“Summer Training Project Report”

PROJECT TOPIC:
“LIFE ADVISOR AS CAREER”

Name of the organization

MASTER OF BUSINESS ADMINISTRATION

Session: 2007 – 09
Submitted By: Hemant Goyal
Project Guide: Mr. Atin Singh

The NIS Academy

(Affi. To Annamalai University, Chennai)
 ACKNOWLEDGEMENT

This report bears the imprint of many persons, who have helped me in

numerous ways in writing this report. It gives me great pleasure in

presenting this report to the Annamalai University, Chennai via The

NIS Academy.
Academy I would like to take this opportunity to extend my
heartful gratitude to all those who helped me in presenting this report.

Their contribution no matter big or small has contributed immensely

towards completion of this report.

I fall short of words to express my gratitude to KOTAK

MAHINDRA OLD MUTUAL LIFE INSURANCE for giving me the

opportunity to work in this prestigious organization. I acknowledge my

deep sense of gratitude to Mr. ATIN JAIN for his generous guidance &

advice before & during the course of this work & also in analyzing the

work.

I have also received valuable guidance and help from the entire

Teaching staff, especially from Miss. Ridhima and others who all are

members of Department of Management, The NIS Academy,Agra.

My overriding debt is to my parents who provide me with the

moral support & inspiration to prepare this report.

Hemant Goyal
 STUDENT’S DECLARATION

I, HEMANT GOYAL here by declare that this project report entitled “LIFE

ADVISOR AS CAREER”, has been completed based on actual study carried

out by me in KOTAK MAHINDRA LIFE INSURANCE.

I am presenting an authentic report of my work, carried out under

the guidance of Mr. ATIN SINGH, which is required in the partial

fulfillment for degree of M.B.A. affiliated to ANNAMALAI

UNIVERSITY, CHENNAI.

This research report is original & the information, data & fact

furnished their in are actual, based on study carried out by me.

HEMANT GOYAL
 CONTENTS

1. INTRODUCTION

1.1 General introduction

1.2 Objective of the study

1.3 Industry profile

a. Origin and development of the industry

b. Growth and present status of the industry

2. INTRODUCTION TO THE COMPANY

2.1 Origin of the Organization

2.2 Current Financial Performance of the organization

2.3 Present status of the organization

2.4 Company profile

3. IRDA

4. LIFE ADVISORS AND THEIR ROLE AS

A BUSINESS PARTNER

4.1 Pre sale role

4.2 Post sale role

4.3 Opportunity of a life time

4.4 Procedure for becoming an advisor

4.5 Documents necessary to be an advisor

4.6 Reward & recognition

5. MARKET RESEARCH AND RECRUITMENT
OF FINANCIAL ADVISORS

5.1 On the job training

5.2 Objectives

5.3 Target

6. RESEARCH METHODOLOGY

7. OPERATION OF THE PROJECT

7.1 Work profile

7.2 Overall learning from the project

8. OBSERVATION

8.1 Training

8.2 Career

9. RECOMMENDATIONS & CONCLUSION

10.APPENDIX

10.1 Customer information form

10.2 Family member detail

10.3 Questionnaire

10.4 Feedback of people during survey

11. BIBLIOGRAPHY
1.1 GENERAL INTRODUCTION

WHAT IS INSURANCE?

The business of insurance is related to the protection of the

economic values of the assets. Every asset has a value. The asset would

have been created through the efforts of the owner. The asset is valuable

to the owner, because he expects to get some benefits from it. The benefit

may be an income or some thing else. It is a benefit because it meets some

of his needs. In the case of a factory or a cow, the product generated by is

sold and income generated. In the case of a motor car, it provides comfort

and convenience in transportation. There is no direct income.

Every asset is expected to last for a certain period of time

during which it will perform. After that, the benefit may not be available.

There is a life-time for a machine in a factory or a cow or a motor car.

None of them will last forever. The owner is aware of this and he can so

manage his affairs that by the end of that period or life-time, a substitute

is made available. Thus, he makes sure that the value or income is not

lost. However, the asset may get lost earlier. An accident or some other

unfortunate event may destroy it or make it non-functional. In that case,

the owner and those deriving benefits there from, would not have been

ready. There is an adverse or pleasant situation. Insurance is a mechanism

that helps to reduce the effect of such adverse situations.

HISTORY OF INSURANCE

The business of insurance started with marine business.

Traders, who used to gather in the Lloyd’s coffee house in London,

agreed to share the losses to their goods while being carried by ships. The

losses used to occur because of pirates who robbed on the high seas or

because of bad weather spoiling the goods or sinking the ship. The first

insurance policy was issued in 1583 in England. In India, insurance began

in 1870 with life insurance being transacted by an English company, the

European and the Albert. The first Indian insurance company was the

Bombay Mutual Assurance Society Ltd, formed in 1870. This was

followed by the Oriental Life Assurance Co. in 1874, the Bharat in 1896

and the Empire of India in 1897.

Later, the Hindustan Co-operative was formed in Calcutta,

the United India in Madras, the Bombay Life in Bombay, the National in

Calcutta, the New India in Bombay, and the Jupiter in Bombay and the

Lakshmi in New Delhi. These were all Indian companies, started as a

result of the Swadeshi Movement in the early 1900’s by the year 1956,

when the life insurance business was nationalized and the Life Insurance

Corporation of India (LIC) was formed on 1st September 1956, there were

170 companies and 75 provident fund societies transacting life insurance

business in India. After the amendments to the relevant laws in1999, the
L.I.C. did not have the exclusive privilege of doing life insurance business

in India. By 31/03/2002, eleven new insurers had been registered and had

begun to transact life insurance business in India.

Life Insurance Industry Overview

FYP Rs Crores

2001-02 2002-03 2003-04 2004-05 2005-06 till Feb

2007
LIC 14,843 15,976 16,285 19,786 25,645 43,573
Private
Sector 273 986 2,422 5,587 10,253 14,365
Total 15,116 16,962 18,707 25,343 35,898 57,938

The Life Insurance Industry has grown by 27% p.a. over the last
5 years and by about 62% in the first eleven months of 2006 -07

Source – IRDA Journal (April 2007)

In India

The Insurance premium as a % of GDP in 2005 increased to 3.14% and is

set to touch 4% in 2006. (Source – Lifeline 26th Dec 2006)
The Life Insurance Industry has grown by 27% p.a. over the last 5 years

and by about 62% in the first eleven months of 2006 -07 ( April 06 to Feb

2007) LIC has 75.2% of the market share and the Pvt. Players have 24.8 %

The Insurance premium as a % of GDP in 2005 increased to 3.14% and is

set to touch 4% in 2006

PURPOSE & NEED OF INSURANCE

Assets are insured, because they are likely to be destroyed,

through accidental occurrences. Such possible occurrences are called

perils. Fire, flood, breakdowns, lightning, earthquakes, etc, are perils. If

such perils can cause damage to the asset, we say that the asset is exposed

to that risk. Perils are the events. Risks are the consequential loses or

damages. The risk to an owner of a building, because of the peril of an

earthquake, may be a few lakhs or a few crores of rupees, depending on

the cost of the building and the contents in it. The risk only means that

there is a possibility of loss or damage. The damage may or may not

happen. Insurance is done against the contingency that it may happen.

There has to be an uncertainty about the risk. Insurance is relevant only if

there are uncertainties. If there is no uncertainty about the occurrence of

an event, it cannot be insured against. In the case of a human being, death

is certain, but the time of death is uncertain. In the case of a person who is
terminally ill, the time of death is not uncertain, through not exactly

known. He cannot be insured.

Insurance does not protect the asset. It does prevent its loss

due to the peril. The peril cannot be avoided through insurance. The peril

can sometimes be avoided, through better safety and damage control

management. Insurance only tries to reduce the impact of the risk on the

owner of the asset and those who depend on that asset. It only

compensates the losses- and that too, not fully.

Only economic consequences can be insured. If the loss is not

financial, insurance may not be possible. Examples of non-economic

losses are love affection of parents, leadership of managers, sentimental

attachments to family heirlooms, innovative and creative abilities, etc.

HOW INSURANCE WORKS

The mechanism of insurance is very simple. People who are

exposed to the same risks come together and agree that, if anyone of them

suffers a loss, the others will share the loss and make good to the person

who lost. All people who send goods by ship are exposed to the same

risks, which are related to water damage, ship sinking, piracy, etc. those

owning factories are not exposed to these risks, but they are exposed to

different kinds of risks like, fire, hailstorms, earthquakes, lightning,

burglary, etc. like this, different kinds of risks can be identified and

separate groups made, including those exposed to such risks. By this

method, the heavy loss that anyone of them may suffer (all of them may

not suffer such losses at the same time) is divided into bearable small

losses by all. In other words, the risk is spread among the community and

the likely big impact on one is reduced to smaller manageable impacts on

all.

If a Jumbo Jet with more that 350 passengers crashes, the

loss would run into several crores of rupees. No airline would be able to

bear such loss. It is unlikely that many Jumbo Jets will crash at the same

time. If 100 airline companies flying Jumbo Jets, come together into an

insurance pool, whenever one of the Jumbo Jets in the pool crashes, the

loss to be borne by each airlines would come down to a few lakhs of

rupees. Thus, insurance is a business of ‘sharing’.

There are certain principles, which make it possible for

insurance to remain a fair arrangement. The first is that it is difficult for

any one individual to bear the consequences of the risks that he is

exposed to. It will become bearable when the community shares the

burden. The second is that the peril should occur in an accidental manner.

Nobody should be in a position to make the risk happen. In other words,

none in the group should set fire to his assets and ask others to share the

costs of the damage. This would be taking unfair advantage of an

arrangement put into place to protect people from the risks they are

exposed to. The occurrence has to be random, accidental, and not the

deliberate creation of the insured person.

The manner in which the loss is to be shared can be

determined before-hand. It may be proportional to the risk that each

person is exposed to. This would be indicative of the benefits he would

receive if the peril befell him. The share could be collected from the

members after the loss has occurred or the likely shares may be collected

in advance, at the time of admission to the group. Insurance companies

collect in advance and create a fund from which the losses are paid.

The collection to be made from each person in advance is

determined on assumptions. While it may not be possible to tell

beforehand, which person will suffer, it may be possible to tell, on the

basis of past experiences, how many persons, on an average, may suffer

losses. The following two examples explain the above concept of

insurance.

Example-1

In a village, there are 400 houses, each valued at Rs. 20,000. Every year, on

the average, 4 houses get burnt, resulting into a total loss of Rs. 80,000. If

all the 400 owners come together and contribute Rs. 200 each, the

common fund would be Rs. 80,000. This would be enough to pay Rs.

20,000 to each of the 4 owners whose houses got burnt. Thus, the risk of 4

owners is spread over 400 house-owners in the village.

Example-2

There are 1000 persons who are all aged 50 and are healthy. It is expected

that of these, 10 persons may die during the year. If the economic value of

the loss suffered by the family of each dying person is taken to be Rs.

20,000, the total loss would work out to Rs. 2,00,000. If each person in the

group contributed Rs. 200 a year, the common fund would be Rs.

2,00,000. This would be enough to pay Rs. 20,000 to the family of each of

the ten persons who die. Thus the risks in the case of 10 persons are

shared by 1000 persons.




 THE HUMAN ASSET

A human being is an income generating asset. One’s manual

labour, professional skills and business acumen are the assets. This asset

also can be lost through unexpectedly early death or through sickness

and disabilities caused by accidents. Accidents may or may not happen.

Death will happen, but the timing is uncertain.

If it happens around the time of one’s retirement, when it

could be expected that the income will normally cease, the person

concerned could have made some other arrangements to meet the

continuing needs. But if it happens much earlier when the alternate

arrangements are not in place, there can be losses to the person and

dependents. Insurance is necessary to help those dependent on the

income.

A person, who may have made arrangements for his needs

after his retirement, also would need insurance. This is because the

arrangements would have been made on the basis of some expectations

like, likely to live for another 15 years, or that children will look after him.

If any of these expectations do not become true, the original arrangement

would become inadequate and there could be difficulties. Living too long

can be as much a problem as dying too young. Both are risks, which need

to be safeguarded against. Insurance takes care.

THE BUSINESS OF INSURANCE

Insurance companies are called insurer. The business of

insurance is to (a) bring together persons with common insurance

interests (sharing the same risks), (b) collect the share or contribution

(called premium) from all of them, and (c) pay out compensations (called

claims) to those who suffer. The premium is determined on the same lines

as indicated in the examples above, but with some further refinements.

In India, Insurance business is classified primarily as life and

non-life or general. Life Insurance includes all risks related to the lives of

human beings and general insurance covers the rest. General insurance

has three classifications viz., Fire (dealing with all fire related risks),

Marine (dealing with all transport related risks and ships) and

Miscellaneous (dealing with all others like liability, fidelity, motor, crop,

personal accident, etc). Personal accident and sickness insurance, which

are related to human beings, is classified as non-life in India, but is

classified as ‘life’, in many other countries. What is ‘Non-Life’ in India is

termed ‘Property and Casualty’ in some other countries.

The business of insurance is nothing but one of sharing. It

spreads losses of an individual over the group of individuals who are

exposed to similar risks. People who suffer loss get relief because their
loss is made good. People who do not suffer loss are relieved because

they were spared the loss.

The insurer is in the position of a trustee as it is managing

the common funds, for and on behalf of the community of policyholders.

It has to ensure that nobody is allowed to take undue advantage of the

arrangement. That means that the management of the insurance business

requires care to prevent entry (into the group) of people whose risks are

not of the same kind as well as paying claims on losses that are not

accidental. The decision to allow entry is the process of underwriting of

risk. Underwriting includes assessing the risk, which means, making an

evaluations of how much is the exposure to risk. The premium to be

charged depends on this assessment of the risk. Both underwriting and

claim settlement have to be done with great care.

INSURANCE AS A SOCIAL SECURITY TOOL

The United Nations Declaration of Human Rights 1948

provides that “Everyone has a right to a standard of living adequate for

the health and wellbeing of himself and his family, including food,

clothing, housing and medical care and necessary social services and the

right to security in the event of unemployment, sickness, disability,

widowhood or other lack of livelihood in circumstances beyond his

control”.

When the bread winner dies, to that extent, the family’s income

dies. The economic condition of the family is affected, unless other

arrangements come into being to restore the situation. Life insurance

provides such an alternate arrangement.

If this did not happen, another family would be pushed into

the lower strata of society. The lower strata create a cost on society. Poor

people cost the nation by way of subsidies and doles and so on. Poor

people also cost by way of larger growth in population, poor education

and vagaries in behavior of children.

Life insurance tends to reduce such costs. In this sense, the

life insurance business is complimentary to the State’s efforts in social

management.

Under a socialistic system the responsibility of full security

would be placed upon the State to find resources for providing social

security. In the capitalistic society, provisions of security are largely left to

the individuals. The society provides instruments, which can be used in

securing this aim. Insurance is one of them.

In a capitalistic society too, there is a tendency to provide some

social security by the State3 under some schemes, where members are

required to contribute e.g. Social Security Scheme in U.K.

In India, social security finds a place in our Constitution.

Article 41 requires the State, within the limits of its economic capacity

and development, to education and to provide public assistance incase of

unemployment, old age, sickness and disablement and in other cases of

undeserved want. Part of the State’s obligations to the poorer sections met

through the mechanism of life insurance.

As per the law and the directions of the regulatory authorities,

insurance companies in India are obliged to extend insurance benefits to

economically weaker sections of the society in the unorganized sector.

Details of these schemes are given in subsequent chapters.

ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT

As per the law and the directions of the regulatory authorities,

insurance companies in India are obliged to extend insurance benefits to

economically weaker sections of the society in the unorganized sector. For

economic development, investments are necessary, which are made out of

savings. A life insurance company is a major instrument for the

mobilization of savings of people, particularly from the middle and lower

income groups. These savings are channeled into investments for economic

growth. All good life insurance companies have huge funds, accumulated

through the payments of small amounts pf premium of individuals. These

funds are invested in ways that contribute substantially for the economic

development of the countries in which they do business. All life insurance

companies get huge amount of funds in the form of premium from the

investors. Every premium represents a risk that is covered by that

premium. In effect, therefore these vast amounts represent pooling of risks.

The funds are collected and held in trust for the benefit of the

policyholders. Apart from investments, business and trade benefits

through insurance. Without insurance, trade and commerce will find it

difficult to face the impact of major banks, would collapse if the factory,

financed by it, is reduced to ashes by terrible fire. Insurers cover also the

loss to financiers, if their debtors default.

ADVANTAGES OF LIFE INSURANCE

Many people perceive about life insurance as an investment or

a means of saving, which is not entirely correct. When a person saves, the

amount of funds at any time is equal to the amount set aside in the past,

plus interest. This happens in a fixed deposit of a bank, in national

savings certificates, in mutual funds, etc. even if there no loss, the

available fund at any time is the amount invested plus appreciation. In

life insurance, however the funds available is not the total of the savings

already made i.e. the premium paid, but the amount one wishes to have

at the end of the savings period say 20 or 30 years. Thus, one is paying

from his savings, for the later, only as long as he/she lives or for a lesser

period if so chosen. Thus there is no substitute to life insurance which

provides this kind of benefits.

Following are few more of the benefits which no other saving instrument

can provide the investor with:

 In the event of death, the settlement is easy. The heirs can collect the

moneys quicker, because of the facility of nomination and assignment.

The facility of nomination is now available for some bank accounts.






 There is a certain amount of compulsion to go through the plan of

savings. In other forms, if one changes the original plan of savings,

there is no loss. In insurance, there is a loss.


 Creditors cannot claim the life insurance moneys. They can be

protected against attachments by courts.


 There are tax benefits, both in income tax and in capital gains.


 Marketability and liquidity are better. A life insurance policy is

property and can be transferred or mortgaged. Loans can be raised

against the policy.

The following tenets help agents to believe in the benefits of life

insurance: Such faith will enhance their determination to sell and their

perseverance

 Life cover: Insurance provides life cover along with high returns. This

can be considered as a major advantage of insurance over mutual

funds.
 Tax Benefits: The government provides some tax incentives to all those

who invest in insurance products by the way of premiums. Tax relief

in income tax and wealth tax can be availed on the premium paid for

life insurance. This is another area where this sector has an upper hand

over mutual funds. Sec 80C and sec10 (10D) are related to premium

payments and withdrawal.

 Returns: Insurance sector provides high return as well as capital

guarantee. For example- investment shield life, guarantees all your

investment premiums, along with the accrued bonus interest.

 Transparency: Private players in insurance are mainly concentrating

on Unit Linked products because it provides both life cover and also

serves the investment purpose and also it provides the transparency

for the customers, that is, customers can know exactly where their

money is invested and how much he/she is going to get.

 Flexibility: We can increase or decrease our annual contribution. The

maximum decrease in the contribution can be up to 20 % of the initial

contribution chosen at the time of inception of the policy. There is no

 limit in increasing the contribution. Increase the death benefit or

decrease the

sum assured, if necessary.

 Security of capital: Investment shield life, invest shield cash, invest

shield gold is a market linked plan that provides capital guarantee on

the investment premiums and declared bonus interest.

 Financial security: If a policy holder looses his life, who is the sole

breadwinner of the family, the insurance company

 guarantees the financial protection of that family by providing the

family the sum assured.

 Medical benefits: Protects the insured against financial loss in the

event of 9 specified critical illnesses. Benefits are payable to the

insured for medical expenses prior to death. Provide financial support

in the event of medical emergency, ensuring benefits are payable to the

life assured for medical expenses incurred for surgical procedures.

Cover is offered against 43 surgical procedures.

 Switching Free: If at a later stage if our financial priorities changes,

we can switch between the various investment option at any time.

There is a provision of 4 free switches every policy year.

 Top-up: Whenever we have surplus amount we can top-up our fund

and utilize the opportunity.

 Sovereign: The government is giving the guarantee that if the

company fails then they will print the currency and provide to the

insured the amount paid by them.

 Compulsory Savings: Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the

unnecessary expenses by the insured. For the purpose of availing

income-tax exemptions also, people invest in insurance. Life

insurance encourages long term saving. By paying a small premium

in easy installment for a long period a handsome saving can be

achieved.

 Loan provided: Loan can be obtained against a policy assured

whenever required. After the policy has acquired a surrender value,

 we can avail of a loan under the policy. An interest will be charged on

the loan, as per the prevailing rate at that time.

1.2 OBJECTIVES OF THE STUDY

 To determine reasons behind opting for an insurance.

 To find out the Kotak Life Insurance Plan in Agra City.

 To study of Different Traditional Plans in Kotak Life Insurance Co.

 To know the most preferred policy.

 To find out benefits of Endowment Plans for Urban Person.

 To find out the future aspects of Kotak Life Insurance Plan

 To determine the feedback on services provided by any other

insurance agent.

 To study the types of benefits provided by insurance services.

 To study of complete security to policyholders.

 1.3 INDUSTRY PROFILE

a. Origin and development of the industry

Almost 4,500 years ago, in the ancient land of Babylonia, traders

used to bear risk of the caravan trade by giving loans that had to be later

repaid with interest when the goods arrived safely. In 2100 BC, the code

of Hammurabi granted legal status to the practice. That, perhaps, was

how insurance made its beginning.

Life insurance had its origins in ancient Rome, where citizens

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

as well as help survivors by making some payments.

As European civilization progressed, its social institutions and

welfare practices also got more and more refined. With the discovery of

new lands, sea routes and the consequent growth in trade, medieval

guilds took it upon themselves to protect their member traders from loss

on account of fire, shipwrecks and the like.

 Since most of the trade took place by sea, there was also the fear of

pirates. So these guilds even offered ransom for members held captive by

pirates. Burial expenses and support in times of sickness and poverty

were other services offered. Essentially, all these revolved around the

concept of insurance or risk coverage. That’s how old these concepts are,

really.

In 1347, in Genoa, European maritime nations entered into the

earliest known insurance contract and decided to accept marine

insurance as a practice.

The first step….

Insurance as we know it today owes its existence to 17th century

England. In fact, it began taking shape in 1688 at a rather interesting place

called Lloyd’s Coffee House in London, where merchants, sgip-owners

and underwriters met to discuss and transact business. By the end of the

18th century, Lloyd’s had brewed enough business to become one of the

first modern insurance companies.

In India….

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

yogashema, the name of Life Insurance Corporation of India’s corporate

headquarters, is derived from the Rig Veda. The term suggests that a

form of “community insurance” was prevalent around 1000 BC and

practiced by the Aryans.

Burial socities of the kind found in ancient Rome were formed in the

Buddhist period to help families build houses, protect widows and

children.

Bombay Mutual Assurance Society, the first Indian life assurance

society, was formed in 1870. Other companies like oriental, Bharat and

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

swadeshi movement in the early 20th century that insurance witnessed a

big boom in India with several more companies being set up.
 As these companies grew, the government began to exercise control

on them. The Insurance Act was passed in 1912, followed by a detailed

and amended Insurance Act of 1938 that looked into investments,

expenditure and management of these companies’ funds.

By the mid-1950s, there were around 170 insurance companies and

80 provident fund societies in the country’s life insurance scene.

However, in the absence of regulatory systems, scams and irregularities

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

As a result, the Government decided nationalize the life assurance

business in India. The Life Insurance Corporation of India was set up in

1956 to take over around 250 life companies.

For years thereafter, insurance remained a monopoly of the public

sector. It was only after seven years of deliberation and debate – after the

RN Malhotra Committee report of 1994 became the first serious

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

players -- that the sector was finally opened up to private players in 2001.

The Insurance regulatory & Development Authority, an

autonomous insurance regulator set up in 2000, has extensive powers to

oversee the insurance business and regulate in a manner that will

safeguard the interests of the insured.

b. GROWTH AND PRESENT STATUS OF THE INDUSTRY

What you should know about Life Insurance…..

There’s always this rush to buy insurance policies towards the end

of the financial year, making one wonder if the tax-saving purpose of life

insurance has not overshadowed its other roles.

Yes, the tax benefits associated with life insurance policies do help

make the investment more attractive. The Public Provident Fund also

offers the 20% tax rebate under section 88 of the Income Tax Act, 1961, as

do small saving scheme like post office deposits and national savings

certificates. You may also avail of Tax benefits under section 80 CCC with

certain plans and there are other investment options that give you higher

returns than insurance. But these don’t offer you security, the risk cover

that helps you overcome the uncertainties of life. The primary function of
life insurance is to cover you against financial losses arising out of sudden

death or disability. It also offers returns and tax savings. Life insurance,

as an instrument, is hence a good marriage of risk cover, returns and tax

benefits.

Insurance does not give good returns

Insurance is different from routine investment options. A fixed deposit or

even a National Savings Certificate may apparently fetch more returns

than a life insurance policy. But that’s not a fair straight-line comparison.

If monetary returns are evaluated in isolation, a fixed deposit {FD}

offering 9.5% might look very good in this depressed market. But

insurance offers other benefits along with returns.

Look at security for instance. If you invest in an FD and happen to die,

your nominee can only the amount of the FD. If you live, you will get

back the sum of the FD with the sum of the FD with the desired interest.

Compare this to a life insurance policy. For a sum of Rs. 5,000 invested in

a FD, you would get the same amount at the end of the year whereas for a

small insurance premium of say Rs 5,000 per annum, you could buy

yourself a cover of around Rs 50,000 to Rs 2 lakhs depending on your age

and type of policy. If you happen to die during the tenure of the policy,

your family members would get Rs 50,000 to Rs 2 lakhs as a benefit. In

case you live, you will get back the entire sum assured with may be a

decent return.

*Condition apply

Evaluate the two options. For a small “notional loss” in returns, you

are running the risk of leaving your loved ones uncared for if something

happened to you. On the other hand, with an insurance policy, peace of

mind will never be an issue. That’s something money can seldom buy.
 2.1 ORIGIN OF THE ORGANIZATION

THE KOTAK MAHINDRA GROUP

Kotak Mahindra is one of the India’s leading financial

institutions, offering a diverse range of financial solution that

encompasses every sphere of the life. From corporate finance to retail

finance, stock broking, mutual funds, life insurance, investment banking,

the group truly understands the financial needs of individual as well as

established corporate clients. With over two decades of experience in

providing financial services and a wide range of financial solutions.

Kotak Mahindra has constantly added value to life.

Kotak Mahindra group was incorporated in 1985 as Kotak

Capital Management Finance Limited. This company was promoted by

Mr. Uday Kotak, S.A.A. Pinto and Kotak & Company. Industrialists Mr.

Harish Mahindra and Mr. Anand Mahindra took a stake in 1986, and

that's when the company changed its name to Kotak Mahindra Finance

Limited (KMFL).

Kotak Mahindra has international partnership with Goldman

Sachs (one of the world’s largest investment bank and brokerage firm),

Ford Credit (one of the world’s largest dedicated automobile financiers),

and Old Mutual (a large insurance, banking and asset management

conglomerate).

In February 2003, the company was given the license to carry

on banking business by the Reserve Bank of India. It was the first

company in India to convert to a Bank. The company has been in retail

lending since mid 1990s. With the conversion into a bank, retail liabilities,

treasury and corporate banking segments have been added.

As on March 31, 2006, the group has a net worth of over Rs.

2,500 crore, employs around 6,700 people in its various businesses and

has a distribution network of branches, franchisees, representative offices

and satellite offices across 250 cities and towns in India and offices in

New York, London, Dubai and Mauritius. The Group services over 1.6

million customer accounts.

VISION OF KOTAK MAHINDRA GROUP

 The global Indian financial services brand:

Customer will enjoy the benefits of dealing with a global Indian brand

that best understand their needs and delivers customized pragmatic

solutions across their platforms. It will be a world-class Indian financial

services group. Technology and best practices will be Indian

benchmarked along international lines while it’s understanding of

customer will be uniquely.

 The most preferred employer in financial services:

A culture of empowerment and a spirit of enterprise attract bright minds

with an enterprise streak to join us and stay with us. Working with a

home grown, professionally-managed company, which has partnership

with international leaders, gives our people a perspective that is universal

as well as unique.
  The most trusted financial services company:

Create an ethos of trust across our constituents. Adhering to high

standards of compliance and corporate governance will be an integral

part of building trust.

 Value creation:

Value creation rather than size alone will be our business driver.
 KOTAK MAHINDRA GROUP OF COMPANIES

KOTAK MAHINDRA GROUP

STRATEGIC BUSINESS UNITS

Asset Wealth Knowledge & Insurance

Finance SBU Skills SBU SBU
Management
SBU
t
Kotak Mahindra
Kotak Mahindra Capital Om Kotak
Bank Ltd. Company Ltd. Mahindra Life
Insurance

Kotak Mahindra
Primus Ltd.

Kotak Securities Kotak Mahindra Kotak Mahindra

Ltd. AMC Venture Capital Fund

Kotak Mahindra Kotak Mahindra

(UK) Ltd. Kotak Mahindra Inc.
(International)
ASSET FINANCE SBU

 Kotak Mahindra Bank Limited:

The Kotak Mahindra Group’s flagship company, Kotak Mahindra Finance

Ltd which was established in 1985, was converted into a bank – Kotak

Mahindra Bank Ltd in March 2003 becoming the first Indian company to

convert into a Bank. It’s banking operations offers a central platform for

customer relationships across the group’s various businesses. The bank

has a presence in the Commercial Vehicles, Retail Finance, Corporate

Banking, Treasury and Housing Finance.

 Kotak Mahindra Primus Limited (KMPL):

Kotak Mahindra Primus Limited (KMPL) is India's largest dedicated car

finance company. Incorporated in 1996 as a joint venture between Kotak

Mahindra Bank Limited and Ford Credit International Inc., KMPL has

financed over 75,000 new and used non-Ford passenger vehicles since its

inception. KMPL offers its services to non-Ford passenger car buyers

through hire-purchase, loan and lease plans. Today KMPL is present in

over 40 locations through a strong network of brokers, direct marketing

associates and its own sales team. It is the preferred financier for global

brands like Toyota, Hyundai, Daewoo and General Motors in India.

With strong systems and control support of Ford, strategic tie-ups and

subvention programs with leading car manufacturer, KMPL has been able

to consolidate its position as the largest dedicated car finance company in

India. It’s annual exceed rs.850 crore and it reaches out to a customer base

of over 60,000 all over the country.

WEALTH MANAGEMENT SBU

 Kotak Securities Limited:

Kotak Securities Ltd. is one of India's largest brokerage and securities

distribution house in India. Set up in 1994, by Mr. Uday Kotak, it has

equity participation from Goldman Sachs L.L.P. (25%) and is a corporate

member of both the BSE and NSE. It conducts stock broking, distribution

of various financial products - including private and secondary placement

of debt and equity, mutual funds and fixed deposits. It also offers

portfolio management. Over the years Kotak Securities has been one of

the leading investment broking houses catering to the needs of both

institutional and non-institutional investor categories with presence all

over the country through franchisees and co-coordinators. Kotak

Securities Ltd. offers online (through www.kotaksecurities.com) and

offline services based on well-researched expertise and financial products

to the non-institutional investors.

 Kotak Mahindra Asset Management Company:

Kotak Mahindra Asset Management Company Limited (KMAMC), a

wholly owned subsidiary of KMFL, is the asset manager for Kotak

Mahindra Mutual Fund (KMMF). KMAMC started operations in

December 1998 and has over 1,15,000 investors in various schemes.

KMMF manages funds in excess of Rs 10,000 crores and offers schemes

catering to investors with varying risk-return profiles and was the first

fund house in the country to launch a dedicated gilt scheme investing

only in government securities.

The Mutual Fund’s mission is to offer a family of schemes for

building investor wealth. The family of schemes will comprise of diverse

portfolio to suit different risk/ reward expectations of investors. Kotak

Mahindra Mutual Fund offered India’s first dedicated Gilt fund-KGilt.

 Kotak Mahindra Venture Capital Fund:

The era of economic liberalization in India has seen an influx of top class

technocrats exposed to the global environment who have not only the
technical expertise, but also the entrepreneurial spirit, to put them to

practice in start-ups as well as in ongoing ventures. They desire support

in the form of capital of their enterprise and they offer an opportunity to

investors with the promise of a worthwhile return. Kotak Mahindra

Venture Capital Fund (KMVCF or the Fund), sponsored by Kotak

Mahindra Finance Limited, was formed to meet the needs of the modern-

day entrepreneur. This is the Group's formal foray into the venture

capital/private equity arena. KMVCF is a SEBI registered VCF, with KMFL

as the principal investor, and 30 other private investors. KMFL is the

Investment Manager of the Fund. The Group's inherent strengths and

expertise in the capital markets shall be leveraged to assist the our

investee companies in areas such as: Financial Planning and Structuring

Resource Raising - From Institutional and Non- Institutional Investors

M&A - To Facilitate (Identify, Negotiate And Conclude) Growth through

Acquisitions Equity Research Franchise in TMT Sectors.

  Kotak Mahindra (International) Limited:

Kotak Mahindra International Limited (KMIL) is the international arm

of the Kotak Mahindra Group and was incorporated in 1994, in

Mauritius with a branch in Dubai. International operations now cover

the United Kingdom through Kotak Mahindra (UK) Limited and the

U.S.A. through Kotak Mahindra Incorporated, U.S.A. Services offered

include GDR trading and broking, debt syndication, placement of

Indian securities and advisory services. Kotak Mahindra was the first

and is currently the only Indian group to be registered with the

Standards and Futures Association (SFA), UK and the National

Association of Securities Dealers, U.S.A.

KNOWLEDGE & SKILLS SBU

 Kotak Mahindra Capital Company:

Kotak Mahindra Capital Company (KMCC), a company with unlimited

liability, was incorporated in 1996 as a joint venture with Goldman

 Sachs Group L.L.P. KMCC focuses on five key areas - Capital Markets,

Corporate Advisory, Mergers & Acquisitions, and Structured.

Finance and International Operations. KMCC has advised

some of the largest telecom and cement deals in India. KMCC is a

leading player in the field of M&As, disinvestments and business

restructuring; debt and equity placements both in primary and

secondary markets and cross-border fund raising. In the year 1999-2000

KMCC pioneered the first book built IPO in India, which ushered in

international standards & practices in the Indian Capital markets.

KMCC is also an RBI-approved Primary Dealer in government

securities. KMCC was ranked as the highest mobiliser of debt and

equity from the Indian Public markets for 1999-2000 (source: Prime

Database) and is amongst the top three investment Banks in the country.

INSURANCE SBU

 Om Kotak Mahindra Life Insurance:

Kotak Mahindra Finance Limited has now embarked upon a new vista in

the financial services arena with an entry into the recently liberalized

Insurance sector. OM Kotak Mahindra Insurance Company Pvt. Ltd.

represents KMFL's Life Insurance venture, a 74:26 joint venture with Old
Mutual plc, U.K. Kotak Mahindra Finance Limited believes that Life

Insurance is a logical expansion of its existing financial services business.

The Life Insurance business also offers Kotak Mahindra with an

opportunity to leverage its core strengths of Wealth Management and

Retail Distribution. Old Mutual plc is a leading financial services provider

in the world, providing a broad range of financial services in the area of

insurance, asset management and banking. It is a leading life insurer in

South Africa, with more than 30% market share. The partnership with Old

Mutual plc, provides the Kotak Mahindra group with an international

perspective and expertise in the life insurance business. Om Kotak

Mahindra life Insurance Co Private Limited (OMKM) has received the

certificate to start a Life Insurance business from The Insurance

Regulatory and Development Authorities (IRDA) on 10/01/2001.

JOURNEY TO GROWTH AND SUCCEESS OF KOTAK MAHINDRA

GROUP
1986 Kotak Mahindra Finance Limited starts the activity of Bill

Discounting

1987 Kotak Mahindra Finance Limited enters the Lease and

Hire Purchase market

1990 The Auto Finance division is started

1991 The Investment Banking Division is started. Takes over

FICOM, one of India’s largest financial retail marketing

networks

1992 Enters the Funds Syndication sector

1995 Brokerage and Distribution businesses incorporated into

a separate company -Kotak Securities. Investment

Banking division incorporated into a separate company –

Kotak Mahindra Capital Company

1996 The Auto Finance Business is hived off into a separate

company - Kotak Mahindra Prime Limited (formerly

known as Kotak Mahindra Primus Limited). Kotak

 Mahindra takes a significant stake in Ford Credit Kotak

Mahindra Limited, for financing Ford vehicles. The

launch of Matrix Information Services Limited marks the

Group’s entry into information distribution.

1998 Enters the mutual fund market with the launch of Kotak

Mahindra Asset Management Company.

2000 Kotak Mahindra ties up with Old Mutual plc. For the Life

Insurance business. Kotak Securities launches its on-line

broking site (now www.kotaksecurities.com).

Commencement of private equity activity through setting

up of Kotak Mahindra Venture Capital Fund.

2001 Matrix sold to Friday corporation Launches insurance

Services

2003 Kotak Mahindra Finance Ltd. converts to a commercial

bank – the first Indian company to do so.

2004 Launches India Growth Fund, a private equity fund

2005 Kotak Group realigns joint venture in Ford Credit; Buys

Kotak Mahindra Prime (formerly known as Kotak

Mahindra Primus Limited) and sells Ford credit Kotak

Mahindra. Launches a real estate fund

2006 Restructuring Ford and Goldman Jvs

BOARD OF DIRECTORS OF KOTAK MAHINDRA

GROUP
 2.2 CURRENT FINANCIAL PERFORMANCE OF KOTAK

MAHINDRA GROUP

 Kotak Investment Banking was ranked no. 1 in the league table s for

Book Runners/ Lead Managers in public equity offerings on the basis

of value of transactions during 2005-06 as per PRIME Database. It also

topped the Bloomberg M&A league tables for calendar year 2005.

 Kotak Securities with a market share of 8.5% in FY06 (6.3% in FY05),

clocked average daily volumes of over Rs. 2,400 crore during FY06 (Rs.

1,060 crore in FY05).

 Total assets managed/ advised by the Group were Rs. 18,650 crore (Rs.

9,740 crore as on March 31, 2005).

 Kotak Life Insurance total premium income was Rs. 621.9 crore in

FY06 (Rs. 466.2 crore in FY05). First year premium income adjusted for

single premium at 1/10 th up 82% to Rs. 351.0 crore.

 The group employee strength was over 6,700 as on March 31, 2006

(around 4,400 employees as on March 31, 2005).

 2.3 PRESENT STATUS OF THE ORGANIZATION

Kotak Mahindra Group in India has market share of 2.2%. It has ability to

enter in the adjacent market, which will help it to grow further in

financial sector of India. Kotak Mahindra is a financial firm in India

fulfilling the financial need of the public. Kotak Mahindra Group came

into being in 1985 as Kotak Capital Management Finance Limited and the

name changed to Kotak Mahindra Finance Ltd. in 1986 when Harish

Mahindra and Anand Mahindra took it. From bill discounting activity in

1986 it had entered into the Lease and Hire Purchase market in 1987. The

auto Finance division was started in 1990. In the year 1998 Kotak

Mahindra ventures into mutual fund market with the launch of Kotak

Mahindra Asset Management Company.

Company It got tied up with Old Mutual
plc. and the Life Insurance Business in the year 2000. Year 2003 saw the

conversion of Kotak Mahindra Finance Ltd. into a commercial Bank. It is

the first Indian Company to do so. In 2004 it launched a private equity

fund named India Growth Fund. Like all other years the 2006 was also

very fruitful for this group as it bought 25% stake held by Golden Sachs

in Kotak Mahindra Capital Company and Kotak Securities.

AREAS IN WHICH KOTAK GROUP DEALS

 Trade finance

 Corporate finance

 Car Finance

 Investment Banking

 Securities

 Commercial Vehicle

 Consumer Finance

 Mutual Funds

 Life Insurance

 Bank

 Stock Broking

 Kotak Reality Fund

 Kotak Private Equity

 Kotak Mahindra International

 2.4 COMPANY PROFILE

The company assigned to me is Kotak Life Insurance Company. It is

in to selling life insurance products. Kotak Life Insurance Company is a

74%-26% joint venture between Kotak Mahindra Bank and Old Mutual

plc. Kotak Life Insurance started its operations from May 2001 after

receiving approval from Insurance Regulatory Development Authority

(IRDA). At present it is growing at a tremendous pace. Now we can say

there is no close competitor to Kotak Life Insurance.

It has total share capital of Rs.340 crore. Presence in 50 cities with

74 branches, 19,066 life advisors, 222 corporate agents, 120 brokers, 100

direct sales agent ( March 2007). The company is regarded as a quality

player in the Indian market. It has a market share of about 4% in private

sector and 1.1% in total industry. The company is ranked No. 1 in average

premium per policy and has 88% persistency. It has a wide range of

flexible products that meet the needs of Indian customer at every step in

life.

The company mainly depends on advisors. The advisors are

considered as the brand ambassadors of the company or the business

partner who doesn’t have to invest to get returns but just work with the

company to make money. Advisors main job is to sell policy and in return

the advisors get huge return like high commission, rewards, recognition

etc. He is, for all purposes, an authorized salesman for insurance.

Advisors can become the Sales Manager of the company if they

fulfill the set target of the branch.. Sales Manager will get a fixed salary

and the commission on the policies sold by his advisor and the

commission of the policies which he has already sold.

The Kotak Mahindra Bank Ltd.

In February 2003, Kotak Mahindra Finance Ltd, was given a license by

RBI. The license was to carry on banking business.This approval creates

banking history since Kotak Mahindra Finance Ltd. is the first NBFC in

India to convert to a bank.

Performance of the group

Net worth of the group – over Rs. 3100 crores (Dec. 2006)

Net NPA – 0.22% ( Dec. 2006)

Consolidated PAT ( group)- Rs. 342.46 crores ( 2005 –06) PAT

( group)– Rs.367.91 crores ( Apr. to Dec. 06)

Asset Under Management ( group)- Rs.22,730 crores (Dec. 2006)

No. of employees – over 9,600 ( Dec. 2006)

Distribution network – 300 cities and towns in India, as well as offices in

London, Dubai, Mauritius and New York

Over 20 Lakh customer accounts

Old Mutual PLC

Old Mutual plc. is a 161 years old, world-class international financial

services company

[ Business spread -US –57%, Europe – 22%, SA – 18%, Others – 3%]

With Skandia acquisition

3rd largest UK Insurer

8th largest European Insurer

Old Mutual plc. owns some of the largest companies in the following

areas in South Africa

No. 1 - Life Insurance Company

No. 1 - Asset Management Company

No. 4 - Bank

No. 2 - Non-Life Insurance Company

Base of over 40 lakh life assurance policyholders

One of the best “Payouts” among insurers in the world

One of the best solvency ratios among insurers in the world

A FTSE 100 company ranked 35th and a Fortune Global 500 company

(ranked 230th – July 2006)

Listed on the London stock exchange with secondary listings in

Johannesburg and Stockholm

The Old Mutual group manages in excess of $400 billion in funds (2006)

Vision - “To build a premier international savings and wealth management

group”

KMOM – The Partnership

The partnership between the two happens because of the following reasons-

Kotak Life Insurance

 Brand equity

 Entrepreneurial employees

 Branch network

 Knowledge of the Indian market

 Distribution associates

 Access to customer base

Old Mutual

 Domain knowledge

 Technology

 Product innovation

 Training expertise

 Global perspective
 Systems and processes

 Multi-channel management
Sales Delivery

Focused Segment – Channel Mapping

 Tied agency

 Alternate Distribution Channels

Banc assurance

Corporate Agency

Brokers
 Group

 Direct Sales Force


 TIED AGENCY

It has well trained and quality Life Advisor team which target

urban households. They have consultative selling approach and complete

Product Range. They also provide superior customer service.

 ALTERNATE DISTRIBUTION

As a channel partner Bancassurance includes Kotak Mahindra

Bank and 24 more co- operative banks across the nation. It also include

Corporate Agencies which are Business houses with large distribution

networks –like Cholamandalam and Brokers like Bajaj Capital, Karvy, IL

& FS, Anand Rathi.

 Group

Group products distributed through Brokers and Customer

relationship officers. Prestigious clients like Sutherland Global services,

Toyota Kirloskar Motors Pvt. Ltd. Product range include Insurance

products like group term and EDLI as well as gratuity and

superannuation solutions.

 Direct Sales Force

Life advisors directly contact with the customers and do their

business.
 IRDA

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

ACT, 1999

It is an act to provide for the establishment of an authority to

protect the interests of holder 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 Authority replaces the Controller under Insurance Act, 1938. It

states that, if “Authority” is superseded by the Central Government,

the “Controller of Insurance” may be appointed till such time as

“Authority” is reconstituted.

 Section 2(f) defines an intermediary to include insurance brokers, re-

insurance brokers, insurance consultants, surveyors and loss assessors.

 The authority has the power and function to satisfy qualifications, code

of conduct and practical training for intermediaries and agents.

DUTIES, POWERS AND FUNCTIONS OF IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and

functions of IRDA...

 Subject to the provisions of this Act and any other law for the time

being in force, the Authority shall have the duty to regulate, promote

and ensure orderly growth of the insurance business and re-insurance

business.

 Without prejudice to the generality of the provisions contained in Sub

section-1, the powers and functions of the Authority shall include, -

(a) Issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registration.

(b) Protection of the interests of the policy holders in matters

concerning assigning of policy, nomination by policy holders,

insurable interest, settlement of insurance claim, surrender value

of policy and other terms and conditions of contracts of

insurance.
(c) Specifying requisite qualifications, code of conduct and

practical training for intermediary or insurance intermediaries

and agents.

(d) Specifying the code of conduct for surveyors and loss assessors.

(e) Promoting efficiency in the conduct of insurance business.

(f) Promoting and regulating professional organizations connected

with the insurance and re-insurance business.

(g) Levying fees and other charges for carrying out the purposes of

this Act.

(h) Calling for information from, undertaking inspection of,

conducting enquiries and investigations including audit of the

insurers, intermediaries, insurance intermediaries and other

organizations connected with the insurance business.

(i) Control and regulation of the rates, advantages, terms and

conditions that may be offered by insurers in respect of general

insurance business not so controlled and regulated by the Tariff

Advisory Committee under section 64U of the Insurance Act, 1938

(4 of 1938).
(j) Specifying the form and manner in which books of account shall

be maintained and statement of accounts shall be rendered by

insurers and other insurance intermediaries.

(k) Regulating investment of funds by insurance companies.

(l) Regulating maintenance of margin of solvency.

(m) Adjudication of disputes between insurers and intermediaries or

insurance intermediaries.

(n) Supervising the functioning of the Tariff Advisory Committee.

(o) Specifying the percentage of premium income of the insurer to

finance schemes for promoting and regulating professional

organizations referred to in clause (f).

(p) Specifying the percentage of life insurance business and general

insurance business to be undertaken by the insurer in the rural or

social sector.

(q) Exercising such other powers as may be prescribed.

 LIFE ADVISORS AND THEIR ROLE AS A BUSINESS
PARTNER

A Life Advisor according to the Insurance Act is one who is

licensed under Section 42 of that Act and is paid by way of commission or

otherwise, in consideration of his soliciting or procuring insurance

business relating to the continuance, renewal or revival of policies of

insurance.

Life Advisor’s main function is to solicit and procure life

insurance business for the insurer, which has appointed him for that

purpose.

At the same time, he is trusted by the prospect to advise him

suitably keeping his circumstances and needs in mind.

He is thus, in a unique role of a person trusted by both parties

to the transaction.

Life Advisor is bound by the terms of appointment of the

insurer and is expected to procure business for the insurer.

4.1 PRE SALES ROLE

 Tele calling for Suspecting of prospects.

 Fixing of appointments with prospects.

 Need analysis of the client.

 Re-fixing appointment for presenting solutions.

 Closing sales with cheque and other document

collection.

 Taking 3-4 references from the client.

 Submission of applications at the branch front desk.

4.2 POST SALES ROLE

 Track logins to achieve issuals of policy.

 Setting up medical appointment and accompany the client to

medicals (wherever required).

 Complete any other documentation or medical formalities as

required.

 Reminders to customers for next payment due to avoid

 lapsation.

4.3 OPPORTUNITY OF A LIFE TIME

As a business partner of Kotak Life Insurance life advisor have a

good opportunity for the life time. For this business no capital investment

is required you can choose your own working hours. Be your own boss

and write your own pay cheque. You have unlimited earning potential

and you become representative of a strong trusted brand.

A life advisor must have qualities like self confidence, initiative,

resourceful etc. He must have wide social circle and interpersonal skills.

He must have sufficient time to invest in the business. In this field only

that person can work which has urge to earn more and more money.

To its life advisors company provides wide range of products, world class

training and refreshers and technology backed customer service. They are

continuously monitored, mentored and supported by the senior staff. The

company has attractive payments, benefits, rewards and recognition.

SPECIAL REWARDS AND HONOURS

Million Dollar Round Table Membership

Special Honours Programs

Exclusive Seminars

Ongoing Contests

Foreign Trips

AS A LIFE ADVISOR YOU CAN ALSO ACHIEVE

Money in hand

Status in Society

Prestige

Long term economic security

Foreign trips

Job satisfaction

Network of contacts

Gratitude of families
 Goodwill of customers

4.4 PROCEDURE FOR BECOMING AN ADVISOR

 The insurance Act, 1938 lays down that an insurance agent must

possess a license under sections 42 of the Act. The license is to be

issued by the IDRA. A license issued by the IDRA will be valid for

three years.

 The qualifications necessary :

a. Be at least 18 years old.

th
b. Have passed at least the 12 standard or equivalent

examination.

 Have to underground at least 100 hours practical training in life or

General Insurance business.

 Have to pass the pre- recruitment examination conducted by the

Institute of India or any other examination body recognized by the

IDRA.

At Kotak Life Insurance, advisors are believed as ambassadors to

the customers. They are a key source of business for the organization, and

are continuing link with the clients.

This is why the company takes a lot of care in recruiting and

developing the advisors force, so that they continue to set higher

standards of quality in service and salesmanship. To cater to the needs of

the knowledge oriented market place, company look for graduate’s

people. Prior sales experience is an added benefit.

4.5 DOCUMENTS NECESSARY TO BE AN ADVISOR

 Educational proof

• 10th Standard Markssheet/ School Leaving for Advisor from

Rural Area.

• 12th Standard Markssheet/ School/ College Leaving for Advisor

from Rural Area.

• Graduation/ Post Graduation Completion Certificate.

• School/ College Leaving Certificate.

• Bonafide/ Character Certificate given by school/ college.

• For CA/ICWA/CS/MBA: Copy of the Membership

Certificate provided by the Institute. MBA should have

 been done from a AICTE Recognized Institute.

• For diploma courses Marks sheet/ Certificate

mentioning 3 yrs.

 Age proof

• Birth Certificate

• Marksheet

• Passport

• School/ College Leaving Certificate

• Driving Licence

• Insurance Policy of any life insurance company

• PAN Card

• ID Card issued by Defence Dept.

• Domicile Certificate where DOR was proved on the

basis of the school or birth certificate.

• PF statement from employers which states the date of

birth.

• Marriage Certificate and Baptism Certificate issued by

 Church.

 Address proof

• Voter ID

• Ration card

• Utility bill electricity/ water/ gas (less than 3 months)

• Telephone bill

• Bank pass book showing last 3 months transactions

• Bank statement/ credit card statement (less than

3months)

• Passport

• Driving Licence

• Self declaration for candidate staying on rent with

permanent address proof

• Insurance Policy Certificate of any life insurance

company

• House allotment letter/ leave licence/ rent agreement

with permanent address proof
 • Copy of PF/PPF statement

• ESIS card/ statement

• Employers certificate for Govt.

 Seven Passport size Photos

 A demand draft of Rs.1,000

4.6 Reward & Recognition

Kotak Life Insurance advisors are constantly recognized and

rewarded for their performance. Numerous contests all year round

promote healthy competition amongst advisors and recognition for their

efforts.

Rewards include Tip, Incentive and Bonus which is over & above

the basic earning. It can be immediate or deferred. Rewards are always

based upon a qualification criteria and it has a Rational Appeal.

Recognition includes Letter of Appreciation, Convention,

Felicitation etc and it has an emotional appeal. It addresses need for

belonging, esteem & actualization

Reward & Recognition combined are important performance

management tools. Most effective when used together.

Reward & Recognition is a Five Level Program. Rewards are in form

of Reward Points and they are redeemable at www.mykotaklife.com

.Reward points are based on commission earned. Recognition supports

are in form of stationery & Executive Accessories.

On www.mykotaklife.com 33 lach+ reward points are uploaded

and 2 lach reward points are redeemed. The website is accessible to all the

life advisors for each branch independently. It maintains records of

commissions, reward program, policy database, customer database, PTS

and smart agents.

My Kotak Life Tower

The reward program is divided in five levels. From top to bottom they

are –

 Hall Of Fame

 The Annual Elite Program

 The Monthly Star Program

 The Countdown Program

 Program Governor

Program Governor

To Be Announced.

Hall Of Fame

To Be Announced.

The Annual Elites

 Annual recognition program is held from January to December.

It recognizes international accreditation. It gives weightage to both 51

Club and MDRT. Rewards are given every January and the Kotak

Elites Konclave Konvention is held every year in Jan / Feb where all

the selected candidates come. This Konclave is happen for one week

and all the expenses are paid by the company.

The Monthly Star Program

The program has two qualification periods leading to two

regionally held conventions and it leads to Star Status & Invitation to

Conventions. This program has three stages.

MEGA

EARN Rs 45000/- commission in any month

WIN 4% Reward Points + An Assured Gift

SUPER

EARN Rs 30000/- commission in any month

WIN 3% Reward Points + An Assured Gift

STAR

EARN Rs 15000/- commission in any month

WIN 2% Reward Points + An Assured Gift

Points to remember

 Your qualification is on commission earned

 For example, If Mr. Rahul Sinha, our Life Advisor earns

25,000 commission in April he is a STAR

 25000 may have

• 15000 on account of business logged & converted in

April

• 5000 on account of business logged in March, converted

in April

• 5000 on account of business logged earlier than March,

converted in March but commission paid in April

• His total commission paid out in April = 25000

 If Rahul Sinha does this thrice between April – September ‘06, say,

April, June and September, he will be coming to the regional

convention.

 He will earn reward points in the month he qualified, i.e.,

April, June and September

 He will receive his executive accessories and stationery before

coming to convention

 He will receive his certificate and medal in the convention

 His status will be valid till March ’07

 If he does it again between October – March ’07, he enjoys to

come to a second convention again!

 You earn reward points only when you WIN in that

Month

 Even if you have the status, the points keep coming to

you on WINNING in the month

 You can be participating in the Monthly Program from

DAY 1 in the company (parallel to your Countdown

program)
Points to remember

 If an LA does 5.1 Lakh of CPI in 25 days with 11 policies

 He will get all benefits of STAR, Trail blaze, Blast off and Launch

pad

 If an LA does 2.5 lakhs of CPI in 42 days with 10 policies but

missed Launch pad,

 He will get all benefits of Orbit, Trail blaze and Blast off
 From now on, The LA kit will be handed over only when the Life

Advisor completes at least one of the five layers

 Executive Stationery will be handed over only once between Trail

blaze and Orbit

 For any other question, please contact the program administrator

or your local marketing representative

MARKET RESEARCH AND RECRUITMENT OF
FINANCIAL ADVISORS

5.1 ON THE JOB TRAINING

Working with Kotak Life Insurance can be considered as an

excellent career path for any SIP <SUMMER INTERNSHIP> student

because we are getting an opportunity to work in a company which is

presently the leader in the insurance industry. It is an opportunity for us

to start our career in a better way. This can be achieved if we perform

according to the company’s standard and do something which is

beneficial for the company in the near future.

Some of the benefits of working with Kotak Life Insurance as a

Management Trainee are:

 Learning Experience.

 A clear career path.

 All round support from the company, our company guide and world
class training.

 A comprehensive benefit package in the long run, this is because we

have a chance to get a job as soon as we complete our studies.

5.2 OBJECTIVES

At Kotak Life Insurance the company understands the

importance of training in a dynamic business environment. We go

through both generic and specific, professional programs that help us

remain well informed and knowledgeable about the company’s products

in the market. There is a further focus on soft skills such as

communication, managing long term relationships and selling skills,

which are very relevant in a service-driven industry like life insurance.

 State of the art infrastructure training facilities coupled with an

excellent faculty, guarantee an exceptional learning environment. For us

who are totally new in the corporate world, Kotak Life Insurance offers us

convenient training which will be very helpful while entering into the

field for recruitment of advisors.

Theoretical training is given with practical appointment

settings with potential customers, gives us a feeling of how the business

will work from the very first day, although, the sales manager and the

management provide continuous support to us in achieving

independence towards getting advisors and the policies.

Our On the job training is to recruit life advisors and to increase

their distribution network and market share.

By the on the job training we are getting to know about the

procedures, the people to target and how to convince the prospects to

become the financial advisor for the company and also how to make sales

out of them.

5.3 TARGET
 The main target of On the job training is to market research &

need analysis of financial advisor for the company within the specified

period provided to us. The basic dimensions for an advisor is that he

should be at least 12th pass, but the company is mainly targeting on CA`s,

Tax Consultants, Teachers, Sales executives, share brokers, House wives,

Government employees, Graduates, retired

and VRS people.

 RESEARCH METHODOLOGY

1. Data base collection:

 Collect data from various sources as much as possible.

 Segment the data and concentrate on one or two

segments.

2. Tele calling:
 Call the customers from the data base and fix the appointment

so that we could explain about the offer provided by the company to the

prospective customer in detail.

3. Mass BOP (Business Opportunity Presentation):

We have decided to organize mass BOP on a particular day in

the company by inviting as many prospective customers as possible and

explain why should they join Kotak Life Insurance and what are the

benefits they are going to receive.

4. Activities:

We conducted various activities at different places in Agra.

When conducting these activities we randomly selected people present at

the location and got the questionnaire filled from them. If we found the

person filling up the questionnaire suitable enough to become a Financial

Advisor with the company, then we told them about the business

opportunity with the company.

 We conducted these activities at various places; few of

them are Malls, Parks, Societies, etc.

Few of the places where we got good responses were as follows:

 Pacific Mall

 TDI Mall

 Saket Mall

 Subhash Park

 Radha Swami Co-Operative Housing Society

 Mangalam Estate Society

EVENT

In order to do our project on an extensive scale, we conducted

an event at the Malls in Agra.

The schedule for this event was as follows:

Day 1: 20th July, 2007

Time: 4:00 p.m. to 7:30 p.m.

 Location: Pacific Mall

Day 2: 21st July, 2007

Time: 4:00 p.m. to 7:30 p.m.

Location: TDI Mall

When conducting this event we had put up a kiosk at the above

said locations. Then we selected people randomly and got the

questionnaires filled. Later we invited these people to attend the seminar

at the company’s branch office (New Vriendawan Tower, Sanjay Place).

The seminar was held on 22nd and 23rd July, 2007 at 6:00 p.m.

The duration of the seminar was approximately 45 minutes,

which was conducted by a qualified trainer of the company. In this

seminar the trainer gave a presentation to these people regarding the

Insurance Industry and Kotak Life Insurance.

Later these people were given an offer of becoming a Life

Advisor with the company. The cases of people found interested were

closed as soon as possible after filing the customer information form and

personal history form. The rest were pitched for the sale of any of the

company’s products as per his/her requirement.

DATA ANALYSIS

In order to analyze the data, we followed Likert Rating Scale

Method. In this method we have given scores to different questions [Q3

to Q11] as per their importance, and analyzed the data on individual as

well as segment basis. Any person can get maximum score of 27 and

minimum of 15. Any person getting a score in between 21 to 27 is

considered to be a suitable prospect for becoming a Financial Advisor for

the company. Also the average score of each segment is calculated and the

segment which has got the maximum average score is considered to be

the segment which has to be focused upon and tapped on an extensive

scale.
OPERATION OF THE PROJECT

7.1 WORK PROFILE

 For the First 18 Days, I approached the people and asked them to
fill up the Questionnaire and explained them the Opportunity
with Kotak Life Insurance.

 For the Remaining Days, I phoned the people and explained the
opportunity of being a partner of the company.
  I Called the Interested Respondents to the Office Place and
explained them the whole detail.

 I also went to Prospects House and explained the detail of

Opportunity.

 Among all whom I met, Converted 5 Prospects into Life Advisors.

During the Survey, 100 People were Contacted, which comprises of:

 Housewives = 10%

 CA / Finance =25%

 Businessmen = 23%

 Professionals = 18%

 Service Class = 24%

The Number of People, who has taken that Opportunity:

 Housewives = 1

 CA / Finance = 1

 Businessmen = 0

 Professionals = 1

 Service Class = 2

7.2 OVERALL LEARNING FROM THE PROJECT

  Achieving the target within a Specified time.

 Convincing the People for our Product and Opportunities.

 Interacting with the People of different background.

 Knowledge about the Products of Kotak Life Insurance.

Reason for a housewife to associate

2.86% 0.00%
11.43% 5.71% Better benefits
Govt
Better money
8.57% 25.71%
Respondents from various segments are ready to get associated with a
No.1
company based on the following factors:
Easy selling
Trust/Reliable
Already a customer
Well established
5.71% Brand name
0.00%
34.29% Good support
 Reason for a CA/Finance to associate
0.00%
11.11% 11.11% Better benefits
Govt
Better money
0.00% 0.00% No.1
Easy selling
Trust/Reliable
11.11% Already a customer
Well established
Brand name
22.22% Good support
 Reason for a businessman to associate
4.57% 4.06%
Better benefits
12.18%
Govt
Better money
No.1
35.03% Easy selling
13.71%
Trust/Reliable
Already a customer
0.51% 1.02% Well established
Brand name
0.51% Good support
19.80% 1.52%
 Reason for Professionals to associate
0.00% 4.29%
Better benefits
18.57%
Govt
Better money
24.29%
No.1
Easy selling
Trust/Reliable
1.43%
Already a customer
18.57% 1.43% Well established
0.00% Brand name
Good support
1.43% 18.57%
 Reason for a service people to associate
3.73% 8.21%
9.70% Better benefits
Govt
Better money
9.70% No.1
23.88% Easy selling
Trust/Reliable
5.22% Already a customer
2.99% Well established
0.00% Brand name
18.66% 5.22% Good support
 The major reason for people to associate with a company is that it

should be a government body.

 It should have a good brand name which would lead to easy

selling of the products.

 The company should be trust worthy and reliable.

 Respondents would not join the company only because there is

good money or better benefits, they would look at the above

mentioned factors focusing on the money factor.

OBSERVATION

Our main aim is to generate maximum business for the

company so that our company can retain its position as No. 1. But there

are certain limitations, because of which we are not able to reach up to the

standard, they are:-

1) The main problem which I found was the training program

for the Advisors. The training is provided for 18 days in a

 row. As we are mainly concentrating on business people

who are normally very busy in their own job are not able to

attend these classes.

2) Apart from this the company also offers on-line training, but

the expense for on-line training is to be beard by the client.

It is also not possible for all to grasp all ideas from it.

3) The company is collecting a Demand Draft of Rs.1,000

which is an additional expense, competitors are collecting

lesser amount.

4) Our Sales Manager is not able to accompany us

because of his busy schedule.

5) We are able to attend only one or two appointments in a day

because the place is all together new to us.

These are some of the reason why we are not able to recruit

advisors, according to the pace in which the company want us to so. So,

if IRDA make some changes in the training program then it would be

better for the companies as well as those who are interested to be an

advisor, with out affecting his/her current job.

8.1 TRAINING

Kotak Life Insurance understands the importance of training in

this business environment. Company’s advisors go through both generic

and specific training programs that help them remain well-informed and

knowledgeable about company’s product in the market. There is a further

focus on soft skill as communicator, managing long term relationship and

selling skills as communication, managing long term relationships and

selling skills, which are very relevant in a service-driven industry like life

insurance.

State of the art infrastructure training facilities coupled with an

excellent faculty, guarantee an exceptional learning environment. For

advisors who might be occupied with their daily business / professional

routines, Kotak Life Insurance also offers convenient training options

such as online and self-learning are also provided by the organization.

A 18-day training schedule covers the mandatory IRDA

Training requirements and, Kotak Life Insurance product-training

module. Revision session ensure that the candidate thoroughly

understand the course contents and are well prepared for the licensing
examination. Theoretical training is interspersed with practical

appointment settings with potential customers, giving advisors a feel

how their business will work from the very first day. All through, the unit

manger and the management provide continuous support to the advisors

in achieving independence towards garnering business.

8.2 CAREER

At Kotak Life Insurance, career development is emphasized

upon from the very first day the advisor joins the system. Through

individual meetings with his\her manager, the advisor can discuss

various issues related to business development and career enhancement.

Expectations from the organization in terms of making a career in the

insurance are also discussed.

Being a Kotak Life Insurance advisor can be an enriching and

exciting career option. It’s an opportunity to associate with an industry

leader, be in touch with latest and finest insurance practices from around

the globe, and grow both personally and professionally.

Here are some of the benefits of being an Kotak Life Insurance

Advisor:

 Unlimited earning potential

 A clear Career path

 All round support through exclusive advertisement,

your own in-house consultant, and world-class training

 A Comprehensive benefit package.

Your career progression

 RECOMMENDATIONS

• As the people think that insurance is a tool to protect their family & a

tax saving device. They are aware of the fact & realizing its,

importance. The company should try to expand & build up its

infrastructure because there is a large potential for insurance in India.

• Since Kotak Life Insurance is leading with several companies’ policies

it should be easy for them to penetrate into the market and secure a

good position if they pay greater attention to the service part provided

to their customer and thereby forming a long and trusted relationship.

• As seen from the survey that at present 70% of the customer are

having insurance policy out of which 87.5% of the customer are

planning for new investments. So it can be a good potential for the

company and they should make an attempt to trap these customers.

• 43% of the customer is even ready to go for insurance if a service

provider away from their home is providing it. But intend they should

provide good products and Services. The company should try to

convince these customers and get them in its favor.

CONCLUSION

In the present situation insurance business is in the booming stage. So, it

can be considered as a career opportunity for those who are searching for

a job. This job is also very flexible because you are your own boss, there
will be no one to force you to work. A person who has good contact and

communication skill can exploit it and generate business out of that.

There is no upper limit of earning in this business, it depends on our

work. This business is mainly running on commission basis. To enter in to

this business there is no capital investment. Any one who has completed

his 12th can do this business.

 10.1 Customer Information Form

Name :

Father/Spouse Name :

Date of Birth :
Education Details :

Children :

Salary/Income Monthly :

Address (off) :

Address (Resi.) :

Residence is : Self Owned / Rented /

Parental / Co. Provided

Vehicle : Two-Wheeler / Four

Wheeler

Contact No./Mobile No. :

Nature of Business/Job :

Duration in the City :

10.2 Family Members Details : Occupation

1. Father

2. Mother

3. Wife

4. Brother

5. Sister
1. How much is the saving on Monthly Basis?

2. What do you want for your son\ daughter to be in future?

3. How much amount do you need at the time of the

retirement?

References

1. Name- Address – Contact No.

2. Name- Address – Contact No.

10.3 QUESTIONNAIRE

1. Name

2. Phone No.

3. Where do you invest your money? (Please tick the Option)

a. Savings A/C

b. Share market
 c. Real estate

d. Mutual Funds

e. Government bonds.

f. Insurance

g. Fixed Deposit

4. What are the reasons for investing in the given option

above?

5. What features do you look at while investing your

money?

6. According to you how is Insurance as a investment?

7. What type of service do you expect from your Life

Advisor?

8. Which one is better? Service by Advisor or by Broker, please

elaborate?

9. What type of advisory service you expect from a Life

Advisor?

10.According to you, is Customer Relationship important? If yes,

why?

11.What is the difference between a life advisor and a LIC

 Agent?

10.5 FEEDBACK OF PEOPLE TOWARDS KOTAK LIFE INSURANCE

DURING THE SURVEY

POSITIVE FEEDBACK

 Company which provides good returns on investment.

 No. 1 player in private sector so more reliable than any other

 private player.

 Wide network and constant growing portrays stability.

 Fast and good service to customers.

 Innovative products.

 Offers flexibility in products.

 Was the first to enter insurance business among the private

players?

 More reliable because of its promoter KOTAK GROUP.

 Good support provided to life advisors.

 Good recognition given to business partners.

NEGATIVE FEEDBACK

 Not a government organization.

 No special schemes for women.

 Risky to invest money in private entity.

 KOTAK LIFE INSURANCE is newly established, LIC is 75 years Old.

 Few products as compared to LIC.

 BIBLIOGRAPHY

PRIMARY SOURCE OF INFORMATION

 Personal interaction with concerned {Advisors, brokers,

sales dept, marketers customers)

 Unstructured interaction with the unit managers

 Observation in the market.

REFERENCE BOOKS

 Marketing Management - Philip Kotler

 Marketing Management - Rajan Saxena

 Reference books & Journals of Kotak Life Insurance and

LIC

WEBSITES

 www.mykotaklife.com

 www.google.com

 www.managementparadise.com