shobhit gupta (m5-36)

8/3/2019 Shobhit Gupta (M5-36)

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A Study on Customers perception of investment in

Life Insurance Products

UNDER THE GUIDANCE OF:

Mr. Vivek Dwivedi (Corporate Guide)

Manager Alternate Unit

Kotak Life Insurance

Sri. Thirumal Reddy

Asst. Professor, SSIM

IIP FACULTY GUIDE

SUBMITTED BY:

Shobhit Gupta

ROLL NO-M5-36

PGDM-MARKETING (2010-2012)

SIVA SIVANI INSTITUTE OF MANAGEMENT


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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to my Corporate Guide, Mr. Vivek Dwivedi

Manager Alternate Unit, Kotak Life Insurance, for providing me this wonderful opportunity to

work with this prestigious organization. I would like to thank him for his kind co-operation and

timely guidance despite his busy schedule. It was his constant feedback and supervision that I

was able to successfully complete the project.

I am extremely grateful to my Project Guide Sri.Thirumal Reddy, Associate Professor, Siva

Sivani Institute of Management, Kompally, Secunderabad, for his constant guidance,

encouragement and invaluable advice from miles apart, without which this project would not

have been complete.

This acknowledgement would be incomplete without a word of thanks to all the people who are

part of Kotak Life Insurance, Lucknow who helped me constantly for various things through

their extremely amicable behavior.

Place: Secunderabad Shobhit Gupta

Date: Roll No: M5-36

PGDM (MARKETING)


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CERTIFICATE

This is to certify that the Industry Internship Project work entitled Customers perception ofInvestment in Life Insurance Products is a bonafide work, carried out by Shobhit Gupta

(M5-36) ofMarketing 5th Batch under my guidance & supervision in partial fulfillment of Post

Graduate Diploma in Management (PGDM) Programme of Siva Sivani Institute of

Management, Kompally, Secunderabad.

I wish him all the success for the Future Endeavour.

Place: Secunderabad. Project Guide:

Date: _________________

Sri. Thirumal Reddy

Associate Professor, Marketing

Siva Sivani Institute of Management


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DECLARATION

I hereby declare that this work entitled Customers perception of Investment in Life

Insurance Products is my work carried out under the guidance of my faculty guide Sri

Thirumal Reddy, Associate Professor, Marketing and my company guide Mr. Vivek Dwivedi,

Manager Alternate Unit, Kotak Life Insurance, the partial fulfillment of the requirements for the

award of my Post Graduate Diploma in Management.

Place: Secunderabad Shobhit Gupta

Date: Roll No: M5-36

PGDM (MARKETING)


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CONTENT

Chapters Page no.

Chapter 1 1

1.1 Objectives of Study 21.2 Scope of Study 2

1.3 Significance of the Study 31.4 Literature Review 4

Chapter 2 5

2.1 Introduction 6-72.2 Industry Profile 8-16

2.3 Company Profile 17-23

Chapter 3 24

3.1 Research Methodology 253.2 Sample Size 253.3 Data Sources 25

Chapter 4 26

4.1 Data Analysis & Findings 27-42

Chapter 5 43

5.1 Interpretation & Recommendation 44-45

Chapter 6 46

6.1 Questionnaire 47-506.2 Bibliography 51


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CHAPTER ONE

OBJECTIVE OF THE STUDY

SCOPE OF THE STUDYSIGNIFICANCE OF THE STUDY

LITERATURE REVIEW


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Objectives of the study:

1.To identify the importance of life insurance in the life of a person.

2.To identify the knowledge of people about life insurance products.

3.To identify customers preferences among different life insurance products.

4.To identify which are the investment products customers mostly like to invest.

Scope of the study

1. Study is restricted to only those people who invest in the financial market.

2. It is related to whole Life Insurance Sector including Kotak Mahindra Life Insurance.

3. Concentrated only on the expectation and behavior of investors towards investment in Life

Insurance Products.

4. The survey was conducted on 100 individuals to get their responses.

5. These Individuals are from various occupations and Age so that we can also find the

difference among their perceptions.


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Significance of the study

1. This study will help to the company to know about expectation of Investors in Life Insurance

Products.

2. This study will help the company to know its ranking of customer preference compare to its

competitors.

3. This study will also help to the company to know which products customer prefer most.

4. This study will help to the company to know the important factors why an investor prefers a

particular product to invest.

5. Through this study company will know to which extent it has to create the products awareness

among its customers.

6. This study will help to the company that which age people like which products.

.


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Literature Review

Li, Donghui; Moshirian, Fariboz, Nguyen, Pascal; Wee, Timothy-The demand forlife insurance in OECD countries (Organization for Economic Corporation and

Development), Journal of Risk and Insurance, SEP, 2007.

This article examines the determinants of life insurance consumption in OECD countries.

Consistent with previous results, they found a significant positive income elasticity of life

insurance demand. Demand also increases with the number of dependents in level of

education, and decreases with the life expectancy and social security expenditures. The

countries level of financial developments and its insurance markets degree of

competition appeared to stimulate life insurance sales, where as high inflation and real

interest rates tend to decrease consumption. Overall life insurance demand is betterexplained when the product market and socio-economic factors are jointly considered. In

addition, the use of GMM estimates helps reconcile our findings with previous puzzling

results based on inconsistent OLS estimates given heteroscedasticity problems in the

data.

Horsham, Pa. An Updated Life Insurance Policy with investment and disability

options consumers want, Business Wire, JUNE 1995.

With changing economic conditions and increasing demands prompting people to take a

different approach to investment and insurance planning, Penn Mutual Insuranceintroduces a new version of popular life insurance productsCornerstone VUL (Variable

Universal Life).

After conducting extensive consumer research nationwide, Penn Mutual learned that

people want more life insurance product than death benefit coverage and some cash value

accrual. They dont want that, plus the opportunity to choose exactly how their money is

invested in a life insurance plan


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CHAPTER TWO

INTRODUCTION

INDUSTRY PROFILE

COMPANY PROFILE


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INTRODUCTION

Life insurance is a contract between the policy holder and the insurer, where the insurer

promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of theinsured person. Depending on the contract, other events such as terminal illness or critical illnessmay also trigger payment. In return, the policy holder agrees to pay a stipulated amount atregular intervals or in lump sums. In some countries, death expenses such as funerals areincluded in the premium.

The value for the policy owner is the 'peace of mind' in knowing that the death of the insuredperson will not result in financial hardship.

Life policies are legal contracts and the terms of the contract describe the limitations of theinsured events. Specific exclusions are often written into the contract to limit the liability of the

insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion.

Life-based contracts tend to fall into two major categories:

Protection policies designed to provide a benefit in the event of specified event,typically a lump sum payment. A common form of this design is term insurance.

Investment policies where the main objective is to facilitate the growth of capital byregular or single premiums.

1818 saw the advent of life insurance business in India with the establishment of the OrientalLife Insurance Company in Calcutta. This Company however failed in 1834. In 1829, theMadras Equitable had begun transacting life insurance business in the Madras Presidency. 1870saw the enactment of the British Insurance Act and in the last three decades of the nineteenthcentury, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started inthe Bombay Residency. This era, however, was dominated by foreign insurance offices whichdid good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool andLondon Globe Insurance and the Indian offices were up for hard competition from the foreigncompanies.

In 1914, the Government of India started publishing returns of Insurance Companies in India.

The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate lifebusiness. In 1928, the Indian Insurance Companies Act was enacted to enable the Government tocollect statistical information about both life and non-life business transacted in India by Indianand foreign insurers including provident insurance societies. In 1938, with a view to protectingthe interest of the Insurance public, the earlier legislation was consolidated and amended by theInsurance Act, 1938 with comprehensive provisions for effective control over the activities ofinsurers.
http://en.wikipedia.org/wiki/Insurance_policyhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Beneficiaryhttp://en.wikipedia.org/wiki/Terminal_illnesshttp://en.wikipedia.org/wiki/Critical_illnesshttp://en.wikipedia.org/wiki/Safetyhttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Safetyhttp://en.wikipedia.org/wiki/Critical_illnesshttp://en.wikipedia.org/wiki/Terminal_illnesshttp://en.wikipedia.org/wiki/Beneficiaryhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Insurance_policy


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The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were alarge number of insurance companies and the level of competition was high. There were alsoallegations of unfair trade practices. The Government of India, therefore, decided to nationalizeinsurance business.

An Ordinance was issued on 19

th

January, 1956 nationalizing the Life Insurance sector andLife Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian,16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. TheLIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector.


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INDUSTRY PROFILE

Industry Name:- Life Insurance Industry

Insurance can be defined as a social device to protect the economic value of the life and other

assets. Under the plan of insurance a group of people are brought together and their share of

money is pooled to manage the loss suffered by any of them.

The clear definition of Insurance says that Insurance is a contract between two parties whereby

one party called insurance insurer undertakes in exchange for a fixed sum called premiums, to

pay the other party called insured a fixed amount of money on the happening of a certain event.

In simple terms it is a contract between a person who buys insurance and an insurance companywho sold the policy. By entering into the contract the insurance company agrees to pay the

policy holder or his family members a predetermined sum of money in case of any unfortunate

event for a predetermined fixed sum payable which is in normal terms called Insurance

Premiums.

Insurance is basically a protection against a financial loss which can arise on the happening of an

unexpected event. Insurance companies collect premiums to provide the protection. By paying a

very small sum of money a person can safeguard himself and his family financially from an

unfortunate event.

For an example if a person buys a Life Insurance Policy by paying the premium to the Insurance

company, the family members of insured person receive a fixed compensation in case of any

unfortunate event like death.

There are different kinds of insurance products available such as Life insurance, Vehicle

insurance, Home insurance, Travel insurance, Health or Medi-claim insurance etc.

Insurance, in Law and Economics, is a form of risk Management primarily used to hedge against

the risk of potential financial loss. Insurance is defined as the equitable transfer of the risk of a

potential loss, from one entity to another, in exchange for a premium and duty of care.


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CHARACTERISTICS OF INSURANCE

1. Sharing of Risk

2. Cooperative device3. Payment on event of happening of any special event

4. The amount of payment depends on the size and type of loss.

5. The success of insurance business depends on the law of large number of people insured

against similar kind of risk.

6. Insurance is a business which spreads the loss and the risk of few people in large no. of

people.

7. The insurance is a plan in which insured transfer his risk to insurer.

8. Insurance is a legal contract

NOTE: - There are basically two types of insurance, one is General Insurance and the other one

is Life Insurance. General Insurance covers the risk of all material things and objects like

motorbike, house, car, and laptop etc. other than that it also covers Medical Insurance. But here

we are talking about Life Insurance which covers the risk of a human life which has some

monetary value.

ORIGIN OF INSURANCE

Almost 4,500 years ago, in ancient land of Babylonia, traders used to bear risk of the caravan

trade by giving loans that had to be later repaid with interest when the goods arrived safely. In

2100 BC, the code of Hammurabi granted legal status to the practice. That, perhaps, was how

insurance made its beginning. Life Insurance had its origins in ancient Rome, where citizens

formed burial clubs that would meet the funeral expenses of its members as well as help

survivors by making some payments.

As European civilization progressed, its social institutions and welfare practices also got moreand more refined. With the discovery of new lands, sea routes and the consequent growth in

trade, medieval guilds took it upon themselves to protect their member traders from loss on

account of fire and shipwrecks.


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ORIGIN IN INDIA

Insurance in India can be traced back to the Vedas. For instance, yogakshema, the term suggests

that a form of community insurance was prevalent around 1000 BC and practiced by theAryans.

Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help

families build houses, protect widows and children. Bombay Mutual Assurance Society, the first

Indian Life Assurance Society was formed in 1870. Other companies like Oriental, Bharat and

Empire of India were also set up in the 1870-90s.

It was during the swadeshi movement in the 20 th century that witnessed a big boom in India with

several more companies being set up.

As these companies grew, the government began to exercise control on them. The Insurance Act

was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into

investments, expenditure and management of these companies funds.

By the mid-1950s, there were around 170 insurance companies and 80 provident fund societies

in the countrys life insurance scene. However, in the absence of regulatory systems, scams and

irregularities were almost a way of life at most of these companies.

As a result, the government decided nationalizes the life assurance business in India. The Life

Insurance Corporation of India was set up in 1956 to take over around 250 life companies.

For years thereafter, insurance remained a monopoly of the public sector. It was only seven years

of deliberation and debate- after RN Malhotra committee report of 1994 the first serious

document calling for the re-opening of the insurance sector to private playersthat the sector

was finally opened up to private players in 2001.


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THE EVOLUTION OF INSURANCE IN INDIA

Year Changes

1818 Oriental Insurance Company. The first insurance company in India

1870 Bombay Mutual Life Assurance Company. First Indian insurance Company.

1912 The Indian Life Assurance Company enacted the first law to regulate the lifeinsurance business in India.

1926 The Indian Assurance Company act enacted to enable the government to collect thestatistical information about the insurance.

1938 The earlier legislation consolidated and amended the life insurance act with theobjective of protecting the interest of insurance in the public.

1956 245 Indian and foreign players and prudent societies are taken once by central govt.and nationalized


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LIFE INSURANCE MARKET: PRESENT SCENARIO

The insurance sector was opened up for private participation seven years ago. For years now, the

private players are active in the liberalized environment. The insurance market have witnessed

dynamic changes which includes presence of a fairly large number of insurers both life and non-

life segment. Most of the private insurance companies have formed joint venture partnering well

recognized foreign players across the globe.

There are now 29 insurance companies operating in the Indian market 14 private life insurers,

nine private non-life insurers and six public sector companies. With many more joint ventures in

the offing, the insurance industry in India today stands at a crossroads as competition intensifies

and companies prepare survival strategies in a de-tariffed scenario.

There is pressure from both within the country and outside on the Government to increase the

foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV

partners to bring in funds for expansion.

State Insurers Continue To DominateThere may be room for many more players in a large

underinsured market like India with a population of over one billion. But the reality is that the

intense competition in the last five years has made it difficult for new entrants to keep pace with

the leaders and thereby failing to make any impact in the market.

Also as the private sector controls over 26.18% of the life insurance market and over 26.53% of

the non-life market, the public sector companies still call the shots.

The countrys largest life insurer, Life Insurance Corporation of India (LIC), had a share of

74.82% in new business premium income in November 2005.

Reaching Out To Customers No doubt, the customer profile in the insurance industry is

changing with the introduction of large number of divergent intermediaries such as brokers,

corporate agents, and bancassurance.

The industry now deals with customers who know what they want and when, and are more

demanding in terms of better service and speedier responses. With the industry all set to move to

a de-tariffed regime by 2007, there will be considerable improvement in customer service levels,

product innovation and newer standards of underwriting.

Intense Competition In a de-tariffed environment, competition will manifest itself in prices,

products, underwriting criteria, innovative sales methods and creditworthiness. Insurance

companies will vie with each other to capture market share through better pricing and client

segmentation.


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The battle has so far been fought in the big urban cities, but in the next few years, increased

competition will drive insurers to rural and semi-urban markets.

Global StandardsWhile the world is eyeing India for growth and expansion, Indian companies

are becoming increasingly world class. Take the case of LIC, which has set its sight on becoming

a major global player following a Rs280-crore investment from the Indian government. The

company now operates in Mauritius, Fiji, the UK, Sri Lanka, Nepal and will soon start

operations in Saudi Arabia

With life insurance premiums being just 2.5% of GDP and general insurance premiums being

0.65% of GDP, the opportunities in the Indian market place is immense. The next five years will

be challenging but those that can build scale and market share will survive and prosper.

MARKET SHARE OF INDIAN INSURANCE INDUSTRY

The introduction of private players in the industry has added value to the industry. The initiatives

taken by the private players are very competitive and have given immense competition to the on

time monopoly of the market LIC. 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. As a result LIC down the years have seen the

declining phase in its career. The market share was distributed among the private players.

Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private

players are enough to give more competition to LIC in the near future. LIC market share has

decreased from 95% (2002-03) to 81 %( 2004-05).The following companies has the rest of the

market share of the insurance industry.

There are a total of 13 life insurance companies operating in India, of which one is a Public

Sector Undertaking and the balance 12 are Private Sector Enterprises.

List of Companies are indicated below:

NAME OF THE LIFE INSURANCE COMPANY AND THE SHARE HOLDING PATTERN

Name of the company Nature of Holding

Allianz Bajaj Life Insurance Co Private

Aviva Life Insurance Private

Birla Sun Life Insurance Co Private


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HDFC Standard Life Insurance Co Private

ICICI Prudential Life Insurance Co Private

ING Vysya Life Insurance Co. Private

Life Insurance Corporation of India Public

Max New York Life Insurance Co. Private

MetLife Insurance Co. Private

Om Kotak Mahindra Life Insurance Private

Reliance insurance Private

SBI Life Insurance Co Private

TATA- AIG Life Insurance Company Private

NAME OF THE PLAYER MARKET SHARE (%)

Name of the Player Market share (%)

LIFE INSURANCE CORPORATION OF INDIA 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJAJ ALLIANZ 2.03

SBI LIFE INSURANCE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YARK 0.90

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYSYA 0.37

MET LIFE 0.21


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PRESENT SCENARIO OF INSURANCE INDUSTRY

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. Indians, havealways 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.

Consumers remain the most important centre 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 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 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. At present the distribution channels that are available in the market are

listed below.

Direct selling

Corporate agents

Group selling

Brokers and cooperative societies

Bancassurance

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 moneyback 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.

The rural consumer is now exhibiting an increasing propensity for insurance products. Aresearch 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


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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.


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COMPANY PROFILE

Company Name: - Kotak Mahindra Old Mutual Life Insurance Ltd

ABOUT THE COMPANYThe 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.

Industrialist Harish Mahindra and Anand Mahindra took a stake in 1986, and thats when the

company changed its name to Kotak Mahindra Finance Limited.

Since then its been a steady and confident journey to grow and success.

1986 Kotak Mahindra Finance Limited started the activity of Bill Discounting

1987 Kotak Mahindra Finance Limited entered into the Lease and Hire Purchase

Market

1990 The Auto Finance Division was started

1991 The Investment Banking Division was started. Company took over FICOM, one of

Indias largest financial retail marketing networks.

1992 Entered into the Funds Syndication sector

1995 Brokerage and Distribution business incorporated into separate company- Kotak

Securities. Investment Banking Division incorporated into separate company- Kotak

Mahindra Capital Company.

1996 The Auto Finance business is hived off into a separate company- Kotak Mahindra

Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak

Mahindra took a significant stake in Ford Credit Kotak Mahindra Limited, for

financing Ford vehicles. The launch of Matrix Information Services Limited marks

the group entry into information distribution.

1998 Entered into the Mutual Fund Market with the launch of Kotak Mahindra Asset

Management Company.

2000 Kotak Mahindra tied up with Old Mutual Plc. For the life insurance business.

Kotak Securities launched its on line broking site (www.kotaksecurities.com).

Commencement of private equity activity through setting up of Kotak Mahindra

Venture Capital Fund.


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2001 Matrix sold to Friday Corporation

2003 Kotak Mahindra Finance Limited converted to a commercial bank the first Indiancompany to do so

2004 Launched India Growth Fund, a private equity fund

2005 Kotak Group realigned joint venture in Ford Credit; Bought by Kotak Mahindra

Prime (formerly known as Kotak Mahindra Primus Limited) and sold Ford credit

Kotak Mahindra

Launched a Real Estate Fund

2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Companyand Kotak Securities

Kotak Mahindra is one of the Indias leading financial organizations, offering a wide range of

financial services that encompass every sphere of life. From commercial banking, to stock

broking, to mutual funds, to life Insurance, to investment banking, to personal financial services,

to asset management, the group caters to the diverse financial needs of individual and corporate.

The group has a net worth of over Rs. 6,799 crores and has a distribution network of branches,franchisees, representative offices and satellite offices across cities and towns in India and

offices in New York, London, San Francisco, Dubai, Mauritius and Singapore. The group

services around 6.4 million customers account. Kotak Mahindra Old Mutual Life Insurance Ltd

is a 74:26 joint venture between Kotak Mahindra Bank Limited,. its affiliates and Old Mutual

plc. Old Mutual plc is an international long term savings, protection and investment group.

Originating in South Africa in 1845, the group provides life assurance, asset management,

banking and general insurance in Europe, America, Africa and Asia. Old Mutual plc is listed on

the London Stock Exchange and the JSE, among others.

Kotak Mahindra Old Mutual Life Insurance Ltd is a company that combines its internationalstrength and local advantage to offer its customers a wide range of innovative life insurance

products, helping them in taking important financial decisions at every stage in life and stay

financially independent. The company is one of the fastest growing companies in India and has

shown remarkable growth since its inception in 2001. Kotak Life Insurance employs around

5,565 people in its various businesses and has 197 branches across 141 cities. The Kotak

Mahindra has over 1,300 offices across India.


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MISSION OF THE COMPANY

Kotak Mahindra Life Insurance Ltd focuses on the needs of customers and creates confidence,

trust and loyalty by offering a wide range of innovative insurance solutions. Strengthen by its

commitment to professional management, company ensures the continued growth and

advancement of its employees.

VISION OF THE COMPANY

Kotak Life Insurance has a deep rooted commitment to improve the quality of its customers,

employees and stakeholders. It aims at improving the long term value in relationship by

continuous innovation and improvements. Company wants do this by its three-prong effort

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

Increase customer value

Kotak Life Insurance has gone to the heart of its customers requirements and developed

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

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

always come first.

Cohesive Work Environment

Kotak Life Insurance forms a long term partnership with its employees by offering them an

invigorating work experience. Company not only demands loyalty, sincerity and values but alsogives it back in equal measures. Kotak Life Insurance will like to offer its employees space to

grow, innovate and build a long term career.

Work with Honor

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

commitment. Our employees strive to build the long term value for all those come in contact

with Kotak Life Insurance. Our customers, distributers, employees, shareholders and the nation

has our commitment that we will uphold the values of trust, integrity and a sense of honor in

every thought, act and deed in order to positively contribute to individual, society and nationgrowth.


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STRENGHTS OF KOTAK LIFE INSURANCE

Financial Acumen - Holds a stable and diversified portfolio and has received some of the

highest ratings in financial strength from industrys independent rating agencies

Disciplined fund management - Years of experience in asset management, and a strong track

record in managing fundbacked by the acclaimed expertise of Old Mutual plc

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

solutions, with a constant focus on customization and flexibility

Unrelenting Customer FocusA highly committed sales force with customer satisfaction as

the key driving forcea major differentiator

Transparency in Services daily declaration of fund performances, regular performancebenchmarking, well regulated asset management, and monthly newsletter on market updates.

MANAGING OVERVIEW OF KOTAK MAHINDRA LIFE INSURANCE

Kotak Life Insurance works as a team and has a flat management structure. Its top level

management has many years of experience which has helped guide the company into a position

of leadership.

Some Important Individuals of the Company

Mr. Uday Kotak - Chairman

Mr. Shailesh Devachand - Vice Chairman

Mr. G Murlidhar - COO

Mr. Pankaj Desai - Managing Director

Mr. Subhashish Gosh - Chief Financial Institution Group

Mr. Sugata Dutta - Head Human Resource

Mr. Elizabeth VenkatramanSr. VP Marketing

Mr. Andrew Cartwright - Appointed Actuary

Mr. Suresh Agarwal - Head of Alternate Channel

Mr. Shekhar Bhandari - Head of Tied Channel


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Mr. Anand Dewan - Head Management Development Training

ORGANIZATION CHART AT BRANCH LEVEL

AWARDS FOR KOTAK MAHINDRA GROUP

Year 2003

1. Best equity house in India by Euro Money

2. Best equity house in India by Asia Money

Year 2004

1. Indias best equity house in India by Finance Asia


3. Best equity house in India by Asia Money

4. Best Indian Equity house by IFR

Branch Manager

Ass. Branch Manager

Sales Manager

Life Advisor

Branch Operation Incharge

Operation Executive

Operations


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Year 2005

1. Best Broker in India by Finance Asia


Year 2006

1. Ranked no. 1 in six categories in the Annual Euro Money Private Banking Survey Poll in

India

2. Best Investment Bank in India by Finance Asia

3. Ranked # 1 in the league table for book runner/ lead manager in public equity offerings in

terms of the value of transaction completed during fiscal 2006 according to Prime

Database

4. Best Broker in India by Finance Asia

5. Topped the best Mutual Fund House in the NDTV Business Leadership Awards 2006

6. Best Bond Fund Group over three years by Lipper Fund Awards India7. Ranked the best Debt Fund over 5 years by Lipper for Kotak Bond Regular Plan

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

Bond Regular Plan

Year 2007

1. Most popular Inventor Relation Website for the Asia Pacific region conducted by IR

Global Ranking.

2. Emerged winner in 16 categories in the Euro Money Private Banking Poll 2007,

including the best local Private Bank.

PROMOTERS OF KOTAK MAHINDRA LIFE INSURANCE

Kotak Mahindra Pvt. Ltd

Kotak Mahindra Prime Ltd (KMPL) is a 100% subsidiary of Kotak Mahindra Group, formed to

finance all passenger vehicles. The company is dedicated to financing and supporting Auto

industry and Auto manufactures dealers and retail customers. The Company offers car financingin the form of loans for the entire range of passenger cars and multi utility vehicles. The

Company also offers inventory funding to car dealers and has entered into strategic arrangements

with various car manufacturers in India for being their preferred financier.

As on March 31, 2005, Kotak Mahindra Pvt. Ltd has a retail distribution network comprising of

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


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

the distribution network and servicing around 113,000 customers.

Kotak Mahindra Bank Ltd

Kotak Mahindra Bank Ltd (KMBL) is a holding company and the flagship of Kotak Mahindra

Group. It was incorporated as Kotak Capital Management Finance Ltd on November 2, 1985 and

obtained its Certificate of Commencement of Businesson February 11, 1986. It commenced

operations with Bill Discounting and soon started other fund based activities like corporate

leasing & hire purchase, automobile finance and money market operations. Subsequently, it also

entered the funds syndication and the investment banking business.

Old Mutual Plc

It has been developed into an international financial services group whose activities are focusedon asset gathering and asset management in South Africa, US and UK. The company is listed on

the London Stock Exchange with a market capitalization of approx. $6 billion and is a member

of the elite FTSE 100 index. In the 2003 rankings of the worlds 500 largest corporations by

Fortune Magazine, Old Mutual climbed 87 places to position number 366 and was also listed as

the 14th large Insurance Company in the world. Old Mutual is the largest financial services

business in South Africa, through its life insurance, asset management, banking and general

insurance operations. The company serves 4 million life insurance policyholders and employs

over 13000 South Africans in its local operations. In the USA, Old Mutual is one of the top 10

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

asset management businesses. The companys Us Life Business recorded sales of $4 billion at

the end of 2002. Operations in the UK are focused on wealth management, through Gerrard as

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


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CHAPTER-3

RESEARCH METHODOLOGYSAMPLE DESIGN

TOOLS OF DATA COLLECTION


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Research Methodology

This research involved a study, which was descriptive as well as explorative in nature. It

basically aims at gathering data from investors who basically invest their savings in financialproducts.

Sample Profile: - Sampling plan consists of:

a) Sampling Unit: - Earning Individuals who invest in different financial products.

b) Sample Size: - Sample size was 100 individuals.

c) Sampling Procedure: - Convenient sampling procedure was followed.

d) Sampling Method: - Data was collected through survey.

Methods of Data Collection

There are mainly two types of data:

1- Primary Data

2- Secondary Data

1. Primary Data Collection: - Primary data can be collected by three methods:

(a) Observation

(b) Meetings

(c) Surveys

But here, only survey method of data collection is preferred which is very suitable to reach the

researchers motto.

i) Research Instrument: - Printed questionnaire was used as the research instrument to collect the

required information.

ii) Area of Survey: - The survey was conducted to different age groups and occupations like

Business persons, Service persons, Retired persons.

2. Secondary Data Collection: -

Secondary data were collected from Annual Reports of the company, its website and other well

known internet sites.


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CHAPTER 4

DATA ANALYSIS AND INTERPRETATION


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Table-1.0

Age Group of the Respondents (n=100)

Age Group

Frequency Percent Valid Percent Cumulative Percent

18-24 23 23.0 23.0 23.0

25-34 41 41.0 41.0 64.0

35-44 16 16.0 16.0 80.0

44-55 10 10.0 10.0 90.0

grater than 55 years 10 10.0 10.0 100.0

Total 100 100.0 100.0

Table no-1.0 represents the age group of the respondents.

Out of total 100 respondents majority (41) of the respondents is in the age group of 25-34, 24 are

from 18-24 group, 16 are from 35-44 group, and 10 from 44-55 group and rest 10 are greater

than 55 years.


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Table No-1.1

Sex of the Respondents (100)

Gender


Male 85 85.0 85.0 85.0

Female 15 15.0 15.0 100.0

Total 100 100.0 100.0

Table 1.1 represents the total no of male and female respondent studies at the time of survey.

From the total no. of respondents only 15% are female rest of all (85%) are male.


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Table-1.3

Educational Qualification of the Respondents (100)

Educational Qualification


Valid Intermediate 16 16.0 16.0 16.0

Graduate 8 8.0 8.0 24.0

Post Graduate 72 72.0 72.0 96.0

Other 4 4.0 4.0 100.0

Total 100 100.0 100.0

Table 1.3 represents the Educational Qualification of the respondents.

Out of 100 respondents 16 are Intermediate,8 are Graduate,72 are Post Graduate and 4 are

having other qualifications.


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Table-1.4

Occupation of the Respondents (100)

Occupation


Student 25 25.0 25.0 25.0

self employed 4 4.0 4.0 29.0

service person 55 55.0 55.0 84.0

business person 12 12.0 12.0 96.0

retired person 4 4.0 4.0 100.0

Total 100 100.0 100.0

As we can see from the chart that there are 25 students, 4 self employed persons, 55 service

persons, 12 business persons and 4 retired persons in the total sample.


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Table No-1.5

Importance of Life Insurance for the Respondents (100)

importance of life insurance


Valid very important 78 78.0 78.0 78.0

important 14 14.0 14.0 92.0

somewhat important 2 2.0 2.0 94.0

not important 6 6.0 6.0 100.0

Total 100 100.0 100.0

Out of all 100 respondents 78 say that Life Insurance is very important for them, 14 say that it is

just important, 2 say that it is somewhat important and 6 say that it is not important at all.


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Table No-1.6

Life Insurance Policy can financially help to the family after the death of earning member

lip can financially help to the family after the death of the earning member


Yes 91 91.0 91.0 91.0

no 9 9.0 9.0 100.0

Total 100 100.0 100.0

91 individuals out of 100 say that life insurance policy can financially help the family after the

death of the policy holder but 9 say it is not.


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Table No-1.7

Knowledge about the following Life Insurance Products

Product name Yes No Total

Term Plan 40 60 100

ULIP 47 53 100

Endowment Plan 31 69 100

Money Back Plan 63 37 100

Pension Plan 50 50 100

Child Plan 47 53 100

As we can see from the table and chart that only 40% individuals know about Term plans, 47%

know about ULIPs, 31% know about Endowment plans, 63% know about Money back plans,

50% know about Pension plan and 47% know about Child plans.

0

10

20

30

40

50

60

70

Term Plan ULIP Endowment Money Back Pension Plan Child Plan

40

47

31

63

5047

60

53

69

37

5053

Yes

No


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Table No-1.8

Rating of Term Plan according to the customers (Rated on Likert scale)

Rated 1 Most Preferred

Rated 2 Preferred

Rated 3 Average Preference

Rated 4 Below Average preference

Rated 5 Not preferred at all

6 No idea

This pie chart shows that 15 people rated it as 1, it means they most prefer term plan. 42 people

rated it as 2 means they normally prefer it. 17 people rated as 3 means they on average prefer it.

10 rated as 4 and 14 rated as 5 means they not prefer term plan at all. And 2 persons have no idea

about it.

15

4217

10

142

Term Plan

Rate1

Rate2

Rate3

Rate4

Rate5

No idea


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Table No-1.9

Rating of ULIP according to the customers (Rated on Likert scale)


Rated 2 Preferred




6 No idea

This pie chart shows that 30 people rated ULIP as 1; it means they most prefer ULIP. 26 people

rated it as 2 means they normally prefer it. 19 people rated as 3 means they on average prefer it.

4 rated as 4 and 13 rated as 5 means they not prefer term plan at all. And 8 persons have no idea

about it.

30

26

19

4

13

8

ULIP

Rated1

Rated2

Rated3Rated4

Rated5

Noi dea


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Table No-1.10

Rating of Endowment Plan according to the customers (Rated on Likert scale)


Rated 2 Preferred




6 No idea

This pie chart shows that 31 people rated Endowment Plan as 1; it means they most prefer

Endowment Plan. 10 people rated it as 2 means they normally prefer it. 32 people rated as 3

means they on average prefer it. 6 rated as 4 and 11 rated as 5 means they not prefer term plan at

all. And 10 persons have no idea about it.

31

10

32

6

11

10

Endowment Paln

Rated1

Rated2

Rated3

Rated4

Rated5

No idea


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Table No-1.11

Rating of Money Back Plan according to the customers (Rated on Likert scale)


Rated 2 Preferred




6 No idea

This pie chart shows that 26 people rated Money Back Plan as 1; it means they most prefer




26

28

21

6

13

6

Money Back Plan

Rated1

Rated2

Rated3Rated4

Rated5

No idea


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Table No-1.12

Rating of Pension Plan according to the customers (Rated on Likert scale)


Rated 2 Preferred




6 No idea

This pie chart shows that 39 people rated Pension Plan as 1; it means they most prefer




39

23

8

14

9

7

Pension Plan

Rated1

Rated2

Rated3Rated4

Rated5

No idea


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Table No-1.13

Rating of different life insurance products according to customers

Products 1 2 3 4 5 Total TotalWeight

WeightedMean

Ranks

Term Plan 15 42 17 10 14 98 260 2.65 5

ULIP 30 26 19 4 13 92 220 2.39 2

EndowmentPlan

31 10 32 6 11 90 226 2.51 4

Money Back

Plan

26 28 21 6 13 94 234 2.48 3

Pension Plan 39 23 8 14 9 93 210 2.25 1

The above table shows that Pension Plan is rated as 1 compare to other investment plans. ULIP is

rated as no. 2. Money Back plan is rated as no. 3, Endowment is on no. 4 and at last Term Plan

rated as no. 5.


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Table No-1.14

Ranking of different investment alternatives according to the customers

Alternatives 1 2 3 4 5 6 7 8 9 10 11 Total TotalWeight

WeightedMean

Ranks

Saving A/c 26 14 10 6 9 8 2 5 7 3 696 414 4.3125 1

FD 8 18 8 22 15 6 2 12 2 3 096 425 4.42708333 2

ULIP 4 5 11 16 23 2 6 6 6 6 1297 574 5.91752577 7

MoneyBack Plans

8 12 7 11 6 12 6 11 6 8 895 551 5.8 6

PensionPlans

3 8 18 4 12 11 14 8 8 6 496 553 5.76041667 5

EndowmentPlans

10 4 2 0 7 4 17 13 10 11 1896 704 7.33333333 10

Gold 7 15 15 10 4 2 12 13 4 10 496 522 5.4375 4

Land 18 14 3 8 8 10 12 8 7 2 696 484 5.04166667 3

ShareMarket

8 4 6 2 2 15 8 8 18 10 1596 689 7.17708333 8

Govt. Sec 2 2 9 8 10 8 10 4 5 28 1096 700 7.29166667 9

Term Plan 2 0 8 9 2 16 6 8 23 9 1396 714 7.4375 11

As we can see from the table that customer rank saving accounts as 1, fixed deposits as 2,

investment in land as 3, investment in gold as 4, pension plans as 5, money back plans as 6 etc.

Term plan is rated lowest in the table.


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Table No-1.15

Respondents preference of the different Life insurance players in the market

Name of the Company No of individualsWho prefer it

Out of total

Kotak Life Insurance 9 100

LIC 70 100

Bajaj Allianze 4 100

DLF 4 100

Max New York Life Insurance 5 100

ICICI Prudential 14 100

Birla Sun Life 11 100

Tata AIG 6 100

SBI Life Insurance 32 100

As you can see from the table that LIC is most preferred by customers among all other

companies. Kotak comes after SBI Life, Birla Sun Life and ICICI.

9

70

4 4 5

1411

6

32

0

10

20

30

40

50

60

70

80

Kotak Life

Insurance

LIC Bajaj

Allianze

DLF Max New

York Life

Insurance

ICICI

Prudential

Birla Sun

Life

Tata AIG SBI Life

Insurance

Life Insurance Players


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Table No-1.16

Respondents satisfaction with their current Life Insurance Provider

satisfaction with the services provided by the current company

Frequency Percent Valid Percent

Cumulative

Percent

fully satisfied 39 39.0 41.5 41.5

Satisfied 35 35.0 37.2 78.7

moderate satisfaction 16 16.0 17.0 95.7

Dissatisfied 2 2.0 2.1 97.9

highly disappointed 2 2.0 2.1 100.0

Total 94 94.0 100.0

Missing System 6 6.0

Total 100 100.0

As we can see from the given chart that most of the respondent are fully satisfied or satisfied

with their current Life insurance provider. Few are disappointed or dissatisfied with their current

Life insurance provider.


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CHAPTER5

INTERPRETATION AND

RECOMMENDATION


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Findings and Interpretations:

In the research we found that 78% respondents feel that life insurance is very important

for their life, 14%for their life respondents say that life insurance is important. It means

that near about 90% respondents are the prospects for the life insurance companies to

target. It is a very huge number to target any segment. I think that the company should

deeply target those prospects.

91% respondents say that life insurance can financially help their family after the death of

earning member in the family. So the company doesnt require to spread knowledge

about life insurance to their customers, it just has to generate the leads using effective

promotional strategies.

Coming to the different life insurance products, 40% respondents know exactly what is

tem plan, 47% know what is ULIP, 31% know about Endowment plan, 63% know aboutmoney back plan, 50% know about pension plan, 47% know about child plans. On the

basis of this data we can say that though customers have knowledge about life insurance

but they dont have knowledge products of life insurance. The company should first

aware its customers about different product lines rather than giving a broad idea about

life insurance.

Respondents ranked pension plan as 1, ULIP as 2nd, Money back as 3rd, money back as

4th, term plan as 5th. The company should focus more on the awareness of term plan,

endowment plan and money back plans among the prospects.

Respondents mostly prefer to invest their money in saving a/c (Ranked 1), FDs (Ranked

2), land (Ranked 3), gold (Ranked 4), rather than in term plans (Ranked 11), Endowment

plans (Ranked 10), ULIP (Ranked 7), Money back (Ranked 6), Pension Plan (Ranked 5).

It clearly shows that most of the investors are highly conservative in their investments.

Most of them preferred low risk and low returns. In this matter, company should

aggressively promote their products and create awareness. They should aware the

customers about the combination of risk and return.

Coming to the different life insurance players in the market, 70% respondents prefer LIC

to purchase Life Insurance products. After LIC, SBI life insurance is mostly preferred by

respondents followed by ICICI Prudential, Birla Sun Life and Kotak Life Insurance. It

means Kotak is 5th preferred company by the respondents.


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Near about 70% respondents are satisfied with their current life insurance providers. So

the companies should focus on the rest of the respondents to give better customer

services.

Suggestions and recommendations

To target the segment (refer to the 1st point in findings) company should focus onadvertisements because LIC and lots of other private players are there in the market to

give huge completion. To make a place into the mind of customer effective

advertisements are required.

Life insurance is a kind of unsorted product means though the customer know itsimportance but they dont buy it easily.(referring to the 2

nd point) company should hire

skilled salespersons to sell the products in the market.

(Referring to the 5th point) we found from the study that most of the investors areconservative in nature they prefer low risk and low return investment like fixed deposits,

saving accounts, gold, land. It clearly shows that their money lies in very low return

products; here the company has an opportunity to spread information among the

customers that if they invest in different ULIP and other products of the company, they

can get very high returns comparatively. Again advertisements and sales force are

expected to do this job.

The major problem with the company is that the Big brother Life Insurance Corporationof India has the major share in the market. To maintain Kotaks share among various

competitors company should have an USP. Though services can be copied easily by thecompetitors but still company can make a different image from its competitors by

entering into some Corporate Social Responsibility as TATA did in past to create a

respect in the eyes of customers.


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CHAPTER-6

QUESTIONNAIRE

BIBLIOGRAPHY


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Questionnaire

I (Shobhit Gupta) am, the student of SIVA SIVANI INSTITUTE OF MANAGEMENT doing a

project for KOTAK MAHINDRA LIFE INSURANCE LTD on Customer perception of

investment in Life Insurance Products. I request your cooperation in filling the questionnaire.

1. How important is Life Insurance to you? (Tick in the Box)

a. Very important

b. Important

c. Somewhat important

d. Not important at all

e. No idea

2. Do you think a Life Insurance Policy can financially help to the family after the death of

earning member? (Tick in the Box)

Yes No

3. Do you think a Life Insurance Policy can give benefits in Tax Rebate? (Tick in the Box)

Yes No

4. Tick in the Box/Boxes if you have proper knowledge about the following Life Insurance

Products.

a. Term Plan

b. Unit Link Insurance Plan

c. Endowment Plan

d. Money Back Plan

e. Pension Plan

f. Child Plan


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5. Rate the following Life Insurance Products according to your likings/disliking while

keeping in mind of 3 factors Risk, Return and Liquidity. (Tick on the scale)

a. Term Plan

Most preferred Not

1 2 3 4 5 preferred at all

b. Unit Link Insurance Plan

Most preferred Not


c. Endowment Plan

Most preferred Not


d. Money back plan

Most preferred Not


e. Pension Plan

Most preferred Not



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6. Rank the following investment alternatives from 1 to 11 according to your perception of

Risk, Return and Liquidity. (1= most preferred, 11= lowest preferred)

a. Investment in Saving A/c

b. Investment in Fixed Deposit

c. Investment in ULIP

d. Investment in Money Back Plans

e. Investment in Pension Plans

f. Investment in Endowment Plans

g. Investment in Gold

h. Investment in Land

i. Investment in Share Market (through D-met A/c)

j. Investment in Govt. Securities

k. Investment in Term Plan

7. If given chances which of the following Life Insurance company/companies you would

like to choose to invest your money. (Tick in the Box/Boxes)

a. Kotak Life Insurance f. ICICI Prudential

b. LIC g. Birla Sun Life

c. Bajaj Allianz h. Tata AIG

d. DLF i. SBI Life Insurance

e. Max New York Life Insurance j. DLF

8. Do you have any Life Insurance Policy? If yes then please specify the name of thatCompany/Companies.

9. Are you satisfied with the services provided by your current Life Insurance

Company/Companies after and before sales? (Tick the Box)

a. Fully satisfied (Delighted)

b. Satisfied

c. Moderate Satisfaction

d. Dissatisfied

e. Highly Disappointed


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10.Educational Qualification:

a. Intermediate

b. Graduate

c. Post graduate

d. Any other (Please mention)

11.Occupation:

a. Student

b. Self employed

c. Service Person

d. Business Person

e. Retired Person

12.Age group:

a. 1824 years

b. 2534 years

c. 3544 years

d. 4455 years

e. Greater than 55 years

13.Gender:

a. Male

b. Female

THANKING YOU FOR GIVING YOUR PRECIOUS TIME


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Bibliography

1. www.kotak.com

2. www.abscohost.com

3. www.lifeinsuranceindepth.com

4. Journal of marketing
http://www.kotak.com/http://www.kotak.com/http://www.abscohost.com/http://www.abscohost.com/http://www.lifeinsuranceindepth.com/http://www.lifeinsuranceindepth.com/http://www.lifeinsuranceindepth.com/http://www.lifeinsuranceindepth.com/http://www.lifeinsuranceindepth.com/http://www.abscohost.com/http://www.kotak.com/

shobhit gupta (m5-36)

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