Jitendra Report

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Rajasthan Technical University, Kota

A

Project Study Report

On

Training Undertaken at

Kotak Life Insurance

TitledThe study of Portfolio of Kotak Life Insurance

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: -JITENDRA KUMARMBA Part III

Submitted To:-Miss. Bhawana MaheshwariAsst. Prof.

2008-2010

LUCKY INSTITUTE OF PROFESSIONAL STUDIES, JODHPUR

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Rajasthan Technical University, Kota

A

Project Study Report

On

Training Undertaken at

Kotak Life Insurance

TitledThe study of Portfolio of Kotak Life Insurance

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: -JITENDRA KUMARMBA Part III

Submitted To:-Miss. Bhawana MaheshwariAsst. Prof.

2008-2010


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PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated

debate for some years. The policy makers where in the catch 22 situation wherein for one

they wanted competition, development and growth of this insurance sector which is

extremely essential for channeling the investments in to the infrastructure sector. At the

other end the policy makers had the fears that the insurance premium, which are

substantial, would seep out of the country; and wanted to have a cautious approach of

opening for foreign participation in the sector.

As one of the rare occurrences the entire debate was put on the back burner and the IRDA

saw the day of the light thanks to the maturing polity emerging consensus among factions

of different political parties. Though some changes and some restrictive clauses as regards

to the foreign participation were included the IRDA has opened the doors for the private

entry into insurance.

Whether the insurer is old or new, private or public, expanding the market will presentmultitude of challenges and opportunities. But the key issues, possible trends, opportunities

and challenges that insurance sector will have still remains under the realms of the

possibilities and speculation. What is the likely impact of opening up Indias insurance

sector?

The large scale of operations, public sector bureaucracies and cumbersome procedures

hampers nationalized insurers. Therefore, potential private entrants expect to score in the

areas of customer service, speed and flexibility. They point out that their entry will mean

better products and choice for the consumer. The critics counter that the benefit will be slim,

because new players will concentrate on affluent, urban customers as foreign banks did

until recently. This seems to be a logical strategy. Start-up costs-such as those of setting up

a conventional distribution network-are large and high-end niches offer better returns.

However, the middle-market segment too has great potential. Since insurance is a volumes

game. Therefore, private insurers would be best served by a middle-market approach,

targeting customer segments that are currently untapped

Acknowledgement

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I express my sincere thanks to my project guide, Mr. KAPIL LAKHARA, Sales Manager, in

Kotak Life Insurance, for guiding me right forms the inception till the successful completion

of the project. I sincerely acknowledge him/her/them for extending their valuable guidance,

support for literature, critical reviews of project and the report and above all the moral

support he/she/they had provided to me with all stages of this project.

I would also like to thank the supporting staff of Management Department of Lucky Institute,

for their help and cooperation throughout our project.

(Signature of Student)

Mr. Jitendra Kumar

EXECUTIVE SUMMARY

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I am JITENDRA KUMAR, a student of Lucky Institute of Professional Studies,

Jodhpur. I was given the opportunity to pursue my internship in KOTAK LIFE INSURACE

for a period of 40 days. My project is titled THE STUDY OF PORTFOLIO OF KOTAK

LIFE INSURANCE.

The basic project objectives are as follows:

To study consumer investment behavior

To study brand awareness of Kotak

Comparison of ULIPs.

To discuss various new avenues in insurance and find the Market potential of ULIP.

Identify various group security of portfolio.

The also main object of this project is collection of fund from where and this fund

invests in which various fund.

For the achieve this object I have done a study. In this study I conduct a survey and take

100 sample sizes. In this survey I take Thirteen (13) major factors related to existing

portfolio of Kotak Life Insurance and among these factor the Five (5) most important

factors is Return on Investment, Financial Health (Company), Comparison with Financial

Products, Tax Saving, and Policy Features.

From the help of this survey I find out the consumer behavior on the bases of StandardDeviation and Variance of these factors. And with the help of this survey I find out the

consumer want high Return on the lower Risk.

In this report I build manly three type of Portfolio on the base of consumer demand

is: - Aggressive / Risky Fund

Balance / Low Risky Fund

Conservative / Non-risky Fund

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The Aggressive funds prefer a higher risk taker person with the high return. The Balance

funds prefer an average risk taker person. The Conservative funds prefer a low risk taker

person.

The following vital conclusions were derived:

Trust needs to be developed among the customers both as far as the ULIP as a product

is concerned.

Some respondents despite of knowing about ULIP were hesitant to talk on it because

they were not too confident about their knowledge.

That people know that insurance is a tax saving tool.

People prefer to do saving rather than doing investment because high return carry high

risk. So, fixed deposit scheme & government securities is favored by maximum number

of people

Returns on Investment & Financial Health of the company are the 2 most important

factors while buying an INSURANCE PLAN.

Important Recommendations that were suggested are:

The Kotak Life Insurance builds Portfolio on the basis of different age group people.

The proper fundamental and technical analysis of privet securities then it include in the

portfolio for maximum return earn on minimum risk.

Building trust by providing the customers with adequate knowledge about the company

and then the product.

Enhancing the level of awareness in terms of the company, their Partners and then the

product and special emphasis among the female chunk of the population.

Adequate advertisement via appropriate media should be done by the various

companies as is done in the case of mutual Funds.

Regular survey of this kind can help the company to know the response of the people

towards policies.

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Se. no Particulars Page No.

1.

2.

3.

4.

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6.

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8.

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10.

Introduction Of The Industry

1.1 Life Insurance.

1.2 History of Insurance Co. in India

Introduction Of The Organization

Research Methodology

3.1 Title of the Study

3.2 Duration of the Project.

3.3 Objective Of The Project.

3.4 Type of Research.

3.5 Sampling Plan.

3.5.1 Sampling Technique.

3.5.2 Sampling Units.

3.5.3 Sample Size

3.5.4 Fieldwork Plan

3.6 Scope Of Study

3.7 Limitations of Study.

Facts & Findings

Analysis & Interpretation

SWOT Analysis

Conclusions

Recommendations & Suggestion

Appendix

Bibliography

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INTRODUCTION OF THE INDUSTRY

1.1 LIFE INSURANCE:-

In the last several decades, the life insurance industry has developed a number of

products that combine the protection of life insurance death benefits, with a significant cash

value element. Policies such as universal life, variable life, and universal-variable life allow

an individual to purchase a single financial instrument providing for both life insurance

and long-term accumulation goals. Such policies may serve as a form of forced

investment" for those who find it difficult to put funds aside on a regular basis, but-who-

routinely-pay-their-bills.

Additionally, life insurance company annuities, with either a fixed or variable return, tax-deferred method of accumulating additional-retirement-funds.

Uses: Life insurance products are commonly used for long-term

accumulation goals. Available cash values may also serve as an

"emergency reserve," if needed, or a source of loans, since life policies

frequently include features permitting borrowing against these cash

values.

Risks: Fixed contracts rely on the financial strength of the issuing life

insurance company. Inflation may negatively impact a fixed return

contract. Variable contracts share the risks of the underlying

investments. Loans and withdrawals must be carefully structured to

avoid negative income tax results.

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1.2 History of Insurance Companies in India:-

Insurance has been known to exist in some form or other since 3000 b.c. Babylonian

traders would agree to pay additional sums to lenders, as the price for writing off loans, in

case of shipment being stolen.

The Greeks had started benevolent societies in the late seven centuries AD, to take care of

the funeral and families of members who died. The friendly societies of England were

similarly constituted. The great fire of London in 1666, in which more than 13000 houses

were lost, gave a boost to insurance and the first fire insurance company, called the fire

office, was started in 1680.

In India, Insurance is a national matter, in which life and general insurance is yet a booming

sector with huge possibilities for different global companies, as life insurance premiums

account to 2.5% and general insurance premiums account to 0.65% of India's GDP. The

Indian Insurance sector has gone through several phases and changes, especially after

1999, when the Govt. of India opened up the insurance sector for private companies to

solicit insurance, allowing FDI up to 26%. Since then, the Insurance sector in India is

considered as a flourishing market amongst global insurance companies. However, the

largest life insurance company in India is still owned by the government.

The history of Insurance in India dates back to 1818, when Oriental Life Insurance

Company was established by Europeans in Kolkata to cater to their requirements.

Nevertheless, there was discrimination among the life of foreigners and Indians, as higher

premiums were charged from the latter. In 1870, Indians took a sigh of relief when Bombay

Mutual Life Assurance Society, the first Indian insurance company covered Indian lives at

normal rates. Onset of the 20th century brought a drastic change in the Insurance sector.

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In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act, and the

Provident Fund Act - to regulate the insurance business. National Insurance Company Ltd,

founded in 1906, is the oldest existing insurance company in India. Earlier, the Insurance

sector had only two state insurers - Life Insurers i.e. Life Insurance Corporation of India

(LIC), and General Insurers i.e. General Insurance Corporation of India (GIC). In December

2000, these subsidiaries were de-linked from parent company and were declared

independent insurance companies: Oriental Insurance Company Limited, New India

Assurance Company Limited, National Insurance Company Limited and United India

Insurance Company Limited.

1.2.1 The evolution of Insurance in India can be summarized as:-

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Yare Changes

1818Oriental Insurance Company. The first Insurance Company in India.

1870Bombay Mutual Life Assurance Company. First Indian Insurance

Company.

1912The Indian Life Assurance Company enacted the first law to regulate the

life insurance business in India.

1926The Indian Assurance Company act enacted to enable the government to

collect statistical information about the insurance.

1938The earlier legislation consolidated and amended the life insurance act

with the objective of protecting the interest of insurance in the public.

1956 245 Indian and foreign players and prudent societies are taken once by

Central govt. and nationalized.


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1.3 The Insurance Regulatory And Development Authority

(IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in April

2000 has fastidiously stuck to its schedule of framing regulations and registering the private

sector insurance companies. The other decisions taken simultaneously to provide the

supporting systems to the insurance sector and in particular the life insurance companies

were the launch of the IRDAs online service for issue and renewal of licenses to agents.

The Insurance Act, 1938 had provided for setting up of the controller of Insurance to act as

a strong and powerful supervisory and regulatory authority for insurance. Post

nationalization, the role of Controller of Insurance diminished considerably in significance

since the Government owned the insurance companies.

But the scenario changed with the private and foreign companies foraying in to the

insurance sector. This necessitated the need for a strong, independent and autonomous

Insurance Regulatory Authority was felt. As the enacting of legislation would have taken

time, the then Government constituted through a Government resolution an Interim

Insurance Regulatory Authority pending the enactment of a comprehensive legislation.

The approval of institutions for imparting training to agents has also ensured that the

insurance companies would have a trained workforce of insurance agents in place to sell

their products, which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a framework of

globally compatible regulations. In the private sector 12 life insurance and 6 general

insurance companies have been registered.

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Since 1956, with the nationalization of insurance industry, the state-run Life Insurance

Corporation of India (LIC) has held the monopoly in that country's life insurance sector.

General Insurance Corporation of India (GIC), with its four subsidiaries, was its counterpart

in the casualty sector. Over time, taking advantage of its monopoly and virtual prerogative

in establishing premiums, LIC has evolved into a monolith. With around 600,000 agents in

every nook and corner of the vast country, it has created an enviable brand name,

particularly among the rural population of the country. It has around $40 billion as its life

fund and is a strong player in the financial sector. However, on the qualitative side, it has

very little to take pride in. And there lies the potential for foreign players to challenge this

behemoth.

A new definition of "Indian Insurance Company" has been inserted. "Indian insurance

company" means any insurer being a company:-

(a) Which is formed and registered under the Companies Act, 1956?

(b) In which the aggregate holdings of equity shares by a foreign company, either by

itself or through its subsidiary companies or its nominees, do not exceed twenty-six percent,

paid up capital in such Indian insurance company.

(c) Whose sole purpose is to carry on life insurance business, general insurance

business or re-insurance business?

2.9.1 Political Scenario:-

The eagerly awaited Insurance Regulatory and Development Authority (IRDA) Bill to open

the insurance sector in India to private and foreign players, was passed by the LokSabha

on December 2, 1999 and by the Rajya Sabha on December 7, 1999. The Bill seeks to

grant statutory status to the interim Insurance Regulatory Authority and amend the 1938

Insurance Act, the 1956

Life Insurance Corporation Act and the 1972 General Insurance Business (Nationalization)

Act to end the public sector monopoly. The IRDA Bill incorporates the recommendations

made by the parliamentary Standing Committee on Finance.

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INTRODUCTION OF THE ORGANIZATION

2.1 HISTORY:-

Kotak Mahindra one of India's leading financial institutions was born in 1985 as

Kotak Capital Management Finance Limited. This company was promoted by Mr. Uday

Kotak, Mr. Sidney A. A. Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra and

Mr. Anand Mahindra took a stake in 1986, and that's when the company changed its name

to Kotak Mahindra Finance Limited.

It's been a steady and confident journey to growth and success:-

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1990 The Kotak Mahindra Group started The Auto Finance Business into a separate

company Kotak Mahindra Prime Limited. Kotak Mahindra Prime Limited

(KMPL) is a subsidiary of Kotak Mahindra Bank Limited. KMPL is Indias one of

the largest nation wide dedicated car finance company.

1996 Kotak Mahindra Prime Limited (KMPL) was incorporated on February 28, 1996.

It was formed as a Joint Venture with Kotak Mahindra Bank Limited holding 60%

and the balance being held by Ford Credit International Inc., U.S.A

1998 Enters the Mutual Fund market with the launch of Kotak Mahindra Asset

Management Company -

Kotak Mahindra Asset Management Company Limited, a wholly owned

subsidiary of KMBL. KMAMC started operations in December 1998 and has over

10 lac investors in various schemes.

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2000 Kotak Mahindra ties up with Old Mutual plc (South Africa). 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 Launches Insurance Services-

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak

Mahindra Bank Ltd. and Old Mutual plc.

Kotak Mahindra Old Mutual Life Insurance is a 74:26 joint venture between Kotak

Mahindra Bank Ltd. and Old Mutual plc.

Old Mutual, a company with 160 years experience in life insurance, is an

international financial services group listed on the London Stock Exchange and

included in the FTSE 100 list of companies.

2003 In February 2003, Kotak Mahindra Finance Ltd. converts to a commercial bank

the first Indian company to do so Kotak Mahindra Bank. It is the first company

in India to convert to a bank.

2004 In 2004 Launches India Growth Fund, a private Equity fund. Kotak Private Equity

Group (KPEG) is a specialist Private Equity arm of Kotak Mahindra Bank.

2005 Kotak Realty Fund, Established in May 2005, is one of Indias first private equity

funds with a focus on real estate and real estate intensive business.

2008 Tell 2008-09, the total Asset under Management of Kotak Group is Rs 37,185

crores approximately. And Net worth of over Rs 6,485 crore. Over the 56 Lakh

customer account in

2.2 Kotak Life Insurance

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Kotak Life Insurance is an Authorize company in Insurance Regulatory & Development

Authority (IRDA). It is a ties up company between Kotak Mahindra Bank Ltd. with Old

Mutual plc. in the ration is 74:26.

2.2.1 Features of Kotak Life Insurance:-

It is 1st and only NBFC (Non Banking Financial Company) to get converted into

bank in March 2003,

It is 3rd biggest bank in Pvt. Sector

Global Indian financial services brand

Most preferred employer in financial services

Highly trusted financial services company

Value creation for all stakeholders*

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2.3 Reason of Kotak Life Insurance Choose

There are many reasons why people should choose Kotak Life Insurance Company Ltd. as

their partner in meeting their insurance need:

a) Innovative products to meet customers needs.

b) Efficient customer service team.

c) Good financial track record of both parents Kotak Group & Old Mutual Plc.d) Certified Financial Consultants to advice prospective customers.

e) Professional approach in managing customers investments.

f) Receive high Rate of Return on Investment compare to other.

g) Income Tax benefits for their insurance products.

2.4 Old Mutual

Old Mutual is a tie up company with Kotak Bank Ltd. It is a 161 Years experience

company. It is working in South Africa, UK & US. It is a Life Insurance company.

2.4.1 Features of Old Mutual:-

It is 161 years of Experience Company. Funds under management over $400 Billion

Significant presence in South Africa, UK and US

A Fortune Global 500 company, Ranked -173

12th largest insurance company in the world

2.5 Vision, Mission & Values

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Vision:-

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

customers, employees and stakeholders. We aim at improving the long term value in our

relationship by continuous innovation and improvements. We do this by our three-prong

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

Increase Customer Value:

Kotak Life Insurance has gone to the heart of its customer's requirements and developed

products which are unique and serve the customer needs perfectly. We built a relationshipof mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance the

customer always comes first.

Cohesive Work Environment: -

We form long-term partnership with our employees by offering them an invigorating work

experience. We not only demand loyalty, sincerity and values but also give it back in equalmeasures. Kotak Life Insurance will like to offer its employees space to grow, innovate and

build a long-term career.

Work with Honor: -

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

duty and commitment. Our employees strive to build the long-term value for all those come

in contact with Kotak Life Insurance. Our consumers, distributors, employees, shareholders

and the nation have our commitment that we will uphold the values of trust, integrity and a

Sense of Honor in every thought, act and deed in order to positively contribute to

individual, society and nation growth.

Mission

At Kotak Life Insurance, we 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.

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2.7 STRUCTURE OF KOTAK LIFE INSURANCE

Its hierarchy in Kotak Life Insurance is like this:-

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2.8 ORGANIZATION CHART:-

2.9 The list of foreign players entering the Indian Life Insurance sector

and their Indian partners:

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Indian Partner

Foreign Insurer

Aditya Birla Group Sun Life, Canada

Kotak Mahindra Finance Old Mutual, South Africa

HDFC Standard Life, UK

Reliance No Foreign Alliance

ICICI Prudential, UK

Max India New York Life, USA

Tata Group AIG, USAVysya Bank ING Insurance, Netherland

Hero Group Zurich, Switzerland

Cholamandalam Group Undecided

Hindustan-Times Undecided

Dabur CGNU Life, UK

Bajaj Auto Allianz

Undecided Metlife, USASanmar Group AMP, Australia

SBI Cardiff, France

Corporation Bank Undisclosed

Undisclosed Aegon, Netherlands

Undisclosed Cigna, USA

Undisclosed Nationwide, USA

Undisclosed GE Capital Services

International, USA

2.10 ULIP?

ULIP is a Unit Link Insurance Plan. In this plan we invest the money in own choose Portfolio

whether in Govt. or Privet funds.

A policy, which provides for life insurance where the policy value at any time varies

according to the value of the underlying assets at the time. ULIP is life insurance solution

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that provides for the benefits of protection and flexibility in investment. The investment is

denoted as units and is represented by the value that it has attained called as Net Asset

Value (NAV).A unit-linked insurance plan provides both insurance and investment benefit.

Advantages of unit-linked policies:-

A combination of protection and tax advantage, unit-linked policies dominate a huge

chunk of the portfolio of the private insurers. The annual premium contributes over 70%

to the premium income.

In the event of death during the life of the policy, the sum assured or value of the

policy fund whichever is higher is paid to the nominees.

There is a lot of flexibility in these plans with falling interest rates. So an investor

can adjust his risk profile according to his choice. The risk element is transferred to the

investor and the insurance company enjoys the capital and solvency.

The client is aware of the "no guarantee" era and he plans his investment

judiciously.

The client enjoys transparency, by way of returns on the equity markets

simultaneously enjoying the benefits of life cover.

It's tax-free, unlike a mutual fund or any other investment, where the gains are

taxed.

The client also has an option of restructuring his investment pattern which is a value

addition to the original policy (i.e. top-ups)

Contrary to the traditional policies, the unit linked policies are more transparent,

flexible and easy to understand. The customer has open options for investment and he

is consciously aware of the ratio of his premium towards investment and life cover.

RESEARCH METHODOLOGY

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Research Methodology refers to search of knowledge .one can also define research

methodology as a scientific and systematic search for required information on a specific

topic.

The word research methodology comes from the word advance learner s dictionary

meaning of research as a careful investigation or inquiry especially through research for

new facts in my branch of knowledge for example some author have define research

methodology as systematized effort to gain new knowledge.

3.1 Title of the Study:-

(A STUDY OF PORTFOLIO OF KOTAK LIFE INSURANCE)

3.2 DURATION OF THE PROJECT:-The duration of the project is 18th May to 26th June 2009. Which is of 40 days training

project report.

3.3 OBJECTIVE OF THE PROJECT:-

The project, as mentioned in the synopsis, is on Portfolio of Insurance Company Funds. For

a multinational company like Kotak Life Insurance Co. Ltd., it is important to know the

awareness/ what people think about Investment of Insurance Company in ULIP &

Traditional Funds?

Hence the objective of this report is

1. To know the awareness of people considering Insurance as an Investment Tool.

2. To know the awareness of people about what is UILP plan & Traditional plan.

3. To observe the general trend which the people want to follow while investing their money

in private sector rather than Government Sector.

4. To study the trend of people shifting from low return & low risk Investment to high return

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& high risk Investment.

5. To give suggestion how to improve the awareness of people.

6. Helping management for getting information and ideas from the report regarding

awareness of the people and to do so.

7. To understand about what is Unit Link Insurance Plan and what is Traditional Plan.

8. The also main object of this project is collection of fund from where and this fund invests

in which various fund.

3.4 TYPE OF RESEARCH

There are three types of research such as follow:-

For exploratory research study. For descriptive and diagnostic research study.

For hypothesis testing research studies.

Then here I have selected exploratory research type.

3.4.1 Research Design:-

Definition: A research design is an arrangement of conditions for collection and analysis

of data in a manner that aims to combine the relevancy of the research with economy in

procedure.

Different Research design:

For exploratory research study.

For descriptive and diagnostic research study.

For hypothesis testing research studies.

For pursuing this particular project exploratory study is the best suited keeping in view its

objective. Thus exploratory research Design has been briefly explained below:

Exploratory research design: Thisdesign is also known as formulative research design.

The main purpose of such studies is that of formulating a problem for more precise

investigation or of developing the working hypothesis from the operational point of view.The major emphasis in such studies is on the discovery of view idea and insight.

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Research design for exploratory study of Portfolio of Kotak Life Insurance:-

Exploratory research study as already mentioned is also termed as formulative research

studies. The main purpose of this study is formulating problem in the area of arrange the

portfolio and to attempt discovery of idea & insight to provide a platform & facilities solving

of the problem. Clinically working on the ideas & insight so provided should lead to results

which will serve as a solution to problem so identified from this project.

This research has been broadly classified into two phase:

To know and understand the existing of the Portfolio of Kotak Life Insurance Co.

To have insight & then suggest measure for optimization.

The first phase is purely of exploratory nature. This phase also includes survey of literature,

gather data and explore the techniques followed in the existing system. This phase also

includes understanding, analyzing & co-relating of data of formulate and precise research

problem/intensifying the specific area for further research.

After collecting data from few sessions of experience survey we are now in a position to

move to the next phase with insight to the problem.

In phase-II of the research we try to co-rater data. This can be done by comparing data

from different sources, finding the interdependence of different data finding out degree of

co-relation among data sets so on and so forth. Some variables affecting the analysis will

be neglecting with the view to simplify the task. Co-relating the data & formulating the

problem associated with the area of study (here Portfolio of Kotak plan) sill initiate the

process of finding & suggestion solution. These solutions and ideas will serve as a platform

for precise and elaborate investigation ultimately developing a working i.e., technically and

financially and feasible solution for the organization.

3.4.2 Data Collection Sources:-

There are two types of data primary & secondary. The primary sources are those which are

collected afresh and for the first time, and thus happen to be original in character. The

secondary sources, on the other hand, are those which have been collected by someone

else and which have already been passed through the statistical process.

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The source of data collection used in this project is primary data collection source. There

are several methods of collecting primary data. The data are collected through

Questionnaires & some Interview was made through personal visit & through telephonic

interview

3.4.3 Data Collection Methods:-

The data collection methods which are used for this project are explained below:-

1) Collection of data through questionnaire:

This method of data collection is quite popular, particularly in case of big enquiries. In this

method a questionnaire is filled by the concerned person himself. A questionnaire consist of

a number of questions printed or typed in a defined order on a form or set of forms.

In the project the main source of collecting data was through questionnaire. For this

purpose questionnaire was designed and filled by individuals.

2)Interview:

The interview method of collecting data involves presentation of oral-verbal stimuli and

reply in terms of oral-verbal response. There are two methods of interview-personal

interview and telephonic interview.

Interview with the help of questionnaire was carried on with individuals. Few telephonic

interviews were also performed in which the response was average due to time constraints.

3.4.4 Data Collection Instruments:-

The work of data collection is done by preparing a questionnaire. A questionnaire was

designed in consideration that the people filling up the questionnaire should not be

uncomfortable with the question.

After through study & pilot study of the questionnaire, I have prepared a questionnaire

keeping in mind the requisites of a good questionnaire.

So, the characteristics of my questionnaire are:

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Questionnaire is short & simple.

Questionnaire is dichotomous & full of multiple choices.

Technical terms & vague expression have been avoided to the extent possible.

Physical appearance of the questionnaire is attractive looking.

3.5 SAMPLING PLAN

In order to know the information from a mass it is not possible to contact individually and

collect information. This is due to following reason:

Time required is enormous

Expensive

Possible to analyze with a sampling plan

A sampling plan is adopted under which numbers of samples are decided along with the

area from which samples are to be chosen. These samples will represent the complete lotfrom where the samples are chosen.

Under this project a random sampling plan is found suitable for analyzing the Kotak Plan.

The sampling procedure contains different steps:-

Define the target population

Identify the sampling frame

Select a sampling procedure

Determine the sample size

Select the sample elements

Collect the data from the designated elements.

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3.5.1 Sampling Techinque

Initially, a rough draft was prepared keeping in mind the objective of the research. The final

Questionnaire was arrived only after certain important changes were done.

3.5.2 Sampling Units

The respondents who were asked to fill out questionnaires are the sampling units. These

comprise from the natural market.

3.5.3 Sample Size

100 persons were contacted on random basis. These persons represent various classes in

the society as below:-

Student.

Service.

Business.

Data in form of Questionnaires were collected from these representative samples to get an

analysis of general trend in investment.

3.5.4 Fieldwork Plan

It is essential to have field work plan before actually processing with the project. The field

work plan would be useful to chalk out the schedule of the project and help us as to

fragment the project into simple tasks.

The field work for the project was planned as below:

1. Data collection through

Questionnaire

Interviews:

Personal Interview

Telephone Interview

2. Analysis of Data

3. Interpretations

4. Conclusion & Recommendatio

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ANALYSIS OF QUESTIONNAIRE No. 1

On the basis of the datas obtained, statistical methods were employed to determine themost important factors of the 13 factors related to existing portfolio of Kotak Life Insurance.This 13 factors are most important from a investment point of view before going for a ULIP

and prefer different portfolios.

Factors

Respondent No. 1 2 3 4 5 6 7 8 9 10 11 12 13

1 4 3 5 3 5 3 3 3 4 2 4 3 5

2 5 4 3 3 2 1 3 5 5 5 3 4 5

3 5 4 5 4 4 3 4 5 4 4 4 5 4

4 5 4 1 5 5 5 3 4 5 5 4 3 4

5 5 5 5 3 5 3 4 4 3 4 3 1 5

6 5 4 2 3 5 1 4 5 5 5 4 4 5

7 4 5 4 5 5 1 3 4 2 1 1 4 4

8 1 5 3 2 5 4 3 5 2 4 3 5 4

9 5 5 2 2 5 5 5 5 4 5 1 2 4

10 4 5 4 5 5 1 3 4 3 1 1 2 4

11 5 5 5 4 2 1 5 5 5 5 1 5 5

12 5 5 5 5 1 1 5 5 5 5 5 5 5

13 5 5 5 5 1 1 5 5 5 5 1 5 5

14 4 2 1 2 3 1 1 2 1 4 3 5 2

15 5 4 2 3 5 1 4 5 5 5 4 4 5

16 5 4 3 3 5 3 3 3 3 5 4 3 4

17 5 3 1 2 5 1 3 5 5 5 3 3 518 5 5 3 5 5 2 3 5 3 2 3 3 4

19 5 4 4 5 5 3 4 5 5 4 5 4 5

20 5 4 4 5 5 2 4 4 5 5 5 4 4

21 5 4 3 3 5 2 4 4 3 4 3 4 3

22 5 4 4 5 5 2 4 5 5 5 4 5 4

23 5 4 4 5 5 2 4 5 5 5 4 5 4

24 5 4 4 5 5 2 5 5 5 4 5 4 4

25 5 2 2 5 5 1 5 5 5 5 2 2 5

26 5 5 5 5 5 2 5 5 3 3 2 3 5

27 5 5 1 5 5 1 5 5 1 5 1 3 5

28 5 1 3 5 3 1 3 5 5 5 3 3 5

29 5 4 4 4 3 5 3 5 5 4 4 4 4

30 5 4 3 4 2 4 4 5 4 1 3 4 4

31 3 4 4 5 5 3 3 4 3 4 3 4 3

32 5 4 5 4 5 3 4 4 5 4 3 4 4

33 5 4 1 3 4 2 4 5 4 5 2 5 3

34 3 4 4 3 4 3 4 3 3 4 3 3 3

35 5 5 4 4 5 4 5 5 4 5 5 4 4

36 5 4 4 5 5 3 4 5 5 4 5 4 5

37 5 4 1 5 5 5 5 5 5 5 1 1 5

38 5 4 1 5 5 5 5 5 4 3 1 1 4

39 4 4 5 4 5 3 2 4 4 2 1 4 4

40 5 5 5 5 4 3 3 5 4 3 3 4 4

41 4 3 3 5 5 1 4 5 4 5 3 5 3

42 5 3 3 5 5 2 4 3 4 5 5 4 5

31


32/68

43 5 5 1 5 5 1 5 5 5 3 3 5 5

44 5 4 2 3 5 1 4 5 5 4 4 3 4

45 5 4 1 3 5 1 4 5 5 4 4 3 4

46 4 4 3 3 4 1 4 3 4 3 1 4 4

47 4 4 2 3 3 1 4 4 3 2 3 3 5

48 5 5 3 4 5 1 5 5 4 4 4 4 4

49 5 5 1 3 4 1 5 5 3 5 5 3 4

50 5 4 4 5 5 2 5 5 4 5 5 2 5

51 5 4 3 4 4 3 4 5 3 3 3 5 5

52 5 4 2 3 4 1 5 5 4 4 3 3 5

53 5 1 4 2 3 2 3 5 4 3 2 4 5

54 5 4 1 3 4 1 3 4 4 5 1 5 5

55 5 5 5 4 5 3 5 4 4 5 4 3 3

56 5 4 3 4 5 2 5 5 2 4 2 4 4

57 5 4 3 4 5 3 5 5 3 5 3 2 5

58 5 4 3 4 5 1 4 3 4 5 2 3 559 4 4 3 3 5 3 4 4 3 4 1 4 4

60 5 5 3 4 5 2 4 4 5 3 2 4 5

61 4 3 2 2 4 2 4 5 3 3 3 4 5

62 5 5 2 3 3 2 5 5 4 4 5 4 5

63 5 4 4 4 4 2 4 5 3 2 4 4 5

64 5 4 1 3 4 2 3 5 4 4 2 4 4

65 5 4 3 4 5 1 2 5 4 3 3 5 4

66 5 4 4 4 4 1 4 5 5 5 4 3 4

67 5 4 5 3 5 2 5 5 5 2 4 3 5

68 5 4 2 4 4 2 4 5 4 2 3 4 5

69 5 5 4 5 5 5 5 5 3 5 3 2 5

70 5 5 3 3 3 2 3 5 4 3 4 4 5

71 5 5 4 3 4 3 4 5 3 4 2 4 5

72 5 5 3 4 5 1 2 4 5 5 5 3 5

73 4 4 2 3 3 1 2 4 4 2 1 5 5

74 4 5 4 5 5 3 5 3 4 5 1 2 5

75 5 4 5 4 5 4 5 5 4 4 2 3 3

76 4 5 2 3 4 2 4 4 4 3 2 4 4

77 5 4 4 4 4 1 4 3 4 4 3 4 3

78 4 4 2 2 3 1 4 5 4 2 1 3 4

79 5 5 3 4 5 2 5 4 4 4 4 5 5

80 5 4 3 3 4 1 3 5 4 3 3 4 5

81 5 4 3 4 4 3 4 5 4 4 3 4 5

82 5 4 1 3 3 2 3 5 5 5 2 3 4

83 5 4 4 3 4 2 4 5 5 5 4 4 3

84 4 4 3 2 3 1 2 3 4 4 1 4 4

85 5 4 3 4 5 1 4 5 3 3 2 4 4

86 5 5 3 3 4 3 5 4 4 4 3 4 4

87 5 3 2 3 3 2 3 5 5 3 3 4 4

88 5 4 3 2 3 3 3 5 4 4 4 3 4

89 5 5 4 5 5 1 4 5 3 5 5 3 490 4 4 3 2 3 2 2 5 3 2 1 2 5

91 5 4 3 3 2 1 2 5 3 4 2 5 4

92 5 4 3 4 5 1 5 4 4 4 2 4 5

93 5 5 2 3 5 3 5 5 4 5 3 4 4

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94 5 3 4 2 4 2 5 3 4 3 3 2 3

95 4 5 5 4 5 4 4 5 5 4 4 3 5

96 5 5 4 3 4 3 3 3 4 3 3 2 4

97 4 4 3 4 4 2 4 4 4 4 1 5 4

98 5 4 2 3 3 2 4 4 3 2 3 3 4

99 5 4 2 4 4 1 3 3 5 1 1 4 5

100 5 5 2 4 5 1 4 5 4 4 2 4 5

SUM 474 415 308 372 425 212 389 451 397 384 291 363 434

AVERAGE 4.74 4.15 3.08 3.724.25

2.12

3.89

4.51 3.97 3.84 2.91 3.63 4.34

MEDIAN 5 4 3 3 5 2 4 5 4 4 3 4 4

MODE 5 4 3 3 5 1 4 5 4 5 3 4 5

S. D.0.596623

50.79

61.22

80.98

60.99

1.16

0.94

0.75

0.915

1.143

1.272

0.991 0.699

VARIANCE0.355959

60.63

41.50

90.97

10.98

1.34

0.89

0.56

0.837

1.307

1.618

0.983 0.489

On the basis of survey done, the following results were obtained:

The 5 most important factors while buying an insurance plan especially ULIPs are asfollows:

Sr.

No.FACTOR

AVER-

AGE

MEDI-

ANMODE S.D. VARIANCE

1Return On Investment 4.74 5 5 0.59662 0.3559596

2Financial Health

(Company) 4.51 5 5 0.74529 0.55545

3Comparison with

Financial Products 4.34 4 5 0.69949 0.48929

4Tax Saving 4.25 5 5 0.98857 0.97727

5Policy Features 4.15 4 4 0.79614 0.63384

3.5.5 Assumptions

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During the entire project some assumptions are being made to simplify the task by reducing

the variable factors as for as practicable.

Some of the assumptions are as follows:

The information gathered through the survey is authentic.

The sample size taken for the research work is small which may not represent the

actual population.

The effect of any media has not taken place on the persons opinion till the analysis

and the computation of the report.

3.6 SCOPE OF STUDY

A big boom has been witnessed in Insurance Industry in recent times. A large number of

new players have entered the market and are vying to gain market share in this rapidly

improving market. The study deals with Kotak Life Insurance in focus and the various

segments that it caters to. The study then goes on to evaluate and analyze the findings so

as to present a clear picture of trends in the Insurance sector.

3.7 LIMITATIONS OF THE STUDY:-

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The project under its purview the study of Portfolio of Kotak Life Insurance. For the purpose

all the Basic Kotak Plan are studies individually to have an understanding of their trend and

all the parameters of the investment like Return, Safety, Liquidity, Risk Cover, Tax Benefit

and Social Status.

After having an insight of all the Basic Kotak plan it is compared with Insurance. After that

the research work is done on Kotak plans and funds. For this purpose both Graphical &

Quantitative Analysis is carried out. After correlating & analyzing the various Graphical &

Quantitative Analysis and figuring out the scope for future optimization and the area of

concern associated with these attempt will be made to provide with suggestion &

recommendation.

Even after giving all our effort there were some limitations which could not be avoided.

1. Due to lack of data & insufficient knowledge of few analyses could not be carried out.

2. Time was also a constraint.

3. Sometime people did not give the correct & sufficient information regarding their

Investment.

4. Printed questionnaire often created panic in the mind of the individuals and at times they

were reluctant in answering.

CHAPTER-4:

FACTS & FINDINGS

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4.1 FINDINDSWe were interested to know how the portfolio constructs with the help of various

securities for the UNIT LINKED POLICY The following graph represents the answers to

this question of our.

4.1.1 DIFFERENT TYPE OF FUND/PORTFOLIO:-

There are basically three type of portfolio given and these portfolio divided into different

type of funds:-

Kotak Aggressive Growth Fund.

Kotak Dynamic Growth Fund.

Kotak Dynamic Floor Fund.

Kotak Guaranteed Growth Fund.

Kotak Dynamic Bond Fund.

Kotak Guaranteed Bond Fund.

AGGRESSIVE / RISKY FUND: - In this fund portfolio, the high proportion invest in privet

security and very low proportion invest in Govt. security and some time 100% invest in

privet security. Like proportion of Privet and Govt. security is 100:0, 90:10 and 80:20.

36

AGGRESSIVE / RISKY FUND

BALANCE / LOW RISKY FUND

CONSERVATIVE / UNRISKY

FUND


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BALANCE / LOW RISKY FUND: - In this fund portfolio, the approximation equally fund

invest in both Privet and Govt. security. Like proportion of Privet and Govt. security is 50:50,

60:40, and 40:60.

Govt.

Security',50%

Privat

Security,50%

, 0, 0BALANCEPORTFOLIO

Govt. Security'

Privat Security

CONSERVATIVE / UNRISKY FUND: - In this fund portfolio, the high proportion invest in

Govt. security and very low proportion invest in privet security and some time 100% invest

in Govt. security. Like proportion of Privet and Govt. security is 10:90, 0:100.

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Govt.

Security',90%

Privat

Security,10%

, 0,

CONSERVATIVEPORTFOLIO

Govt. Security'

Privat Security

KOTAK AGGRESSIVE GROWTH FUND

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KOTAK DYNAMIC GROWTH FUND

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KOTAK DYNAMIC FLOOR FUND

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KOTAK GUARANTEED GROWTH FUND

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KOTAK DYNAMIC BOND FUND

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KOTAK GUARANTEED BOND FUND

4.1.2 PORTFOLIO OF KOTAK LIFE INSURANCE:-

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On the help of these three portfolios the Kotak Life Insurance prepare basically three plans

namely is:-

KOTAK SAFE INVESTMENT PLAN (KSIP) KOTAK SMART ADVANTAGE PLAN (KSAP)

KOTAK HEADSTART FUTURE PLAN (KHFP)

Depending upon the needs & wants, clients have the option of choosing between any of

these three plans which provides them with various benefits & growth options along with an

Insurance cover.

KOTAK SAFE INVESTMENT PLAN (KSIP)

Kotak Safe Investment Plan is a Unit Linked Insurance Plan that combines the benefits of

insurance and capital market returns into one. This plan from the stable of Kotak Life

Insurance is a true reflection of the companys essence: innovation that will benefit the

investor.

What makes investing in Kotak Life Insurance truly unique is that you enjoy a Guaranteed

Maturity Value with varying degrees of equity exposure depending on your risk appetite. So

if the market value of your units is higher, you reap the benefits with the peace of mind that

whilst in a bear market your investment is under-pinned by the Guaranteed Maturity Value.

And there is more, the returns are totally Tax free.

KOTAK SMART ADVANTAGE PLAN (KSAP)

Guaranteed returns of unto 275% of your first year premium at maturity

Assured bonus additions at regular intervals during his policy term to enhance your

fund value.

100% allocation of the premium from 2nd year onwards

Unique fund offering maximum opportunity for growth and choice for your investment

needs

Maximum protection for your loved ones to choose from.

KOTAK HEADSTART FUTURE PLAN

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Every child is different. Each has their own set of dreams and aspirations. As a parent you

would like to provide your child with all the building blocks that could develop his or her

potential to the fullest. This could mean extra coaching or tuition for talented children,

special training or equipment for natural athletes or professional training for born singers.

Headstart Child Plans is a specially tailored, cost-effective plan, aims to give your children

the financial means to pursue his or her dreams and live them.

4.1.3 COMPARISON BETWEEN VARIOUS POLICIES:-

POLICIES

FEATURES KSAP KSIP HEADSTART

ENTRY AGE MIN: 0 Years

MAX:65Years

MIN:0Years

MAX:65Years

MIN:18 Years

MAX:60Years

MATURITY AGEMIN:18Years

MAX:75Years

MAX:75Years MIN:18Years

MAX:70Years

POLICY TERMS

REGULAR:10/15

/20/25Years

FOR MINOR: 10Years or 18

less entry age at last birthday

whichever is higher.

MIN: 10Years or 18

minus age at entry for

minors; whichever

Is higher

MAX: 30Years

Min: Greater of (10 Yrs or

18 less childs present

age)

Ma

x: 25 Yrs.

MINIMUM

PREMIUM

Regular Ppt: Rs.15, 000

P.A.

Limited Ppt:

Rs 36,000p.A.

Regular:

Rs.18, 000 P.A.

Limited Ppt:

Rs 50,000 P.A.

Regular Ppt: Rs.15, 000

P.A.

Limited Ppt:

Rs 25,000 P.A

For 4-10 Yrs

Rs 50,000 P.A.

For 3 Yrs

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BASIC SUM

ASSURED

MIN: 0.5 X

(Policy term x annual

premium.)

MAX: Any multiple of

premium, subject to

underwriting

HIGH COVER:

Policy term x

annual premium

LOW COVER:Greater of(5x

annual

premium,0.5xpolicy

term x annual

premiums )

MIN: 0.5 X

(Policy term x annual

premium.)

MAX: Any multiple ofpremium, subject to

underwriting

RIDERS

BENEFITS

Critical Illness Benefit

Permanent DisabilityBenefit

Accidental Disability

Guardian Benefit:

Premiums waiver

protection on disability.

Accidental Death

Benefit

Preferred Term Benefit

Life Guardian Benefit

NO RIDERS

BENEFITS

Critical Illness

Benefit

PermanentDisability Benefit

Accidental

Disability Guardian

Benefit: Premiums

waiver protection on

disability.

Accidental Death

Benefit

4.1.4 USP Of The Various Plans

(USP: - Unique Selling Point)

PLAN KSAP KSIP HEADSTART

USP

Upto 275 % return on

first year premium at

maturity & assured

bonuses.

Guaranteed Maturity

Value for all type of

investors.

Triple Death Benefit & Dynamic

Floor fund.

4.1.5 COMPARISON OF CHARGES:-

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POLICIES

CHARGES

KSAP KSIP HEADSTART

PREMIUM

ALLOCATION

CHARGES

Years =36000 Years charges Years Allocation(15k to 25k)

2-5

6-10

11+

2%

1%

Nil

Nil

Nil

Nil

1

>2

14%

3.5%

1

2

3

4-10

>11

68%

86%

93%

99%

100%

POLICYADMINISTRATION

CHARGES

Rs.65p.m. atcommencement of thepolicy, inflating by 5%p.a.

=20000-3.5%

Rs.100000: Nocharges

FUND

MANAGEMENT

CHARGES

Dynamic bond fund - 1.2%

Dynamic floor fund- 1.75%

Opportunities fund- 2%

Guaranteed/dynamic money marketfund

Guaranteed/dynamic gilt fund

Guaranteed/dynamic bond fund

Guaranteed/dynamic floating ratefund

Guaranteed/dynamic balanced fund

Guaranteed/dynamic growth fund

Aggressive growthfund

0.6%

1%

1.2%

1.2%

1.3%

1.5%

1.6%

Dynamic moneymarket fund

Dynamic gilt fund

Dynamic bondfund

Dynamic floatingrate fund

Dynamic balancedfund

Dynamic growthfund

Aggressive growth

fund

0.6%

1%

1.2%

1.2%

1.3%

1.5%

1.6%

SWITCHING

CHARGES

First four switches in a year

are free.

Rs. 500 will be charged for

every additional switch.

First four switches in

a year are free.

Rs. 500 will be

charged for every

additional switch.

First four switches in a

year are free.

Rs. 500 will be charged

for every additional

switch.

MORTALITY

CHARGES

No mortality charges in 1st

year. From year 2nd

onwards, the cost of life

cover & will be levied by

Thus is the cost of life

cover & will be levied

by cancellation of

Thus is the cost of life

cover & will be levied

by cancellation of units


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Inference:

We found in our study that more than three fourth of the surveyed customers had a

satisfaction level above average. Where 55% of the respondents rated the service

parameters as good, 20% were in favor that the service parameters are extremely good.

Only 7% of the respondents rated the same as bad or very bad.

48

01020

30405060708090

100

ExtremelyGood

Good Neither Good nor

Bad

Bad Very Bad

20

55

18

6 1

SATISFACTION LEVEL OF THE SERVICEPARAMETERS


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34%

27%

21%

13%

5%

SATISFACTION COMPARED TO COMPETITION

After Sales Service Solutions Recommendations

Customer delightment Policy Content

Others

4.1.6 Investment depends upon the Age of the Investor:-

If investors are between 25-40 years of age:-

If investors are between 25-40 years of age then they are in a position to take average risk

to achieve there financial goals. They can afford to have 70% of their investments in

equities by investing in assets like diversified equity funds, sector funds, tax-saving funds,

balanced funds and stocks. The balance should be in bonds, small saving schemes, debt

funds and cash.

If investors are between 40-55 years of age:-

If investors are between 40-55 years of age they are in a position to take some risk. This

means that they can invest in equity-oriented products, but not as much as they could have

when you were younger. They must look at building a 60:40 (equity: debt) portfolio.

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They must consider owning a steady, large cap, diversified equity fund as also a well-

managed mid cap fund. They must consider tax-saving funds while chalking out a tax-

planning strategy. Balanced funds will fit nicely in their portfolio.

If investor are over 55 years of age:-

If investors are over 55 years of ageat this advanced age, it would be prudent to shun risk

and strive to achieve their financial goals by taking on minimal risk. If at all, they can allow

themselves the luxury of a small equity exposure (10-15%) to supplement the existing

investments in their portfolio. Since regular income post-retirement is their most pressing

need, their investments must reflect this important trait.

Age and Gender showed an interesting relationship with the insurance. Where the males

took 84% of the insurance policies only females took a mere 16% of them. Out of these

16% the males in the name of female family members took the major of the policies.

Age Relationship with Investment

In this chart we can see that 25 age to 40 age people likes invest in 70% equity and 30%

govt. security. 40 to 55 age people likes invest in 40% equity and 60% govt. security and 55

above people like in 80% equity and 20% govt. security.

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In this chart we can see that 40% of the Investor likes to invest in Fixed Deposits, 20% in

Properties, 5% in Insurance and only 1% like to Invest in Mutual Fund.

When it comes to investment criteria 50% of the people need safety for their Investment &

only 5% of the people choose risk cover for their Investment Criteria.

51

40%

1%

4%30%

5%

20% Fixed Deposits

Mutual Fund

Shares

Govt.Securities

Insurance

Properties

INVESTMENT CRITERIA

20%

50%

10%

5%

15% Return

Safety

Liquidity

Risk Cover

Tax Benefit

INVESTORS CHOICE


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85% of the people are aware of Tax Benefit on Insurance at its premium & maturity & 15%

are unaware regarding Tax Benefit.

95% of the people are unaware of ULIPs and only 5% people are aware of the same

52

TAX BENEFIT ON INSURANCE

85%

15%

Yes

No

AWARENESS OF ULIPs

5%

95%

Yes

No


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From the above pie chart we can see that people are very aggressive of knowing about

ULIPs so 98% people want to know about ULIPs and only 2% people are not interested or

already aware of it.

Here we can see that 40% of the people did not invest in Insurance because of Low Return

& another 40% of the people are till not approach and only 3% of the people did not invest

due to Unawareness.

ANALYSIS & INTERPRETATION

53

LOOK ON ULIPs

98%

2%

Yes

No

WHY WON'T INVEST IN INSURANCE

40%

7%10%3%

40%

Low Return

Unsafe

No Liquidity

Unawareness

Not Approach


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5.1 Analysis:-

After going through the data surveyed we are in a position to analyze the trend of

people regarding Investment and their perception regarding Insurance as an Investment

Tool and different Portfolio of Kotak Life Insurance, as well as to find out scope for further

optimization. Interpretation of the finding is done below.

5.1.1 DO PEOPLE INVEST: - Now a days in a country like India every person thinks of

their future & save as per their capacity for his/her future & for the future of his family. Now

people are aware that the earning period is limited & in that period they not only have to live

but also have to secure their future by Investing/Saving. For this reason 100% people like to

Invest.

5.1.2 IS IT A SAVING / INVESTMENT TOOL:- India is a developing country here people

work very hard to earn for their living, so they did not want to take much risk to gain high

return. High return means high risk. Here people want guaranteed return, which may be

low. From the survey it is proved that service class people in a middle income group go for

saving rather than Investment. 80% people like to do saving rather than Investment.

5.1.3 INVESTORS CHOICE: - People choose saving scheme like Fixed Deposit scheme

& Government Securities over Investment schemes like Properties, Mutual Fund, Shares,

Insurance etc. because their mindset do not allow them to take the risk of Investment. This

is mainly due to their ignorance on the subject. In the survey we can see that 40% of the

people choose Fixed Deposits, 30% choose Government Securities and only 30% people

choose rest of them. Out of that 20% people choose Properties, 5% choose Insurance, 4%

choose Shares and only 1% choose Mutual Fund for their Investment.

So, this basis the best portfolio is Conservative Portfolio because most of people like safe

investment. But some youth and mature people want high return in long term so for this the

best portfolio is Aggressive portfolio.

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5.1.4 INVESTMENT CRITERIA: - As discussed earlier people in India did not want to take

risk on their money. They are not able to break out the bondage of safety to take risk. So in

the survey also 50% of the people choose Safety as their first priority. 20% of the people go

for Return, 15% people do saving because of Tax Benefit, 10% of the people want Liquidity

and only 5% go for Risk Cover.

5.1.5 TAX BENEFIT ON INSURANCE: - From the early days Insurance has always been

bought more for tax benefits than for what it actually purported to do i.e. insure human life.

Most of the people (85%) are aware of Insurance as a tax benefit tool and they are also

aware that there is tax benefit on its premium & maturity which is a good perception as this

may lead more people to invest in Insurance and only 15% people are unaware of tax

benefit on the premium & maturity of Insurance.

5.1.6 AWARENESS OF UNIT LINK INSURANCE PLANS (ULIPs): - Now when people

are cautious about their present and think for their future they are unaware about ULIPs,

the hottest Investment Tool in todays market. This unawareness of the people about ULIPs

has also led them to be unaware of Insurance as an Investment Tool. In the survey it is

found that 95% people are unaware of ULIPs and only 5% people are aware of the same.

5.1.7 LOOK ON ULIPs: - However it is interesting to know from the survey that 98%

people are interested to know about ULIPs to secure their future investment & only 2%

people did not want to know due to lack of knowledge or already aware of it.

5.1.8 WHY WONT INVEST IN INSURANCE: - The general survey revealed that people

did not invest in Insurance because of its low return and because they have not approached

by anyone. 40% people did not invest in Insurance due to low return & 40% people are till

not approach by anyone. 10% people did not invest due to no liquidity, 7% people think that

investment in Insurance is unsafe and only 3% people are unaware. So, there is a huge

opportunity for the Insurance companies to do their business knowing people about ULIPs

& approaching the not approached people. For its Kotak Life Insurance build KotakAggressive Growth Fund Plan and Kotak Dynamic Growth Fund.

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5.1.9 KOTAK PORTFOLIO FUNDS: - In the Kotak Plan there are three mostly fund is on

the basis of the people prefer: -

(1) Aggressive Fund: - This portfolio is more risky but highly retune.

(2) Balance Fund: - This portfolio is low risky but average retune.

(3) Conservative Fund: - This portfolio is less risky but low retune.

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SWOT ANALYSIS

Strength:

Money Power, which makes them ignorant about the gestation period

Brand image, business experience, and innovative products

The agents are very selectively chosen have excellent communication skills

Service quality, which is crux of their mission

Large network branches which is helped to customer for the payment

Strong and popular brand name.

Weaknesses:

High targets for financial advisors and for the sales departments.

Many competitors in the market offer same product by the title difference

the premium and offerings.

Sustainable to Rick associated with investment in money market.

Try to catch middle-lower level people also.

Lack of awareness about insurance among people Less coverage in Rural Areas

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CONCLUSIONS

7.1 CONCLUSION

The overall result of the survey showed mixed response among the people. The people

knew about investment/saving and they do so. People prefer to do saving rather than doing

investment because high return carry high risk. So, fixed deposit scheme & government

securities is favored by maximum number of people because of mind set which is very

difficult to change. Where as now people are also investing in mutual fund, insurance &

shares to earn high return. The mind set of the people work for more security rather than

risk cover & other. So, the mind set of the people is to be molded. So for this The Kotak Life

Insurance take all Govt. and Privet securities and build different funds of portfolio.

It is a good thing that people know that insurance can act as a tax saving tool due to tax

policy by the Government. This is why they do not expect high return from insurance.

However they are ignoring the fact that insurance do give high return. As the survey shows

that people are aware of the fact that there is tax benefit on premium & maturity oninsurance and this may lead to more investment. Ignorance of the mass towards insurance

policy has led because of unawareness of ULIPs.

However it is known from the survey that people are eager to know about ULIPs to secure

their future investment. If the ULIPs or the insurance policies are properly covered through

appropriate channel it may change the misconception of people regarding low return in

insurance.

Till data people are Unaware about Portfolio of Kotak Life Insurance so they think of low

return & no liquidity in Insurance. They are not aware of Unit Link Insurance Plan (ULIPs)

which has all the facilities such as High Return, Liquidity, Tax Benefit, Risk Cover, Safety

and Social Status. They must be aware through proper channel which may change the

misconception in the mind of people regarding low return & no liquidity in Insurance

policies.

CONCLUSIONS FROM QUESTIONNAIRE NO: - 1

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Returns on Investment & Financial Health of the company are the 2 most important

factors while buying an INSURANCE PLAN.

Return on Investment gets an average of 4.74 (on a scale of 5) with both median &

mode being 5. S.D & Variance are 0.56 & 0.36 respectively which are quite less &

shows high degree of similarity in the views of the people surveyed, on the

importance of this factor.

Financial Health of the company gets an average of 4.51 (on a scale of 5) with both

mean & median being 5. S.D & Variance are 0.75 & 0.56 respectively which also

show quite a high degree of similarity in the views but comparatively lesser than

RETURN ON INVESTMENT Factor.

A comparison with Financial Products, Tax Saving & Policy Features is also very

important factors & plays a very important role in the purchase of an Insurance

Policy.

The above 5 factors are the most important ones which affect the purchase of an

Insurance Policy.

An Insurance company needs to pay a lot of attention on these factors beforedeveloping a policy as they play utmost importance in the purchase of an Insurance

Policy

To conclude I would say that these 40 days of summer project spent with Kotak Life

Insurance Co. was a great experience as it gave the scope of adding knowledge by

interacting with different people of different level as well as building up relation with them.

The project although helped me to gather an insight to the Financial Insurance Sector as a

whole of Kotak Old Mutual Life Insurance Co.Ltd. in particular.

RECOMMENDATIONS & SUGGESTIONS

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There are few recommendations which have been figured out of the project that may beuseful for the organization to improve on the own Portfolio, how ULIP plans are beneficialand awareness of people regarding Insurance as an Investment Tool:-

1. The Kotak Life Insurance builds Portfolio on the basis of different age group people.

2. The proper fundamental and technical analysis of privet securities then it include in

the portfolio for maximum return earn on minimum risk.

3. A proper channel is required to make the people aware about Portfolio of Kotak is

differ from others. Advertisements in the Daily Newspaper may be a channel of

propaganda.

4. Television is also a very strong media of advertising. It reaches out the masses and is

a very good audio-visual tool.

5. Door to door campaigning can also help the people become aware of the beneficial

policies of Insurance.

6. Regular survey of this kind can help the company to know the response of the people

towards policies.

Appendix:-

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QUESTIONNAIRE:-1

QUESTIONNAIRE ON ULIP (Unit Linked Insurance Plan)

Questionnaire No.

Sir/Madam,

This research project is a part of our curriculum. This is a general study of Insurance

Plans especially ULIP & thus we seek to know only your general views about insurance

companies. This is not specific to any particular company.

Please grade the following questions on the given 1 to 5 scale.

Features preferred during purchase of ULIP.

(1 Not required at all, 2 Some Essential, 3 Average Essential, 4 Very Essential,

5 Very Most Essential)

Please rate the factors in the empty cells.

Sr.

No.

Factors

1 Return on Investment

1

2

3

4

5

2 Policy Features

1

2

3

4

5

3 Investment Risk

1

2

3

4

5

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4 Length of Investment

1

2

3

4

5

5 Tax Savings

1

2 3

4

5

6 Forced Savings

1

2

3

4

5

7 Brand Equity of the company

1

2

3

4

5

8 Financial Health (Company)

1

2

3

4

5

9 Core competency of the company in that sector.

1

2

3

4

5

10 Interpersonal Skills (Sales Staff)

1

2

3

4

5

11 Influence of Relatives/Friends in investment decision

making 1

2

3

4

5

12 Post Sales Services support.1

2

3

4

5

13 Comparison with other Financial product (eg. Mutual

Funds)

1

2

3

4

5

When you think of investment in Insurance, which company name immediately

creeps in your mind? Rank in the order of preference.

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(*: From 1 to 5; 1 is most preferred & 5 is least preferred)

While investing in an insurance policy whether the company is local or multinational

affects your decision & Why?

.

Thank You for your cooperation & we assure you complete confidentiality of

the information you have so kindly, sincerely & patiently shared with us.

64

Sr. No. Company Rank*

1 HDFC Life Insurance

2 ICICI Prudential

3 KOTAK Life Insurance

4 LIC

5 OTHERS


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QUESTIONNAIRE No. 2

We are conducting a survey on the Unit Linked Insurance Plan (ULIP). We request the

Respondents to provide their valuable views on the same by answering to this

Questionnaire .The information provided by you will be used solely for Academic purpose

and to study the present Market Potential of ULIP.

Name:_______________

__

Address:-_______________

Contact No.:-___________

AGE:

(A) 15-20 yrs (B) 21-30 yrs (C) 31- 40 yrs (D) 41-50 yrs (E) >50 yrs

GENDER:

(A) Male (B) Female

OCCUPATION:

(A) Government Service (B) Private Service (C) Business

(D) Student (E) Others

ANNUALINCOME:

(A) Up to 2lacs (B) Between 2-5 lacs (C) 5-7 lacs

(D) 7-10 lacs (E) Above 10 lacs

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Q.1. Are you aware about Unit Linked Insurance Plan (ULIP)?

Ans. (A) Yes (B) No

Q.2. Have you invested in the ULIP of any company;

(i) if yes then please tick the following?

(A) ICICI Prudential life insurance (B) HDFC Standard Life

(C) Bajaj Allianz Life Insurance (D) Kotak Life Insurance

(E) Any other (please specify)

(ii) If No, then would you like to invest in ULIP?

(A) Yes (B) No

Q.3. What is the reason for investment in the ULIP?

Ans. (A) Child Education (B) Child Marriage

(B) Pension (D) Income Growth

(E) Tax Rebate (F) 2 in 1 benefit.

Q.4.What is your time horizon when investing in ULIP?

Ans. (A) Up to 3 yrs (B) Between 4-7 yrs (C) 7-10 yrs

(D) 10-15 yrs (E) Over 15 yrs

Q.5. When investing in a ULIP, what would be your preference?

Ans. (A) Low Risk, Low Gain (B) Moderate Risk, Moderate Gain

(C) High Risk, High Gain (D) No Risk

Q.6. where do you like to invest?

Ans. (A) LIC (B) Post Office (C) PPF (D) Other

Q.7. Are you aware of Kotak Life Insurance Co.?

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Ans. (A) Yes (B) No (C) Something

Q.8. Would you like to know about some Unit Linked Return Plans?

Ans. (A) Yes (B) No (C) Something

Q.9. Which sectors do you prefer when you choose equity market?

Ans. (A) Large Cap (B) Mid. Cap (C) Small Cap. (D) Nothing

Q.10. Which sectors do you prefer when you choose Debts market?

Ans. (A) Govt. Bond, (B) Debenture (C) Other..

Q.11. What is your consideration when you invest in Equity Market?

Ans. (A) High Return (B) High Risk (C) Low Risk (D) Other

Q.12. How long you would like to Invest Fund in this market?

Ans. (A) Long term (B) Short term (C) Mid. Term

Q.13. Which type of fund would you like most?

Ans. (A) Aggressive fund (B) Balance fund

(C) Debts fund (D) Cash fund.

Q.14. Do you like our products? Are impressive?

Ans. ___________________________________________________

Q.15. Which products do you find the most impressive?

Ans. (A) Kotak Flexi Plan, (B) Kotak Safe Investment Plan,

(C) Smart Advantage Plan. (D) Other.

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BIBLIOGRAPHY

A. Books Referred

1. Research Methodology

- By C. K. Kothari

B. Magazines & Newspapers

1. Money Simplified.

2. Economic Times.

C. Brochures of the Company.

D. Website: www.kotaklifeinsurance.com

www.kotakbank.com

www.wikipedia.org

www.google.com

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