Final Project of Kotak Mahindra Project

TABLE OF CONTENTS
Serial No. I.
Chapter Name INTRODUCTION

EXECUTIVE SUMMARY INTRODUCTION TO INVESTMENT ANALYSIS INDUSTRIAL SCOPE INVESTMENT STYLES PERFORMANCE MEASUREMENT INTRODUCTION TO STUDY(FINANCE) REVIEW OF LITERATURE HYPOTHESIS RESEARCH DESIGN SCOPE OF STUDY LIMITATION OF STUDY CHAPTER SEHEME
Page No.
2 3-7
8to17 18to47 48 49to50 51 52 53
II.
COMPANY PROFILE
PROFILE OF THE COMPANY PRODUCTSANDSERVICES 54to68
III. IV. V.
SUMMARY OF FINDINGS, SUGGESTION AND CONCLUSION
69to71
BIBLOGRAPHY
72 73to75
ANNEXURE S
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EXECUTIVE SUMMARY
In todays corporate and competitive world, I find that insurance sector has maximum growth potential as compare to the other sector.Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and KOTAK LIFE INSURANCE has given me the opportunity to work and get experience in highly competitive and enhancing sector. Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market. My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate. As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to our target competition. For this I developed a questionnaire and I did my survey in Jaipur city. This job training also helped me a lot in understanding the process of building effective marketing channels for life insurance products by establishing network of life insurance advisors. The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents/advisors or agency holders of the company. If a company like KOTAK LIFE INSURANCE, ICICI PRUDENTIAL, RELIANCE LIFE INSURANCE, TATA MAX etc has adequate agents in the market, they can capture big market as compared to the other companies.
BANGALORE INSTITUTE OF MANAGEMENT STUDIES
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PORTFOLIO ANALYSIS
INTRODUCTION
Investment management is the professional management of various securities (shares, bonds and other securities) and assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds).
The term asset management is often used to refer to the investment management of collective investments, (not necessarily) while the more generic fund management may refer to all forms of institutional investment as well as investment management for private investors. Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as wealth management or portfolio management often within the context of socalled "private banking". The provision of 'investment management services' includes elements of financial statement analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Investment management is a large and important global industry in its own right responsible for caretaking of trillions of yuan, dollars, euro, pounds and yen. Coming under the remit of financial services many of the world's largest
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companies are at least in part investment managers and employ millions of staff and create billions in revenue.
Fund manager (or investment adviser in the United States) refers to both a firm that provides investment management services and an individual who directs fund management decisions .
INDUSTRY SCOPE
The business of investment management has several facets, including the employment of professional fund managers, research (of individual assets and asset classes), dealing, settlement, marketing, internal auditing, and the preparation of reports for clients. The largest financial fund managers are firms that exhibit all the complexity their size demands. Apart from the people who bring in the money (marketers) and the people who direct investment (the fund managers), there are compliance staff (to ensure accord with legislative and regulatory constraints), internal auditors of various kinds (to examine internal systems and controls), financial controllers (to account for the institutions' own money and costs), computer experts, and "back office" employees (to track and record transactions and fund valuations for up to thousands of clients per institution). Key problems of running such businesses Key problems includeRevenue is directly linked to market valuations, so a major fall in asset prices causes a precipitous decline in revenues relative to costs; above-average fund performance is difficult to sustain, and clients may not be patient during times of poor
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performance; successful fund managers are expensive and may be headhunted by competitors;
above-average fund performance appears to be dependent on the unique skills of the fund manager; however, clients are loath to stake their investments on the ability of a few individuals- they would rather see firm-wide success, attributable to a single philosophy and internal discipline. analysts who generate above-average returns often become sufficiently wealthy that they avoid corporate employment in favor of managing their personal portfolios
Investment styles
There is a range of different style of fund management that the institution can implement. For example, growth, value, market neutral, small capitalisation, indexed, etc. Each of these approaches has its distinctive features, adherents and, in any particular financial environment, distinctive risk characteristics. For example, there is evidence that growth styles (buying rapidly growing earnings) are especially effective when the companies able to generate such growth are scarce; conversely, when such growth is plentiful, then there is evidence that value styles tend to outperform the indices particularly success.
Performance measurement
Fund performance is often thought to be the acid test of fund management, and in the institutional context, accurate measurement is a necessity. For that purpose,
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institutions measure the performance of each fund (and usually for internal purposes components of each fund) under their management, and performance is also measured by external firms that specialize in performance measurement. The leading performance measurement firms (e.g. Frank Russell in the USA or BISAM in Europe) compile aggregate industry data, e.g., showing how funds in general performed against given indices and peer groups over various time periods. In a typical case (let us say an equity fund), then the calculation would be made (as far as the client is concerned) every quarter and would show a percentage change compared with the prior quarter (e.g., +4.6% total return in US dollars). This figure would be compared with other similar funds managed within the institution (for purposes of monitoring internal controls), with performance data for peer group funds, and with relevant indices (where available) or tailor-made performance benchmarks where appropriate. The specialist performance measurement firms calculate quartile and deciles data and close attention would be paid to the (percentile) ranking of any fund. Generally speaking, it is probably appropriate for an investment firm to persuade its clients to assess performance over longer periods (e.g., 3 to 5 years) to smooth out very short term fluctuations in performance and the influence of the business cycle. This can be difficult however and, industry wide, there is a serious preoccupation with short-term numbers and the effect on the relationship with clients (and resultant business risks for the institutions).
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INTRODUCTION TO STUDY
DEFINITION
According to Joseph and Massie financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation According to Prather and wert Business finance deals primarily with raising administering and disbursing funds by privately owned business units operating in non-financial fields of industry
BUSINESS FINANCE
Business finance is that business activity which is concerned with the acquisition and conversion of capital funds in meeting financial needs overall objectives of business enterprises. Financial function of a business may define as the procurement of funds and their effective utilization.
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Financial Management
In every organization, where finds are involved sound financial management is necessary. As COLLINS BROOKS has remarked Bad production management and bad sales management have stain in hundreds, but faulty financial management has slain in thousands. A business finance of financial management is a managerial activity, which is concerned with the anticipation of financial needs acquiring financial resources allocating funds within the business. Administrating the allocated funds and accounting and reporting to management over financial matters.
Objectives
The main objective of financial management is as follows 1. To archive profit maximization as a corporate Social objective. 2. To ensure wealth maximization. 3. It should give way for maintaining balanced asset Structure. 4. To maintain liquidity to meet debt obligation. 5. To ensure fair returns to share holders.
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Financial decision
The function of finance manager is to review and control decision to commit or recommit funds to new or outgoing uses thus in addition to raising funds, financial management is concerned with production marketing and other function whenever decision are made up on the acquisition or destructions of asset.
The types of financial decision are
1 Funds requirement decision 2. Financing decision 3. Investment decision 4. Dividend decision
Financial statements
A financial statement is an organized collection of data according to logical and consistent accounting procedure. Its purpose is to convey an understanding of some financial aspects of business firm. It may show a position at a movement of time it the case of balance sheet or may reveal a series of activity over a given period of time as in the of income statement.
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1. To assist decision making 2. To provide financial information that assist in Estimating the earning potential of the enterprises 3 .To provide reliable financial information changes in Economic resource and obligation of the business Enterprises. 4. Financial statement can be divided as under:
Income statement
It reflects the earning capacity and potential of a firm. It is the scoreboard of the firms performance, since it reflects the result of people ration for a period of time; it is also called as the flow statement. It represents summary of revenue, expenses of and income of a firm. It serves the firms profitability.
Balance sheet
It is the most significant financial position statement. It contains information about resources along with the obligation of the business entity, and abut it owners interest in the business at a particular point of time. It communicates information about asset liability and owners equity of the business firm as on specific date. These by providing information on its financial position.
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Statement of changes in retained earnings
The statement knows as statement of retaining earnings or profit and loss appropriation account or income disposal statement. The statement gives details of the distribution of earnings during a particular accounting period. The balance shown by the income statement is transferable to the balance sheet through this statement after making necessary appropriation.
Statement of changes in financial position

The balance sheet shows the financial condition of business at a particular moment of time while income statement discloses the operations of business over a period of time. The state meant may emphasize any of the following aspects relating to changes financial position of the business.
A. B.
Changes in working capital position Changes in cash position.
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Analysis and interpretation of financial statements

Indicators of Financial statements are the two significant factors:
Profitability Financial soundnessAnalysis and interpretation of financial statements refer to such a treatment of the information contained in the income statement and the balance sheet, so as to afford full diagnosis of the profitability and financial soundness of the business. Financial Statement AnalysisIt involves the process of Analysis and Interpretation
Analysis
Refer to the proper arrangement of data; where in the total figure in the financial statements are regrouped into their distinct and different component parts. Egg: The amount of current assets in the balance sheet may be regrouped in to debtors, cash inventories etc., Debtors further classified in to amounts due for less than 3 months, for 3 to 6 months, more than 6 months etc.
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Interpretation
Refer to the comparison of the various components and the examination of their content so that use full and decline conclusions may be drawn about the earning capacity, profitability, liquidity and solvency etc. Compression therefore is a pre requisite for meaningful interpretation. Both analysis and interpretation are closely related. Analysis is always followed by interpretation and interpretation is performed through a process called comparison.
IMPORTANCE AND OTHER RELEVANT ASPECTS:
The financial statement analysis helps in evaluating the relationship between different items constituting financial statements and understands the financial position and the performance of the firms. This significance could be summarized as follows:
It helps in screening:
Financial statement analysis serves as a preliminary screening tool in the selection of investment. It greatly helps the investor in studying the prospects, payments, and protection.
It helps in forecasting:
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It can be used as forecasting tool for future profitability and financial soundness of the business
It helps in Diagnosing:
It helps the management in identifying the factors responsible for creating managerial operations and other financial problems.
It helps in Evaluation:
It is an important tool for evaluating the performance of both management and the organization it is thus a yardstick used by the financial analysis to evaluate condition and performance of the firm.
Persons Interested In Financial Analysis

The persons interested in the financial analysis can broadly be divided in to two categories:
The insiders or management
The management is basically interested in overall performance of the firm. The management also employs financial analysis for purpose of internal control. In particular, it is concerned with profitability of investment in the various assets of the company and in the efficiency of assets management
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The outsiders of management They are mainly interested in the information that is relevant from their point of view. For instance the shareholders and potential investor would be more interested in the earnings per share and dividend pay-out ratio.
TOOLS AND TECHNIQUES OF ANALYSIS

The purpose of analysis and interpretation can be served by using the following important tools as analysis: 1. Comparative financial statements 2. Common-size statement 3. Trend-Analysis 4. Ratio-Analysis 5. Cost-volume profit statement.
Comparative financial statements
Refers to examine and compare the various elements in financial statements. These statements add time dimension to the analysis. The current year happenings are compared to the previous year and the direction of growth of the enterprises is
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found out. The two financial statements that are Balance sheet and profit and loss account are used for comparison.
Common size statement :

Under common size statement method individual items of profit and loss account and balance sheet are reduced to a common base which is equivalent to hundred, in these statements each percentage will have a relative significance to its respective total.
Trend Analysis-
Emphasize on changes in the financial and operational data from year to year with the help of the trend analysis statement it is possible to identify the areas in which the organization has achieved improvement over the years. These statements are use full in comparative analysis of the data.
Ratio Analysis-
The essence of ratio analysis is the linking of significant items of accounting data to each other to compute a ratio and comparing ratio with yardstick. They may be company specific or they may be relating to industry or economic average. They are useful in that a position and simplify on explanation of complicated statement by its expressions in one figure.
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Fund flow statement-
Flow of funds means change in the amount of fund and net working capital either increase or decreased of working capital. Increase in working capital leads to sources of fund and decreased in working capital is application of fund.
Definition:
According to Robert Anthony, The fund flow statement described the source flow which additional finds were derived and cases which these funds were put.
Cash flow statement:

It refers to which defects the change in the cash position and a concerned between one balance sheet data and another is know as cash flow statement.
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Difference between FFS AND CFS
Fund flow statement is based on working capital where as cash flow statement is based on cash position. Cash flow statement difference the change in cash position of enterprise between two balance sheets where as fund flow statement defects the changes in working capital position of enterprises between two balance sheets. Cash flow statement deals with the inflow and outflow of only cash where as fund flow statement deals with all items of the working capital. Cash flow statement is only supplementary statement where as fund flow statement is main statement . Cash flow statement is useful short-term financial analysis taking where as fund flow statement useful to long period.
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REVIEW OF LITERATURE & RESEARCH DESIGN
INTRODUCTION
The story of insurance is probably as old as the story of mankind. Tendency of a human being to secure themselves against loss and disaster has been from the starting of world. They sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years as per records. Functions of insurance: Provide Protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also.
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Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. Means of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.
Insurance is divided into two basic zones: 1. General Insurance 2. Life insurance
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GENERAL INSURANCE
Insurance of the non life assets are called general insurance, this includes loss of asset against water, fire, earthquake etc. With the opening up of the Indian Market in Insurance sector for private players, in General Insurance the monopoly of the general Insurance public sectors companies has been broken. With the entrance of the new private player market innovative technique has been introduced to capture the market. In general insurance Around 17% of the market has been captured by the private players. General Insurance is a sector which alone has many type of insurance coverage in it like Fire Insurance, Marine Insurance, motor Insurance, Liability Insurance, Engineering Insurance etc.
The Non Life Insurers:

National Insurance Co. Ltd New Indian Assurance Co. Ltd Oriental Insurance Co. Ltd United India Insurance Co. Ltd Tata AIG General Insurance Co. Ltd Bajaj Allianz General Insurance Co. Ltd IFFCO Tokyo General Insurance Co. Ltd ICICI Lombard General Insurance Co. Ltd Reliance General Insurance Co. Ltd Royal Sundaram Alliance Insurance Co. Ltd Bharti Axe General Insurance HDFC Chub
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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

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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 insurance enables a person to enjoy peace of mind and a of a person reduces. Life
sense of security in his/her old age. Promotion of savings: 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.
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Tax Benefit: Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.
INDIAN INSURANCE INDUSTRY
HISTORY:
Life insurance came to India from England in 1818 when oriental life insurance company started in Calcutta by Europeans. After this many insurance companies had been started in India. But these companies were looking after only the needs of European community established in India. Indian people were not being insured by these companies. First Indian life insurance company came as Bombay mutual life insurance assurance. Second company was Bharat insurance company came in 1896. After this the united India in Madras, national Indian and national insurance in Calcutta and the co-operative assurance in Lahore were established in 1906. To regulate Indian insurance business first insurance act came in 1912 as life insurance company act and provident fund act. These acts consist of premium rates tables and periodical valuations of companies. In the first two decade of 20th century many life insurance companies were started. So the insurance act came in 1938 to governing life and non life insurance companies and to provide strict state control. In 1956 the life insurance business in India was
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nationalized. In 1956 life insurance corporation of India (LIC) was created to spreading life insurance much more widely particularly in rural areas. In that year LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. In 1957 the business of LIC of sum assured of 200crores, 1000crores in 1970, and 7000crores in 1986.
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:

In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.
Role of IRDA
1. Protecting the interests of policyholders. 2. Establishing guidelines for the operations of insurers and brokers. 3. Specifying the code of conduct, qualifications and training for insurance intermediaries and agents. 4. Promoting efficiency in the conduct of insurance business.
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5. Regulating the investment of funds by insurance companies. 6. Specifying the percentage of business to be written by insurers in rural sectors.
Handling disputes between insurers and insurance intermediaries. Changing perception of Indian customers: Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers. For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and was practically forced onto consumers on a Take-it-As-it-basis. All that got changed with passage of IRDA act in 1999. New insurance companies have come into existence leading to open competition and hence better products for customers. Indian customers have become very sensitive to Coverage / Premium as well as the Products (read Risk Solution), that is given to them. There are not ready to accept any product, no matter even if that is coming from the market leader, should that product is not serving the purpose. A case in point is ULIP product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the Non-life segment are new age Avatar. The new products are constantly being demanded
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by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond. Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now Indian customers are aware of insurance industry and insurance products provided by companies. They have become more sensitive. They would not accept any type of insurance product unless it fulfills their requirements and needs. In historic days customers looking at insurance products as a life cover which
can provide security against any unacceptable events, but now customers look at insurance products as an investment as well as life cover. So todays customers wants good return from the insurance companies. The Indian customers forms the pivot of each companys strategy.
Investment of Indian household savings (as a % in different sector)
BANK DEPOSITS CORP. BANKS SHARES AND DEBENTURES MUTUAL FUNDS NBFCS GOVT. BONDS INSURANCE PF/ RETIRE FUNDS
39 2 1 2 3 13 13 21
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CURRENCY Source: www.avivaindia.com
Changing face of Indian insurance industry:

After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. Previously there was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the only life-insurance company for the people till 2000. L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of private life insurance companies there is a great competition in Indian market now. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. Today life-insurance is not only limited
up to just life risk cover and maturity period bonuses but changed to greater return from the investments. With the introduction of the unit linked insurance policies these companies are investing the money in different investment instruments like shares, bonds, debentures, government and other securities. People are demanding for higher returns with the life risk cover and private companies are giving 30- 40% average growth per annum. These life-insurance companies have every kind of policies suiting every need right from financial needs of, marriage, giving birth and rearing up a child, his education, meeting daily financial needs of life, pension solutions after retirement. These companies have every aspects and needs of our life covered along with the death-benefit. In India only 25% of the population has life insurance. So Indian life- insurance market is the target market of all the companies who either want to extend or diversify their business. To tap the Indian market there has been tie-ups between the major Indian companies with other International insurance companies to start up their business. The
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government of India has set up rules that no foreign insurance company can set up their business here and they have to tie up with an Indian company and this foreign insurance company can have an investment of only 24% of the total start-up investment.
Indian insurance industry can be featured by:

1. 2. 3. 4. 5. 6. Market penetration. Ever growing Low middle class component in population. Growth of customers interest with an increasing demand for better Insurance products. Application of information technology for business. Rebate from government in the form of tax incentives to be insured.
Today, the Indian life insurance industry has more than a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. The success of their effort is that they have captured over 28% of premium income in five years. The biggest beneficiary of the competition among life insurers has been the customer. A wide range of products, customer focused service and professional advice has become the mainstay of the industry, and the Indian customers forms the pivot of each companys strategy. Penetration of life insurance is beginning to cut across socio-economic classes and attract people who have never purchased insurance before.
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Life insurance is also now being regarded as a versatile financial planning tool. Apart from the traditional term and saving insurance policies, industry has seen the entry and growth of unit linked products. This provides market linked returns and is among the most flexible policies available today for investment. Now products are priced, flexible, and realistic and Sustain people in better position to understand the risk and benefits of the product and they are accepting these innovative products. So it is clear that the face of life insurance in India is changing, but with the changes come a host of challenges and it is only the credible players with a long term vision and a robust business strategy that will survive. Whatever the developments, the future and the opportunities in this industry will surely be exciting. The number of companies in Insurance particularly in Life Insurance has changed drastically . List of them are mentioned as below:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
ICICI Prudential Life Insurance TATA AIG Life Insurance Max New York Life Insurance AVIVA Life Insurance Bharti AXA Life Insurance Kotak Mahindra Life Insurance Reliance Life Insurance SBI Life Insurance HDFC Standard Life Insurance Birla Sun Life Insurance Sahara Life Insurance ING Visya Life Insurance And so on
Increasing growth since liberalization:

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YEAR FY 03 FY 04 FY 05 FY 06 FY 07
LIC (in billion Rs.) 110 120 130 140 240
PRIVATE PLAYER 10 20 40 60 160
Possibilities for insurance companies in India:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Further deregulation of the market. Greater concern for the customers. Newer products and services. Competition and quality consciousness. Cost effective operations. Restructuring of the public sector. Consolidation of domestic insurance markets. Technology driven shift in product design. Actual operations and distribution. Convergence of financial services.
GLOBAL INSURANCE INDUSTRY

Globally, insurers increasingly are pressured by the demands of their clients. The development of global insurance industry over the past few years was influenced by booming stock markets which enabled considerable capital gains to be made in non life business. Increase in insurers equity capital increased underwriting capacity, while demand did not develop at the same pace, resulting in decrease in insurance policies
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prices. The stock market boom of the past few years led to demand for unit linked insurance products. The global insurance industry is growing at rapid pace. Most of the markets are undergoing globalization. Lot of mergers and acquisition are taking place in the insurance world. The rapidity in the industry, technological improvement has resulted in pressures on a few economic parameters. The world insurance industry is at peak of its globalization process. Global insurance market is increasing by an average of six percent per year since 1990. Insurance companies have collected $2443.7 billion premium worldwide according to the global development of premium volume in 144 countries in 2005. $1521.3 has been generated as life insurance premium and $922.7 as non life insurance premium. The US accounted for 35% of global life and non life premium, Japan had global share of 21%, and UK was having 10% of global share.
Influence on Indian Insurance Industry

In this era of globalization, insurance companies face a dynamic global environment. Dramatic changes are taking place owing to the internationalization of activities, appearance of new risk, new types of covers to match with new risk situations, and unconventional and innovative ideas on customer services. Low growth rates in developed markets, changing customers needs, and the uncertain economic conditions in the developing world are exerting pressure on insurers resources and testing their ability to survive. Now the existing insurers are facing difficulties from non-traditional competitors those are entering the retail market with new approaches and through new channels
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India has a rapidly growing middle class and this section can afford to buy insurance products. This shows the attraction that the Indian market holds for foreign insurers who have been putting pressure on developing countries as well as on India to open up its market. Life Insurance Penetration as a % of GDP United Kingdom Japan Korea United States Malaysia India China Brazil 8.9 8.3 7.3 4.1 3.6 3.0 1.8 1.3
Source: www.indianinsuranceresearch.com
INSURANCE AND ECONOMY
Indian economy is growing in reference to global market. Business of insurance with its unique features has a special place in Indian economy . It is a highly specialized technical business and customer is the most concern people in this business, therefore this business is able to spur the growth of infrastructure and act as a catalyst in the overall development of Indian economy.
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The high volumes in the insurance business help spread risk wider, allowing a lowering of the rates of the premium to be charged and in turn, raising profits. When there is a bigger base, the probabilities become more predictable, and with system wide risks balanced out, profits improve. This explains the current scenario of mergers, acquisitions, and globalization of insurance. Insurance is a type of savings. Insurance is not only important for tax benefits, but also for savings and for providing security. It can be serving as an essential service which a welfare state must make available to its people. Insurance play a crucial role in the commercial lives of nations and act as the lubricants of economic activities. Insurance firms help to spread the potentially financial consequences of risk among the large number of entities, to mobilize and distribute savings for productive use, facilitate investment, support and encourage external trade, and protect economic entities against external risk. Insurance and economic growth mutually influences each other. As the economy grows, the living standards of people increase. As a consequence, the demand for life insurance increases. As the assets of people and of business enterprises increase in the growth process, the demand for general insurance also increases. In fact, as the economics widens the demand for new types of insurance products emerges. Insurance is no longer confined to product markets; they also cover service industries. It is equally true that growth itself is facilitated by insurance. A well-developed insurance sector promotes economic growth by encouraging risk-taking. Risk is inherent in all economic activities. Without some kind of cover against risk, some of these activities will not be carried out at all. Also insurance and more particularly life insurance is a mobilize of long term savings and life insurance companies are thus able to support infrastructure projects which require long term funds. There is thus a mutually beneficial interaction between insurance and economic growth.
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The low income levels of the vast majority of population have been one of the factors inhibiting a faster growth of insurance in India. To some extent this is also compounded by certain attitudes to life. The economy has moved on to a higher growth path. The average rate of growth of the economy in the last three years was 8.1 per cent. This strong growth will bring about significant changes in the insurance industry. At this point, it is important to note that not all activities can be insured. If that were possible, it would completely negate entrepreneurship. Professor Frank Knight in his celebrated book Risk Uncertainty and Profit emphasized that profit is a consequence of uncertainty. He made a distinction between quantifiable risk and non-quantifiable risk. According to him, it is non- quantifiable risk that leads to profit. He wrote It is a world of change in which we live, and a world of uncertainty. We live only by knowing something about the future; while the problems of life or of conduct at least, arise from the fact that we know so little. This is as true of business as of other spheres of activity. The real management challenges are uninsurable risks. In the case of insurable risks, risk is avoided at a cost.
FUNCTIONING OF INSURANCE INDUSTRY Insurers Business Model

: Profit = Earned Premium + Investment Income Incurred Loss Underwriting expenses Insurers make money in two ways: 1. Through Underwriting, the processes by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks, and
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2. By investing the premiums they collect from insured. The most difficult aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of area covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy
An insurer's underwriting performance is measured in its combined ratio. The loss ratio(incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss. Insurance companies also earn investment profits on float. Float or available reserve is the amount of money, at hand at any given moment that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out. Naturally, the float method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up
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their underwriting standards. So a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the "underwriting" or insurance cycle.
Finally, claims and loss handling is the materialized utility of insurance. In managing the claims-handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages.
Investment Management :
Investment operations are often considered incidental to the business of insurance, and have traditionally viewed as secondary to underwriting. In the past risk management was the most important part of business, whereas today the focus has shifted to fund management. Investment income is a large component of insurance revenues, skilful and careful management of funds. Insurance is a business of large numbers and generates huge amount of funds over time. These funds arise out of policyholder funds in the case of life insurance, and technical and free reserves in the non-life segments. Time lag between the procurement of premium and the payment of claim provides an interval during which the funds can be deployed to generate income. Insurance companies are Among the largest institutional investors in the world. Assets managed by insurance companies are estimated to account for over 40% of the worlds top ten asset managers. Returns on investments influence the premium rates and bonuses and hence investment income will continue to be an important component of insurance company profits. In life insurance, benefits from insurance profits accrue directly to policy holders when it is passed on to him in the form of a bonus. In non life insurance
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the benefits are indirect and mostly by the creation of an investment portfolio. Investment income has to compensate for underwriting results which are increasingly under pressure.
In the case of insurance, the difference between revenue and the expenses is known as operating surplus. Revenue = Premium Expenses = (Sum of Claims + Commission payable on procurement of business + Operating expenses) Operating Surplus = (Revenue Expenses)
Net investment income includes income from trading in and holding stock market securities including government securities, special deposits with the central government, loans to several public utilities and service providers in state government. Insurance premium collected is converted in a pool of fund then divided in to four expenses. To pay the expenses of the management To pay agency commission To pay for the claims
Surplus money will be invested in govt. securities Requirements of an insurance risk Insurance normally insure only pure risks .However, not all pure risk is insurable .certain requirements usually must be fulfilled before a pure risk can be privately insured .From the view point of the insurer, there are ideally six requirement of an insurable risk:
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1. There must be a large number of exposure units 2. The loss must be accidental and unintentional 3. The loss must be determinable and measurable 4. The loss should not be catastrophic
The chance of loss must be calculable The premium must be economically feasible Comparison of Insurance with other Similar Factors
1.
Insurance and Gambling compared Insurance is often erroneously confused with gambling .There are two important differences between them First , gambling creates a new speculative risk ,while insurance is a technique for handling an already existing pure risk .thus ,if you bet Rs 300 on a horse ,a new speculative technique is created ,but if you pay Rs 300 to an insurer for fire insurance ,the risk of fire is already present and is transferred to the insurer by a contract. No new risk is created by the transaction. The second difference between insurance and gambling is that gambling is socially unproductive, because the winners gain comes at the expense of the loser .In contract; insurance is always socially productive, because neither the insurer nor the insured is placed in a position where the gain of the winner comes at the expense of the loser. The insurer and the insured have a common interest in the prevention of a loss. Both parties win if the loss does occur .Moreover, consistent gambling transaction generally never restore the losers to their former financial position. In contract insurance contracts restore the insureds financially in whole or in part if a loss occurs .
2. Insurance and Hedging compared
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The concept of hedging is to transferring the risk to the speculator through purchase of future contracts .An insurance contract, however, is not the same thing as hedging .Although both technique are similar in that risk is transferred by a contract, and no new risk is created, there are some important difference between them. First, an insurance transaction involves the transfer of insurable risks, because the requirement of an insurable risk generally can be met .However, hedging is a technique for handling risks that are typically uninsurable ,such as protection against a decline in the price agriculture products and raw materials. A second difference between insurance and hedging is that insurance and hedging is that insurance can reduce the objective risk of an insurer by application of the law of large numbers. As the number of exposure units increases, the insurers prediction of future losses improves, because the relative variation of actual loss from expected loss will decline .thus, many insurance transactions reduce objective risk. In contract, hedging typically involves only risk transfer, not risk reduction .The risk of adverse price fluctuation is transferred because of superior knowledge of market conditions The risk is transferred, not reduced, and prediction of loss generally is not based on the law of large numbers.
Various types of life insurance policies:
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Endowment policies : This type of policy covers risk for a specified period, and at
the end of the maturity sum assured is paid back to policyholder with the bonuses during the term of the policy.
Money back policies: This type of policy is for periodic payments of

partial survival benefits during the term of the policy as long as the policy holder is alive.
Group insurance: This type of insurance offers life insurance protection

under group policies to various groups such as employers employees, professionals, cooperatives etc it also provides insurance coverage for people in certain approved occupations at the lowest possible premium cost.
Term life insurance policies: This type of insurance covers risk only
during the selected term period. If the policy holder survives the term, risk cover comes to an end. These types of policies are for those people who are unable to pay larger premium required for endowment and whole life policies. No surrender, loan or paid up values are in such policies.
Whole life insurance policies: This type of policy runs as long as the
policyholder is alive and is covered for the entire life of the policyholder. In this policy the insured amount and the bonus is payable only to nominee on the death of policy holder.
Joint life insurance policies: These policies are similar to endowment

policies in maturity benefits and risk cover, but joint life policies cover two lives simultaneously such as married couples. Sum assured is payable on the first death and again on the death of survival during the term of the policy.
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Pension plan: a pension plan or annuity is an investment over a certain number of

years but does not provide any life insurance cover. It offers a guaranteed income either for a life or certain period.
Unit linked insurance plan: ULIP is a kind of insurance plan which provides life
cover as well as return on premium paid over a certain period of time. The investment is denoted as units and represented by the value called as net asset value (NAV).
DISTRIBUTION OF INSURANCE PRODUCTS
Insurance has to be sold the world over. The Touch point with the ultimate customer is the distributor or the producer and the role played by them in insurance markets is critical. It is the distributor who makes the difference in terms of the quality of advice for choice of product, servicing of policy post sale and settlement of claims. In the Indian market, with their distinct cultural and social ethics, these conditions will play a major role in shaping the distribution channels and their effectiveness. In today's scenario, insurance companies must move from selling insurance to marketing an essential financial product. The distributors have to become trusted financial advisors for the clients and trusted business associates for the insurance Companies. Challenges for insurance companies and intermediaries in India- Building faith about company in the mind of clients. Building personal credibility with the clients.
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Different distribution channels in India:

A multi-channel strategy is better suited for the Indian market. Indian insurance market is a combination of multiple markets. Each of the markets requires a different approach. Apart from geographical spread the socio- cultural and economic segmentation of the market is very wide, exhibiting different traits and needs. Different multi-distribution channels in India are as follows: Agents: Agents are the primary channel for distribution of insurance. The public and private sector insurance companies have their branches in almost all parts of the country and have attracted local people to become their agents. Today's insurance agent has to know which product will appeal to the customer, and also know his competitor's products to be an effective salesman who can sell his company, the product, and himself to the customer. To the average customer, every new company is the same. Perceptions about the public sector companies are also cemented in his mind. So an insurance agent can play an important role to create a good image of company.
Banks: Banks in India are all pervasive, especially the public sector banks. Many insurance companies are selling their products through banks. Companies which are bank owned, they are selling their products through their parent bank. The public sector banks, with their vast branch networks, are helpful to insurance companies. This channel of selling insurance is known as Bank assurance.
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INSURANCE COMPANY ICICI Prudential
ASSOCIATE BANKS ICICI Bank, Bank of India, Citibank, Allahabad Bank, Federal Bank, South Indian Bank, Punjab and Maharashtra Cooperative Bank State Bank of India Deutsche Bank, Citibank, Bank of Rajasthan, Andhra Bank Vysya Bank ABN Amro Bank, Canara Bank HDFC Bank, Union Bank, Indian Bank Karnataka Bank, J&K Bank
SBI Life Birla Sun Life ING Vysya Bank Aviva Life Insurance HDFC Standard Life Met Life
Source: Hindu Business Line, January 08, 2007
Brokers: Now a days different financial institution are selling insurance.

These financial institutions are known as brokers. They are taking some underwriting charges from the insurance companies to sell their insurance products.
Corporate agents: Corporate agency is a cross selling type of channel. Insurance

companies tie-up with business houses in other industries to sell insurance either to their employees or their customers. Insurance industry, during the past 2 years has witnessed a number of such strategic tie-ups and alliances. Corporate agents have become a major force to reckon with in distributing insurance products. Such as- Bajaj Allianz tied up with Maruti Udyog and Ford for auto insurance and Tata AIG life has tied up with Tata tea, Khaitans Williamson major and bridge foundation for selling rural policies.
Internet: In this technological world internet is also a channel of selling insurance. This
can be as direct marketing.
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EFFECTIVE MARKETING STRATEGIES FOR INSURANCE PRODUCTS
Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now days an insurance manager requires leadership, commitment, creativity, and flexibility. "Every family in every village in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager. Financial, marketing and human resource polices of the corporations influence the unit mangers to make decisions. Performance of insurance company 1. Marketing mix. 2. The importance of relationship. 3. Positioning. 4. Value addition. 5. Segmentation. 6. Branding. 7. Insuring service quality. 8. Effective pricing. 9. Customer satisfaction research. The growth of insurance sector is governed largely by factors external to it. The following factors influence the market and demand of product1. Government policies. 2. Growth in population.
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3. Changing age profile. 4. Income wise distribution of the population. 5. Level of insurance awareness. 6. The pricing of the policies. 7. The economic climate of the country. 8. The aversion to risk. 9. Social and political features of the country. 10. Growth scenario in the world. Different companies adopt different approaches in their marketing strategies. One approach is focus upon product quality which can give confidence in the mind of customers that they are offered by best featured products. And other approach is focusing on customers needs, which involve a heavy investment in developing relationships with policyholders. Under this approach customer can expect a range of products and service offered to him. Third approach is market segmentation under which the population can be divided into several homogeneous products and groups, the effort should be tie clients to the company by customized combination of coverage, easy payment plans, risk management advice, and convenient and quick claim handling.
An insurance product can be classified into three phases: Core product: In insurance industry the core product is the policy that provides
protection to the customers.
Expected product: Because of competition customers start to expect

more from an insurance product. Then insurance companies provide some tangible attributes in their product to differentiate from competitors, such as1.Brand 2.Some additional features in existing product 3. By providing instruction manual with the policy
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Augmented product :
An insurance company can provide different types of services to differentiate their products1. Post sales services. 2. Branches in different places for customers. 3. Customer complaint management. 4. Payment option convenient to customers.
The entry of private players and their foreign partners has given domestic players a tough time, because the opening up of the sector has not brought in only foreign players, but also professional techniques and technologies. The present scene in India is such that everyone is trying to put in the best efforts. There are marketing strategies more for survival than growth. But the most important gift of privatization is the introduction of customer- oriented services. Utmost care is being taken to maximize customer satisfaction.
Success of an insurance company depends on four important functions:

Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis. Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents.
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Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving overall efficiency in operations. The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations. Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, companys market share, increase in number of branches and divisions etc. Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness. Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provides measures of efficiency of a unit as well as the organization. Investment control and expense control are dealt separately and the effectiveness of managements decisions at various levels is to be assessed separately.
To find best prospects:

1. Allocating marketing strategies against market potential. 2. Estimating potential for specific products within local markets. 3. Identifying high opportunity areas. 4. Measuring agency performance relative to market potential. 5. Optimizing your agency network against market potential.
Attributes to develop marketing strategies :
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1. Channel data: - Useful to know future buying preferences, learning about products and purchase channels. 2. Consumer attitudes. 3. Consumption data: - Useful to evaluate annual premiums, number of annuities owned, value of annuities, and with which company the current policy is held.
Effective Strategies for Insurance Agents:

1. Learn how to construct a mental image for success. 2. Learn how to find a proper perspective and how to turn off all the signals that cause people not to buy from you. 3. Learn how to get and set more appointments. 4. Learn how to convert a new lead into sales. 5. Learn how to act when you meet a client for the first time. 6. Learn how the order in which you explain the types of policies can double your income.
. HYPOTHESIS
1. Analyzing the financial position of company. 2. Analyzing the annual report of the company. 3. Promoting company towards its position to improve Developing the financial status of company.
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RESEARCH DESIGN
Research was initiated by examining the secondary data to gain insight into the problem. The primary data is evaluated on the basis of the analysis of the secondary data.
DEVELOPING THE RESEARCH PLAN

The data for this research project has been collected through self administration. Due to time limitation and other constraints direct personal interview method is used. A structured questionnaire was framed as it is less time consuming, generates specific and to the point information, easier to tabulate and interpret. Moreover respondents prefer to give direct answers. In questionnaires open ended and closed ended, both the types of questions has been used.
COLLECTION OF DATA Secondary Data: It was collected from internal sources. The secondary data was collected on the basis of organizational file, official records, news papers, magazines, management books, preserved information in the companys database and website of the company. Primary data: Individual respondents, Chartered Accountants, Tax Consultants, Insurance Agents, Auto loan providers were personally visited and interviewed. They were the main source of Primary data. The method of collection of primary data was direct personal interview through a structured questionnaire.
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SAMPLING PLAN
Since it is not possible to study whole population, it is necessary to obtain representative samples from the population to understand its characteristics. 1. Sampling Units: Individual respondents for studying Customer Buying Behavior and Market Segmentation, selected randomly from different areas in Jaipur, like various shopping malls and markets, Government Offices. Chartered Accountants, Tax Consultants, Lawyers, Business Men, Professionals and House Wives of Jaipur for recruitment of Life Insurance Advisors 2. Sample Technique: Random Sampling 3. Research Instrument: Structured Questionnaire 4. Contact Method: Personal Interview SAMPLE SIZE Study of Customer Buying Behaviour and Market Segmentation: 100 respondents Recruitment of Life Insurance Advisors for Kotak Life Insurance: 200 respondents
DATA COLLECTION INSTRUMENT DEVELOPMENT The mode of collection of data is based on Survey Method and Field Activity. Primary data collection is based on personal interview. I have prepared the questionnaire according to the necessity of the data to be collected.
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RESEARCH LIMITATIONS 1. The research is confined to certain parts of Jaipur and does not necessarily show a pattern applicable to all of country. 2. Some respondents were reluctant to divulge personal information which can affect the validity of all responses.
SCOPE & OBJECTIVE OF THE STUDY The objectives of the present study are as following : 1. Proper understanding and analysis of life insurance industry. 2. To know about brand awareness of Kotak Life Insurance and customers preference about Kotak Life Insurance. 3. .Conduct market survey on a sample selected from the entire population and derive opinion on that research.. 4. To help company in establishing a network of Life Insurance Advisors and to promote the benefits those are provided by Kotak Life Insurance to its Life Insurance Advisors. 5. To offer suggestions based upon findings.
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LIMITATIONS
Through the study displays all most all relevant data, it suffers from some inherent limitations, they are follows:
1. The study no doubt with relation to objective, but it does not give complete and total accuracy of findings. 2. It is only the study of interim reports. 3. Due to time constraints, all the ratios could not be calculated, only few of them were taken in to account. 4. Discussion about the project could be conducted only with a few officials due to time constraints face by them. 5. As this study is related to the financial aspects the union could not revel all the information, some data were confidential. 6. Constraints of time due to busy schedule of organizational Personnel. 7. Analysis and interpretation of the report is purely based on the manual provided by the finance department
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CHAPTER SCHEME
Introduction It introduces the reader to the influencing introduction about investment analysis.
Research Design This part explains about the modes of operations of the research work.
Company Profile The background of the company and its significance in the financial analysis in world. in relation to its
Interpretation Data Analysis It introduces the reader to the subject of total analysis and interpretation towards KOTAK Annual Reports and financial position of the company.
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COMPANY PROFILE (About Kotak Mahindra Old Mutual Life Insurance)
Kotak Mahindra is in business since 1985 as a partnership between Uday Kotak and Mr. Mahindra, and insurance part of their business came into existence in the year 2001. Evolution of Insurance business in Kotak Mahindra business is like this:YEAR 1985 1986 1990 1991 1992 1995 1997 1998 2001 SIGNIFICANT CHANGES BUSINESS DEVELOPMENT Trade Finance Corporate Finance Car Finance Investment Banking Brokerage and Distribution Commercial Vehicle Consumer Finance Mutual Fund Life Insurance
Goldman Sachs Ford Credit Old Mutual Plc
2003
Bank
KMOM- The Partnership and Lineage A 26% - 74% Joint Venture Between
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As stated above Kotak Mahindra Life Insurance has Joint venture with Old Mutual plc. Old Mutual Plc is the 12th largest Insurance Company in the world. It has its base of over 4 million life assurance policyholders. It has one of the best Payouts among insurers in the world. It has one of the best Solvency Ratios among insurers in the world. A FTSE 100 financial services group and Ranks as a Fortune Global 500 company. The Old Mutual group manages in excess of 239 billion pounds in funds (Dec06). The company is 160 years old and has prominent presence in the United States and the United Kingdom. Now the question arises that why for the business in India of life insurance Kotak Mahindra chose Old Mutual plc and vice versa. Features of Kotak Mahindra and Old Mutual plc at a glance: KOTAK MAHINDRA Brand Equity Branch Network Entrepreneur Employees Knowledge of Indian Market Access to customer base Distribution Associates Multi Channel Working System OLD MUTUAL Domain Knowledge Technology Product Innovation Training Expertise Global Perspectives System and Process
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PRODUCTS
Term Plans
i. ii. Term Assurance Plan Kotak Preferred Term Plan
Endowment Plans
i. Kotak Endowment Plan ii. Kotak Money Back Plan iii. Kotak Child Advantage Plan iv. Kotak Capital Multiplier Plan v. Kotak Retirement Income Plan vi. Kotak Premium Return Plan
Unit Linked Plans

i. ii. iii. iv. v. Kotak Retirement Income Plan (Unit Linked) Kotak Safe Investment Plan II Kotak Flexi Plan Kotak Easy Growth Plan Kotak Privilege Assurance Plan
Group
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i. Employee Benefits ii. Kotak Term Group Plan
Rural
i. ii. iii. iv. Kotak Credit-Term Group Plan Kotak Complete Cover Group Plan Kotak Gratuity Group Plan Kotak Superannuation Group Plan
Kotak Gramin Bima Yojna

If we look at the status of Kotak Life Insurances market share in comparison of other private company in comparison of premium earned:-
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14
INSURER Bajaj Allianz ICICI Prudential HDFC Standard Life SBI Life Birla Sun Life Tata AIG Max New York Aviva Kotak Mahindra Old Mutual ING Vysya Reliance Life Met Life Sahara Life Shri ram Life
Market Share (%) 7.56 7.35 2.87 2.31 1.89 1.29 1.23 1.14 1.11 0.79 0.54 0.40 0.06 0.03
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If we talk the growth of Insurance industrys private players in recent years, the data will reflect:-
Structure of Kotak Life Insurance

Director: GAURANG SHAH CFO: G.MURALIDHAR Managing Vice President (Training and Management Development): ARUN PATIL Vice President (HR): SUGATTA DUTTA Vice President (Distribution Development and Planning): KAMLESH VORA Appointed Actuary: JOHN BRYCE
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HIERARCHY OF KOTAK LIFE INSURANCE LIMITED
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DATA VALIDATION COSTOMER BUYING BEHAVIOUR & MARKET SEGMENTATION FORLIFE INSURANCE PRODUCTS
DATA ANALYSIS
The data of the collection is reduced to workable size .The data then it is analyzed using various statistical tools, and it is interpreted and conclusions are drawn. Finally recommendations shall be made based on this. Table showing insured & uninsured respondent in the company From the above table 33% of respondents are insured and 67% of respondents are uninsured for investment in policies.
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2.
DATA ANALYSIS
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From the above table 66% of respondents give more preference to LIC insurance company,11% gives to ICICI PRUDENTIAL,9%gives to SBI LIFE,6%gives to HDFC standard life,5%gives to TATA AIG,2%gives to KOTAK & 1%gives to RELIANCE LIFE.
3.
DATA ANALYSIS
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From the above table 58% of respondents want to invest for 10-20years,20% for less than 5years,17% for 5-10 years,4% for whole life & 1% for whole life.
4.
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DATA ANALYSIS
From the above table 47% perception of respondents are comprehensive investment & risk coverage instrument,34% wants to cover future uncertainty,13% are for investment purpose & 6% are for tax savings.
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5.
DATA ANALYSIS
From the above table there are some features of insurance policy that attracts respondents,37% are attracted by companies credibility,30%attracted by large risk coverage,15% are attracted by money back guarantee,11% are attracted by low premium & 7% are attracted by easy access to agent.
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6.
DATA ANALYSIS
From the above table it shows the buying preference of the respondents,55% insurance company/agent approaching the customer & 45% customer approaching insurance com[any/agent.
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7.
DATA ANALYSIS
From the above table it shows the awareness about kotak life insurance, 73% are aware about this,& 27% are not aware about.
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8.
DATA ANALYSIS
From the above table it shows that 85% of the respondents are willing to be associated with kotak life insurance & 15% are not willing to this.
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9.
DATA ANALYSIS
From the above table it shows the time commitment of willing respondents for kotak life insurance, 41% wants few hours daily, 35% wants weekends and holidays & 24% cannot commit specific time schedule.
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FINDINGS
1. Networking is needed to be made broad as the number of branches with Kotak Life Insurance is only 75 and only 7 states are touched by the company so; there is a huge untapped market available for Kotak Life. 2. Marketing in terms of the media via advertisements on Television to small commercials on FM, hoardings and signage etc. has to be made because there were respondents who havent even heard about Kotak Life Insurance.
3. Awareness camp for sub-urban area should be focused. 4. State and Central Government employees should be targeted because of reasons like: They dont have Life Insurance cover other than that provided by their respective employers and LIC. 5. Most of them are underinsured. They have a stable source of income and social security. .Kodak Life Insurance recruits its advisors mainly through personal reference,
through advertisement and through walk-in interviews. They must also recruit them though placement agencies on trial basis. 6. .Kotak Life Insurance must build its reputation by focusing on service quality.
Better service quality. Better service quality may be in the form:
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Issuing policy in time. Providing claims in time. Making customers aware about their status of policy
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CONCLUSION
During the data collected, it has been found that people have great awareness about various companies but a lot more has to be done, especially by smaller companies like Kotak Life Insurance to establish their market presence. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money People in general have been influenced by the marketing activities of insurance companies. A high penetration of print, radio and TV ad campaigns over the years is beginning to have its impact now. Another important trend was in terms of people viewing insurance as a tax saving and investment instrument as much as protective one. The general satisfaction levels among public with regards to policy and agents still requires improvement. Here lies the opportunity for a relatively new comer like Kotak Life Insurance. LIC has never been known for prompt service or customer oriented methods but Kotak Life Insurance can build its reputation based on these factors.
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SUGGESTIONS
1 2 3 4 5 6
Provide more and more training to employees and financial consultants Introduce new life insurance product Open more and more branches as according to the growth of business Increase financial consultant commission and incentives Increase sales promotional activities and advertisement The company can use latest advertisement media like INTERNET, TV, RADIO, and NEWS PAPERS etc...
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BIBLOGRAPHY
Text Books Organizational Behaviour - K Ashwathappa Personnel Management - C B Mamoria Insurance in India Kapoor(page 5to35) Other References Brochures, pamphlets & financial consultants manuals published by KOTAK MAHINDRA LIFE INSURANCE PVT LTD. Websites www.kotak.com www.investmentkotak.com www.privatequityfund.kotak.com www.kotaksecurites.com
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ANNEXURE
I AMREEN QURESHI introduce myself as a student of M. B. A. course from B.I.M.S College Bangalore I have completed my project work on PORTFOLIO ANALYSIS in your company. Is solicited to complete this project and your information will be kept in confidential.
1. Name: 2. Email address: 3. Country of residence at present: 4. Phone number with country code : 5. I do not need a high level of current income from my investments. I am more interested in their long-term growth potential: 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 6. I have set aside savings to cover large expenses such as purchasing a home, college tuition or financial emergency: 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 7. I am concerned about the effects of inflation on my investments: 1. Strongly agree 2. Agree 3. Disagree
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4. Strongly disagree 8. I can tolerate sharp ups and downs in the short-term value of my investments in return for potential long-term gains: 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 9. I am comfortable holding on to an investment even though it declines sharply in value: 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 10. I am willing to take the risk associated with my investments in order to earn a potential return greater than the rate of inflation: 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 11. I consider myself knowledgeable about the risks and potential returns associated with investing in stocks, mutual funds and other types of securities 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 12. For how many years do you plan to stay invested with your investments: 1. More than 15 2. More than 10 3. More than 5 4. Less than 5
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13. I am comfortable with an investment that may take 5 years to provide the returns I expect: 1. Strongly agree 2. Agree 3. Disagree 4. Strongly disagree 14. How stable is your current income source: 1. Very unstable 2. Moderately unstable 3. Moderately stable 4. Very stable 15. In how many years will you withdraw all or the majority of this investment: 1. Less than 5 years 2. Between 5 and 10 years 3. Between 11 and 20 years 4. More than 20 years
ANY SUGGESTIONS
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TABLE OF CONTENTS

Chapter Name INTRODUCTION

8to17 18to47 48 49to50 51 52 53

SUMMARY OF FINDINGS, SUGGESTION AND CONCLUSION

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

The types of financial decision are

1 Funds requirement decision 2. Financing decision 3. Investment decision 4. Dividend decision

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Statement of changes in retained earnings

Statement of changes in financial position

Changes in working capital position Changes in cash position.

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Analysis and interpretation of financial statements

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

IMPORTANCE AND OTHER RELEVANT ASPECTS:

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Persons Interested In Financial Analysis

The insiders or management

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

TOOLS AND TECHNIQUES OF ANALYSIS

Comparative financial statements

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Common size statement :

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Fund flow statement-

Cash flow statement:

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Difference between FFS AND CFS

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REVIEW OF LITERATURE & RESEARCH DESIGN

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

The Non Life Insurers:

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Roles of Life Insurance

Importance of Life Insurance

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

INDIAN INSURANCE INDUSTRY

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Investment of Indian household savings (as a % in different sector)

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

CURRENCY Source: www.avivaindia.com

Changing face of Indian insurance industry:

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Indian insurance industry can be featured by:

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Increasing growth since liberalization:

LIC (in billion Rs.) 110 120 130 140 240