as a
tool for increasing their market penetration in India. It is also good for
the one who sees bancassurance in terms of reduced price, high
quality product and delivery at doorsteps. Everybody is a winner here.
The creation of bancassurance operations has made an important
impact on the financial services industry at large. This is though a new
concept but it has gained a lot of importance in the industry at present
and has a great future.
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5. Product Innovation
There has been a plethora of new and innovative products offered by
the new players.
Customers have tremendous choice from a large variety of products
from pure term (risk) insurance to unit-linked investment products.
Customers are offered unbundled products with a variety of benefits
as riders from which they can choose. More customers are buying
products and services based on their true needs and not just traditional
money-back policies, which is not considered very appropriate for
long-term protection and Savings. There is lots of saving and
investment plans in the market. However, there are still some key new
products yet to be introduced - e.g. health products.
6. Rural Marketing
Rural India seems to have an appetite for mobile phones, computers,
and cars and to add to it we have insurance. In India with the private
players having entered into the insurance industry, the expected
explosion in job opportunities may not actually happen but for them
the catchments area is the opportunities in the rural India. In India the
Insurance business can be said to be "a marathon, not a sprint". This is
because of the nature of the business being long term. With merely
two years of the industry being opened, not surprisingly, the new
comers are making losses. The public sector Companies, notably the
LIC, have gained in strength, thanks to the deepening of the market
consequent to the awareness created by the new companies. However
25
this does not deterred the private sector, which knows know that the
race is a marathon, not a sprint. However it seems that they if not
anything, are only increasing their spending, though only out of the
capital. Today, there are 18 insurance companies in India excluding
the PSU's, with 12 in the life insurance business and the rest in non-
life .As Insurance companies go more and more rural in search of
business, there will be opportunities in the rural sector. Those who
understand rural India better will be in demand. Already United India
The rural consumer is now exhibiting an increasing propensity for
insurance products.
A Research conducted exhibited that the rural consumers are willing
to dole out anything between Rs 3,500 and Rs 2,900 as premium each
year. In the insurance the awareness level for life insurance is the
highest in rural India, but the consumers are also aware about motor,
accidents and cattle insurance. In a study conducted by MART the
results showed that nearly one third said that they had purchased some
kind of insurance with the maximum penetration skewed in favor of
life insurance. The study also pointed out the private companies have
huge task to play in creating awareness and credibility among the
rural populace. The perceived benefits of buying a life policy range
from security of income bulk return in future, daughter's marriage,
children's education and good return on savings, in that order, the
study adds.
Regulatory and Development Authority (IRDA) have set stiff rural
targets for insurance Companies. For the life sector, in the first year, 5
per cent of the total policies written should come from the rural sector.
This will go up to 15 per cent in five years. Similarly, for the non-life
26
sector, two per cent of the total gross premium income should come
from the rural sector going up to 5 per cent in five years, according to
the regulation. All these moves will make the investment the rural
area a big start.
7. Information Technology and Insurance
In the insurance industry today, there is a clear trend away from
selling a broad range of products to a large volume of customers in
one -size-fits-all manners. Instead of focusing on their different
products lines as silos (i.e., life, property and casualty etc).
Insurers are looking for ways to offer highly targeted insurance
products that are tailored to the individual's customers with the
highest propensity to buy them. There is an evolutionary change in the
technology that has revolutionized the entire insurance sector.
Insurance industry is a data-rich industry, and thus, there is dire need
to use the data for trend analysis and personalization.
With increased competition among insurers, service has become a key
issue. Moreover, Customers are getting increasingly sophisticated and
tech-savvy. People today don't want to accept the current value
propositions, they want personalized interactions and they look for
more and more features and add ones and better service.
The insurance companies today must meet the need of the hour for
more and more personalized approach for handling the customer.
Today managing the customer intelligently is very critical for the
insurer especially in the very competitive environment. Companies
need to apply different set of rules and treatment strategies to different
27
customer segments. However, to personalize interactions, insurers are
required to capture customer information in an integrated system.
With the explosion of Website and greater access to direct product or
policy information, there is a need to developing better techniques to
give customers a truly personalized experience. Personalization helps
organizations to reach their customers with more impact and to
generate new revenue through cross selling and up selling activities.
To ensure that the customers are receiving personalized information,
many organizations are incorporating knowledge database-
repositories of content that typically include a search engine and lets
the customers locate the all document and information related to their
queries of request for services. Customers can hereby use the
knowledge database to mange their products or the company
information and invoices, claim records, and histories of the service
inquiry. These products also may be able to learn from the customer's
previous knowledge database and to use their information when
determining the relevance to the customers search request. the
insurance sector remains a very competitive market and those
companies that are able to best utilize their data and provide their
customer with the most personalized options will have the distinct
competitive advantage. The insurers that come up to the top will be
those who leverage the appropriate technology solutions effectively in
order to foster customer loyalty attract new customers and improve
operational efficiency by providing common information across their
lines of business.
28
8. Mergers and Acquisitions
This is an era of mergers and acquisitions. Private companies
including MNC's are amalgamating the world over to get more
competitive edge. Currently, the general insurance industry has been
opened up. The question here is that for over two years, eight private
companies have operated and has the size of the cake expanded. We
here find that this is not true. The insurers are doing enough to raise
the level of risk awareness or are they merely content to compete in
the markets organized and established. However sooner or later the
private sector players will have to put in place strategies aimed not at
winning the existing accounts of the public players but at diversifying
markets penetration as a whole. The private players in the future
would have to turn their attention to working in the unorganized and
under served markets.
What is likely to happen is that the private players would continue to
skim the profitable segments of the already organized business in the
urban areas? The time has already come for the government of India
to evaluate the performance of private companies' vis-Ã -vis their
declared objective of opening up the industry.
However it is high time for the government to realize that importance
of merging the public sector general insurance companies into single
entity. The resent scenario calls for a better performance from part of
each of the public sector insurance companies against each other; or in
other words a competition to be the best. The result what we see is the
Undercutting of premium to retain or wrest business and quoting an
uneconomical rate of premium. While this allows one of the Public
29
Sectors Company to win a business form another in this manner. The
others suffer a loss and the resultant effect is a cannibalization with a
fall in the average premium of the public sector itself. This at many
times brings advantage to the private players who grab the business
because of the unethical competition among the public players.
The purpose of having four companies all subsidiaries of General
Insurance Corporation of India (GIC)- National Insurance Company,
New India Assurance Company, Oriental Insurance Company, And
The United India Insurance Company; at the time of nationalization
was to have competition among themselves -in service and products
at the same price. The service provided by them was also equally
good or bad depending on the experience of the customers.
Now with real competition coming in with most of the global
insurance players setting footprints here, it is felt that the time for
merger has come and to enjoy the benefits if the size. It is to be sated
that size does matter in insurance business. All over the world's
mergers and acquisitions in the risk-underwriting sector is common.
The benefits if the four insurance companies merge will be enormous.
The merged entity will enjoy higher underwriting and risk retention
capacity; increase in reinsurance premium, reduction in reinsurance
outflow, healthy solvency margins, setting right the asset -liability
mismatch and reduction in cost. The insurance market thus becomes a
gambling place. Had the public sector companies made into a single
entity, perhaps the total premium of the four public sector companies
in the year 2003-04 would have gone up but 25 percent. But the public
sector alone is forced to underwrite the loss making motor third party
liability (TPL) insurance. The public insurance companies insured a
30
loss of Rs 1943 crore on this Portfolio on just one year (03-04). The
cumulative loss under this portfolio is astronomical. The loss of
profitable business in view of undeserved competition among the
public sector companies is hampering the subsidization of social
insurance including the motor TPL.
It is thus clear that it is good for the public sector companies to merge
immediately when they are still strong, lest a merger becomes
inevitable later after the independent public sector companies fail one
after another. This does not bid well for the public sector, nor fort he
insuring public and not for the economic development either. For a
progress me require merger of strong public sector companies. Else it
would render public sector companies weak and destroy them.
9. Impact of Budget in Insurance
The 2005-06 Budget has dampened the spirit of insurance companies.
Hardly any changes have been made in the general insurance sector.
The change in the tax structure may have some impact on the life
insurers. With the removal of the Section 88 relief there is not much
for the insurance players to cheer for.
FDI hike in insurance sector:
The Finance Minister commended on the growth in the insurance
sector, there was no mention of the steps being taken for increasing
FDI in insurance sector. There is a dire need to attract more foreign
capital in the sector. However it seems that the Union Finance
Ministry is looking at proposals to delink the FDI limit from the
Insurance Act, when it is amended. This move would empower any
31
future government to increase the FDI limit through an executive
order without taking the issue to the Parliament.
Removal of Sec 88 tax relief: With the removal of the Section 88 tax
relief on life insurance products there would be a sever blow on the
life insurance companies. Removal of tax relief will have an adverse
impact on the flow of investments into life insurance products.
Continuation of Sec 10(10) (d): The continuations of this section
create sever blow for the insurance players. Here by the life insurance
companies for availing the optimum benefit under this section need to
change their strategy. Till now, life insurers were selling life insurance
products mostly on tax-benefit grounds. However, now they will have
to sell products with an investment pitch.
The investment limit in pension plans is unaltered at Rs 10,000 so
these plans may not enjoy the luxury of the expanded limit of Rs 1
lakh allowed for investments/expenditures that could be claimed as a
deduction from income. This is likely to have an adverse impact on
the overall growth of the sector. Pension plans are the only Investment
Avenue where specific limits continue to apply.
32
Profile of
Kotak Mahindra Old Mutual Life Insurance Ltd.
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between
Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. 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.
Kotak Mahindra Old Mutual Life Insurance is a 74:26 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 in 2001.
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 distribution network of Kotak Mahindra Insurance Co Ltd includes,
retail distribution through the branches, insurance agency and individual
agents network, and insurance brokers for claim settlements. Each Kotak
Mahindra insurance agent and broker is trained in-house to provide the
customers a transparent transaction with the company.
33
MANAGEMENT
Mr. Gaurang Shah (Managing Director)
Mr. Gaurang Shah is the Managing Director of Kotak Mahindra
Old Mutual Life Insurance Limited.
Mr. Gaurang Shah is a Chartered Accountant and a Cost and
Works Accountant. He has also done his Company Secretary ship
from the Institute of Company Secretaries of India. Mr Gaurang
Shah has been with the Kotak Group for the past eight years
where he has held different positions of great responsibility and juggled
multiple tasks effectively. His cumulative experience, primarily in financial
services, stands at over 21 years, several of those in building the retail
finance business. At Kotak Life Insurance, Mr Shah will focus on
developing new lines of businesses and leveraging the company's existing
competencies and network to steer Kotak Life Insurance on its ongoing
growth path with even greater thrust. Mr. Shah has a commendable expertise
in managing a large number of employees.
Mr.Shah has been previously associated with Kotak Mahindra Primus since
its inception and has contributed towards its growth to become a Rs.2000 Cr
plus business. Before coming to Kotak Life Insurance, Gaurang Shah was
Group Head of Retail Assets for Kotak Mahindra Bank. The Retail Assets
include commercial vehicles, personal loans, structured products, car loans
and loans against shares.
34
Mr. Pankaj Desai (Executive Director, Sales & Distribution)
As the Executive Director at Kotak Life Insurance, Mr. Pankaj
Desai is responsible for Sales, Training, Distribution and Channel
Marketing.
A Chartered Accountant by qualification, Pankaj comes with a
very rich and diverse experience in the Banking and Finance
sectors.
Pankaj joined the Kotak Group in 1999 as Vice President - Kotak Mahindra
Finance Ltd. and since then has juggled many responsibilities within the
Group. Prior to joining Kotak Life Insurance, he was heading the Retail
Assets business at Kotak Mahindra Bank Ltd. where he was responsible for
verticals like Car Finance, Personal Loans, Home Finance and Business
Banking.
Mr. Desai is passionate about reading and traveling.
Mr. G Murlidhar (Chief Financial Officer)
Mr. Murlidhar is a Chief Financial Officer and Company
Secretary of Kotak Life Insurance. Mr. Murlidhar is an associate
member of the Institute of Chartered Accountants of India, an
associate member of the Institute Of Company Secretaries of
India, and graduate member of the Institute of Cost & Works
Accountants of India. Mr. Murlidhar possesses over 20-year work
experience and has earlier worked with National Dairy Development Board
(NDDB), MDS Switchgear Limited and Nicholas Piramal India Limited and
Ion Exchange Ltd. Prior to Kotak Life Insurance, he held the position of VP-
Finance at Gujarat Glass Ltd.
35
Kotak Mahindra Group Management
Mr. Uday Kotak
Mr. Shivaji Dam
Mr. C. Jayaram
Mr. Dipak Gupta
Executive Vice Chairman & Managing Director
History of Kotak Group
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.
Since then it's been a steady and confident journey to growth and success.
1986
1987
1990
1991
1992
1995
1996
Kotak Mahindra Finance Limited starts the activity of Bill Discounting
Kotak Mahindra Finance Limited enters the Lease and Hire Purchase
market
The Auto Finance division is started
The Investment Banking Division is started. Takes over FICOM, one of
India's largest financial retail marketing networks
Enters the Funds Syndication sector
Brokerage and Distribution businesses incorporated into a separate
company - Kotak Securities. Investment Banking division incorporated
into a separate company - Kotak Mahindra Capital Company
The Auto Finance Business is hived off into a separate company -
36
1998
2000
2001
2003
2004
2005
2006
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.
Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance
business.
Kotak Securities launches its on-line broking site (now
www.kotaksecurities.com). Commencement of private equity activity
through setting up of Kotak Mahindra Venture Capital Fund.
Matrix sold to Friday Corporation
Launches Insurance Services
Kotak Mahindra Finance Ltd. converts to a commercial bank - the first
Indian company to do so.
Launches India Growth Fund, a private equity fund.
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
Bought the 25% stake held by Goldman Sachs in Kotak Mahindra
Capital Company and Kotak Securities
37
KOTAK 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. 5,824 crore, employs around 20,000
people in its various businesses and has a distribution network of branches,
franchisees, representative offices and satellite offices across 370 cities and
towns in India and offices in New York, London, San Francisco, Dubai,
Mauritius and Singapore. The Group services around 4.4 million customer
accounts.
The journey so far
In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held
by Ford Credit International (FCI) and FCI acquired the stake in Ford
Credit Kotak Mahindra (FCKM) held by Kotak Group.
In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in
Kotak Capital and Kotak Securities.
38
CORPORATE IDENTITY
KOTAK MAHINDRA GROUP STRUCTURE
39
OLD MUTUAL
Old Mutual operates in Europe mainly through Skandia, the Swedish
insurance company acquired in 2006. With Skandia, Old Mutual has an
enlarged footprint in Europe and has the potential to grow a strong franchise.
The business model of Skandia centres around three main elements:
distribution, product and investment management in three geographies: UK
& Offshore, Europe & Latin America (ELAM) and Nordic.
South Africa
Old Mutual South Africa's (OMSA) financial services business, comprising
life and asset management business, has at its core one of the largest
distribution capabilities in the South African industry. This uses a
combination of tied agents, independent financial advisers, bank distribution,
corporate advisers and direct distribution to ensure that the business appears
in front of a full spectrum of potential clients. OMSA's investment and risk
products, as well as its strong links with other Group businesses, positions
the business to meet a full array of client needs.
USA
Old Mutual has built significant asset management and life assurance
businesses in the USA through a number of acquisitions during the past six
years. Our US businesses are well placed strategically to take advantage of
demographic and other related trends as we enhance our products and
investment styles. We have introduced a common management structure
across the life and asset management businesses, and are working on the
implementation of a co-ordinated retail distribution strategy.
Asia Pacific
Our operations in India, China and Australia continue to benefit from our
strategy to take our business skills into other developing markets.
40
A strong combination
In combination, Old Mutual and Skandia are well positioned to become a
formidable force in the European savings market through efficient
distribution networks, leading products and optimal service and systems.
The Group will be financially robust, with strong growth potential and more
broadly-spread risk. Skandia's strong position in Europe adds to Old
Mutual's existing strengths in the USA and Africa, giving the Group a
diverse earnings base and more sustainable earnings patterns.
Leading open architecture player
The Group will be a leading provider of a variety of innovative and flexible
products, designed according to clients' preferences and needs. These market
segments are expected to grow at a faster rate than the traditional life
assurance market.
Outlook
We are committed to ensuring that not only do we deliver the prospective
returns from Skandia factored into our acquisition planning, but also that our
other businesses continue to make good progress.
41
PRODUCTS OF KOTAK MAHINDRA OLD
MUTUAL LIFE INSURANCE LTD.
Make every rupee work for your happiness
In this policy, the investment risk in the investment portfolio is borne by the
policyholder.
Kotak Life Insurance introduces Kotak Smart Advantage, a great
combination of investment with insurance, to put your savings to work
today. It is a market linked plan with 100% premium allocations helping you
accumulate wealth systematically, over the long-term.
Highlights
Guaranteed returns of upto 275% of your first year premium at
maturity
Assured bonus additions at regular intervals during the policy term to
enhance your fund value
1
100% allocation of your premiums from second year onwards to
maximize your earnings potential
A unique fund offering you the maximum opportunity for growth
Option to maximize protection for your loved ones
2
Tax Benefits to avail under section 80 C and section 10 (10 D) of the
Income Tax Act, 1961.
42
Kotak Eternal Life Plans are participating whole life plans that provide
enhanced protection till the golden age of 99. The plans provide for a high
cover at lower premiums, cash lumpsum benefits at desired stage and a way
to care for your spouse in the second innings of life.
With guaranteed protection for life, opportunity to create wealth, and
comprehensive cover options, these plans provide you with a perfect
financial solution to suit your needs.
Key Highlights of the plan:
i.
ii.
iii.
iv.
Provides you with lifelong protection which continues well beyond
retirement to ensure that your loved ones remain secure, irrespective
of the uncertainties in life.
Enables a high amount of insurance cover at affordable premiums
which takes into account your growing responsibilities and keeps pace
with your increasing needs.
Offers liquidity for planned and unplanned needs so that you have
access to your money when you need it the most, adding to your
comfort and security at important stages in life.
Presents options and solutions that suit your personal preference
which enables you to make a decision that is more suitable and
beneficial for you.
Permanent and complete protection till your 99th birthday
o
o
Insurance cover that extends well beyond 60-70 years, to
protect your loved ones till you turn 99
Guaranteed Death Benefit till age 99
43
o
A complete protection package guarding you against risk of
Death, Disability* as well as Critical Illness^
Adequate protection to meet your growing needs
o
o
High amount of insurance cover that is almost 25-45 times the
initial premium paid
Regular bonuses# that boost guaranteed death benefit to
provide for higher protection during and after the premium
payment term
Cash lumpsum to fulfill your dreams
o
o
A significant cash lumpsum paid at the end of the premium
payment term to secure your dreams (Bonuses# accumulated
till the end of the premium paying term)
In case of emergencies, loan facility can be provided to help
you tide through adversities.
Increased choice through a range of plan options
o
o
o
o
Increasing Premium Option that keeps income and offers
affordable protection from the start
A few years of premium payment (option to choose between
10-40 years) offers a lifetime of protection
Special rates for females and non-smokers (For Sum Assured
greater than Rs. 10 lakhs)
Choice of Riders to personalize your plan as per your
requirement.
Key Features:
Lifelong cover protection till age 99 with a few years of premium
payment.
Higher Protection at affordable premiums
44
Complete safeguard against uncertainties of Accidental Disability#
and Critical Illness^
Lumpsum Cash at the end of the premium payment term
Premiums that match your preference and lifestyle
Tax Benefits under Sec 80C and Sec 10(10)D.
In this policy, the investment risk in the investment portfolio is borne
by the policyholder.
For those who live life on their own terms, here is an insurance plan that
understands your needs fully. Built around the core values of flexibility and
transparency, Kotak Platinum Advantage Plan features capital protection,
embedded investment advice, life cover and aggressive market linked
growth options — all under one life insurance plan. This plan even offers
you the flexibility to adjust the risk profile and tenure of your investments as
you climb the ladder of success and your needs evolve and change.
Advantages
Unique blend of safety & returns
Wealth maximization through superior fund management
Protection for loved ones
Flexibility to increase savings
High liquidity through easy withdrawals
45
Life is unpredictable, but the earlier you start planning for your future, the
more likely are you and your family to reap the rewards.
Sukhi Jeevan is a long-term savings and protection plan that keeps pace with
your changing needs at every step of life - be it saving for your kids' future,
or your retirement. This plan helps you prepare for important milestones in
your life. And, most importantly, it ensures your family is secure when life
dishes up harsh misfortunes.
Benefits
Fulfill your children's dreams or plan your retirement
Small savings to meet your varying needs
Regular bonuses
Easy application:
o
o
o
Simple documentation
No medical tests*
Hassle-free sign-up
Premium payment options: yearly, half-yearly or monthly (through
ECS only)
Kotak Term Plan is a pure risk product that aims to cover your life at a
nominal cost. You may want to take this plan to cover your outstanding
debts like a mortgage, a home loan etc. Since this is a pure risk cover
product, there are no maturity benefits payable on survival. This is a non-
participating plan.
46
Eligibility
HOW OLD DO YOU HAVE TO BE Minimum age - 18 years
TO AVAIL OF THIS PLAN? Maximum age - 60 years
FOR WHAT TERM CAN I AVAIL 10 - 30 years for regular premium
OF THIS PLAN?
5 - 30 years for single premium
Mode
Quarterly
WHAT IS THE MINIMUM
PREMIUM THAT I NEED TO PAY Half Yearly
AND AT WHAT INTERVALS CAN Annually
I PAY THEM?
Single
Premium
Amount
Rs.540
Rs.1055
Rs.2000
Rs.10000
WHAT IS THE MAXIMUM AGE
THAT THE PLAN CAN COVER
YOU TILL?
advantages of this plan
1. It is a low-cost insurance plan.
70 years
2. You can choose between a regular premium payment option or a
single premium payment option.
In case you opt for the regular premium payment option, you may pay
your premiums either annually, or in half yearly or quarterly
installments.
3. Your Kotak Term Plan can be converted into any other plan offered
by Kotak Life Insurance (except for another Term plan) provided
there are at least 5 years before cover ceases*.
47
4. In case you forget to pay your premium by the due date, you are
entitled to a grace period of 30 days from the date of unpaid
premiums.
5. In case of a financial emergency, you have the option to surrender the
policy provided you have taken the single premium payment option*.
The Kotak Money Back Plan not only covers your life, it also assures you a
certain percent of the sum assured as cash payment at regular intervals of
every 5 years. It is a savings plan with the added advantage of life cover and
regular cash inflow. This plan is ideal for planning special moments like a
wedding, your child's education or purchase of an asset etc. This is a
participating plan (with profits).
"Who can avail of this Plan?"
HOW OLD DO YOU HAVE TO BE Minimum age- 18 years
TO AVAIL OF THIS PLAN?
FOR WHAT TERM CAN I AVAIL
OF THIS PLAN?
WHAT IS THE MAXIMUM AGE
THAT THE PLAN CAN COVER
YOU TILL?
Advantages of this plan
Maximum age- 60 years
15, 20 & 25 years
75 years
1. The plan not only covers your life but also provides you with a
survival benefit payout every 5 years.
48
2. In the unfortunate event of death of life insured, the beneficiary would
receive the death benefit. The death benefit keeps increases by 7% of
the sum assured every year.
3. On maturity, you would receive the sum of the Survival Benefit,
Bonus addition* and Guaranteed addition**.
4. The amount available in the Accumulation Account is invested in
various financial instruments (as per IRDA regulations) so your
money works hard for you.
5. The Automatic Cover Maintenance facility ensures the policy remains
in force even if you miss premium payments. This facility is available
after the first three years of the term.
6. You have the benefit of a 15-day free look period.
7. You have the option of paying premiums quarterly, half yearly or
yearly.
The Kotak Child Advantage Plan is an investment plan designed to meet
your child's future financial needs. It's a plan that gives your child the
"azaadi" to realize his dreams. The plan is a participating plan with a 15-day
free look period.
Eligibility
Minimum age - 0
HOW OLD DOES THE CHILD HAVE TO BE
TO AVAIL OF THIS PLAN?
FOR WHAT TERM CAN I AVAIL OF THIS
PLAN?
years
Maximum age -17
years
10 - 30 years
49
WHAT IS THE MAXIMUM SUM ASSURED
ALLOWED UNDER THIS PLAN?
Advantages of this plan
Rs.25,00,000
1. On Maturity, you would receive the sum assured plus the bonus
addition. Bonus addition is the amount in the Accumulation
Account*, in excess of the sum assured.
2. The balance available in the Accumulation Account is invested in
various financial instruments (as per IRDA regulations) so your
money works hard to earn more for your child.
3. The Automatic Cover Maintenance facility ensures the policy remains
in force even if you miss premium payments. This facility is available
after the first three years of the Term.
4. You can take a loan against this plan, after the policy has been in
force for at least three years.
5. You have the option of paying premiums quarterly, half yearly or
yearly.
6. You have the benefit of a 15 day free look period.
Kotak Endowment Plan is a protection plan that covers your life and at the
same time ensures that your money does not lie idle. It invests a portion of
your premium in financial instruments and ensures a considerable growth in
savings. This is a participating plan (with profits).
50
Eligibility
HOW OLD DO YOU HAVE TO BE
TO AVAIL OF THIS
PLAN?
FOR WHAT TERM CAN I AVAIL
OF THIS PLAN?
WHAT IS THE MAXIMUM AGE
THAT THE PLAN CAN COVER
YOU TILL?
Advantages of this plan
Minimum age - 18 years
Maximum age - 65 years
10-30 years
75 years
1. On maturity, you would receive the sum assured plus the bonus
addition. Bonus addition is the amount in the Accumulation
Account*, in excess of the sum assured.
2. The amount available in the Accumulation Account is invested in
various financial instruments (as per IRDA regulations) so your
money works harder for you.
3. The Automatic Cover Maintenance facility ensures the policy remains
in force even if you miss premium payments. This facility is available
after the first three years of the term.
4. You can take a loan against your policy, after the policy has been in
force for at least three years.
5. You have the option of paying premiums quarterly, half yearly or
yearly. You also have the flexibility to pay premiums through the full
term of the policy or pay it for a fixed term of 3, 5, 7, 10 or 15 years.
6. You have the benefit of a 15-day free look period.
51
The Kotak Capital Multiplier Plan is a participating plan that is built in such
a way that it allows your money to multiply, and gives you the flexibility of
using this money the way you need it, in regular withdrawals. This is an
endowment plan, which is very flexible, and has a lot of other in-built
benefits.
Eligibility
AGE
TERM OF PLAN
AGE WHEN INSURER CAN
CHOOSE TO START MAKING
WITHDRAWALS
Minimum age - 18 years
Maximum age - 60 years
5 yrs - 30 yrs
Any age upto 65 yrs
MIN. PREMIUM AMOUNT
Mode
Quarterly
Half Yearly
Annually
Amount
Rs.2620
Rs.5115
Rs.10000
Advantages of this plan
1. You can choose to start making withdrawals from the vesting age,
subject to a maximum of 65 yrs.
2. At the start of your withdrawal period, you can draw the full proceeds;
or you can draw upto 50%, of your Basic Sum Assured or
Accumulation Account*, whichever is higher.
3. In the event that you draw the full proceeds, your policy terminates.
52
4. In the event that you do not draw full proceeds, then you can make
one or more withdrawals yearly (that can alter year to year, as per
your needs), total of which will be between 0% to 25% of the Net
Vesting Value**, subject to the rules applicable at the vesting age.
These withdrawals can be made for a maximum period of 15 years
after maturity.
5. You have the choice to opt for an early vesting at any age before the
scheduled vesting age (subject to at least 3 years' premiums having
been paid), if need arises. If the early vesting is due to medical
grounds, then the minimum condition of 3 yrs is also waived.
6. In addition to the regular premiums, you can make lump-sum
injections into your plan during the premium-paying period, as and
when you want (such lump-sum injections during a year may not
exceed 25% of the Basic Sum Assured). A Supplementary
Accumulation Account will be created for this, and will be combined
with the Accumulation Account at the chosen vesting age.
7. You have the facility of Automatic Cover Maintenance, which ensures
that the policy remains in force even when you miss the premium
payments. This facility is available after the first 3 years of the term.
8. You have the option of paying premiums from the Supplementary
Accumulation Account, created for "lump-sum injections", if the need
arises.
9. During the build-up period, you get an additional life cover of 10% of
the Basic Sum Assured, which is over and above the life cover you
have opted for.
10.During the withdrawal period, you get life cover of 10% of the Basic
Sum Assured, and the Critical Illness Benefit (CI+15), if opted for.
53
This is available for a period of 15 years from your vesting age or till
you turn 75, whichever is earlier.
11.During the withdrawal period, returns will continue to be added to the
Accumulation Account. Such returns cannot be negative.
12.You have the option of paying premiums in quarterly, half-yearly or
yearly installments.
13.You have the benefit of a 15-day free look period.
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". It gives
you the choice to remain independent even after retirement.
The Kotak Retirement Income Plan is a participating plan. The plan comes
in two forms:
(i) With Cover (ii) Without Cover.
Eligibility
HOW OLD DO YOU HAVE TO BE Minimum age - 18 years
TO AVAIL OF THIS PLAN?
FOR WHAT TERM CAN YOU
CHOOSE TO PAY THE
PREMIUMS?
HOW OLD DO YOU HAVE TO BE
TO RECEIVE YOUR ANNUITY?
Maximum age - 60 years
5 yrs - 30 yrs
Minimum Age - 45 yrs
Maximum Age - 65 yrs
54
AT WHAT INTERVALS CAN YOU
PAY THE PREMIUM?
Advantages of this plan?
Quarterly
Half Yearly
Annually
1. You can choose to retire at any age between 45 yrs and 65 yrs.
2. On Retirement:You may take a lump sum in cash of up to a third of
your Basic Sum Assured or Accumulation Account*, whichever is
higher; and the balance of the benefit you are eligible for will be used
to buy an annuity of your choice.
3. Annuity Options:You may buy an annuity either from Kotak Life
Insurance (subject to the choice and rates available at that time)**, or
from any other insurer.
4. Early Retirement Benefits: You may opt to retire early, i.e. at any
age before the normal retirement date (subject to the policy being in
force for 3 years or your attaining a minimum age of 45 yrs,
whichever is later). You can then secure benefits with your
Accumulation Account, net of an early retirement charge of 5%.
If the early retirement is due to ill health, then you may retire before
attaining the age of 45. You can then secure benefits with your full
Accumulation Account.
5. Late Retirement Benefits: You may opt to retire after the retirement
date originally selected, and select a new retirement date (subject to a
maximum of 65 years). No further premiums will be payable and the
death benefit will be equal to the balance in Accumulation Account.
(However, all riders will cease at the original retirement date).
55
6. You can make lump-sum injections into your policy at any time
before retirement (such lump-sum injections during a year may not
exceed 25% of the Basic Sum Assured). A Supplementary
Accumulation Account will be created for this, and will be paid out in
the same manner as other benefits.
7. You may exercise the option of paying premiums from the
Supplementary Accumulation Account, created for "lump-sum
injections", if the need arises.
8. For a "With Cover" plan, you have the facility of Automatic Cover
Maintenance, which ensures that the cover remains in force even
when you miss the premium payments. This facility is available after
the first three years of the term.
9. You have the option of paying premiums in quarterly, half-yearly or
yearly installments.
10.You have the facility of a 15-day free look period.
Kotak Easy Growth Plans are single premium, market linked insurance
plans that keep pace with your ever growing success. It not only helps you
save for the future but also lets you reap rich benefits from the investments
of your choice. The undisputed advantage of these plans, is its simplicity.
This simplicity stems from our clear understanding of what would appeal to
a customer who is looking for a hassle free investment option.
56
The unit linked, investment-oriented insurance plans are flexible and will
help you strike the right proportion between protection and savings. Kotak
Easy Growth Plans would appeal to you:
If you would like to save the hassle of regular premium payments
If you would like to increase your investment amount at your
convenience as per your requirement
If you do not want to be tied down to a tight, pre-decided maturity
schedule
Life is about change and you will want to be prepared for it. At OM Kotak
Mahindra, we understand your need to protect your loved ones and to
provide for a financially independent future.
Presenting the Kotak Gramin Bima Yojana, a plan that takes protects your
loved ones against uncertainties and provides you with guaranteed returns,
just like your fixed deposit.
The Kotak Gramin Bima Yojana
The Kotak Gramin Bima Yojana is an insurance plan that not only covers
your life but also ensures that your money works hard for you and generates
returns. The plan lets you pay a one-time premium so you are saved the
bother of remembering to make annual payments.
This is a non-participating plan.
Who can avail of this plan?
HOW OLD DO YOU HAVE TO BE TO
AVAIL OF THIS PLAN?
Minimum age- 18 years
Maximum age- 45 years
57
FOR WHAT TERM CAN I AVAIL OF THIS
PLAN?
15 years
WHAT IS THE PREMIUM THAT I NEED TO Minimum - Rs.200
PAY ?
WHAT IS THE MAXIMUM AGE THAT THE
PLAN CAN COVER YOU TILL?
Maximum - Rs.20,000
70 years
Advantages of this plan
The Kotak Gramin Bima Yojana combines the benefits of a fixed
deposit and an insurance plan.
Easy one-time premium payments.
Guaranteed returns on maturity of the plan.
Increasing death benefit cover.
No medical tests required.
15 day free-look period.
The Kotak Term Grouplan is a good way to show your employees you care.
Not only does it provide a life cover for your employees, it also takes care of
their family's needs and protects them against life's uncertainties.
The plan provides life cover for a group of employees, by paying a lump
sum benefit to the beneficiary on the death of an employee. The plan is
offered on a yearly renewable basis and is non-participating. It is secured via
a single policy on the lives of all the members of the Group.
58
Benefit to an Employer
Provide welfare benefits and a sense of security to the employees and
their families
Simple administrative procedures
High degree of customization and flexibility
Option to choose from flat or graded cover, multiple of salary or
banded to length of service
Provision for additional benefit riders at nominal costs
The premium paid by the employer is deductible as business expense
under section 37 of the Income Tax Act, 1961
Contributions other than statutorily required under any law in force
may be liable for Fringe Benefit Tax
Benefit to an Employee
1
Insurance protection at a relatively low cost.
Hassle free and convenient process.
Cover is available 24 hours a day, 7 days a week, anywhere in the
world.
Conversion option- Option to convert to an individual policy from
Kotak Life Insurance.
All claim payments may be considered as non-taxable receipts and
could consequently be considered as tax exempt under Section
10(10D) of the Income Tax Act, 1961.
If the employee pays part or whole of the premium, he/she may be
able to claim a deduction under Section 80(C) of the Income Tax Act,
1961.
59
Eligibility
The plan offers cover on a compulsory basis to all active, permanent
employees of the participating group, subject to the following age limits:
Minimum age at entry will be 18 years
No employee will be covered above age 65 or normal retirement date,
whichever is earlier
The minimum number of eligible employees in a group is 50. There is
no maximum limit
Minimum sum assured to be Rs. 20,000 per member
60
OBJECTIVES OF THE STUDY
The project undertaken shall meet the following objectives:
1. To analyze the awareness of the Kotak Mahindra Old Mutual Life
Insurance Ltd. amongst people.
2. To get the overview of the insurance industry.
3. To find out the awareness level of the respondents regarding public
and private sector insurance companies.
4. To find out the percentage of the population insured and those
interested in getting insured.
5. To analyze the market acceptability of the products of Kotak
Mahindra Old Mutual Life Insurance Ltd.
61
RESEARCH METHODOLOGY
Definition: Research methodology is a careful investigation or inquiry in a
systematic manner and finding solution to the problem in a research. It
includes of defining and redefining problems formulating hypothesis or
researching conclusions to determine whether they fit the formulating
hypothesis.
Research design: Research design is an arrangement of conditions for
collection and analysis of data in a manner that aims to combine relevance to
the research purpose with economy in procedure. The research problem have
been formulated in clear-cut terms, helps the researcher to prepare a research
design. The preparation of such a design facilitates in conducting research in
an efficient manner. The function of research design is the collection of
relevant evidence with minimal expenditure of efforts, time and money.
Followed research design: The methodology adopted in research was
exploratory in nature.
Universe: The survey was conducted in the area of Chandigarh.
Sample size: The sample size of 100 was taken.
Sampling: The survey was conducted through Simple Random Sampling.
62
Data Collection :
The objectives of the project are such that both primary and secondary data
is required to achieve them. So both primary and secondary data was used
for the project. The mode of collecting primary data is questionnaire mode
and sources of secondary data are various magazines, books, newspapers, &
websites etc.
(a) Primary Data Collection: The primary data was collected by means of
questionnaire and analysis was done on the basis of response received from
the customers. The questionnaire has been designed in such a manner that
the customer satisfaction and awareness level can be measured and
consumer can enter his responses easily.
(b) Secondary Data Collection: The Secondary data refer to those data
which are gathered for some other purpose and are already available in the
internal records and commercial, trade, or government publications. In my
project, the Secondary data was collected by going through various
newspapers, magazines, journals and web sites.
Data Analysis
Data after collection have been processed and analyzed using percentages.
Data obtained during the study have been systematically tabulated and
interpreted with the help of tables or pie charts.
63
DATA ANALYSIS AND ITS INTERPRETATION
1. What is your occupation?
Occupation
Business Class
Service Class
%age of Respondents
52%
48%
52%
52%
51%
50%
49%
48%
47%
46%
48%
Business Class
Service Class
Interpretation :
Majority of the respondents covered were businesspersons
i.e. 52%.
Service class formed 48% of the total respondents.
64
2. How much of your income do you invest annually?
Income
Below 5000
Below 10000
More than 10000
%age of Respondents
40
35
25
40%
40%
35%
30%
25%
20%
15%
10%
5%
0%
35%
25%
Below 5000
Below 10000
More than 10000
Interpretation:
25% respondents say that they invest below than Rs. 5000 out of their
annual income.
35% respondents say that they invest below than Rs. 10000 out of their
annual income.
25% respondents say that they invest below than Rs. 10000 out of their
annual income.
65
3 . Are you aware of Privatization in Life Insurance sector?
Yes
90%
No
10%
90%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
10%
Yes
No
Interpretation
The evident from above finding showed that out of 100
respondents, majority of the respondents 90% respondents are
aware of the private companies present in the insurance sector
10% respondents are not aware of private insurance companies.
66
4. Are you aware of following Life Insurance Companies ?
Insurance Company
Kotak Mahindra
LIC
ICICI Pru
HDFC Standard Life Insurance
Bajaj Allianz Life Insurance
No. of Respondents
77
98
85
80
66
98
100
90
80
70
60
50
40
30
20
10
0
85
77
80
66
Kotak
Mahindra
Interpretation
LIC
ICICI Pru
HDFC
Bajaj
Allianz
The above evident shows that out of the total respondents 98
respondents are aware of LIC, which is a public sector insurance
company.
In private sector majority (85) of the respondents are aware of
ICICI , 80 respondents are aware of HDFC followed by Kotak
Mahindra Old Mutual and Bajaj Allianz Life Insurance.
67
5. Do you have insurance policy?
Response
Yes
No
%age of Respondents
85%
15%
85%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
15%
Yes
No
Interpretation :
From the above figure it is clear that majority (85%) of the
respondents are covered under life insurance schemes and 15% are not
covered under any life insurance scheme.
68
7. If yes, is it under Kotak Mahindra Old Mutual Life Insurance Ltd.
Co. ?
Response
Yes
No
%age of Respondents
60%
40%
60%
60%
50%
40%
30%
20%
10%
0%
40%
Yes
No
Interpretation :
60% people say that they have insurance under Kotak Mahindra Old
Mutual Life Insurance Ltd.
40% of the respondents' say that they are not having insurance under
Kotak Mahindra Old Mutual Life Insurance Ltd.
69
8. From where you get awareness about Kotak Mahindra Old Mutual
Life Insurance Ltd. ?
Response
Electronic Media
Print Media
Agents
Others
%age of Respondents
39%
28%
11%
22%
39%
40%
35%
30%
25%
20%
15%
10%
5%
0%
28%
22%
11%
Electronic Media
Print Media
Agents
Others
Interpretation :
39% of the respondents have heard about Kotak Mahindra Old Mutual
Life Insurance Ltd. through Electronic Media i.e. Computers, Internet,
Television etc
28% of the respondents have heard about Kotak Mahindra Old Mutual
Life Insurance Ltd. through Print Media i.e. Newspapers, Magazines,
Journals etc.
22% have heard about it from their agents and remaining 11% have heard
about Kotak Mahindra Old Mutual Life Insurance Ltd. through others
sources.
70
1. What was the motive behind purchasing the policy?
Particulars
Risk Coverage
Saving
Investment
Taxation
%age of Respondents
5%
29%
14%
52%
60%
50%
40%
30%
20%
10%
52%
29%
14%
5%
0%
Risk Coverage
Saving
Investment
Taxation
Interpretation :
Majority of the respondent (52%) says that the most important reason
in mind while taking the life insurance policy is tax benefit as there
life insurance policy is exempted from tax.
People who believe in capital gains propose to go for investment in
insurance that made 14%
5% respondents invest in life insurance policy. So as to set adequate
risk coverage.
71
8.
Are you satisfied with the services offered by Kotak Mahindra
Old Mutual Life Insurance Ltd.?
Response
Yes
No
%age of Respondents
75%
25%
75%
80%
70%
60%
50%
40%
30%
20%
10%
0%
25%
Yes
No
Interpretation :
From the above graph it is clear that majority of the respondents are satisfied
with the services offered by Kotak Mahindra Old Mutual Life Insurance Ltd.
i.e. 75%. Only 25% respondents are dissatisfied with the services offered by
Kotak Mahindra Old Mutual Life Insurance Ltd.
72
9. If yes, how much extent ?
Highly Satisfied
Satisfied
Neutral
Not Satisfied
Dissatisfied
55%
15%
15%
10%
5%
60%
55%
50%
40%
30%
15%
20%
15%
10%
10%
5%
0%
Highly
Satisfied
Satisfied
Neutral
Not Satisfied Dissatisfied
Interpretation :
From the above graph it is clear that majority (55%) of the respondents are
highly satisfied with the services offered by Kotak Mahindra Old Mutual
Life Insurance Company. 15% of the respondents are satisfied with Kotak
Mahindra, only 15% responded as Neutral. Only 10% are not satisfied and
5% are dissatisfied with the services offered by Kotak Mahindra Old Mutual
Life Insurance.
73
10.Are you aware of the following insurance plans offered by Kotak
Mahindra Old Mutual Life Insurance Ltd.?
Single Premium
Money Back
Endowment
Children
Pension
ULIP
All
1%
25%
20%
20%
24%
1%
9%
25%
24%
25%
20%
20%
20%
15%
10%
9%
5%
1%
0%
Single
Premium
Money
Back
Endowment
Children
Pension
1%
ULIP
All
Interpretation
Majority of the respondent i.e.25% are aware about the money back
plan.
24% of the respondent is aware about the pension plan.
20% of the respondent is aware about the Endowment policy.
20% of the respondent is aware about the children policy.
Only 9% of the respondents know about all the plans.
74
12.
How will you rate the Kotak Mahindra Old Mutual Life
Insurance Ltd. in maintaining good customer relationship?
Parameters
Response
Good
70%
Average
25%
Poor
5%
70%
70%
60%
50%
40%
30%
20%
10%
0%
25%
5%
Good
Average
Poor
Interpretation:
The above chart shows that out of 100 respondents surveyed 70% have rated
the Kotak Mahindra Insurance as good in maintaining customer relationship.
25% Respondents have rated the Kotak Mahindra as average in maintaining
good customer relationship. Rest of them has rated the Kotak Mahindra Old
Mutual Life Insurance Ltd.
relationship.
as poor in maintaining good customer
75
13. Do you think services provided by Private sector will be better than
Public sector companies?
Yes
78
No
22
78%
80%
70%
60%
50%
40%
30%
20%
10%
0%
22%
Yes
No
Interpretation
The above figure depicts that 78% of the total respondents agree that private
sector is providing better services as compared to the public sector.
76
FINDINGS OF THE STUDY
1. It is clear from the above study that most of the respondents are aware
of the private companies present in the insurance sector.
2. It is revealed from the study that out of 100 respondnets, 77
respondents are aware of Kotak Mahindra Old Mutual Life Insurance
Co.
3. The above study shows that majority of the respondents are covered
under life insurance schemes while remaining 15% are not covered
under any life insurance scheme.
4. It is clear from the research study that 60% respondents have availed
insurance plans from Kotak Mahindra Old Mutual Life Insurance Ltd.
5. The above study shows that 39% of the respondents have heard about
Kotak Mahindra Old Mutual Life Insurance Ltd. through Electronic
Media i.e. Computers, Internet, Television etc. while 28% of the
respondents have heard about Kotak Mahindra Old Mutual Life
Insurance Ltd. through Print Media i.e. Newspapers, Magazines,
Journals etc. The remaining 22% have heard about it from their agents
and remaining 11% have heard about Kotak Mahindra Old Mutual
Life Insurance Ltd. through others sources.
77
6. Majority of the respondent favoured that the most important reason in
mind while taking the life insurance policy is tax benefit as there life
insurance policy is exempted from tax.
7. Most of the respondents are satisfied with the services offered by
Kotak Mahindra Old Mutual Life Insurance Ltd.
8. It is clear that majority (55%) of the respondents are highly satisfied
with the services offered by Kotak Mahindra Old Mutual Life
Insurance Company. 15% of the respondents are satisfied with Kotak
Mahindra, only 15% responded as Neutral. Only 10% are not satisfied
and 5% are dissatisfied with the services offered by Kotak Mahindra
Old Mutual Life Insurance.
9. It is revealed from the study that most of the respondnets are aware of
Money Back, Endowment, Children and Pension plans of Kotak
Mahindra Old Mutual Life Insurance Ltd.
10.Most of the respondents have rated Kotak Mahindra Old Mutual Life
Insurance Ltd. as "Good" in maintaining customer relationship.
11.Majority of the respondents agree that private sector is providing
better services as compared to the public sector
78
RECOMMENDATIONS
Kotak should cover rural areas, as they are also the segment of
population not aware of the advantages of policies.
Kotak must conduct seminars and presentations at all kinds of places
whether cities or towns and focus should be on people who have large
network of references.
The policies should be easy to understand and simple that people should
be clean about the plans.
Kotak should go in for product innovation, new features and proceed for
good customer success for satisfaction of the customer.
Kotak should cover uneducated people, as they are not aware of the
advantages of the policies for tax savings.
Moreover presentations should be conducted at places where more and
more people are available such as educational institutes, society clubs,
hospitals etc.
The agent should be provided with more and more incentives so that they
can keep further some assistants who can help them to fetch more
policies side by side what agents themselves fetch out.
Kotak should do efforts to promote the brand name and create awareness
through channels such as advertisements.
Measures to build faith among people about Kotak Mahindra Old Mutual
Life Insurance Ltd. must be taken on accounts of its reliability,
credibility, responsibility, sincerity and the long lasting establishment.
The agent should not only be provided with training at the time of
selection but they should also be given refresher training periodically. It
79
increases their professionalism and make them more competitive. Every
year the agents should be given the training for at least one week.
The agent should be given sufficient traveling allowance so as to
compensate the expenditures made by them to meet customers from one
place to another.
Kotak should deal with the customer's complaints. The company should
avoid legal proceedings by setting the claims out of the courts.
80
CONCLUSION
The insurance sector has a vast potential not only because incomes are
increasing and assets are expanding but also because the volatility in the
system is increasing. Trade is becoming increasingly global. Technologies
are changing and getting replaced at a faster rate. In this more uncertain
world, for which enough evidence is available in the recent period, insurance
will have an important role to play in reducing the risk burden individuals
and businesses have to bear. In the emerging scenario, the insurance
industry must pay attention to (a) product innovation, (b) appropriate
pricing, and (c) speedy settlement of claims. The approach to insurance
must be in tune with the changing times. The mission of the insurance sector
in India should be to extend the insurance coverage over a larger section of
the population and a wider segment of activities.
Globalization has opened new frontiers of technology, knowledge,
communication and information. About the awareness regarding the
products offered by Kotak Mahindra, I conclude that most of the people are
aware but they still need more publicity among the citizens of the city.
Kotak Mahindra has set all the strategies and mission after proper vision and
is achieving the targets by working in co-operative and co-coordinated
manner and giving the people full services and facilities and making work
easy. At the end I would like to conclude that Kotak Mahindra Old Mutual
Life Insurance Ltd. should try to create awareness among people about their
company.
So, in the last I would like to conclude by saying that Kotak Mahindra is a
wonderful gift given to the mankind in the new era for people development
and maintenance of the world as well as India.
81
LIMITATIONS OF THE STUDY
1. The study is to be limited in Chandigarh only because of limited time
and financial resources. So results of the study may not be generalized
for India as a whole.
2. The sample size is limited to 100 respondents, so complete knowledge
about subject is not possible.
3. Another factor could be the existence of biasness in the respondents
mind. Many times these biasness have greater bearing on the
responses put forward by respondents.
4. Human weaknesses such as inattentiveness cannot be ignored.
5. People generally considered me as an insurance agent and tried to
avoid discussions with me.
82
BIBLIOGRAPHY
Books & Journals
Mishra, M.N., ―Insurance Principles and Practices‖
(S.Chand & Co., Delhi, 1999)
Kotler, Philip, ―Marketing Management‖
(Prentice Hall India, 2004)
Kothari, C.R., ―Research Methodology: Methods & Techniques‖
(Wishwa Publication, Delhi, 1990)
Websites :
http://www.kotaklifeinsurance.com/
www.bimaonline.com
www.irdaindia.org
83
QUESTIONNAIRE
Dear Sir/Madam,
I am Hitesh Sharma MBA-IIIrd Sem. student of M.K. Institute of
Management Studies, Shahpur, Jalandhar conducting survey on Customer
Awareness Regarding Kotak Mahindra Old Mutual Life Insurance Ltd..
Please spare few minutes to fill the questionnaire.
1. What is your occupation?
Business Class • Service Class •
2. How much of your income do you invest annually?
Below 5000 • Below 10000 •
3.
More than 10000 •
Are you aware of Privatization in Life Insurance sector?
Yes
•
No
•
4.
Are you aware of following Life Insurance Companies ?
Kotak
ICICI Pru
Bajaj Allianz
•
•
•
HDFC
LIC
•
•
5.
Do you have insurance policy?
Yes
•
No
•
7.
If yes, is it under Kotak Mahindra Old Mutual Life Insurance Ltd. ?
Yes
•
No
•
84
8.
From where you get awareness about Kotak Mahindra Old Mutual
Life Insurance Ltd. ?
Electronic Media •
Agents
•
Print Media
Others
•
•
9.
What was the motive behind purchasing the policy?
Risk Coverage
Saving
Investment
Taxation
•
•
•
•
8.
Are you satisfied with the services offered by Kotak Mahindra?
Yes
•
No
•
9.
If yes, how much extent ?
Highly Satisfied
Neutral
Dissatisfied
•
•
•
Satisfied
Not Satisfied
•
•
10.
Are you aware of the following insurance plans offered by Kotak
Mahindra Old Mutual Life Insurance Ltd. ?
Single Premium
Endowment
Pension
All
•
•
•
•
Money Back
Children
ULIP
•
•
•
12
How will you rate the Kotak Mahindra Life Insurance in
maintaining good customer relationship?
Good • Average • Poor •
85
13.
Do you think services provided by Private sector will be better than
Public sector companies?
Yes •
No
•
PERSONAL PROFILE
Name:__________________________________
Age : A. 18-30 Years B. 30-45 Years
C. 45-60 Years D. 60 and above
Sex : Male
Qualification :
Female
A. Undergraduate
C. Post-Graduate
B. Graduate
Contact No.______________________________
THANK YOU
86
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