Summer Training Report

on

Finding new potential area of kotak life insurance

Submitted to M.D University Rohtak in partial fulfillment of the requirements

for the award of degree of Master of Business Administration

2009-2011

Submitted by:
SUMEET GARG

ROLL NO. 543/MBA/09

M.B.A. 4th Semester

P.D.M. COLLEGE OF ENGINEERING, BAHADURGARH

MAHARSHI DAYANAND UNIVERSITY, ROHTAK
 DECLARATION

I, Sumeet, Roll No. 543/MBA/09 class MBA 4th SEM of PDM college of Engineering, Bahadurgarh, hereby
declare that the project entitled ‘ finding new potential area of kotak life insurance ’ is an original work
and same has not been submitted to any other institution for the award of any other degree. The
interim report was presented to the supervisor on ________________ and the pre-submission was
made on _______________.

The feasible suggestions as approved by Faculty have been duly incorporated in consultation with the
supervisor.

Countersigned

Signature of supervisor Signature of the Candidate

Forwarded by

Director/Principal of the institute  

 ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any task would be
incomplete without mentioning the people who made it possible, whose consistent guidance and
encouragement crowned the efforts with success.

I also express my heartfelt gratitude to Mrs. shruti, lecturer of management studies, under whose
guidance I undertook this project, for extending the advice and direction that is required to carry on a
study of this project, and for helping me with the intricate detail of the every step of the way.

I would express my thanks and gratitude to my project guides Dr. Rohit Garg And Mrs. Monisha
Vashishta for their able guidance and support throughout the tenure of the project.

Sumeet garg
 INTRODUCTION

INDUSTRY PROFILE

The insurance industry has faced many challenges over the last decade including:

Globalization is pushing companies to operate in different continents forcing them to enter into
new partnerships in order to improve efficiencies

Competition between the various players has resulted in increased merger and acquisition
activities driving industry convergence and value chain decomposition

The customer is more knowledgeable and demanding than ever before and this is forcing
companies to perform process integration, operational restructuring and technology upgrades

Insurance companies are moving beyond their traditional business models and are searching for
the right combination of technology and processes to remain profitable. Companies are investing
more in information technology in order to alter their business models and processes.

HISTORY OF INSURANCE

In some sense we can say that insurance appears simultaneously with appearance of human
society. We know of two types of economies in human societies: money economies (with
markets, money, financial instruments and so on) and non-money or natural economies (without
money, markets, financial instruments and so on). The second type is a more ancient form than
the first. In such an economy and community, we can see insurance in the form of people helping
each other. For example, if a house burns down, the members of the community help build a new
one. Should the same thing happen to one's neighbor, the other neighbors must help? Otherwise,
neighbors will not receive help in the future. This type of insurance has survived to the present
day in some countries where modern money economy with its financial instruments is not
widespread (for example countries in the territory of the former Soviet Union).

Achaemenian monarchs were the first to insure their people and made it official by registering
the insuring process in governmental notary offices. The purpose of registering was that
whenever the person who presented the gift registered by the court was in trouble, the monarch
and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient
Iran: "Whenever the owner of the present is in trouble or wants to construct a building, set up a
feast, have his children married, etc. the one in charge of this in the court would check the
registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount
of twice as much."

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they
organized guilds called "benevolent societies" which cared for the families and paid funeral
expenses of members upon death. Guilds in the Middle Ages served a similar purpose.

Separate insurance contracts were invented in Genoa in the 14th century, as were insurance pools
backed by pledges of landed estates. These new insurance contracts allowed insurance to be
separated from investment, a separation of roles that first proved useful in marine insurance.

The first insurance company in the United States underwrote fire insurance and was formed in
Charles Town (modern-day Charleston), South Carolina, in 1732. Company was the first to make
contributions toward fire prevention. Not only did his company warn against certain fire hazards,
it refused to insure certain buildings where the risk of fire was too great, such as all wooden
houses.

In the United States, regulation of the insurance industry is highly Balkanized, with primary
responsibility assumed by individual state insurance departments. Whereas insurance markets
have become centralized nationally and internationally, state insurance commissioners operate
individually, though at times in concert through a national insurance commissioners'
organization. In recent years, some have called for a dual state and federal regulatory system for
insurance similar to that which oversees state banks and national banks.

Brief history of Insurance Sector in India:-

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

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

insurance is probably as old as the story of mankind. The same instinct that prompts modern
businessmen today to secure themselves against loss and disaster existed in primitive men also.

They too sought to avert the evil consequences of fire and flood and loss of life and were willing

to make some sort of sacrifice in order to achieve security. Though the concept of insurance is

largely a development of the recent past, particularly after the industrial era – past few centuries

– yet its beginnings date back almost 6000 years.

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

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

on Indian Soil. All the insurance companies established during that period were brought up with

the purpose of looking after the needs of European community and these companies were not

insuring Indian natives. However, later with the efforts of eminent people like Babu Muttylal

Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were

being treated as sub-standard lives and heavy extra premiums were being charged on them.

Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company

in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with

highly patriotic motives, insurance companies came into existence to carry the message of

insurance and social security through insurance to various sectors of society. Bharat Insurance

Company (1896) was also one of such companies inspired by nationalism. The Swadeshi

movement of 1905-1907 gave rise to more insurance companies. The United India in Madras,

National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore

were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in

one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The

Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the

companies established during the same period. Prior to 1912 India had no legislation to regulate
insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund

Act were passed. The Life Insurance Companies Act 1912 made it necessary that the premium

rate tables and periodical valuations of companies should be certified by an actuary. But the Act

discriminated between foreign and Indian companies on many accounts, putting the Indian

companies at a disadvantage.

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

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

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

insurance companies many financially unsound concerns were also floated which failed

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

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

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

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

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

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

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

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

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

bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956,

and the Life Insurance Corporation of India was created on 1st September, 1956, with the

objective of spreading life insurance much more widely and in particular to the rural areas with a

view to reach all insurable persons in the country, providing them adequate financial cover at a

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

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

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

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

of LIC took place and large numbers of new branch offices were opened. As a result of re-

organization servicing functions were transferred to the branches, and branches were made

accounting units. It worked wonders with the performance of the corporation. It may be seen that

from about 200.00 Crore of New Business in 1957 the corporation crossed 1000.00 Crore only in

the year 1969-70, and it took another 10 years for LIC to cross 2000.00 Crore mark of new

business. But with re-organization happening in the early eighties, by 1985-86 LIC had already

crossed 7000.00 Crore Sum Assured on new policies.

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

offices, 7 zonal offices and the corporate office. LIC’s Wide Area Network covers 100 divisional

offices and connects all the branches through a Metro Area Network. LIC has tied up with some

Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s

ECS and ATM premium payment facility is an addition to customer convenience. Apart from

on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmadabad,

Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision

of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK

offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized

records of the satellite offices will facilitate anywhere servicing and many other conveniences in

the future.
 LIFE INSURANCE

Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured
covered in the policy. Essentially, a life insurance policy is a contract between the named insured
and the insurance company wherein the insurance company agrees to pay an agreed upon sum of
money to the insured's named beneficiary so long as the insured's premiums are current.

With a large population and the untapped market area of this population insurance happens to be
a very big opportunity in India. Today it stands as a business growing at the rate of 15-20%
annually. Together with banking services, it adds about 7 percent to the countries GDP. Nearly
80% of Indian populations are without life insurance cover and the health insurance. This is an
indicator that growth potential for the insurance sector is immense in India.

Since then the insurance industry has gone through many changes. The liberalization of the
industry the insurance industry has never looked back and today stand as one of the most
competitive and exploring industry in India. The entry of the private players and the increased
use of the new distribution are in the limelight today. The use of new distribution techniques and
the IT tools has increased the scope of the industry in the longer run.

Insurance is the business of providing protection against financial aspects of risk, such as those
to property, life health and legal liability. It is one method of a greater concept known as risk
management –which is the need to mange uncertainty on account of exposure to loss, injury,
disadvantage or destruction.

Insurance is the method of spreading and transfer of risk. The fortunate many who are exposed to
some or similar risk shares loss of the unfortunate. Insurance does not protect the assets but only
compensates the economic or financial loss.

In insurance the insured makes payment called “premiums” to an insurer, and in return is able to
claim a payment from the insurer if the insured suffers a defined type of loss. This relationship is
usually drawn up in a formal legal contract.

Insurance companies also earn investment profits, because they have the use of the premium
money from the time they receive it until the time they need it to pay claims. This money is
called the float. When the investments of float are successful they may earn large profits, even if
the insurance company pays out in claims every penny received as premiums.
 CLASSIFICATION OF INSURANCE

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

INSURANCE

LIFE INSURANCE GENERAL INSURANCE

WHAT IS LIFE INSURANCE?

A human being is an income generating asset. One’s manual labour, professional skills and
business acumen are the assets. This asset also can be lost through unexpectedly early death or
through sickness and disabilities caused by accidents. Accidents may or may not happen. Death
will happen, but the timing is uncertain. If it happens around the time of one’s retirement, when
it could be expected that the income will normally cease, the person concerned could have made
some other arrangements to meet the continuing needs. But if it happens much earlier when the
alternate arrangements are not in place, here can be losses to the person and dependents.
Insurance is necessary to help those dependent on the income.
A person, who may have made arrangements for his needs after his retirement, also would need
insurance. This is because the arrangements would have been made on the basis of some
expectations like, likely to live for another 15 years, or that children will look after him. If any of
these expectations do not become true, the original arrangement would become inadequate and
there could be difficulties. Living too long can be as much a problem as dying too young. Both
are risks, which need to be safeguarded against. Insurance takes care.
BASIC PRINCIPLES OF LIFE INSURANCE
 Insurable Interest : Ordinarily, the proposer of a life insurance contract should have an
insurable interest in the life of the life insured. The law of life insurance on insurable
interest in India is in a state of chaos. Though the roots of the doctrine of ‘insurable
interest’ lie in the English law but at the same time, various developments taking place in
other parts of the world also have to be looked into and the changing social conditions
have to be taken into account to redefine the doctrine of ‘insurable interest’. Based on
these excerpts, it is clear that ‘insurable interest’ depends upon the facts of each case – no
clear legal framework exists to define insurable interest. Whether a relationship as
‘proposer – life assured’ creates an insurable interest has to be seen viewed whether this
familial affection will provide adequate social and legal safeguards against premeditated
homicide by the proposer to procure substantial life insurance proceeds. That is,
 no moral hazard should exist when a life insurance contract is intended to be purchased.
Examples of relationships where insurable interest exist between proposer and life assured are:
self proposing on his / her life, parent – child, husband – wife. Trust – trustee, employer –
employee and creditor – debtor.
 Utmost Good Faith: A life insured knows about the state of his / her health better than
anyone else. What may not be unraveled in a medical examination may well be in the
know of the life insured. Hence, life insurance contracts are postulated on the belief that
the life insured will reveal all the relevant particulars in utmost good faith when applying
for an insurance contract. That is, non disclosure of material facts that may have guided
the insurer to decline or offer on different terms an insurance contract, will give the right
to an insurer to repudiate an insurance claim when the insured event occurs.
PARTIES TO A LIFE INSURANCE CONTRACT
a) Proposer: The proposer, also known as the premium payer or the policyholder, pays the
premium. For determining whether future premiums can be paid to keep the contract
alive, ability of the proposer is considered. All tax benefits as well as maturity proceeds
are available to the proposer.
b) Life Assured: The life assured, as known as the life insured, is the person on whose life
the policy is taken. Mortality or risk premium is charged based on the age of the life
 assured. As stated above, an insurable interest should exist between the proposer and life
assured.
c) Nominee: Where the proposer and life assured are the same persons, it is mandatory to
nominate a person to receive the benefits of the insurance policy in the event the proposer
deceased before the policy matures. A nominee has to be a real person, i.e. artificial
bodies like company and trust can’t become nominee.
d) Appointee: If the nominee is a minor, an appointee is required to act on behalf of the
nominee till he / she attains majority.
e) Assignee: An insurance policy can be assigned to another person (real persons and
artificial bodies are acceptable as assignees) who then becomes the owner of the policy
and is entitled to receive policy benefits. As a result of an assignment, an assignee
supersedes the policyholder who has assigned the policy.

ADVANTAGES OF LIFE INSURANCE

Life insurance has no competition from any other business. Many people think that life insurance
is an investment or a means of saving. This is not a correct view. When a person saves, the
amount of funds available at any time is equal to the amount of money set aside in the past, plus
interest. This is so in a fixed deposit in the bank, in national savings certificates, in mutual funds
and all other savings instruments. If the money is invested in buying shares and stocks, there is
the risk of the money being lost in the fluctuations of the stock market. Even if there is no loss,
the available money at any time is the amount invested plus appreciation. In life insurance,
however, the funds available is not the total of the savings already made (premiums paid),but the
amount one wished to have at the end of the savings period (which is the next 20 or 30 years).
Even so, a comparison with other forms of savings will show that life insurance has the
following advantages:-
a) In the event of death, the settlement is easy. The heirs can collect the moneys quicker,
because of the facility of nomination and assignment. The facility of nomination is now
available for some bank accounts.
b) There is a certain amount of compulsion to go though the plans of savings. In other
forms, if one changes the original plan of savings, this is no loss. In insurance, there is a
loss.
 c) Creditors cannot claim the life insurance moneys. They can be protected against
attachments by courts.
d) Marketability and liquidity are better. A life insurance policy is property and can be
transferred or mortgaged. Loans can be raised against the policy.

2. Non-Life (general) Insurance:-

Triton insurance co. ltd was the first general insurance company to
be established in India in 1850, whose shares were mainly held by the British. The first general
insurance company to be set up by an Indian was Indian mercantile insurance co. Ltd., which
was stabilized in 1907. There emerged many a player on the Indian scene thereafter.

The general insurance business was nationalized after the promulgation of General
Insurance Corporation (GIC) OF India undertook the post-nationalization general insurance
business.
 COMPANY PROFILE

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

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

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

Kotak Mahindra Bank Ltd. (74%) and Old Mutual plc. (26%) Old Mutual plc is a world-Class

international financial services company. It was established in South Africa before 160 years.

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

insurance, asset management, banking and general insurance operations. The company serves 4

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

operations.

In the USA, OLD MUTUAL is one of the top ten fixed annuity businesses offering an array

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

company’s US Life business recorded sales of $4 billion at the end of 2002.

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.

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 VPFinance at Gujarat
Glass Ltd.
As Chief Financial Officer at Kotak Life Insurance, he oversees all aspects of Finance including
Operations, Regulatory, Internal Control, Finance, Accounts and Treasury.
Mr. Arun Patil (Vice President - Sales & Management Development)
Mr. Arun Patil is the Vice President - Sales & Management Development with Kotak Life
Insurance. A post- graduate with Law qualifications, he has over 25 years' experience in life
insurance industry. He joined as a Direct Recruit Officer in L.I.C. and worked in various
departments such as Sales, Marketing, I.T., Publicity, Housing & Branch Administration all
across the country. On foreign deputation to Fiji Islands for 5 years, Mr. Patil substantially
increased the market-share of LIC in competitive environment. After heading LIC's premier
Mumbai Division, he joined the then ICICI Ltd. as a member of the insurance venture team and
later worked for Tata AIG Insurance Company as Head of Sales Development. Widely traveled
all over the country & the world several times for insurance related work, Mr. Patil presently has
responsibilities to enhance the skills, knowledge, productivity, and professionalism of the sales-
force, with special emphasis on developing all Managers to enhance their competencies,
capabilities & managerial effectiveness.
MILE STONES - KOTAK LIFE INSURANCE
Kotak Life Insurance, aim to help customers take important financial decisions at every stage in
life by offering them a wide range of innovative life Kotak Mahindra Life Insurance Ltd. is a
joint venture between Kotak Mahindra Bank Ltd.(KMBL), and Old insurance products, to make
them financially independent. Jeene Ki Azaadi.

A Lifetime of Value

Kotak Mahindra one of India's leading financial institutions was born in 1985 as Kotak Capital
Management Finance Limited. This company was promoted by Mr. Uday Kotak , Mr. Sidney A.
A. Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra and Mr. Anand Mahindra
took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance
Limited.
It's been a steady and confident journey to growth and success.

1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over FICOM, one of
India’s largest financial retail marketing networks
1992 Enters the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into a separate company
- Kotak Securities. Investment Banking division incorporated into a separate
company - Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company – Kotak
Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford
Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of
Matrix Information Services Limited marks the Group’s entry into
information distribution.
1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Kotak Securities launches kotakstreet.com - its on-line broking site. Formal
commencement of private equity activity through setting up of Kotak
Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation
Launches Insurance Services
2003 Kotak Mahindra Finance Ltd. converts to bank

Kotak Mahindra is one of India's leading financial institutions, offering complete financial
solutions that encompass every sphere of life. From commercial banking, to stock broking, to
mutual funds, to life insurance, to investment banking, the group caters to the financial needs of
individuals and corporate.
The group has a net worth of around Rs.1, 700 crore and employs over 4,000 employees in its
various businesses. With a presence in 74 cities in India and offices in New York, London,
Dubai and Mauritius, it services a customer base of over 5, 00,000.

ORGANISATION STRUCTURE
  KOTAK LIFE INSURANCE
The organization of Kotak Life Insurance is divided into 5 categories:-
 Finance
 Sales
 Marketing
 Operations
 Human Resource
 Corporate Structure

The Chairman of Kotak Group is Mr. Uday Kotak and Kotak Insurance is managed by Mr.
Gaurang Shah – Managing Director.

MANAGING

DIRECTOR

CFO VP-Sales
&
&

SALES MARKETING HR APPOINTED CIO

HEAD HEAD
& ACTUARY

FINANCE
The Finance section is operated centrally by Head Office which is Bombay headed by CFO - Mr.
G. Murlidharan and further sub-divided into categories like Vice Presidents of different
departments. These departments are: -
CPC & Group Ops, Internal Control, MIS, Accounts & Compliance, Underwriting, Branch
Operations.

CFO

&

Accounts Internal Underwri- Branch

and control ting operation
compliance MIS

MANAGERS MANAGERS MANAGERS MANAGERS MANAGERS

EXEC. EXEC. EXEC. EXEC. EXEC.

FINANCE FINANCE FINANCE FINANCE FINANCE

SALES
The Sales Department is divided on the basis of region. Each region is thereafter divided into
categories like Alternate Channel, Tied Channel and Group Business. The Sales dept is headed
by Mr. Pankaj Desai, Alternate Channel Head – Mr. Suresh Agarwal, Tied Channel Head – MR.
Subbaiah K P, Group Business Head – Group Business Head – Mr. Sandeep Srikhande.
Subdivided into categories like Regional Managers, Area Managers and others.

SALES HEAD

ALTERNATE TIED CHANNEL GROUP BUSINESS

CHANNEL HEAD RM HEAD

REGIONAL AREA REGIONAL HEAD

MANAGER
MANAGER

AGENCY
TEAM CUSTOMER
AREA MANAGER & RELATIONSHIP
MANAGERS BM MANAGER
MARKETING
The Marketing Department is headed by Mr. Rahul Sinha from Head Office.

MARKETING
HEAD

PRODUCT &
BRAND CHANNEL
DEVELOPMENT
HEAD HEAD

BRAND & REGIONAL HO

PRODUCT
PR MARKETING CHANNEL
MANAGERS
MANAGERS DEV. TEAM

Trade
Marketing

Managers

Asst. Trade

Marketing
Managers
 PRODUCTS – Kotak Life Insurance
INDIVIDUAL
 Kotak Headstart Child Plans
 Kotak Sukhi Jeevan Plan
 Kotak Privileged Assurance Plan
 Kotak Term Plan
 Kotak Preferred Term Plan
 Kotak Money Back Plan
 Kotak Child Advantage Plan
 Kotak Endowment Plan
 Kotak Capital Multiplier Plan
 Kotak Retirement Income Plan
 Kotak Retirement Income Plan
 Kotak Safe Investment Plan II
 Kotak Flexi Plan
 Kotak Easy Growth Plan
 Kotak Premium Return Plan
 Riders
GROUP
 Kotak Term Grouplan
 Kotak Credit-Term Grouplan
 Kotak Complete Cover Grouplan
 Kotak Gratuity Grouplan
 Kotak Superannuation Grouplan

1. Kotak Safe Investment Plan II

Kotak Safe Investment Plan II is a unit linked plan that combines the benefits of insurance and
capital market returns into one. This plan from the stable of Kotak Life Insurance is a true
reflection of the company’s essence: innovation that will benefit the investor.
What makes investing in Kotak Safe Investment Plan II truly unique is that you enjoy a
Guaranteed Maturity Value, with varying degrees of equity exposure depending on your risk
appetite. So, if the market value of your units is higher, you reap the benefits with the peace of
mind that whilst in a bear market your investment is under-pinned by the Guaranteed Maturity
Value. And there’s more, the returns are totally tax-free.

2. Kotak Retirement Income Plan

An ideal retirement solution is the one that gives you complete flexibility and peace of mind, not
only while you save for your retirement but also after you retire. To help you plan towards the
golden years of your life, we present to you the Kotak Retirement Plan (Unit-Linked).
An investment plan designed to secure your future, it assures that even though you have stopped
working, your income does not. It is offered to you in three versions – Regular Premium, With
Cover and Without Cover, in addition to a Single Premium version. The regular premium options
come with the Kotak “Seal of Guarantee”@. These plans have been designed to ensure that your
money earns you handsome returns, safe from the vagaries of the capital market, so that you can
retire comfortably and securely.
Step 1: Choose from the Regular Premium With Cover and Without Cover Options or the
Single Premium plan based on your need for protection from the harsh uncertainties of life and
the investment markets
Step 2: Decide the amount of savings (premiums) you may wish to allocate to building your
retirement kitty and aiming for healthy cash flows in your golden years
Step 3: Choose the retirement (vesting) age between the age of 45 and 75 years.
Step 4: Select the fund options to balance your risk profile and the tenure of investment.
Step 5: Opt for any of the rider benefits in the regular premium versions to enhance flexibility
and boost benefits.
 3. Kotak Capital Multiplier Plan
What is the Kotak Capital Multiplier Plan?"

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.

4. Kotak Preferred Term Plan

What is Kotak Preferred Term Plan?"

The Kotak Preferred Term Plan is designed to provide you with reduced premium rates for a sum
assured of Rs.10 lakhs and above.

"Who is eligible for Kotak Preferred Term Plan?"

1) Males over the age of 18 years, who do not use tobacco in any form.
2) Females over the age of 18 years.
"What value-adds can you opt for?"
You may avail of the following non-participating value-adds for a nominal premium at the time
of taking your policy, subject to aggregate premium on all value-adds (except Critical Illness
Benefit) not exceeding 30% of the basic Kotak Term Plan premium.

 Accidental Death Benefit

 Permanent Disability Benefit
 Critical Illness Benefit
5. Kotak Money Back Plan

What is Kotak Money Back Plan?"

The Kotak Money Back Plan not only covers your life, it also assures you a certain percent of
the sum assured as cash payment at regular intervals of every 5 years. It is a savings plan with
the added advantage of life cover and regular cash inflow. This plan is ideal for planning special
moments like a wedding, your child's education or purchase of an asset etc. This is a
participating plan (with profits).
"What are the advantages of this plan?"
 1. The plan not only covers your life but also provides you with a survival benefit payout
every 5 years.
2. In the unfortunate event of death of life insured, the beneficiary would receive the death
benefit. The death benefit keeps increases by 7% of the sum assured every year.
3. On maturity, you would receive the sum of the Survival Benefit, Bonus addition* and
Guaranteed addition**.
4. The amount available in the Accumulation Account is invested in various financial
instruments (as per IRDA regulations) so your money works hard for you.
5. The Automatic Cover Maintenance facility ensures the policy remains in force even if
you miss premium payments. This facility is available after the first three years of the
term.
6. You have the benefit of a 15-day free look period.
7. You have the option of paying premiums quarterly, half yearly or yearly.

"What value-adds can you opt for?"

You may avail of the following value-ads for a nominal premium at the time of taking the plan,
subject to the aggregate premium on all value-ads not exceeding 30% of the basic Kotak Money
Back Plan premium.

 Term Benefit/ Preferred Term Benefit

 Accidental Death Benefit
 Critical Illness Benefit
 Life Guardian Benefit

 Accidental Disability Guardian Benefit

6. Kotak Flexi Plan

Here is ‘Kotak Flexi Plan’ which is designed to do just this. It comes to you with the option of
investing in six professionally managed funds, allowing you to allocate your investment in a
combination of one or more funds, switch between them and take charge of your investments.
The plan aims to earn efficient returns over the long term and helps you plan for your financial
goals, with the comfort of a Guaranteed Maturity Value. More importantly, it ensures that your
loved ones are protected, if any unfortunate events were to take place……….a plan that gives
you complete control.

"Why should you invest in Kotak Flexi Plan?"

Kotak Flexi Plan is an ideal option if:

 You want a comprehensive long term solution for managing your finances.
 You want insurance to be an important part of your portfolio to protect your loved ones.
 You are cautious with investments in the equity markets due to the fear of loss of capital.
 You think that financial concepts require lot of time to grasp and are probably best left to
the experts.

7. Kotak Term Plan

What is Kotak Term Plan?"

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 is no maturity benefits payable on survival. This is a non-
participating plan.

"What are the advantages of this plan?"

1. It is a low-cost insurance plan.

2. You can choose between a regular premium payment option or a single premium
payment option.
 In case you opt for the regular premium payment option, you may pay your premiums
either annually, or in half yearly or quarterly installments.
3. Your Kotak Term Plan can be converted into any other plan offered by Kotak Life
Insurance (except for another Term plan) provided there are at least 5 years before cover
ceases*.
4. In case you forget to pay your premium by the due date, you are entitled to a grace period
of 30 days from the date of unpaid premiums.
5. In case of a financial emergency, you have the option to surrender the policy provided
you have taken the single premium payment option*.

"What value-adds can you opt for?"

You may avail of the following non-participating value-adds for a nominal premium at the time
of taking your policy, subject to aggregate premium on all value-adds (except Critical Illness
Benefit) not exceeding 30% of the basic Kotak Term Plan premium.
Accidental Death Benefit
 Permanent Disability Benefit
 Critical Illness Benefit

KOTAK LIFE INSURANCE PERFORMANCE

 Kotak Life offers life insurance, deferred annuity and employee benefit products to
individuals and groups. The business is distributed through three distribution channels.
Tied Agency, Alternate Channels and Group Insurance. The business is value driven
with a focus on long-term shareholder value and an aspiration to meet policyholder
expectations.

 The premium income for the year grew to Rs. 971.51 crore (previous year Rs.
621.85crore). During the year, Kotak Life wrote over 1, 65,200 policies (previous
year96, 750 policies) of adjusted first year annualized premium (single premium
weighted at 1/10th) of Rs. 572 crore (previous year Rs. 367 crore), representing a sum
assured of Rs. 20,163 crore (previous year Rs. 8,631 crore). Riders are not included in
the sum assured.
  As at March 31, 2007, Kotak Life Insurance had around 24,500 active life advisors
who are continuously being trained to facilitate them to advise customers in a proper
manner. The philosophy of Kotak Life to focus on ‘Quality’ life advisors has started
yielding results.

 During 2006-07, Kotak Life introduced two products. In unit linked segment
KotakLife introduced Kotak Head Start Plan; a product designed to offer protection to
individual by securing the future of his child and it met with good success. In the
participating segment Kotak Life introduced Sukhi Jivan, meant for the semi-urban and
rural segments. The product was received well and will be an important part of Kotak
Life’s expansion goals in the coming years.

 Currently, Kotak Life operates from 74 branches in 49 cities with a primary focus on
the middle class and affluent population. During the year 29 new branches were
opened and this expansion was in second tier cities which offer good opportunity and
also provide a window to reach to rural areas.

 A survey conducted in September 2006 in top 8 towns placed Kotak Life at the top 6

brands among the life insurance brands recalled.

 KOTAK ETERNAL LIFE PLAN

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.
  KOTAK PLATINUM ADVANTAGE PLAN
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

KOTAK HEAD START CHILD PLAN

Every child is different. Each has their own set of dreams and aspirations. As a parent you would
like to provide your child with all the building blocks that could develop his or her potential to
the fullest. This could mean extra coaching or tuition for talented children, special training or
equipment for natural athletes or professional training for born singers.

Headstart Child Plans - a specially tailored, cost-effective plan, aims to give your children the
financial means to pursue his or her dreams and live them.
 SWOT ANALYSIS OF “KOTAK LIFE INSURANCE”

Strengths
 Rich experience of the management.
 Stabilized and loyal clients.
 Skilled and tactful staff.
Weaknesses
 Insufficient office equipments.
 Not all employees have his/her cabin.
 Work place (back office) is quite congested.
Opportunities
 Stability through increased brand awareness, market penetration and service offerings
across all categories of financial services.
 Increase in customer’s wallet share.
 Leveraging the latest technology for providing quality and client centric services.
 Growth in economy would lead to higher demand for credit.
Threats
 Increasing interest rate scenario.
 Execution risk.
 Competition from local and multinational players.
 Rising inflation could reduce savings and investments
 Rising crude oil prices
 OBJECTIVES OF STUDY

The objective for this study are :

 To judge the current product portfolio

 To recognize the popular insurance plans
 To suggest ideal policy term and premium for insurance
 To know the consumers’ willingness to spend on life insurance
 To know the factors that motivate purchase of insurance policies
 . To find the current market share of Kotak.
 Provide suggestion to improve the current market share