Minor Project Report

ON

Comprehensive Study on the Product of Kotak Mahindra Life Insurance

Submitted in partial fulfillment of the requirements for the award of the degree of

Bachelor of Business Administration (BBA)

To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Submitted by: MR. A LENIN JOTHI Endroll No. 03019301809

Madhukar Rai

(KASTURI RAM COLLEGE OF HIGHER EDUCATION)

Batch (2009-2012)

ACKNOWLEDGEMENT

A report, when prepared with true spirit goes a long way in enriching many people's knowledge and also it serves as a vital ingredient in the learning process of the individuals involved in preparing it. I am deeply grateful to Mr. A.LENIN JOTHI for providing me the opportunity to Study the research, which provided me with valuable insight into insurance sector. He Thoroughly taught us the details of project making. From selection of topic to final Analysis of project he helped me a lot. Last but not the least; I am also thankful to my family members and to my friends who very patiently helped me out with this project.

Madhukar Rai BBA (B&I) 03019301809

CERTIFICATE
This is to certify that Madhukar Rai, has accomplished the project titled Comprehensive Study on the Product of Kotak Mahindra Life Insurance under my guidance and supervision. He has submitted this project Submitted in partial fulfillment of the requirement for the award of the degree of BBA (B & I) GGSIP University. The work has not been submitted else anywhere for any other award. All source of information has been duly mentioned.

MR. A LENIN JOTHI

(Lecturer) (KRCHE)

CONTENT
DISCRIPTION CHAPTER 1. Introduction to Insurance
1.1 1.2 1.3

PAGE NO.

Introduction History of Life Insurance Definition of Insurance Classification of Life insurance Objective Marketing of Insurance Services Customer Satisfaction
1.7.1

1.4 1.5
1.6 1.7

Need for Customer Satisfaction in Insurance Industry

1.8 Objectives of the Study 1.9 Limitations of the Study

CHAPTER2. Life Insurance concept

2.1 2.2 2.3 2.4 CONCEPTUAL DISCUSSION TYPE OF LIFE INSURANCE POLICIES LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGES LIFE INSURANCE INDUSTRY

CHAPTER3. Indian Life Insurance Industry

3.1 Introduction 3.2 3.3 3.4 3.5 Impact of Liberalization Malhotra committee Recommendations Insurance Regulatory and Development Authority (IRDA) Indian Insurance Market: A current scenario

3.6
3.7

Booming Insurance Market in India (2008-2011)

Players of Insurance Business

CHAPTER 4.
Insurance 4.1 4.2 4.3 4.4 4.5 4.6

Company Profile: Kotak Mahindra Life

Profile Of Organization Competitors Of Organization Strength And Weaknesses Of Organization Opportunities And Threats Of Organization Problem Of Organization

Major Problem Of Life Insurance

CHAPTER 5.

DATA ANALYSIS & INTERPRETATIONS

CHAPTER 6.

CONCLUSION

ANNEXURES. Questionnaire

BIBILOGRAPHY

CHAPTER 1

Introduction With such a large population and the untapped market area of this population, Insurance happens to be a very big opportunity in India. Insurance is defined as a co-operative device to spread the loss caused by a particular risk over number of persons who are exposed to it and who agree to ensure themselves against that risk. Risk is uncertainty of a financial loss. Wherever there is uncertainty with respect to a probable loss there is risk. Every risk involves the loss of one or the other kind. The risk cannot be averted but loss occurring due to a certain risk can be distributed amongst the agreed persons. The larger the number of such persons, the easier is the process of distribution of loss. In fact, the loss is shared by them by payment which is calculated on the probability of loss.
1.1

History of Life Insurance

The origin of Insurance is very old. It was since the era of primitive ages, that man has sought some sort of protection from the unpredictable calamities of the nature. This basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. Though the concept of insurance is largely a development of recent past, particularly after the industrial era, yet its beginning dates back to about 6000 years. The insurance in its modern form came to India from UK in the year 1818 with the establishment of Oriental Life Insurance Company by the Europeans the first Indian

company on Indian soil. Bombay Mutual Life Assurance Society heralded the birth of first Indian Life Insurance Company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi Movement of 1905-1907 gave rise to more insurance

companies. He united India in Madras, National India and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912, India had no legislation to regulate insurance business, but in the year 1912, the Life Insurance Companies act and the provident fund act were passed. An actuary should certify the Life Insurance

Companies act 1912 made it compulsory that the premium rates tables and periodical valuation of companies. However, the act discriminated between foreign and national companies on many accounts, putting the Indian companies at a disadvantage. The first two-decade of the twentieth century saw a lot of growth in insurance business. From 44 companies with total business in-force as Rs.22.44 crore, it rose to Rs.298 crore with the total of 176 companies in 1938. During the mushrooming of insurance companies, many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-

life insurance to provide strict state control over insurance companies. About 154 Indian insurance companies, 16 non- Indian companies and 75 provident (total of 245) were operating in India at the time for nationalization. The parliament of India passed the Life Insurance Corporation Act on 19th June 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas. Corporation (LIC) came into existence in 1956. monopoly. In 1993, Malhotra Committee, headed by former finance secretary and RBI governor, R. N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction. The committee was setup with an objective of complementing the reforms in the Indian financial sector. The Committee strongly recommended opening the insurance sector to the private players. In 1999, The IRDA bill was drafted keeping the Malhotra Committee recommendations in view. In Dec 1999, the bill was passed and IRDA was formed to regulate and promote insurance business in India. Thus, the Life Insurance

Since then LIC was enjoying the

1.2

Definition of Insurance

Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate the risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved.

With the help of Insurance, large number of people exposed to a similar risk makes contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. Insurance can also be defined in two ways: In Financial sense, Insurance is a social device in which a group of individuals (insureds) transfer risk to another party (insurer) in order to combine loss experience, which permits statically prediction of losses and provides for payment of losses from funds contributed (premium) by all members who transferred risk. In Legal sense, Insurance is a contract by which one party in consideration of the price paid to him proportionate to the risk provides security to the other party that he shall suffer loss, damage, or prejudice by the happening of certain specified events. The Commission on Insurance Terminology of the American Risk and Insurance Association has defined insurance as follows: Insurance is the pooling of fortuitous losses by transfer of such risks to the insurers, who agree to indemnify insureds for such losses, to provide other pecuniary benefits on their occurrence, or to render services connected with the risk. 1.4 Classification of Life Insurance Though it comes in many forms, all life insurance policies serve a main purpose: to provide financial resources to a decedent's family when the decedent dies. The main differing factors in all life insurance policies are cost, length of coverage and any accumulation of cash value. Therefore, depending on the type of life insurance, how much an individual is willing to pay for it and the length of coverage desired, insurance policies can vary greatly.

Different classifications of life insurance are in place to satisfy the varying needs of individuals. Whole Life: Whole life insurance is the most permanent type of life insurance. Coverage continues for the entire life of the insured. Premiums for whole life policies are fixed and are usually more expensive than other policies because of the guaranteed benefit. Some whole life policies have the option of building cash value (the amount of cash available when a policy is canceled). Term Life: Term life insurance covers the insured only during a specified period of time. Premiums are less expensive; however, the insured runs the risk of running out of coverage and having to purchase more life insurance at a later date. Term life policies do not accumulate a cash value like whole life policies. Variable Life: Variable life policies are a type of whole life insurance that has a separate investment account which directly affects the death benefit and cash value amounts. This investment account gives the insured the opportunity to have diversified investments and therefore has greater growth potential. The premium cost is fixed; however, the death benefit and cash value can fluctuate. Universal Life: Universal life policies are another form of permanent insurance that offers flexible premiums. The death benefit is guaranteed, but the cash value can fluctuate. If enough cash value accumulates, payment of future premiums might not be needed. Variable Universal Life: Variable universal life policies combine the flexible premiums of universal life and the investment options of variable life. Sufficient cash value amounts allow flexibility in premiums. These policies allow an individual to change his coverage as his needs change.

1.5 Objectives of this Study 1.6 Research Methodology 1.7 Limitations of the study

Due to the following unavoidable and uncontrollable factors, the result might not be accurate. Some of the problems faced while conducting the survey are as follows: Time and cost constraints. Chances of some biasness could not be eliminated.

A Sample size of hundred has been use due to time limitations.

A majority of respondents show lack of cooperation and are biased towards their own opinions.

CHAPTER 2

CONCEPTUAL DISCUSSION
Life insurance provides liquidity to your estate. When you die, you may leave some liquid assets (such as cash, CDs, and savings bonds), and some illiquid assets (such as real estate, an automobile, and stocks). Your liquid assets may not be enough to pay all the debts that you leave behind, plus all the expenses that arise because of your death (such as funeral expenses and estate taxes). Your illiquid assets may have to be sold in order to meet these obligations when they come due. This may cause a financial loss if the assets must be sold cheaply in order to get the money on time. Life insurance can avert this situation, because the proceeds are available almost immediately upon your death. Life insurance creates an estate for your heirs. After your debts and expenses are paid, there may not be much left over for your family. Life insurance can automatically provide assets for them after your death. Life insurance is a great way to give to charity when you die. You may have always had a great philanthropic desire, but not the means to make it a reality. Life insurance can do that for you. Life insurance can be a critical component for specialized business applications, such as funding a buy-sell agreement. Under a buy-sell agreement, life insurance can be used to provide cash for the purchase of a deceased owner's interest in the business. Finally, life insurance can be an investment vehicle. Some types of life insurance policies may actually make money for you, as well as provide the benefits described above. This can help you with long-term financial goals.

TYPE OF LIFE INSURANCE POLICIES

The policies mentioned under are the traditional insurance products which are offered by the life insurance companies.

Term Insurance Policy Term insurance covers you for a term of one or more years. It pays a death benefit only if the policy holder dies during the period the insurance is in force. Term insurance generally offers the cheapest form of life insurance. You can renew most term insurance policies for one or more terms even if your health condition has changed. Whole Life Policy As the name suggests, a Whole Life Policy is an insurance cover against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death, following which the money is handed over to his family. Endowment Policy Combining risk cover with financial savings, endowment policies is the most popular policies in the world of life insurance. In an Endowment Policy, the sum assured is payable even if the insured survives the policy term. If the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured just as any other pure risk cover. Money Back Policy The money back plan not only covers your life, it also assures you the return of a certain per cent of the sum assured as cash payment at regular intervals. It is a savings plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset, etc. Annuties & Pension Policy In an annuity, the insurer agrees to pay the insured a stipulated sum of money periodically. The purpose of an annuity is to protect against risk as well as provide money in the form of pension at regular intervals. Riders Riders are additional add-on benefit that you could opt to include in your policy over and above what the policy may provide. However, these additions come at an extra premium

charge depending of the rider you opt for. These riders cannot be bought separately and independently. The extra premium, nature and characteristics of the riders are based on the base policy that is offered. Some of riders available are:1. Accident Death Benefit: Provides a additional amount in case of death as a result of accident. 2. Term Rider: It allows the payment of an additional amount should death of the insured happens. 3. Waiver of Premium: In case of total and permanent disability of life insured due to accident or any other means this rider allows premiums on base policy or riders to be waived. 4. Critical Illness: It provides payment of an additional amount on the diagnosis of some critical illness.

LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGES

Your need for life insurance changes, as your life moves ahead. When you're young, you typically have no need for life insurance, but this changes as you take on more responsibility, and as your family grows. Then, as your responsibilities once again begin to diminish, your need for life insurance drops off. Let's look at how your life insurance needs change throughout your lifetime. School days Childhood is typically a time of no worries, no cares, and no responsibilities. A child depends on others to take care of them, not the other way around. Although it would be tragic, a child's death would likely have little financial impact on the child's family. Thus, there is generally no need for life insurance at this point in an individual's life. A child's death does create one short-term financial problem: funeral expenses. But buying a life insurance policy just for that purpose doesn't really make sense. Instead,

think about saving the money you would spend on insurance premiums and open a savings account, or put the money in some type of investment vehicle. That way, the money can be used for college expenses or a first home, but it will also be available in case of a tragedy. Alternatively, a burial policy provides enough money for funeral expenses, at a much lower cost than a typical life insurance policy. Your growing family When you have young children, your life insurance needs reach a climax. In most any situation, life insurance for both parents is appropriate. Single-income families are completely dependent on the income of the breadwinner. If he or she dies without life insurance, the consequences could be disastrous. The death of the stay-at-home spouse would necessitate costly daycare expenses. Both spouses should carry enough life insurance to cover the expenses that would result from their death. Dual-income families need life insurance, too. If one spouse dies, it is unlikely that the surviving spouse will be able to keep up with the household expenses and pay for childcare with the remaining income. Moving up the ladder For many people, career advancement means starting a new job with a new company. At some point, you might even decide to be your own boss and start your own business. It might not be your top priority, but it is important to review your life insurance coverage any time you leave an employer. Keep in mind; you probably won't be able to keep any life insurance that was provided by your employer. If you're going to work for a new company, you might receive a comparable life insurance benefit. But if you're going into business for yourself, you'll need to purchase an individual life insurance policy. Make sure the amount of your coverage is up-to-date, as well. The policy you purchased right after you got married might not be adequate anymore, especially if you

have kids, a mortgage, and college expenses to consider. Business owners may also have business debt to consider. If you're not incorporated, your family would have to pay those bills if you die.

Single again Unfortunately, divorce has become a fact of life in our society. You'll have to make many financial decisions during this stressful time, including the decision of what to do about your life insurance. Divorce raises both beneficiary issues and coverage issues. And if you have children, these issues become even more complex. If you and your spouse have no children, it may be as simple as changing the beneficiary on your policy and adjusting your coverage to reflect your newly single status. However, if you have kids, you'll want to make sure that they are provided for in the event of your death. This may involve purchasing a new policy and naming them as beneficiaries. The custodial and no custodial parent will need to work out the details of this complicated situation. If you can't come to terms, the court may make the decisions for you. The golden years Once your children are grown, your life insurance needs decrease. You'll live off your retirement savings, and hopefully you have accumulated assets that can be passed on to your heirs when you die. Not only is life insurance expensive at this point, but also it's probably unnecessary. One exception: if you will be leaving a large estate when you die, your heirs may be stuck paying a hefty estate tax bill. Consider obtaining cash value life insurance policy, because you don't actually know when you're going to die. Your heirs can then use the death benefit to pay the IRS. If the policy is held by a trust, the proceeds won't be included in your estate

INDIAN INSURANCE INDUSTRY: A PERSPECTIVE A. Life Insurance

Life insurance in its existing form came in India from United Kingdom (UK) with the establishment of a British firm, Oriental Life Insurance Company in 1818 followed by Bombay Life Assurance Company in 1823, the Madras Equitable Life Insurance Society in 1829 and Oriental Life Assurance Company in 1874. Prior to 1871, Indian lives were treated as sub-standard and charged an extra premium of 15% to 20%. Bombay Mutual Life Assurance Society, an Indian insurer that came into existence in 1871, was the first to cover Indian lives at normal rates. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life insurance business. Later, in 1928 the Indian Insurance Companies Act was enacted, inter alia, to enable the government to collect statistical information about life and non-life insurance business transacted in India by Indian and foreign insurers, including the provident insurance societies. In 1938, with a view to protecting the interest of insuring public, earlier legislation was consolidated and amended by Insurance Act, 1938 with comprehensive provisions for detailed and effective control over the activities of insurers. In order to administer the aforesaid legislation, an insurance wing was established and attached first with the Ministry of Commerce and then Ministry of Finance. This ministry was administratively responsible for policy matters pertaining to insurance. The actuarial and operational matters relating to the insurance industry were looked after by an attached office in Shimla, headed first by Actuary to the Government of India, then by Superintendent of Insurance and finally by the Controller of Insurance. The act was amended in 1950, making far-reaching changes such as requirement of equity capital for companies, carrying on life insurance business, ceilings on shareholdings I such companies, stricter control on investment of life insurance companies, submission of periodical returns relating to investments and such other information to the Controller as he may call for, appointments of administrators for mismanaged companies, ceilings on expenses of management and agency commission, incorporation of the Insurance Association of India and formation of councils and committees thereof.

By 1956, 154 Indian insurers, 16 non-Indian insurers and 75 provident societies were carrying on life insurance business in India. Life insurance business was confirmed mainly to cities and better off segments of the society. On 19th January 1956 the management of life insurance business of 245 Indian and foreign insurers and provident societies, then operating in India, was taken over by the Central Government and then nationalized on 1st September 1956. An Act of Parliament, viz. LIC Act, formed LIC in September 1956, with capital contribution of Rs. 5 crore from the Government of India. The then Finance Minister, Shri S.D.Deshmukh, while piloting the bill for nationalization, outlined the objectives of LIC thus: to conduct the business with utmost economy, in a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtaining maximum yield for the policy holders consistent with safety of the capital; to render prompt and efficient service to policyholders, thereby making insurance of recommendations of the Administrative Reforms Commission as under: a. To spread life insurance much more widely and in particular to the rural areas and to the socially and economically backward classes b. To making mobilization of peoples savings by making insurance linked savings adequately attractive. c. To bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust without losing sight of the interest of the community as a whole d. To conduct business with utmost economy and with the full realization that money belongs to the policy- holders. e. To act as trustees of the insured public in their individual and collective capacities. f. To meet various life insurance needs of the community that would arise in the changing social and economic environment.

g. To promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of corporate objectives.

B. General Insurance
General Insurance developed in India with industrial revolution in the West and consequent growth of seafaring trade and commerce in the 17th century. It came to India from UK. The 1st general insurance company, Triton Insurance Company Ltd. was established in Calcutta in 1850 whose shares were mainly headed by British. The 1st general insurance company established by an Indian was Indian Mercantile Insurance Company Ltd. in Bombay in 1907. In 1957,the General Insurance Council, a wing of the Insurance Association of India framed a code of conduct for ensuring fair conduct and sound business practices in the general insurance industry. An administrative set-up headed by the Controller of Insurance was set up at Delhi in 1957 with a branch office at Bombay, Calcutta, and Madras for administrating code of conduct. Further in order to retain the business of general insurance in India, the insurers started a reinsurance company, viz. India Reinsurance Corporation Ltd. In 1956 to which they voluntarily ceded 10% of their gross direct business. In 1961, by arrangement to Insurance Act, this voluntary arrangement was formalized by notifying the Indian Guaranty and General Insurance Company Ltd., a government company, along with the Indian Reinsurance Corporation as Indian Reinsures. In 1968, the Insurance Act was amended to provide for extension of social control over insurers transacting general insurance. The amendments provided, inter alia for regulation of assets, setting up of the Tariff Advisory Committee (TAC) under the chairmanship of Controller of Insurance. Before the amendments of the act could be implemented, management of non-life insurers was taken over by the Central Government in 1971 as a prelude to nationalization. The General Insurance Business Act, 1972, nationalized general insurance business with effect from 1.1.73. Prior to 1973, general insurance was more cities oriented, catering to the needs of trade and industry.107 insurers including branches of foreign companies operating here were

amalgamated and grouped into 4 companies, viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd., and the United India Assurance Company Ltd. GIC was incorporated as a company in November, 1972 and it commenced business on January 1, 1973. Government of India and that of 4 companies subscribe the capital of GIC by GIC. All the 5 entities are Government companies, registered under the Companies Act. The purpose of establishment of GIC as a holding company of the four operating companies as stated in General Insurance Business Act is superintending, controlling, and carrying on the business of general insurance. (ref.bibliography)

LIFE INSURANCE INDUSTRY

Legislative issues
Based on developments over the last couple of years, it would be fair to say that the longterm outlook for the policy regime for insurance appears positive. In many ways the IRDA has exhibited transparency and protectiveness in attending to critical issues this has not only provided a degree of comfort to existing and prospective insurers, but has also laid the foundation for the orderly development of the insurance market in India. The most obvious comparison one could make is with the banking sector liberalization that took place a few years ago. Unlike the RBI, the IRDA has been transparent, efficient and adequately cautions in its process of granting licenses. The hectic lobbying and 'loophole exploitation' that firms indulged in have been thankfully absent in the insurance business, thus far. At a broader level, the government maintains its bullish outlook for insurance reforms, reflected by its willingness to ensure a level playing field for private insurer vis--vis LIC (e.g. similar tax treatment to all life insurers, similar paid up capital requirement etc) and to minimize its intervention in operational and commercial issues. Private players in other recently liberalized sectors (especially telecom and banking where industry regulator and industry government disputes have severely constrained development) could scarcely consider themselves as lucky. Perhaps the only major issue is the cap on foreign investment, which the government is not keen on increasing in the near future. For the longer term, it may reconsider its stand, depending among other things, on the Indian partner's ability to continue contributing financially and technically to the joint venture. (ref.bibliography)

Taxation policy for life insurance firms

After prolonged debate, the Finance Ministry had expressed its desire to accord similar tax treatment to LIC and private insurers.

Co-operative Banks excluded from Insurance

Based on the strict requirements set out by the RBI for banks entry into insurance, cooperative banks would be unable to apply for direct insurance at this stage. However, the norms for participating in non-equity insurance activities (such as marketing and distribution) are slightly easier and may allow some cooperative banks to enter. The RBI requires banks to possess a net worth of Rs. 500 crores, a capital adequacy ratio of 10, a reasonable level of non-performing assets (NPAs), continuos net profit for the last 3 years, and a 'satisfactory' track of subsidiaries. While capital adequacy norms do not apply to cooperative banks, they are likely to fail on the grounds of net worth and NPAs. The Kerala State Cooperative Banks (KSCB) and the Maharashtra State Cooperative Bank (MSCB) had earlier declared their interest in entering the insurance sector. Based on RBI guidelines, however, they may have to limit their exposure to marketing and distribution only.

Competitive developments existing insurers

Expectedly, private companies that have commenced operations have done so with a 'soft launch'. This is presumably in realization of the fact that long term resources are better spent in consistent and well targeted promotional efforts rather than in 'big-bang' exercise especially for non - impulse purchase, long term financial products such as life insurance. Treading new round carefully by patiently establishing one's credibility and competence appears to be the preferred strategy over one that involves a head on battle with LIC. The other important observation based on industry developments, pertains to the role of banks. With most banks resigning themselves to the fact that obtaining a license to sell insurance will be difficult to come by (due to strict RBI norms), they have chosen to participate in the industry through the banc assurance, route instead. In the Indian context, this is significant. In the interiors of the country, public sector banks have built up excellent penetration and enjoy the public's confidence-2 important prerequisites for selling insurance. On the other hand, in the bigger cities, private banks, which are constantly

looking for ways to enhance customer value and profitability (e.g. through cross selling), are likely to incorporate insurance in their portfolio of offerings. (ref.bibliography) The flip side to selling thru banks is that it raises the risk of channel conflicts for insurers. In addition, financial stability could become an issue, especially in the context of certain PSU banks. The manner in which PSU banks are privatized, and the extent to which the government reduces its stake, will therefore have an important bearing on the success of banc assurance in India.

CHAPTER 3

3.1 Introduction The Indian financial sector has undergone a significant structural transformation since the Initiation of the financial liberalization in 1990s. It brought significant changes in the Indian economy in general and financial sector in particular.

The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

Till date, only 20% of the total insurable population of India is covered under various life is insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector.

3.2 Impact of Liberalization Economic liberalization is the gateway of globalization and financial liberation plays the most crucial role in integration of one countrys economy on the global economic network.

It Stresses the geographical dispersion of industrial and service activities and the cross boarder networking of companies. Liberalization thus focuses on an integrated economic world in which the economy is a single market characterized by trade and investment flows, cross border economic activities in production, investment financing, movement of capital, technology, labour, internationalization of consumption, capital, and services.

Important instruments of liberalization are regulation of financial market to allow foreign capital, foreign investment, to and fro flow of capital etc. reduction of tariff and non-tariff barriers of trade, simplifications of customs measures etc.

Insurance in India started without any regulations in the nineteenth century. It is a typical story of a colonial era: a few British insurance companies dominating the market serving mostly large urban centre. After independence, the life insurance company was nationalized in 1956, and then the general insurance business was nationalized in 1972. There was monopoly state run LIC transacting life business and the General Insurance Corporation of India with its four Subsidiaries transacting the rest.

While the Public Sector insurance companies made enormous contribution in the spread of awareness about insurance, and expanded the market, it was recognized that their reach was still limited, the range of products offered restricted and the service to the consumer inadequate. It was also felt that the rapid economic growth witnessed in the 90s cannot be sustained without a thriving insurance sector.

It was also recognized that India has a vast potential that is waiting to be tapped and this could be achieved when sufficient competition is generated and it is exposed to the developments in the rest of the world. The insurance sector was, therefore, opened up for private sector participation with provision for limited foreign equity exposure.

The insurance sector was opened up for private participation with the enactment of the Insurance Regulatory and Development Authority Act, 1999. While permitting foreign participation in the ventures set up by the private sector, the government restricted participation of the foreign joint venture partner through the FDI route to 26 per cent of the paid-up equity of the insurance company. The objective of the liberalization was to expand the scope and ambit of Insurance both Life and General in India. Since opening up, the number of participants in the sector has gone up from state run LIC in the year 2000 to 22 insurers operating in the life insurance segments as on December 2009.

The insurance market has grown due to public sector continuing its presence by holding on to its market prompting the private companies to market new products. This they have been able to do as they have geared themselves to face the competition. The LIC, for instance, has concentrated on retaining its market in traditional products like endowment and money back and has not slackened its hold in the rural areas. It has simultaneously started experimenting with new products like Unit Linked where there is private sector domination.

Due to opening up of the insurance industry, Competition has increased threshold.

Private and Foreign entrants made others difficult to retain their market. Higher customer aspirations lead to new expectations and compel him to move towards the insurer who provides him the best service in time. This made them to analyze the emerging requirements of the policyholders / insured. Also insurers are the earlier adopters of technology. Because of the Information revolution, customers are free to choose from a wide range of new and innovative products. The Insurance companies are utilizing the Information technology applications for better customer service, cost reduction, new product design and development and many more.

With more and more players entering the insurance industry and with increasing ventures with the global players has made changes in every process of this unique sector. Distribution channels are one of them. While the traditional channel of tied up advisors or agents are the chief distribution channel, insurer are finding new methods of delivering the products to customers. Corporate agency, brokerage, Bancassurance, e-insurance, cooperative societies and panchayats are some of the channels, which are recently added to the traditional method of providing insurance to the untapped market. Now days, insurers has also undertaken various measures to improve customer services which includes the reminders and notices as well as information to the insured using the facilities provided by the IT. Rural masses are attracted by the consultative approach adopted by the Insurers.

Since the insurance sector has been liberalized, the Indian insurance sector has achieved 4% of the total world insurance during 2008 making the 3rd position among the Asian nations. Also the insurance density of India in life insurance segment has been 41.2 us dollars which keep it on the sixth position among all the Asian countries. 3.3 Malhotra Committee Recommendations The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms".

In 1994, the committee submitted the report and some of the key recommendations included: 1) Structure Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.

2) Competition Private companies with a minimum paid up capital of Rs.1 billion should be allowed to enter the industry. No company should deal in both Life and General Insurance through a single entity.

Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.

Postal Life Insurance should be allowed to operate in the rural market. Only One state level Life Insurance Company should be allowed to operate in each state.

3) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory Body should be set up. Controller of Insurance should be made independent.

4) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company

5) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the

customer services and increase the coverage of the insurance industry should be opened up to the competition.

But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided

to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. independent regulatory body. For this purpose, it had proposed setting up an

3.4 Insurance Regulatory and Development Authority (IRDA) The Insurance Regulatory and Development Authority (IRDA) were constituted as an autonomous body to regulate and develop the business of insurance and re-insurance in India. The authority was constituted on April 29, 2000; vide government of Indias notification No.277.

The Insurance Regulatory and Development Authority Act ,1999, was enacted by parliament in the fiftieth year of the Republic of India to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry, and for matters connected therewith or incidental thereto and further to amend the Insurance Act,1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business Act, 1972. The Act was approved in the Parliament in December 1999 and the insurance sector was thrown open for licenses on August 15, 2000. IRDA was constituted in terms of the IRDA Act, 1999, as the regulator of the Insurance Industry. The regulator was initially known as the Insurance Regulator but was subsequently rechristened as The Insurance Regulatory and

Development Authority as it was provided that it had a broader role to perform in the Indian Insurance Market. It has not only to frame and issue statutory and regulatory stipulations, guidelines, and clarification but it has also to perform a developmental and promotional role. The development and promotional role of the regulator include

facilitating the growth of the market by attracting large number of players, integrating of the insurance market with the domestic financial services, and synchronizing the Indian Insurance Market with that of global insurance market. Thus, the objectives of the IRDA are two fold: policyholder protection and healthy growth of the insurance market.

IRDA has a Chairman and four whole-time and four part-time members. IRDA has constituted the insurance Advisory committee and in consultation with this committee has brought out seventeen regulations. A leading consumer activist has also been inducted into the Insurance Advisory Committee. In addition, representatives of consumers, industry, insurance agents, womens organizations, and other interest groups are a part of this committee. It has also formed a Consumer Advisory Committee and a Surveyor and Loss Assessors Committee. It has a panel of eligible Chartered Accountants to carry out

investigation, inspection, and so on. IRDA has till 2001 issued seventeen regulations in the areas of registration of insurers, their conduct of business, solvency margins, conduct of reinsurance business, licensing, and code of conduct intermediaries. It follows the practice of prior consultation and discussion with various interest groups before issuing regulations and guidelines.

After creation of IRDA, insurance sector has seen tremendous growth. Before IRDA came into force there were only players in the insurance field, namely, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). Since then 23 new players have entered in the insurance sector. 3.5 Indian Insurance Market: A current scenario The fiscal 2008-09 witnessed global financial meltdown. Despite it, the Indian insurance industry which has big opportunity to expand, given the large population and untapped potential, grew satisfactorily. Life insurance business registered a growth of 10.15 per cent in 2008-09. With this, Insurance penetration (premium volume as a ratio of GDP) in rupee terms for the year 2008-09 stood at4.74 per cent; 4.17 per cent for life insurance. The level of penetration, particularly in life insurance, tends to rise as income levels increases. India, with its huge middleclass households, has exhibited growth potential for the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance market in India has witnessed dynamic changes including entry of a number of global insurers. Most of the private insurance companies are joint ventures with recognized foreign institutions across the globe.

The total capital of the life insurers at end March 2009 stood at Rs.18253.04 crores, with additional infusion of capital to the extent of Rs.5956.62 crores. There had been no infusion of capital in the case of LIC, which continued to be Rs.5 crores. The infusion of additional capital of Rs. 5956.62 crores comprised of Rs. 987.05 crores from new companies and remaining Rs. 4969.57 crores from existing private insurers.

New policies underwritten by the life insurers were 509.23 lakh in 2008-09 as against 508.74 lakh during2007-08 showing a marginal increase of 0.10 per cent. The private insurers exhibited a growth of 13.19 percent, which is much lower than 67.40 per cent recorded in the previous year. LIC, showed a negative growth for the second consecutive year at 4.52 percent as against its previous year negative growth of1.61 per cent. New Policies Issued: Life Insurers Insurer LIC Private Sector Total 2007-08 37612599 13261558 50874157 2008-09 35912667 15010710 50923377

Premium Life insurance industry recorded a premium income of Rs.221791.26 crores during 2008-09 as againstRs.201351.41 crores in the previous financial year, recording a growth of 10.15 per cent. Regular premium, single premium and renewal premium in 200809 were Rs.49370.56 crores (22.26per cent); Rs.37635.67 crores (16.97 per cent); andRs.134785.03 crores (60.77 per cent), respectively.

1.7.1. Booming Insurance Market in India (2008-2011) With a huge population base and large untapped market, insurance industry is a big opportunity area in India for national as well as foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new players significantly enhancing product awareness and promoting consumer education and information.

Insurance sector has obviously started growing at a rapid pace after the sector was opened up. The market share of the private players has to be seen in the context of this enlarged market. There is also evidence to show that the rate of growth of public sector undertakings had not shown any decline after the entry of the private sector companies. The Credit for enlarging the market should however goes to the private sector as they came up with an aggressive marketing strategy to establish their presence. The Public Sector has, in its turn, redrawn its priorities, revamped their marketing strategy, and together the public and private sectors have enlarged the market.

The strong growth potential of the country has also made international players to look at the Indian Insurance Market. Moreover, saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players. 3.6 Players of Life Insurance Business Apart from LIC, there are other players in Life insurance business, are as follows:

S.N Registrati Date of Reg. Name of the Company o on Number 1 2 3 4 5 101 104 105 107 109 23.10.2000 15.11.2000 24.11.2000 10.01.2001 31.01.2001 HDFC Standard Life Insurance Company Ltd. Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Limited Birla Sun Life Insurance Co. Ltd.

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

110 111 114 116 117 121 122 127 128 133 135 136 138 139 140 142 143

12.02.2001 30.03.2001 02.08.2001 03.08.2001 06.08.2001 03.01.2002 14.05.2002 06.02.2004 17.11.2005 04.09.2007 19.12.2007 08.05.2008 27.06.2008 27.06.2008 27.06.2008 26.12.2008 05.11.2009

TATA AIG Life Insurance Company Limited SBI Life Insurance Company Limited. ING Vysya Life Insurance Company Private Limited Bajaj Allianz Life Insurance Company Limited Met Life Insurance Company Ltd. Reliance Life Insurance Company Limited (AMP Sanmar Life Insurance Co. Ltd.) Aviva Life Insurance Company India Pvt. Limited Sahara India Insurance Company Ltd. Shriram Life Insurance Company Ltd. Future General India Life Insurance Co. Limited IDBI Fortis Life Insurance Company Ltd. Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. Aegon Religare Life Insurance Company Ltd. Bharti Axa General Insurance Company Ltd. DLF Pramerica Life Insurance Company Ltd. Star Union Dai-ichi Life Insurance Company limited India First Life Insurance Company Limited

CHAPTER 4

PROFILE OF THE ORGANIZATION

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance, aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent. Mr. Sandesh Kirkire is the Chief Executive Officer of Kotak Mahindra Asset Management Company. He moved into this role in May 2005. Mr. Kirkire joined the Kotak Group in 1994, and has 15 years of in-depth knowledge and hands-on experience related to fund management, corporate finance, proprietary trading, investment banking and treasury. Prior to joining Kotak, Mr. Kirkire worked with SBI Capital Markets Limited and ITC Bhadrachalam Finance & Investments Limited. Mr. Kirkire, 41, is a Mechanical Engineer and holds a Masters Degree in Management from Jamnalal Bajaj Institute of Management Studies. Kotak Mahindra Mutual Fund (Kotak Mutual) is a trust set up by Kotak Mahindra Bank Limited, whose assets are managed by Kotak Mahindra Asset Management Company Ltd. (KMAMC). KMAMC is in the business of asset management, offering investors smart financial products that are aimed at enhancing customers wealth, along with services that make the investing process easier. Set up in 1998, Kotak Mutual has shown steady growth since inception, and currently manages assets of Rs73.98bn contributed by over 321,434 investors (as on December 31, 2005).

PROBLEMS OF THE ORGANIZATION Service delivery / Logistics perception is weak Negative Environment Top management takes large amount of time to approve high value loan borrowers.

Competitors of Organization
1. LIFE INSURANCE CORPORATION OF INDIA

2. HDFC STANDARD LIFE INSURANCE CO. LTD

3. ICICI PRUDENTIAL LIFE INSURANCE CO. LTD

4. BAJAJ ALLIANZ LIFE INSURANCE CO. LTD 5. 6. 7. 8. 9. BIRLA SUN LIFE INSURANCE CO. LTD MAX NEWYORK LIFE INSURANCE CO. LTD MET LIFE INDIA LIFE INSURANCE CO.LTD KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD RELIANCE LIFE INSURANCE CO. LTD

10. BHARTI AXA LIFE INSURANCE CO. LTD 11. SBI LIFE INSURANCE CO. LTD. 12. TATA AIG LIFE INSURANCE CO. LTD 13. ING VYSYA LIFE INSURANCE CO.LTD 14. AVIVA LIFE INSURANCE PVT. CO. LTD

Strength And Weaknesses Of Organization

STRENGTHS KOTAK MAHINDRA is the first life insurance company to offer ECS debit facility. KOTAK MAHINDRA has deposited a paid up capital of Rs. 925 crores with IRDA as a caution deposit, the highest amongst all the life insurance companies in India whereas LIC has deposited only 60 crores so far. KOTAK MAHINDRA is the first company to introduce unit linked life insurance and pension products. Presently the maximum numbers of ranges are under ULIP like life insurance, investment as well as pension plans. Its Venture funds management co. Ltd is Indias largest venture capital company.

WEAKNESSES Industry in nascent stage. Rural areas still not covered. Not very well known among the Indian population. Lack of credibility in the public because Kotak being a private player. Premiums are high as compared to its competitors. Very few branches in the country.

Opportunities and Threats of Organization

OPPORTUNITIES Liberalization of Indian economy. As the industry is growing the whole market is virgin. The whole private sector is open to be tapped even though the competition is fierce from government owned insurance companies. Its a volume business that is even if the company has few good corporates the turnover ceases to increase by manifold. THREATS The Govt. players will become aggressive thus growth is going to be tough. Entry of other new players is not ruled out Apprehension towards KOTAK MAHINDRA being a private life insurance

company. We expect the industry to rationalize in future that is mergers and acquisitions

will happen which will impact the industry and KOTAK MAHINDRA fortunes.

Problem of Organization
Service delivery / Logistics perception is weak Negative Environment

Top management takes large amount of time to approve high value loan borrowers.

CHAPTER 5

LIST OF TABLES
5.1 Data gives preference of respondents of insurance companies 5.2 Data gives benefits of insurance perceived by respondents 5.3 Data provides features of insurance policy that attracted respondents 5.4 Data provides number of insurance policy type respondents 5.5 Data gives people perception about insurance 5.6 Data shows peoples having insurance 6.7 Data shows buying process of the people 5.8 Data shows satisfaction of respondents with respect to policy 5.9 Data shows satisfaction of +respondents with respect to service agent 5.10 Data shows number of respondents paying tax 5.11 Data shows people interested in going for insurance if a service provider away from the city offers better service & products 5.13 Data shows percentage of people surfing internet 5.14 Data shows percentage of people using net for information & decision making

DATA ANALYSIS & INTERPRETATION

DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES
COMPANYS NAME L.I.C. SBI LIFE ICICI PRUDENTIAL OM KOTAK HDFC TOTAL NO.OF RESPONDENT 78 7 10 3 2 100 SHARE (%) 78 7 10 3 2 100

40 28

12

312

L.I.C.

SBI LIFE

ICICI PRUDENTIAL

OM KOTAK

HDFC

DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS

BENEFITS Cover Future Uncertainty Tax Deductions Future Investment TOTAL 20 25 100 20 25 100 NO.OF RESPONDENTS 55 SHARE (%) 55

BENEFITS OF INSURANCE COVER

COVER FUTURE UNCERTANITY TAX DEDUCTIONS FUTURE INVESTMENT

INTERPRETATION
55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy. Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively.

DATA PROVIDES FEATURES OF INSURANCE THAT ATTRACTED RESPONDENTS

FEATURE NO.OF RESPONDENTS Money Back Guarantee Larger Risk Coverance Easy Access to Agents Low Premium Companys Reputation TOTAL 15 37 7 30 11 100 15 37 7 30 11 100

POLICY

SHARE (%)

FEATURES OF INSURANCE POLICY

MONEY BACK GUAARENTEE
11% 15%

LARGER RISK COVERANCE EASY ACCESS TO AGENTS

37%

30% 7%

LOW PREMIUM REPUTATION OF COMPANY

INTERPRETATION
Majority of the respondent (37%) found larger risk coverance as the most attracted feature of the all.

DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS

POLICY TYPE NO. OF RESPONDENTS LIFE POLICY NON LIFE POLICY BOTH 75 25 45
NATURE OF POLICY
80 60 40 20 0 1 POLICY TYPE 25 75 45

SHARE (%)

75 25 45

NUMBER OF RESPONDENTS

LIFE POLICY NON LIFE POLICY BOTH

INTERPRETATION
75% of the respondents have Life Insurance Policy while 45% have both. (The % is calculated out of 280 positive response)

DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE

RESPONSE NO. OF RESPONDENTS A saving tool A tax saving device A tool to protect your family 324 296 400 81% 74% 100% SHARE (%)

100% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 81.00% 74.0%

share (%)

A saving tool

A tax saving device

A tool to protect your family

INTERPRETATION
device. But 100% of the respondents are with the view that Insurance is a tool to 81% of the respondents have perception of Insurance being a saving tool. And 74% of the respondents have perception of Insurance being a tax saving

protect your fami

DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF RESPONDENTS SHARE (%)

Yes No Total

70 30 100

70% 30% 100%

30%

70% Yes No

INTERPRETATION
Of the sample size of 400 surveyed respondents 70% of the respondents are

having Insurance policy. 30% of the respondents are either not having any Insurance policy at present or

their policy is already matured. And at present 100% of the respondents are with the view that Insurance is a

tool to protect your family.

DATA SHOWS BUYING PROCESS OF THE PEOPLE

BUYING PROCESS NO. OF RESPONDENTS Customer approached Insurance 45 45 SHARE (%)

company/Agent Company/agent approached customer Total 55 100 55 100%

55% 45%

Customer approached Insurance company/Agent Company/agent approached customer

INTERPRETATION
44.5% of the respondents approached the Insurance Company / Agent. Whereas, 55.5% of the respondents were approached by the Company /Agent.

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY

RESPONSE NO. OF RESPONDENTS Satisfied Not satisfied Not Responded Total 60 40 0 100 60% 40% 0.0% 100% SHARE (%)

0% 40%

60%

Satisfied

Not satisfied

Not Responded

INTERPRETATION
60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded.

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO SERVICE AGENT

RESPONSE NO. OF RESPONDENTS Satisfied Not satisfied Not Responded Total 45 55 0 100 45% 55% 0.0% 100% SHARE (%)

55.00%

45.00%

Satisfied

Not satisfied

INTERPRETATION
45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded.

DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

RESPONSE NO. OF RESPONDENTS Paying tax Not paying tax Total 400 400 100% 0% 100% SHARE (%)

0%

100%

Paying tax

Not paying tax

INTERPRETATION
Of the sample size of 400 respondents, all the respondents are paying tax.

DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS

RESPONSE NO. OF RESPONDENTS Planning Not planning Total 350 50 400 87.5% 12.5% 100% SHARE (%)

12.5%

87.5%

Planning

Not planning

INTERPRETATION
Only 12.5% of the customers contacted are not planning for new investments

presently. Whereas, 87.5% of the customers are still planning for new investments this

can be a great potential for company to take them on their favor.

DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS
RESPONSE Yes No Uncertain Total NO. OF RESPONDENTS 43 44 13 100 SHARE (%) 43% 44% 13% 100%

13% 43%

44%

Yes

No

Uncertain

INTERPRETATION
The interested customers i.e. 43% are ready to go for insurance even away

from a city if services and products are worthwhile.

DATA SHOWS PERCENTAGE OF PEOPLE SURFING INTERNET

RESPONSE NO. OF RESPONDENTS Surf net Do not surf net Total 82 18 100 82% 18% 100% SHARE (%)

18.00%

82.00%

Surf net

Do not surf net

INTERPRETATION
82% of the customers surveyed generally surf net.

DATA SHOWS PERCENTAGE OF PEOPLE USING NET FOR INFORMATION & DECISION MAKING
RESPONSE NO. OF RESPONDENTS Yes No Total 73 26 100 72.25% 27.75% 100% SHARE (%)

27.75%

72.25% Yes No

INTERPRETATION
72.25% of the customer survey takes help of Internet for valuable information

& decision-making. This shows the importance of Internet in decision-making process.

CHAPTER 6

CONCLUSION
The general perception of the people regarding insurance is that it is a tool to protect their family. They opt for insurance as to keep their family on a safer side, 100% of the customers surveyed are with this particular view. There are other factors also, for which people opt for insurance such as, a tax saving device, a saving tool. All the customers surveyed were not having insurance policy. Only 70% of the

respondents were having an insurance policy, but it still shows that the majority of the people are very well focused towards insurance and they are aware of the benefits related to it. It is seen from the survey conducted that generally the insurance

company/agent approaches the customers. But the data that 44.5% of the people themselves approached the insurance company/agent. This shows that in today's scenario there is a strong need felt for having the insurance. From the data collected it is seen that 60% of the customers are satisfied with

their existing policy. And still they are looking forward for better policy and services. The service provided by the agent is not up to the expectations of the

customers. Hence this area should be looked upon and sincere attempts should be made to improve it in future. The people generally invest in various things in order to enjoy the tax saving

benefits. Generally their investment is in LIC, NSC, BONDS, PPF, and PF. From the survey it is seen that investment for tax savings is more in form of LIC i.e. 51%. People generally invest in various forms for securing their future. Such as

insurance, fixed assets, bank deposits, bonds, cash & Jewellery etc. But the people are more attracted towards LIC. 70.5% of the respondents have invested in Insurance for securing their future.

78% of the people contacted prefer LIC policy to any other and therefore it

is ranked no.1 by that percent of respondents. 75% of the positive respondents have Life Insurance Policy while 45% have

both Life and Non-life Insurance Policy. With regards to purchase of insurance policy majority of the customers are

with the view that there are no age specifications for purchasing insurance policy, it can be done at any age according to their convenience. Now, when the private companies are emerging into the market most people

are with the opinion that Indian insurance companies does not have flexible plans, they are non-user friendly, their service is unsatisfactory sector and they are not aggressive. On the other hand 24% of the customers surveyed are with the view that Indian Insurance companies are satisfactory. The people look for friendly service & Responsiveness, Good plans, a trusted

name & Accessibility in a company for Insurance. 87.5% of the respondents are planning for investments, i.e. they all are having

positive intentions and hence are interested in buying an insurance cover. 43% of the respondents are interested in going for insurance it service provider

is away form the city. But he should offer better services and products. In today's scenario Internet has become an important means for getting

valuable information & decision-making. 82.75% of the respondents are interested for taking help of Internet to make a decision for an insurance plan. 82% customers look for a Trusted name in a company for insurance, whereas

81.5% customers look for a good plan in a company for insurance.

QUESTIONNAIRE
1. ARE YOU EMPLOYED? YES If YES, only then proceed 2. DO YOU HAVE ANY INSURANCE POLICY? YES NO NO

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE`` BOTH

4. WHICH COS INSURANCE POLICY YOU PREFER THE MOST?

(RANK THEM) a) LIC b) ICICIPRUDENTIAL c) SBI LIFE INSURANCE d) ING VYSYA LIFE e) OM KOTAK MAHINDRA f) TATA AIG LIFE g) ANY OTHER ________( Specify)

5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY? (Please Tick)
a) <5Yrs b) 5-10 Yrs c) 10-15 Yrs d) Any Other______ (Specify)

6. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COVER? (RANK THEM) a) COVER FUTURE UNCERTAINITY b) TAX DEDUCTIONS c) FUTURE INVESTMENT d) ANY OTHER _________ (Specify)

7. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT? (RANK THEM) a) LOW PREMIUM b) LARGER RISK COVERANCE c) MONEY BACK GUARNTEE d) REPUTATION OF COMPANY e) EASY ACCESS TO AGENTS f) ANY OTHER 8.YOUR MONTHLY INCOME? a)<4k b)4k-8k c)8k-12k d)12k-16k e)Other_____(Specify) 9.DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAYS SCENARIO IS NOT ESSENTIAL? ________________________________________________________________________ _________ (Specify)

10. WHATS YOUR PERCEPTION ABOUT INSURANCE? (RANK THEM) a) A SAVING TOOL b) A TAX SAVING DEVICE c) A TOOL TO PROTECT FUTURE

11. HOW HAS/WOULD YOU BOUGHT/BUY AN INSURANCE? a) CUSTOMER APPROCHED INSURANCE COs b) INSURANCE COs APPROCHED CUSTOMER 12. ARE YOU SATISFIED WITH THE POLICY? a) SATISFIED SAVING TOOL b) NOT SATISFIED c) NOT RESPONDING 13. ARE YOU SATISFIED WITH THE SERVICE AGENT? a) SATISFIED SAVING TOOL b) NOT SATISFIED c) NOT RESPONDING 14. DO YOU PAY TAXES? YES 15. WHATS THE RIGHT AGE TO BUY INSURANCE? a) AFTER 25 Yrs b) AFTER 35 Yrs c) AFTER 45 Yrs d) ANYTIME 16.HOW WOULD YOU RATE INDIAN INSURANCE COs? a) RIGID PLANS b) NON-USER FRIENDLY c) UNSATISFATORY SREVICES d) NON-AGGRESSIVE NO

e) SATISFACTORY f) GOOD g) VERY GOOD 17.. WHAT WOULD YOU LOOK FOR IN AN INSURANCE COs? (RANK THEM) a) A TRUSTED NAME b) FRIENDLY SERVICE & RESPONSIVENESS c) GOOD PLANS d) ACCESSIBILITY 18.. ARE YOU PLANNING FOR NEW INVESTMENTS?

PLANNING

NOT PLANING

19. WOULD YOU GO FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS? a) YES b) NO c) UNCERTAIN 20. DO YOU SURF NET? a) SURF NET b) DO NOT SURF NET 21. DO YOU USE INTERNET FOR INFORMATION & DECISION MAKING? a) YES b) NO

22. ARE YOU INTERESTED IN USING NET FOR CHOOSING YOUR INSURANCE PLAN? a) INTERESTED b) NOT INTERESTED c) UNCERTAIN

THANK YOU
NAME: _________________________ ADDRESS: ______________________ ______________________________ OCCUPATION: ___________________

Bibliography

BIBILOGRAPHY 1. BOOKS/MAGAZINES REFFERED:

i.
AIMA. ii. published by INSURANCE INSTITUTE OF INDIA iii. INSURANCE, by Mc GILL iv. CEWATCH. v. UTLOOK. MONEYO INSURAN LIFEBooks STUDY GUIDE- PRINCILES & PRACTICES OF LIFE / GENERALINSURANCE, by

2. WEBSITES REFFERED:

WWW.CIFAINSURANCE.COM WWW.MONEYOUTLOOK.COM WWW.INSURANCE.IND.COM

3. REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY. Dec2003.

BRIEF PROFILE OF LIC, INDIADec 2003. REPORT: COPING WITH COMPETITIONJan2004