Delhi Institute of Advanced Studies

A constituent of GGSIPU
Plot No 6, Sector-25, Rohini New Delhi 110085

http://www.dias.ac.in/

Summer Internship Report

Internship Report submitted as a partial requirement for the award of the two year Master of Business Administration Program

Name: Jatin Arora MBA 2010-2012 Telephone: 9811006218 E-mail: a.jatin@ymail.com

Summer Internship Supervisor Name: Mr. Mohd. Aakif (Senior Deputy Manager) Ph. : +91 9999254466 Mailing Address: @kotak.com Kotak Mahindra Old Mutual Life Insurance 2nd Floor, 7, Community Centre, New Friends Colony, New Delhi- 110065

Academic Supervisor: Mr. Vivek Vohra

Start Date for Internship: June 10th 2011. End Date for Internship: August 10th 2011.

Report Date: August 17th 2011.

Self Certification by the Intern

I hereby certify that I, Jatin Arora have successfully completed my internship with Kotak Mahindra Life Insurance in the month of July and August 2011. This is also to certify that this report is an original product and no unfair means like copying etc. have been used for its completion.

Name: Jatin Arora Signature: Date:

Certificate From the Summer Internship Providing Organization

This is to certify that Mr. Jatin Arora has successfully completed his internship with us in the month of July and August 2011. We wish him all the best for all his future endeavors.

Name of the Supervisor: Mohd. Aakif (Senior Deputy Manager)

Signature:

Date:

Acknowledgements

No task is a single person effort, same is with this project. Thus I would like to extend my sincere thanks to all those people who helped me in accomplishing my project.

I owe my project success to all faculty members, especially our Director Prof. S.N. Maheshwari for providing us with this wonderful opportunity and guidance. I would like to extend my special gratitude to Mrs. Ruchi Gupta for providing excellent facilitation for the successful completion of this project. This project provided me a platform to increase my knowledge and empowered me with a better understanding of concepts in the real world scenario. And last but not the least special thanks to Kotak Mahindra Life Insurance who accepted me in spite of my inexperience in the field and gave me the opportunity to work and learn with them.

Table of Contents

S. No.

Topic

Page Number

Delhi Institute of Advanced Studies

Summer Internship Objective

Summer Internship- Abstract

Internship Organizations Profile

8-12

Introduction

13-15

Project Description

16-23

Project Analysis

24-53

Project - Conclusion & Recommendation

54-56

My Take Away Key Learnings

57-58

Annexure & References

59

Objective of the Summer Internship

Knowledge & awareness of the corporate environment its components & functioning is a must for tomorrows managers to be. The basic objectives of the summer internship program for the SMART Pioneers are: To facilitate our students in testing what they have learnt in all the foundation courses in the very first year. To get a feel of corporate life, its functioning & various interactional style.

To fulfill the need of the Corporate, DIAS has formed Summer Internship. The Business School provides Corporate Internship to its students in different Organisation, which they have to do for a minimum period of 6 weeks. A project report is presented to the Corporate on conclusion of the summer internship and is later evaluated by the DIAS community.

Thus, summer internship aims at creating better managers for tomorrow in the booming area of services & relationship technologies.

SUMMER INTERNSHIP REPORT

Abstract

The Summer Internship was carried out at Kotak Mahindra Old Mutual Life Insurance 2nd Floor, 7, Community Centre, New Friends Colony, New Delhi- 110065

My goal was to develop the distribution channel of Kotak Mahindra by recruiting Life Advisors for the company who provided business to the company. Moreover I had to fix portfolios of the clients who had done investment in different policies provided by the company in areas of life insurance and ULIP funds.

I achieved my goal through different ways. Initially I did telephonic calls and asked my friends through which I got a list of interested candidates who were interested in becoming Life Advisors for the company. Then I made sure that they fulfilled all the conditions that were required for becoming a Life Advisor. After some days, I was told to do telephonic calls directly to the clients and simultaneously bring business for the company. Simultaneously I handled ULIP funds of the existing clients where I had to maximize their returns by switching their investments in various funds.

The company has a cooperative environment among the employees. The employees always remain enthusiastic and motivated for their work and are very helping in nature.

COMPANY PROFILE Kotak Mahindra Old Mutual Life Insurance (Kotak Life) is 74: 26 joint venture of the Bank with Old Mutual plc. The 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 it is that when the company changed its name to Kotak Mahindra Financial Limited. It is one of Indias leading financial institutions with a group net worth of around Rs. US$ 2.5 billion with over 15million customers and is present in 370 cities in India and offices in New York, London, Dubai and Mauritius. Kotak Mahindra, the first and only NBFC in India to convert to a bank, offers pragmatic, world-class solutions that take care of four basic financial needs Earning, Saving, Investment and Spending. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to financial needs that encompass every sphere of life. The life insurance industrys growth is related to demographics, purchasing power, economy growth rate, share of savings and government support through tax and fiscal sops. All these factors were favorable to the industry in the year 2011-2012. In the coming years, India is likely to have a growing middle and affluent class with a burgeoning service sector contributing significantly to the growth of life insurance industry. Introduction of new products and focus on service delivery were primary drivers for the growth of the private life insurers during 2011-2012. Consumer confidence in the private sector has substantially improved over the years, and going by the current trends, it is expected that the private sector will improve upon the perceived value to the consumer. It comprises of following sub units which combines to form such a vast company and group of people. 1. Kotak Securities. 2. Kotak Insurance.
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3. Kotak Mahindra bank. 4. Kotak Mutual funds. 5. Kotak Private equity. 6. Kotak Investment banking. 7. Kotak Reality funds. .

Here is a list of year wise progress in the company:

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1986: Kotak Mahindra Financial Limited starts the activity of Bill Discounting. 1987: Enter the lease and hire purchase market. 1990: Auto financial division started. 1991: Investment Banking Division started. Take over FICOM, one of Indias largest financial retail marketing network. 1992: Enter Funds Syndication sector. 1995: Brokerage and distribution incorporated into a separate company. Kotak Securities Investment Banking division incorporated into a separate company Kotak Mahindra Capital Company. 1996: Auto Financial business is hived off into a separate company. 1998: Enters Mutual Funds marketing and launch Kotak Mahindra Asset Management. 2000: Tie up with Old Mutual Plc. for life insurance. 2001: Launched insurance services. 2003: Kotak Mahindra Financial Ltd. Converted to Bank. 2004: Launched India Growth Fund, a private equity fund. 2005: Kotak Group realigned joint venture in Ford Credit; their stake in Kotak Mahindra Prime was bought out (formerly known as Kotak Mahindra Primus Ltd) and Kotak groups stake in Ford credit Kotak Mahindra was sold.

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2006: Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities.

2008: Launched a Pension Fund under the New Pension System.

2009: Kotak Mahindra Bank Ltd. opened a representative office in Dubai and Entered Ahmedabad Commodity Exchange as anchor investor.

2010: Ahmedabad Derivatives and Commodities Exchange, a Kotak anchored enterprise, became operational as a national commodity exchange.

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MARKET SHARE OF FEW MAJOR PLAYERS: 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 has seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 50% 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 50 %( 2010-11). The following companies have the rest of the market share of the insurance industry.

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PIE-CHART SHOWING MARKET SHARE (2010-11) NAME OF THE PLAYER LIC ICICI PRUDENTIAL BIRLA SUNLIFE BAJAJ ALLIANZ SBI LIFE HDFC STANDARD TATA AIG MAX NEW YORK AVIVA OM KOTAK MAHINDRA RELIANCE LIFE OHERS MARKET SHARE (%) 50 10 4 4 5 6 2 3 1 2 5 8

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INTRODUCTION: Kotak Life offers life insurance, deferred annuity and employee benefit products to individuals and groups. The business is distributed through three distribution channels viz. 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 2010-2011 grew to Rs. 2975 crore (previous year Rs. 2868 crore). During the year, Kotak Life wrote 259444 policies (previous year 320735 policies) of adjusted first year annualized premium. Riders are not included in the sum assured. As at March 31, 2011, Kotak Life Insurance had more than 35000 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. Currently, Kotak Life operates from 300 cities all over the world 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 by AC Nielsen ORG MARG in September 2006 in top 8 towns placed Kotak Life at the top 6 brands among the life insurance brands recalled.

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My objective as a Finance Intern was to help in creating awareness of insurance products in people by analyzing their needs, handling their objections regarding insurance and then offering right product to them. Simultaneously handling ULIP funds of the existing clients where I had to maximize their returns by switching their investments in various funds. The project will lead to increase the turnover of the company and the distribution channel of the company thereby it would lead to increase the market share of the company, to increase the reach and visibility of the company and its brand name. Moreover I had to To recruit the Life Advisors (agents) for the company so as to increase sales and also to promote the brand. To analyze the securities and portfolios of the clients. To switch funds of the clients if the market is going down.

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PROJECT DESCRIPTION: My project at Kotak life insurance wasPortfolio Management

ULIP FUNDS
A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder. In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment is governed by the Insurance Regulatory and Development Authority (IRDA).

ULIP IN KOTAK MAHINDRA: Kotak Wealth Insurance is a unit-linked insurance plan, that provides you with investment growth to take care of your family's goals and comprehensive protection to help your family and you meet unplanned events head on. Advantages: * Comprehensive triple benefit to secure your family's future * Wide array of fund options to suit your investment needs * Liquidity to take care of contingencies * Convenience of shorter payment term * Optional rider benefits to boost protection
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POLICIES OF KOTAK DIRECT: 1. KOTAK SAFE INVESTMENT PLAN (KSIP) 2. KOTAK SMART ADVANTAGE PLAN (KSAP) 3. KOTAK HEADSTART FUTURE PROTECT Depending upon the needs & wants, clients have the option of choosing between any of these three plans which provides them with various benefits & growth options along with an Insurance cover. KOTAK SAFE INVESTMENT PLAN (KSIP) Kotak Safe Investment Plan is a Unit Linked Insurance 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 companys essence: innovation that will benefit the investor. What makes investing in Kotak Life Insurance 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 is more, the returns are totally Tax free. KOTAK SMART ADVANTAGE (KSAP) Guaranteed returns of unto 275% of your first year premium at maturity Assured bonus additions at regular intervals during he policy term to enhance your fund value. 100% allocation of the premium from 2nd year onwards Unique fund offering maximum opportunity for growth and choice for your investment needs Maximum protection for your loved ones to choose from.

KOTAK HEADSTART FUTURE PROJECT

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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. Head start Child Plans is a specially tailored, cost-effective plan, aims to give your children the financial means to pursue his or her dreams and live them.

COMPARISON BETWEEN VARIOUS POLICIES:

POLICY FEATURE
ENTRY AGE

KSAP
MIN: 0 Years MAX:65Years

KSIP MIN:0Years MAX:65Years MAX:75Years

HEADSTART MIN:18 Years MAX:60Years MIN:18Years MAX:70Years

MATURITY AGE

MIN:18Years MAX:75Years

POLICY TERMS

REGULAR:10/15 /20/25Years FOR MINOR: 10Years or 18 less entry age at last birthday whichever is higher REGULAR PPT: Rs.15, 000 p.a. LIMITED PPT: Rs 36,000p.a.

MIN: 10Years or 18 minus age at entry for minors; whichever Is higher MAX: 30Years REGULAR: Rs.18, 000 p.a. LIMITED PPT: Rs 50,000 p.a.

Min: Greater of (10 Yrs or 18 less childs present age) Max: 25 Yrs.

MINIMUM PREMIUM

REGULAR PPT: Rs.15, 000 p.a. LIMITED PPT: Rs 25,000 p.a for 4-10 Yrs Rs 50,000 p.a. for 3 Yrs
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BASIC SUM ASSURED

MIN: 0.5 X (Policy term x annual premium.) MAX: Any multiple of premium, subject to underwriting

HIGH COVER: Policy term x annual premium LOW COVER: Greater of(5x annual premium,0.5xpolicy term x annual premiums

MIN: 0.5 X (Policy term x Annual premium.) MAX: Any multiple of premium, subject to underwriting

RIDERS BENEFITS

Critical Illness Benefit Permanent Disability Benefit

NO RIDERS BENEFITS

Critical Illness Benefit Permanent Disability Benefit Accidental

Accidental Disability Guardian Benefit: Premiums waiver protection on disability. Accidental Death Benefit Preferred Term Benefit Life Guardian

Disability Guardian Benefit: Premiums waiver protection on disability. Accidental Death Benefit

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Benefit

USP OF THE VARIOUS PLANS: PLAN

USP

KSAP
Upto 275 % return on first year premium at maturity & assured bonuses.

KSIP
Guaranteed Maturity Value for all type of Investors.

HEADSTART
Triple Death Benefit & Dynamic Floor fund.

COMPARISON OF CHARGES: POLICIES CHARGES

POLICY Rs.65p.m. at =<Rs.20000 -7% <Rs100000: flat
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KSAP

KSIP

HEADSTART

ADMINISTRATION commencement of CHARGES the policy, inflating by 5%p.a.

>20000-3.5%

fee of Rs.75 p.m. in year 1and Rs 40 p.m. in year2 onwards. >Rs.100000: No charges 22 Dynamic money market fund- 0.6% Dynamic gilt Fund- 1%

FUND MANAGEMENT CHARGES

Dynamic bond fund - 1.2% Dynamic floor fund- 1.75% Opportunities fund2%

Guaranteed/dy namic money market fund- 0.6% Guaranteed/dy namic gilt fund- 1%

Guaranteed/dy namic bond fund- 1.2% Guaranteed/dy namic floating rate fund 1.2% Guaranteed/dy Namic balanced fund- 1.3% Guaranteed/dy namic growth fund- 1.5% Aggressive growth fund- 1.6%

Dynamic bond fund- 1.2%

Dynamic floating rate fund- 1.2% Dynamic balanced fund-1.3% Dynamic growth fund- 1.5%

Aggressive growth fund- 1.6%

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SWITCHING CHARGES

First four switches in a year are free. Rs. 500 will be charged for every additional switch.

First four switches in a year are free. Rs. 500 will be charged for every additional switch.

First four switches in a year are free. Rs. 500 will be charged for every additional switch.

KOTAK DYNAMIC FLOOR FUND:

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In this fund the investment of the clients is mainly done in equity (0-65%) and rest of the investment is done in debt.

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KOTAK DYNAMIC BOND FUND:

KOTAK GUARANTEED BOND FUND

In the above 2 funds the investments is done in govt. debts when the market is goin down so as to protect the investors investments. This basically is the work of portfolio manager as he has to assume the future risk, he has to take the market fluctuations into consideration and invest in the govt. bonds when the market is slow.

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KOTAK OPPORTUNITY FUND

This fund helps manager to grow the returns as this fund comes into use when the market is going up. Again this works on the assumptions of the fund manger. When the manager assumes that the market will be rising in the near future, he switches the clients funds into the opportunity fund, to reap maximum returns. This maximizes the clients returns. The manager invests 100% of the clients investments in this fund.

Learnings

We learnt a lot about switching of the funds. The crux of the switching was the timing of the switch. Our manager had a no. in his mind of the Sensex. He always seeked the time when to maximize the returns of the clients. When the market was hovering around 16000 he switched the Bond funds to Opportunity funds considering the market will rise in future along with the clients returns. And when he knew the market is almost at its peak he switched the Opportunity funds to Bond funds.

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COMPETITIVE ANALYSIS WITH HDFC-STANDARD LIFE:

HDFC Standard Life Insurance Company is a joint venture between India's largest housing finance provider, HDFC and Europe's largest mutual life assurance company The Standard Life Assurance Company (U. K). Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance industry for 175 years by combining sound financial judgment with integrity and reliability. It is the Largest Mutual Life company in Europe and has total assets of Rs. 10607 crore. Training activities for agents/advisors. As per IRDA guidelines, 50hrs training is compulsory. Both online & classroom training are available. Training is compulsory with both part-time & full time Options. An objective based exam is conducted by IRDA, the minimum qualification required is12th pass for urban areas 10th pass for rural areas.

Commission Structure. Depends on the product, like on savings 20-40% Ist year premium. On investment 2% On pension 7.5%

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Modes & ways through which the company recruits agents. Direct contacts. Newspaper adds. Consultants. Member of the company can introduce a new member.

CURRENT AGENT FORCE 2000-3000 in NOIDA. Top 5 USPs (Unique Selling Proposition) Of HDFC Std. Life Best insurer according to Outlook. Well supported by foreign Ist private sector life insurance Company to be granted a license. Declared bonus every year from the day of incorporation (only company.) Provides fast service to the customers in terms of claim

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TRADITIONAL PLANS Traditional Plans are Life Insurance plans provided by Kotak Mahindra Life Insurance along with ULIP. LIFE INSURANCE Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a premium paid undertakes to pay a fixed sum of money on the death of the insured or on the expiry of a specified period of time, whichever is earlier. In case of life insurance, the payment for life insurance policy is certain. The Event insured against is sure to happen only the time of its happening is not known. So life insurance is known as Life Assurance. The subject matter of insurance is life of human being. Life insurance provides risk coverage to the life of a person. On death of the person insurance offers protection against loss of income and compensate the titleholders of the policy. Roles of Life Insurance Life insurance as an investment:Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies. Life insurance as risk cover:Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide. Life insurance as tax planning:Insurance serves as an excellent tax saving mechanism too. Importance of Life Insurance Protection against untimely death: Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving for old age: After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. Promotion of savings:
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Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy.

Initiates investments: Life Insurance Corporation encourages and mobilizes the public savings and channelizes the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings. Credit worthiness: Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business. Social Security: Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future. Tax Benefit: Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C. Traditional Plan under Life Insurance The Kotak Capital Multiplier Plan is a plan that allows you to enjoy returns even beyond maturity. This plan is best suited for you... If you are looking for an investment plan for your child combined with insurance and want a flexible money-back plan that gives you the power to decide the amount and time of withdrawals. If you are planning for your retirement and require a retirement plan that allows you to withdraw any amount as per your need and at the same time invests your money prudently to get you bonuses on the balance in your account. If you think that from time to time you will have extra cash, which you would like to invest in an instrument which is safe and which will get you attractive returns.

Advantages

Freedom of extending the policy term beyond the maturity date. Additional 10% life-cover over and above the original life-cover throughout the policy term. Get a free ATM card to withdraw your maturity proceeds with ease Accumulate more through the bonuses declared regularly by the company. Invest your surplus monies top-up premium. Key Features
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Maturity Benefit: This is a participating plan and you are entitled to the higher of the basic sum assured or the Accumulation Account on maturity along with the balance in the Supplementary Accumulation Account. Early maturity benefits available after at least 3 years: The higher of Guaranteed Cash value* and Special Cash value^ plus the higher of Guaranteed Cash Value* in respect of lump sum injections and the Special Cash Value^ in respect of lump sum injections. Ill health Early Maturity Benefits: Higher of Guaranteed Cash Value* and Accumulation Account plus Higher of Guaranteed Cash Value* in respect of Lump sum Injections and Supplementary Accumulation Account. *Guaranteed Cash Value = 30% of all the premiums paid excluding the first year's premium and additional premium, if any. The value of the bonus will be included in cash value. Special Cash Value will be as per the discretion of the company. Death Benefit: During the build-up phase. In the event of unfortunate death, your beneficiary would get the higher of basic sum assured (less premiums due but not paid) or Accumulation Account. In addition, 10% of the basic sum assured and the higher of all lump sum injections made and the Supplementary Accumulation Account will also be paid. During the withdrawal phase. In the event of unfortunate death, your beneficiary would get 10% of the basic sum assured upto 75 years of life assured's age and the balance in the Accumulation Account (into which the Supplementary Accumulation Account is added). Top-Up Premiums: In case you have any surplus funds you may invest them at anytime in the policy. This facility of lump sum injections allows you to augment your savings in the build-up phase, in addition to the regular premiums. A Supplementary Accumulation Account is created to hold these lump sums. Funds in Top-Up Account continue to earn bonus at the same rate as that of the Accumulation Account. 15 year withdrawal period: If you do not see any immediate utilization of your maturity proceeds, you could let it stay invested with us for a maximum of 15 years after the maturity of the plan and it could function like a fixed deposit offering returns and liquidity to withdraw all your funds. In the event that you do not withdraw the entire amount, you can leave behind the full amount or at least 50% of the Accumulation Account balance. You may make one or more partial withdrawals each year, for the next 15 years or till the age of 75, whichever is earlier. You can withdraw amounts as per your need; subject to an upper limit of 25% of the Net Vesting Value (NVV). The NVV is the basic sum assured or Accumulation Account, whichever is higher after deducting the immediate withdrawals on the date of maturity. At anytime during this post maturity phase, you still have the flexibility to withdraw funds in full and terminate the insurance policy Additional Life Cover:
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In the build-up phase there is an additional life cover of 10% of the basic sum assured and of the Critical Illness Benefit, if opted for. This 10% cover continues even in the withdrawal phase for a period of 15 years or till you reach the age of 75, whichever is earlier.

Automatic Cover Maintenance: In case you miss your premium payment, Automatic Cover Maintenance facility will ensure that your insurance cover is in force. This facility is available after 3 completed policy years. Rider Benefits: You can choose from any of the following riders: Term / Preferred Term Benefit (KTB UIN No: 107C003V02, KPTB UIN No: 107C013V01) Accidental Death Benefit (ADB UIN No: 107C001V01) Permanent Disability Benefit (PDB UIN No: 107C002V01) Critical Illness Benefit (CIB UIN No: 107C004V02) Life Guardian Benefit (LGB UIN No: 107C012V01) Accidental Disability Guardian Benefit (ADGB UIN No: 107C011V01) Tax Benefits Section 80C, 10(10D) of Income Tax Act, 1961 would apply. Premium paid for Critical Illness Benefit qualify for a deduction under Section 80D. Tax benefits are subject to change in tax laws. You are advised to consult your tax advisor for details.

SWOT ANALYSIS OF KOTAK LIFE INSURANCE: Strengths: Automatic cover maintenance provided by the company gives the customers, a chance of paying the premium even when their due date is over without much hassle and without lapsing of the policy. This helps the company in attracting the customers.
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 The company provides a healthy return of nearly 8% which is highest in the insurance industry. This can attract customers for even traditional plans like KEP, KCMP, etc. The company follows a sound promotion policy on internet, schemes, and promotional gifts etc. which are attracting customers.

Weaknesses: The product mix is not according to the market leaders like LIC, ICICI Prudential, etc. These companies have lot of variants even in a single type of product according to the need and financial capacity of the customer. Premium rates are not so competitive. They are usually very high in comparison to other companies. Till the term is ten years, its premium rate, in comparison to the returns it gives, is very high as compared to LIC. Unwillingness of the sales force to forward the promotional offers to the existing clients acts as a barrier in maintaining relations with customers and business growth. The promotional strategies are not that effective as that of the competitors.

Opportunities: The company has its main customer base in the upper segment of the market. In country like India, where maximum of the population is of working type with moderate salary, that to with low insurance penetration, the opportunities are great in this segment. So, the company should look for the middle segment and the rural market as their future target segment to gain a healthy position in the market
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 Since, in the present situation, with increasing awareness of people towards medical insurance and general insurance, the company should expand its horizon in this area also. The company has a very wide and open market to be covered. Low share of other organized players. Still, only 6% OF Indias population is insured. They can target the uninsured people especially targeting rural sector. Threats: Due to firm belief of the people in LIC, changing their attitudes for a private company like Kotak Life Insurance is difficult. So it is the major threat to the company. Due to the presence of private players like ICICI Prudential, HDFC life, Bajaj Allianz etc., which are much older in the market in comparison to Kotak life, gaining the market share is very difficult. RBI infrastructure and flexi bonds are proving to be great threats, along with mutual funds, to life insurance policies as they are giving better returns along with easy liquidity options. RBI infrastructure and flexi bonds are even providing 6.5% tax free returns. Entry of NBFCs also posed a big threat.

FUTURE GROWTH PROSPECTS OF COMPANY IN the total market share, LIC has reduced its share from 91% to 50%. This means that private insurance players have got more margins in their hands which have increased from 9% to 50% in the last 5 years only.
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Kotak Mahindra Bank completed 8 years as a scheduled commercial bank in 2010. The Bank opened its 100th branch in January 2007. As on March 31, 2011, the Bank has built a network of over 2000 full fledged branches spread across 300 cities and towns. The Bank proposes to have around 200 full-fledged branches by mid next year. Kotak Mahindra Capital Company and Kotak Securities continued to report good financial performance on the back of strong capital markets and the robust overall economic growth. The life insurance subsidiary, Kotak Mahindra Old Mutual Life Insurance continued its growth momentum but posted an accounting loss. The premium income for the year grew to Rs. 2975 crore (previous year Rs. 2868 crore). During the year, Kotak Life wrote over 259444 policies (previous year 320735 policies) of adjusted first year annualized premium. Riders are not included in the sum assured. The group continues to have a significant presence in distribution of mutual funds and is among the top three distributors of mutual funds in India.

CONCLUSION The insurance industry has come a long way since the year 2000, when the government opened up the market to private players also. In India, people are finally beginning to realize the importance of insurance. With life expectancy growing and 94% of the

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population having no social security or old age pension plans, insurance provides a useful vehicle to save up for later stage in life. Although the endowment and money back plans are the major sold plans but the current flavor is the unit linked plans, which provides covers as well as the opportunity to invest through the same product. The Indian insurance industry is witnessing a plethora of changes as customers are given more options to choose from custom-made products, better transparency, improved technologies and processes and better service standards. Government and industry action in insurance are more mutually receptive than ever before. Indias enormous population, continuously developing infrastructure facilities and globally visible corporate success add to the countrys promising prospect for insurers looking for huge demands and alternatives to already tapped market. However, one area where the companies are not upbeat right now is the rural market. IRDA regulations specify that companies must log five percent of the business from socially weaker sections and rural areas in the 1st year, 10 percent in the next year and 15 percent in the 3rd year. Moreover, from the project we can also conclude that there are many things which the company should take care before designing the products. People generally look for their financial status before investing their money anywhere and then look for the product and its reliability. So, while designing the product company should take care of these basic factors.

UNDER THIS PROJECT: No. of customers met : more than 250 No. of customers called (phone) : 500 No. of forms filled : more than 50
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Kotak life insurance is a fastest growing private life insurance company in India with a market share of 2%. ICICI is the no. one private life insurance co. with a market share of 10%. Birla sun life stands second in private life insurance companies with a market share of 4%. Looking at the private sector, ICICI Prudential has been the dominant player because the amount of gap between the market shares is huge. If we analyze in all sectors of life insurance then LIC has been the most dominant player since 1956. The impact of LIC has been so much in both rural and urban areas that people use the term LIC instead of life insurance. Kotak life faces a big challenge in front of them so as to stay in the race with Life insurance Corporation (LIC) because with the entrance of other companies like ICICI, Max New York, HDFC Standard Life & Birla Sun Life, the competition has become tougher. But insurance is also growing day by day, India has a population of 1.2 billion and only 6% of the population is insured. This means insurance is an upcoming industry but Kotak life has to work a lot on their strategies to overcome LIC.

RECOMMENDATIONS AND SUGGESTIONS

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During the exposure of 2 months I had in the insurance industry via KOTAK LIFE, it helped me to develop the basic understanding of how this industry works and the work experience & knowledge gained has also helped me to give the recommendations as stated below: Insurance is a business of credibility. As they are in service marketing, proper care of the customers before and after buying the product is an important criterion of competing in the market. So proper Customer Relationship Management techniques should be adopted by the company. As we know nearly 70% of the present countrys population belongs to rural areas and our company has its bases in urban area only, the company should take majors to tap the rural market also. In comparison to the market leaders like LIC, ICICI Prudential, etc. the company has very few product variants. However, to resist the competition in the market, company should try to increase its product mix so that it can cater the need of the maximum proportion of the population. Implementation of proper technology should be done. It can adopt VSAT technology or can implement payment of premium through ATM and customers should be revealed about their due premium through SMS and emails. The company should look for proper advertising and sales promotion tools so as to achieve its aspiration of being one of the top 5 insurance companies in India. The company should try to change the perception of the people that insurance is all about getting discount in tax, they should be made to realize that it is a great way of saving for the future too.

KEY LEARNINGS How to recruit insurance advisors and convince them for the job profile.
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 Managerial Communication & Etiquettes Time Management i.e. reaching the organization on time and leaving accordingly Practical aspects of Customer Relationship Management Communication gap shouldnt exist between different levels of management so as to ensure maximum efficiency of the employees For gaining a competitive edge over the competitors, we need to increase the product mix How the information is carried out from middle level management to corporate level management and vice-versa How to switch funds of the customers in ULIP at the time of fluctuating Sensex How to fix the appointment, prepare ourselves, present, sale and follow up

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Annexure & References (including Web references)

various business newspapers magazines www.amfindia.com www.kotaklifeinsurance.com www.investmsrtindia.com www.personalfn.com www.economictimes.com www.stockindia.com www.irdaindia.org Annual report of Kotak life insurance and HDFC standard life insurance

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